Wednesday, March 26, 2014

Getaways For Members Of Congress And Lobbyists Showcase The Prostitution Of Our Legislative System

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How bad will it get? The public approval rating for Congress has sunk to 9 percent, the lowest level since Gallup began to ask us about it.

But your lawmakers are bound to get even more unpopular.

Willing legislators have begun a scandalous relationship with corporate cash. The lovebirds are hooking up in secretive rendezvous resorts like the Dorado Beach Ritz-Carlton in Puerto Rico.

Lobbyists dine with politicians
mag3737/Flickr
Lawmakers and lobbyists don’t like to talk about what they’re doing. They certainly don’t want voters or the media to see them. These getaways showcase the prostitution of our legislative system.

If you had wandered innocently into the swank Four Seasons hotel of Vail, Colorado, in early January, you might have witnessed these groups groping for each other’s support.

Assorted lobbyists, including one who represents the utility giant, PPL Corporation, had slipped tens of thousands of dollars into the political pockets of Rep. Ed Whitfield and four other House members for the pleasure of rubbing elbows, wining and dining, and whispering sweet legislative nothings to them for hours.

At one dinner, the cozy group dug into juicy — and expensive — Wagyu steaks and swilled $60-a-bottle wine as they played “scratch-my-back.” That’s Washington-style politics for you.

Whitfield, a Kentucky Republican, was especially popular with the utility lobbyists because he chairs the House committee that handles legislation affecting — guess what? — utilities.

Ed must have had a good time in Vail, because when he returned to Washington, he promptly introduced a bill to let PPL and other electric utilities build additional polluting, coal-burning power plants – an industry favor that would overturn health protections recently approved by the Obama administration.

And it doesn’t look like this manipulation game will cease anytime soon.

Regarding these surreptitious meetings, a corporate lobbyist recently admitted to the New York Times: “Everybody is embarrassed about it. Although not so embarrassed that they don’t do it.”

War threats against Russia and the social crisis in the United States

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Once again, the American people are faced with a full-scale propaganda drive for war. The crisis in Ukraine, set off by a US- and European-backed putsch one month ago, has been followed by a campaign against Russia over the referendum in Crimea that includes economic sanctions and a threatened military response by NATO.

The present crisis is the latest iteration of what has become a permanent feature of life in the United States. Just last summer the American people were subjected to a manufactured war fever that nearly led to a bombing campaign against Syria. Before that it was Libya, with the people being told that immediate military action was required to prevent a “human rights” catastrophe. Threats against Iran and China are permanent, with the possibility of military action always “on the table.”

Over the past 25 years, the United States has been engaged in a campaign of global militarist violence that has taken on an increasingly reckless and unrestrained character. The collapse of the Soviet Union in 1991, accompanied by proclamations of the “end of history,” has been followed by a string of military interventions, from bombings and drone attacks to outright invasions: Panama, Iraq, Haiti, Somalia, Sudan, Serbia, Afghanistan, Iraq again, Yemen, Pakistan and Libya.

An unending “war on terror” proclaimed after the 9/11 attacks has been used to justify constant scare-mongering and the erection of the framework of a police state.

The scenario, with minor variations, has been repeated again and again: A hyperventilating media demonizes the latest incarnation of Hitler; there are manufactured pretexts and hypocritical denunciations from the president; a string of congressmen demand more aggressive measures. Any sliver of information that calls into question the official narrative—such as the fact that the US is working with fascistic and anti-Semitic forces in Ukraine—is ignored.

By now, the population has become somewhat inured to the process, yet the war hysteria emanating from the political establishment only intensifies.

The fact that the country is always at war or on the verge of going to war is a political and sociological phenomenon that requires explanation.

There are, first of all, the geopolitical and financial imperatives of American capitalism. The American ruling class saw in the collapse of the Soviet Union an opportunity to exercise unrestricted control over the entire world. In foreign policy, it conducts itself as though it is inconceivable that a country could have interests that do not perfectly align with those of the United States. Any government that thwarts its ambitions, including control over the most important markets and resources, is a potential target for attack, subversion or regime-change.

However, a central factor in the perpetual drive for war is the social situation within the United States itself. The atmosphere of war crisis serves a definite function—to direct the social pressure within the country outward against the latest proclaimed enemy.

Certain indices give a picture of the state of social relations in America, five-and-a-half years after the crash of 2008:

* Officially, 10.5 million people in the United States are unemployed, but these official figures vastly understate the extent of the jobs crisis. Over the past five years, another 5.5 million people have dropped out of the labor force for economic reasons (and are not counted as unemployed). The percentage of the population that has a job has remained essentially flat since the depths of the 2008-2009 economic collapse, while already meager jobless benefits have been slashed or eliminated.

* Poverty is epidemic, in recent years rising to levels not seen since the 1960s. One in seven US children is living in poverty, ranking the United States 26th out of 29 developed countries, according to the United Nations. A greater percentage of children live in poverty in the US than in crisis-stricken Greece. Some 1.65 million households (including 3.55 million children) live on less than $2 a day per person.

* The response of the ruling class to every social problem has been to lock people behind bars. The United States imprisons a higher percentage of its population, by far, than any other country in the world—743 out of 100,000, or more than 2.3 million people. About one quarter of the world’s prisoners are in the United States, which has only 5 percent of the world’s population.

* Wages of American workers have been under sustained attack for decades, and the share of the national income going to labor has declined steadily. Consumers confront surging prices for basic commodities. Families are saddled with unsustainable levels of debt from credit cards (averaging $15,252 per indebted household), student loans ($32,986) and mortgages ($152,209).

The ruling class has exploited the economic crisis to carry out a vast redistribution of wealth from the bottom to the top. Corporate profits are at record highs, as is the stock market. The richest 400 individuals now possess $2.2 trillion in wealth, an increase of $500 billion from 2012 to 2013 alone. The top one percent has received 95 percent of all income gains since 2009.

In domestic policy as in foreign policy, the past five years represent an escalation of processes that have deeper roots. For four decades the ruling class has been engaged in a systematic effort to reverse all previous social reforms and regulatory restrictions on business, engineering a historic retrogression in the living standards of the majority of the population.

The ruling class itself has taken on an increasingly criminal character, amassing its fortune through fraud, speculation and theft. The depraved social physiognomy of the corporate-financial elite finds expression in both foreign and domestic policy—in war, social counterrevolution and the dismantling of democratic rights.

The tremendous social tensions built up through this restructuring of class relations find no political expression, let alone progressive outlet. The state and its auxiliary organizations, including the media, function as wholly-owned subsidiaries of a ruthless and increasingly criminal financial oligarchy.

Military actions, whatever their geopolitical aims, serve to divert and regulate class antagonisms. The ferocity of American militarism is an expression of the depth and insoluble character of the crisis of American capitalism. It points to the inevitability and necessity of its opposite—social revolution.

FBI Held Strategy Meeting With Keystone XL Partners

The Bureau meeting with TransCanada suggests that concerns over opposition to the pipeline had reached the highest levels of the law enforcement community.

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On April 4, 2012 the FBI held a daylong “strategy meeting” with TransCanada Corporation, the company building the controversial Keystone XL pipeline, according to documents obtained by Earth Island Journal through a Freedom of Information Act request. The meeting, which took place in the agency’s Oklahoma City Field Office, came just three weeks after President Barack Obama visited the state vowing to cut through bureaucratic red tape and approve the southern portion of the pipeline. In a speech at a TransCanada pipe yard in Cushing, Oklahoma on March 22 Obama said: “Today, we’re making this new pipeline from Cushing to the Gulf a priority. So the southern leg of it we're making a priority, and we're going to go ahead and get that done.” The same day the White House issued an executive order [3] expediting the permit and review process for energy infrastructure projects.

The FBI meeting with TransCanada suggests that concerns over opposition to the pipeline had reached the highest levels of the law enforcement community. Terry Brannon, Cushing Police Chief at the time, says it was an information-sharing meeting. “I think it was important that law enforcement and the oil companies worked hand in hand together to make sure that if something did happen, that law enforcement wasn't playing behind the eight ball,” he told me. He said the biggest concerns raised at the meeting were opposition to the pipeline as well as terrorism and environmental activism.

The FBI declined to comment for this, story citing the contention surrounding the pipeline. According to Linda Wilkins, a public affairs specialist at the FBI, “TransCanada/Keystone Pipeline seems to be very politicized and controversial at this time. And the FBI generally do not participate or comment on such issues.”

The FBI routinely refuses to comment on, or even acknowledge, ongoing investigations. However, the agency does not appear to have a formal policy that bars it from commenting on politically sensitive issues. 

“Every arm of the federal government, apparently including the FBI, has been doing favors for TransCanada,” says Bill McKibben, co-founder of 350.org. “That they want to cover it up comes as no great surprise.”

Mike German, a former FBI agent who is now a fellow at the Brennan Center for Justice, says there are plenty of valid reasons why a company might meet with the FBI, including security threats and pipeline safety. He was surprised to learn, however, that the meeting came at the behest of the FBI and that the agency would produce a document with the FBI logo alongside that of a private corporation. He doesn’t see any reason why the FBI should dodge questions about the meeting. “I don't think it's appropriate for the FBI to refuse comment because something is political or controversial,” German says. “You're asking about their conduct. That their conduct might be controversial is the entire point of your asking the question.”

According to the documents obtained by Earth Island Journal, the meeting included presentations by TransCanada and the FBI. The agenda shows the dual logos of TransCanada and the FBI at the top and describes the day-long meeting as a “Training Session.” (TransCanada disputes this characterization of the meeting. “We did not participate in any training session with law enforcement,” says Shawn Howard, a company spokesperson.) In a March 13, 2012 FBI synopsis of a planning meeting between TransCanada and the FBI, the upcoming April event was described as a “Keystone XL Pipeline Strategy Meeting.” At the meeting TransCanada delivered presentations on the Gulf Coast project, pipeline operations, and corporate security. The FBI offered a legal briefing, a cyber briefing, and a “Common Operating Picture Support to Pipeline Initiative.” The day concluded with a 45-minute “Strategy Meeting.”

scan of a document bearing the logos of the FBI and TransCanada A copy of the meeting agenda obtained by Earth Island Journal shows the dual logos of
TransCanada and the FBI at the top and describes the day-long meeting as a “Training Session”.

In addition to TransCanada, representatives from several other oil and gas firms attended the meeting. These included Blue Knight Energy, Centurion Pipeline, and Plains Pipeline. More than 30 FBI agents from several states participated in the meeting, along with local and state law enforcement agencies, as well as representatives from the Department of Homeland Security.

TransCanada spokesperson Shawn Howard says the company was asked by the FBI to “update law enforcement officials” about their experience during the construction of the Gulf Coast Project. “While we are responsible for the construction activities that take place on our job sites,” he added, “law enforcement is responsible for enforcing the laws in the state and county where that work is taking place.”

In spring 2013, one year after the FBI strategy meeting, a similar event was held with Nebraska law enforcement agencies and TransCanada. According to a spokesperson for the Nebraska State Patrol, that meeting was initiated by TransCanada but organized and facilitated by the state police. Documents [4] made public from that session included a TransCanada presentation on activists arrested in Texas and Oklahoma as well as legal justifications for those arrests. It also featured profiles of three prominent organizers: Scott Parkin of the Rainforest Action Network, Tar Sands Blockade’s Ron Seifert, and Rae Breaux of 350.org.

Law enforcement has been keeping a close eye on activists along the southern leg of the pipeline. As I reported in Earth Island Journal [5] last August, the Bryan County Sheriff’s department in Oklahoma infiltrated a Tar Sands Resistance Training camp in March 2013. The intelligence passed from the undercover officers to the Department of Homeland Security was used to thwart a planned act of civil disobedience in Cushing. During that same week the Oklahoma Department of Homeland Security Fusion Center was communicating with TransCanada and even shared a “Situational Awareness Bulletin” with the company.

A final decision [6] on the Keystone XL Pipeline is expected in the next couple of months. If Obama approves the pipeline, environmental activists, Native Americans, and landowners along the pipeline route have promised a sustained campaign of protest and civil disobedience.

“As we look ahead to the pending approval of the presidential permit for Keystone XL,” says TransCanada’s Shawn Howard, “law enforcement agencies (local, state and federal) have wanted to know how these protests have been managed in the past – and what they may have to be prepared for if the same occurs in the future.”

Links:
[1] http://www.earthisland.org/journal/index.php/issues/current/
[2] http://www.alternet.org/authors/adam-federman
[3] http://www.whitehouse.gov/the-press-office/2012/03/22/executive-order-improving-performance-federal-permitting-and-review-infr
[4] http://www.scribd.com/doc/147203140/TransCanada-Presentation-on-Security-to-Local-Law-Enforcement-Part-1-of-3
[5] http://www.earthisland.org/journal/index.php/elist/eListRead/undercover_agents_infiltrated_tar_sands_resistance_camp_to_break_up_planned/
[6] http://www.politico.com/story/2014/02/obama-keystone-xl-decision-governors-103858.html

New Lawsuit Alleges That Wells Fargo Has a Manual for Mass Fabrication of Foreclosure Documents

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Recall that some of the most damaging documents released by Edward Snowden were NSA manuals. They discuss in detail how certain abuses are performed and provide strong proof that that behavior is routine and presumably widespread.

Catherine Curan of the New York Post has an important new story on a Federal lawsuit that looks to have unearthed a smoking gun about systematic document fabrication at Wells Fargo. As the article notes, this filing confirms a report we received from a whistleblower in 2013.

Recall that we’ve long been critics of Wells Fargo, not simply for its bad conduct, but for the intelligence-insulting manner in which it keeps asserting that it is better than other mortgage servicers, when the evidence is overwhelmingly the reverse. For instance, during the not-really-supervised-by-the-OCC Independent Foreclosure Reviews, whistleblowers told us how Wells Fargo’s serving conduct was worse even than that of Bank of American, which took over subprime miscreant number one Countrywide. For instance, both by statute and via the mortgage securitization contracts, borrower payments are required to be applied in a specific order: interest first, then principal, then fees. If a borrower had incurred a late fee, Wells would apply the payment to fees first, guaranteeing the payment would be too small. That would enable Wells to declare the payment to be insufficient for the current month and charge another late fee. That scam is called “pyramiding fees” and because the amount the borrower supposedly owes grows rapidly, almost always means that the delinquent borrower is never able to dig his way out of his hole and loses his home.

The reason this new case is a bombshell is that so far, the cases against Wells, both in court and in the court of public opinion, have specific. Even though the abuses are often grotesque, they are noise to Wells, since the allegations of particular borrowers or individual whistleblowers seldom gets traction outside foreclosure-defense-oriented sites and local newspapers. By contrast, this suit has the potential to demonstrate that Wells constructed a well-oiled machine to flout the law.

Key sections of Curan’s article:

In a filing in New York’s Southern District in White Plains for a local homeowner in bankruptcy, attorney Linda Tirelli described a 150-page Wells Fargo Foreclosure Attorney Procedures Manual created November 9, 2011 and updated February 24, 2012. According to court papers, the Manual details “a procedure for processing [mortgage] notes without endorsements and obtaining endorsements and allonges.”…

Attorneys, forensic accountants and consumer advocates have long suspected that banks were systematically creating improper documents to prove ownership of loans. Foreclosure defense lawyers use the term ‘ta-da’ endorsement to describe situations in which they say a document appears, as if by magic, in the bank’s possession as needed in a foreclosure case—even though the proper endorsement was not included in the original foreclosure filing. It might sound like a technicality, but correct proof of ownership lies at the heart of the foreclosure crisis for securitized loans, which were sold by the lender that originally issued the mortgage. To legally transfer a securitized loan, the endorsements and allonges have to be created in a very specific way and within a specific time frame, usually 90 days after a residential mortgage trust closes. For many loans in foreclosure now, which were originated years ago and then sold, it’s way too late to correct incomplete documents, experts said.

If the allegations in Tirelli’s court filing are true, this manual represents the first time ‘ta-da’ endorsements are “being described and admitted to be a procedure” at a major bank, as Tirelli claimed to The Post.

The manual, a copy of which was obtained by the Post, appears to provide step-by-step instructions for a Wells Fargo Home Mortgage “Default Docs Team” and foreclosure attorneys if a blank endorsement is in a file and the attorney wants that note executed. In addition, the manual outlines steps for attorneys and the Default Docs Team to create allonges, endorsements to a note on a separate sheet of paper when there is no room left at the bottom of the note. Step 3 under the header “Allonge” on page 17 reads: “WFHM Default Docs Team: If file was ordered and received, review … to determine what entities the attorney needs the note endorsement to reflect.”

Foreclosure experts called these procedures shocking.

Of course, sanctimonious Wells claims the manual has been updated 30 times since the version filed in the lawsuit, and it’s only a piece of the process, since Wells has internal checks. If you believe that, as Wells asserts, they are in full or even substantial compliance, I have a bridge I’d like to sell you.

Our Wells whistleblower saw evidence first hand of document fabrication at a Wells facility, indicating that the idea that the internal procedures were intended to follow the law is a canard. The notion was clearly to complete as many foreclosures as cheaply as possible, the law be damned. From our 2013 post:

A contractor who worked at a Wells Fargo facility in Minnesota reports that the bank engaged in systematic, large scale alteration of mortgage notes and fabrication of related documents in preparation for foreclosure. The procedures the bank used are questionable for a large portion of the mortgages.

A team of roughly 100 temps divided across two shifts would review borrower notes (the IOU) to see whether they met a set of requirements the bank set up. Any that did not pass (and notes in securitized trusts were almost always failed) went to another unit in the same facility. They would later come back to the review team to check if the fixes and fabrications had been done correctly.

Not only is having Wells Fargo tamper with documents in this way dubious in many cases (more detail on that shortly), but amusingly, the bank does not even appear to be terribly competent at this sort of falsification. The bank changed procedures frequently, and did not go back to redo its prior work. In addition, it regularly took loans that appear to have been endorsed properly and changed them as well. Finally, even if the procedures had been proper, the temps were required to meet such aggressive production timetables and were so laxly supervised that it seems unlikely that their work was done well.

This account confirms what foreclosure defense attorneys have reported for some time: that servicers have been engaging in document fabrication for some time. It’s not uncommon for a servicer or foreclosure mill to present “tah dah” documents that miraculously remedy the problems that homeowner attorneys have raised, sometimes resulting in clear proof of fabrication, like two different notes (borrower IOUs) having been presented to the court, each supposedly an original.

But what is striking about this practice is both the brazenness and the scale. Our source was told that Wells Fargo added a second shift to its mortgage review operation in November 2011 [update: it is likely the related doctoring activities were increased correspondingly]; he* did not know when it had been established. Bank employees claimed that some of these operations had formerly been done by outside firms and the cost of doing it in-house was much lower than the cost of doing it externally. Apparently having plausible deniability was too expensive.

For those with an appetite for train wrecks, the post contains much more granular detail.

I don’t know how much stamina the attorney, Linda Tirelli, has, but the fact that the core of the case revolves around a manual would enable her to do wide-ranging, potentially very damaging discovery on related policies and procedures. Wells would be nuts not to settle this case.

But bank has consistently been arrogant and obstructionist. So as much as Wells allowing her to proceed with discovery will be a longer, harder road than a quick and quiet settlement, it has the potential to do a tremendous amount of good for beleaguered borrowers by exposing the deliberate, orchestrated nature of Wells’ bad conduct. Stay tuned.