Twenty nine of the 42 representatives in the states contained within EPA’s Region 6 — as well as Iowa Republican Rep. Steve King and Arizona Republican Rep. Trent Franks — are pushing for the removal of Al Armendariz from his post as EPA Region 6 Administrator for his “crucify them” enforcement philosophy against U.S. oil and gas companies.
Rep. Mike Conaway announced a letter Friday calling on EPA administrator Lisa Jackson to relieve Armendariz from his position.
The letter was signed by all the Republican House members from the Texas delegation as well as New Mexico Republican Rep. Steve Pearce, King, and Franks. Region 6 serves Arkansas, Louisiana, New Mexico, Oklahoma, Texas and 66 Native American tribes.
“Mr. Armendariz’s conduct and statements have so contaminated the well that his continued service in this office seems likely to be met with increasing hostility and resistance from the very people he is expected to work with and for,” the letter reads.
“We are deeply disappointed in not only the statements of Mr. Armendariz, but also the abrasive, hostile posture that his office has struck during his tenure. It is our recommendation that Mr. Armendariz be relieved of his position, effective immediately.”
In addition to the members who signed the letter, Oklahoma Republican Rep. James Lankford told TheDC that he would like Armendariz to resign as well. (RELATED: EPA ‘crucify’ official received $540k in taxpayer-funded research grants)
“Armendariz’s flippant and inflammatory remarks demonstrate an attitude of power and control from a federal agency that was formed to serve the American people, not ‘crucify’ them,” Lankford said. “The EPA has transitioned into an agency determined to destroy energy production, not help our nation develop our abundant domestic energy resources.”
WASHINGTON MERRY-GO-ROUND - Government Crimes and Corruption
April 30, 2012
April 27, 2012
Insanity: CISPA Just Got Way Worse, And Then Passed On Rushed Vote
Up until this afternoon, the final vote on CISPA was supposed to be tomorrow. Then, abruptly, it was moved up today—and the House voted in favor of its passage with a vote of 248-168. But that's not even the worst part.
The vote followed the debate on amendments, several of which were passed. Among them was an absolutely terrible change (pdf and embedded below—scroll to amendment #6) to the definition of what the government can do with shared information, put forth by Rep. Quayle. Astonishingly, it was described as limiting the government's power, even though it in fact expands it by adding more items to the list of acceptable purposes for which shared information can be used. Even more astonishingly, it passed with a near-unanimous vote. The CISPA that was just approved by the House is much worse than the CISPA being discussed as recently as this morning.
Previously, CISPA allowed the government to use information for "cybersecurity" or "national security" purposes. Those purposes have not been limited or removed. Instead, three more valid uses have been added: investigation and prosecution of cybersecurity crime, protection of individuals, and protection of children. Cybersecurity crime is defined as any crime involving network disruption or hacking, plus any violation of the CFAA.
Basically this means CISPA can no longer be called a cybersecurity bill at all. The government would be able to search information it collects under CISPA for the purposes of investigating American citizens with complete immunity from all privacy protections as long as they can claim someone committed a "cybersecurity crime". Basically it says the 4th Amendment does not apply online, at all. Moreover, the government could do whatever it wants with the data as long as it can claim that someone was in danger of bodily harm, or that children were somehow threatened—again, notwithstanding absolutely any other law that would normally limit the government's power.
Somehow, incredibly, this was described as limiting CISPA, but it accomplishes the exact opposite. This is very, very bad.
There were some good amendments adopted too—clarifying some definitions, including the fact that merely violating a TOS does not constitute unauthorized network access—but frankly none of them matter in the light of this change. CISPA is now a completely unsupportable bill that rewrites (and effectively eliminates) all privacy laws for any situation that involves a computer. Far from the defense against malevolent foreign entities that the bill was described as by its authors, it is now an explicit attack on the freedoms of every American.
The vote followed the debate on amendments, several of which were passed. Among them was an absolutely terrible change (pdf and embedded below—scroll to amendment #6) to the definition of what the government can do with shared information, put forth by Rep. Quayle. Astonishingly, it was described as limiting the government's power, even though it in fact expands it by adding more items to the list of acceptable purposes for which shared information can be used. Even more astonishingly, it passed with a near-unanimous vote. The CISPA that was just approved by the House is much worse than the CISPA being discussed as recently as this morning.
Previously, CISPA allowed the government to use information for "cybersecurity" or "national security" purposes. Those purposes have not been limited or removed. Instead, three more valid uses have been added: investigation and prosecution of cybersecurity crime, protection of individuals, and protection of children. Cybersecurity crime is defined as any crime involving network disruption or hacking, plus any violation of the CFAA.
Basically this means CISPA can no longer be called a cybersecurity bill at all. The government would be able to search information it collects under CISPA for the purposes of investigating American citizens with complete immunity from all privacy protections as long as they can claim someone committed a "cybersecurity crime". Basically it says the 4th Amendment does not apply online, at all. Moreover, the government could do whatever it wants with the data as long as it can claim that someone was in danger of bodily harm, or that children were somehow threatened—again, notwithstanding absolutely any other law that would normally limit the government's power.
Somehow, incredibly, this was described as limiting CISPA, but it accomplishes the exact opposite. This is very, very bad.
There were some good amendments adopted too—clarifying some definitions, including the fact that merely violating a TOS does not constitute unauthorized network access—but frankly none of them matter in the light of this change. CISPA is now a completely unsupportable bill that rewrites (and effectively eliminates) all privacy laws for any situation that involves a computer. Far from the defense against malevolent foreign entities that the bill was described as by its authors, it is now an explicit attack on the freedoms of every American.
April 26, 2012
Napolitano says prostitute scandal 'not part of the Secret Service way'
Conflicting portraits of the Secret Service took stage Wednesday on Capitol Hill, as senators challenged Homeland Security Secretary Janet Napolitano to reconcile the image of agents who protect the lives of America's president with the dozen officers and supervisors implicated in a humiliating prostitution scandal.
Napolitano told the Senate Judiciary Committee that the incident in Colombia involving as many as 20 women and a dozen military personnel appeared to be an isolated one. She said the agency's office of professional responsibility had not received any complaints in the past 21/2 years. She said investigators are reviewing earlier time periods as well.
"This behavior was not part of the Secret Service way of doing business," Napolitano testified. "We are going to make sure that standards and training, if they need to be tightened up they are tightened."
The White House said Wednesday that the conduct of the employees punished in the ongoing scandal was "inappropriate" and unacceptable for people representing the United States abroad.
At the hearing, committee chairman Sen. Patrick Leahy, D-Vt., praised the Secret Service as "wise, very professional men and women," and called it shocking that so many of the agency's employees were involved in the scandal.
"It really was, I think, a huge disappointment to the men and women of the Secret Service to begin with, who uphold very high standards and who feel their own reputations are now besmirched by the actions of a few," Napolitano said.
Sen. Lindsey Graham, R-S.C., pressed Napolitano about whether she believes this was the first incident involving prostitutes and the Secret Service.
"The only reason I suggest that we need to maybe look at little harder is because we're lucky to have found out about this. If there hadn't been an argument between one of the agents and, I guess, a prostitute, for lack of a better word, about money, we'd probably have never known about this."
Napolitano said while she is not aware of a broader culture problem at the Secret Service, Director Mark Sullivan and his investigators are looking into it.
"What the director is doing is reviewing training, supervision, going back and talking to other agents, really trying to ferret out if this is a systemic problem," Napolitano said. "If it is, that would be a surprise to me."
Napolitano also said the government is also reviewing training rules for Secret Service employees to make clear what behavior is acceptable and what's unacceptable.
"The training is focused on professionalism, on conduct consistent with the highest moral values and standards," she said.
Graham told Napolitano that the Secret Service officers and supervisors involved should have known their conduct was wrong: "I don't think it's a lack of training."
Wednesday was the first time Napolitano has faced public questioning from lawmakers since the scandal became public.
The Secret Service announced late Tuesday that all 12 implicated officers had been dealt with: eight forced out, one stripped of his security clearance and three cleared of wrongdoing, all within two weeks of the night in question.
Napolitano pointed to that swift action as evidence that incident is being taken seriously.
"We will not allow the actions of a few to tarnish the proud legacy of the Secret Service," Napolitano said.
She said the Homeland Security inspector general is also supervising the investigation and using "the investigatory resources of the Secret Service." She added add that she expected the inspector general to do a complete investigation.
The scandal erupted after a fight over payment between a Colombian prostitute and a Secret Service employee spilled into the hallway of the Hotel Caribe ahead of President Barack Obama's arrival at the Summit of the Americas in Cartagena. A dozen military personnel have also been implicated, and Defense Secretary Leon Panetta said they have had their security clearances suspended.
Napolitano told the Senate Judiciary Committee that the incident in Colombia involving as many as 20 women and a dozen military personnel appeared to be an isolated one. She said the agency's office of professional responsibility had not received any complaints in the past 21/2 years. She said investigators are reviewing earlier time periods as well.
"This behavior was not part of the Secret Service way of doing business," Napolitano testified. "We are going to make sure that standards and training, if they need to be tightened up they are tightened."
The White House said Wednesday that the conduct of the employees punished in the ongoing scandal was "inappropriate" and unacceptable for people representing the United States abroad.
At the hearing, committee chairman Sen. Patrick Leahy, D-Vt., praised the Secret Service as "wise, very professional men and women," and called it shocking that so many of the agency's employees were involved in the scandal.
"It really was, I think, a huge disappointment to the men and women of the Secret Service to begin with, who uphold very high standards and who feel their own reputations are now besmirched by the actions of a few," Napolitano said.
Sen. Lindsey Graham, R-S.C., pressed Napolitano about whether she believes this was the first incident involving prostitutes and the Secret Service.
"The only reason I suggest that we need to maybe look at little harder is because we're lucky to have found out about this. If there hadn't been an argument between one of the agents and, I guess, a prostitute, for lack of a better word, about money, we'd probably have never known about this."
Napolitano said while she is not aware of a broader culture problem at the Secret Service, Director Mark Sullivan and his investigators are looking into it.
"What the director is doing is reviewing training, supervision, going back and talking to other agents, really trying to ferret out if this is a systemic problem," Napolitano said. "If it is, that would be a surprise to me."
Napolitano also said the government is also reviewing training rules for Secret Service employees to make clear what behavior is acceptable and what's unacceptable.
"The training is focused on professionalism, on conduct consistent with the highest moral values and standards," she said.
Graham told Napolitano that the Secret Service officers and supervisors involved should have known their conduct was wrong: "I don't think it's a lack of training."
Wednesday was the first time Napolitano has faced public questioning from lawmakers since the scandal became public.
The Secret Service announced late Tuesday that all 12 implicated officers had been dealt with: eight forced out, one stripped of his security clearance and three cleared of wrongdoing, all within two weeks of the night in question.
Napolitano pointed to that swift action as evidence that incident is being taken seriously.
"We will not allow the actions of a few to tarnish the proud legacy of the Secret Service," Napolitano said.
She said the Homeland Security inspector general is also supervising the investigation and using "the investigatory resources of the Secret Service." She added add that she expected the inspector general to do a complete investigation.
The scandal erupted after a fight over payment between a Colombian prostitute and a Secret Service employee spilled into the hallway of the Hotel Caribe ahead of President Barack Obama's arrival at the Summit of the Americas in Cartagena. A dozen military personnel have also been implicated, and Defense Secretary Leon Panetta said they have had their security clearances suspended.
April 25, 2012
Top ex-CIA officer on waterboarding tape destruction: ‘Just getting rid of some ugly visuals’
The retired top CIA officer who ordered the destruction of videos showing waterboarding says in a new book that he was tired of waiting for Washington’s bureaucracy to make a decision that protected American lives.
Jose Rodriguez, who oversaw the CIA’s once-secret interrogation and detention program, also lashes out at President Barack Obama’s administration for calling waterboarding torture and criticizing its use.
“I cannot tell you how disgusted my former colleagues and I felt to hear ourselves labeled ‘torturers’ by the president of the United States,” Rodriguez writes in his book, “Hard Measures.”
The book is due out April 30. The Associated Press purchased a copy Tuesday.
The chapter about the interrogation videos adds few new details to a narrative that has been explored for years by journalists, investigators and civil rights groups. But the book represents Rodriguez’s first public comment on the matter since the tape destruction was revealed in 2007.
That revelation touched off a political debate and ignited a Justice Department investigation that ultimately produced no charges. Critics accused Rodriguez of covering up torture and preventing the public from ever seeing the brutality of the CIA’s interrogations. Supporters hailed him as a hero who acted in the best interest of the country in the face of years of bureaucratic hand-wringing.
The tapes, filmed in a secret CIA prison in Thailand, showed the waterboarding of terrorists Abu Zubaydah and Abd al-Nashiri.
Especially after the Abu Ghraib prison abuse scandal, Rodriguez writes, if the CIA’s videos were to leak out, officers worldwide would be in danger.
“I wasn’t going to sit around another three years waiting for people to get up the courage,” to do what CIA lawyers said he had the authority to do himself, Rodriguez writes. He describes sending the order in November 2005 as “just getting rid of some ugly visuals.”
Rodriguez writes critically of Obama’s counterterrorism policies today. With no way to capture and interrogate terrorists, Rodriguez says, the CIA relies far too much on drones. Unmanned aerial attacks alienate America’s foreign partners and make it impossible to question people in the know, he says.
These points could foreshadow Republican attack lines in the presidential race because other former senior CIA officers are advising presumptive Republican nominee Mitt Romney.
The killing of Osama bin Laden is Obama’s signature national security accomplishment, but Rodriguez writes that valuable intelligence from the CIA’s “black sites” helped lead the U.S. to bin Laden.
The book is published by Threshold, a conservative imprint of Simon and Schuster that also published former Vice President Dick Cheney’s memoir.
Jose Rodriguez, who oversaw the CIA’s once-secret interrogation and detention program, also lashes out at President Barack Obama’s administration for calling waterboarding torture and criticizing its use.
“I cannot tell you how disgusted my former colleagues and I felt to hear ourselves labeled ‘torturers’ by the president of the United States,” Rodriguez writes in his book, “Hard Measures.”
The book is due out April 30. The Associated Press purchased a copy Tuesday.
The chapter about the interrogation videos adds few new details to a narrative that has been explored for years by journalists, investigators and civil rights groups. But the book represents Rodriguez’s first public comment on the matter since the tape destruction was revealed in 2007.
That revelation touched off a political debate and ignited a Justice Department investigation that ultimately produced no charges. Critics accused Rodriguez of covering up torture and preventing the public from ever seeing the brutality of the CIA’s interrogations. Supporters hailed him as a hero who acted in the best interest of the country in the face of years of bureaucratic hand-wringing.
The tapes, filmed in a secret CIA prison in Thailand, showed the waterboarding of terrorists Abu Zubaydah and Abd al-Nashiri.
Especially after the Abu Ghraib prison abuse scandal, Rodriguez writes, if the CIA’s videos were to leak out, officers worldwide would be in danger.
“I wasn’t going to sit around another three years waiting for people to get up the courage,” to do what CIA lawyers said he had the authority to do himself, Rodriguez writes. He describes sending the order in November 2005 as “just getting rid of some ugly visuals.”
Rodriguez writes critically of Obama’s counterterrorism policies today. With no way to capture and interrogate terrorists, Rodriguez says, the CIA relies far too much on drones. Unmanned aerial attacks alienate America’s foreign partners and make it impossible to question people in the know, he says.
These points could foreshadow Republican attack lines in the presidential race because other former senior CIA officers are advising presumptive Republican nominee Mitt Romney.
The killing of Osama bin Laden is Obama’s signature national security accomplishment, but Rodriguez writes that valuable intelligence from the CIA’s “black sites” helped lead the U.S. to bin Laden.
The book is published by Threshold, a conservative imprint of Simon and Schuster that also published former Vice President Dick Cheney’s memoir.
April 24, 2012
Ron Paul’s Minnesota delegate blowout prompts Romney ‘panic,’ says Paul adviser
Minnesota will send 40 delegates to the Republican National Convention. Twenty of the 24 delegates based on congressional districts were awarded to Texas Rep. Ron Paul in selection processes that concluded this weekend.
Thirteen Minnesota delegates will be allocated based on the results of a statewide convention in May, according to Paul campaign senior adviser Doug Wead.
Wead wrote on his blog that GOP presidential front-runner Mitt Romney is an a “panic” after the Paul landslide. Similar efforts to bolster the Texas congressman’s delegate count are underway in Iowa, Colorado, Maine and other states.
“[A] number of Romney Hawks are now deeply concerned that Ron Paul has already laid the groundwork for similar success in six more caucus states,” Wead wrote.
Romney spokeswoman Andrea Saul declined to comment on the record about whether or not Romney is indeed in a panic.
Former Pennsylvania Sen. Rick Santorum’s candidacy was seen as the last major hurdle for Romney. His exit from the race gave Romney a clear path to win the delegates needed to clinch the nomination outright.
The Paul campaign is being mum about the prospect of other delegate coups. The libertarian-leaning candidate’s spokesman and campaign manager did not respond when asked if surprising landslides are anticipated in other states.
David Weigel of Slate noted that The Associated Press had projected that Paul would win only 10 delegates in Minnesota, with Romney projected to score 6 and Santorum 17.
Thirteen Minnesota delegates will be allocated based on the results of a statewide convention in May, according to Paul campaign senior adviser Doug Wead.
Wead wrote on his blog that GOP presidential front-runner Mitt Romney is an a “panic” after the Paul landslide. Similar efforts to bolster the Texas congressman’s delegate count are underway in Iowa, Colorado, Maine and other states.
“[A] number of Romney Hawks are now deeply concerned that Ron Paul has already laid the groundwork for similar success in six more caucus states,” Wead wrote.
Romney spokeswoman Andrea Saul declined to comment on the record about whether or not Romney is indeed in a panic.
Former Pennsylvania Sen. Rick Santorum’s candidacy was seen as the last major hurdle for Romney. His exit from the race gave Romney a clear path to win the delegates needed to clinch the nomination outright.
The Paul campaign is being mum about the prospect of other delegate coups. The libertarian-leaning candidate’s spokesman and campaign manager did not respond when asked if surprising landslides are anticipated in other states.
David Weigel of Slate noted that The Associated Press had projected that Paul would win only 10 delegates in Minnesota, with Romney projected to score 6 and Santorum 17.
April 23, 2012
Lawmakers Weigh in on GSA, Secret Service Scandals
The Secret Service and General Services Administration scandals are two very disparate situations -- one revolves around sex, the other around lavish spending. But it’s no coincidence that both took center stage on Sunday's political talk shows, as both indicate a government lacking oversight, characterized by a culture of autonomy run amok.
Sen. Joe Lieberman, I-Conn., was an outspoken critic of both organizations. As chairman of the Senate Committee on Homeland Security and Government Affairs, he’ll have a large say in deciding what role Congress will have in addressing the issues. He characterized both the Secret Service scandal, which has implicated 12 agents in misconduct with prostitutes while preparing for Obama’s recent visit to Colombia, and the GSA's excessive spending as problems with the ethic of the organizations.
"From what we know of what was happening in Cartagena, they were not acting like Secret Service agents, they were acting like a bunch of college students away on spring weekend," he said on Fox News Sunday.
And he wondered if the GSA was similarly flouting regulations.
“They have had a tradition of having each of their regions have a lot of autonomy. That autonomy was clearly abused in Region Nine. I want to make sure it's not happening in other regions, and never happens again in region nine,” Lieberman said.
Though former Secret Service Director Ralph Basham said that the Secret Service misconduct was an "aberration," Rep. Darrell Issa, R-Calif., chairman of the House Committee on Oversight and Government Reform, gave voice to widespread murmurs that the events in Cartagena, Colombia, were indicative of a wider problem in the culture of the agency.
"Obviously, nobody believes that something with 11 or 12 people involved couldn't have happened before," Issa said on NBC’s Meet the Press. "The real point is will we have confidence that it will never happen again, particularly for nationals having access to our men and women in the Secret Service."
Regardless of whether the incident was one of many, lawmakers said one such event is enough to hurt the agency’s reputation to a dangerous degree.
"It's not only important that you be excellent, but we also don't want people to even imagine that they can pierce the shield of the Secret Service," said Oversight Committee ranking member Elijah Cummings (D-Md.) on CNN's State of the Union.
Lawmakers did seem to find a contrast between the GSA scandal and the Secret Service scandal in terms of accountability. Most absolved the Obama administration of responsibility for the Secret Service misconduct, with Sen. Tom Coburn, R-Okla., saying he’s “not critical of what the administration has done” to address the issue and multiple lawmakers commending Secret Service Director Mark Sullivan for his handling of the situation.
But numerous lawmakers said the responsibility for GSA overspending does fall on Obama’s shoulders.
“In the case of GSA, the administration clearly bears responsibility, because the head of that agency received an alert from the inspector general way last year that there were problems, and took no action,” Sen. Susan Collins, R-Maine, Homeland Security and Governmental Affairs' ranking Republican, said on ABC’s This Week. “The president is responsible in that case.”
Lieberman, however, made a distinction between the president being held responsible for the events and being held accountable. He said that while the incidents weren’t Obama’s fault, it’s up to Obama to deal with them properly.
“The buck stops at the president's desk. He's the leader of our government. He now has to be acting with a kind of relentless determination to find out exactly what happened, and to make sure that people who work for him at the Secret Service and GSA and everywhere else in the government don't let anything like this happen again,” he said.
Lieberman didn't say how Obama should do that, although he did say that a suggestion by his colleague Sen. Chuck Grassley, R-Iowa, that the White House launch an internal investigation, was a good one.
Missing from the conversation was a definite path forward. Lawmakers called for further investigations into both scandals, with Lieberman saying the GSA Inspector General should look at all ten GSA regions, not just the one in which the overspending occurred. But with those investigations still underway, the outcome is unclear.
Sen. Joe Lieberman, I-Conn., was an outspoken critic of both organizations. As chairman of the Senate Committee on Homeland Security and Government Affairs, he’ll have a large say in deciding what role Congress will have in addressing the issues. He characterized both the Secret Service scandal, which has implicated 12 agents in misconduct with prostitutes while preparing for Obama’s recent visit to Colombia, and the GSA's excessive spending as problems with the ethic of the organizations.
"From what we know of what was happening in Cartagena, they were not acting like Secret Service agents, they were acting like a bunch of college students away on spring weekend," he said on Fox News Sunday.
And he wondered if the GSA was similarly flouting regulations.
“They have had a tradition of having each of their regions have a lot of autonomy. That autonomy was clearly abused in Region Nine. I want to make sure it's not happening in other regions, and never happens again in region nine,” Lieberman said.
Though former Secret Service Director Ralph Basham said that the Secret Service misconduct was an "aberration," Rep. Darrell Issa, R-Calif., chairman of the House Committee on Oversight and Government Reform, gave voice to widespread murmurs that the events in Cartagena, Colombia, were indicative of a wider problem in the culture of the agency.
"Obviously, nobody believes that something with 11 or 12 people involved couldn't have happened before," Issa said on NBC’s Meet the Press. "The real point is will we have confidence that it will never happen again, particularly for nationals having access to our men and women in the Secret Service."
Regardless of whether the incident was one of many, lawmakers said one such event is enough to hurt the agency’s reputation to a dangerous degree.
"It's not only important that you be excellent, but we also don't want people to even imagine that they can pierce the shield of the Secret Service," said Oversight Committee ranking member Elijah Cummings (D-Md.) on CNN's State of the Union.
Lawmakers did seem to find a contrast between the GSA scandal and the Secret Service scandal in terms of accountability. Most absolved the Obama administration of responsibility for the Secret Service misconduct, with Sen. Tom Coburn, R-Okla., saying he’s “not critical of what the administration has done” to address the issue and multiple lawmakers commending Secret Service Director Mark Sullivan for his handling of the situation.
But numerous lawmakers said the responsibility for GSA overspending does fall on Obama’s shoulders.
“In the case of GSA, the administration clearly bears responsibility, because the head of that agency received an alert from the inspector general way last year that there were problems, and took no action,” Sen. Susan Collins, R-Maine, Homeland Security and Governmental Affairs' ranking Republican, said on ABC’s This Week. “The president is responsible in that case.”
Lieberman, however, made a distinction between the president being held responsible for the events and being held accountable. He said that while the incidents weren’t Obama’s fault, it’s up to Obama to deal with them properly.
“The buck stops at the president's desk. He's the leader of our government. He now has to be acting with a kind of relentless determination to find out exactly what happened, and to make sure that people who work for him at the Secret Service and GSA and everywhere else in the government don't let anything like this happen again,” he said.
Lieberman didn't say how Obama should do that, although he did say that a suggestion by his colleague Sen. Chuck Grassley, R-Iowa, that the White House launch an internal investigation, was a good one.
Missing from the conversation was a definite path forward. Lawmakers called for further investigations into both scandals, with Lieberman saying the GSA Inspector General should look at all ten GSA regions, not just the one in which the overspending occurred. But with those investigations still underway, the outcome is unclear.
April 22, 2012
Congress to FAA: Don't Let Domestic Drones Spy on Americans
The Federal Aviation Administration has cleared drone aircraft for widespread use in U.S. domestic airspace, and the chairmen of a congressional privacy caucus want to know how FAA will protect Americans from surveillance by operators of these aircraft, including police departments.
The FAA Modernization and Reform Act, which President Obama signed on Feb. 14, calls for the FAA to integrate operation of drones into its National Airspace System by 2015. The agency in March kicked off a rule-making to set up six unmanned aircraft system test ranges by this summer.
The language in the FAA bill and the rule-making both deal with safety issues and control of unmanned aircraft, but not privacy concerns, an issue the agency should address, Reps. Ed Markey, D-Mass., and Joe Barton, R-Texas, cochairmen of the Bipartisan Congressional Privacy Caucus, said in a letter sent on Thursday to Michael Huerta, acting FAA administrator.
Many drones -- such as those the Defense Department and intelligence agencies use to snoop on enemies -- are designed to carry surveillance equipment, including video cameras, infrared thermal imagers, radar, and wireless network detectors, raising questions about how the privacy of individuals will be safeguarded and how the public will be informed about drone activities, whether by law enforcement, commercial enterprises, or private individuals, Markey and Barton said.
"We must ensure that as drones take flight in domestic airspace, they don't take off without privacy protections for those along their flight path," Markey said in a statement.
The Electronic Frontier Foundation disclosed on Thursday that some 60 organizations, including the military, universities, and even police departments and sheriff offices, already have received limited authorization to operate drones. The revelation was based on documents the group received from the FAA in response to a Freedom of Information Act lawsuit filed in January. EFF said it also received a list of more than 50 authorizations from the FAA permitting manufacturers to test-fly drones.
Markey and Barton told Huerta they wanted to know:
What privacy protections and public transparency requirements has the FAA built into its current temporary licensing process for drones used in U.S. airspace?
Is the public notified about where and when drones are used, who operates them, what data are collected, how are the data used, how long are they retained, and who has access to that data?
How does the FAA plan to ensure that drone activities under the new law are transparent and individual privacy rights are protected?
How will the FAA determine whether an entity applying to operate a drone will properly address these privacy concerns?
"The potential for invasive surveillance of daily activities with drone technology is high," Markey said. "Standards for informing the public and ensuring safeguards must be put in place now to protect individual privacy. I look forward to the FAA's responses and will monitor this situation as the use of drone technology in our airspace increases."
Barton said that while he knows "the usage of these unmanned aircraft would bring a great benefit to our local and state governments, as well as some businesses," he also has concerns about their misuse. "If used improperly or unethically, drones could endanger privacy, and I want to make sure that risk is taken into consideration," he said.
EFF said domestic drones pose "serious implications for privacy, and the public should have all the information necessary to engage in informed debate over the incorporation of these devices into our daily lives."
The FAA Modernization and Reform Act, which President Obama signed on Feb. 14, calls for the FAA to integrate operation of drones into its National Airspace System by 2015. The agency in March kicked off a rule-making to set up six unmanned aircraft system test ranges by this summer.
The language in the FAA bill and the rule-making both deal with safety issues and control of unmanned aircraft, but not privacy concerns, an issue the agency should address, Reps. Ed Markey, D-Mass., and Joe Barton, R-Texas, cochairmen of the Bipartisan Congressional Privacy Caucus, said in a letter sent on Thursday to Michael Huerta, acting FAA administrator.
Many drones -- such as those the Defense Department and intelligence agencies use to snoop on enemies -- are designed to carry surveillance equipment, including video cameras, infrared thermal imagers, radar, and wireless network detectors, raising questions about how the privacy of individuals will be safeguarded and how the public will be informed about drone activities, whether by law enforcement, commercial enterprises, or private individuals, Markey and Barton said.
"We must ensure that as drones take flight in domestic airspace, they don't take off without privacy protections for those along their flight path," Markey said in a statement.
The Electronic Frontier Foundation disclosed on Thursday that some 60 organizations, including the military, universities, and even police departments and sheriff offices, already have received limited authorization to operate drones. The revelation was based on documents the group received from the FAA in response to a Freedom of Information Act lawsuit filed in January. EFF said it also received a list of more than 50 authorizations from the FAA permitting manufacturers to test-fly drones.
Markey and Barton told Huerta they wanted to know:
What privacy protections and public transparency requirements has the FAA built into its current temporary licensing process for drones used in U.S. airspace?
Is the public notified about where and when drones are used, who operates them, what data are collected, how are the data used, how long are they retained, and who has access to that data?
How does the FAA plan to ensure that drone activities under the new law are transparent and individual privacy rights are protected?
How will the FAA determine whether an entity applying to operate a drone will properly address these privacy concerns?
"The potential for invasive surveillance of daily activities with drone technology is high," Markey said. "Standards for informing the public and ensuring safeguards must be put in place now to protect individual privacy. I look forward to the FAA's responses and will monitor this situation as the use of drone technology in our airspace increases."
Barton said that while he knows "the usage of these unmanned aircraft would bring a great benefit to our local and state governments, as well as some businesses," he also has concerns about their misuse. "If used improperly or unethically, drones could endanger privacy, and I want to make sure that risk is taken into consideration," he said.
EFF said domestic drones pose "serious implications for privacy, and the public should have all the information necessary to engage in informed debate over the incorporation of these devices into our daily lives."
April 21, 2012
Last act of Abramoff lobbying scandal: 5 months in halfway house for ex-aide to Tom DeLay
Tony Rudy was among the first people to plead guilty in the long-running probe of influence peddling tied to Republican super-lobbyist Jack Abramoff. On Friday, the former aide to Rep. Tom DeLay was the last person sentenced in an investigation that focused on Congress, racked up 21 convictions, yet netted only one lawmaker.
Rudy’s cooperation over the past six years helped win convictions of 18 people, but U.S. District Judge Ellen Huvelle still gave Rudy a sentence of five months in a halfway house and three years of probation for his role in conspiring with Abramoff and others to accept a stream of gifts when Rudy was a staffer and to offer gifts to public officials when he became a lobbyist — all in exchange for legislative favors.
Team Abramoff’s brazen behavior included lavish foreign trips for public officials, as well as frequent meals and tickets to sporting events. All the while, Abramoff and his coterie of former congressional aides were grossly overbilling their Indian tribe clients and secretly lobbying against them in order to create more need for lobbying services.
Abramoff spent 3 ½ years in federal prison for his crimes. His crimes have long since been depicted in a documentary movie and a Hollywood release, with actor Kevin Spacey playing Abramoff.
In recent months, Abramoff has been promoting his memoir recounting his time of influence. He says the reforms generated by the scandal that bears his name didn’t go nearly far enough to eliminate the corruption.
Former Rep. Bob Ney, R-Ohio, was the only member of Congress charged in the investigation. He served a year in prison and six months in a halfway house for granting political favors to Abramoff and his lobbying associates in exchange for golf trips, including a pricey one to Scotland, other gifts and campaign donations. Ney briefly hosted a radio program in Ohio and now does occasional commentary for the Talk Radio News Service in Washington.
DeLay, a Texas Republican who rose to House majority leader, was one of several members of Congress who were investigated by the Justice Department but never charged. He was tried and convicted on state charges not related to the Abramoff investigation.
Craig Holman, government affairs lobbyist for the Washington-based Public Citizen watchdog group, said the absence of charges against more members of Congress has bothered him. “They caught a lot of little fish, and they deserved to be caught, but not many bigger ones,” Holman said.
The government acknowledged in a written report that Rudy “provided detailed information about his knowledge and interactions with several public officials and lobbyists who were significant parts of the Abramoff investigation,” although the information did not lead to criminal charges.
Laura Miller, Rudy’s lawyer, said in court Friday that “many public officials one might have thought would be charged weren’t for a variety of reasons.”
The Justice Department did not respond to questions about Rudy’s cooperation or his sentence. But spokeswoman Laura Sweeney said: “The department is proud of the work it did in investigating and holding accountable 20 individuals, including a U.S. congressman, for their roles in the Abramoff matter. As we always do, we followed the facts and the law in bringing to justice these individuals for their crimes.”
The revelations led to reforms in Congress to limit the wining and dining of lawmakers, and eliminate free trips. Abramoff has said the reforms don’t go far enough because they don’t impose limits on campaign contributions from lobbyists to lawmakers.
Holman, who helped draft the legislation, said the changes have made a big difference, but he also agreed with Abramoff on the need to cut off opportunities for lobbyists to collect campaign cash for the lawmakers they seek to influence.
Rudy, 45, has been living in California, where he runs a business that does marketing, among other things, he said in court Friday. He also has spent a lot of time coaching children’s sports teams and doing other volunteer work, he said.
As a congressional aide, Rudy helped secure appropriations for Abramoff clients and developed a strategy to defeat legislation that would have restricted Internet gambling.
The government says that while Rudy worked for DeLay in the late 1990s, Abramoff’s lobbying team paid $50,000 to Rudy’s wife for what prosecutors described as a “low-show job.” Prosecutors allege she was hired only because she was Rudy’s wife and that Rudy continued to accept payments from Abramoff’s associates even though he knew she had stopped working.
Huvelle said Friday that she was particularly struck by the arrangement with Rudy’s wife. “It is fairly brash to funnel $50,000 to your own pocket basically, as a public servant,” Huvelle said.
In 2000, Rudy left the government, joined Team Abramoff and lobbied Congress in violation of a one-year federal ban imposed on former congressional staffers.
As a lobbyist, Rudy helped organize several all-expense-paid trips. An outing to the 2001 Super Bowl in Tampa, Fla., for some House and Senate staff members included a gambling cruise on Abramoff’s SunCruz casinos. Rudy helped organize a lavish 2002 trip to Scotland for congressman Ney and David Safavian, who is serving a year in prison for lying to investigators about his relationship with Abramoff. Safavian was the General Services Administration’s chief of staff and later worked in the White House as the top procurement official in the George W. Bush administration.
While working for DeLay, Rudy was the conduit for tickets to sporting events for numerous congressional staffers to advance Rudy’s political influence and DeLay’s political standing. At the time, DeLay held the No. 3 leadership post for Republicans in the House.
In the late 1990s, Rudy’s many gifts from Abramoff’s lobbying team including use of a private jet to play golf at Pebble Beach in California. Rudy failed to disclose any of the gifts that he received from Abramoff — including trips, golf and frequent meals.
Huvelle also ordered Rudy to pay $100,000 to several Indian tribes that were lobbying clients and a $5,000 fine.
Rudy’s cooperation over the past six years helped win convictions of 18 people, but U.S. District Judge Ellen Huvelle still gave Rudy a sentence of five months in a halfway house and three years of probation for his role in conspiring with Abramoff and others to accept a stream of gifts when Rudy was a staffer and to offer gifts to public officials when he became a lobbyist — all in exchange for legislative favors.
Team Abramoff’s brazen behavior included lavish foreign trips for public officials, as well as frequent meals and tickets to sporting events. All the while, Abramoff and his coterie of former congressional aides were grossly overbilling their Indian tribe clients and secretly lobbying against them in order to create more need for lobbying services.
Abramoff spent 3 ½ years in federal prison for his crimes. His crimes have long since been depicted in a documentary movie and a Hollywood release, with actor Kevin Spacey playing Abramoff.
In recent months, Abramoff has been promoting his memoir recounting his time of influence. He says the reforms generated by the scandal that bears his name didn’t go nearly far enough to eliminate the corruption.
Former Rep. Bob Ney, R-Ohio, was the only member of Congress charged in the investigation. He served a year in prison and six months in a halfway house for granting political favors to Abramoff and his lobbying associates in exchange for golf trips, including a pricey one to Scotland, other gifts and campaign donations. Ney briefly hosted a radio program in Ohio and now does occasional commentary for the Talk Radio News Service in Washington.
DeLay, a Texas Republican who rose to House majority leader, was one of several members of Congress who were investigated by the Justice Department but never charged. He was tried and convicted on state charges not related to the Abramoff investigation.
Craig Holman, government affairs lobbyist for the Washington-based Public Citizen watchdog group, said the absence of charges against more members of Congress has bothered him. “They caught a lot of little fish, and they deserved to be caught, but not many bigger ones,” Holman said.
The government acknowledged in a written report that Rudy “provided detailed information about his knowledge and interactions with several public officials and lobbyists who were significant parts of the Abramoff investigation,” although the information did not lead to criminal charges.
Laura Miller, Rudy’s lawyer, said in court Friday that “many public officials one might have thought would be charged weren’t for a variety of reasons.”
The Justice Department did not respond to questions about Rudy’s cooperation or his sentence. But spokeswoman Laura Sweeney said: “The department is proud of the work it did in investigating and holding accountable 20 individuals, including a U.S. congressman, for their roles in the Abramoff matter. As we always do, we followed the facts and the law in bringing to justice these individuals for their crimes.”
The revelations led to reforms in Congress to limit the wining and dining of lawmakers, and eliminate free trips. Abramoff has said the reforms don’t go far enough because they don’t impose limits on campaign contributions from lobbyists to lawmakers.
Holman, who helped draft the legislation, said the changes have made a big difference, but he also agreed with Abramoff on the need to cut off opportunities for lobbyists to collect campaign cash for the lawmakers they seek to influence.
Rudy, 45, has been living in California, where he runs a business that does marketing, among other things, he said in court Friday. He also has spent a lot of time coaching children’s sports teams and doing other volunteer work, he said.
As a congressional aide, Rudy helped secure appropriations for Abramoff clients and developed a strategy to defeat legislation that would have restricted Internet gambling.
The government says that while Rudy worked for DeLay in the late 1990s, Abramoff’s lobbying team paid $50,000 to Rudy’s wife for what prosecutors described as a “low-show job.” Prosecutors allege she was hired only because she was Rudy’s wife and that Rudy continued to accept payments from Abramoff’s associates even though he knew she had stopped working.
Huvelle said Friday that she was particularly struck by the arrangement with Rudy’s wife. “It is fairly brash to funnel $50,000 to your own pocket basically, as a public servant,” Huvelle said.
In 2000, Rudy left the government, joined Team Abramoff and lobbied Congress in violation of a one-year federal ban imposed on former congressional staffers.
As a lobbyist, Rudy helped organize several all-expense-paid trips. An outing to the 2001 Super Bowl in Tampa, Fla., for some House and Senate staff members included a gambling cruise on Abramoff’s SunCruz casinos. Rudy helped organize a lavish 2002 trip to Scotland for congressman Ney and David Safavian, who is serving a year in prison for lying to investigators about his relationship with Abramoff. Safavian was the General Services Administration’s chief of staff and later worked in the White House as the top procurement official in the George W. Bush administration.
While working for DeLay, Rudy was the conduit for tickets to sporting events for numerous congressional staffers to advance Rudy’s political influence and DeLay’s political standing. At the time, DeLay held the No. 3 leadership post for Republicans in the House.
In the late 1990s, Rudy’s many gifts from Abramoff’s lobbying team including use of a private jet to play golf at Pebble Beach in California. Rudy failed to disclose any of the gifts that he received from Abramoff — including trips, golf and frequent meals.
Huvelle also ordered Rudy to pay $100,000 to several Indian tribes that were lobbying clients and a $5,000 fine.
April 20, 2012
White House defends Secret Service director
The White House expressed renewed confidence Thursday in the director of the Secret Service in the midst of a sordid prostitution scandal that has threatened to become a serious political distraction in an election year. A key lawmaker who oversees the Secret Service predicted more firings there soon.
President Barack Obama's chief spokesman, Jay Carney, noted that some Secret Service employees involved have already lost their jobs, just days into the government's formal investigation of the incident last weekend in Colombia, where Obama was to attend a summit meeting. Carney also said the president's security in Cartagena was never compromised, and he asked for patience as official investigations continue.
"Perhaps it would be in the interests of a complete and thorough and fair investigation not to make determinations about the conclusions of an investigation before they've even been reached," Carney said. "That's the president's position."
RECOMMENDED: Secret Service scandal sheds light on sex tourism in Latin America
The scandal arose ahead of the Summit of the Americas when at least some of 11 Secret Service employees brought prostitutes back to their Cartagena hotel. The agency has moved quickly to try to quell the embarrassing episode, forcing out three employees so far, including two supervisors. The supervisors were in the agency's uniformed division; one is a sergeant, according to a person familiar with Secret Service operations who refused to be identified because he was not authorized to discuss the matter.
Lawrence Berger, general counsel for the Federal Law Enforcement Officials Association, confirmed Thursday he is representing the supervisors, Greg Stokes and David Chaney, but said he could not discuss details of the investigation.
"I cannot comment because I have an obligation of confidentiality with my clients and I have to maintain that," Berger said.
A third employee has resigned. The employees under investigation include members of the agency's "jump teams," which are sent to sites to set up security in advance of the president's arrival. Others are on counter-assault and counter-sniper teams. The majority of the group is believed to be based in the Washington area.
Eight men remain suspended and have had their top-secret security clearances lifted. The scandal also involves about 10 military personnel and as many as 20 Colombian women.
Rep. Peter King, a New York Republican and chair of the House Homeland Security Committee, said Thursday that more firings could be imminent.
"I wouldn't be surprised if you saw more dismissals and more being forced out sooner rather than later," said King, who is being updated on the investigation by Secret Service Director Mark Sullivan. "You may see a few more today or tomorrow."
Sen. Chuck Grassley, the senior Republican on the Senate Judiciary Committee, said he thought more people would be fired within "just a few days."
"'I expect there will be more, but that's what the investigation is all about."
Three U.S. military officials have said the military personnel include five Army Green Berets, two Navy Explosive Ordinance Disposal technicians, two Marine dog handlers and an Air Force airman. The officials spoke on condition of anonymity because the investigation is still under way.
An Air Force colonel and a military lawyer have gone to Colombia as part of the military investigation. The Secret Service probe has included interviews with the employees and hotel staff.
King said investigators in Colombia have not been able to interview the women.
A 24-year-old prostitute told The New York Times this week that the scandal became public after she fought over payment with one of the Secret Service employees, and it spilled out into the hallway of the Hotel Caribe on April 12.
Jose Pena, a Cartagena taxi driver, told The Associated Press that he picked up the woman after the dispute. She said she left the hotel, where other members of the security detail and the White House press corps were staying, after she was paid $225.
In Cartagena this week, sex workers and hotel staff were reluctant to speak about the incident, which has become an election year embarrassment in the U.S.
Prostitution is legal in Colombia, and Cartagena thrives on the sex tourism industry, Mayor Campo Elias readily acknowledged, with hundreds of prostitutes available on any given night throughout the colonial walled city.
In Washington, House Democratic leader Nancy Pelosi, who said she had not been briefed, called the incident "disgusting."
"There has to be an investigation to see how this could have happened, and those responsible should have to pay a price," Pelosi said. "But as with all these things, there are many people in the Secret Service who do their job responsibly, and we can't paint everyone with the same brush. But nonetheless, those people who were responsible have brought disgrace and it's disgusting."
Rep. Randy Forbes, a Virginia Republican, called for leadership changes at the Secret Service.
"I mentioned before, and I can't get a better analogy than baseball. You get three strikes," Forbes said. "They went over their budgets, they couldn't control their budget. They couldn't control who got in the White House. And now we're talking about just absolutely a fundamental principle of security planning — you don't let the prostitutes in."
Senate Majority Leader Harry Reid of Nevada suggested the problem lies with the judgment of those involved.
"Understand this, there is not a committee hearing that's going to take the place or stop people from being stupid. There is not a bill we can pass to cause people to have common sense," Reid said. "Think about this. People that are here to protect the president, they go to Colombia and have a fight with a prostitute over how much she should be paid. That's either very stupid or a total lack of common sense."
RECOMMENDED: Secret Service scandal sheds light on sex tourism in Latin America
Another Republican lawmaker said Thursday that the Secret Service incident raised questions about whether Obama was capably leading the government.
"I don't sense that this president has shown that kind of managerial leadership," said Sen. Jeff Sessions of Alabama.
During his daily briefing, Carney shot back: "That sounds very much like a lawmaker attempting to politicize something that is not at all political."
President Barack Obama's chief spokesman, Jay Carney, noted that some Secret Service employees involved have already lost their jobs, just days into the government's formal investigation of the incident last weekend in Colombia, where Obama was to attend a summit meeting. Carney also said the president's security in Cartagena was never compromised, and he asked for patience as official investigations continue.
"Perhaps it would be in the interests of a complete and thorough and fair investigation not to make determinations about the conclusions of an investigation before they've even been reached," Carney said. "That's the president's position."
RECOMMENDED: Secret Service scandal sheds light on sex tourism in Latin America
The scandal arose ahead of the Summit of the Americas when at least some of 11 Secret Service employees brought prostitutes back to their Cartagena hotel. The agency has moved quickly to try to quell the embarrassing episode, forcing out three employees so far, including two supervisors. The supervisors were in the agency's uniformed division; one is a sergeant, according to a person familiar with Secret Service operations who refused to be identified because he was not authorized to discuss the matter.
Lawrence Berger, general counsel for the Federal Law Enforcement Officials Association, confirmed Thursday he is representing the supervisors, Greg Stokes and David Chaney, but said he could not discuss details of the investigation.
"I cannot comment because I have an obligation of confidentiality with my clients and I have to maintain that," Berger said.
A third employee has resigned. The employees under investigation include members of the agency's "jump teams," which are sent to sites to set up security in advance of the president's arrival. Others are on counter-assault and counter-sniper teams. The majority of the group is believed to be based in the Washington area.
Eight men remain suspended and have had their top-secret security clearances lifted. The scandal also involves about 10 military personnel and as many as 20 Colombian women.
Rep. Peter King, a New York Republican and chair of the House Homeland Security Committee, said Thursday that more firings could be imminent.
"I wouldn't be surprised if you saw more dismissals and more being forced out sooner rather than later," said King, who is being updated on the investigation by Secret Service Director Mark Sullivan. "You may see a few more today or tomorrow."
Sen. Chuck Grassley, the senior Republican on the Senate Judiciary Committee, said he thought more people would be fired within "just a few days."
"'I expect there will be more, but that's what the investigation is all about."
Three U.S. military officials have said the military personnel include five Army Green Berets, two Navy Explosive Ordinance Disposal technicians, two Marine dog handlers and an Air Force airman. The officials spoke on condition of anonymity because the investigation is still under way.
An Air Force colonel and a military lawyer have gone to Colombia as part of the military investigation. The Secret Service probe has included interviews with the employees and hotel staff.
King said investigators in Colombia have not been able to interview the women.
A 24-year-old prostitute told The New York Times this week that the scandal became public after she fought over payment with one of the Secret Service employees, and it spilled out into the hallway of the Hotel Caribe on April 12.
Jose Pena, a Cartagena taxi driver, told The Associated Press that he picked up the woman after the dispute. She said she left the hotel, where other members of the security detail and the White House press corps were staying, after she was paid $225.
In Cartagena this week, sex workers and hotel staff were reluctant to speak about the incident, which has become an election year embarrassment in the U.S.
Prostitution is legal in Colombia, and Cartagena thrives on the sex tourism industry, Mayor Campo Elias readily acknowledged, with hundreds of prostitutes available on any given night throughout the colonial walled city.
In Washington, House Democratic leader Nancy Pelosi, who said she had not been briefed, called the incident "disgusting."
"There has to be an investigation to see how this could have happened, and those responsible should have to pay a price," Pelosi said. "But as with all these things, there are many people in the Secret Service who do their job responsibly, and we can't paint everyone with the same brush. But nonetheless, those people who were responsible have brought disgrace and it's disgusting."
Rep. Randy Forbes, a Virginia Republican, called for leadership changes at the Secret Service.
"I mentioned before, and I can't get a better analogy than baseball. You get three strikes," Forbes said. "They went over their budgets, they couldn't control their budget. They couldn't control who got in the White House. And now we're talking about just absolutely a fundamental principle of security planning — you don't let the prostitutes in."
Senate Majority Leader Harry Reid of Nevada suggested the problem lies with the judgment of those involved.
"Understand this, there is not a committee hearing that's going to take the place or stop people from being stupid. There is not a bill we can pass to cause people to have common sense," Reid said. "Think about this. People that are here to protect the president, they go to Colombia and have a fight with a prostitute over how much she should be paid. That's either very stupid or a total lack of common sense."
RECOMMENDED: Secret Service scandal sheds light on sex tourism in Latin America
Another Republican lawmaker said Thursday that the Secret Service incident raised questions about whether Obama was capably leading the government.
"I don't sense that this president has shown that kind of managerial leadership," said Sen. Jeff Sessions of Alabama.
During his daily briefing, Carney shot back: "That sounds very much like a lawmaker attempting to politicize something that is not at all political."
April 19, 2012
Yet Another Obama Big Lie: Mortgage Fraud Investigation Not Even Staffed
The Administration has managed the impressive task of operating in a more cynical fashion than even its worst critics predicted.
Remember the widely ballyhooed mortgage fraud investigation, announced at the State of the Union address? This was the shiny toy that succeeded in getting New York attorney general Eric Schneiderman to abandon his opposition to the mortgage settlement. Schneiderman had been the defacto leader of the dissenters by virtue both of being the first to stand against the effort and by having the Martin Act. Suborning Schneiderman put the objecting state attorneys general in disarray and enabled the Administration to push this toxic deal over the finish line.
It was pretty obvious Schneiderman had been had. Obama tellingly did not mention his name in the SOTU. Schneiderman was only a co-chairman of the effort and would still stay on in his day job as state AG, begging the question of how much time he would be able to spend on the task force. His co-chairman is Lanny Breuer from the missing-in-action Department of Justice. And most important, no one on the committee was head of an agency, again demonstrating that this wasn’t a top Administration priority.
The Administration started undercutting Schneiderman almost immediately. He announced that the task force would have “hundreds” of investigators. Breuer said it would have only 55, a simply pathetic number (the far less costly savings & loan crisis had over 1000 FBI agents assigned to it). And they taunted him publicly by exposing that he hadn’t gotten a tougher release as he has claimed to justify his sabotage.
We had assumed that the Administration would engage in a Potemkin version of an investigation, bringing a few cases close to the election to generate deceptive and useful “tough on crime” headlines. But having succeeded in protecting the banks, it looks like they can’t even be bothered to go through the motions. This update comes from the New York Daily News (hat tip Matt Stoller):
On March 9 — 45 days after the speech and 30 days after the announcement — we met with Schneiderman in New York City and asked him for an update…As of that date, he had no office, no phones, no staff and no executive director. None of the 55 staff members promised by Holder had materialized. On April 2, we bumped into Schneiderman on a train leaving Washington for New York and learned that the situation was the same.
Tuesday, calls to the Justice Department’s switchboard requesting to be connected with the working group produced the answer, “I really don’t know where to send you.” After being transferred to the attorney general’s office and asking for a phone number for the working group, the answer was, “I’m not aware of one.”…
In fact, the new Residential Mortgage-Backed Securities Working Group was the sixth such entity formed since the start of the financial crisis in 2009. The grand total of staff working for all of the previous five groups was one, according to a surprised Schneiderman. In Washington, where staffs grow like cherry blossoms, this is a remarkable occurrence.
We are led to conclude that Donovan was right. The settlement and working group — taken together — were a coup: a public relations coup for the White House and the banks…
But for 12 million American homeowners, collectively $700 billion under water, this was just another in a long series of sham transactions.
However, we disagree with the charitable conclusion made by the Daily News:
Schneiderman, who has acted boldly and honorably, should distance himself from this cynical arrangement. He should resign and go back to working effectively with fellow attorneys general in Delaware, Massachusetts and Nevada.
As we indicated, Schneiderman’s actions were neither bold nor honorable. Not surprisingly, his effort at a star turn in the national media has not led to favorable poll results for him in New York. And the Daily News offers a fantasy as an alternative. There is no “going back.” The attorneys general gave up their best legal theories, and with it, their ability to protect the integrity of title, for grossly inadequate compensation and a photo opportunity.
It would be better if we were proven wrong, but Schneiderman entered into an obvious Faustian pact. He’s not getting his soul or his reputation back.
Remember the widely ballyhooed mortgage fraud investigation, announced at the State of the Union address? This was the shiny toy that succeeded in getting New York attorney general Eric Schneiderman to abandon his opposition to the mortgage settlement. Schneiderman had been the defacto leader of the dissenters by virtue both of being the first to stand against the effort and by having the Martin Act. Suborning Schneiderman put the objecting state attorneys general in disarray and enabled the Administration to push this toxic deal over the finish line.
It was pretty obvious Schneiderman had been had. Obama tellingly did not mention his name in the SOTU. Schneiderman was only a co-chairman of the effort and would still stay on in his day job as state AG, begging the question of how much time he would be able to spend on the task force. His co-chairman is Lanny Breuer from the missing-in-action Department of Justice. And most important, no one on the committee was head of an agency, again demonstrating that this wasn’t a top Administration priority.
The Administration started undercutting Schneiderman almost immediately. He announced that the task force would have “hundreds” of investigators. Breuer said it would have only 55, a simply pathetic number (the far less costly savings & loan crisis had over 1000 FBI agents assigned to it). And they taunted him publicly by exposing that he hadn’t gotten a tougher release as he has claimed to justify his sabotage.
We had assumed that the Administration would engage in a Potemkin version of an investigation, bringing a few cases close to the election to generate deceptive and useful “tough on crime” headlines. But having succeeded in protecting the banks, it looks like they can’t even be bothered to go through the motions. This update comes from the New York Daily News (hat tip Matt Stoller):
On March 9 — 45 days after the speech and 30 days after the announcement — we met with Schneiderman in New York City and asked him for an update…As of that date, he had no office, no phones, no staff and no executive director. None of the 55 staff members promised by Holder had materialized. On April 2, we bumped into Schneiderman on a train leaving Washington for New York and learned that the situation was the same.
Tuesday, calls to the Justice Department’s switchboard requesting to be connected with the working group produced the answer, “I really don’t know where to send you.” After being transferred to the attorney general’s office and asking for a phone number for the working group, the answer was, “I’m not aware of one.”…
In fact, the new Residential Mortgage-Backed Securities Working Group was the sixth such entity formed since the start of the financial crisis in 2009. The grand total of staff working for all of the previous five groups was one, according to a surprised Schneiderman. In Washington, where staffs grow like cherry blossoms, this is a remarkable occurrence.
We are led to conclude that Donovan was right. The settlement and working group — taken together — were a coup: a public relations coup for the White House and the banks…
But for 12 million American homeowners, collectively $700 billion under water, this was just another in a long series of sham transactions.
However, we disagree with the charitable conclusion made by the Daily News:
Schneiderman, who has acted boldly and honorably, should distance himself from this cynical arrangement. He should resign and go back to working effectively with fellow attorneys general in Delaware, Massachusetts and Nevada.
As we indicated, Schneiderman’s actions were neither bold nor honorable. Not surprisingly, his effort at a star turn in the national media has not led to favorable poll results for him in New York. And the Daily News offers a fantasy as an alternative. There is no “going back.” The attorneys general gave up their best legal theories, and with it, their ability to protect the integrity of title, for grossly inadequate compensation and a photo opportunity.
It would be better if we were proven wrong, but Schneiderman entered into an obvious Faustian pact. He’s not getting his soul or his reputation back.
April 18, 2012
Media Matters’ targets revealed: business, wealth, Christianity
When David Brock applied for tax-exempt status for Media Matters for America, he told the IRS exactly who his group would be fighting against: businesses, wealthy Americans and conservative Christians.
“Media Matters for America (MMA) believes that news reporting and analysis by the American media, with its eye on profit margin and preservation of the status quo, has become biased,” read the group’s application, obtained by The Daily Caller, “It is common for news and commentary by the press to present viewpoints that tend to overly promote corporate interests, the rights of the wealthy, and a conservative, Christian-influenced ideology.”
Treasury Department documents — 88 pages that The Daily Caller obtained through a public records request to the IRS — reveal for the first time how the organization described its mission while applying for coveted 501(c)(3) non-profit status.
Media Matters has made no secret of its adherence to progressive principles, but flagging Christianity as having undue influence in media is the latest revelation about the group’s treatment of religion. (RELATED: Complete coverage of Media Matters for America)
The Democratic-aligned ARCA Foundation specifically supplied Media Matters with a $50,000 grant in 2006 “to support a Religious Broadcasting Project to expand the monitoring and fact checking of religious broadcasts,” TheDC reported in February.
A present-day search of the Media Matters website for the terms “religion” and “Christianity” yields a steady stream of anti-Christian criticism and posts aimed at dismissing Christians’ religious concern over President Obama’s contraception mandate.
Another search revealed a large number of articles critical of perceived “Islamophobia.”
“Media Matters for America (MMA) believes that news reporting and analysis by the American media, with its eye on profit margin and preservation of the status quo, has become biased,” read the group’s application, obtained by The Daily Caller, “It is common for news and commentary by the press to present viewpoints that tend to overly promote corporate interests, the rights of the wealthy, and a conservative, Christian-influenced ideology.”
Treasury Department documents — 88 pages that The Daily Caller obtained through a public records request to the IRS — reveal for the first time how the organization described its mission while applying for coveted 501(c)(3) non-profit status.
Media Matters has made no secret of its adherence to progressive principles, but flagging Christianity as having undue influence in media is the latest revelation about the group’s treatment of religion. (RELATED: Complete coverage of Media Matters for America)
The Democratic-aligned ARCA Foundation specifically supplied Media Matters with a $50,000 grant in 2006 “to support a Religious Broadcasting Project to expand the monitoring and fact checking of religious broadcasts,” TheDC reported in February.
A present-day search of the Media Matters website for the terms “religion” and “Christianity” yields a steady stream of anti-Christian criticism and posts aimed at dismissing Christians’ religious concern over President Obama’s contraception mandate.
Another search revealed a large number of articles critical of perceived “Islamophobia.”
April 17, 2012
FDA Protects Drug Companies Again?
Prescribing labels for Merck & Co's drugs for baldness and enlarged prostate will add reports of sexual side effects that continued after use of the medicines was stopped, U.S. health regulators said. Labels will be revised for Proscar, which treats symptoms of enlarged prostate, and hair-loss treatment Propecia, the Food and Drug Administration said. The active ingredient in both drugs is finasteride. The Propecia label will now include notification of problems with libido, ejaculation and orgasms that continued after use of the drug was ended. Proscar's label will include notification of decreased libido. – Reuters
Dominant Social Theme: So long as the FDA is on the case, we're fine with it.
Free-Market Analysis: We have just written several articles on regulation and suddenly we see our points in action. In the excerpt (above) we observe quite clearly what we call "regulatory capture."
The FDA supervises foods and drugs throughout the US but we cannot help but think the REAL reason for the FDA is to protect drug companies.
Drug companies and the power elite we write about often are closely aligned, in our view. When one examines the ownership of drug companies, familiar names are found at the top, the same individuals that seem to control central banking and even most if not all of mainstream media.
These dynastic families and their enablers and associates want to run the world it seems. Controlling medicine and what goes into people's bodies is an important part of building a global governance that has power over people's minds and lives.
Drug companies are the foundation of the Western medical model that is gruesomely efficient at creating a certain kind of society and medical consumer. Individuals are taught not to question their drug intake. Experts are trotted out to explain why medicine as currently constituted is "good" for you.
Likely it is not. There are other models, ancient ones such as acupuncture and herbal remedies. There is naturopathy that rejects the modern medical model entirely and claims that sicknesses may be in part symptoms of the body's attempts to get well.
As we have long predicted, medicine, like so much other "accepted wisdom" is being continually debunked during the growth of what we call the Internet Reformation. Much that people believed in is being questioned these days.
This also happened after the invention of the Gutenberg Press, from what we can tell. Then, much that society had been organized around began to be examined more critically, including the Catholic Church.
Recently, we discovered that vaccines were never double-blind tested for reasons having to do with "ethics."
But given all we've learned about the Way the World Really Works, we wouldn't be surprised if the real reason that vaccines were never scientifically tested has to do with the many side effects that are now becoming well known thanks to the Internet.
There is generally increased skepticism when it comes to so many of the elite's dominant social themes, whether they be global warming, the war on terror, or the efficacy of modern Western medicine. Here's what Mike Adams, the "health ranger," had to say about the FDA's announcement regarding Merck:
Hey, men! Looking for a way to ruin your sex life and become infertile? Try Propecia or Proscar, two drugs from the vaccine giant Merck, whose top vaccine scientist Dr. Maurice Hilleman already admitted that Merck's vaccines contained "stealth viruses" that cause cancer.
Now, the FDA is finally – after years of delays and denials – calling for new warnings on the labels of male baldness drugs made by Merck. According to the FDA, Propecia and Proscar are now linked to:
• Ejaculation disorders (oops!)
• Libido disorders (not tonight, honey)
• Orgasm disorders (still nothing?)
• Erectile dysfunction (life is hard, but you're not)
• Male infertility (you're firing blanks, dude...)
And the best part about these male baldness drugs? These effects continue even after you stop using the drugs! ... So let's see: A guy starts to go bald and thinks his male virility is slowly slipping away, but at least he can still get erections without pills, he thinks to himself. So he reaches for Propecia or Proscar to solve his male baldness problem. But a month later, he might have another tuft of hair on his head, but his manhood has gone soft. And five months down the road, he's got so much hair that "chicks are digging me!" but in bed he's softer than a baseball bat made of Jell-O.
Adams also makes the point that in order to have an erection, a man taking baldness drugs might have to take ANOTHER drug like Viagra in order to have sex. This benefits drug companies but not the rest of us.
While the labels on the two baldness drugs will change, the larger issues remain the same. To an ordinary individual it would seem that the FDA's real business is protecting drug manufacturers not consumers.
DB contributor Ron Holland pointed this out in an article he wrote a while back entitled, "You'd Have To Be Crazy To Start a Global Business in the USA – As a Public Company." In the article, he mentioned that he has taken on the position of CEO of a start-up hair company. He wrote the following:
Actually, the United States will lose all the way around with this venture, at least for now. No American will be able to access the treatment in the US before we receive FDA approval, which will probably take years unless they travel outside the country. This delayed business in America will result in lost tax revenue for a federal government that is desperate for revenue.
Second, many hair-loss suffers will wish to seek immediate treatment rather than waiting on regulatory approval in their home countries. Fortunately, some countries, including popular international travel destinations, have positioned themselves as centers for innovation by avoiding paralyzing regulations.
The company that Ron Holland joined is called Biologix Hair Inc. (write to Mr. Holland there) and produces a mostly all-natural injectable solution that utilizes minerals, nutrients and vitamins to re-generate hair growth. It's treated thousands privately over the years with great results – roughly 9 of every 10 people treated re-grow their natural hair.
No reduction of the blood flow to the pelvis. No impotence. No need for Viagra.
The company has announced a treatment that revives dormant hair follicles that have been encapsulated in the scalp and effectively "frozen." The treatments developed by Biologix affiliated researchers unlock these hair cells and allow them to grow again.
Conclusion: A company like Biologix – based on nutrition and vitamin therapy – probably wouldn't have had much of a chance to be noticed pre-Internet. But with the constant exposures of the West's drug-oriented medical model and its many problems, the West's 20th century medical paradigm is beginning to crumble, or at least to be exposed. May the 21st century be freer and healthier than the 20th.
Dominant Social Theme: So long as the FDA is on the case, we're fine with it.
Free-Market Analysis: We have just written several articles on regulation and suddenly we see our points in action. In the excerpt (above) we observe quite clearly what we call "regulatory capture."
The FDA supervises foods and drugs throughout the US but we cannot help but think the REAL reason for the FDA is to protect drug companies.
Drug companies and the power elite we write about often are closely aligned, in our view. When one examines the ownership of drug companies, familiar names are found at the top, the same individuals that seem to control central banking and even most if not all of mainstream media.
These dynastic families and their enablers and associates want to run the world it seems. Controlling medicine and what goes into people's bodies is an important part of building a global governance that has power over people's minds and lives.
Drug companies are the foundation of the Western medical model that is gruesomely efficient at creating a certain kind of society and medical consumer. Individuals are taught not to question their drug intake. Experts are trotted out to explain why medicine as currently constituted is "good" for you.
Likely it is not. There are other models, ancient ones such as acupuncture and herbal remedies. There is naturopathy that rejects the modern medical model entirely and claims that sicknesses may be in part symptoms of the body's attempts to get well.
As we have long predicted, medicine, like so much other "accepted wisdom" is being continually debunked during the growth of what we call the Internet Reformation. Much that people believed in is being questioned these days.
This also happened after the invention of the Gutenberg Press, from what we can tell. Then, much that society had been organized around began to be examined more critically, including the Catholic Church.
Recently, we discovered that vaccines were never double-blind tested for reasons having to do with "ethics."
But given all we've learned about the Way the World Really Works, we wouldn't be surprised if the real reason that vaccines were never scientifically tested has to do with the many side effects that are now becoming well known thanks to the Internet.
There is generally increased skepticism when it comes to so many of the elite's dominant social themes, whether they be global warming, the war on terror, or the efficacy of modern Western medicine. Here's what Mike Adams, the "health ranger," had to say about the FDA's announcement regarding Merck:
Hey, men! Looking for a way to ruin your sex life and become infertile? Try Propecia or Proscar, two drugs from the vaccine giant Merck, whose top vaccine scientist Dr. Maurice Hilleman already admitted that Merck's vaccines contained "stealth viruses" that cause cancer.
Now, the FDA is finally – after years of delays and denials – calling for new warnings on the labels of male baldness drugs made by Merck. According to the FDA, Propecia and Proscar are now linked to:
• Ejaculation disorders (oops!)
• Libido disorders (not tonight, honey)
• Orgasm disorders (still nothing?)
• Erectile dysfunction (life is hard, but you're not)
• Male infertility (you're firing blanks, dude...)
And the best part about these male baldness drugs? These effects continue even after you stop using the drugs! ... So let's see: A guy starts to go bald and thinks his male virility is slowly slipping away, but at least he can still get erections without pills, he thinks to himself. So he reaches for Propecia or Proscar to solve his male baldness problem. But a month later, he might have another tuft of hair on his head, but his manhood has gone soft. And five months down the road, he's got so much hair that "chicks are digging me!" but in bed he's softer than a baseball bat made of Jell-O.
Adams also makes the point that in order to have an erection, a man taking baldness drugs might have to take ANOTHER drug like Viagra in order to have sex. This benefits drug companies but not the rest of us.
While the labels on the two baldness drugs will change, the larger issues remain the same. To an ordinary individual it would seem that the FDA's real business is protecting drug manufacturers not consumers.
DB contributor Ron Holland pointed this out in an article he wrote a while back entitled, "You'd Have To Be Crazy To Start a Global Business in the USA – As a Public Company." In the article, he mentioned that he has taken on the position of CEO of a start-up hair company. He wrote the following:
Actually, the United States will lose all the way around with this venture, at least for now. No American will be able to access the treatment in the US before we receive FDA approval, which will probably take years unless they travel outside the country. This delayed business in America will result in lost tax revenue for a federal government that is desperate for revenue.
Second, many hair-loss suffers will wish to seek immediate treatment rather than waiting on regulatory approval in their home countries. Fortunately, some countries, including popular international travel destinations, have positioned themselves as centers for innovation by avoiding paralyzing regulations.
The company that Ron Holland joined is called Biologix Hair Inc. (write to Mr. Holland there) and produces a mostly all-natural injectable solution that utilizes minerals, nutrients and vitamins to re-generate hair growth. It's treated thousands privately over the years with great results – roughly 9 of every 10 people treated re-grow their natural hair.
No reduction of the blood flow to the pelvis. No impotence. No need for Viagra.
The company has announced a treatment that revives dormant hair follicles that have been encapsulated in the scalp and effectively "frozen." The treatments developed by Biologix affiliated researchers unlock these hair cells and allow them to grow again.
Conclusion: A company like Biologix – based on nutrition and vitamin therapy – probably wouldn't have had much of a chance to be noticed pre-Internet. But with the constant exposures of the West's drug-oriented medical model and its many problems, the West's 20th century medical paradigm is beginning to crumble, or at least to be exposed. May the 21st century be freer and healthier than the 20th.
April 16, 2012
GSA official to assert privilege to remain silent
A General Services Administration executive will assert his right to remain silent at a congressional hearing next week into the agency's spending practices, the official's lawyer said Friday.
It was learned that the official, Jeffrey Neely, also could face a possible criminal investigation.
Neely was placed on leave by the GSA's new leadership. He was commissioner for the Public Buildings Service in the Pacific Rim region, covering Arizona, California, Hawaii, Nevada and several other countries and territories.
As the executive largely responsible for an October, 2010 conference at a Las Vegas resort, Neely was subpoenaed to testify Monday before the House Oversight and Government Reform Committee.
The panel is one of four congressional committees investigating GSA spending -- inquiries that began earlier this month when the agency's inspector general reported an $823,000 spending spree at the Las Vegas event.
A congressional committee official, who was not authorized to be quoted by name on the subject, confirmed Friday that the inspector general referred Neely to the Justice Department.
Whether the referral was directly connected to the conference is uncertain.
Neely's attorney for employment matters,, Robert DePriest, did not immediately comment.
His lawyer for the committee proceedings, Preston Burton, said Friday night that Neely will comply with the subpoena and appear Monday. Burton said he doesn't know whether a referral has been made.
Oversight committee chairman Darrell Issa, R-Calif., wrote Burton on Friday that the subpoena was issued after "you advised my staff that Mr. Neely would not appear voluntarily."
Issa said in the letter that Burton advised the committee "that if Mr. Neely is compelled to appear at the hearing, he will `assert his constitutional privilege to remain silent.'"
GSA Inspector General Brian Miller has told several congressional committees investigating the agency that there have been criminal referrals.
An internal government memo released Friday shows officials of the GSA were aware of a spending problem months before the scandal burst into public view this month.
The GSA's deputy administrator, Susan Brita, emailed agency officials last July that the inspector general found no substantive agenda for the conference. She said that expenses for a clown suit, bicycles used for a team-building exercise, tuxedos and a mind-reader didn't lend themselves to the claim of a substantive conference.
Brita also questioned why a regional administrator in charge of the conference received only a disciplinary letter that "is not even a slap on the wrist."
A major concern in the memo was how The Washington Post, with thousands of readers who are federal employees, would report the story.
A GSA spokesman declined to comment, saying the agency preferred to let the email speak for itself.
The email was sent to Robert Peck, then the head of the GSA's Public Building Service, with copies to his deputy, David Foley, and another top agency official, Stephen Leeds.
Peck and Leeds were fired after the inspector general issued a stinging report this month on the cost of the conference to taxpayers.
GSA administrator Martha Johnson resigned in the wake of the report. Eight GSA employees have been placed on administrative leave, including Foley. He is seen in a conference video giving an award to an employee who produced a rap video bragging about the conference spending.
The email by Brita, who remains at GSA, was made public by the House Oversight and Government Reform Committee, which will conduct the first of four hearings on GSA's spending practices next week. The agency is in charge of federal buildings and supplies and part of its mission is to save taxpayers money.
"The Obama administration has not been upfront with the American people about how long they've known about lavish spending abuses at GSA," said Issa, the committee chairman.
"It's clear that they were fretting about the political consequences and preparing for media scrutiny on abuses many months ago but didn't seem to take real actions until the release of the inspector general's report couldn't be delayed any longer," Issa said.
Brita wrote that a letter to Neely "should be crafted with a WAPO (Washington Post) mind frame." She said she had no doubt the Post would connect the lavish conference spending to a period of high unemployment and a down economy. She wondered what the reaction to the story would be from the public and Congress and questioned how GSA's political leadership would respond.
"Jeff is a seasoned SES (senior executive service employee) who is expected to display the highest standards of common sense, and prudent financial management," she wrote Peck.
"He did neither. Sorry, but your letter is not even a slap on the wrist," she wrote.
It was learned that the official, Jeffrey Neely, also could face a possible criminal investigation.
Neely was placed on leave by the GSA's new leadership. He was commissioner for the Public Buildings Service in the Pacific Rim region, covering Arizona, California, Hawaii, Nevada and several other countries and territories.
As the executive largely responsible for an October, 2010 conference at a Las Vegas resort, Neely was subpoenaed to testify Monday before the House Oversight and Government Reform Committee.
The panel is one of four congressional committees investigating GSA spending -- inquiries that began earlier this month when the agency's inspector general reported an $823,000 spending spree at the Las Vegas event.
A congressional committee official, who was not authorized to be quoted by name on the subject, confirmed Friday that the inspector general referred Neely to the Justice Department.
Whether the referral was directly connected to the conference is uncertain.
Neely's attorney for employment matters,, Robert DePriest, did not immediately comment.
His lawyer for the committee proceedings, Preston Burton, said Friday night that Neely will comply with the subpoena and appear Monday. Burton said he doesn't know whether a referral has been made.
Oversight committee chairman Darrell Issa, R-Calif., wrote Burton on Friday that the subpoena was issued after "you advised my staff that Mr. Neely would not appear voluntarily."
Issa said in the letter that Burton advised the committee "that if Mr. Neely is compelled to appear at the hearing, he will `assert his constitutional privilege to remain silent.'"
GSA Inspector General Brian Miller has told several congressional committees investigating the agency that there have been criminal referrals.
An internal government memo released Friday shows officials of the GSA were aware of a spending problem months before the scandal burst into public view this month.
The GSA's deputy administrator, Susan Brita, emailed agency officials last July that the inspector general found no substantive agenda for the conference. She said that expenses for a clown suit, bicycles used for a team-building exercise, tuxedos and a mind-reader didn't lend themselves to the claim of a substantive conference.
Brita also questioned why a regional administrator in charge of the conference received only a disciplinary letter that "is not even a slap on the wrist."
A major concern in the memo was how The Washington Post, with thousands of readers who are federal employees, would report the story.
A GSA spokesman declined to comment, saying the agency preferred to let the email speak for itself.
The email was sent to Robert Peck, then the head of the GSA's Public Building Service, with copies to his deputy, David Foley, and another top agency official, Stephen Leeds.
Peck and Leeds were fired after the inspector general issued a stinging report this month on the cost of the conference to taxpayers.
GSA administrator Martha Johnson resigned in the wake of the report. Eight GSA employees have been placed on administrative leave, including Foley. He is seen in a conference video giving an award to an employee who produced a rap video bragging about the conference spending.
The email by Brita, who remains at GSA, was made public by the House Oversight and Government Reform Committee, which will conduct the first of four hearings on GSA's spending practices next week. The agency is in charge of federal buildings and supplies and part of its mission is to save taxpayers money.
"The Obama administration has not been upfront with the American people about how long they've known about lavish spending abuses at GSA," said Issa, the committee chairman.
"It's clear that they were fretting about the political consequences and preparing for media scrutiny on abuses many months ago but didn't seem to take real actions until the release of the inspector general's report couldn't be delayed any longer," Issa said.
Brita wrote that a letter to Neely "should be crafted with a WAPO (Washington Post) mind frame." She said she had no doubt the Post would connect the lavish conference spending to a period of high unemployment and a down economy. She wondered what the reaction to the story would be from the public and Congress and questioned how GSA's political leadership would respond.
"Jeff is a seasoned SES (senior executive service employee) who is expected to display the highest standards of common sense, and prudent financial management," she wrote Peck.
"He did neither. Sorry, but your letter is not even a slap on the wrist," she wrote.
April 15, 2012
Military ensnared in Colombia Secret Service scandal
Five U.S. military members have been ordered confined to quarters over possible involvement in inappropriate conduct at the same hotel here as the 11 Secret Service personnel sent home in an unfolding scandal involving local prostitutes.
Making the announcement Saturday, United States Southern Command commander Gen. Douglas Fraser said he is “disappointed by the entire incident and that this behavior is not in keeping with the professional standards expected of members of the United States military.”
The Secret Service confirmed Saturday night that 11 of its staffers assigned to the trip have been placed on administrative leave as the investigation proceeds into dealings between prostitutes and U.S. government personnel preparing for President Barack Obama’s arrival at the Summit of the Americas in Colombia.
“The nature of the allegations, coupled with a zero tolerance policy on personal misconduct, resulted in the Secret Service taking the decisive action to relieve these individuals of their assignment” and send them home, Secret Service Assistant Director Paul Morrissey said in the agency’s most detailed statement to date.
“The personnel involved were brought to Secret Service Headquarters in Washington, D.C., for interviews today. These interviews have been completed,” Morrissey added. He called the administrative leave “standard procedure [that] allows us the opportunity to conduct a full, thorough and fair investigation into the allegations.”
Morrissey said some of the Secret Service personnel were special agents and some were part of the Service’s Uniformed Division, but none came from the Presidential Protective Division — the iconic plainclothes agents who shadow the president at his public events.
Earlier Saturday, the White House maintained its stance of refusing to comment on the scandal, even as word came that military personnel were also involved.
White House press secretary Jay Carney, in an on-camera briefing in Cartagena Saturday afternoon, said of the military personnel that “It is our understanding this is part of the same incident” as the Secret Service.
Carney confirmed that the White House was informed of the incident by the Secret Service on Thursday and that Obama was told about it Friday.
Asked whether the episode amounted to a distraction for the president, Carney said, “It has not. I think it’s been much more of a distraction for the press.”
Carney directed reporters’ questions to the Secret Service, declining even to say whether the White House was disappointed by the episode.
“I don’t have any characterization of this beyond my referral [of questions] to the Secret Service,” Carney said.
However, the Secret Service did express regret and acknowledge that it may have shifted the spotlight.
”We regret any distraction from the Summit of the Americas this situation has caused,” Morrissey said in his statement.
On Wednesday night, 11 special agents, including at least one supervisor, allegedly brought prostitutes back to the hotel where the president was expected to stay later in the week, Rep. Pete King (R-N.Y.) told POLITICO earlier Saturday. King, the chairman of the House Committee on Homeland Security, received a 15-minute briefing Saturday by an aide to Secret Service Director Mark Sullivan. The hotel in Colombia required hotel guests to leave IDs at the front desk and leave by 7 a.m. the next morning, King said. When one of the women did not leave on time, the hotel manager went to the room, but the guests would not come out, he said, so the manager called the police.
The alleged prostitute told police she would not leave until she was paid, King said. The incident was resolved peacefully, but local police are required to file a report with the embassy any time they come in contact with a citizen of another country, King said.
The report to the embassy set off the broader investigation, although rumors of the evening had already spread to the Secret Service’s Miami office, which has jurisdiction over the summit’s security, King said.
“All of this happened very quickly,” he said. “The 11 guys were required to leave the country.”
King said he will first instruct his staff to do an investigation “to see if this is symptomatic of the Secret Service.”
“I don’t believe it is,” King said. “I have great regard for them. [Sullivan] moved very quickly on this, very quickly, very effectively.”
But, he added, “it definitely could have compromised the security of the president” by opening the agents to threats of blackmail.
King said he was not briefed on the alleged actions of the five U.S. military members.
Ronald Kessler, a former Washington Post reporter and author of the book “In the President’s Secret Service: Behind the Scenes With Agents in the Line of Fire and the Presidents They Protect,” called the incident “the biggest scandal in Secret Service history.”
“It is all part of this pattern that I wrote about in the book of corner cutting, laxness, cover up,” Kessler said in an interview Saturday with POLITICO.
King said: “If this is the worst [scandal] they have, this is a pretty good agency.”
Making the announcement Saturday, United States Southern Command commander Gen. Douglas Fraser said he is “disappointed by the entire incident and that this behavior is not in keeping with the professional standards expected of members of the United States military.”
The Secret Service confirmed Saturday night that 11 of its staffers assigned to the trip have been placed on administrative leave as the investigation proceeds into dealings between prostitutes and U.S. government personnel preparing for President Barack Obama’s arrival at the Summit of the Americas in Colombia.
“The nature of the allegations, coupled with a zero tolerance policy on personal misconduct, resulted in the Secret Service taking the decisive action to relieve these individuals of their assignment” and send them home, Secret Service Assistant Director Paul Morrissey said in the agency’s most detailed statement to date.
“The personnel involved were brought to Secret Service Headquarters in Washington, D.C., for interviews today. These interviews have been completed,” Morrissey added. He called the administrative leave “standard procedure [that] allows us the opportunity to conduct a full, thorough and fair investigation into the allegations.”
Morrissey said some of the Secret Service personnel were special agents and some were part of the Service’s Uniformed Division, but none came from the Presidential Protective Division — the iconic plainclothes agents who shadow the president at his public events.
Earlier Saturday, the White House maintained its stance of refusing to comment on the scandal, even as word came that military personnel were also involved.
White House press secretary Jay Carney, in an on-camera briefing in Cartagena Saturday afternoon, said of the military personnel that “It is our understanding this is part of the same incident” as the Secret Service.
Carney confirmed that the White House was informed of the incident by the Secret Service on Thursday and that Obama was told about it Friday.
Asked whether the episode amounted to a distraction for the president, Carney said, “It has not. I think it’s been much more of a distraction for the press.”
Carney directed reporters’ questions to the Secret Service, declining even to say whether the White House was disappointed by the episode.
“I don’t have any characterization of this beyond my referral [of questions] to the Secret Service,” Carney said.
However, the Secret Service did express regret and acknowledge that it may have shifted the spotlight.
”We regret any distraction from the Summit of the Americas this situation has caused,” Morrissey said in his statement.
On Wednesday night, 11 special agents, including at least one supervisor, allegedly brought prostitutes back to the hotel where the president was expected to stay later in the week, Rep. Pete King (R-N.Y.) told POLITICO earlier Saturday. King, the chairman of the House Committee on Homeland Security, received a 15-minute briefing Saturday by an aide to Secret Service Director Mark Sullivan. The hotel in Colombia required hotel guests to leave IDs at the front desk and leave by 7 a.m. the next morning, King said. When one of the women did not leave on time, the hotel manager went to the room, but the guests would not come out, he said, so the manager called the police.
The alleged prostitute told police she would not leave until she was paid, King said. The incident was resolved peacefully, but local police are required to file a report with the embassy any time they come in contact with a citizen of another country, King said.
The report to the embassy set off the broader investigation, although rumors of the evening had already spread to the Secret Service’s Miami office, which has jurisdiction over the summit’s security, King said.
“All of this happened very quickly,” he said. “The 11 guys were required to leave the country.”
King said he will first instruct his staff to do an investigation “to see if this is symptomatic of the Secret Service.”
“I don’t believe it is,” King said. “I have great regard for them. [Sullivan] moved very quickly on this, very quickly, very effectively.”
But, he added, “it definitely could have compromised the security of the president” by opening the agents to threats of blackmail.
King said he was not briefed on the alleged actions of the five U.S. military members.
Ronald Kessler, a former Washington Post reporter and author of the book “In the President’s Secret Service: Behind the Scenes With Agents in the Line of Fire and the Presidents They Protect,” called the incident “the biggest scandal in Secret Service history.”
“It is all part of this pattern that I wrote about in the book of corner cutting, laxness, cover up,” Kessler said in an interview Saturday with POLITICO.
King said: “If this is the worst [scandal] they have, this is a pretty good agency.”
April 14, 2012
GSA aware of spending scandal last July, internal government memo shows
An internal government memo released Friday shows officials of the General Services Administration were aware of a spending problem months before the scandal burst into public view this month.
The GSA's deputy administrator, Susan Brita, emailed agency officials last July that the inspector general found no substantive agenda at a 2010 GSA conference at a Las Vegas resort.
She said that expenses for a clown suit, bicycles used for a team-building exercise, tuxedos and a mind-reader didn't lend themselves to the claim of a substantive conference. The event cost taxpayers about $823,000.
Brita also questioned why a regional administrator in charge of the conference received only a disciplinary letter that "is not even a slap on the wrist."
A major concern in the memo was how The Washington Post, with thousands of readers who are federal employees, would report the story.
A GSA spokesman declined to comment, saying the agency preferred to let the email speak for itself.
The email was sent to Robert Peck, then the head of the GSA's Public Building Service, with copies to his deputy, David Foley, and another top agency official, Stephen Leeds.
Peck and Leeds were fired after Inspector General Brian Miller issued a stinging report earlier this month on the cost of the conference to taxpayers.
GSA administrator Martha Johnson resigned in the wake of the report. Eight GSA employees have been placed on administrative leave, including Foley. He is seen in a conference video giving an award to an employee who produced a rap video bragging about the conference spending.
The email by Brita, who remains at GSA, was made public by the House Oversight and Government Reform Committee, which will conduct the first of three hearings on GSA's spending practices next week. The agency is in charge of federal buildings and supplies, and part of its mission is to save taxpayers money.
"The Obama administration has not been upfront with the American people about how long they've known about lavish spending abuses at GSA," committee chairman Darrell Issa said.
The California Republican added, "It's clear that they were fretting about the political consequences and preparing for media scrutiny on abuses many months ago, but didn't seem to take real actions until the release of the inspector general's report couldn't be delayed any longer."
Brita wrote that a letter to a GSA executive responsible for the conference, Jeff Neely, "should be crafted with a WAPO (Washington Post) mind frame." Neely is one of the eight officials placed on administrative leave.
She said she had no doubt the Post would connect the lavish conference spending to a period of high unemployment and a down economy. She wondered what the reaction to the story would be from the public and Congress, and questioned how GSA's political leadership would respond.
"Jeff is a seasoned SES (senior executive service employee) who is expected to display the highest standards of common sense, and prudent financial management," she wrote Peck.
"He did neither. Sorry, but your letter is not even a slap on the wrist," she wrote.
The GSA's deputy administrator, Susan Brita, emailed agency officials last July that the inspector general found no substantive agenda at a 2010 GSA conference at a Las Vegas resort.
She said that expenses for a clown suit, bicycles used for a team-building exercise, tuxedos and a mind-reader didn't lend themselves to the claim of a substantive conference. The event cost taxpayers about $823,000.
Brita also questioned why a regional administrator in charge of the conference received only a disciplinary letter that "is not even a slap on the wrist."
A major concern in the memo was how The Washington Post, with thousands of readers who are federal employees, would report the story.
A GSA spokesman declined to comment, saying the agency preferred to let the email speak for itself.
The email was sent to Robert Peck, then the head of the GSA's Public Building Service, with copies to his deputy, David Foley, and another top agency official, Stephen Leeds.
Peck and Leeds were fired after Inspector General Brian Miller issued a stinging report earlier this month on the cost of the conference to taxpayers.
GSA administrator Martha Johnson resigned in the wake of the report. Eight GSA employees have been placed on administrative leave, including Foley. He is seen in a conference video giving an award to an employee who produced a rap video bragging about the conference spending.
The email by Brita, who remains at GSA, was made public by the House Oversight and Government Reform Committee, which will conduct the first of three hearings on GSA's spending practices next week. The agency is in charge of federal buildings and supplies, and part of its mission is to save taxpayers money.
"The Obama administration has not been upfront with the American people about how long they've known about lavish spending abuses at GSA," committee chairman Darrell Issa said.
The California Republican added, "It's clear that they were fretting about the political consequences and preparing for media scrutiny on abuses many months ago, but didn't seem to take real actions until the release of the inspector general's report couldn't be delayed any longer."
Brita wrote that a letter to a GSA executive responsible for the conference, Jeff Neely, "should be crafted with a WAPO (Washington Post) mind frame." Neely is one of the eight officials placed on administrative leave.
She said she had no doubt the Post would connect the lavish conference spending to a period of high unemployment and a down economy. She wondered what the reaction to the story would be from the public and Congress, and questioned how GSA's political leadership would respond.
"Jeff is a seasoned SES (senior executive service employee) who is expected to display the highest standards of common sense, and prudent financial management," she wrote Peck.
"He did neither. Sorry, but your letter is not even a slap on the wrist," she wrote.
April 13, 2012
Obama administration corruption In Solyndra deal confirmed
House Energy and Commerce Committee Chairman Fred Upton (R-MI) and Oversight and Investigations Subcommittee Chairman Cliff Stearns (R-FL) responded this week to the Department of Treasury Inspector General’s report on the Obama administration’s ill-fated $535 million loan guarantee to Solyndra by saying "it was a bad bet from the beginning.
The report, “Consultation on Solyndra Loan Guarantee Was Rushed,” reveals that Department of Energy cut out the Treasury Department officials from issues regarding Solyndra, ignoring the agency’s advice and limiting its opportunity to review the high-priced, high-risk financing of what critics call "an Obama green pipe dream."
“The Treasury report echoes what our investigation has shown over and over; Solyndrawas a bad bet from the beginning that was rushed out the door while every red flag was ignored. Treasury’s report confirms the agency had been effectively cut out of the loan guarantee process despite federal laws and regulations that require their consultation," Upton said. The “serious concerns” of U.S. Treasury officials involving a risky $535 million infusion for a fly by night solar panel firm were ignored as the deal was fast-tracked by the Obama Administration, according to a Washington, DC, watchdog group.
Bankrolled by Obama fundraiser George Kaiser, the now-defunct northern California company (Solyndra) got more than half a billion dollars from the U.S. government to promote green energy. Instead, it abruptly folded last fall, stiffing American taxpayers and laying off more than 1,000 workers. From the start, it was a controversial deal that was suspiciously rushed through for a politically-connected entrepreneur that had raised large sums for Obama, Judicial Watch reported on it's web site blog.
This week the Treasury Inspector General report shed light on the scandalous process that, not only ignored warning signs about the startup company’s viability, but also blew off the concerns of officials at the agency responsible for doling out the cash. The “loan,” which will never be repaid, was rushed through by "Obama appointees at the Department of Energy (DOE) without Treasury [Department] input," according to the Judicial Watch blog.
That action violated the terms of the program, which was created by the president’s disastrous stimulus. It allows the DOE to make loan guarantees to companies investing in “innovative clean technologies” but specifically requires the Secretary of the Treasury to be consulted on the terms and conditions of the loan guarantee concurrent with its review process. As of December 2011 the DOE guaranteed 28 projects totaling $16.1 billion after consulting with Treasury, the Inspector General's audit report says.
Evidently this did not occur with the Solyndra deal because it was expedited for a political donor, said the JW blog. In fact, the IG report cites an email written by a Treasury official after a conference call with the DOE brass, presumably to discuss the pros and cons of the huge Solyndra deal. “We pressed certain issues…but the train really has left the station on this deal.”
Judicial Watch is investigating the Solyndra scandal and has sued the Obama DOE and Office of Management and Budget to obtain records involving the deal.
In September JW submitted Freedom of Information Act (FOIA) requests seeking records from both agencies, but the DOE says it’s reviewing documents in preparation for public release.
"The Office of Management and Budget has totally blown off the request. This indicates that the administration is on cover-up mode," Judical Watch officials stated.
“At every step of the way, Treasury was clearly an afterthought in Solyndra’s loan guarantee as well as its restructuring that put company investors ahead of taxpayers. What this report and our continuing investigation show is an Obama administration that was either not up to the job, was cavalier in its attitude for following federal laws, or both, said Congressman Upton.
“Treasury’s examination also underscores why the public is so fed up with the Washington bureaucracy – according to a review by the independent Treasury watchdog, the Obama administration was more worried about sending out a press release than it was ensuring Solyndra was a wise investment. And now taxpayers are paying half a billion dollars for the sins of Solyndra," Upton claims.
The report, “Consultation on Solyndra Loan Guarantee Was Rushed,” reveals that Department of Energy cut out the Treasury Department officials from issues regarding Solyndra, ignoring the agency’s advice and limiting its opportunity to review the high-priced, high-risk financing of what critics call "an Obama green pipe dream."
“The Treasury report echoes what our investigation has shown over and over; Solyndrawas a bad bet from the beginning that was rushed out the door while every red flag was ignored. Treasury’s report confirms the agency had been effectively cut out of the loan guarantee process despite federal laws and regulations that require their consultation," Upton said. The “serious concerns” of U.S. Treasury officials involving a risky $535 million infusion for a fly by night solar panel firm were ignored as the deal was fast-tracked by the Obama Administration, according to a Washington, DC, watchdog group.
Bankrolled by Obama fundraiser George Kaiser, the now-defunct northern California company (Solyndra) got more than half a billion dollars from the U.S. government to promote green energy. Instead, it abruptly folded last fall, stiffing American taxpayers and laying off more than 1,000 workers. From the start, it was a controversial deal that was suspiciously rushed through for a politically-connected entrepreneur that had raised large sums for Obama, Judicial Watch reported on it's web site blog.
This week the Treasury Inspector General report shed light on the scandalous process that, not only ignored warning signs about the startup company’s viability, but also blew off the concerns of officials at the agency responsible for doling out the cash. The “loan,” which will never be repaid, was rushed through by "Obama appointees at the Department of Energy (DOE) without Treasury [Department] input," according to the Judicial Watch blog.
That action violated the terms of the program, which was created by the president’s disastrous stimulus. It allows the DOE to make loan guarantees to companies investing in “innovative clean technologies” but specifically requires the Secretary of the Treasury to be consulted on the terms and conditions of the loan guarantee concurrent with its review process. As of December 2011 the DOE guaranteed 28 projects totaling $16.1 billion after consulting with Treasury, the Inspector General's audit report says.
Evidently this did not occur with the Solyndra deal because it was expedited for a political donor, said the JW blog. In fact, the IG report cites an email written by a Treasury official after a conference call with the DOE brass, presumably to discuss the pros and cons of the huge Solyndra deal. “We pressed certain issues…but the train really has left the station on this deal.”
Judicial Watch is investigating the Solyndra scandal and has sued the Obama DOE and Office of Management and Budget to obtain records involving the deal.
In September JW submitted Freedom of Information Act (FOIA) requests seeking records from both agencies, but the DOE says it’s reviewing documents in preparation for public release.
"The Office of Management and Budget has totally blown off the request. This indicates that the administration is on cover-up mode," Judical Watch officials stated.
“At every step of the way, Treasury was clearly an afterthought in Solyndra’s loan guarantee as well as its restructuring that put company investors ahead of taxpayers. What this report and our continuing investigation show is an Obama administration that was either not up to the job, was cavalier in its attitude for following federal laws, or both, said Congressman Upton.
“Treasury’s examination also underscores why the public is so fed up with the Washington bureaucracy – according to a review by the independent Treasury watchdog, the Obama administration was more worried about sending out a press release than it was ensuring Solyndra was a wise investment. And now taxpayers are paying half a billion dollars for the sins of Solyndra," Upton claims.
April 12, 2012
John Derbyshire: National Review ‘race-whipped,’ controversial anti-black column ‘just common sense’
In the wake of his high-profile ouster from National Review over an essay that was widely condemned as racist, John Derbyshire told the Daily Caller that he was surprised by the conservative flagship’s response to what he considers “just common sense.”
Derbyshire’s controversial column, published in the libertarian webzine “Taki’s Mag,” was a list of fifteen points that, he wrote, non-black parents should teach their children about black people. Some of the advice was instantly controversial, including the warning to “[a]void concentrations of blacks not all known to you personally.”
Asked by The Daily Caller if he saw this firestorm coming, Derbyshire tersely replied, “No.”
He was caught by surprise, he said, when National Review editor Rich Lowry decided to sever the magazine’s ties with him. “I didn’t think they cared about my Takimag columns, which contain no references to National Review,” he told TheDC in an email exchange.
But his attitude towards National Review, he added, changed after Lowry decided to let him go. “I didn’t realize they were THAT race-whipped.”
In an online note announcing the break, Lowry called Derbyshire’s comments “nasty and indefensible” and added that the writer used the National Review banner to provide oxygen for views that the conservative stalwart magazine would never support.
The column sparked outrage across the political spectrum, with denunciations coming from some of Derbyshire’s former colleagues, other conservative commentators, and many liberal pundits.
Derbyshire is not new to controversy over statements widely considered offensive. And he hasn’t shied away from the “racist” label.
“I am…a racist,” he said in a 2003 interview, “though an even more mild and tolerant one.”
Derbyshire seemed surprised by the public blowback. “I thought the piece was just common sense,” he told TheDC, “backed by facts established beyond the range of dispute.”
Conor Friedersdorf of The Atlantic is among the conservatives who denounced Derbyshire as a racist. He told TheDC that it is impossible to single out just one egregious element in the column.
But, Friedersdorf says, “one of the objectionable bits of advice he offered was to ignore black people in need of help rather than being a Good Samaritan.”
The American Conservative’s Noah Millman, who considers himself a friend of Derbyshire’s, told TheDC that it’s no surprise National Review ended its relationship with the longtime contributor.
“I think it’s safe to say that Derbyshire’s piece was bluntly racist,” Millman said.
“Derbyshire seems to think that there’s a straight line of deductive reasoning from his views on the science of racial differences and the observable statistical disparities in things like crime rates, to his ‘advice’ to his children about how to keep themselves safe from black-on-white violence.”
Millman believes that this isn’t the case and that it is important to show why.
As the dust settled, Derbyshire expressed gratitude towards the magazine for helping him navigate a complete career change during his mid-50s after spending most of his working career as a computer programmer. “They cut me a lot of slack — on a couple of occasions, a lot.” he said.
Citing the “shrieking … witch-hunting” political left, Derbyshire said, “I know who my enemy is. It’s not conservatism, not the NR [National Review] brand nor any other.”
Derbyshire’s controversial column, published in the libertarian webzine “Taki’s Mag,” was a list of fifteen points that, he wrote, non-black parents should teach their children about black people. Some of the advice was instantly controversial, including the warning to “[a]void concentrations of blacks not all known to you personally.”
Asked by The Daily Caller if he saw this firestorm coming, Derbyshire tersely replied, “No.”
He was caught by surprise, he said, when National Review editor Rich Lowry decided to sever the magazine’s ties with him. “I didn’t think they cared about my Takimag columns, which contain no references to National Review,” he told TheDC in an email exchange.
But his attitude towards National Review, he added, changed after Lowry decided to let him go. “I didn’t realize they were THAT race-whipped.”
In an online note announcing the break, Lowry called Derbyshire’s comments “nasty and indefensible” and added that the writer used the National Review banner to provide oxygen for views that the conservative stalwart magazine would never support.
The column sparked outrage across the political spectrum, with denunciations coming from some of Derbyshire’s former colleagues, other conservative commentators, and many liberal pundits.
Derbyshire is not new to controversy over statements widely considered offensive. And he hasn’t shied away from the “racist” label.
“I am…a racist,” he said in a 2003 interview, “though an even more mild and tolerant one.”
Derbyshire seemed surprised by the public blowback. “I thought the piece was just common sense,” he told TheDC, “backed by facts established beyond the range of dispute.”
Conor Friedersdorf of The Atlantic is among the conservatives who denounced Derbyshire as a racist. He told TheDC that it is impossible to single out just one egregious element in the column.
But, Friedersdorf says, “one of the objectionable bits of advice he offered was to ignore black people in need of help rather than being a Good Samaritan.”
The American Conservative’s Noah Millman, who considers himself a friend of Derbyshire’s, told TheDC that it’s no surprise National Review ended its relationship with the longtime contributor.
“I think it’s safe to say that Derbyshire’s piece was bluntly racist,” Millman said.
“Derbyshire seems to think that there’s a straight line of deductive reasoning from his views on the science of racial differences and the observable statistical disparities in things like crime rates, to his ‘advice’ to his children about how to keep themselves safe from black-on-white violence.”
Millman believes that this isn’t the case and that it is important to show why.
As the dust settled, Derbyshire expressed gratitude towards the magazine for helping him navigate a complete career change during his mid-50s after spending most of his working career as a computer programmer. “They cut me a lot of slack — on a couple of occasions, a lot.” he said.
Citing the “shrieking … witch-hunting” political left, Derbyshire said, “I know who my enemy is. It’s not conservatism, not the NR [National Review] brand nor any other.”
April 11, 2012
Testimony Suggests Former GSA Administrator Skipped Vegas Conference For Meetings at Solyndra
Former General Services Administration administrator Martha Johnson missed a lavish Las Vegas conference for government employees because she was already committed to meetings in California at Solyndra, according to testimony in an official government investigation.
Solyndra is the now-bankrupt green energy company that the Obama administration had provided with a $535 million loan through the stimulus.
The development, if true, dovetails together two embarrassing but otherwise unrelated episodes for the Obama administration.
According to a 52-page transcript from the Inspector General investigator’s March 15, 2011 interview with Jeff Neely, a regional administrator currently on administrative leave, Neely explained that GSA incurred some unanticipated expenses for a last-minute video link for four assistant commissioners assigned to participate at the conference in Johnson’s place.
Adam Elkington, a spokesman for GSA, disputes the testimony of Neely, claiming that Johnson did not attend meetings at Solyndra that day. Elkington, however, was unable to explain where Johnson was during the conference.
According to the testimony transcript, in response to a question about Johnson, Neely explained the need for extra audio/visual expenses because Johnson couldn’t attend the conference.
“Martha was actually coming to the West Coast and we had invited her to participate, but the events that she was coming to the West Coast for; one was a meeting with Salindra [sic], who is down to the San Jose area,” Neely answered, although the transcript incorrectly spelled the Fremont, Calif.-based business.
GSA ended up forking over $3500 for the four assistant administrators to participate in a video-teleconference, according to Neely in the IG interview transcript.
ABC News was able to view a copy of the transcript, but it is not currently publicly available.
“Maybe some of those contract costs were related to that last minute change, because they were supposed to come present in person and then decided to do it via video,” Neely explained. “We said we would try this as an experiment. I, personally, explained to them that I had some concerns about this because we were spending $3,500.00 to save $1,500.00 in travel.”
At the time, the Department of Energy was working to help enable GSA to purchase Solyndra solar panels for rooftops of federal buildings, which some critics believed was an attempt to prop up the doomed company with more federal money.
Earlier Tuesday, GSA acting administrator Dan Tangherlini apologized for GSA’s conduct, and announced the agency had suspended a separate “Hats Off” incentive program for employees.
“What took place was completely unacceptable,” Tangherlini said in a video statement posted to YouTube. “Those responsible violated rules of common sense, the spirit of public service, and the trust that America’s taxpayers have placed in all of us.”
The agency spent about $823,000 on the 2010 convention for 300 employees, including thousands of dollars spent on items such as a commemorative coin set, a mind reader, a comedian and a clown.
Johnson resigned abruptly after the GSA inspector general presented findings of abuse and waste of taxpayer dollars from the conference. Seven other officials have resigned, been fired or suspended in the wake of the scandal.
Multiple congressional hearings are scheduled to investigate the matter when Congress returns to session next week.
Solyndra is the now-bankrupt green energy company that the Obama administration had provided with a $535 million loan through the stimulus.
The development, if true, dovetails together two embarrassing but otherwise unrelated episodes for the Obama administration.
According to a 52-page transcript from the Inspector General investigator’s March 15, 2011 interview with Jeff Neely, a regional administrator currently on administrative leave, Neely explained that GSA incurred some unanticipated expenses for a last-minute video link for four assistant commissioners assigned to participate at the conference in Johnson’s place.
Adam Elkington, a spokesman for GSA, disputes the testimony of Neely, claiming that Johnson did not attend meetings at Solyndra that day. Elkington, however, was unable to explain where Johnson was during the conference.
According to the testimony transcript, in response to a question about Johnson, Neely explained the need for extra audio/visual expenses because Johnson couldn’t attend the conference.
“Martha was actually coming to the West Coast and we had invited her to participate, but the events that she was coming to the West Coast for; one was a meeting with Salindra [sic], who is down to the San Jose area,” Neely answered, although the transcript incorrectly spelled the Fremont, Calif.-based business.
GSA ended up forking over $3500 for the four assistant administrators to participate in a video-teleconference, according to Neely in the IG interview transcript.
ABC News was able to view a copy of the transcript, but it is not currently publicly available.
“Maybe some of those contract costs were related to that last minute change, because they were supposed to come present in person and then decided to do it via video,” Neely explained. “We said we would try this as an experiment. I, personally, explained to them that I had some concerns about this because we were spending $3,500.00 to save $1,500.00 in travel.”
At the time, the Department of Energy was working to help enable GSA to purchase Solyndra solar panels for rooftops of federal buildings, which some critics believed was an attempt to prop up the doomed company with more federal money.
Earlier Tuesday, GSA acting administrator Dan Tangherlini apologized for GSA’s conduct, and announced the agency had suspended a separate “Hats Off” incentive program for employees.
“What took place was completely unacceptable,” Tangherlini said in a video statement posted to YouTube. “Those responsible violated rules of common sense, the spirit of public service, and the trust that America’s taxpayers have placed in all of us.”
The agency spent about $823,000 on the 2010 convention for 300 employees, including thousands of dollars spent on items such as a commemorative coin set, a mind reader, a comedian and a clown.
Johnson resigned abruptly after the GSA inspector general presented findings of abuse and waste of taxpayer dollars from the conference. Seven other officials have resigned, been fired or suspended in the wake of the scandal.
Multiple congressional hearings are scheduled to investigate the matter when Congress returns to session next week.
April 10, 2012
Zimmerman family challenges Holder on New Black Panthers, says no arrests ‘based solely on your race’
In a letter to Attorney General Eric Holder on Monday, obtained exclusively by The Daily Caller, a family member of George Zimmerman asked the nation’s top law enforcement officer why he has chosen to not arrest members of the New Black Panther Party for their rhetoric — some of which may fit the federal government’s definition of a hate crime — throughout the Trayvon Martin case.
The family member believes the reason Holder hasn’t made those arrests is because he, like the members of the New Black Panther Party, is black.
“I am writing you to ask you why, when the law of the land is crystal clear, is your office not arresting the New Black Panthers for hate crimes?” the family member wrote to Holder.
“The Zimmerman family is in hiding because of the threats that have been made against us, yet the DOJ has maintained an eerie silence on this matter. These threats are very public. If you haven’t been paying attention just do a Google search and you will find plenty. Since when can a group of people in the United States put a bounty on someone’s head, circulate Wanted posters publicly, and still be walking the streets?”
The New Black Panthers have issued ultimatums to the Sanford authorities, saying they want Zimmerman arrested “dead or alive.” They have placed a bounty on Zimmerman’s head, and have called for the building of an army of vigilantes to track him down and effect a citizen’s arrest.
Most recently, the New Black Panther Party has called for violence.
In a conference call recorded over the weekend, the militant group said it planned to “suit up and boot up” and prepare for the next stages of the “race war.”
The family member believes the reason Holder hasn’t made those arrests is because he, like the members of the New Black Panther Party, is black.
“I am writing you to ask you why, when the law of the land is crystal clear, is your office not arresting the New Black Panthers for hate crimes?” the family member wrote to Holder.
“The Zimmerman family is in hiding because of the threats that have been made against us, yet the DOJ has maintained an eerie silence on this matter. These threats are very public. If you haven’t been paying attention just do a Google search and you will find plenty. Since when can a group of people in the United States put a bounty on someone’s head, circulate Wanted posters publicly, and still be walking the streets?”
The New Black Panthers have issued ultimatums to the Sanford authorities, saying they want Zimmerman arrested “dead or alive.” They have placed a bounty on Zimmerman’s head, and have called for the building of an army of vigilantes to track him down and effect a citizen’s arrest.
Most recently, the New Black Panther Party has called for violence.
In a conference call recorded over the weekend, the militant group said it planned to “suit up and boot up” and prepare for the next stages of the “race war.”
April 9, 2012
Prosecution of Accused CIA Leaker Will Face Legal Hurdles
Former CIA officer John C. Kiriakou was indicted yesterday on charges of leaking classified information to the press in violation of the Espionage Act and the Intelligence Identities Protection Act. He had been charged on January 23 but the indictment was not filed and unsealed until yesterday.
Kiriakou is accused of violating the Intelligence Identities Protection Act for allegedly disclosing the identity of a covert CIA officer, and of violating the Espionage Act for allegedly disclosing national defense information to persons not authorized to receive it. He is further accused of making false statements to the CIA Publications Review Board in connection with a manuscript he intended to publish.
While the indictment is a daunting blow to Mr. Kiriakou, who must mobilize an expensive and burdensome defense, it is challenging in a different way for the prosecution, which will face a variety of substantive and procedural hurdles.
For one thing, it remains to be shown that the “covert officer” whose identity was allegedly disclosed to a reporter by Kiriakou actually falls within the ambit of the Intelligence Identities Protection Act. To be subject to the Act’s penalties, the covert officer in question — whose identity has not been publicly revealed — must not only be under cover but must also have served abroad within the past 5 years.
But the prosecution’s biggest challenge, which may well be insurmountable, will be to demonstrate to a jury that Mr. Kiriakou actually intended to harm the United States or to assist a foreign nation by committing an unauthorized disclosure.
The new indictment asserts generally that Kiriakou “had reason to believe [the information] could be used to the injury of the United States and to the advantage of any foreign nation,” which is an element of the crime set forth in the Espionage Act (18 USC 793).
Yet the meaning of this provision was construed by Judge T.S. Ellis III in a 2006 opinion in a way that would seem to make the prosecution of Mr. Kiriakou particularly difficult. In light of that opinion, the government will have to prove not merely that Kiriakou “had reason to believe” some harm to the United States could possibly result from his action, but that he deliberately intended to cause such harm.
This follows from the (alleged) fact that Kiriakou disclosed classified “information” rather than classified “documents,” as well as from the seemingly duplicative Espionage Act use of the terms willfulness and reason to believe, which Judge Ellis interpreted thus:
“If a person transmitted classified documents relating to the national defense to a member of the media despite knowing that such an act was a violation of the statute, he could be convicted for ‘willfully’ committing the prohibited acts even if he viewed the disclosure as an act of patriotism,” Judge Ellis wrote. “By contrast, the ‘reason to believe’ scienter requirement that accompanies disclosures of information requires the government to demonstrate the likelihood of defendant’s bad faith purpose to either harm the United States or to aid a foreign government.” (see pp. 33-34).
But there is no known indication that Mr. Kiriakou, a former CIA counterterrorism operations officer, had a bad faith purpose to harm the United States, and every indication of the opposite.
“For more than 14 years, John worked in the field and at home, under conditions of great peril and stress and at great personal sacrifice, dedicating himself to protecting America and Americans from harm at home and abroad,” states a new website devoted to his cause.
Kiriakou is accused of violating the Intelligence Identities Protection Act for allegedly disclosing the identity of a covert CIA officer, and of violating the Espionage Act for allegedly disclosing national defense information to persons not authorized to receive it. He is further accused of making false statements to the CIA Publications Review Board in connection with a manuscript he intended to publish.
While the indictment is a daunting blow to Mr. Kiriakou, who must mobilize an expensive and burdensome defense, it is challenging in a different way for the prosecution, which will face a variety of substantive and procedural hurdles.
For one thing, it remains to be shown that the “covert officer” whose identity was allegedly disclosed to a reporter by Kiriakou actually falls within the ambit of the Intelligence Identities Protection Act. To be subject to the Act’s penalties, the covert officer in question — whose identity has not been publicly revealed — must not only be under cover but must also have served abroad within the past 5 years.
But the prosecution’s biggest challenge, which may well be insurmountable, will be to demonstrate to a jury that Mr. Kiriakou actually intended to harm the United States or to assist a foreign nation by committing an unauthorized disclosure.
The new indictment asserts generally that Kiriakou “had reason to believe [the information] could be used to the injury of the United States and to the advantage of any foreign nation,” which is an element of the crime set forth in the Espionage Act (18 USC 793).
Yet the meaning of this provision was construed by Judge T.S. Ellis III in a 2006 opinion in a way that would seem to make the prosecution of Mr. Kiriakou particularly difficult. In light of that opinion, the government will have to prove not merely that Kiriakou “had reason to believe” some harm to the United States could possibly result from his action, but that he deliberately intended to cause such harm.
This follows from the (alleged) fact that Kiriakou disclosed classified “information” rather than classified “documents,” as well as from the seemingly duplicative Espionage Act use of the terms willfulness and reason to believe, which Judge Ellis interpreted thus:
“If a person transmitted classified documents relating to the national defense to a member of the media despite knowing that such an act was a violation of the statute, he could be convicted for ‘willfully’ committing the prohibited acts even if he viewed the disclosure as an act of patriotism,” Judge Ellis wrote. “By contrast, the ‘reason to believe’ scienter requirement that accompanies disclosures of information requires the government to demonstrate the likelihood of defendant’s bad faith purpose to either harm the United States or to aid a foreign government.” (see pp. 33-34).
But there is no known indication that Mr. Kiriakou, a former CIA counterterrorism operations officer, had a bad faith purpose to harm the United States, and every indication of the opposite.
“For more than 14 years, John worked in the field and at home, under conditions of great peril and stress and at great personal sacrifice, dedicating himself to protecting America and Americans from harm at home and abroad,” states a new website devoted to his cause.
April 8, 2012
Solyndra Redux: Feds Prep Another Round of 'Green Energy' Loans
The U.S. Energy Department said it is preparing to approve more federal loan guarantees for green energy projects.
The development comes amid controversy over the Obama administration's clean energy investments, after California solar-panel firm Solyndra, recipient of a $535 million U.S. Department of Energy loan guarantee, went bankrupt last year.
Developers of about three dozen projects in the loan guarantee pipeline but that weren't approved in time for last year's Sept. 30 deadline are eligible for loan guarantees under a separate program that funds innovative clean energy projects, the department said.
Energy Department loan program chief David Frantz, in a letter Thursday to U.S. Sen. Jeff Bingaman, D-N.M., chairman of the Committee on Energy and Natural Resources and Sen. Lisa Murkowski, R-Alaska, ranking member of the Committee on Energy and Natural Resources, said the department expects to begin issuing conditional commitments over the next several months "after completing a rigorous internal and external review of each application."
Projects selected for funding would be "subject to a robust monitoring effort to ensure that taxpayers' investments are protected," he wrote.
He said the number of projects and amount of loan guarantees depends on the "government's assessment of the risk level of the projects selected."
In his letter Frantz defended the Energy Department loan program, saying it has "helped the United States keep pace in the fierce global race for clean energy technologies."
Those loans, he said, support American clean energy projects expected to provide power to nearly 3 million households and are creating tens of thousands of jobs.
In part because of private sector investment enabled through the loan program, he said, the nation's renewable energy generation has nearly doubled since 2008, with a nearly 110 percent growth in solar installations last year.
He cited NRG Solar's Agua Caliente in Yuma County, Ariz., recipient of a $967 million loan guarantee, as an example. When completed this year, he said, the project will be the world's largest solar photovoltaic installation and has already started delivering energy to the power grid.
Because of "intense" global competition, he warned, the nation "cannot afford to stop moving forward" in clean energy, noting that China offered $30 billion in government-backed financing to solar companies in 2010 alone.
Murkowski spokesman Robert Dillon told The New York Times that Murkowski had no immediate objections to a new round of loans but added that Republicans were keeping an eye on the program.
"We're always concerned when we're using taxpayer money to pay for the credit subsidy but this is money that's already been appropriated," Dillon said.
The development comes amid controversy over the Obama administration's clean energy investments, after California solar-panel firm Solyndra, recipient of a $535 million U.S. Department of Energy loan guarantee, went bankrupt last year.
Developers of about three dozen projects in the loan guarantee pipeline but that weren't approved in time for last year's Sept. 30 deadline are eligible for loan guarantees under a separate program that funds innovative clean energy projects, the department said.
Energy Department loan program chief David Frantz, in a letter Thursday to U.S. Sen. Jeff Bingaman, D-N.M., chairman of the Committee on Energy and Natural Resources and Sen. Lisa Murkowski, R-Alaska, ranking member of the Committee on Energy and Natural Resources, said the department expects to begin issuing conditional commitments over the next several months "after completing a rigorous internal and external review of each application."
Projects selected for funding would be "subject to a robust monitoring effort to ensure that taxpayers' investments are protected," he wrote.
He said the number of projects and amount of loan guarantees depends on the "government's assessment of the risk level of the projects selected."
In his letter Frantz defended the Energy Department loan program, saying it has "helped the United States keep pace in the fierce global race for clean energy technologies."
Those loans, he said, support American clean energy projects expected to provide power to nearly 3 million households and are creating tens of thousands of jobs.
In part because of private sector investment enabled through the loan program, he said, the nation's renewable energy generation has nearly doubled since 2008, with a nearly 110 percent growth in solar installations last year.
He cited NRG Solar's Agua Caliente in Yuma County, Ariz., recipient of a $967 million loan guarantee, as an example. When completed this year, he said, the project will be the world's largest solar photovoltaic installation and has already started delivering energy to the power grid.
Because of "intense" global competition, he warned, the nation "cannot afford to stop moving forward" in clean energy, noting that China offered $30 billion in government-backed financing to solar companies in 2010 alone.
Murkowski spokesman Robert Dillon told The New York Times that Murkowski had no immediate objections to a new round of loans but added that Republicans were keeping an eye on the program.
"We're always concerned when we're using taxpayer money to pay for the credit subsidy but this is money that's already been appropriated," Dillon said.
April 7, 2012
Issa, Grassley hammer White House for stonewalling on ‘Fast and Furious’ witness
The Obama administration is stonewalling two lawmakers’ requests to interview a former member of the National Security staff in connection with the failed Operation Fast and Furious gun-walking program, according to a March 28 letter obtained by The Daily Caller.
California Rep. Darrell Issa and Iowa Sen. Chuck Grassley, both Republicans, requested a response by April 4 to their letter, which asks for an interview with Kevin O’Reilly, that former staffer. But the White House, according to the letter, is blocking access to him.
Through staff, both Grassley and Issa confirmed to TheDC on Thursday that April 4 came and went without any response from the Obama administration.
In their letter to White House Counsel Karen Ruemmler, Grassley and Issa cited a cryptic email exchange between O’Reilly and William Newell, the special agent in charge of the Phoenix office of the Bureau of Alcohol, Tobacco, Firearms and Explosives at the time Fast and Furious was implemented. The emails, their letter suggests, indicate that Newell was going around his chain of command to personally brief the White House about developments in the gun-walking program.
“You didn’t get this from me,” Newell wrote to O’Reilly in a Sept. 3, 2010 email about Fast and Furious, according to the letter from Issa and Grassley.
“Just don’t want ATF HQ to find out,” Newell wrote in am earlier email, “especially since this is what they should be doing (briefing you!).” (RELATED: Full coverage of Operation Fast and Furious)
The House Oversight and Government Reform Committee, which Issa chairs, has not yet made complete copies of those emails available to reporters.
Newell testified before that committee on July 26, 2011, saying he couldn’t remember what the email exchange was about.
“To date, the White House has not complied with multiple congressional requests to interview O’Reilly,” Issa and Grassley wrote in their letter to Ruemmler. “Our staffers have had extensive discussions with lawyers in your office, who have represented that the White House does not perceive any need for us to interview O’Reilly and consequently will not make arrangements for him to speak to us.”
Speaking with Fox News Channel host Greta Van Susteren last week, Grassley said that while Newell and O’Reilly are friends, “it’s very, very unusual to have someone at a field office communicating directly with someone at the National Security Council.”
Grassley hinted that Newell’s poor memory about his emails with O’Reilly looked suspicious. “It’s very convenient that he’d have an absence of mind when he’s under oath in front of a congressional committee,” he said.
California Rep. Darrell Issa and Iowa Sen. Chuck Grassley, both Republicans, requested a response by April 4 to their letter, which asks for an interview with Kevin O’Reilly, that former staffer. But the White House, according to the letter, is blocking access to him.
Through staff, both Grassley and Issa confirmed to TheDC on Thursday that April 4 came and went without any response from the Obama administration.
In their letter to White House Counsel Karen Ruemmler, Grassley and Issa cited a cryptic email exchange between O’Reilly and William Newell, the special agent in charge of the Phoenix office of the Bureau of Alcohol, Tobacco, Firearms and Explosives at the time Fast and Furious was implemented. The emails, their letter suggests, indicate that Newell was going around his chain of command to personally brief the White House about developments in the gun-walking program.
“You didn’t get this from me,” Newell wrote to O’Reilly in a Sept. 3, 2010 email about Fast and Furious, according to the letter from Issa and Grassley.
“Just don’t want ATF HQ to find out,” Newell wrote in am earlier email, “especially since this is what they should be doing (briefing you!).” (RELATED: Full coverage of Operation Fast and Furious)
The House Oversight and Government Reform Committee, which Issa chairs, has not yet made complete copies of those emails available to reporters.
Newell testified before that committee on July 26, 2011, saying he couldn’t remember what the email exchange was about.
“To date, the White House has not complied with multiple congressional requests to interview O’Reilly,” Issa and Grassley wrote in their letter to Ruemmler. “Our staffers have had extensive discussions with lawyers in your office, who have represented that the White House does not perceive any need for us to interview O’Reilly and consequently will not make arrangements for him to speak to us.”
Speaking with Fox News Channel host Greta Van Susteren last week, Grassley said that while Newell and O’Reilly are friends, “it’s very, very unusual to have someone at a field office communicating directly with someone at the National Security Council.”
Grassley hinted that Newell’s poor memory about his emails with O’Reilly looked suspicious. “It’s very convenient that he’d have an absence of mind when he’s under oath in front of a congressional committee,” he said.
April 6, 2012
Hot water rising for Rep. Miller, son
Rep. George Miller, D-CA, has cultivated a reputation for honesty and high ethical standards, but that image may suffer amid revelations about two cases in which he and his lobbyist son came to the aid of powerful campaign donors and troubled California companies.
Miller has represented California’s seventh congressional district since 1975, being one of only two remaining members of the Watergate class of Democrats elected in 1974. He is the ranking Democrat on the House Education and the Workforce Committee, and a long-time confidant of House Minority Leader Nancy Pelosi.
In the first case, the senior Miller intervened in a 2005 referendum on a proposed zoning change in Pittsburgh, CA, sought by the Albert D. Seeno Construction Company, the San Francisco Bay area’s largest homebuilder and a prospective Miller campaign donor.
Seeno builds homes and shopping centers throughout Northern California and in five other states. The Seeno family’s net worth is estimated at $2 billion. Miller’s son, George Miller IV, was the family firm’s registered lobbyist in Washington, earning $320,000 from 2003 to 2005.
From 2003 to 2008, Albert D. Seeno Jr., his brother and partner Thomas, and other family members contributed nearly $800,000 to a lengthy, bipartisan cast of state and federal candidates, including Miller, Senate Majority Leader Harry Reid, Sen. Barbara Boxer, (D-CA), President George W. Bush, and Sen. John Ensign, (R-NV), as well as the major Democratic and Republican national and congressional campaign committees.
Seeno needed the zoning change to build 1,400 new homes in Miller’s district, a project with potential to generate millions of dollars in profit for the firm.
The zoning change was opposed by local environmentalists, so political leaders put the zoning change on the ballot as Measure P. The environmentalists saw Miller - who had a 100 percent voting record in Congress in 2005, according to the League of Conservation Voters – as an ally in the campaign to defeat the proposal.
But they were stunned three days before the voting when Seeno officials distributed an endorsement letter from Miller, saying “Measure P is well written and has many benefits for Pittsburgh.”
The referendum was narrowly approved, 51-49 percent, in balloting that saw less than 11,000 votes cast.
More recently, the Miller duo has been caught up in the growing controversy surrounding the U.S. Department of Energy’s award of a $1.2 billion loan guarantee to the struggling SunPower Corporation.
Miller in 2010 urged DOE Secretary Steven Chu to approve the loan guarantee to the solar panel manufacturer with facilities in the congressman’s district. Miller also escorted Secretary of the Interior Kenneth Salazar on an October 2010 tour of the SunPower facility.
Just hours before the DOE loan program was set to expire last Sept. 30, DOE awarded the $1.2 billion loan guarantee to SunPower.
SunPower has paid George Miller, IV and his lobbying firm, Land, Hansen, O’Malley & Miller $138,000 fee for representation. Officially, Miller only represents the firm in California, but the issue could get sticky as Sunpower’s fortunes wane.
Since the DOE loan guarantee, the company’s stock has fallen nearly 50% and is hovering below $6.00 a share. At its height, SunPower commanded $133 a share and enjoyed a market value of $13 billion.
Today, it is valued at $800 million, but carries $975 million in debt. Morningstar, the independent rating company gives SunPower only two out of five stars.
On February 1, Judicial Watch filed a Freedom of Information Act (FOIA) lawsuit in federal court against the Interior Department and the U.S. Department of the Treasury for records on the SunPower loan guarantee. The Treasury Department executes all DOE loan agreements.
The lawsuit also seeks records and communications between federal officials and George Miller IV’s lobby firm, Lang, Hansen, O’Malley and Miller.
Miller has claimed that he never discusses legislation with his son. A spokesman for the congressman did not return a reporter’s request for comment.
In January 2006, Miller denounced “the Republican culture of corruption that has permeated every corridor and pillar of power in Washington.”
Those words could come back to haunt the veteran Democrat because his son openly boasts about his family’s political connections in California and Washington.
“George Miller brings a lifetime of friendships, relationships, and contacts together with over 15 years of front-line advocacy experience,” reads the son’s profile on the Sacramento-based lobbying firm’s web site.
Miller has represented California’s seventh congressional district since 1975, being one of only two remaining members of the Watergate class of Democrats elected in 1974. He is the ranking Democrat on the House Education and the Workforce Committee, and a long-time confidant of House Minority Leader Nancy Pelosi.
In the first case, the senior Miller intervened in a 2005 referendum on a proposed zoning change in Pittsburgh, CA, sought by the Albert D. Seeno Construction Company, the San Francisco Bay area’s largest homebuilder and a prospective Miller campaign donor.
Seeno builds homes and shopping centers throughout Northern California and in five other states. The Seeno family’s net worth is estimated at $2 billion. Miller’s son, George Miller IV, was the family firm’s registered lobbyist in Washington, earning $320,000 from 2003 to 2005.
From 2003 to 2008, Albert D. Seeno Jr., his brother and partner Thomas, and other family members contributed nearly $800,000 to a lengthy, bipartisan cast of state and federal candidates, including Miller, Senate Majority Leader Harry Reid, Sen. Barbara Boxer, (D-CA), President George W. Bush, and Sen. John Ensign, (R-NV), as well as the major Democratic and Republican national and congressional campaign committees.
Seeno needed the zoning change to build 1,400 new homes in Miller’s district, a project with potential to generate millions of dollars in profit for the firm.
The zoning change was opposed by local environmentalists, so political leaders put the zoning change on the ballot as Measure P. The environmentalists saw Miller - who had a 100 percent voting record in Congress in 2005, according to the League of Conservation Voters – as an ally in the campaign to defeat the proposal.
But they were stunned three days before the voting when Seeno officials distributed an endorsement letter from Miller, saying “Measure P is well written and has many benefits for Pittsburgh.”
The referendum was narrowly approved, 51-49 percent, in balloting that saw less than 11,000 votes cast.
More recently, the Miller duo has been caught up in the growing controversy surrounding the U.S. Department of Energy’s award of a $1.2 billion loan guarantee to the struggling SunPower Corporation.
Miller in 2010 urged DOE Secretary Steven Chu to approve the loan guarantee to the solar panel manufacturer with facilities in the congressman’s district. Miller also escorted Secretary of the Interior Kenneth Salazar on an October 2010 tour of the SunPower facility.
Just hours before the DOE loan program was set to expire last Sept. 30, DOE awarded the $1.2 billion loan guarantee to SunPower.
SunPower has paid George Miller, IV and his lobbying firm, Land, Hansen, O’Malley & Miller $138,000 fee for representation. Officially, Miller only represents the firm in California, but the issue could get sticky as Sunpower’s fortunes wane.
Since the DOE loan guarantee, the company’s stock has fallen nearly 50% and is hovering below $6.00 a share. At its height, SunPower commanded $133 a share and enjoyed a market value of $13 billion.
Today, it is valued at $800 million, but carries $975 million in debt. Morningstar, the independent rating company gives SunPower only two out of five stars.
On February 1, Judicial Watch filed a Freedom of Information Act (FOIA) lawsuit in federal court against the Interior Department and the U.S. Department of the Treasury for records on the SunPower loan guarantee. The Treasury Department executes all DOE loan agreements.
The lawsuit also seeks records and communications between federal officials and George Miller IV’s lobby firm, Lang, Hansen, O’Malley and Miller.
Miller has claimed that he never discusses legislation with his son. A spokesman for the congressman did not return a reporter’s request for comment.
In January 2006, Miller denounced “the Republican culture of corruption that has permeated every corridor and pillar of power in Washington.”
Those words could come back to haunt the veteran Democrat because his son openly boasts about his family’s political connections in California and Washington.
“George Miller brings a lifetime of friendships, relationships, and contacts together with over 15 years of front-line advocacy experience,” reads the son’s profile on the Sacramento-based lobbying firm’s web site.
April 5, 2012
ICE fast-tracks amnesty for illegal aliens to clear immigration-court backlog
With only 254 immigration judges available to hear 300,000 cases currently somewhere in the immigration judicial system, U.S. Immigration and Customs Enforcement has begun a review of its to determine who may be eligible for a type of ICE amnesty known as “administrative closure.”
Speaking during a March hearing before the Homeland Subcommittee in the Appropriations Committee of the House of Representatives, ICE Director John Morton said his agency has already reviewed the cases of 142,212 illegal aliens who are not currently in custody. ICE concluded that 13,175 of them should start the process toward administrative closure, Morton said.
Those who enter that process will have to pass a background check and clear other administrative hurdles before they have their cases put into “closure.”
Ben Winograd, a staff attorney at the left-leaning American Immigration Council, approvingly told The Daily Caller that the ICE review is little more than an effort to clear its backlog. The latest data from the Department of Justice indicates that just 254 immigration court judges have about 300,000 cases on their dockets at any given time.
“The numbers don’t add up,” Winograd said, suggesting that the problem is merely one of statistics. “The real answer is to reduce the pool of people that can be put into proceedings.”
While most immigration analysts agree that the U.S. lacks a sufficient number of immigration judges, not everyone wants to release illegal aliens through a virtual safety valve.
Jessica Vaughan, an analyst with the right-leaning Center for Immigration Studies, told theDC that ICE’s unilateral action is hijacking the judicial system’s authority. (RELATED: More on illegal immigration)
“These folks were already in the immigration system,” Vaughan said. “They had cases in front of immigration judges. Now, ICE will step in and subvert that process and simply find them all innocent and let them free.”
Alabama Republican Rep. Robert Aderholt, who chairs the Subcommittee on Homeland Security, was equally scathing.
“Last year we provided funding for 34,000 detention beds, the highest level in history,” Aderholt said in a statement, “but despite the expansion of Secure Communities into new jurisdictions as well as a large known illegal population, ICE has failed to fill those beds.”
The review is part of ICE’s policy, as laid out in a controversial June 2011 memo from ICE director John Morton.
In an email to the subcommittee that accompanied his written testimony, Morton said the case review’s goal “has been to speed the removal of criminal aliens from the United States. Low priority cases of individuals with no criminal records and who pose no public safety concerns are being administratively closed.”
Last month, TheDC reported exclusively that ICE only has enough beds to hold one out of every ten suspected illegal aliens that its officers detain.
Both Winograd and Vaughan agree that some ICE immigration cases have been fast-tracked, taking less than a month. But Vaughan added that those cases are limited to suspected illegal aliens who are already in custody. ICE has just 34,000 beds at its disposal, while roughly 300,000 people have currently pending cases in immigration court.
For the rest, said Winograd, cases can take years. He said his group has seen some suspects spend as long as five years in immigration courts.
With hiring freezes at all federal agencies, Winograd said, increasing the number of judges isn’t an option.
“The hardliners on immigration want to have it both ways,” he said. Advocates of tough immigration enforcement policies, he observed, are also typically the first to demand budget cuts at all levels.
While Vaughan said hiring more judges would be a good option, there are also other ways to reduce the number of people in immigration courts. Rep. Aderholt has suggested broader use of videoconferencing to speed court appearances.
Vaughn insisted that ICE has been far too conservative in using a process called expedited removal, which allows the agency to quickly deport some suspected illegal aliens without a judicial order.
Speaking during a March hearing before the Homeland Subcommittee in the Appropriations Committee of the House of Representatives, ICE Director John Morton said his agency has already reviewed the cases of 142,212 illegal aliens who are not currently in custody. ICE concluded that 13,175 of them should start the process toward administrative closure, Morton said.
Those who enter that process will have to pass a background check and clear other administrative hurdles before they have their cases put into “closure.”
Ben Winograd, a staff attorney at the left-leaning American Immigration Council, approvingly told The Daily Caller that the ICE review is little more than an effort to clear its backlog. The latest data from the Department of Justice indicates that just 254 immigration court judges have about 300,000 cases on their dockets at any given time.
“The numbers don’t add up,” Winograd said, suggesting that the problem is merely one of statistics. “The real answer is to reduce the pool of people that can be put into proceedings.”
While most immigration analysts agree that the U.S. lacks a sufficient number of immigration judges, not everyone wants to release illegal aliens through a virtual safety valve.
Jessica Vaughan, an analyst with the right-leaning Center for Immigration Studies, told theDC that ICE’s unilateral action is hijacking the judicial system’s authority. (RELATED: More on illegal immigration)
“These folks were already in the immigration system,” Vaughan said. “They had cases in front of immigration judges. Now, ICE will step in and subvert that process and simply find them all innocent and let them free.”
Alabama Republican Rep. Robert Aderholt, who chairs the Subcommittee on Homeland Security, was equally scathing.
“Last year we provided funding for 34,000 detention beds, the highest level in history,” Aderholt said in a statement, “but despite the expansion of Secure Communities into new jurisdictions as well as a large known illegal population, ICE has failed to fill those beds.”
The review is part of ICE’s policy, as laid out in a controversial June 2011 memo from ICE director John Morton.
In an email to the subcommittee that accompanied his written testimony, Morton said the case review’s goal “has been to speed the removal of criminal aliens from the United States. Low priority cases of individuals with no criminal records and who pose no public safety concerns are being administratively closed.”
Last month, TheDC reported exclusively that ICE only has enough beds to hold one out of every ten suspected illegal aliens that its officers detain.
Both Winograd and Vaughan agree that some ICE immigration cases have been fast-tracked, taking less than a month. But Vaughan added that those cases are limited to suspected illegal aliens who are already in custody. ICE has just 34,000 beds at its disposal, while roughly 300,000 people have currently pending cases in immigration court.
For the rest, said Winograd, cases can take years. He said his group has seen some suspects spend as long as five years in immigration courts.
With hiring freezes at all federal agencies, Winograd said, increasing the number of judges isn’t an option.
“The hardliners on immigration want to have it both ways,” he said. Advocates of tough immigration enforcement policies, he observed, are also typically the first to demand budget cuts at all levels.
While Vaughan said hiring more judges would be a good option, there are also other ways to reduce the number of people in immigration courts. Rep. Aderholt has suggested broader use of videoconferencing to speed court appearances.
Vaughn insisted that ICE has been far too conservative in using a process called expedited removal, which allows the agency to quickly deport some suspected illegal aliens without a judicial order.
April 4, 2012
GSA Turmoil Will Live on in Congressional Hearings
The revelations of spending excesses at a Las Vegas training conference will keep General Services Administration officials in the hot seat in the coming weeks as both chambers of Congress rev up for hearings on the agency’s inspector general report and broader performance issues.
Rep. John Mica, R-Fla., chairman of the House Transportation and Infrastructure Committee, on Tuesday called a spring-break press conference to warn that “the $800,000 Las Vegas junket is only the tip of the iceberg.” He plans a hearing later this month to shift the focus to the “billions of dollars in taxpayer money wasted on vacant and underutilized buildings” that GSA is charged with unloading.
For much of his 14 months heading the panel, Mica has pressed a campaign against “Sitting on our Assets,” some 14,000 federal properties that could be profitably sold to eliminate maintenance costs and help reduce the budget deficit.
“The Las Vegas fiasco is going to demonstrate to the public an example of one agency that has lost control,” Mica said. “The best thing is to put the spotlight and examination on GSA where it belongs and hold them accountable. Imagine someone being in charge of your property and having a party at taxpayer’s expense.”
GSA has “stonewalled,” Mica added, against congressional requests for basic information such as administrative costs and prospectuses on individual properties. “It’s unfortunate that the people’s representatives are denied basic information needed for accountability,” he said.
Mica and colleagues have been seeking additional information on such projects as Washington’s Old Post Office Building -- which GSA recently sold to Donald Trump -- the empty Cotton Annex in Southwest Washington, and Mica’s own effort to remove the Federal Trade Commission from its longtime headquarters to consolidate space for the National Gallery of Art.
Asked how President Obama handled the GSA firings and the resignation of Administrator Martha Johnson, Mica said, “the good news is no one impeded the inspector general’s work, the information was made public, and we were properly alerted.”
Noting his committee had “gotten pretty rough” with GSA Public Buildings Service Commissioner Robert Peck -- who was fired on Monday -- Mica said it was “unfortunate that some had to lose their jobs on the holiday week, but they must be held accountable. Business as usual at GSA is over.”
In other developments in the GSA ordeal, the vivid details that the conference planners hired a clown and a mind reader, first reported by The Washington Post and not in the inspector general’s report released on Monday evening, were confirmed to Government Executive by an administration official who asked to remain unnamed.
Monday was “a sad day for GSA, which is unfortunate given all GSA can do to help with the budget issues with all the agencies,” said Jim Williams, who did three stints at GSA, including serving as acting administrator for the final months of the George W. Bush administration.
Williams noted the conference was organized by four senior executives. “I don’t put the blame on Martha for not having stopped it,” he said. “She’s doing the right thing to protect the president,” he said, referring to Johnson’s resignation.
Now a senior vice president at Daon Inc., Williams questioned whether this conference was needed at all. “It’s always been clear you don’t waste taxpayer money, and anyone would be outraged by the excesses,” he said. “There are benefits to getting people together for training, but it’s not clear there was a need for this one” for 300 employees from only four of GSA’s 11 regions.
Andy McNeill, chief executive officer of Fort Lauderdale, Fla.-based American Meetings Inc., after reviewing details on the incident, told Government Executive that the $825,000 spent on a three-day event was “way out of scope” for federal conferences, which are heavily scrutinized. “This happens usually every couple of years in our industry, but these ones got caught,” he said.
The overall price seems “a little excessive,” though certain items, such as the hors d’oeuvres, are “industry standard, based on availability,” he said. What the inspector general described as GSA’s bicycle-constructing exercise in team-building “is actually very popular” and training conferences, and the bikes are commonly donated to Boys and Girls Clubs, McNeill said. A similar exercise put on by his group was only about $28,000, he added, as opposed to the $75,000 it cost GSA.
Many private-sector corporations are wary of holding conferences in Las Vegas because of the “optics” or appearance, McNeill said. But in a rough economy, conference planners can get good deals there.
Both GSA and the IG’s offices said they would not comment beyond the report. But David Farley, a spokesman for the IG’s office, confirmed that hearings have been discussed with both the Senate Homeland Security and Governmental Affairs Committee and the House Oversight and Government Reform Committee. Committees of jurisdiction in both chambers were given previews of the report, Farley said, and the White House had been kept abreast of the investigation since March.
Rep. John Mica, R-Fla., chairman of the House Transportation and Infrastructure Committee, on Tuesday called a spring-break press conference to warn that “the $800,000 Las Vegas junket is only the tip of the iceberg.” He plans a hearing later this month to shift the focus to the “billions of dollars in taxpayer money wasted on vacant and underutilized buildings” that GSA is charged with unloading.
For much of his 14 months heading the panel, Mica has pressed a campaign against “Sitting on our Assets,” some 14,000 federal properties that could be profitably sold to eliminate maintenance costs and help reduce the budget deficit.
“The Las Vegas fiasco is going to demonstrate to the public an example of one agency that has lost control,” Mica said. “The best thing is to put the spotlight and examination on GSA where it belongs and hold them accountable. Imagine someone being in charge of your property and having a party at taxpayer’s expense.”
GSA has “stonewalled,” Mica added, against congressional requests for basic information such as administrative costs and prospectuses on individual properties. “It’s unfortunate that the people’s representatives are denied basic information needed for accountability,” he said.
Mica and colleagues have been seeking additional information on such projects as Washington’s Old Post Office Building -- which GSA recently sold to Donald Trump -- the empty Cotton Annex in Southwest Washington, and Mica’s own effort to remove the Federal Trade Commission from its longtime headquarters to consolidate space for the National Gallery of Art.
Asked how President Obama handled the GSA firings and the resignation of Administrator Martha Johnson, Mica said, “the good news is no one impeded the inspector general’s work, the information was made public, and we were properly alerted.”
Noting his committee had “gotten pretty rough” with GSA Public Buildings Service Commissioner Robert Peck -- who was fired on Monday -- Mica said it was “unfortunate that some had to lose their jobs on the holiday week, but they must be held accountable. Business as usual at GSA is over.”
In other developments in the GSA ordeal, the vivid details that the conference planners hired a clown and a mind reader, first reported by The Washington Post and not in the inspector general’s report released on Monday evening, were confirmed to Government Executive by an administration official who asked to remain unnamed.
Monday was “a sad day for GSA, which is unfortunate given all GSA can do to help with the budget issues with all the agencies,” said Jim Williams, who did three stints at GSA, including serving as acting administrator for the final months of the George W. Bush administration.
Williams noted the conference was organized by four senior executives. “I don’t put the blame on Martha for not having stopped it,” he said. “She’s doing the right thing to protect the president,” he said, referring to Johnson’s resignation.
Now a senior vice president at Daon Inc., Williams questioned whether this conference was needed at all. “It’s always been clear you don’t waste taxpayer money, and anyone would be outraged by the excesses,” he said. “There are benefits to getting people together for training, but it’s not clear there was a need for this one” for 300 employees from only four of GSA’s 11 regions.
Andy McNeill, chief executive officer of Fort Lauderdale, Fla.-based American Meetings Inc., after reviewing details on the incident, told Government Executive that the $825,000 spent on a three-day event was “way out of scope” for federal conferences, which are heavily scrutinized. “This happens usually every couple of years in our industry, but these ones got caught,” he said.
The overall price seems “a little excessive,” though certain items, such as the hors d’oeuvres, are “industry standard, based on availability,” he said. What the inspector general described as GSA’s bicycle-constructing exercise in team-building “is actually very popular” and training conferences, and the bikes are commonly donated to Boys and Girls Clubs, McNeill said. A similar exercise put on by his group was only about $28,000, he added, as opposed to the $75,000 it cost GSA.
Many private-sector corporations are wary of holding conferences in Las Vegas because of the “optics” or appearance, McNeill said. But in a rough economy, conference planners can get good deals there.
Both GSA and the IG’s offices said they would not comment beyond the report. But David Farley, a spokesman for the IG’s office, confirmed that hearings have been discussed with both the Senate Homeland Security and Governmental Affairs Committee and the House Oversight and Government Reform Committee. Committees of jurisdiction in both chambers were given previews of the report, Farley said, and the White House had been kept abreast of the investigation since March.
April 3, 2012
How American Corporations Transformed from Producers to Predators
Corporations are not working for the 99 percent. But this wasn’t always the case. In a special five-part series, William Lazonick, professor at UMass, president of the Academic-Industry Research Network, and a leading expert on the business corporation, along with journalist Ken Jacobson and AlterNet’s Lynn Parramore, will examine the foundations, history and purpose of the corporation to answer this vital question: How can the public take control of the business corporation and make it work for the real economy?
In 2010, the top 500 U.S. corporations – the Fortune 500 – generated $10.7 trillion in sales, reaped a whopping $702 billion in profits, and employed 24.9 million people around the globe. Historically, when these corporations have invested in the productive capabilities of their American employees, we’ve had lots of well-paid and stable jobs.
That was the case a half century ago.
Unfortunately, it’s not the case today. For the past three decades, top executives have been rewarding themselves with mega-million dollar compensation packages while American workers have suffered an unrelenting disappearance of middle-class jobs. Since the 1990s, this hollowing out of the middle-class has even affected people with lots of education and work experience. As the Occupy Wall Street movement has recognized, concentration of income and wealth of the top “1 percent” leaves the rest of us high and dry.
What went wrong? A fundamental transformation in the investment strategies of major U.S. corporations is a big part of the story.
A Look Back
A generation or two ago, corporate leaders considered the interests of their companies to be aligned with those of the broader society. In 1953, at his congressional confirmation hearing to be Secretary of Defense, General Motors CEO Charles E. Wilson was asked whether he would be able to make a decision that conflicted with the interests of his company. His famous reply: “For years I thought what was good for the country was good for General Motors and vice versa.”
Wilson had good reason to think so. In 1956, under the Federal-Aid Highway Act of 1956, the U.S. government committed to pay for 90 percent of the cost of building 41,000 miles of interstate highways. The Eisenhower administration argued that we needed them in case of a military attack (the same justification that would be used in the 1960s for government funding of what would become the Internet). Of course, the interstate highway system also gave businesses and households a fundamental physical infrastructure for civilian purposes– from zipping products around the country to family road trips in the station wagon.
And it was also good for GM. Sales shot up and employment soared. GM’s managers, engineers and other male white-collar employees could look forward to careers with one company, along with defined-benefit pensions and health benefits in retirement. GM’s blue-collar employees, represented by the United Auto Workers (UAW), did well, too. In business downturns, such as those of 1958, 1961 and 1970, GM laid off its most junior blue-collar workers, but the UAW paid them supplemental unemployment benefits on top of their unemployment insurance. When business picked up, GM rehired these workers on a seniority basis.
Such opportunities and employment security were typical of most Fortune 500 firms in the 1950s, ’60s and ’70s. A career with one company was the norm, while mass layoffs simply for the sake of boosting profits were viewed as bad not only for the country, but for the company, too.
What a difference three decades makes! Now mass layoffs to boost profits are the norm, while the expectation of a career with one company is long gone. This transformation happened because the U.S. business corporation has become in a (rather ugly) word “financialized.” It means that executives began to base all their decisions on increasing corporate earnings for the sake of jacking up corporate stock prices. Other concerns — economic, social and political — took a backseat. From the 1980s, the talk in boardrooms and business schools changed. Instead of running corporations to create wealth for all, leaders should think only of “maximizing shareholder value.”
When the shareholder-value mantra becomes the main focus, executives concentrate on avoiding taxes for the sake of higher profits, and they don’t think twice about permanently axing workers. They increase distributions of corporate cash to shareholders in the forms of dividends and, even more prominently, stock buybacks. When a corporation becomes financialized, the top executives no longer concern themselves with investing in the productive capabilities of employees, the foundation for rising living standards for all. They become focused instead on generating financial profits that can justify higher stock prices – in large part because, through their stock-based compensation, high stock prices translate into megabucks for these corporate executives themselves. The ideology becomes: Corporations for the 0.1 percent — and the 99 percent be damned.
The 99 percent needs to understand these fundamental changes in the ways in which top executives have decided to make use of resources if we want U.S. corporations to work for us rather than just for them.
The Financialization Monster
The beginnings of financialization date back to the 1960s when conglomerate titans built empires by gobbling up scores and even hundreds of companies. Business schools justified this concentration of corporate power by teaching that a good manager could manage any type of business — the bigger the better. But conglomeration often became simply a method of using accounting tricks to boost earnings in the short-run to encourage speculation in the company’s stock price. This focus on short-term financial manipulation often undermined the financial conditions for sustaining higher levels of earnings over the long term. But the interest of stock-market speculators was (as it always is) to capitalize on short-term changes in the market’s evaluation of corporate shares.
When these giant empires imploded in the 1970s and 1980s, people began to see the weakness of the model. By the early 1970s the downgraded debt of conglomerates, known as “fallen angels,” created the opportunity for a young bond trader, Michael Milken, to create a liquid market in high-yield “junk bonds.” By the mid-’80s, Milken (who eventually went to jail for securities fraud) was using his network of financial institutions to back corporate raiders in junk-bond financed leveraged buyouts with the purpose of extracting as much money as possible from a company once it was taken over through layoffs of workers and by breaking up the company to sell it off in pieces.
Wall Street changed the way it made its money. Investment banks turned their focus from supporting long-term corporate investment in productive assets to trading corporate securities in search of higher yields. The great casino was taking form. In 1971, NASDAQ was launched as a national electronic market for generating price quotes on highly speculative stocks. The Employee Retirement Income Security Act of 1974 encouraged corporate pension funds to get into the game since inflation had eroded household savings. In 1975, competition from NASDAQ led the much more conservative New York Stock Exchange, which dated back to 1792, to end fixed commissions on stock transactions. This move only further encouraged stock market speculation by making it less costly for speculators to buy and sell.
In 1980, Robert Hayes and William Abernathy, professors of technology management at Harvard Business School, wrote a widely read article that criticized executives for focusing on short-term profits rather than investments in innovation. But in 1983, two financial economists, Eugene Fama of the University of Chicago and Michael Jensen of the University of Rochester, co-authored two articles in the Journal of Law and Economics which extolled corporate honchos who focused on “maximizing shareholder value” — by which they meant using corporate resources to boost stock prices, however short the time-frame. In 1985 Jensen landed a higher profile pulpit at Harvard Business School. Soon, shareholder-value ideology became the mantra of thousands of MBA students who were unleashed in the corporate world.
Proponents of the Fama/Jenson view argue that for superior economic performance, corporate resources should be allocated to maximize returns to shareholders because they are the only economic actors who make investments without a guaranteed return. They say that shareholders are the only ones who bear risk in the corporate economy, and so they should also get the rewards. But this argument could not be more false. In fact, lots of people bear risks of investing in the corporation without knowing if they will pay off for them. Governments in the U.S., funded by the body of taxpayers, are constantly making investments in physical infrastructures and human capabilities that provide benefits to businesses, but without a guaranteed return to taxpayers. An employer expects workers to give time and effort beyond that required by their current pay to make a better product and boost profits for the company in the future. Where’s the worker’s guaranteed return? In contrast, most public shareholders simply buy and sell shares of a corporation on the stock market, making no contribution whatsoever to investment in the company’s productive capabilities.
In the name of this misguided philosophy, major U.S. corporations now channel virtually all of their profits to shareholders, not only in the form of dividends, which reward them for holding shares, but even more importantly in the form of stock buybacks, which reward them for selling shares. The sole purpose of stock buybacks is to give a manipulative boost to a company’s stock price. The top executives then benefit when they exercise their typically bountiful stock options and cash in by selling the stock. For 2001-2010, 459 companies in the S&P 500 Index in January 2011 distributed $1.9 trillion in dividends, equivalent to 40 percent of their combined net income, and $2.6 trillion in buybacks, equal to another 54 percent of their net income. After all that, what was left over for investments in innovation, including upgrading the capabilities of their workforces? Not much.
Falling to the Challenge
Big changes in markets and technologies since the 1980s have given U.S. corporations serious competitive challenges. Confronted by Japanese and then Korean competition, companies closed plants, permanently displacing blue-collar workers from what had been middle-class jobs. Meanwhile, the open systems technologies that characterized the microelectronics revolution favored younger workers with the latest computer skills. In the name of shareholder value, by the 1990s U.S. corporations seized on these changes in competition and technology to put an end to the norm of a career with one company, ridding themselves of more expensive older employees in the process. In the 2000s, American corporations found that low-wage nations like China and India possessed millions of qualified college graduates who were able and willing to do high-end work in place of U.S. workers. Offshoring put the nail in the coffin of employment security in corporate America.
In response to these challenges, U.S. corporations could have used their profits to upgrade the capabilities of the U.S. labor force, laying the foundation for a new prosperity. Instead, the same misguided financialized responses have meant big losses for taxpayers and workers while the top 1 percent has gained. Instead of rising to the challenge, they’ve fallen into greed and short-sightedness that chips away at our chances for a prosperous economy.
Yet properly governed, corporations can be run for the 99 percent. In fact, that’s still the case in many successful economies. The truth is that it’s possible to take back the corporations for the 99 percent in the U.S. if we can really wrap our heads around the problem and the solutions. Here are three places to start:
1) Ban It. Ban large established companies from buying back their own stock, and reward them instead for investing in the retention and training of their employees.
2) Link It. Link executive pay to the productive performance of the company, with increases in executive pay being tied to increases for the corporate labor force as a whole.
3) Occupy It. Recognize that taxpayers and workers bear a significant proportion of the risk of corporate investment, and put their representatives on corporate boards where they can have input into the relation between risks and rewards.
In 2010, the top 500 U.S. corporations – the Fortune 500 – generated $10.7 trillion in sales, reaped a whopping $702 billion in profits, and employed 24.9 million people around the globe. Historically, when these corporations have invested in the productive capabilities of their American employees, we’ve had lots of well-paid and stable jobs.
That was the case a half century ago.
Unfortunately, it’s not the case today. For the past three decades, top executives have been rewarding themselves with mega-million dollar compensation packages while American workers have suffered an unrelenting disappearance of middle-class jobs. Since the 1990s, this hollowing out of the middle-class has even affected people with lots of education and work experience. As the Occupy Wall Street movement has recognized, concentration of income and wealth of the top “1 percent” leaves the rest of us high and dry.
What went wrong? A fundamental transformation in the investment strategies of major U.S. corporations is a big part of the story.
A Look Back
A generation or two ago, corporate leaders considered the interests of their companies to be aligned with those of the broader society. In 1953, at his congressional confirmation hearing to be Secretary of Defense, General Motors CEO Charles E. Wilson was asked whether he would be able to make a decision that conflicted with the interests of his company. His famous reply: “For years I thought what was good for the country was good for General Motors and vice versa.”
Wilson had good reason to think so. In 1956, under the Federal-Aid Highway Act of 1956, the U.S. government committed to pay for 90 percent of the cost of building 41,000 miles of interstate highways. The Eisenhower administration argued that we needed them in case of a military attack (the same justification that would be used in the 1960s for government funding of what would become the Internet). Of course, the interstate highway system also gave businesses and households a fundamental physical infrastructure for civilian purposes– from zipping products around the country to family road trips in the station wagon.
And it was also good for GM. Sales shot up and employment soared. GM’s managers, engineers and other male white-collar employees could look forward to careers with one company, along with defined-benefit pensions and health benefits in retirement. GM’s blue-collar employees, represented by the United Auto Workers (UAW), did well, too. In business downturns, such as those of 1958, 1961 and 1970, GM laid off its most junior blue-collar workers, but the UAW paid them supplemental unemployment benefits on top of their unemployment insurance. When business picked up, GM rehired these workers on a seniority basis.
Such opportunities and employment security were typical of most Fortune 500 firms in the 1950s, ’60s and ’70s. A career with one company was the norm, while mass layoffs simply for the sake of boosting profits were viewed as bad not only for the country, but for the company, too.
What a difference three decades makes! Now mass layoffs to boost profits are the norm, while the expectation of a career with one company is long gone. This transformation happened because the U.S. business corporation has become in a (rather ugly) word “financialized.” It means that executives began to base all their decisions on increasing corporate earnings for the sake of jacking up corporate stock prices. Other concerns — economic, social and political — took a backseat. From the 1980s, the talk in boardrooms and business schools changed. Instead of running corporations to create wealth for all, leaders should think only of “maximizing shareholder value.”
When the shareholder-value mantra becomes the main focus, executives concentrate on avoiding taxes for the sake of higher profits, and they don’t think twice about permanently axing workers. They increase distributions of corporate cash to shareholders in the forms of dividends and, even more prominently, stock buybacks. When a corporation becomes financialized, the top executives no longer concern themselves with investing in the productive capabilities of employees, the foundation for rising living standards for all. They become focused instead on generating financial profits that can justify higher stock prices – in large part because, through their stock-based compensation, high stock prices translate into megabucks for these corporate executives themselves. The ideology becomes: Corporations for the 0.1 percent — and the 99 percent be damned.
The 99 percent needs to understand these fundamental changes in the ways in which top executives have decided to make use of resources if we want U.S. corporations to work for us rather than just for them.
The Financialization Monster
The beginnings of financialization date back to the 1960s when conglomerate titans built empires by gobbling up scores and even hundreds of companies. Business schools justified this concentration of corporate power by teaching that a good manager could manage any type of business — the bigger the better. But conglomeration often became simply a method of using accounting tricks to boost earnings in the short-run to encourage speculation in the company’s stock price. This focus on short-term financial manipulation often undermined the financial conditions for sustaining higher levels of earnings over the long term. But the interest of stock-market speculators was (as it always is) to capitalize on short-term changes in the market’s evaluation of corporate shares.
When these giant empires imploded in the 1970s and 1980s, people began to see the weakness of the model. By the early 1970s the downgraded debt of conglomerates, known as “fallen angels,” created the opportunity for a young bond trader, Michael Milken, to create a liquid market in high-yield “junk bonds.” By the mid-’80s, Milken (who eventually went to jail for securities fraud) was using his network of financial institutions to back corporate raiders in junk-bond financed leveraged buyouts with the purpose of extracting as much money as possible from a company once it was taken over through layoffs of workers and by breaking up the company to sell it off in pieces.
Wall Street changed the way it made its money. Investment banks turned their focus from supporting long-term corporate investment in productive assets to trading corporate securities in search of higher yields. The great casino was taking form. In 1971, NASDAQ was launched as a national electronic market for generating price quotes on highly speculative stocks. The Employee Retirement Income Security Act of 1974 encouraged corporate pension funds to get into the game since inflation had eroded household savings. In 1975, competition from NASDAQ led the much more conservative New York Stock Exchange, which dated back to 1792, to end fixed commissions on stock transactions. This move only further encouraged stock market speculation by making it less costly for speculators to buy and sell.
In 1980, Robert Hayes and William Abernathy, professors of technology management at Harvard Business School, wrote a widely read article that criticized executives for focusing on short-term profits rather than investments in innovation. But in 1983, two financial economists, Eugene Fama of the University of Chicago and Michael Jensen of the University of Rochester, co-authored two articles in the Journal of Law and Economics which extolled corporate honchos who focused on “maximizing shareholder value” — by which they meant using corporate resources to boost stock prices, however short the time-frame. In 1985 Jensen landed a higher profile pulpit at Harvard Business School. Soon, shareholder-value ideology became the mantra of thousands of MBA students who were unleashed in the corporate world.
Proponents of the Fama/Jenson view argue that for superior economic performance, corporate resources should be allocated to maximize returns to shareholders because they are the only economic actors who make investments without a guaranteed return. They say that shareholders are the only ones who bear risk in the corporate economy, and so they should also get the rewards. But this argument could not be more false. In fact, lots of people bear risks of investing in the corporation without knowing if they will pay off for them. Governments in the U.S., funded by the body of taxpayers, are constantly making investments in physical infrastructures and human capabilities that provide benefits to businesses, but without a guaranteed return to taxpayers. An employer expects workers to give time and effort beyond that required by their current pay to make a better product and boost profits for the company in the future. Where’s the worker’s guaranteed return? In contrast, most public shareholders simply buy and sell shares of a corporation on the stock market, making no contribution whatsoever to investment in the company’s productive capabilities.
In the name of this misguided philosophy, major U.S. corporations now channel virtually all of their profits to shareholders, not only in the form of dividends, which reward them for holding shares, but even more importantly in the form of stock buybacks, which reward them for selling shares. The sole purpose of stock buybacks is to give a manipulative boost to a company’s stock price. The top executives then benefit when they exercise their typically bountiful stock options and cash in by selling the stock. For 2001-2010, 459 companies in the S&P 500 Index in January 2011 distributed $1.9 trillion in dividends, equivalent to 40 percent of their combined net income, and $2.6 trillion in buybacks, equal to another 54 percent of their net income. After all that, what was left over for investments in innovation, including upgrading the capabilities of their workforces? Not much.
Falling to the Challenge
Big changes in markets and technologies since the 1980s have given U.S. corporations serious competitive challenges. Confronted by Japanese and then Korean competition, companies closed plants, permanently displacing blue-collar workers from what had been middle-class jobs. Meanwhile, the open systems technologies that characterized the microelectronics revolution favored younger workers with the latest computer skills. In the name of shareholder value, by the 1990s U.S. corporations seized on these changes in competition and technology to put an end to the norm of a career with one company, ridding themselves of more expensive older employees in the process. In the 2000s, American corporations found that low-wage nations like China and India possessed millions of qualified college graduates who were able and willing to do high-end work in place of U.S. workers. Offshoring put the nail in the coffin of employment security in corporate America.
In response to these challenges, U.S. corporations could have used their profits to upgrade the capabilities of the U.S. labor force, laying the foundation for a new prosperity. Instead, the same misguided financialized responses have meant big losses for taxpayers and workers while the top 1 percent has gained. Instead of rising to the challenge, they’ve fallen into greed and short-sightedness that chips away at our chances for a prosperous economy.
Yet properly governed, corporations can be run for the 99 percent. In fact, that’s still the case in many successful economies. The truth is that it’s possible to take back the corporations for the 99 percent in the U.S. if we can really wrap our heads around the problem and the solutions. Here are three places to start:
1) Ban It. Ban large established companies from buying back their own stock, and reward them instead for investing in the retention and training of their employees.
2) Link It. Link executive pay to the productive performance of the company, with increases in executive pay being tied to increases for the corporate labor force as a whole.
3) Occupy It. Recognize that taxpayers and workers bear a significant proportion of the risk of corporate investment, and put their representatives on corporate boards where they can have input into the relation between risks and rewards.
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