Thursday, June 18, 2009

Bush Officials Cash In as More Americans Lose Out

Bush Officials Cash In as More Americans Lose Out

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Here's a tip for tough times. If anywhere in your genealogy you can find the name Bush or Obama, or anything close to either, no matter how distant the ancestor, start writing and, while you're at it, contact the nearest "literary" agent! A contract could be in the offing. As everyone knows, President Obama has written two wildly successful books, which have made millions, and since his run for president began, whole bookstore shelves have filled with what can only be called Obamiana, including Obama: The Historic Campaign in Photographs, Barack Obama: 44th President Collectors Vault, Barack Obama for Beginners, Michelle Obama: First Lady of Hope, The Faith of Barack Obama, Thanks and Have Fun Running the Country: Kids' Letters to President Obama, as well as a pile of Obama books for kids, and that barely scratches the surface.

Now comes the news that the president's Kenyan half-brother George, a community organizer, is writing a book for Simon & Schuster for a mere six-figure advance. So are a half-sister, Maya Soetoro-Ng (for Candlewick Press), and Michelle Obama's brother, Craig Robinson (for Gotham Books). TomDispatch hears that Bo Obama, too, may be searching for an agent and inking up that little paw to sign on the dotted line.

As for the Bushes: Daughter Jenna proved so naturally skilled with the pen (and the deal) that, at age 25, based on a nine-month UNICEF internship in Central America, she had already published her first book, Ana's Story: A Journey of Hope, signed up for a piddling $300,000 or so with HarperCollins (now, in more straitened publishing times, redubbed just plain Harper). Jenna's children's book, Read All About It, followed, selling 80,000 copies. Mom hit her stride this January with a deal for a memoir estimated to be in the range of $3.5-5 million ("I look forward to working with Scribner and the Simon & Schuster team as I tell the stories of the extraordinary events and people I've met in my life, particularly during my years in the White House.")

Now, Dad's made his deal, too, $7 million worth of it for a Nixonian-style volume of critical life moments as "the decider." According to an aide, "He's having a lot of fun doing it. He's reliving some great moments, and thinking about how he can bring the reader into his shoes or put them in his seat for a fascinating period in history." Here at TomDispatch, we're not so sure we'd care to be "in his seat" for years we remember by adjectives other than "fascinating." But we have no doubt that it's going to be a lot of fun for the former prexy, even if he did come up $8 million short of Bill Clinton's contract for My Life. That's what tough times are all about, after all. Maybe he'll call it War and Pieces (as in smashing the world into...).

Anyway, where were we? Oh yes, I think we were talking about cashing in. At least that's what Nick Turse is certainly talking about in his nifty Class of '00 Bush memorabilia piece, a twist on the series he's been doing these last months for this site on Tough Times in America. Tom

Where Are They Now?

Ex-Bush Loyalists Cash In
By Nick Turse

In May, the U.S. economy lost 345,000 nonfarm jobs, pushing the unemployment rate from 8.9% to 9.4%. According to official statistics, 14.5 million Americans are now looking for work and, as a recent headline at put it, "The jobs aren't coming back anytime soon." In fact, a team of economists at the San Francisco Federal Reserve Bank recently reported that "the level of labor market slack could be higher by the end of 2009 than at any other time in the post-World War Two period."

The news, however, is not altogether grim. While times are especially tough for teenagers (22.7% jobless rate) and blacks (14.9% jobless rate), one group is doing remarkably well. I'm talking about former members of the Bush administration who are taking up prestigious academic posts, inking lucrative book deals, signing up with speakers bureaus, joining big-time law firms and top public relations agencies, and grabbing spots on corporate boards of directors. While their high-priced wars, ruinous economic policies, and shredding of economic safety nets have proved disastrous for so many, for them the economic outlook remains bright and jobs are seemingly plentiful. In fact, many of them have performed the eye-opening feat of securing two or more potentially lucrative revenue streams at once during these tough financial times.

While it would likely take a small book to catalogue the fates of all former "loyal Bushies," a look at just a few of these fortunate folks indicates that not everybody was harmed by the Bush era.

The Memoirists

Many of the top figures of the Bush years are joining the ranks of (or reaffirming their credentials as) men and women of letters. Following in the footsteps of 2003-2006 White House Press Secretary Scott McClellan, who wrote the tell-some exposé, What Happened: Inside the Bush White House and Washington's Culture of Deception, is former Secretary of Defense Donald Rumsfeld (2001-2006). Now penning his life story for Sentinel, a conservative imprint of the Penguin Group, he has announced that he is forgoing an advance and donating all proceeds to charity. Similarly, 2006-2009 Treasury Secretary Henry Paulson is reportedly donating the "author's profits" from his forthcoming "insider's account of [his] experiences as Treasury Secretary." Many other former colleagues are, however, apparently intent on cashing in on their public service.

Last month, the New York Times reported that Rumsfeld's long-time pal, former Vice President Dick Cheney, "is actively shopping a memoir about his life in politics and service in four presidential administrations" and seeking multi-millions. In the same way, back in 2007, Bush's right-hand man Karl Rove, aka his "brain," agreed, for a reported seven figures, to write a memoir for Simon & Schuster's conservative imprint Threshold. Earlier this year, Bush's first term National Security Advisor and second term Secretary of State, Condoleezza Rice, signed a gaudy three-book deal, reportedly worth at least $2.5 million, with Random House's Crown imprint.

Following her to Crown (also the publisher of Barack Obama's Dreams from My Father and The Audacity of Hope) was former President Bush himself. His book, tentatively titled Decision Points, will reportedly recount "a dozen of the most interesting and important decisions in the former President's personal and political life" for a cool $7 million. Former First Lady Laura Bush has already inked a book deal with Scribner reportedly worth $3.5-5 million.

Only one prominent Bush loyalist who cared to try appears to have been unable to cash-in. In late 2008, the Wall Street Journal's Evan Perez reported that Alberto Gonzales, former White House counsel (2001-2005) and attorney general (2005-2007), "said he is writing a book to set the record straight about his controversial tenure as a senior official in the Bush administration," but could interest no publisher in the manuscript. This followed an earlier report in the New York Times that Gonzales had been "unable to interest law firms in adding his name to their roster..."

Law and Orders

One Bush administration lawyer who did land a job with a law firm was Gonzales's successor, Attorney General Michael Mukasey (2007-2009), who became a partner at Debevoise & Plimpton, a firm "offering sophisticated legal services" which "places the highest value on collaboration and interdisciplinary cooperation in order to provide clients with seamless representation across practice areas and across continents."

Tommy Thompson, Bush's Secretary of Health and Human Services from 2001-2005, is now a partner with Akin, Gump, Strauss, Hauer & Feld where he "focuses on developing solutions for clients in the health care industry, as well as for companies doing business in the public sector." Michael Chertoff, Secretary of Homeland Security from 2005–2009, is serving as "senior of counsel," and a "member of the White Collar Defense and Investigations practice group" at the firm of Covington & Burling.

Meanwhile, Harriet Miers, who served Bush from 2001-2007 as Staff Secretary, Deputy Chief of Staff, and Counsel to the President -- and whose Supreme Court bid crashed and burned in 2005 -- returned to Locke, Lord, Bissell & Liddell in May 2007 to serve as a member of the law firm's "Litigation and Public Policy sections." That firm is also home to Karin Torgerson, a partner who served as Special Assistant to President George W. Bush, one of several White House positions she held from 2003-2005.

Speak Easy

In addition to his book-writing duties, former President Bush recently signed on with the Washington Speakers Bureau, which already represents his wife. The Bureau is to arrange lucrative speeches for him worldwide. In fact, just last month, the New York Times reported that the former president had "earned more than an estimated $150,000" to "discuss national and international policy" alongside fellow former President Bill Clinton at the Metro Toronto Convention Center.

Together the Bushes joined a speakers' roster of former administration heavyweights, including Richard Armitage (Deputy Secretary of State, 2001-2005), John Bolton (U.S. Ambassador to the United Nations, 2005-2006), Andrew Card (White House Chief of Staff, 2001-2006), Ari Fleischer (White House Press Secretary, 2001-2003), Michael Mukasey, Colin Powell (Secretary of State, 2001-2005), Condoleezza Rice, Tom Ridge (Secretary of Homeland Security, 2003-2005), Donald Rumsfeld, and John Snow (Secretary of the Treasury, 2003-2006), as well as Bush family consigliere James Baker III.

Meanwhile, at Leading Authorities, another top-of-the-line speakers bureau, the list of ex-Bush loyalists includes Dan Bartlett (Counselor to the President, 2002-2007), Christopher Cox (Chairman of the Securities and Exchange Commission, 2005-2009), Ed Gillespie (Counselor to the President, 2007-2009), Porter Goss (Director of the Central Intelligence Agency, 2005-2006), Stephen Hadley (National Security Advisor, 2005-2009), Michael Hayden (Director of the Central Intelligence Agency, 2006-2009), Keith Hennessey (Director of the National Economic Council, 2007-2009), Dana Perino (White House Press Secretary, 2007-2009), and Margaret Spellings (Secretary of Education, 2005-2009).

A third lecturers' stable, the Leigh Bureau, boasts John Negroponte who served Bush as Ambassador to the United Nations, Ambassador to Iraq, Director of National Intelligence, and Deputy Secretary of State.

Talking Heads and Lobbyists

Some Bush loyalists have nabbed other sorts of speaking gigs. Karl Rove, for one, took a job as an analyst for Fox News. (He also writes a weekly op-ed for the Wall Street Journal and, in 2007, signed a two-year deal to be a columnist for Newsweek magazine.)

Ari Fleischer was hired as a media consultant to the Green Bay Packers in 2008 and serves as the president of Ari Fleischer Communications, Inc., which bills itself as a "unique media training and consultancy company [that] brings to the world of sports the lessons of how to successfully handle the toughest situations with the most aggressive reporters." (Clients reportedly include Major League Baseball, the Sporting Goods Manufacturers Association, and "several other leading sports figures.")

Many more Bush loyalists, however, are involved in another lucrative form of communication. For example, Michael Chertoff quickly launched the Chertoff Group, a consulting firm that "will advise clients on a range of security concerns, including cyber security, terrorism, fraud, border protection and supply-chain security." Tom Ridge, when not serving as a keynote-speaker-for-hire (as he did recently at the 2009 CoBank Energy Directors Conference in Colorado Springs, Colorado) is now a security and crisis-management consultant for his own firm, Ridge Global, whose self-professed "expertise encompasses risk management and global trade security, leadership guidance and strategic business generation, event security, crisis management and communications, campus security, technology innovation and integration and more."

In fact, a recent analysis by USA TODAY found that "more than one in four members of President George W. Bush's Cabinet have landed jobs with consulting or lobbying firms in which they can help clients navigate the departments they once oversaw." And it's not just heads of executive departments like Homeland Security who are cashing in.

John Ashcroft (Attorney General, 2001-2005) co-founded the Ashcroft Group, a strategic consulting firm that advises and invests "in companies in the security and law enforcement marketplaces." Not surprisingly, the firm has become a home for Bush loyalists like Juleanna Glover, who served on the senior staffs of then President-elect George W. Bush and Vice President Dick Cheney, and was then "the registered U.S. government affairs advisor for Iraq's first post-Saddam Hussein ambassador to the United States."

Recently, according to the Quad City Times, Jim Nussle, Bush's director of the White House Office of Management and Budget (2007-2009) "formed a company that will offer consulting, government relations and lobbying services." The Nussle Group, its website proclaims, "specializes in recruiting a talented team and developing creative solutions to assist clients in navigating the complicated and challenging intersections of public policy, government relations, public relations, international relations and politics."

According to his company bio, the senior policy director at lobbying powerhouse Dutko Worldwide, Gene Hickok, "joined the George W. Bush Administration as Under Secretary of Education. He became Deputy Secretary in 2003 [and] was an architect of the No Child Left Behind Act." And he isn't alone. Kent Sholars, a Senior Associate at Dutko, "was a political appointee during both terms of the administration of George W. Bush, serving as the Confidential Assistant to the Controller for the White House Office of Management and Budget (OMB) in Washington, DC," while Karen Yeager, a Dutko vice president, "serve[d] in the White House for President Bush in 2001."


Karen Hughes helped George W. Bush get elected in 2000 and, for the first two years of his first term, served him as a "counselor." In 2002, she left the White House to spend more time with her family in Texas. In 2004, however, she was back at work on Bush's campaign and then, in 2005, signed on as an undersecretary of state. In 2007, she left again, the White House said, "to spend more time with her family." Nonetheless, in 2008, she was in an office yet again, this time as Global Vice Chair at public relations giant Burson-Marsteller. In 2009, she was joined there by former White House Press Secretary Dana Perino, who now serves as Chief Issues Counselor for the company in the U.S.

Here, too, Michael Chertoff has gotten into the act. The announcement of the formation of the Chertoff Group, wrote the Wall Street Journal, "was made by the communications firm Burson-Marsteller, which said it formed an alliance with Mr. Chertoff."

Board to Death

Bush Administration officials have also been popping up on various boards of directors. Richard Armitage is perhaps typical. He sits on the board at military-corporate complex member ManTech International. He also serves on the boards of oil giant ConocoPhillips, "pharmaceutical and cosmeceutical" company Transcu Ltd., and his own firm, Armitage International, which, according to its website, provides "multinational clients with critical support in the areas of international business development, strategic planning, and problem-solving."

In April, chemical giant DuPont announced that Samuel Bodman, Secretary of Energy from 2005-2009 (and before that, Deputy Secretary of the Treasury, 2004-2005, and Deputy Secretary of the Department of Commerce, 2001-2004) had been elected to its board of directors.

That same month, former CIA chief Michael Hayden became a member of the Board of Directors of the National Interest Security Company, an "information technology, information management, and management technology consulting services" provider serving the U.S. Intelligence Community and the Departments of Defense, Homeland Security, and Energy. There, Hayden joined fellow former administration cronies Henry A. Crumpton (Coordinator for Counterterrorism at the State Department, 2005-2007) and Donald Kerr (Principal Deputy Director of National Intelligence, 2007-2009).

Meanwhile, Andrew Card not only serves on the board of directors of railroad giant Union Pacific, but has also turned up on the board of directors of the George W. Bush Presidential Library Foundation.

In the Tank

If you can't get a gig at a law firm, a PR agency, or on a corporate board of directors, there are always the nation's think-tanks to fall back into -- and they've become a shelter for more than a few Bush administration refugees in the Obama era. For example, after serving as a Deputy Assistant to the President and Deputy National Security Adviser in the Bush administration, Elliott Abrams has now joined the Council on Foreign Relations (CFR) as senior fellow for Middle Eastern studies.

Alongside Abrams at CFR are a number of officials who served during the Bush years, including Evan Feigenbaum, former Deputy Assistant Secretary of State for India, Nepal, Sri Lanka, Bhutan, and the Maldives; Paul Lettow, former senior adviser to the Under Secretary of State for Democracy and Global Affairs and the Senior Director for Strategic Planning and Institutional Reform on the National Security Council staff; and Dan Senor, an administration foreign policy advisor and senior advisor to the Coalition Provisional Authority in Iraq.

Meanwhile, the conservative Heritage Foundation is not surprisingly housing a large contingent of Bush loyalists, including Becky Norton Dunlop, who served as the chairperson of the Federal Services Impasse Panel (which handles disputes between government agencies and labor unions); Kim R. Holmes, Assistant Secretary of State for International Organization Affairs; Terry Miller, ambassador to the United Nations Economic and Social Council; Peter Brookes, Deputy Assistant Defense Secretary for Asian and Pacific Affairs; and Mike Gonzalez who, in 2005, left the Wall Street Journal to join the Bush administration where, according to his Heritage Foundation bio, he "wrote speeches for Securities and Exchange Commission Chairman Christopher Cox, then moved to the State Department in 2006 as communications adviser and speechwriter on European and Eurasian affairs" and even "helped craft an op-ed column… which appeared throughout Europe under the bylines of Secretary of State Condoleezza Rice and Secretary of Defense Robert Gates."

Ivory Tower Power

While Gates stayed on to work for President Barack Obama, Rice is pursuing many different career paths. In addition to the lucrative book contracts and the speakers bureau gigs, she inked a deal for the William Morris Agency to represent her for "business initiatives in media, sports and communications." Rice also returned, as a professor of political science, to her old stomping grounds at Stanford University, where she had long taught and also, from 1993-1999, served as provost. Presumably in her spare time, she serves as the Thomas and Barbara Stephenson Senior Fellow on Public Policy at Stanford's conservative Hoover Institution.

Rice is actually following in the footsteps of Rumsfeld who served a stint, beginning in 2007, as "a distinguished visiting fellow" at the Hoover Institution. But Stanford is hardly the only academic bastion of former Bush-ites. For example, this year, John Negroponte headed back to his old alma mater, Yale University, to become the "Brady-Johnson Distinguished Senior Research Fellow in Grand Strategy and Lecturer in International Affairs at the Whitney and Betty MacMillan Center for International and Area Studies."

"Torture memo" author John Yoo, who served as Deputy Assistant Attorney General in the Office of Legal Counsel at the Department of Justice from 2001-2003, is, of course, a professor of law at the School of Law of that bastion of leftist radicalism, the University of California at Berkeley. (As Liliana Segura of AlterNet recently reported, he also just landed a gig as a columnist for the Philadelphia Inquirer.)

Hope on the Horizon

Last year, for many Americans, Barack Obama became synonymous with hope. (And last year, Obama's The Audacity of Hope as well as his Dreams from My Father earned him an eye-popping $2.4 million in royalties.) This year, for struggling job-hunters nationwide, it's former Bush administration officials who offer a glimmer of hope in tough economic times. Their ease in finding gainful employment suggests that, even if your prior work has been judged ruinous by many and been roundly repudiated, there's still hope for you on the job front.

Even former Vice President Cheney, a man about whom 55% of Americans hold an unfavorable opinion, has realistic prospects of receiving a multimillion dollar book deal. After all, his former boss is viewed unfavorably by 57% of Americans and look how he's done.

Since most jobless Americans don't have nearly the unfavorable polling numbers of Bush or Cheney, nor do they face the distant threat of possible war crimes prosecutions like John Yoo, they should perk up. Maybe the problem is that none of them have signed up with the right speakers bureau to discuss their disastrous life circumstances. Maybe they haven't had that extra little bit of help tweaking their book proposals for their proposed tell-littles and tell-nones. Maybe they hadn't thought to check with Burson-Marsteller, just in case a few top slots with grandiose titles are still open. Maybe the Hoover Institution will now extend distinguished visiting fellowships to a few of the residents of modern-day Hoovervilles.

With only former Attorney General Gonzales still out of work, grant the men and women of the Bush administration one thing: the best unemployment rate in the land. In but a few short months, they've managed to prove that, no matter how spectacularly you fail, those inside-the-Beltway never have to tighten a belt. In our world, they will always fail upwards -- generally in lucrative, prestigious, and glamorous ways.

Obama’s bank regulation plan: A free pass for Wall Street

Obama’s bank regulation plan: A free pass for Wall Street

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President Barack Obama on Wednesday announced what he called “a sweeping overhaul of the financial regulatory system, a transformation on a scale not seen since the reforms that followed the Great Depression.”

The reality behind the rhetoric was indicated by the reaction on Wall Street. The stock market responded with a shrug, with the Dow and the S&P 500 finishing slightly down and the Nasdaq ending with a modest gain. Had there been anything in the proposals outlined by Obama that suggested a serious crackdown on the fraudulent practices that precipitated the present crisis, one can be certain the market would have reacted with a massive selloff.

The insiders knew they had nothing to fear. The plan Obama presented was in all essentials formulated by Wall Street lobbyists and CEOs.

The New York Times on Wednesday described the process by which the plan was drafted: “In the last two weeks alone, the administration has heard from top executives from Goldman Sachs, MetLife, Allstate, JPMorgan Chase, Credit Suisse, Citigroup, Barclays, UBS, Deutsche Bank, Morgan Stanley, Travelers, Prudential and Wells Fargo, among others. Administration officials also discussed the president’s plan with the top lobbyists at major financial trade associations in Washington.”

The officials with whom the bankers consulted are themselves Wall Street insiders, headed by two protégés of former Goldman Sachs and Citigroup executive Robert Rubin—Treasury Secretary Timothy Geithner and the director of Obama’s National Economic Council, Lawrence Summers. The former was president of the Federal Reserve Bank of New York before becoming Obama’s treasury secretary, and the latter was treasury secretary under Bill Clinton. They played major roles in lifting regulations and facilitating the orgy of speculation that ended with the Great Crash of 2008.

The plan outlined by Obama calls for enhanced powers for the Federal Reserve to oversee big financial firms, both bank and non-bank companies; higher capital reserve and liquidity requirements; minimal government oversight of some hedge funds; a privately-run clearinghouse for some forms of derivative trading; and a requirement that lenders retain a small stake in loans they sell to the banks to be turned into securities.

All of these requirements can be easily circumvented by the banks. Moreover, the political forces responsible for enforcing them are bound hand and foot to Wall Street.

The panoply of existing federal regulatory agencies is for the most part to remain in place. Obama made much of the creation of a new body, the Consumer Financial Protection Agency, which he said would protect consumers against predatory practices by mortgage lenders and credit card companies. However, this agency will have no new powers beyond those previously spread out among other agencies.

The centerpiece of the plan is a proposal to allow the Fed and the Federal Deposit Insurance Corporation to seize and wind down big banks and non-bank financial firms whose failure would pose a “systemic threat.” This is considered necessary precisely because none of the other proposals challenge the ability of banks, hedge funds, insurance companies and other financial firms to engage in speculative practices that are certain, at some future point, to threaten another financial collapse. It amounts to the institutionalization of taxpayer bailouts of the financial system, in place of the ad hoc methods employed in the present crisis.

Obama’s speech was a typical performance—populist gestures and verbal wrist-slaps for the bankers combined with paeans to capitalism and the free market.

He cited as “significant contributors” to the crisis the failure of government regulators and “abuse and excess” on Wall Street. He spoke of the proliferation of complex financial instruments, such as asset-backed securities, that generated “easy money” but were “built on a pile of sand.” Executive compensation, he said, “rewarded recklessness rather than responsibility.”

What he called “systematic and systemic abuse” and “the failure of the entire system” had inflicted “terrible pain in the lives of ordinary Americans,” with “retirees who’ve lost much of their life savings, families devastated by job losses, small businesses forced to shut their doors.”

“Millions of Americans,” he continued, “who’ve worked hard and behaved responsibly have seen their life dreams eroded by the irresponsibility of others and by the failure of their government to provide adequate oversight. Our entire economy has been undermined by that failure.”

Having painted a picture of a corrupt economic system that preyed upon the people and caused suffering and social devastation, he moved on to the business at hand—keeping the system going and the profits flowing.

He hastened to reassure his most important audience, Wall Street, declaring, “I’ve always been a strong believer in the power of the free market. It has been and will remain the engine of America’s progress... I believe that our role is not to disparage wealth, but to expand its reach.”

This was a signal to those who have benefitted from plunging the country and the world into economic disaster that they will continue to benefit, and will face no consequences for their crimes. When all is said and done, they will make more money than ever.

Indeed, the New York Times published an article on Monday entitled, “In Banks, Return of the Big Bonus.” It began, “The stage is set for the return of supersize banker bonuses,” and went on to speak of “headline bonuses of $10 million or more” for Wall Street bankers and traders.

The comparison of Obama’s plan to the regulatory reforms of the 1930s is specious. In the depths of the Depression, Roosevelt imposed significant structural reforms to rein in the banks and save American capitalism from the threat of social revolution. A cornerstone of these reforms was the Glass-Steagall Act of 1933, which erected a barrier between commercial banks and investment banks.

Glass-Steagall was repealed in 1999, during the Clinton administration. That was a milestone in the deregulation of the banks. It was part of a process, stretching back to the early 1980s, in which the US ruling elite has turned increasingly to financial manipulation to generate profit and personal wealth, while dismantling huge sections of industry and waging relentless war against the jobs and wages of the working class.

The result has been a colossal growth of social inequality and the emergence of a financial oligarchy that dominates the political life of the country. Both parties are at the beck and call of Wall Street, and are incapable of enacting any measures to rein in its plundering of the social wealth.

Obama and the Democratic-controlled Congress have ruled out a return to Glass-Steagall. They have rejected capping executive pay. Nor is there any suggestion of closing down the casino for credit default swaps, collateralized debt obligations, structured investment vehicles and other exotic forms of speculation that played a major role in the financial crash.

Far from limiting the size and power of the big banks, the government has used the crisis to encourage a further consolidation of the banking system. As a result of the disappearance of Bear Stearns, Lehman Brothers, Merrill Lynch, Wachovia and Washington Mutual—to name just the biggest bank failures—the four largest US banks today account for 70 percent of the country’s bank assets, as compared to less than 50 percent at the end of 2000. This process of consolidation will accelerate under Obama’s regulatory scheme.

The premise of Obama’s plan is a lie. The crisis is not fundamentally the result of mistakes or malfeasance on the part of bankers and government regulators—as plentiful and destructive as they were. It represents the failure of the system to which Obama pays homage—capitalism.

There is no solution outside of socialist measures—beginning with the nationalization of the banks under the democratic control of the working population—to break the back of the financial oligarchy and reorganize economic life in accordance with social needs, not private profit. That requires the development of an independent political movement of the working class in opposition to the Obama administration and both parties of big business.

Major banks made whole in GM bankruptcy

Major banks made whole in GM bankruptcy

By Tom Eley

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Major lenders to General Motors (GM) will not lose any money as a result of the automakers’ bankruptcy, according to several media accounts. Senior secured lenders—all major Wall Street banks and finance houses—will be made whole, realizing the full $6 billion they are collectively owed. In sharp contrast, the estimated $35 billion GM owes its current and future retired workers in the form of pension and healthcare obligations will be subject to ruthless cuts, overseen in large measure by United Auto Workers (UAW) executives.

Because the banks will recover “about 100 percent of their investment,” the New York Times notes, additional protection purchased on their loans through the credit-default swap market will only have to “cover administrative costs and the like.” In other words, the major banks, including J.P. Morgan Chase & Co., Citigroup Inc. and Credit Suisse, will lose not a penny on their failed investments. This in spite of the fact that, since the onset of the financial crisis, J.P. Morgan and Citigroup have been handed tens of billions in taxpayer money through direct cash infusions, Federal Reserve loans, and guarantees on their debts.

Even many so-called “subordinated lenders,” mostly bondholders, will be covered in full. Though they will receive only 12.5 cents per investment dollar through bankruptcy proceedings, debt insurance paid out through credit-default swap contracts will in many cases cover the rest. Bondholders will take over about 10 percent of “the new G.M.” and control another 15 percent in stock warrants.

A third category of investors—those who bought into GM when its demise was imminent—stand to reap “one of the greatest payoffs in the history of long-short investing,” Citigroup Inc. analysts write. These groups bought into GM’s secured loans and at the same time acquired derivatives tied to the company’s unsecured debt that would pay out when the company defaulted. They were essentially gambling that the Obama administration would make whole the secured loans, which are dominated by the top Wall Street finance houses. Among the firms that reaped windfall profits in this manner is the hedge fund BlueMountain Capital Management LLC.

“G.M. bonds have been changing hands rapidly” among a number of hedge funds, Times business columnist Andrew Sorkin noted in March, “suggesting that some hedge funds have been plowing into them, gambling that these investments soon will be worth even more.” Among these concerns are Fidelity Investments, Research & Management, Loomis, Sayles, the Pacific Investment Management Company and Franklin Resources Inc. The guarantees on the banks’ and hedge funds’ GM debts exposes the real workings of the “free market.” On the market, these securities would be worth pennies on the dollar. But because the real market value is unacceptable to the financiers, the Obama administration—and his Auto Task Force, led by billionaire private equity manager Steven Rattner—intervened to ensure that they realize their full investment in the failed corporation.

The Obama administration’s guarantees of the banks’ and hedge funds’ GM debts exposes the class character of its intervention in the auto industry. The concern was never to “save” the auto industry—i.e., the jobs, living standards and communities of auto workers. It was from the beginning a wrecking operation designed to plunder the retirement benefits of workers and the remaining profitable parts of GM—to the benefit of the Wall Street finance industry, whose reckless gambling triggered the financial crisis in the first place.

More fundamentally, the Obama administration has used the forced bankrutpcy of GM and Chrysler to launch a far-reaching attack on the jobs, wages and living conditions of workers. Just as the struggle of auto workers in the 1930s once raised living standards for the whole working class, so now the Obama administration seeks to use the impoverishment of auto workers and their communities as a bludgeon against the working class as a whole. It is notable in this regard that the forced bankruptcy of GM, once the nation’s largest provider of decent-paying industrial jobs, has been quickly followed by the de facto forced bankruptcy of California, the nation’s most populous state, which once fostered its highest standard of living.

Indeed, while GM’s creditors will lose nothing in bankruptcy, Obama and his Auto Task Force predicated loans to GM and rival Chrysler Corp. on plant closings, layoffs, wage and benefit cuts, sacrifices in working conditions, and the forced closure of thousands of auto dealerships. These draconian measures will devastate communities across the nation, especially in the hard-hit industrial states of Michigan, Ohio and Indiana, where only one year ago Obama campaigned feverishly for the presidency on the promise that he would save jobs.

More devastation is to come. Top members of Obama’s Auto Task Force have warned that the “culture” of the auto industry—which they associate with steady employment and decent standards of living—continues to be a barrier to profitability.

“Addressing cultural issues is just as fundamental to our assignment as addressing the balance sheet or financing,” said Steven Rattner, Task Force head and close Obama ally. And Task Force member Ron Bloom, who has close ties to both Wall Street and the AFL-CIO, warned that “General Motors has been kicking problems down the road for a long time.” The Auto Task Force has made interim GM CEO Fritz Henderson’s job dependent on his willingness to overcome this “culture,” a recent Times article explains. No jobs will be safe. “Mr. Henderson said that changes were coming at G.M. that would demonstrate his willingness to break from the past. For example, Mr. Henderson said that by the end of the year, G.M. would reduce its executive ranks by 35 percent from 2008 levels,” the Times writes.

Things must be called by their right name. Auto workers face no more ruthless enemies than those who claim to be their allies—the Obama administration, the Democratic Party politicians, and the UAW. UAW executives have worked intimately with Obama’s Auto Task Force to prepare and push through the bankruptcies of GM and Chrysler in the interests of Wall Street. In so doing, the UAW officialdom has secured for itself a majority ownership of Chrysler and a major stake in GM. It will hereon in have a direct, and pressing, interest in driving down the wages and benefits of workers.

Journalist Threatened For Exposing Cover-Ups

Journalist Threatened For Exposing Cover-Ups

By Cliff Kincaid

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A journalist who has uncovered evidence of al-Qaeda involvement in the 1995 Oklahoma City bombing and the 1996 crash of TWA Flight 800 has been threatened with a lawsuit by powerful U.S. Attorney Patrick Fitzgerald.

Government officials blamed the crash of TWA Flight 800, which killed 230 people, on a mysterious mechanical malfunction, while the Oklahoma City bombing, which killed 168, was quickly labeled the work of domestic “right-wing” terrorists.

Accuracy in Media has long maintained that Clinton Administration officials concealed the truth about both incidents.

But at a news conference at the National Press Club, investigative reporter Peter Lance said that “the greatest mass murder in U.S. history,” the attack on 9/11 which occurred during the administration of President George W. Bush that killed nearly 3,000 Americans, has still not been thoroughly investigated.

A five-time Emmy Award winner formerly with ABC News, Lance is one of the few journalists with mainstream press credentials still raising the hard questions about how al-Qaeda agents were able to prepare terrorist attacks on U.S. soil, even while some of them were under surveillance here and abroad by various U.S. government agencies.

Rather than fire anybody over this massive intelligence failure, President Bush gave George Tenet, CIA director at the time of 9/11, a presidential Medal of Freedom, we noted in a 2006 column that praised the work of Lance and others for continuing to raise questions about the attack.

The 9/11 attack was foreseeable and preventable, Lance said at the Tuesday press conference, and there has been a spectacular “failure of accountability” for those who could and should have stopped them. Lance said the 9/11 commission, officially known as the National Commission on Terrorist Attacks Upon the United States, was a whitewash and that commission members had political agendas designed to protect people and agencies from scrutiny.

The Lance book, Triple Cross, originally published in 2006 and now issued in paperback, includes a timeline, also on his website, tracing the history of some of the perpetrators of these terrorist acts going back to 1981. His book goes into substantial detail about the TWA 800 and Oklahoma City bombing cases and how government officials covered up the nature of these crimes.

Offering support to Lance at the press club event was Lt. Colonel Anthony Shaffer, a member of the Able Danger military intelligence unit that identified al-Qaeda terrorist cells in America before the 9/11 attack. This project used a process known as “data mining” to develop information on potential terrorists and establish a data base for government use. Shaffer blew the whistle on the fact that the information wasn’t shared with other agencies or used effectively.

Also appearing in support of Lance was Jan Schlichtmann, the attorney whose lawsuit over polluted and poisoned water was the subject of the film “A Civil Action,” starring John Travolta. He said Lance had a “right to write” and that Fitzgerald’s attempt to control “what we say and write about his conduct in office” should not stand.

Lance argues that one of the biggest intelligence failures involved the handling of al-Qaeda agent and former Egyptian Army commando Ali Mohamed, whose face appears on the cover of the book and who worked for the CIA, the Army Green Berets, and the FBI, even while he was helping al Qaeda prepare terrorist acts against Americans. He was eventually arrested on terrorism charges, convicted and sentenced to prison.

Lance’s previous books include 1000 Years for Revenge and Cover Up.

However, it wasn’t until Fitzgerald threatened Lance over Triple Cross and demanded that the paperback edition be killed that the specter of government censorship had emerged. Before he became U.S. Attorney in Chicago, Fitzgerald ran anti-terrorism efforts as an Assistant U.S. Attorney out of the Southern District of New York.

Lance argues in his book that Fitzgerald and other senior Department of Justice and FBI officials failed to properly follow up on hard evidence about al-Qaeda activities on U.S. soil and that information was discounted and suppressed about the planning and nature of some of the terrorist attacks.

Another former prosecutor, Andrew McCarthy, has taken issue with Lance’s version of some of the facts. But Fitzgerald, who cites McCarthy’s book, Willful Blindness, in disputing some of Lance’s contentions, is threatening Lance and publisher HarperCollins with legal action and even mocking the journalist as a “heroic” figure because he had broken with the rest of the press on the TWA 800 matter. Fitzgerald calls the idea of a government cover-up of a terrorist attack on TWA 800 “fantastically paranoid.”

But Lance reminds people that Fitzgerald’s record, which now includes indicting former Illinois Governor Rod Blagojevich on corruption charges, has not been without controversy.

Fitzgerald functioned as Special Prosecutor in the case involving whether Valerie Plame’s CIA affiliation being revealed in a Robert Novak column somehow violated the law. In an attempt to find the source of the disclosure, Fitzgerald grilled many reporters over their sources and put one of them, Judith Miller of the New York Times, in jail, even though the original source of the leak, State Department official Richard Armitage, was known and never charged. Fitzgerald ended up prosecuting and convicting Lewis “Scooter” Libby, the former top aide to Vice President Dick Cheney, for a side issue—allegedly lying about what he told a reporter about the case. Libby’s prison sentence was commuted by President Bush.

Lance finds the CIA leak case to be another example of how Fitzgerald escapes accountability for his questionable prosecutorial conduct.

The Fitzgerald threats consist of 32 pages of letters. While some of the letters were sent from Patrick J. Fitzgerald as a private citizen, with a Post Office Box for an address, one was faxed from the office of the “U.S. Attorney Chicago.”

In response, Lance has filed a complaint with the Office of Professional Responsibility in the Department of Justice, saying, “I ask that the Office of Professional Responsibility investigate to determine whether…Mr. Fitzgerald crossed the line from public official charged with protecting the Constitution to thin-skinned prosecutor who used the authority of his office to undermine it.”

In a curious revelation, one of the letters from Fitzgerald refers to HarperCollins, a subsidiary of News Corporation, having once offered Fitzgerald a “seven figure” sum for the rights to his biography. Fitzgerald calls this an “estimate of the market value of my personal reputation.”

While such a statement may be a reference to a monetary figure that Fitzgerald thinks he can sue to recover because of a book that he thinks damages his reputation, a blogger at the Able Danger site commented, “So, he’s suing Harper Collins after being offered ‘seven figures’ by Harper Collins which he obviously never got, or did I miss the story about a Fitzgerald book deal?”

Lance said the American people should demand a “truth commission” to examine the history of government intelligence failures in the war on terrorism.

While the threats from Fitzgerald have attracted some media interest and attention, Lance had harsh words for the mainstream media and their lack of curiosity regarding the ultimate truth about 9/11 and other terrorist acts on American soil. He said the New York Times won’t touch the controversy over his book.

Lance said that he had no information about the post 9/11 anthrax attacks, which the FBI had falsely blamed on former government scientist Steven Hatfill. AIM had always maintained that Hatfill was being unfairly targeted and that the attacks were probably the work of al Qaeda. Last year the government paid Hatfill millions of dollars in a settlement.

Lance said that while reform of the FBI was absolutely essential if the terrorist networks are to be exposed and stopped from attacking America again, a proposed new FBI computer system called Sentinel that is supposed to analyze cases and potential threats is over-budget and behind schedule.

The Good, the Bad, the Ugly: Financial Sector Reform

The Good, the Bad, the Ugly: Financial Sector Reform

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There are major gaps and shortcomings in the Obama administration's financial regulatory proposals, formally released today, and the proposals alone leave the financial sector vulnerable to future crisis. Still, it's nice to be able to say that the proposal does contain meaningful reforms.

Whether those meaningful reform proposals become law is no sure thing, and will depend on the administration's willingness to stare down Wall Street -- which still retains immense political power, despite its partial self-immolation -- and on whether a mobilized public demands Congress act for consumers, not contributors.

The 85-page draft released today is qualitatively different than the bullet-point plans previously issued by the Treasury Department. It contains detailed proposals, spanning across the financial regulatory spectrum, not easily summarized. Here are only some key elements -- first, the good, then the bad.

The Good

1. The administration supports creation of a strong Consumer Financial Regulatory Agency.

It proposes to give this new agency very strong powers, and jurisdiction over consumer protection rules -- taking away authority from existing regulators (like the Federal Reserve) that have failed utterly to protect consumers. It favors simplicity and gives the new agency the authority to mandate financial firms offer "plain vanilla" loans along with the more complicated packages they prefer. It gives the agency authority to ban mandatory arbitration provisions that strip consumers' right to go to court for redress of scams and rip-offs. And it establishes that the new agency's rules will be a regulatory floor, with states permitted to adopt stronger protections.

2. The administration proposes to reduce speculative betting, through new standards on leverage.

One reason the financial crisis spun out of control was financial firms'
excessive use of "leverage" -- borrowed money. Heavily leveraged, the top commercial banks and investment banks overreached with very risky loans and investments. The administration proposes that all systemically important financial firms be subjected to higher capital reserve standards (meaning they can rely less on borrowed money). The administration properly says these rules should apply to any systemically important firm, whether or not it is a bank. It defines systemically important as a firm "whose combination of size, leverage and interconnectedness could pose a threat to financial stability if it failed." There are still important details to be worked out here, including how much capital such firms must maintain. And there is the very worrisome element that it is the Federal Reserve that is given primary responsibility for overseeing these systemically important firms.

3. Through "skin-in-the-game" rules, the administration aims to prevent predatory and reckless lending.

One reason lenders were willing to make so many predatory and bad-quality mortgages -- including but not limited to the class of "subprime" loans -- was that mortgage originators did not hold on to the loans. Mortgage brokers cut deals on behalf of banks and non-bank originators, which in turn sold the resulting mortgages to other banks. These banks, in turn, sliced and diced the mortgages, combined them into packages of pieces of thousands of other mortgages, and sold them to all kinds of investors. Because the initial lender did not maintain an ongoing interest in the mortgage, they did not have any incentive to ensure they were making a quality loan.

The administration proposes that loan originators be required to keep, at minimum, a 5 percent exposure in loans.

4. The administration seeks power to take over failing, systemically important financial firms.

The government already has such "resolution" power for commercial banks.
The Federal Deposit Insurance Corporation regularly takes control over failing banks and "resolves" them outside of the bankruptcy process. This typically means selling off the failing bank to another bank, often after separating its good assets from bad. FDIC is expert at this process, moves very quickly, and averts the harmful consequences from extended bankruptcy processes.

The government does not have the legal authority to undertake comparable measures for important non-bank firms. This includes investment banks (think Lehman Brothers) and insurance companies (think AIG). Giving the government resolution power for non-banks should help control financial panic.

The Bad

1. The administration does not propose to do anything serious about executive pay and top-level compensation for financial firms.

The administration does support "say-on-pay" proposals, which give shareholders the right to a *non-binding* vote on executive compensation. But a non-binding vote isn't worth too much; and, more importantly, shareholders are often willing to support excessive compensation while risky bets are paying off.

In terms of financial stability, the imperative is to do away with the Wall Street bonus culture, where executives and traders are given extraordinary bonuses -- often four or more times base salary -- based on annual performance. This bonus culture gives traders and executives alike an incentive to take big bets -- because they get massive payoff if things go well, and don't suffer if they go bad, or go bad sometime in the future.

This is a structural problem, not a symbolic one. Anyone who thinks pay isn't of overriding importance in financial regulation should have been set straight by the desperation of the bailed out Wall Street firms to pay back their loans from the government. That desperation is overwhelmingly tied to a desire to escape the extremely modest pay standards issued by the Obama administration.

Besides financial stability, there are important questions of economic justice and taxpayer rights related to executive compensation. The Wall Street hotshots -- including the major hedge fund players -- have paid themselves unfathomable amounts of money over the last decade. They have set an aspirational standard for other executives and professionals, and helped drive wealth and income inequality to outrageous and unhealthy levels. Ultra compensation should be taxed at very high rates; and, at a bare minimum, the loopholes that let hedge fund managers pay taxes at about half the rate of regular folks must be closed. The case for aggressive tax reform on ultra rich financiers was overwhelming last year; now, with the financial system completely dependent on taxpayer largesse, there shouldn't be anything left to debate. No one in finance can say they made their money just by working hard or being clever -- their system was saved by the government.

2. The administration does not propose structural reform of the financial sector.

Although it proposes some meaningful regulatory reform, and modest alteration of the structure of regulatory agencies, the administration does not propose to alter the structure of the financial sector itself.

There is no discussion of returning to Glass-Steagall principles, to separate commercial banking from other financial activities including the speculative world of investment banking. Glass-Steagall was adopted during the Great Depression, as a response to financial abuses that closely parallel those of the previous decade. Repeal of Glass Steagall -- following a decades-long erosion -- came in 1999, and helped pave the way for the present crisis.

Nor is there any discussion of shrinking the size of goliath financial firms. Everyone now recognizes the problem of too-big-to-fail and too-interconnected-to-fail financial firms. The administration proposes to deal with the problem through regulation alone; a more fundamental approach would break up giant firms (or at least commit to prevent further consolidation going forward).

Addressing structure and size is important not only because of the economic power accreted by the goliaths, but because of their political strength -- about which, see below.

3. The administration's approach to regulating financial derivatives is too timid.

To its credit, the administration proposes to repeal recent deregulatory statutes and establish regulation of financial derivatives. But its plan does not go far enough. It creates a regulatory exemption for customized derivatives -- a loophole that will create lots of business for corporate lawyers ready to change terms in derivative contracts so that they differ somewhat from standardized terms.

Nor does the administration propose to ban classes of dangerous financial instruments that cannot be justified. A clear example of a product that should be banned is a credit default swap -- a kind of insurance against a certain outcome, like the inability of a bondholder to make required payments -- in which neither party has a stake in the underlying transaction. Such credit default swaps have no insurance component, and are nothing more than bets -- but they are bets that can vastly exceed the value of the transaction being bet on, and can spread financial contagion, as AIG demonstrated. George Soros argues that all credit default swaps basically share this feature, and should be banned altogether.

The administration proposal also fails to require that exotic financial instruments be subjected to pre-approval requirements. Under such an approach, financial firms would be required to show that new instruments offer some social benefit, and do not pose excessive risk.

4. The administration does not propose to empower consumers.

There is enormous merit to the proposal for a Consumer Financial Products Agency. But it is not a substitute for giving consumers the power to organize themselves to advance their own interests. Simply mandating that financial firms include in bills and statements (whether mailed or e-mailed) an invitation to join an independent consumer organization would facilitate tens of thousands of consumers -- and likely many more -- banding together to make sure the regulators do their job, and to prevent Wall Street from "innovating" the next trick to scam borrowers and investors.

The Ugly

Identifying the merits and gaps in the administration's proposal is important. But the proposal does not exist in a vacuum, and it doesn't become law just because the administration has proposed it.

The Wall Street types don't know shame. Having benefited from literally trillions of dollars of taxpayer largesse, one might expect that they would be embarrassed to lobby on Capitol Hill. Or, that Members of Congress would be unsympathetic to their pleas.

But that's not how Washington works. Having spent $5 billion on political investments over the last decade, Wall Street continues to pour cash into the political process -- and those investments continue to pay handsomely.

To understand how things work, consider the fate of the proposal to give bankruptcy judges the power to adjust mortgages, so that they could reduce the principal owed on loans on homes now worth less than value of the loan. Then-candidate Barack Obama campaigned in favor of such "cram-down" provisions. In a rational world, banks would agree to these adjustments to principal on their own, because they do better if people stay in their homes and continue paying on the loan, rather than by forcing foreclosure. Not long ago, it was widely expected that cram-down would quickly become law. But the banks deployed their lobbyists, and this vital though totally inadequate measure was defeated in May. The Obama administration sat quietly by.

Now, Wall Street is already trashing the good parts of the administration's proposals.

"Congress is not going to impose a 'skin-in-the-game' requirement on all loans," Jaret Seiberg, an analyst with Washington Research Group, a division of Concept Capital, flatly tells American Banker.

The Chamber of Commerce and other industry groupings are attacking the idea of a Consumer Financial Product Agency, including with the extraordinary claim that it will improperly relieve consumers of their duty to do "due diligence" on financial products.

Hedge funds are hiring ever more lobbyists and floating the claim that the administration's requirements for some modest disclosure requirements for secretive hedge funds could do more damage than good. One purported reason: the disclosures may be too complicated for regular people to understand.

There's no question that Wall Street is going to mobilize -- is already mobilized -- to defeat the administration's positive proposals.

What remains very much in question is the administration's willingness to engage in bare-knuckled political fighting to defend these proposals, as well as whether the public will be mobilized to support these and other moves to control Wall Street.

A new public interest coalition -- Americans for Financial Reform -- aims to do just that, but they are fighting on occupied territory. As Senator Majority Whip Richard Durbin says, "the banks are still the most powerful lobby on Capitol Hill. And they frankly own the place."

Senate OKs bill to keep detainee abuse photos private

Senate OKs block of alleged abuse photos

From Terry Frieden

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The Senate passed by unanimous consent Wednesday a bill that would prevent the release of controversial photos of alleged U.S. abuse of prisoners and detainees.

The bill, sponsored by Sens. Joe Lieberman, a Connecticut Independent, and Lindsey Graham, a South Carolina Republican, had originally been part of the war funding supplemental bill passed Tuesday by the House.

But House Democrats stripped that part of the measure from the bill, and the senators proposed it as stand-alone legislation.

Earlier Wednesday, Graham said at a Judiciary Committee hearing that he had received assurance from White House Chief of Staff Rahm Emanuel "that the president will not let these photos see the light of day."

"The people involved in Abu Ghraib and other detainee abuse allegations have been dealt with," Graham said, arguing against the release of the photographs. "Every photo would become a bullet or IED used by terrorists against our troops."

Hundreds of photos allegedly depict explosive images of prisoner abuse -- images U.S. military leaders believe would fuel anger in the war regions and endanger U.S. troops.

After receiving the White House promise, Graham agreed to release a "hold" on key legislation, including the $106 billion war funding measure.

Before the Senate vote, Graham told his colleagues from the Senate floor that President Barack Obama "would sign ... an executive order" classifying the photographs unless Congress acted to prevent their release.

The ACLU has gone to court to argue for release of the photos under the Freedom of Information Act. The lawyers won a Circuit Court ruling agreeing they should be made public.

The Obama administration, which initially indicated a willingness to release the photos, bowed to fears of military commanders and reversed course, announcing it is appealing the ruling to the Supreme Court.

The Graham-Lieberman bill will now go to the House.

A senior Democratic aide said it's "unclear at this point" what the House will do on the bill. The House may not take up the bill at all or take it up as an amendment to the Department of Defense funding authorization bill, the aide said.

EPA Refuses to Reveal Dangerous Coal Ash Waste Sites

EPA refuses to reveal dangerous coal ash waste sites

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Around the United States today, there are 44 coal ash waste disposal sites so hazardous that -- were they to fail like the one at the Tennessee Valley Authority's Kingston plant did last December -- they could kill untold numbers of nearby residents.

In fact, the sites are so dangerous that last week the federal Environmental Protection Agency began notifying local officials and first responders about the sites. In recent weeks the EPA has also deployed teams to determine whether any of them present an imminent threat.

However, we don't know where these hazardous sites are because the EPA is refusing to disclose their locations to the public due to security worries. The agency made the decision after consulting with the Department of Homeland Security and the Army Corps of Engineers, which has raised concerns about whether they could be possible targets for terrorists.

The Obama administration's decision to withhold the information concerns U.S. Sen. Barbara Boxer (D-Calif.), whose Environment and Public Works Committee has been holding hearings to examine the dangers posed by poorly regulated coal ash waste disposal sites. She held a press conference on Friday to discuss the administration's refusal to inform the public about the high-risk sites.

"If these sites are so hazardous and if the neighborhoods nearby could be harmed irreparably, then I believe it is essential to let people know," she said. "Because if they know, they will press their local authorities who have responsibility for their safety to act now to make these sites safer and not sit back and wait."

Boxer is pressing to find out whether the handling of these coal ash disposal sites is consistent with the treatment of similar facilities under laws that guarantee the public's right to know about threats in their communities. On Friday, she sent a letter to DHS, the Army Corps and EPA asking for more details about that.

"One of the lessons we all learned from the TVA spill is that a close look at these facilities is extremely important, and we cannot rely on general assurances that the sites are safe," Boxer said at the press conference. The failure of a retaining wall at the Kingston plant in eastern Tennessee's Roane County resulted in the release of more than 1 billion gallons of toxic coal ash into a nearby community, destroying several homes and polluting water supplies with arsenic, lead and other poisons.

The senator said she felt that a "muzzle" has been placed on her. The only people she is allowed to discuss the sites with are the staff from her committee and the senators from the impacted states. She is not allowed even to speak to other senators' staff about the issue, saying the calls she made to her colleagues' offices were the "strangest" she's ever had to make.

"I think we are losing what we cherish in America, which is the citizen's right to know," said Boxer, who plans to hold additional hearings on the matter. "If I live in one of these communities, I want to know."

The EPA has authority to regulate coal ash as hazardous waste, and the new administrator, Lisa Jackson, has pledged to move forward on the issue. Boxer said she's confident the agency will have regulations in place before the end of the year.

For a list of the 100 surface impoundments like the one at the Kingston plant where the greatest amount of coal ash waste was reportedly dumped in 2006 according to EPA data, click here.

Why Wal-Mart Workers Need the Employee Free Choice Act

Why Wal-Mart Workers Need the Employee Free Choice Act

America's largest private employer has systematically harassed and fired pro-union workers.

By Nelson Lichtenstein

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Since liberal Democrats and their labor supporters introduced the Employee Free Choice Act into Congress earlier this year, opposition to the legislation has reached a fever pitch.

The main line of attack from corporations and business trade associations zeroes in on EFCA's "card check" provision, which would give union advocates the option of avoiding a contentious and often employer-dominated National Labor Relations Board (NLRB) election. The provision would allow a majority of workers in any given workplace to enroll in a union via a simple card-signing.

A typical corporate response to the bill--which remains in committee in both the House and the Senate--came from Wal-Mart, the nation's largest company. The proposed labor law would "effectively eliminate freedom of choice and the right to a secret-ballot election," Wal-Mart spokeswoman Daphne Moore said in March, a few days after the bill was introduced. "We believe every associate or employee should have the right to make a private and informed decision regarding union representation."

So Wal-Mart champions worker freedom. To get a sense of that company's Orwellian definition of the concept it is useful to revisit the scene of a union organizing effort at Wal-Mart's Kingman, Ariz. discount store. One might well look at dozens of other failed organizing attempts at Wal-Mart, but this campaign in the late summer of 2000 was exceptionally well-documented. The account that follows is based not only on NLRB reports and opinions, but on an authoritative Human Rights Watch report and internal company documents that were put in the public domain after litigation before the labor board and the federal courts.

Summers are hot in Arizona, and the young men who work in Wal-Mart's Tire and Lube Express (TLE) department get their hands dirty, have few prospects for promotion and are well aware that similar blue collar jobs in garages and car dealerships pay a lot more. Such was the case in Kingman where an otherwise humane manager, under corporate pressure to keep labor and maintenance costs down, refused to spend the $200 needed to repair an air-cooling system essential in the 110 degree heat. So the TLE workers got in touch with the United Food and Commercial Workers, which on August 28, 2000, filed a petition with the nearby Phoenix office of the NLRB to represent as many as 18 automotive service technicians.

The reaction from Wal-Mart managers, both at the Kingman store and at corporate headquarters in Bentonville, Ark., was virtually instantaneous. Within 24 hours a Bentonville-based "labor team" had flown into Kingman, where they joined a growing cadre of district and regional managers from Arizona and Nevada. In all more than 20 outside executives flooded the store. Wal-Mart replaced the Tire and Lube department manager with a high-level personnel executive, untutored in changing oil or tires but well-versed in the corporation's union avoidance program. Loss prevention--the company's shoplifting police--got busy as well, training a new set of cameras on work areas in the tire and lube shop. "I had so many bosses around me, I couldn't believe it," rememberes Larry Adams, a union supporter who worked in the TLE at that time. "They weren't there to help me. They were there to bug me. It was very intimidating."

The key labor team figures were Vicky Dodson, a 13-year veteran in Wal-Mart's People division, and Kirk Williams, a young law school graduate from Chicago that Wal-Mart had hired just a few months before. Dodson was a pro, a forceful and controlling "pistol," remembers one of the assistant managers who came under her authority; "an intelligent, articulate, sophisticated individual" in the more judicious words of an NLRB administrative law judge. Williams, who had worked his way through Kent State as a Wal-Mart assistant store manager, including a stint in loss prevention, was a coldly ambitious functionary who would soon spend enormous amounts of time on the corporate jet putting out union fires throughout the company's retail empire.

Most people in the store, management and workers alike, called the Bentonville labor team the "union busters" or the "Nazi SS." Not unexpectedly, Dodson and Williams were contemptuous of the existing store management, whose maladroit handling of layoffs and scheduling issues they blamed for precipitating the union uprising. "They took us out of the store for a couple of days," Assistant Manager Tony Kuc says, "took us to a hotel, telling us how to handle the union, how to stop them from coming in...what to say, what not to say." Within a few weeks the store manager had been transferred and demoted, his two assistant managers marked for dismissal, and the TLE district manager fired outright.

Within less than a week Dodson and her confederates met with 95 percent of all workers eligible to participate in the NLRB certification vote. Meanwhile, the labor team held daily meetings at 8 a.m. with all the salaried managers, as well as the hourly department heads, who they falsely claimed were part of the store "management" and therefore ineligible to take part in an NLRB certification election. "We were basically spies, spies for the store, spies for the company," recalls a disenchanted associate. "We had to run our departments, do everything normally, and then be spies for them. The stress level was so high."

Unionists complained, at Kingman and elsewhere, that "Wal-Mart has tricked hourly department managers into thinking they were part of the management team and therefore obligated to report any signs of union activity," even though the NLRB ruled repeatedly against the company about the status of these hourly employees. Observed Michael Leonard, a UFCW official at the time, "Wal-Mart's M.O. is to test the limits of the law, and to only change its prepackaged anti-union program when it is forced to."

The labor team screened one of five different anti-union videos every day. "Wal-Mart Under Attack" was a lurid depiction of union thuggishness and disruption directed at a company that was portrayed as merely trying to provide inexpensive goods for ordinary working people. "Sign Now, Pay Later" urged Wal-Mart workers to resist the siren song of the union organizers, who would do and say anything to win another signature on a union card, all the while ensnaring the hapless retail worker in a world of burdensome dues and serf-like subservience to an alien, boss-ridden organization. These videos, always followed by a Q and A with a member of the labor team, were highly effective. A worker later interviewed by Human Rights Watch remembered: "I actually had fears after seeing videos of Molotov cocktails and rocks, pelting rock, hurling bottles." Another said, "After those meetings, minds started changing" as one-time union supporters turned against the UFCW.

Dodson, Williams and other top managers from the southwest stayed in Kingman for nearly two months. This was the period during which the local NLRB held hearings to determine the size and composition of the TLE unit and in which both the UFCW and the Wal-Mart labor team marshaled their forces for the certification election itself. In minutely detailed reports back to Bentonville, labor team members described every instance of possible union talk, every wavering worker and every meeting. Dodson kept track of the workers who wore union pins and the ones who took them off, what comments were made at the captive meetings and the degree of union sentiment in various departments of the store.

The labor team authorized raises for 85 percent of all workers, fixed the TLE cooling system and repaired other equipment in that same department. On October 9, Wal-Mart senior executive Tom Coughlin jetted into Kingman to tell a group of TLE workers that the Wal-Mart "Open Door," not the UFCW, was the solution to their problems. This was a clear violation of the spirit, if not the letter, of the existing labor law, which forbade management efforts to bribe, promise or cajole employees in the midst of an organizing effort. "If you have any questions or problems, don't hesitate to call me," Coughlin told his grease-stained listeners. "I will get you some results. I can override anybody."

Given all this, it is hardly surprising that the UFCW organizing drive collapsed in inglorious defeat. Although the Labor Board ruled that the TLE was an appropriate bargaining unit, the union lost key supporters there within weeks of the labor team's arrival in town. Union partisans had virtually no opportunity to counter the propaganda barrage unleashed by the Bentonville labor team. If they sought the telephone number of undecided associates, this violated Wal-Mart's "no solicitation" rule; if they distributed leaflets in the parking lot or break room in the store, managers immediately called loss prevention and then patrolled the facility to pick up any stray literature.

And when UFCW organizers made evening house calls, Wal-Mart denounced this tactic as harassment and intimidation. So on October 24, UFCW lawyers filed a broad set of Unfair Labor Practice complaints against Wal-Mart, thus postponing indefinitely the NLRB election scheduled for just a few days later. Working life for the remaining pro-union people in the Kingman store became increasingly intolerable. Within little more than a year virtually all would be fired, forced to quit or simply leave in disgust.

The Labor Board eventually ruled, at Kingman and elsewhere, that Wal-Mart had systematically harassed and spied upon numerous workers, that it had threatened employees with a loss of benefits and raises if they supported the union, and that the company had fired outright key labor partisans. But none of this had any real impact on Wal-Mart's anti-union operation, if only because the penalties were so trivial: a few thousand dollars in back pay for a few unjustly fired employees, plus a formal notice briefly posted in the break room pledging to obey the labor law.

In its authoritative report on Wal-Mart, "Discounting Rights: Wal-Mart's Violation of U.S. Workers' Rights to Freedom of Association," Human Rights Watch concluded that the company "has translated its hostility toward union formation into an unabashed, sophisticated and aggressive strategy to derail worker organizing at its U.S. stores that violates workers' internationally recognized right to freedom of association."

The events at Kingman took place more than eight years ago, but there is no evidence that Wal-Mart has altered its internal anti-union policies in the slightest. Wal-Mart workers, all 1.4 million of them in the United States, need the Employee Free Choice Act.

Flawed Elections: US and Iran

Flawed Elections: US and Iran

The Right has been bashing President Obama for not calling the Iranian elections a fraud. Perhaps Obama understands that you can’t tell someone to fix a problem you haven’t first fixed in your own house.

American democracy is seriously at risk so long as many of our votes are counted solely by machines.

As electronic voting has moved into the U.S. (and other countries), the notion that a handful of people can swing entire elections is not just a fantasy; it is a definite possibility.

Once you move to all-digital records, you can never know for certain if the ballot you are examining is the one the voter actually cast. (For an excellent demonstration of electronic voting machine vulnerabilities, watch this video from Princeton.)

And the problem isn’t only the voting machines themselves, but the central tabulator, the machine on which the results from the individual machines votes are totaled.

It would be hard to rig hundreds of voting machines. But it would be quite simple to switch out the code on the single machine in the county that totals the votes from all the other machines.

When you cast your vote, how do you know your vote was properly recorded? Properly transmitted to the central tabulator? Properly reported from the central tabulator?

If we are being honest about this, we have to admit there’s no way we can know. We can trust, or not trust. But we can’t know.

Ironically, electronic voting was instituted in the wake of the 2000 presidential election in an effort to fix elections. The spectacle of publicly hand-counting the hanging, pregnant, swinging, and dimpled chad had become an international embarrassment, and Congress wanted to do better. Or so we were told.

Congress passed the “Help America Vote Act” (HAVA). HAVA added a requirement for electronic voting machines under the guise of helping the disabled community vote in privacy. The disabled community, unfamiliar with the numerous vulnerabilities of an all-digital system of voting, readily endorsed HAVA.

Now, some groups are starting to realize that the cure may have been worse than the disease. Because by requiring one voting machine in each voting district to be electronic, HAVA opened the door to Diebold (now Premiere Election Solutions) and other electronic voting vendors to sell large quantities of the machines to the states.

According to the data at, seven states cast their votes solely in digital form, with no paper record that can be audited or recounted. Several more use DREs that produce a paper ballot, but, as the University of Santa Barbara’s security team demonstrated, the paper printout from a DRE may not necessarily match what the voter intended, even if the voter saw the correct printout before he left the booth.

DREs can be programmed to wait a few seconds, void the ballot the voter had approved, and issue a new ballot with a different vote on it. (See Part 1

and Part 2 of UCSB’s security team’s video demonstrating this and other vote-altering scenarios on a Sequoia voting machine. See Part 2 at 3:15 minutes for this scenario.)

Because most people aren’t programmers, they don’t know what is possible. And because most people are basically decent people, it’s hard for them to imagine, much less believe, that anyone would deliberately try to swing an election in this manner.

But people have tried to steal elections for years. In some cases, they have succeeded.

Look at what happened in Florida in 2000. Had the recount in process continued, and had all the votes been counted, Gore would have won. (See Robert Parry’s articles “Gore’s Victory” and "So Bush Did Steal the White House" for details.)

We know this because we had voter-marked paper ballots that could be examined. Instead, the Supreme Court effectively “stole” the vote out from under us and put in office a man who came in second, according to the votes cast by the American people.

If all we had were an electronic summary of the votes, the only “recount” option would be to simply print out the election results again to see if they matched the original tally of results. And of course, they would match.

How would that have verified the count? It wouldn’t have. But people haven’t really thought this through, and so we’re stuck with digital voting.

And it’s about to get much worse. There’s a lobbying effort underway to promote Internet voting. Just as HAVA was sold as a way to help the disabled, this Trojan horse comes to us in the guise of helping the troops overseas vote.

For the record, it’s possible Internet voting could be made secure and accurate. But just because something is possible doesn’t make it probable.

Why have people stuffed ballot boxes, registered dead people, and tried numerous ways to swing outcomes throughout the history of elections? Because so much power is at stake.

All Internet voting does is make it that much easier for a very small number of people to do what used to require large teams of operatives.

Rep. Rush Holt, D-New Jersey, has been fighting to protect our vote for several sessions of Congress. He’s put forward a bill that requires that all votes be cast on paper using non-tabulating devices (a pen, a mechanical device) and that a relevant portion of the paper ballots be audited afterwards.

The audit is perhaps the most important part of the bill. There’s no point in having paper ballots if no one ever looks at them again.

If no one had checked the paper ballots in the Minnesota Senate race, Norm Coleman would be seated there now. The original tally put Coleman 477 votes ahead of Al Franken.

At the start of the hand recount, that margin dropped to 215. By the end of the hand recount, his lead was down to 192 votes. When challenged ballots were reviewed, Franken ended up in the lead by 251 votes. After additional reviews, Franken’s lead stands at 312.

Imagine how this would have played out if there was nothing to review except an electronic printout of summary vote information. There’s no way we’d have any idea who really won. There’d be nothing to recount.

Holt’s bill is the only bill that provides for a phasing out of all DRE machines, provides that the paper ballot is the legal ballot of record in a dispute, and provides a guaranteed audit on a sliding scale – the smaller the margin of victory, the larger the number of ballots that need to be audited by hand.

Congress has so much on its plate, all of it worthy. But really, is there anything more important in a democracy than first securing our vote?

Let’s not criticize Iran until we first get our own house in order.