Archive for June 2014
Is that TIMEspeak, or what? But Kevin Drum definitely nails it. And look at the number of Catholics on the Supreme Court: 6 out of 9. Three are Jewish. And thus undoubtedly the determination that the US government should be bound by Catholic doctrine. Those are the core beliefs of six of the nine justices: 67%.
A withering comment on the Roberts Court by Jeffrey Toobin.
Great article in the Washington Post by Roberto Ferdman. A must-read.
It’s strange how much we support activities that are clearly detrimental to us—the fast-food industry, for an obvious example based on the findings in the story at the link.
Closely linked: 7 in 10 Youths Would Fail to Qualify for Military Service. That’s strong evidence that we are, in effect, failing ourselves.
Corporate gloves being removed: Blackwater manager threatened to murder State Dept investigator; investigation halted in response
I imagine this is not the only instance—such threats might explain why the SEC seems so inept at its investigations. In the NY Times James Risen reports (still—he’s probably headed for jail for not letting the US government know his sources for his reporting; Obama hates whistleblowers):
Just weeks before Blackwater guards fatally shot 17 civilians at Baghdad’s Nisour Square in 2007, the State Department began investigating the security contractor’s operations in Iraq. But the inquiry was abandoned after Blackwater’s top manager there issued a threat: “that he could kill” the government’s chief investigator and “no one could or would do anything about it as we were in Iraq,” according to department reports.
American Embassy officials in Baghdad sided with Blackwater rather than the State Department investigators as a dispute over the probe escalated in August 2007, the previously undisclosed documents show. The officials told the investigators that they had disrupted the embassy’s relationship with the security contractor and ordered them to leave the country, according to the reports.
After returning to Washington, the chief investigator wrote a scathing report to State Department officials documenting misconduct by Blackwater employees and warning that lax oversight of the company, which had a contract worth more than $1 billion to protect American diplomats, had created “an environment full of liability and negligence.”
“The management structures in place to manage and monitor our contracts in Iraq have become subservient to the contractors themselves,” the investigator, Jean C. Richter, wrote in an Aug. 31, 2007, memo to State Department officials. “Blackwater contractors saw themselves as above the law,” he said, adding that the “hands off” management resulted in a situation in which “the contractors, instead of Department officials, are in command and in control.”
His memo and other newly disclosed State Department documents make clear that the department was alerted to serious problems involving Blackwater and its government overseers before the Nisour Square shooting, which outraged Iraqis and deepened resentment over the United States’ presence in the country.
Today, as conflict rages again in Iraq, four Blackwater guards involved in the Nisour Square shooting are on trial in Washington on charges stemming from the episode, the government’s second attempt to prosecute the case in an American court after previous charges against five guards were dismissed in 2009.
The shooting was a watershed moment . . .
(I included the category “terrorism,” because what Blackwater was doing in Iraq was exactly terrorism—e.g., gunning down 17 civilians over NO PRETEXT. That’s terrorism: actions to induce terror, like a marketplace bombing. Or an appearance of Blackwater… troops? And they even threaten a US State Department Investigator—and get totally away with it! It does show that some sort of tide has turned.
UPDATE: And read what Paul Krugman wrote.
But probably we’ll not see many results until the hard partying begins this fall.
Paul Krugman has a good column:
Two years ago Kansas embarked on a remarkable fiscal experiment: It sharply slashed income taxes without any clear idea of what would replace the lost revenue. Sam Brownback, the governor, proposed the legislation — in percentage terms, the largest tax cut in one year any state has ever enacted — in close consultation with the economist Arthur Laffer. And Mr. Brownback predicted that the cuts would jump-start an economic boom — “Look out, Texas,” he proclaimed.
But Kansas isn’t booming — in fact, its economy is lagging both neighboring states and America as a whole. Meanwhile, the state’s budget has plunged deep into deficit, provoking a Moody’s downgrade of its debt.
There’s an important lesson here — but it’s not what you think. Yes, the Kansas debacle shows that tax cuts don’t have magical powers, but we already knew that. The real lesson from Kansas is the enduring power of bad ideas, as long as those ideas serve the interests of the right people.
Why, after all, should anyone believe at this late date in supply-side economics, which claims that tax cuts boost the economy so much that they largely if not entirely pay for themselves? The doctrine crashed and burned two decades ago, when just about everyone on the right — after claiming, speciously, that the economy’s performance under Ronald Reagan validated their doctrine — went on to predict that Bill Clinton’s tax hike on the wealthy would cause a recession if not an outright depression. What actually happened was a spectacular economic expansion.
Nor is it just liberals who have long considered supply-side economics and those promoting it to have been discredited by experience. In 1998, in the first edition of his best-selling economics textbook, Harvard’s N. Gregory Mankiw — very much a Republican, and later chairman of George W. Bush’s Council of Economic Advisers — famously wrote about the damage done by “charlatans and cranks.” In particular, he highlighted the role of “a small group of economists” who “advised presidential candidate Ronald Reagan that an across-the-board cut in income tax rates would raise tax revenue.” Chief among that “small group” was none other than Art Laffer.
And it’s not as if supply-siders later redeemed themselves. On the contrary, they’ve been as ludicrously wrong in recent years as they were in the 1990s. For example, five years have passed since Mr. Laffer warned Americans that “we can expect rapidly rising prices and much, much higher interest rates over the next four or five years.” Just about everyone in his camp agreed. But what we got instead was low inflation and record-low interest rates.
So how did the charlatans and cranks end up dictating policy in Kansas, and to a more limited extent in other states? Follow the money.
For the Brownback tax cuts didn’t emerge out of thin air. They closely followed a blueprint laid out by . . .
More use by corporations of agreements designed to muzzle the public and enable corporate secrecy regarding bad practices. Scott Higham and Kaley Belval report in the Washington Post:
In November 2012, the U.S. Department of Energy asked contract employees at the Hanford plutonium processing plant in Washington state to take an unusual oath.
The DOE wanted them to sign nondisclosure agreements that prevented them from reporting wrongdoing at the nation’s most contaminated nuclear facility without getting approval from an agency supervisor. The agreements also barred them from using any information for financial gain, a possible violation of federal whistleblower laws, which allow employees to collect reward money for reporting wrongdoing.
Donna Busche reluctantly signed the agreement.
“It was a gag order,” said Busche, 51, who served as the manager of environmental and nuclear safety at the Hanford waste treatment facility for a federal contractor until she was fired in February after raising safety concerns. “The message was pretty clear: ‘Don’t say anything to anyone, or else.’ ”
The company that fired Busche, URS, has said her termination was unrelated to her whistleblowing. Busche and another employee testified before Congress in March at a hearing called by Sen. Claire McCaskill (D-Mo.) to examine the handling of whistleblowers at Hanford.
An Energy spokesman denied that the nondisclosure agreements violated federal law.
“The DOE fully complies with the law,” Brendan Daly said. “We not only encourage but require contractors to report waste, fraud and abuse, with no retaliation.”
Lawyers who represent whistleblowers like Busche say they are seeing a rise in the use of overly restrictive nondisclosure agreements, which prevent employees from reporting fraud, even to government investigators. The agreements incorporate language that goes beyond those that had traditionally protected proprietary information, the attorneys said. In recent months, agreements criticized as overly restrictive have surfaced at Kellogg, Brown and Root, one of the nation’s largest defense contractors, and International Relief and Development, a nonprofit organization in Arlington County, Va. The nonprofit collected more than $1 billion in tax dollars for war-related projects funded by the U.S. Agency for International Development.
The Securities and Exchange Commission is investigating the agreements at KBR, and the Special Inspector General for Afghanistan Reconstruction is examining the agreements used by IRD. Both companies have denied wrongdoing, and IRD changed the wording of its agreements after they were written about in The Washington Post.
Fear of retaliation for reporting fraud in the workplace is on the rise, according to surveys of federal employees and workers on Wall Street. The U.S. Office of Special Counsel is investigating reports that the Department of Veterans Affairs retaliated against 37 workers who had come forward with allegations of wrongdoing. Some of those employees had tried to report problems with the VA’s medical appointment scheduling system, which is now the subject of a growing national controversy. . .
The problem with the SEC investigating anything is that the SEC seems singularly dedicated to not finding things—cf. Bernie Madoff. The SEC is a cover-up facilitator.
There seems to be a dedicated effort to silence whistleblowers. And it is undoubtedly having an effect.
Something very odd is going on the banking industry. Pam Martens and Russ Martens report in Wall Street on Parade:
A man with a long history of keeping big bank secrets safe from the public’s prying eyes has denied the appeal filed by Wall Street On Parade to obtain specifics about the worker deaths upon which JPMorgan Chase pockets the life insurance money each year.
According to its financial filings, as of December 31, 2013, JPMorgan held $17.9 billion in Bank-Owned Life Insurance (BOLI) assets, a dark corner of the insurance market that allows banks to take out life insurance policies on their workers, secretly pocket the death benefits, and receive generous tax perks subsidized by the U.S. taxpayer. According to experts, JPMorgan could potentially hold upwards of $179 billion of life insurance in force on its current and former workers, based on the size of its BOLI assets.
The man who denied Wall Street On Parade’s appeal is Daniel P. Stipano, who told us by letter on June 20, 2014 that he had 450 pages of responsive material but it was not going to be released to us or the public. (See OCC Response to Appeal from Wall Street On Parade Re JPMorgan Banker Death Bets.)
Stipano is, by title, the Deputy Chief Counsel of the Office of the Comptroller of the Currency (OCC), the U.S. regulator of national banks, including those that were at the center of the 2008 financial collapse, mortgage and foreclosure frauds, and which continue to violate the nation’s laws with regularity. According to Stipano’s current bio, he also functions as the supervisor of the OCC’s Enforcement and Compliance, Litigation, Community and Consumer Law, and Administrative and Internal Law Divisions. That’s a lot of hats for one man to wear at a regulator of serially malfeasant mega banks.
Stipano also appears to be the decider-in-chief when it comes to Freedom of Information Act (FOIA) requests to the OCC. He also functions as a key decision maker when it comes to denying documents to U.S. Senators to allow them to perform their oversight duties. (One would certainly think that a Federal regulator would establish an independent office to handle FOIA and Congressional information requests.)
Stipano is the man who played an outsized hand in the scandalous structure of the “Independent Foreclosure Review,” where the major Wall Street banks who had illegally foreclosed on families were allowed to hire their favorite, deeply conflicted consultants to review the foreclosure files for wrongdoing, set the terms of the consulting contracts and pay out $2 billion to the consultants before homeowners had received a dime — and a year had been wasted on bogus reviews.
The end result of that hubris, as Senator Elizabeth Warren revealed last year, was that the actual banks engaged in the illegal foreclosure activities, not the so-called Independent Foreclosure Review consultants, were allowed by the OCC to tally up and classify their own wrongdoing.
One of the “independent” consultants that the OCC rubber-stamped for hire by the banks was Promontory Financial Group. As Wall Street On Parade reported in April of last year: . . .
Read the whole thing. I’m hoping that Senator Warren will look into this.