As usual in the horrifying new world of Trump, there is so much shocking news that there’s no way to deal with all of it. I guess the top story has to be that Trump’s former lawyer John Dowd dangled pardons in front of Michael Flynn and Paul Manifort last summer.
The New York Times: Trump’s Lawyer Raised Prospect of Pardons for Flynn and Manafort.
A lawyer for President Trump broached the idea of Mr. Trump’s pardoning two of his former top advisers, Michael T. Flynn and Paul Manafort, with their lawyers last year, according to three people with knowledge of the discussions.
The discussions came as the special counsel was building cases against both men, and they raise questions about whether the lawyer, John Dowd, who resigned last week, was offering pardons to influence their decisions about whether to plead guilty and cooperate in the investigation.
The talks suggest that Mr. Trump’s lawyers were concerned about what Mr. Flynn and Mr. Manafort might reveal were they to cut a deal with the special counsel, Robert S. Mueller III, in exchange for leniency. Mr. Mueller’s team could investigate the prospect that Mr. Dowd made pardon offers to thwart the inquiry, although legal experts are divided about whether such offers might constitute obstruction of justice.
Mr. Dowd’s conversation with Mr. Flynn’s lawyer, Robert K. Kelner, occurred sometime after Mr. Dowd took over last summer as the president’s personal lawyer, at a time when a grand jury was hearing evidence against Mr. Flynn on a range of potential crimes.
Flynn ultimately took the safe route and agreed to cooperate with the Mueller investigation; but this could explain why Paul Manafort is holding out even though the evidence against him is overwhelming and he could face life in prison if convicted.
Constitutional experts are now discussing whether Trump could get away with pardoning Manafort and others, even if he did it with corrupt intent. Some opinions:
Alex Whiting at Just Security: Why Dangling a Pardon Could Be an Obstruction of Justice—Even if the Pardon Power is Absolute. A brief excerpt:
Some experts have argued that the pardon power is absolute and that the President’s motives in issuing a pardon thus could not be questioned, while others contend that it could be a crime to issue a pardon for corrupt purposes (such as in exchange for cash). But the debate over the absolute nature of the pardon power is actually not relevant to the alleged incidents involving Trump’s lawyer. Indeed, that entire debate can be set aside for the moment. Why? Because there’s been no pardon. Instead, a pardon has only been dangled before Flynn and Manafort, and the analysis of whether that action could become part of an obstruction case against Trump raises entirely different considerations….
The pardon dangle works completely differently—and in important respects has the opposite effects. First, this kind of dangle is not a public act. Therefore, as long as it remained secret, it could be done without incurring any of the political downstream consequences that come with actually pardoning someone. It hides the President from scrutiny rather than exposes him to it as a potential check on the use of the power. Second, the objective of the dangle appears to have been to foreclose the prospect of Flynn and Manfort’s cooperating or testifying. Once again, this is the opposite effect of an actual exercise of the pardon. The message of the dangle was sufficiently clear: hang in there and keep fighting (do not cut a deal with the special counsel) because you will be pardoned before you spend a day in jail. The President and his lawyer’s hope would have been that with the threat of jail eliminated, neither former aid would feel compelled to plead guilty and cooperate with Mueller to reduce his sentence. But, since they were not actually pardoned or not yet anyway, they still kept their Fifth Amendment privileges, and so Mueller could not simply demand they testify before the Grand Jury. In this way, the dangle could operate to stop any cooperation from Flynn and Manafort, who could then be pardoned later if and when they were indicted or even after their cases went through pretrial, trial and appeal. Indeed, you also have to put yourself back at the time these events all took place: before Manafort was indicted and Flynn pleaded guilty. That’s when the dangle could work its magic.
Because a pardon dangle is secret and seeks to discourage cooperation with an ongoing investigation without public scrutiny or consequences, it should be analyzed differently than a pardon when it comes to an obstruction case.
Former U.S. Attorney Harry Littman at The Washington Post: We may know why Paul Manafort has kept quiet. But his bet is still risky.
Manafort’s refusal to cooperate can’t be driven by a rational calculation that he has any reasonable chance of escaping conviction, multimillion-dollar legal fees and a prison sentence that will result in years behind bars.
The indictments against him lay out an overwhelming case of money laundering in particular. The meticulously gathered evidence will be as clear for the jury as a laundry detergent commercial: The jury will see the dirty money go in and the clean money come out. To the extent there had been a small risk, inherent in paper-driven chases, that the jury could become bored at the accounting presentation and tune out, Mueller now has a narrator for the trial in Manafort’s co-conspirator Rick Gates.
So is hoping for a Trump pardon a good bet for Manafort?
…the Times story does not definitively solve the Manafort mystery. First, Dowd’s reported overture, particularly if done with the president’s knowledge or consent, could have constituted a conspiracy to obstruct justice, a separate impeachable offense. That presumably is why the story includes a categorical denial from Dowd that he ever discussed pardons for the president’s former advisers with lawyers. For Dowd, the conduct would be putting his license at risk.Second, Manafort surely recognizes that he can’t fully count on Trump, both because the president is a habitual liar and because the political dynamic is subject to such extreme and violent turns. (Of course, under this hypothesis, Manafort retains the valuable insurance policy of spilling the goods if Trump double-crosses him, leaving both huge losers in a real-life prisoners dilemma.)
Third, Manafort could still be required to testify after any pardon, when he would no longer be in federal jeopardy. Undoubtedly, the plan would be for him to deny assurances of a pardon from Trump. Still, were Mueller to catch him in a lie, the special counsel would surely come down on him.
Finally, it is likely that in the event of a pardon for federal crimes, which is all Trump can provide, some state attorneys general, such as New York’s Eric T. Schneiderman, would prosecute Manafort for financial crimes under their potent state statutes.
Maybe Manafort figures a possible pardon is a better bet than hoping Putin doesn’t send his goons to shut him (Manafort) up for good.
A few more pardon stories:
Bloomberg: Pardon Talk Could Put Trump Lawyer in Hot Water.
The Washington Post: This overlooked part of the Constitution could stop Trump from abusing his pardon power.
Another big story broke late yesterday. Trump fired Veterans Affairs Secretary David Shulkin. Today Shulkin is speaking out, claiming he was fired because he opposed privatizing the VA. Shulkin spoke to NPR’s Morning Edition:
Fired Veterans Affairs Secretary David Shulkin tells NPR’s Morning Edition that political forces in the Trump administration want to privatize the VA — and that he was standing in the way.
“There are many political appointees in the VA that believe that we are moving in the wrong direction or weren’t moving fast enough toward privatizing the VA,” he said. “I think that it’s essential for national security and for the country that we honor our commitment by having a strong VA. I was not against reforming VA, but I was against privatization.”
Those political forces may be why Shulkin says he wasn’t allowed to speak out to defend himself against an ethics controversy over use of funds on a trip to Europe that he says was overhyped and intended to weaken him.
“This was completely mischaracterized,” Shulkin said. “There was nothing improper about this trip, and I was not allowed to put up an official statement or to even respond to this by the White House. … I think this was really just being used in a political context to try to make sure that I wasn’t as effective as a leader moving forward.”
Shulkin argued his case in an op-ed at The New York Times: David J. Shulkin: Privatizing the V.A. Will Hurt Veterans.
That’s a lot of news, but I’ve barely touched on everything that’s happening. Here’s a shocking Trump corruption story that broke at The Guardian this morning: FBI looked into Trump plans to build hotel in Latvia with Putin supporter.
In 2010, a small group of businessmen including a wealthy Russian supporter of Vladimir Putin began working on plans to build a glitzy hotel and entertainment complex with Donald Trump in Riga, the capital of Latvia.
A senior Trump executive visited the city to scout for locations. Trump and his daughter Ivanka spent hours at Trump Tower with the Russian, Igor Krutoy, who also knows compatriots involved in arranging a fateful meeting at the same building during the 2016 US election campaign.
Then the Latvian government’s anti-corruption bureau began asking questions.
The Guardian has learned that talks with Trump’s company were abandoned after Krutoy and another of the businessmen were questioned by Latvian authorities as part of a major criminal inquiry there – and that the FBI later looked into Trump’s interactions with them at Latvia’s request.
Those involved deny that the inquiry was to blame for the deal’s collapse.
Latvia asked the US for assistance in 2014 and received a response from the FBI the following year, according to a source familiar with the process. Latvian investigators also examined secret recordings in which Trump was mentioned by a suspect.
This means the FBI looked into Trump’s efforts to do business deals in the former Soviet Union earlier than was widely known. Robert Mueller, the special counsel, is now investigating other Trump dealings with Russians as part of his wide-ranging criminal inquiry into alleged collusion between Moscow and members of Trump’s 2016 campaign team.
The Riga developers saw their potential partner in New York as a ticket to lucrative western revenues.
This shit just never ends. I haven’t even touched on the North Korea news or the Bolton mess or the fact that Trump wants to put his personal physician in charge of the VA. More headlines to check out:
The Washington Post: Who is Trump’s new Veterans Affairs pick, Ronny Jackson?
The Washington Post: Three big questions about a Trump-Kim summit.
Talking Points Memo: WSJ: Kushner Has Phoned Bolton For Advice In The Past Year.
The Daily Beast: ICE Now Detaining Pregnant Women, Thanks to Trump Order.
I continue to investigate news stories where a large group of people seem to sit in denial. You might even say they wallow in denial. There are never stories with one side. There are never truths that should be accepted with out proof and facts. Nothing good ever comes from denying the complexities of life. Here are a few stories that offer up complexities. I hope you enjoy reading them, although I have to admit that the details aren’t always pretty.
The first story I want to offer is about Greece and the collapse of its government, its economy, and the ongoing collapse of its culture. Is Greece a nation for sale? Is it a nation whose people are being sold out and have been sold out? How can democracy exist when your entire country is up for sale to the highest bidder?
The savage methods of alleged “economic efficiency” and privatization increase neither efficiency nor competition, but do lead to price increases for consumers, higher costs for government, corruption, embezzlement and the destruction of democracy.
When the European Union (EU) and the International Monetary Fund (IMF) came to Greece’s rescue in May 2010 with a 110 billion euro bailout loan in order to avoid the default of a eurozone member state (a second bailout loan worth 130 billion euros was activated in March 2012), the intentions of the rescue plan were multifold. First, the EU-IMF duo (with the IMF in the role of junior partner) wanted to protect the interests of the foreign banks and the financial institutions that had loaned Greece billions of euros. Greece’s gross foreign debt amounted to over 410 billion euros by the end of 2009, so a default would have led to substantial losses for foreign banks and bondholders, but also to the collapse of the Greek banking system itself as the European Central Bank (ECB) would be obliged in such an event to refuse to fund Greek banks.
Second, by bailing out Greece, the EU wanted to avoid the risk of negative contagion effects spreading across the euro area. A Greek default would have led to a financial meltdown across the euro area and perhaps to the end of the euro altogether.
Third, with Germany as Europe’s hegemonic power, there was a clear intention to punish Greece for its allegedly “profligate” ways (although it was large inflows of capital from the core countries that financed consumption and rising government spending), and by extension, send out a message to the other “peripheral” nations of the eurozone of the fate awaiting them if they did not put their fiscal house in order.
Fourth, the EU wanted to take the opportunity presented by the debt crisis to turn Greece into a “guinea pig” for the policy prescriptions of a neoliberal Europe. Berlin and Brussels had long ago embraced the main pillars of the Washington Consensus – fiscal austerity, privatization, deregulation and destatization – and the debt crisis offered a golden opportunity to cut down the Greek public sector to the bare bones and radicalize the domestic labor market with policies that slash wages and benefits and enhance flexibilization and insecurity.
Everyone has known for some time that the Southern United States is primarily a drag on the rest of the country. Its states cannot function without massive infusions of federal dollars. Its institutions remain broken. Its governments are corrupt. What does it mean to the country that the South behaves like a third world set of nations where any one can dump pollutants, destroy worker’s rights, deny women and the poor basic health care, and pay wages that don’t cover any kind of normal expenses? What’s worse is that poor white Southerners just seem to vote like they love taking it up the ass. Why are we letting an entire region drag the country to ruin?
On this point Thompson is unrelenting. “We can no longer afford to wait on the South to get its racial shit together,” he writes. “It’s time to move on, let southerners sort out their own mess free from the harassment of northern moralizers.” This is pretty much what William Faulkner wrote in more eloquent terms some 60 years ago. And, as we approach the 150th anniversary of the battles of Vicksburg and Gettysburg, Thompson finds plenty of Southerners who think, as one of them tells him, “We’re on the verge of a civil war.” Thompson asks, “Between North and South?” The answer: “Between conservative and liberal.”
It’s attitudes like this that keep white Southerners from understanding that year after year, decade after decade, they support policies that don’t help them. “Rank-and-file southern voters—who have lower average incomes than other Americans—resoundingly defeated Barack Obama in 2008; the eventual president carried just 10, 11, and 14 percent of the white vote in Alabama, Mississippi, and Louisiana respectively,” Thompson writes. “An influential percentage of poor, uneducated, underserved, insurance-less white southerners continue to cast votes for candidates whose agendas clearly conflict with their own self interest.” What Thompson doesn’t do—what I’ve never seen anyone do—is offer a valid explanation for why white Southerners ally themselves with the party that treats them contemptuously.
Whites in the South overwhelmingly support right-to-work laws, which Thompson defines, correctly, as “the Orwellian euphemism for ‘the right for companies to disregard the welfare of their workers.’ ” According to a 2009 survey by Grand Valley State University, annual salaries for autoworkers in Alabama, Tennessee and South Carolina averaged about $55,400, while their counterparts in Michigan averaged $74,500. Thompson notes that Southern blue-collar workers also have “inferior health and pension plans, less job security, higher risk of being fired for trivial reasons, and diminished safety precautions. … ”
Not only are Southern workers hurt by their anti-union attitudes, the whole nation suffers. “Southern economic success,” writes Thompson, “comes at the expenseof the rest of the country.” By luring foreign manufacturers to Southern states with promises of cheap labor, “The South is bad for the American economy in the same way that China and Mexico are bad for the American economy. By keeping corporate taxes low, public schools underfunded, and workers’ rights to organize negligible, it’s southern politicians who make it so. … [The South] is an in-house parasite that bleeds the country far more than it contributes to its collective health.”
That leads to what is for me the single most baffling 21st century paradox about the South. The region, home to nine of the nation’s 10 poorest states, is rabidly against government spending, yet all of its states get far more in government subsidies than they give back in taxes, as pointed out by Sara Robinson in a 2012 piece for AlterNet, “Blue States Are the Providers, Red States Are the Parasites.”
The subject of Palestine and Israel frequently leads to passionate, intractable arguments. At another blog, we eventually decided to leave the topic in the “Do Not Discuss” box for the sake of peace and quiet.
I still cannot believe that some folks find disliking Israeli neocon policy to be the same as being anti-semitic, but there it is and seems to be.
I do not support Hamas or consider it blameless. Indeed, the horrific things going on in Iraq due to Sunni Muslim fundamentalism should be damned. But, so should Israel’s continued oppression of Palestinian people.
I’m no longer staying quiet and avoiding arguments. I cannot stay quiet while completely innocent people die, when they live under apartheid and intolerable situations, and when I hear completely unsubstantiated talking points from Israel’s propaganda ministry held up as truths.
The first completely unsubstantiated talking point just got a vote in the US House of Representatives. I’ve read every independent NGO that I can find. There appears to be no truth to rumor that Hamas uses citizens as human shields. There is some proof that the IDF actually uses children in that capacity. I stand appalled. I will call out the mass slaughter of indigenous people and innocents no matter what their religion or what their nationality. This is ethnic cleansing with a sophisticated Luntz-style propaganda show. I’ve linked to a well sourced article on Five Israeli Talking points that no independent source can verify and if looked into are completely false.
Hamas hides its weapons in homes, mosques and schools and uses human shields.
This is arguably one of Israel’s most insidious claims, because it blames Palestinians for their own death and deprives them of even their victimhood. Israel made the same argument in its war against Lebanon in 2006 and in its war against Palestinians in 2008. Notwithstanding its military cartoon sketches, Israel has yet to prove that Hamas has used civilian infrastructure to store military weapons. The two cases where Hamas indeed stored weapons in UNRWA schools, the schools were empty. UNRWA discovered the rockets and publicly condemned the violation of its sanctity.
International human rights organizations that have investigated these claims have determined that they are not true. It attributed the high death toll in Israel’s 2006 war on Lebanon to Israel’s indiscriminate attacks. Human Rights Watch notes:
The evidence Human Rights Watch uncovered in its on-the-ground investigations refutes [Israel’s] argument…we found strong evidence that Hezbollah stored most of its rockets in bunkers and weapon storage facilities located in uninhabited fields and valleys, that in the vast majority of cases Hezbollah fighters left populated civilian areas as soon as the fighting started, and that Hezbollah fired the vast majority of its rockets from pre-prepared positions outside villages.
In fact, only Israeli soldiers have systematically used Palestinians as human shields. Since Israel’s incursion into the West Bank in 2002, it has used Palestinians as human shields by tying young Palestinians onto the hoods of their cars or forcing them to go into a home where a potential militant may be hiding.
Even assuming that Israel’s claims were plausible, humanitarian law obligates Israel to avoid civilian casualties that “would be excessive in relation to the concrete and direct military advantage anticipated.” A belligerent force must verify whether civilian or civilian infrastructure qualifies as a military objective. In the case of doubt, “whether an object which is normally dedicated to civilian purposes, such as a place of worship, a house or other dwelling or a school, is being used to make an effective contribution to military action, it shall be presumed not to be so used.”
I did want to put up a link to an interview with Rabbi Henry Seignman at Democracy Now! The Rabbi was an executive director–for some time–of the American Jewish Congress and is considered the foremost authority on Jewish people in America. Please watch it. The number of American Jewish Rabbis and intellectuals coming out against Israel’s policies and attacks on the occupied territories is amazing. As the children of holocaust victims and survivors, they recognize the “slaughter of innocents”. There are two interviews that you may watch or read.
HENRY SIEGMAN: Yes, it’s disastrous. It’s disastrous, both in political terms, which is to say the situation cannot conceivably, certainly in the short run, lead to any positive results, to an improvement in the lives of either Israelis or Palestinians, and of course it’s disastrous in humanitarian terms, the kind of slaughter that’s taking place there. When one thinks that this is what is necessary for Israel to survive, that the Zionist dream is based on the slaughter of—repeated slaughter of innocents on a scale that we’re watching these days on television, that is really a profound, profound crisis—and should be a profound crisis—in the thinking of all of us who were committed to the establishment of the state and to its success. It leads one virtually to a whole rethinking of this historical phenomenon.
If you’d like to read an interesting discussion on how violence drives colonization of the remaining Palestinian territories, I suggest this article in Jacobin Magazine.
Seeing Israel as engaging in senseless bloodletting might seem an even more reasonable conclusion in light of the massacre of sixty-three people in Shujaiya after “the extensive use of artillery fire on dozens of populated areas across the Gaza Strip” that left bodies “scattered on streets,” or the bombing of United Nations shelters for those fleeing the violence. That conclusion is also tempting based on reports out of Khuza’a, a hamlet in the hinterlands of the Strip that was the scene of another Israeli massacre.
But describing such violence as aimless misses the underlying logic of Israel’s conduct throughout Operation Protective Edge and, indeed, for much of its history.
As Darryl Li points out, “Since 2005, Israel has developed an unusual, and perhaps unprecedented, experiment in colonial management in the Gaza Strip,” seeking to “isolate Palestinians there from the outside world, render them utterly dependent on external benevolence,” and at the same time “absolve Israel of responsibility toward them.”
This strategy, Li goes on to argue, is one way that Israel is working to maintain a Jewish majority in the territories it controls so that it can continue to deny equal rights for the rest of the population.
The suppression of Palestinian resistance is crucial to the success of the Israeli experiment. But there is a corollary, which is a cyclical interaction between Israeli colonialism and US militarism. As Bashir Abu-Manneh explains, there is a relationship between American imperialism and Zionist policies. American policymakers believe that an alliance with Israel helps the US control the Middle East. So the United States enables Israeli colonialism and occupation, which in turn creates contexts for further US interventions in the region that can be used to try to deepen American hegemony.
I would like to see a peaceful two- (very secular) state solution; but as I’ve said before, I don’t think Bibi wants that at all.
Supreme Ruth Bader Ginsberg gave a wonderful interview to Katie Couric. It’s worth watching. Ginsberg is our only hope on SCOTUS.
“Do you believe that the five male justices truly understood the ramifications of their decision?” Couric asked Ginsburg of the 5-4 Hobby Lobby ruling, which cleared the way for employers to deny insurance coverage of contraceptives to female workers on religious grounds.
“I would have to say no,” the 81-year-old justice replied. Asked if the five justices revealed a “blind spot” in their decision, Ginsburg said yes.
The feisty leader of the court’s minority liberal bloc compared the decision of her five male peers to an old Supreme Court ruling that found discriminating against pregnant women was legal.
“But justices continue to think and can change,” she added, hopefully. “They have wives. They have daughters. By the way, I think daughters can change the perception of their fathers.
“I am ever hopeful that if the court has a blind spot today, its eyes will be open tomorrow,” she said.
Rachel Maddow sent a team down to look into the Operation Save America siege of New Orleans. If you haven’t seen the interview with the 74 year old doctor whose home and clinic was terrorized, please go watch. She’s something too! Equally as crazy is this coverage of a Louisiana Republican Woman running for Congress who ran away from a nonpartisan group that interviews candidates.
David Wasserman reported yesterday that he recently sat down with state Rep. Lenar Whitney, a Republican congressional candidate in Louisiana’s 6th congressional district, though their interview didn’t go well.
As a House analyst for the nonpartisan Cook Political Report, I’ve personally interviewed over 300 congressional candidates over the course of seven years, both to get to know them and evaluate their chances of winning. I’ve been impressed by just as many Republicans as Democrats, and underwhelmed by equal numbers, too. Most are accustomed to tough questions.
But never have I met any candidate quite as frightening or fact-averse as Louisiana state Rep. Lenar Whitney, 55, who visited my office last Wednesday.
Whitney, who reportedly likes the “Palin of the South” nickname, “froze” when asked to substantiate her claims that climate change is the “greatest deception in the history of mankind.”
And then Wasserman asked about President Obama’s birthplace.
…I asked whether she believed Obama was born in the United States. When she replied that it was a matter of some controversy, her two campaign consultants quickly whisked her out of the room, accusing me of conducting a “Palin-style interview.”
It was the first time in hundreds of Cook Political Report meetings that a candidate has fled the room.
A tip for candidates everywhere: if you literally run away from questions, you’re doing it wrong.
Whitney, a graduate of Nicholls State University who is running for Louisiana’s open 6th District, owned a dance studio in Houma, La., for 34 years and also worked in sales for small telecommunications and oilfield equipment companies. She clearly relishes poking Democrats in the eye, cites Minnesota’s Rep. Michele Bachmann (R) as a political role model, and takes kindly to the nickname “Palin of the South.”
Whitney has only raised $123,000 to date (fourth in the GOP field), but she has sought to boost her profile and appeal to conservative donors with a slickly made YouTube video entitled “GLOBAL WARMING IS A HOAX” (84,000 views so far). In the video, Whitney gleefully and confidently asserts that the theory of global warming is the “greatest deception in the history of mankind” and that “any 10-year-old” can disprove it with a simple household thermometer.
Whitney’s brand of rhetoric obviously resonates with some very conservative Louisiana voters who view President Obama and the Environmental Protection Agency as big-city elitists directly attacking the state’s energy industry and their own way of life. And she would hardly be the first “climate denier” elected to Congress. But it’s not unreasonable to expect candidates to explain how they arrived at their positions, and when I pressed Whitney repeatedly for the source of her claim that the earth is getting colder, she froze and was unable to cite a single scientist, journal or news source to back up her beliefs.
We’ve definitely entered a zone where people are just saying things they believe are true simply because they want them to be true or–ala Luntz–they’ve heard it from some one who keeps repeating lies over and over again. Hey, it ain’t there if they don’t want to see it, right?
I’m on break today. Enjoy yourselves. Whats on your reading and blogging list today?
There are so many confusing things out there at the moment about our national policies in so many areas that it gets overwhelming at times. One topic that I really think should be getting obvious at this point but isn’t really taking root as a source of discussion because of the huge amount of corporate money in elections is the absolute failure of the private sector in providing all kinds of traditionally public goods. I’ve been following the Snowden episode from a weird angle. It is probably an occupational hazard, but what if James Bond weren’t in her majesty’s secret service but Halliburton’s? What does it mean to outsource the public’s safety, welfare, and security?
Federal investigators have told lawmakers they have evidence that USIS, the contractor that screened Edward Snowden for his top-secret clearance, repeatedly misled the government about the thoroughness of its background checks, according to people familiar with the matter.
The alleged transgressions are so serious that a federal watchdog indicated he plans to recommend that the Office of Personnel Management, which oversees most background checks, end ties with USIS unless it can show it is performing responsibly, the people said.
Cutting off USIS could present a major logistical quagmire for the nation’s already-jammed security clearance process. The federal government relies heavily on contractors to approve workers for some of its most sensitive jobs in defense and intelligence. Falls Church-based USIS is the largest single private provider for government background checks.
The inspector general of OPM, working with the Justice Department, is examining whether USIS failed to meet a contractual obligation that it would conduct reviews of all background checks the company performed on behalf of government agencies, the people familiar with the matter said, speaking on the condition of anonymity because the investigation has not yet been resolved.
After conducting an initial background check of a candidate for employment, USIS was required to perform a second review to make sure no important details had been missed. From 2008 through 2011, USIS allegedly skipped this second review in up to 50 percent of the cases. But it conveyed to federal officials that these reviews had, in fact, been performed.
Ah, the profit motive as the root of all evil. Isn’t it similar to the love of money when you basically cut costs at all corners just to provide increasing bits of the pie to your voracious, nonmanagerial owners who only care about ROE?
Republicans continue to push ideological hype over reality in the fight to give any public interest institution to their friends. Sneaking into a congress near you is the possible end of Fannie and Freddie despite the fact they are currently returning goods sums of money to the Treasury. It’s all based on the false hype that they were the reason the mortgage market failed instead of private mortgage factories.
It has now been nearly five years since Fannie and Freddie were put into conservatorship by the Treasury Department. Since then, we have been through the financial crisis, the housing crisis and the foreclosure crisis. Although the housing market has come a long way back, the market for private mortgage-backed securities — that is, bundles of mortgages sold to investors without a government guarantee — remains moribund. Believe it or not, the much-maligned Fannie and Freddie have kept the housing market alive by taking on the credit risk for most plain-vanilla mortgages, especially that most sacred of sacred cows, the 30-year, fixed-rate mortgage.
Indeed, ever since the creation of mortgage-backed securities in the 1970s, this has been a critical role of Fannie and Freddie; their “wrap” helped give investors the confidence to buy securities stuffed with thousands of mortgages they were never going to inspect individually. Currently, an incredible 77 percent of the mortgages being made in America are guaranteed by Fannie and Freddie.
Yet this can’t last forever. Conservatorship was supposed to be temporary. Although Fannie and Freddie are now making a gaggle of money, for complicated reasons having to do with the way the Treasury Department originally set up the conservatorship, that money is not reducing the government’s $180 billion bailout of the two companies.
Meanwhile, many Republicans have been screaming that the financing of housing should be left to the private market and that Fannie and Freddie must be put out of business. (They believe, wrongly, that Fannie and Freddie caused the financial crisis.) And the Obama White House — shocker! — has punted.
Thus we have Corker-Warner. (The bill has six other co-sponsors, three from each party.) The first thing to note about it is that, by god, it actually would eliminate Fannie and Freddie; the two companies are supposed to be wound down within five years.
But does that mean the private market will take over? Not a chance. Warner told me that although the bill would insist that private capital absorb the first 10 percent of any losses, the federal role remains critical. A new federal agency would be established to explicitly guarantee losses beyond that. And the bill would create programs to help make homeownership possible for low-income Americans, just like Fannie and Freddie once did. Those ads Fannie and Freddie used to run showing diverse Americans smiling in front of their home-sweet-homes could easily be replayed by supporters of Corker-Warner.
Yes. You read that right. The big change is that the profits don’t stay in these quasi agencies and they won’t remain low. The duties shift to the same kinds of contractors that have been bilking the defense department for years with a crippled over sight agency and no guarantee they will make a market.
There are instances where the public sector outperforms the private sector. Mass privatization of everything from schools to jails to spying due to ideological or rent-seeking corporations is a really bad idea. More thought should be put into these privatization schemes. There is a new book out that discusses this and uses BP as a good example of a cautionary tale.
The London civil servants of the 1960s and ’70s who all but ignored profitability as they issued directives across British Petroleum’s bloated corporate network were replaced by highly motivated managers who were rewarded for cutting costs, reducing risk and making money. The company’s more incongruous businesses — food production and uranium mines, for instance — were sold. Payroll was cut by more than half. Oil reserves jumped. The time it took to drill a deepwater well plummeted. Profits soared.
But then, in 2005, a BP refinery in Texas City blew up, killing 15 and injuring around 170. In 2006, a leak in a BP pipeline spilled hundreds of thousands of gallons of oil in Prudhoe Bay, Alaska. And in 2010, an explosion on the Deepwater Horizon oil rig killed 11 and resulted in the biggest offshore oil spill in the history of the United States. These days, BP’s stock trades about 25 percent below where it was before the disaster off the coast of Louisiana, about the same place it was a decade ago.
BP’s bumpy ride is recorded in “The Org: The Underlying Logic of the Office,” a compelling new book by Ray Fisman, a professor at Columbia Business School, and Tim Sullivan, the editorial director of Harvard Business Review Press. “The Org” aims to explain why organizations — be they private companies or government agencies — work the way they do.
The book offers telling insight on a topic that has ebbed and flowed across the world over the last 30 years, as governments of all stripes have set out to privatize state-owned enterprises and outsource services — what does the private sector do better than government, and what does it do worse? Long dormant in the United States, the debate has acquired new urgency as governments from Washington to statehouses and city halls around the country consider privatizing everything from Medicare to the management of state parks as a possible solution to their budget woes. One of the authors’ chief insights is that every organization faces trade-offs — inherent conflicts between competing objectives. The challenge is to manage them. This is way more difficult than it sounds.
While in government hands, British Petroleum paid too little attention to profitability, constrained by its need to please elected officials who often cared more about keeping energy cheap and employment high. But in private hands, it may have cared about profits far too much, at the expense of other objectives. “BP veered from being a company that made sure nothing blew up to one focusing on cost-cutting at all costs,” Professor Fisman said.
The success or failure of an organization often depends on whether it can clearly identify its goals and align the interests of managers and employees to serve them. Yet whatever reward structure an organization picks can skew incentives in an undesirable way.
The 2012-2013 school year saw the fight over public education reach a new pitch, ending with mass layoffs in Philadelphia, and other large school districts, and a cadre of parents and workers who began a hunger strike in protest. This final incident marks the end of a 10-month stretch that has seen an increasingly diverse chorus of voices speaking against American education policy’s relentless focus on high-stakes testing, massive expansions of charter schools and mass teacher and staff layoffs. But there have also been some serious advancements in that agenda, especially in large urban districts.
The Philadelphia School District decision to lay off 3,800 teachers and staff (about one-fifth of the workforce), includes 1,202 safety staff among the casualties. Only 12 will remain next school year to watch over the district’s 149,535 students while they are not in class, in the hallways and cafeteria where violence is most likely.
“I just can’t [see] school district of Philadelphia…without student safety staff. It will be a disaster,” says Patricia Norris, a cafeteria worker at Cayuga Elementary in North Philadelphia.
On Monday June 17, Norris, two parents and another school district employee began a hunger strike to protest the layoffs and the general deterioration of public education in Philadelphia. When interviewed that afternoon, she’d been drinking nothing but water all day. She was red-eyed and exhausted, but spoke animatedly from the tent on Broad Street where she was camped outside Corbett’s Philadelphia offices. “I just want the governor and people in Harrisburg to put their children in our children’s shoes. All I know is I’m fighting. And fasting.” She paused and sunk back in her metal chair. “I just want someone to listen.”
Similar layoffs are being seen in Chicago, where 50 public schools will be shuttered next year, one of the largest number of closures in America history (Philadelphia will be closing 23 public schools next year). These austerity measures put a grim cap on the 2012-2013 school year.
“The mantra of the Republicans was always choice, competition, testing and accountability, says Diane Ravitch, who served as a Assistant Secretary of Education for the first President George Bush. “Now that’s the mantra of the Democratic Party… All over the country, in most states, there is legislation to roll back any kind of rights for teachers, any tenure, any academic freedom, cut their pensions, cut their benefits, make it easier to fire them. Everywhere there is a fight going on for the survival of public education. The country is filled with ground zeroes.”
So much of the actual effectiveness of these efforts or ability to provide same service are lost in the shrillness of ideology, the quite search for political funding by providing more pork to corporations, and the corporate media who is yet another example of the public trust put up for auction. It is time to look around at many of these functions and say enough! There are a whole lot of things that die when subjected to the siphoning of profits and the idea of cost slashing as an end itself.
What is on your reading and blogging list today?
This is going be short and sweet because it’s been a long week for me. Yesterday the Washington Post published a highly cited story about Mitt Romney as a “pioneer” in the outsourcing of American jobs.
During the nearly 15 years that Romney was actively involved in running Bain, a private equity firm that he founded, it owned companies that were pioneers in the practice of shipping work from the United States to overseas call centers and factories making computer components, according to filings with the Securities and Exchange Commission.
While economists debate whether the massive outsourcing of American jobs over the last generation was inevitable, Romney in recent months has lamented the toll it’s taken on the U.S. economy. He has repeatedly pledged he would protect American employment by getting tough on China.
“They’ve been able to put American businesses out of business and kill American jobs,” he told workers at a Toledo fence factory in February. “If I’m president of the United States, that’s going to end.”
Really? I strongly suggest you read this story–it’s long and detailed with plenty of specific examples of Romney’s involvement in shipping jobs overseas.
In his speech to Latino officeholders this afternoon, President Obama used the WaPo article to hammer Romney. In comparison to Romney’s appearance before the group yesterday, Obama received a much more enthusiastic reception with more and longer applause.
Meanwhile one of Mitt Romney’s campaign co-chairs undercut the candidate’s campaign of confuse and befuddle and came right out and told the truth to the Daily Telegraph: Mitt Romney ‘likely to scrap Barack Obama’s immigration order’
Ray Walser, the co-chairman of Mr Romney’s Latin American Working Group, also said Mr Obama’s administration had been “fairly tough” on measures to counter illegal migration and that unlawful crossings of the Mexican border had declined, appearing to contradict the Republican candidate’s own comments on the subject.
Mr Romney has repeatedly declined to say what, if elected president in November, he would do about Mr Obama’s move to offer work permits to law-abiding undocumented migrants aged 30 or under.
The Romney campaign later claimed that Walser has no knowledge of the campaign’s policy decisions. The why is he co-chair of the Latin America working group? Looks like Romney is having some surrogate trouble now.
The LA Times interviewed Stephen Mansfield, the author of a new book “The Mormonizing of America” in order to get Mansfield’s take on Romney and his religion.
Q) …[H]ow do you think Romney’s faith has shaped his politics and the way he might lead?
A) I think that there’s no question it’s shaped what you might call his worldview or his system of ethics, what he believes about the Constitution, what he believes about abortion, what he believes about American history — I think all that grows organically out of his Mormonism. I think that his leadership is a product of his training and his gifts, but he does lead out of a sense of it being part of him qualifying, being found worthy, him passing the test of this life — that’s standard Mormon theology.
Q) We are said to be living in this “Mormon Moment,” but a new Gallup poll shows that American attitudes about Mormons haven’t really changed for decades. Nearly one in five Americans say they won’t vote for a Mormon for president. How big a barrier is that to Romney and would a Romney presidency be a game-changer in terms of Mormon acceptance?
Q) Would Romney be better off talking about it?
A) If I was king of his campaign, I’d have folks out there talking about it for the campaign, unofficially, but I’d keep the candidate away from it. I’m not sure I’d want Romney talking about temple garments and gods on other planets and Joseph Smith. But I wouldn’t mind having an articulate representative in the field, defending Mr. Romney’s Mormonism in the campaign. And if I don’t see that happen after the convention, I’m going to wonder how much they’re aware in Romney headquarters how much this is an issue in the culture.
At The Daily Beast, here’s an interesting article by Daniel Klaidman on the Holder Witchhunt over “Fast and Furious.” Klaidman said that House Oversight Committee Chairman Darrell Issa demanded a “scap” from the Justice Department as a last ditch effort to avoid going nuclear with a contempt citation.
for Issa, a partisan warrior who has called Holder a “liar” and the Obama administration one of “the most corrupt” in history, there was always the risk of overreach. When he started to go down the road toward a contempt citation, the House Republican leadership began to show signs of nervousness. Some thought Issa needed to leave himself an escape route. In recent weeks he and his staff began negotiating with DOJ, looking for a way to head off the looming confrontation.
During a phone call last week with a senior Justice official, Issa’s chief investigative counsel, Stephen Castor, broached a possible settlement. As the conversation began, according to two sources familiar with the conversation, Castor asked the official where things stood on “accountability.” By that, Castor meant would any heads roll at Justice. Castor mentioned Lanny Breuer, the head of the department’s Criminal Division, whom Republicans had been gunning for because of his knowledge of gun-walking techniques that had been used during the Bush administration. (Their theory was that Breuer should have taken aggressive steps to ensure that such measures were not repeated in future operations.) According to these sources, Castor said that if Breuer resigned, they could head off the looming constitutional clash.
But the Justice official, Steven Reich, an associate deputy attorney general involved in the Fast and Furious negotiations with Congress, rejected the offer, calling it a “non-starter.”
Still, Castor’s gambit was seen by DOJ officials as evidence that Issa was more interested in drawing blood than getting to the truth.
The Massachusetts Democratic Party managed to get some embarrassing video of Senator Scott Brown making a very strange remark about being in “secret meetings with kings and queens and prime ministers.”
The comments on WTKK-FM were roundly mocked by Democrats. Brown, in making them, was pushing back against critics who say his campaign has not been focused on serious issues, pointing out that he ran a radio ad about military base closings. He also said he was working on substantive issues on a daily basis, some that involve royalty.
“Each and every day that I’ve been a United States senator, I’ve been discussing issues, meeting on issues, in secret meetings and with kings and queens and prime ministers and business leaders and military leaders, talking, voting, working on issues every single day,” he said on the Jim Braude and Margery Eagan [talk radio] Show.
At first his campaign said he “misspoke,” but The Boston Globe learned that Brown had made similar statements at least five times.
That’s got to be at least as weird as thinking you have Native American blood because your parents told you so. It probably won’t get as much play as the attacks on Elizabeth Warren though.
In Philadelphia, yesterday Monsignor William Lynn became the first member of the Catholic clergy to be convicted for covering up child sexual abuse by priests.
A Philadelphia priest was convicted Friday (June 22) of one count of child endangerment, becoming the first cleric in the Catholic Church’s long-running clergy abuse scandal to be tried and found guilty of shielding molesters.
Monsignor William Lynn, 61, was acquitted of conspiracy and a second endangerment charge after a three-month trial that had seemed on the verge of a hung jury two days earlier….
The jurors said they were deadlocked on attempted rape and endangerment charges against Lynn’s codefendant, the Rev. James J. Brennan.
Common Pleas Court Judge M. Teresa Sarmina declared a mistrial on the Brennan charges, which means prosecutors could decide to try him again.
Lynn, who was head of priest personnel in the Archdiocese of Philadelphia for 12 years, was charged with recommending that Brennan and another priest, Edward Avery, be allowed to live or work in parishes in the 1990s despite indications that they might abuse children.
Avery pleaded guilty before the trial to sexually assaulting a 10-year-old altar boy in 1999 and is serving 2-1/2 to 5 years in state prison.
Finally, if you haven’t read the NYT series on Chris Christie and New Jersey’s privatized halfway houses from hell, be sure to check it out. Looks like Christie won’t be getting that VP nod after all.
Have a great Saturday, and please share what you’re reading and blogging about today.
From our vantage point in the US, Greece seems very far away. That is an illusion of mere miles. The disintegration of the Cradle of Democracy should send shivers down the spine of every American because this is what a plutocracy looks like. This is the dismantlement of a civil society for the sake of the 1%.
Yes, yes, we’ve heard all the stories of the profligate Greeks, lazy to the extreme, addicted to the welfare state, ridiculously high wages and cushy, early retirements. The Greeks, we are told, are the millstone around the northern European neck, a weak sister draining the stamina and wealth from her industrious siblings, the Germans in particular.
Here are some factoids that don’t match the stereotypes we’ve been fed:
- Greece has had one of the lowest per capita income levels in Europe. Average Greek wage comes in at 21,100 euros [$27, 640] as compared to the Eurozone 12 average off $27,600 euros [$36,134].
- According to Eurostats, the average retirement age for most Greek citizens is 61.
- The average Greek schoolteacher makes 800 euros a month [$1041.04].
- The Greek social welfare system is considerably lower than its European neighbors, averaging 3530.49 euros per capita [$4593.87] as compared to the Eurozone 12 average of 6251.78 euros [$8135.32]
- Unemployment has spiked to nearly 22%, the number increasing with each round of austerity measures, which has deflated the Greek economy and exacerbated the problem. [In actuality, unemployment is higher since anyone working 16 hours is listed as fully employed. However, even those workers working fulltime are often listed as part time, allowing employers to avoid paying minimum wage, insurance and other benefits.]
- The top 20% in Greece pay virtually no taxes at all, a cushy deal reached during the days of the junta between the military and Greece’s wealthy plutocrats.
- The cost of living [food, rent, energy] has spiraled out of control, leaving many Greek citizens unable to make ends meet.
As you might recall Greece’s elected leader George Papandreou resigned [with encouragement] and was replaced by Lucas Papademos, a former vice president of the European Central Bank [what a coincidence!]. Papademos assembled a temporary government then quickly pledged to approve the tough terms of a second European aid package of $150 billion.
The new, current round of austerity measures, which resulted in citizens taking to the streets and setting Athens afire, will purge another 150,000 public sector workers, mandate a 22% decrease in private sector salaries [the third decrease in less than a year] and substantial decreases in pensions and welfare services.
Mike Whitney at Counterpunch has said this about the new agreement, the Memorandum of Understanding [MOU]:
The Memorandum is as calculating and mercenary as anything ever written. And while most of the attention has been focused on the deep cuts to supplementary pensions, the minimum wage, and private sector wages; there’s much more to this onerous warrant than meets the eye. The 43-page paper should be read in its entirety to fully appreciate the moral vacuity of the people who dictate policy in the Eurozone.
Greece will have to prove that it’s reached various benchmarks before it receives any of the money allotted in the bailout. The Memorandum outlines, in great detail, what those benchmarks are— everything from reduced spending on life-saving drugs to “lift(ing) constraints for retailers to sell restricted product categories such as baby food.”
It just shows what the MOU is really all about. It’s a corporate “wish list”; a mix of punitive belt tightening policies for working people and perks for big oil, big gas, electric, aviation, railroads, communications etc. “Fast track licensing” and “baby food” have nothing to do with helping Greece reach its budget targets. It’s a joke.
Oddly enough, much of this has the ring of the ‘Privatize the World,” theology, so popular with the Republican Party. Ron Paul? He finds the idea of all government owned lands very disagreeable. It should be opened to private enterprise, he has said. Think of that splendid idea of mining uranium in the Grand Canyon. The evils of the public sector [that would be teachers and firemen and police] have been eloquently dissected by the likes of Scott Walker now facing a recall in November. Paul Ryan has thrilled Tea Party aficionados by warbling vouchers = Medicare and offering schemes to privatize Social Security. Public schools? Don’t fix them, critics say, replace them with private, for-profit Charter schools because for-profit universities have been such a treat for many low-income students, strapped with unsustainable debt and worthless, unaccredited degrees. Prisons? Turn them private and watch costs escalate to the moon. Taxes? We all know the mantra: we cannot possibly tax the ‘job creators.’ Accountability in financial matters? See the ‘deal’ the Administration’s Fraud Task Force crafted with the TBTFs. Respect for the environment? Go no further than the proposed Keystone Pipeline, but never forget the Gulf of Mexico, the shameless behavior of BP and their political handmaidens.
The beat goes on.
These are self-serving reasons to sit up, listen and pay attention before it’s too late. On a more human level is this:
Athens has always had a problem with homelessness, like any other major city. But the financial and debt crises have led poverty to slowly but surely grow out of control here. In 2011, there were 20 percent more registered homeless people than the year before. Depending on the season, that number can be as high as 25,000. The soup kitchens in Athens are complaining of record demand, with 15 percent more people in need of free meals.
It’s no longer just the “regulars” who are brought blankets and hot meals at night, says Effie Stamatogiannopoulou. She sits in the main offices of Klimaka, brooding over budgets and duty rosters. It was a long day, and like most of those in the over-heated room, the 46-year-old is keeping herself awake with coffee and cigarettes. She shows the day’s balance sheet: 102 homeless reported to Klimaka today.
“Enough is enough!” said 89-year-old Manolis Glezos, one of Greece’s most famous leftists, who long ago tore down a Nazi flag under the noses of German occupiers. “They have no idea what an uprising by the Greek people means. And the Greek people, regardless of ideology, have risen.”
“I can still remember as a boy how it was during the great famine and great freeze of the winter of 1941,” said Panaghiotis Yerogaloyiannis, a former mariner now surviving on a pension of €500 [$650.55] a month.
“We have a different sort of war now, one that’s economic, that’s not fought on the field. But it’s still the same enemy, the Germans. And today you are not even allowed to protest. I carry this around,” he said producing a wooden baton from a plastic bag, “to protect myself from the police and thugs who hijack our demonstrations.”
The first day of every economics course I teach, I always describe what I call Blurry Brain. I tell my students that they’re going to experience it frequently as they wrap their minds around the abstract theory that is taught in economics class. Some times something will seem very clear but when they look at it again, it will look very strange and they’ll experience Blurry Brain. Eventually, however, things should click for them as long as they stick with studying it.
In order to make it all easier, I start teaching an abstract concept and model by telling a very intuitive story. At the root of all good theory is a story and it should make sense at the intuitive level. Theory should reflect common sense. After that, I explain we have to take some thing that is very intuitive and put into a place where we can study and poke at it like a scientist with a stick and a frog. However, we don’t have frogs and sticks in our economics laboratory. Physicists don’t have those things either. We only have numbers and math relationships. We have to take these very intuitive ideas and make them testable or we can’t prove if we have a valid theory. If we don’t have theory, then we don’t have those common sense stories that guide our understanding of the world.
Theories must be testable so that they come from hypotheses that can be proved or disproved. That is why evolution is a theory. It is testable and has been proved over and over. God is an idea that can never be proved or tested. God has to stay a hypothesis in terms of the scientific method because we can’t empirically test the existence of a ‘god’. Some folks try to infer god, but when it comes to science, you pretty much have to stay within the realm of things that can be deduced from data. If you can experience the data directly, you can test the idea or hypothesis, you can prove it true or false, and you can contribute to theory.