December 18, 2002: Flash! Generalissimo Francisco
Franco is still dead, and the Federal Energy Regulatory Commission is still
On December 12, a FERC administrative law judge, Bruce
Birchman, ruled that the energy companies that created the California electricity
crisis overcharged the state not by $8,900,000,000 as claimed by the state,
but by only $1,800,000,000. This means that the refunds the state
can collect according to the ruling are about $0, because this is less
than the $3,000,000,000 or so that the energy companies are still waiting
to collect in unpaid bills from PG&E and the defunct Power Exchange
agency. Governor Davis was blunt in describing the nature of this
ruling: "FERC rigged the rules" so that the judge was unable to consider
most of the money that the companies grabbed. For instance, FERC
blocked any consideration being given to money squeezed out of the California
Department of Water Resources. That excluded $3,400,000,000 right
there. And anything before October 2000 was excluded, though the
rolling blackouts began earlier. "These people are not on our side,"
noted Davis. Duh.
This ruling is very much like the previous ruling on this
point by judge Curtis Wagner a year and a half earlier, back when Enron
was still going strong and evidence of market manipulation was mostly not
acknowledged or admitted in Washington. (It was only starting to
be discussed even by state politicians, though it was obvious enough that
I, as an uninformed ordinary citizen, began pointing it out six months
earlier.) But this time, FERC itself has "uncovered" extensive market
manipulation by Enron and others. So, given that FERC now knows that
the high prices were the result of fraud, why did the new ruling still
find most of it legitimate, just as before? Simple: judge Birchman
disregarded the fact that the price gouging was fraudulent. He
came up with a number based solely on some weird formula written into FERC's
I may have unfairly blamed Wagner himself, at the time,
more than I should have. The real problem comes from his superiors,
who write the rules for him.
The state is setting out to prove fraudulency and market
manipulation, which then can be part of the case it brings before the full
commission, which has the final say. Then we will see once and for
all whether FERC is willing to be honest. Chairman Pat Wood hopes
to finish the case sometime next spring.
In itself, this doesn't sound so unhopeful, but look what
FERC just did in the case of El Paso Natural Gas, which held back gas supplies
and faked various numbers in order to drive up prices. Judge Wagner
had ruled that El Paso was guilty of this market manipulation, and had
delivered 10% less gas than the contractual minimum they were obliged to
ship, and attorneys for the state were asking FERC to make El Paso pay
El Paso's lawyers still denied everything, and urged the commissioners
to just "ignore" the findings that they had cheated the state's power consumers.
And what is the end result? The ruling isn't being overturned, but
the result is not much different in effect: it appears that FERC
is allowing El Paso to settle the case, with an agreement to pay a refund
of only $14,000,000. That's only a few percent of what they earned
with the scam! (Nobody can name an exact figure, but according to
Public Utilities Commission investigators, the bare minimum they made with
the scammery is a dozen times that refund, and it could be as high as seventy
Congress has found fault with FERC's way of doing business
twice already this year: first the Government Accounting Office in June,
and then the Senate Governmental Affairs Committee in November, have each
pointed out that the California electricity crisis and the collapse of
Enron could both have been handled a lot better if FERC had properly done
the job that Congress mandated for it.
One of El Paso's vice presidents, Todd Geiger, has been
arrested for fraud and has pled not guilty. He is charged with reporting
48 fake trades to the FERC natural gas market report newsletter.
His sole defense is that the newsletter rejected his submission.
Ugh: Williams Energy, which recently reached a settlement
with the state of California, just started a big new image-enhancing ad
campaign here, somewhat reminiscent of those Chevron "people do!" ads about
how environmentally conscious they supposedly are... the ones where they
would, like, spend some modest amount on a project to protect bald eagles,
and then several times that amount on the advertisements patting themselves
on the back for it.
In news about Enron itself, there have been some possibly
new revelations that the involvement of J.P. Morgan Chase and Citicorp
with Enron's swindles was deeper and more overtly criminal than was previously
thought. They actively helped Enron avoid taxes and conceal its debts
from investors, working "aggressively" on this right up until the collapse.
Citicorp doesn't seem to be able to staunch the flow of embarrassing revelations
about its operation lately, despite vigorous attempts to clean house.
They could end up having to pay $500,000,000 in fines. Other firms
are expected to be stuck with smaller amounts.
And somebody tried to set fire to the mansion of Andrew
Fastow (Enron's CFO), unaware that Fastow had sold the place in order to
pay restitution. The suspect has a record of repeated drunk driving
and has been eyeballed by the police in several other arson cases.
is a progress report on the prosecution of Enron executives. They
are concentrating at this point on the second tier of management: people
who reported directly to Jeffrey Skilling and Andrew Fastow. Another
guy has pled guilty to tax evasion and agreed to cooperate: Lawrence Lawyer.
is a report that begins to explain how Enron managed to lose so much money:
they took bigger and bigger leveraged risks in the power price speculation
business, sometimes gaining or losing half a billion dollars in a single
day. They lied their asses off to companies like Moody's who were
concerned about their level of risk, as well as to government agencies
and to the public, and kept making bigger and bigger bets. They became
"a hedge fund disguised as an energy company". During the crisis,
they came out some $7,000,000,000 ahead overall on these speculative trades,
and the winnings just whetted their appetite to bet more and more.
When the crisis suddenly ended, their betting strategy no longer worked.
Thomas White, now Secretary of the Army, allegedly wrote
a smoking-gun email just before the Enron collapse telling others in the
company to hide lost money by closing a bigger deal to cover it up with.
A reporter named Jason Leopold got a dozen sources to attest to this.
He wrote about it on Salon. But something turned fishy: Salon pulled
the story, saying it was unverifiable. Paul Krugman at the New York
Times picked up the story; here
is a copy of his column on it. After Salon pulled the story, Leopold
got all his dozen sources to agree to talk to Krugman, who then verified
the story independently. Krugman decided to write a column questioning
Salon's retraction and saying that the story was legitimate. But
the New York Times told Krugman they wouldn't print it, even with the sources
verified. Leopold was hung out to dry. Here
is Leopold's letter defending the article, saying the Times went back on
its word; here
is an anti-Leopold article viewing the whole fracas more skeptically.
Note how the bottom half of the latter article fawns unashamedly over White...
it reports as hard news, not as editorial, that "White completely
won over critics with his candid testimony [before Congress]." They
imply that, for instance, Barbara Boxer no longer believes White did anything
wrong! This is not so, of course. This "news" organization
turns out to be pure right-wing propaganda, using terms like "democrat
dimwit" right on the front page... So did White really write an e-mail
that said "Close a bigger deal. Hide the loss before the 1Q"?
I don't know, but it sure sounds like he did.
Public Citizen, by the way, reminds us that White's denial
of having manipulated the California electricity market to drive prices
up is provable perjury.
Lest you think I'm picking on Republicans here, here's
a story about ties between Enron and the finance chairman of Al Gore's
The process of digging out Cheney's energy commission
documents has hit a nasty snag: the suit by the General Accounting Office
against Cheney's group has been thrown
out by a judge named John Bates whom many say was far from impartial
in the case. Congressman Henry Waxman, for one, said "The decision
is another Bush v. Gore. It is a convoluted decision by a Republican
judge that gives Bush and Cheney near total immunity from scrutiny....
It is inconceivable that the appellate court will uphold the embarrassing
reasoning used by the district judge." Bates has ties with some of
Washington's most partisan judges (Scalia, Silberman) and was involved
in the effort to prosecute Clinton for the nonexistent Whitewater scandal.
The precedent of this ruling (until overturned), plus
the loss of Democratic committee chairmanships in Congress, means that
Bush may be nearly immune from Congressional investigation for the next
The Judicial Watch / Sierra Club suit plods on.
(Judicial Watch is also still pursuing some Clinton cases, and just won
a ruling to see some Clinton-era e-mail related to the FBI.)
The latest twist on PG&E's bankruptcy: we just had
a winter storm with high winds, causing many power outages. PG&E,
after having run TV ads about how hard they work to serve customers during
hard times, just sent many of its line workers home during the outage because
it didn't want to pay them. They aren't answering customers' questions
by phone, either.
What kind of system are we living in when it's front page
news that a large private corporation doesn't get a handout from
the government? That was the headline of the San Francisco Chronicle
on December 5. The Air Transport Stabilization Board (ATSB) turned
down federal loan guarantees to bail out United Airlines, and the company
filed Chapter 11 soon after. Now some in the pro-labor camp were
in favor of the bailout -- Jesse Jackson for one -- but one of the people
most offended by the board's failure to help United was Speaker of the
House Dennis Hastert (R-IL, that being the state United is based in), whose
that this is why Treasury secretary Paul O'Neill finally got booted out
of the Bush administration. Not, as is commonly assumed in the media
reports on the subject, because the economy has turned to utter shit and
Dubya has to be seen to be doing something about it... but because an appointee
of his on the ATSB voted to block a $1,800,000,000 check for United.
By the way, it was shortly after the Chapter 11 announcement
that the White House suddenly decided to ease up on those airline security
measures that the airlines found most onerous and expensive. As if
they were throwing United a bone. Of course, the administration has
been trying for a while to find a way to help out the whole airline industry.
Sort of like the ways they and other Washington corporatists helped it
before 9/11 by, for instance, quashing the push to strengthen cockpit doors.
(We need security, but not if it costs money!) Anyway, United is
planning to reapply for the loan after they finish a round of heavy cost-cutting,
so they may still get it. Maybe then they'll actually have a chance
to pay it back someday, though airlines that go into Chapter 11 rarely
come out again.
By the way, United's CEO, Glenn Tilton, stands to make
more money in bankruptcy than he would if they'd gotten the bailout.
In the latter case he agreed to take a pay cut, but in the former case
he's in line for hefty bonuses if he meets some recovery targets.
Tilton has already raked in millions in bonuses and options just for agreeing
to take the CEO job. Tilton is, I guess, used to this lifestyle:
he's an oilman (Chevron), and was once the acting chairman of the Texas
energy company Dynegy, a company which has gotten itself mentioned in this
space quite a few times.
The new Treasury secretary nominee to replace O'Neill
is John W. Snow of CSX Corp., who is described as being a "smoother" version
of O'Neill. (CSX is a major railroad company, currently somewhat
troubled by safety problems, asbestos lawsuits, racial discrimination lawsuits,
a too-expensive merger with Conrail, "runaway paychecks" for executives
like Snow, and a few questions about how it managed to pay no taxes in
some recent years despite significant profits. The latter is especially
reassuring, since the IRS reports to the Treasury secretary.) O'Neill
was known for shooting off his mouth. Molly Ivins called him "the
only straight shooter" in the Cabinet. Is the state of the economy
his fault? Of course not. In this administration, his job has
been to advocate one economic policy: upper bracket tax cuts. His
replacement, Snow, is not a tax cut kind of guy, he's a balanced budget
kind of guy... but according to all media reports, it is expected
that he is going to be putting aside his own beliefs and promoting a straight
Bush program of tax cuts. ("Bush Names His Man to Lead Tax Cut Fight,"
read one headline.) Bush appointed Stephen Friedman of Goldman-Sachs
to replace the also-booted Lawrence Lindsey as head of the National Economic
Council, and supply-side ideologues attacked him for being another who
favors a balanced budget over tax cuts -- to these guys, ideological purity
is apparently the sole measure of moral worth -- but like Snow, he also
is expected to toe the line and push the existing Bush plan. Ironically,
some are saying that one reason O'Neill was kicked out was because even
he got cold feet about pushing the tax cut, despite having better credentials
for ideological purity as a supply-sider than Snow and Friedman have.
In other words, Bush's economic housecleaning is all form and no substance
-- he still wants to pursue the same recklessly irrational policies that
have been failing so far.
Wall Street is noticing this. The corruption of
this corporatist regime has become so deep that even Wall Street investors,
as a group, are finding it too greedy and shortsighted. Things have
now reached a point where the appetites of the CEOs who back Bush are not
even compatible with the interests of stock market investors, let alone
the interests of working people. It's to the point where not only
are corporate interests being put ahead of the broad public interest, but
the interests of greedy executives are being put ahead of the interests
of the corporations they run. Not only have investors' calls for
improved accountability been shined on with lip service and superficialities,
but as a whole, Wall Street does not want this tax cut! Many
in the financial industry consider it grossly irresponsible. But
Bush is still going to push it anyway. He's basically embracing the
exact same Laffer-curve wishful thinking theory that his father famously
called "voodoo economics".
Some on Wall Street are even starting to notice,
with historical studies, that Republican administrations are not actually
good for the market in the long run. And the general thinking there
now is that, rather than a long term tax cut for businesses and wealthy
individuals, what the economy wants is a quick-acting short term tax cut
or tax refund for the middle class. The Democrats are working on
such a proposal. Their new leadership is starting to notice that
they have to provide alternatives to Republican ideas -- something they
forgot under the leadership of Dick Gephardt.
Bush's way of coping with the budget deficit, meanwhile,
is to start making a bunch of Reaganesque cuts of social programs, none
of which add up to much against the deficit. School lunch money,
heating oil assistance, housing aid, reduced cost of living raises for
federal workers, and so on. Senator Nickles, now chair of the Budget
committee, warned Congress that they may soon need to go after the big
bucks in Social Security and Medicare/Medicaid.
And some conservative pundits and think tanks are starting
to send up trial balloons for the idea which is the logical endpoint of
corrupt tax cuts for rich campaign donors: they're proclaiming that the
working poor aren't paying their share of taxes, and that taxes ought to
be raised on the lower brackets, and exemptions taken away. I almost
hope they go ahead and try to do this, because there would be nothing better
to make clear to middle America just what they've voted into power.
During the height of the corporate crime scandal, Bush
talked a lot about "restoring investor confidence". But he never
did it. Even the measures he did take were often watered down, either
by the Republicans in Congress, or by the White House itself after some
time had elapsed. Since Bush can't undo 9/11, or the bursting of
the dot-com bubble in the spring of 2000, the single most important thing
he could do for the economy in the short run probably is, indeed, to restore
investor confidence. The sharp loss of stock capital due to discouraged
and disillusioned investors has a lot to do with why companies have to
make so many layoffs nowadays. Bush's choice to pursue a blatantly
irresponsible fiscal policy, and his reluctant half-measures on corporate
accountability (and come to think of it, his war push as well) are actively
a stock market recovery, and thereby reinforcing the economic downturn.
As another part of this process of showing us all a new
economic team, Bush has named his replacement for Harvey Pitt at the SEC:
William Donaldson, co-founder of the investment banking firm Donaldson,
Lufkin & Jenrette, who was once Chairman and CEO of the New York Stock
Exchange. He worked for the SEC once before, back in the '70s.
His first Wall Street job was working for Dubya's uncle Herbert Walker.
He worked for a while under Henry Kissinger. Bush had previously
floated a couple of trial balloons about appointing a real hardcore indisputable
enforcer type to the SEC -- maybe even a Democrat -- but in the end, he
eschewed such a bold choice. Guess what: it turns out that Donaldson
is a defendant
in a stock fraud lawsuit. The suit alleges that as chairman of
Aetna, he concealed accounting misstatements. Also, stories are coming
out about corruption inside the New York Stock Exchange during his leadership
there: the most pervasive problem perhaps being one where insider investors
who agreed to share a percentage of profits with brokers were credited
with profits that properly belonged to no-name investors who paid straight
commission fees, sticking the latter with losing trades that really belonged
to the insiders. Now this guy's really going to turn around that
slumping investor confidence, isn't he?
(Speaking of lawsuits, some woman in Texas just sued Dubya
for orchestrating a campaign of harassment against her via police and government
agencies, and alleges that she "dated" Dubya while still a minor.
Just random paranoia, or a scandal way bigger than any of the Paula Jones
stuff they used on Clinton? Hopefully, evidence will clarify things
One positive piece of news is that along with announcing
the nomination of Donaldson, Bush reversed his effort to cut the SEC's
budget to less than that called for by Congress. That was itself
a reversal from what Bush had publicly called for in his speech about corporate
responsibility last spring, and got strong criticism from Congress.
Bush felt the sting, apparently, and then called for a budget a bit above
Congress's, for 2004.
A couple of Pitt's underlings have also quit, as well
as an official there who was apparently caught leaking semi-sensitive financial
data to people in China.
The Republican desire to enforce a single top-down policy
message on the party's rank and file, as manifested in Bush's economic
policy non-changes, is also active in the House of Representatives: party
leaders Tom DeLay and Dennis Hastert are pushing through rule changes that
center the party power in the House in themselves, not in representatives
with seniority. They will appoint committee chairs, and so on, solely
as they see fit. It doesn't matter any more how distinguished your
record is, it only matters whether you
do what Hastert and DeLay tell you to do. As an example of the
new regime's criteria, freshman representative Katherine Harris -- yes,
Katherine Harris, the Florida secretary of state who worked so tirelessly
to resolve the 2000 election mess in a fair and balanced way, as long as
Bush won -- has been picked as an assistant majority whip before even serving
one day in Washington.
And speaking of appointments that do nothing to restore
public confidence, picking Henry Kissinger to head the commission investigating
9/11 pretty much speaks for itself, and there's not much more I need to
say about it. I'll just quote (as best I can from memory) the guy
on the MacNeil/Lehrer report who compared it to "putting velcro-fingers
Wynona Rider in charge of Bloomingdale's security, or putting Dracula in
charge of the blood bank." Someone else compared finding Kissinger
back in government to finding maggots in one's sandwich. Molly Ivins
said "The only time I ever interviewed Kissinger, he told me three lies
in the first sentence he spoke." Someone else pointed out that the
"realpolitik" that Kissinger famously practiced was not only free of ethics,
it was mostly free of success.
Even many conservatives were rather appalled. One
interesting view on the appointment, publicized by Matt Drudge and others,
is that Kissinger might see this as an opportunity to stab Donald Rumsfeld
in the back with embarrassing revelations -- returning the favor that Rummy
did him back in 1976. This is the one scenario under which people
are speculating that the
commission might really uncover something good. That right there
speaks volumes about how much confidence Kissinger is inspiring.
Judicial Watch was muttering about a suit to investigate how and why Kissinger
Fortunately, Kissinger has dropped the appointment.
He was being pressured to list his consulting clients with middle-eastern
ties, in order to reveal any conflicts of interest, and he wouldn't do
it. First he tried to claim attorney-client privilege, which is totally
bogus, then when that didn't fly and the Senate Governmental Affairs Committee's
legal staff reported that he was obliged to reveal the names, he refused
the job. (Another who has refused the job, for different reasons,
is George Mitchell, who was invited to be the head Democrat in the group.)
I really have to wonder why there's so much activity that
creates the appearance of hiding something about 9/11. I never would
have assumed there was any dark secret to cover up... but some people are
sure acting as if there is. For instance, the families of 9/11 victims
got together and agreed that they wanted former senator Warren B. Rudman
(R-NH) appointed to the commission. They said that Rudman was the
only Republican they felt to be both highly qualified and sufficiently
independent to be thorough and impartial. But the GOP leadership
the choice. The visible resistance is coming from Trent Lott, but
some suspect the White House. The panel will have five democrats
and five republicans, but it takes six votes to issue a subpoena, and they
fear that without one active and independent republican, the commission
will be easily hamstrung. It took huge congressional pressure to
even get this commission formed in the first place, against White House
But Dubya may have finally stopped fighting it:
Kissinger's replacement is Tom Kean, the former governor of New Jersey
-- a moderate Republican (that is, way to the left of most of his party)
who is actually a friend of Bill Clinton. Unlike Kissinger, this
guy seems to be getting some positive notices. About the worst I've
heard anyone say about him is that he's in the oil and gas industry.
And somebody mumbled that he may be gay and closeted, and therefore vulnerable
to blackmail, but as far as I know that's pure speculation. We'll
just have to see whether he really does his job, or whether the fix is
still in somehow.
Also named to the commission is former Illinois governor
James R. Thompson. He was picked by Dennis Hastert. He also
seems to be considered a Republican of above-average trustability.
Looks like the GOP heard the "No Kissingers" message loud and clear.
But oddly, I hear the same "closet case" rumor about him as about Kean.
Another appointment of the un-reassuring kind was, of
course, picking John Poindexter -- the guy who was apparently the brains
behind the Iran/Contra affair -- a few months ago to run the new Pentagon
office that snoops on everyone's e-mail and even digs through people's
medical records. This is the fruit of passing the USA-PATRIOT act
last fall. Now the Fourth Amendment is trampled not just on paper
but in practice.
And another Iran/Contra figure also got a new appointment:
Elliott Abrams. He's just been picked for a role on the national
security staff, in charge of Near East and North African Affairs, for which
he was legally qualified because he got a pardon from the previous President
Bush. And hey -- Richard Secord, another Iran/Contra figure, just
got named in a case of insider stock dumping.
The elder President Bush, it's just been announced, is
going to have a new aircraft carrier named after him, to be completed in
2009. Which leads to... well, it's very tempting to go on a
rant about Trent Lott and Strom Thurmond -- about how Lott was already
a favorite for claiming Thurmond's title of Most Disgraceful Senator even
before he came out in favor of Thurmond's segregationism, and about how
the Old South segregationists and white supremacists seem to have a continuing
grip on the Republican party, like a bulldog whose jaws can't be pried
open even after it's dead -- but that's not really on topic for a space
focusing on corruption. But I have to mention that Dubya is dubbing
a C-17 cargo plane -- the 100th built -- as the "Spirit of Strom Thurmond".
Finally, an update on the status of the McCain-Feingold
campaign finance reform law. The Federal Election Commission is once
again unilaterally loosening the new election rules without a congressional
mandate to do so. This time they relaxed the rules on coordination
between candidates and outside interest groups to run unified ad campaigns.
(They also ruled that campaign funds can be used to pay a salary to the
candidate during the race. This is defended on the grounds that it
makes it easier for non-millionaires to run.) John McCain is still
pissed at Bush for delaying the appointment of Ellen Weintraub to the Commission,
and with good reason: Bush finally allowed her appointment to go
forward one day after the FEC was finished writing all these new rules
for how it "interprets" the McCain-Feingold law. McCain called this
timing "cynical", called the White House's overall actions "orchestrated
and systematic undermining" of the McCain-Feingold law, and said he will
now "assume all future assurances and promises by this administration to
be quite possibly insincere."
The law has hit its first court challenge, as long expected.
Opponents charge that regulating campaign contributions is a violation
of free speech. The case is expected to be fast-tracked to the Supreme
Court some time in the spring, regardless of how the lower court rules.
It's been a while since we've caught up on minor corruption
stories, and there are many that got missed in the last few months, so
I'm going to make a big ole grab-bag list of brief story summaries.
There are so many that I have to divide them into categories. Something
Bush is setting up new rules for "cash balance" pension plans.
These plans are criticized for shorting workers soon to retire on money
they would get under traditional pension plans. Companies that switch
to this kind of plan might therefore be vulnerable to an age discrimination
lawsuit, but Bush's new rules protect them from such suits. (Some
companies must be tempted, because the bad stock market has left many pension
funds without enough cash to pay retirees, forcing the companies to pay
them out of their revenues. Many pensions claimed big profits at
times when they actually lost money! But "cash balance" would allow
some of them to rewrite past agreements on how much to pay.) This
kind of "tort reform" -- preventing citizens from suing corporations and
rich people -- was a big Bush agenda item when he was governor of Texas.
Down there, there's hardly anything left that it's worth trying to sue
Plenty more industries are lining up for lawsuit protection,
and have high expectations of the new GOP congress. Here's an overview
of some of them. Many are the euphemisms these lobbyists are coining
in order to avoid calling this what it is. The Supreme Court will
soon be trying a case that tests the constitutionality of tort limits in
general. I am not hopeful of any reforms coming from them.
Oh, and remember the clause in the Homeland Security bill
that protects Eli Lilly from liability for a product that may be linked
to autism? Funny thing, nobody can identify what person or persons
added that language to the bill. No wait, somebody just confessed:
Dick Armey. And Dan Burton (R-IN) now says Armey told him in conversation
that the White House asked for it.
On the deregulation front, a recent study found bacterial
contamination in a frighteningly large percentage of poultry sold for human
consumption. This follows a tainted meat incident in which dozens
were sickened in Wisconsin, Minnesota, and Illinois, forcing the recall
of 1400 tons of ground beef.
PG&E "accidentally" failed to report almost a million
dollars of its campaign spending to defeat the San Francisco public power
The Department of Energy has shut
down PubScience, a public website that allows searching research papers
in the physical sciences and energy-related topics, because it undercut
the profits of commercial enterprises charging money for the same service.
Quiz question of the day: during the year 2001, as the whole
economy slid downhill, the tech market collapsed, and many companies were
hard-hit by 9/11... did CEO pay go up, or down? If you guessed "down",
put a dark brown star next to your name.
a story about how popular and trendy it's become for CEOs to pad their
The new GOP Congress is likely to try and repeal the Corporate
Alternative Minimum Tax, a measure designed to make sure that no matter
how many tax shelters you dreamed up, a company would still pay something.
But the tax has become increasingly toothless anyway due to numerous small
changes, some by Congress and some by the IRS, and it may not make much
difference any more if it's repealed.
National Century Financial Enterprises got raided by the
FBI due to somebody inside the company apparently having made $300,000,000
disappear. Several health care companies that depended on National
Century are in a state of collapse. The company's founder, Lance
Poulsen, is a crony of Jeb Bush®, and lent him an airplane to campaign
in. He swears he has no idea where the money went. Apparently
he reacted to the missing money by digging into the company's safety reserve
in an attempt to continue business as usual... and had to quit when this
was found out.
I previously mentioned how Jeb
intervened for Bacardi-Martini with the US Trademark Office. Now
Bacardi-Martini has filed a belated report admitting to millions of dollars
spent on lobbying that had not previously been recorded.
The FDA has attempted to quash an Oregon ballot measure requiring
that food made from genetically modified organisms be labeled as such,
claiming it would be illegal because it would interfere with food company
marketing. (The European Union and Japan already have such labelling
Wal-mart has had a couple of little embarrassments lately:
toys donated to Toys for Tots accidentally got put back on store shelves
and resold, and a woman who dropped off a couple of semi-naked baby pictures
got reported to the police as a possible pedophile, and sued them for it.
Of course, none of this is nearly as embarrassing as when they got caught
taking out life insurance policies on employees, so that if one of them
died, the company would benefit and the family would not. Not that
there's anything illegal about creating a conflict of interest between
profits and keeping employees alive...
Kellogg, Brown & Root, the subsidiary of Halliburton
which has recently been tapped to provide "privatized" combat support services
to the Army, just lost a lawsuit to a bunch of Filipino workers it hired
for a project under Bahrain -- they alleged that under Bahraini law, they
were illegally underpaid. The judgement awarded by the Philippine
court was $609,000,000... ouch! Think they'll collect?
Here's a weird one: a broker at Salomon Smith Barney
is being sued for promising a gullible middle aged woman that he would
not only invest her money soundly, but would father her child. He
did neither. (This is one of those suits where you have to admit
to being a naive idiot right in your court papers.)
And here's a story
about some previously sealed court documents that show, once again, the
pervasive pattern on Capital Hill of both parties selling favors for campaign
contributions. Ralph Nader's statement that "there is not a dime's
worth of difference" between the two parties is usually quite true, at
those times when nobody is watching.
Another general problem, it turns out, is that there are
few restrictions on favors granted to politicians' wives. Many of
them end up paid to serve on boards of friendly corporations, often with
little work involved. Phil Gramm's wife being on the board of Enron
is an egregious but hardly rare example.
WAR ON TERROR AND WAR ON IRAQ
OTHER FOREIGN AFFAIRS
A Russian oil executive is alleging that his and other oil
companies in Russia have seen the US government attempt to use blackmail
on them, to get them to make deals with Iraqi opposition groups, and fund
them, instead of making deals with Saddam.
When Iraq's weapons report arrived at the UN, Americans grabbed
the only copy before the UN people could see it. What are they hiding?
The names of US companies that sold weapons material to Iraq? Such
companies are listed, according to an Iraqi spokesperson. Perhaps
the illegal role of Halliburton in rebuilding Iraq's oil infrastructure?
I can see why it's not released to the public, because it contains useful
hints about how to make such weapons. But why hide anything from
UN officials? Nelson Mandela denounced this grab as "piracy".
Woops: while denying many medical supplies to Iraq, we okayed
them buying considerable amounts of the drug atropine. Turns out
that can be used as a nerve gas precursor...
The government of Turkey just flatly told us that if we want
to buy their support against Iraq, it will cost a minimum of $5,000,000,000
and they might want five times that. Turkish Kurds would like to
drag their country into the war, but most other Turks want nothing to do
with it. They're considering a national referrendum. The US,
meanwhile, is not only still buttering up the Turkish government, but is
telling the Turkish people that Al Qaeda is targeting them for attack.
The EU is telling Bush to stop pushing them to take in Turkey as a member.
A Senate committee report has revealed the United States
continued to sell weapons of mass destruction, or equipment to make them,
to Iraq right up to March of 1992. Here
is an overview of the history of the arming of Iraq by the Reagan and Bush
administrations. A veterans' group is demanding the resignation of
Donald Rumsfeld for the role he played in this. (Rummy has admitted
to twice meeting with Saddam.) Since Rummy is also not getting along
with his generals in the Pentagon, you would normally think he'd soon be
gone, but in this administration, he's probably not going anywhere.
Colin Powell just claimed that the agenda of "regime change"
in Iraq, which Bush had to abandon in order to get UN cooperation, was
Bill Clinton's fault, a policy inherited from the previous administration
rather than anything Bush wanted himself.
First we supported a dictator in Iran, then we supported
a dictator in Iraq who fought Iran, and now we may be going back to supporting
Iranian types against Iraq: as I warned previously, conservative Islamists
in Iran are now
getting US funding to build them up as a serious anti-Saddam expatriate
Iraqi opposition group, despite their ideology probably being much closer
to Osama bin Laden's than to ours. This could even constitute, some
say, illegally funding a terrorist group. This bunch also gets funding
from the Iranian government, and are now strengthening their ties to that
government. (At least Iran as a whole is showing signs of a push
toward greater democracy.)
What kind of friends are we making in the War on Terror?
The Interior minister of Saudi Arabia says 9/11 was done by Jews
(bin Laden, by the way, claims
America is controlled by Jews), and our new pals in the government of Uzbekistan
are said to routinely
use torture. And dig this roster
of unsavory Iraqis who might be in line to replace Saddam if we remove
One particular Iraqi opposition group -- reportedly the only
one Saddam ever feared -- is known to have carried out bombings and kidnappings
against Americans in the 1980s, when we were helping Saddam. They're
called Al Daawa, and some hawks in the White House, it has been admitted,
have already opened talks with them.
Quiz question of the day number two: which group of US citizens
is more in favor of a war against Iraq -- Christian conservatives, or Jews?
If you guessed Jews, put another brown star next to your name, and go sit
in the corner until recess. Yes, the corner where Osama is sitting.
Speaking of aiding terrorists, a new book called Cuba
that the Bushes, especially Jeb, have done exactly that -- sheltering known
terrorists from the law and even getting them out of jail -- when the terrorists
in question are anti-Castro Cubans.
That's not nearly as embarrassing, though, as this allegation:
according to the French authors of the 9/11 conspiracy theory book Forbidden
Truth, some genius at the British agency MI6 actually gave £100,000
to Al Qaeda, and then hampered efforts to investigate them. I do
not consider this book a dependable source.
The government is starting a massive smallpox vaccine campaign.
Some of those getting vaccinated are coming down with startlingly
frequent side effects that nobody expected. Bush is getting a
ceremonial smallpox jab. Dudes, the terrorists do not have
any damn smallpox!
Did I forget to mention this
bizarre claim by the U.S. Commerce Department that fighting Iraq will help
the world economy?
Here's an interesting
antiwar march: not very big, but it's made of business executives!
Why didn't Clinton go after Al Qaeda more stongly?
to one recent book, The Age of Sacred Terror, it was partly
because the Pentagon was "particularly unwilling to go out on a limb for
Clinton." When he tried to go after them, the generals would not
cooperate! The FBI was no help either.
You've heard that Dubya is willing to use nuclear bombs if
we are attacked with diseases or nerve gas... you've heard that he's ready
to strike first at whoever he thinks might launch such an attack
against us, and you may even have heard that he's issuing "licenses
to kill" so that agents can assassinate terrorism suspects overseas...
but have you heard that our anti-terrorist covert agents are actually willing
to go out there and provoke new terrorist attacks, just to make
it easier to catch the perpetrators? This was quietly admitted
a few months ago...
Bush says we are slowly but surely crushing Al Qaeda, but
the UN says that Al Qaeda is re-establishing its bases in Afghanistan,
re-opening training camps and so on... and our generals say our presence
there is becoming increasingly futile.
The pentagon's attempt to build a ballistic missile defense
system (which some say is getting money ahead of counter-terrorism) has
produced another failed test at intercepting an incoming rocket.
It missed by hundreds of miles when a booster failed to separate.
Some "successful" past tests were cheats, where the target had a big beacon
on it. And the Massachusetts Institute of Technology, which apparently
is getting a lot of money to help put together this nonfunctioning technology,
is now being accused of punishing whistleblowers.
Despite these problems, Bush just decided
to start deploying this mess in 2004.
A random tidbit in another military area: You expect
sailors to spend money in whorehouses, but you don't expect them to pay
for prostitutes with credit cards issued by the Government Accounting Office
for the purpose of covering military officials' travel expenses, do you?
The Pentagon is trying to get this under control, but is having a hard
time stopping the problem...
The Bush-backed oilmen in Venezuela who want to topple President
Chávez are not giving up: they made another try at a general strike,
but got poor turnout. They (or somebody) did manage to create a strike
in the oil industry, which they apparently saw as choking off the president's
air hose more severely than it blocked their own. The whole conflict
is basically about control of the country's oil. The people are not
happy with this, and they recently turned out in big protest rallies at
Venezuelan TV stations that were filling the airwaves with pro-coup propaganda.
At latest report, it looks like the coup forces have been defeated again.
(On December 12, an Uruguayan congressman says he saw secret
communications indicating that the CIA would be moving to topple Chávez
within the next 72 hours. But nothing obvious happened.)
One of the few Republicans to openly admit to the right-wing
agenda of getting Chávez out of office, despite his democratic mandate
to be there, is Henry Hyde. He and a few other right-wing nutters
have recently started grumbling that a new "Axis of Evil" is forming in
South America, due to the people in some countries down there, such as
Brazil and Ecuador, voting for leftists. Bush himself is calling
for "early elections" in Venezuela -- which the White House had to retract
in embarrassment a few days later. Some members of Congress have
sent Bush an open letter warning him to keep his hands off the country.
So has a coalition of 32 nations, mostly Latin American. Even Canada
sided against us.
an allegation that Ford Motor Company's branch in Argentina, back in the
"disappearances" era, hired its own death squads.
Dubya is proposing a new kind of foreign aid, in which poor
companies would compete with each other for our funds. Ironically,
one of the areas of competition is who does better at rooting out corruption.
In a similar moment of irony -- or should I say hypocrisy
-- our government is warning the King of Swaziland that if he buys a $45,000,000
luxury jet while his people are hungry, he ma not be welcome to land this
plane in the United States.
The World Trade Organization is making another attempt to
get a price break for live-saving medications sold to poorer countries,
instead of charging them the monopoly-inflated prices enjoyed by pharmaceutical
companies in rich countries. Almost everyone finally managed to agree
to a compromise, but the United States blocked
Surprise surprise: an international opinion survey shows
that the United States is becoming rapidly more unpopular and disliked
in countries all over the world.
Corruption-wise, our government could be a lot worse:
Bhopal, India has been back in the news lately due to a hoax press-release
that activists used to embarrass Dow Chemical (which bought up Union Carbide),
and Pacifica Radio revealed one reason why many in India are still very
unhappy with the situation: the bulk of the $470,000,000 settlement fund
paid by Carbide after the poison gas disaster was never distributed
to victims by the Indian government. They still have most of
the money in banks. Incidentally, the government of India is one
of the few that's been willing to express some friendship and solidarity
with Saddam Hussein. If they ever get in a real war with Pakistan,
it's going to be awfully tricky for us to pick a side, since Pakistan has
a lot of Al Qaeda sympathizers, who just won local elections in the provinces
near Afghanistan... it could be like Iran vs. Iraq all over again.
I thought I had mentioned Bush's new rules for snowmobiles
in Yellowstone and Grand Teton national parks, which the park service itself
had wanted to ban. Bush instead put a very generous limit on the
number of snowmobiles allowed per day. Environmentalists are now
Bush is proceeding with the plan to reduce fires in national
forests by increased logging. No trees, no fires. Congress
was stalled on the plan, so (as in other cases) Bush simply went ahead
without them. They are now working to (cough) "streamline" the environmental
review process that precedes logging in these forests. But now his
plan has been tripped up in court.
He also wants to (cough, cough) "modernize" the law that
requires the filing of environmental impact reports in general.
An appellate court ruling has blocked some new offshore oil
drilling in California. Bush is not happy with this. He only
wants offshore drilling stopped in Florida, where it makes his brother
I previously mentioned a corrupt
Everglades cleanup measure... well now that Jeb Bush® is safely elected,
suddenly the much-touted new Everglades policy is being weakened
to allow more pollution.
Recent studies seem to show that diesel exhaust causes cancer,
and we did once have some diesel cleanliness rules, but I'm told they were
all removed by Reagan, and have never been brought back. (Clean diesel
could do a lot to reduce oil consumption: a turbocharged diesel-electric
hybrid can give mileage that's just about inconceivable for gasoline.)
At least Bush is going ahead with signing a bill to push
up SUV mileage by 1.5 MPG over three years. At first he and his party
put up considerable resistance to this.
But he also sent people to help automakers argue in court
against California's law mandating zero-emission cars.
As at MIT, whistleblowers are reportedly being punitively
stifled at the Yucca Mountain nuclear waste dump.
Jerry Falwell is so opposed to those who warn about global
warming that he actually said "I urge everyone to go out and buy an SUV
STATE AND LOCAL GOVERNMENTS
There has been a weird rash of corruption incidents and mini-scandals
involving state governors and lieutenant governors lately. Other
than Jeb, I mean. First, George Pataki (R-NY) has been accused of
using the awarding of state grants as a means of bribing organizations
such as unions, with taxpayers' money, to deliver republican votes.
The amount involved may be over a billion dollars. He has also used
state money on a series of media spots which, to many, are far too close
to campaign ads.
George Ryan (R-IL) has had dozens of people around him indicted
for crooked behaviors too widely varied to summarize here.
And here's a story
about corruption in DuPage County, IL: contributors to the County Board
Chairman get contracts with no bidding.
When Tom Ridge, now head of Homeland Security, was governor
(R-PA), he routinely awarded state contracts -- some $3,000,000,000 worth
-- to corporations that didn't pay their state taxes, or other debts to
Governor-elect Robert Ehrlich Jr. (R-MD) and his running
mate Michael S. Steele are facing questions about money paid out on election
day and executive helicopters received. There's also a small matter
of someone having been indicted for paying residents of a homeless shelter,
on election day, to pass out Ehrlich campaign literature. (Disclosure:
my brother is an officer
of Maryland's government.)
Governor-elect Craig Benson (R-NH) founded a company called
Cabletron; in its current form, it's being sued for accounting fraud.
(Benson is not a defendant.)
Lt. Gov. Steve Henry (R-KY) is being sued for Medicare fraud
by the US Attorney's office.
Worst of all, Gov. Mike Huckabee (R-AK), it turns out, actively
used influence behind the scenes to get rapist Wayne DuMond paroled --
and when released, DuMond was soon re-arrested in Missouri for a case of
rape and murder, and is suspected in a second rape and murder case.
Why on Earth did Huckabee want to release him? Apparently, some of
the fanatical Clinton-haters in Arkansas got the idea in their heads that
DuMond had been railroaded by Governor Bill Clinton and was innocent.
Woops! Looks like their partisan blinders cost at least one woman
her life. Amazingly, Huckabee was still re-elected when this became
a campaign issue. I guess accusing your opponent of releasing dangerous
felons only works on Democrats.
a water project in Arkansas that could be considered a serious boondoggle.
Grover Norquist, the GOP strategist and prominent anti-Clintonian
who heads Americans for Tax Reform, has apparently been laundering
money for an Oregon election.
The Higher Education Trust Fund of the state of Texas is,
according to the Houston Chronicle, apparently loaded with kickbacks.
As a result, apparently, the fund frequently invests in financial instruments
of prominent Republican cronies, such as the Carlyle Group, which consists
in large part of friends and colleagues of George H.W. Bush.
(The Carlyle Group, by the way, just bought up a chunk of
John Snow's company CSX.)
Following the lead of the Department of Justice, all the
states that were suing Microsoft for monopolistic practices have given
up, with the sole exception of Massachusetts, which is soldiering on alone.
This collapse happened after Microsoft was already found guilty,
and only the sentencing needed to be decided.
Okay, I'll throw in one more Jeb item: Florida ranks lowest
of all states in the percentage of high school students who graduate, but
the state government's figures are fudged to deny this.
Oh, and Neil Bush (the Savings & Loan thief) is now working
to sell software in Florida schools which is designed to help students
prepare for the Florida Comprehensive Assessment Test, which is Florida's
response to the progress accounting requirements of the No Child Left Behind
Act. At least one competitor is crying foul over the family connection.
Believe me, there's more. Maybe I should just update
a list like this every day or two. I don't see how else to keep the
I forgot to mention earlier that the No Child Left Behind
Act has a surprise kicker that is troubling many school districts: they
are now obligated to provide military recruiters with lists of students.
Meanwhile, the act's requirements for "highly qualified" teachers are being
routinely watered down, both federally and locally.
Some good news: a judge ruled that terror suspect Jose Padilla
a.k.a. Abdulla al-Muhajir gets to have an attorney. The Bush administration's
attempt to overrule the Sixth Amendment has been at least partially thwarted...
after the guy's been in jail for more than six months.
Speaking of constitutional protection, a guy who sat in a
bar and blathered half-jokingly about creating a "burning Bush" by pouring
gasoline on the president just got sentenced to 37 months in prison for
it. Another guy recently got arrested just for taking snapshots of
buildings around where Dick Cheney was staying. And a kid who wore
a "Not My President" T-shirt to school got questioned by the Secret Service.
Dick Armey, the retiring Congressional conservative who played
such an unforgettable role in trying to impeach Bill Clinton, has been
back in the news lately for, of all things, joining the ACLU and working
to awaken people to the dangers of Bush's multi-pronged undermining of
the bill of rights. So is he all in favor of civil liberties?
Maybe, and maybe not: a few months ago, when his son ran in a special election
to fill his father's seat and lost, Armey attacked the Dallas Morning News
for negative coverage of his son's campaign (they pointed out a pattern
of his friends getting favors), and then tried to pass an amendment on
a house bill that would have forced the Morning News's parent company to
divest itself of one of its three newspapers. Armey cited his long-term
concern about concentration of media ownership; the company replied that
Dallas is unusually competitive in newspapers and he was disregarding far
larger organizations to pick on them.
Here's a probable new Bush nominee for the court of appeals:
Douglas W. Kmiec. This guy is a staunch defender of the USA-PATRIOT
act, in essence arguing that there's nothing wrong with overruling the
fourth and sixth amendments. He also has written extensively about
the need to bring "the lessons of religion" into law, and that his sense
of a "natural law" above the written law is a sound basis on which to make
Trent Lott made a speech before business types in which he
them that they ought to stop contributing to candidates of both parties
and adopt a strict single-party policy of campaign contributions, if they
still want access. Corporations have, as a whole, been moving strongly
in this direction.
It's been reported
that even the National Endowment for the Arts is becoming more conservative.
Mainly, this means that the institutions that get the money are the symphonies,
operas, and museums that upper class society hangs out at.
It came out a couple of months ago that our president was
using money from the Office of Family Assistance, of all things, to pay
for campaign trips. He would wedge in one small Family-Assistance
related event into a campaign trip to justify it. He agreed to stop
The investigation of Janet Rehnquist at Health and Human
Services has now extended to shredding evidence, and hampering an audit
of the Florida state pension fund that might embarrass to Jeb Bush®.
She successfully delayed the audit until after Jeb was re-elected.
Jeb is reportedly working on on a "marriage reform" measure,
designed to cut down Florida's divorce rate. Say what? Are
we going to have courts telling people they can't divorce, or something?
He denies that this is what he's considering, but offers no other specifics,
other than the clue that something "needs to be addressed before couples
wed." So now what, obstacles to getting married in the first place?
Dubya is appointing a "scantily credentialed" doctor who
believes in faith healing to head a Food and Drug Administration panel
on women's health policy. Dr. W. David Hager wrote books in which
he recommended particular scripture readings as a treatment for PMS symptoms,
and so on. He is not only anti-abortion, but apparently also anti-contraception.
Feminists and others are mounting letter-writing campaigns and other protests.
Meanwhile, John Ashcroft is appointing a couple of Phyllis
Schlafly clones to the Department of Justice's advisory committee on domestic
violence -- people who opposed the Violence Against Women Act that the
committee oversees, which President Clinton credited with bringing about
a 21% drop in such violence.
Clinton passed a rule that states are allowed to use unemployment
benefits for employees taking maternity/paternity leave. Dubya just
Senator John Warner is wondering aloud whether it might be
time to "reconsider" the Posse Comitatus law, which forbids using the military
for civilian law enforcement. He asked Paul Wolfowitz of the Defense
Department about this, and of course Wolfowitz (a classic chicken-hawk)
Bush also recently reversed a rule that forbids the granting
of cash bonuses to political appointees. The practice was banned
because it's a big invitation to the worst sort of cronyism. What
past administration's abuses showed the need to create such a rule?
That of George H.W. Bush. Democrats are objecting, especially since
the timing was shortly after the announcement that federal employees' cost
of living raises would be cut. The White House is defending the policy
and not budging an inch.
I mentioned Bush's plan to "privatize" many federal jobs
by contracting them out. Well, at the Department of Energy, "some
officials... reacted with rueful shakes of the head", because they
had tried contracting out lots of work, and found that above a certain
level, it caused the government employees to be no longer able to properly
oversee that the jobs were being done right.
Dubya appointed Eugene Scalia, son of Antonin Scalia, to
be top attorney of the Labor Department during a Congressional recess so
that he wouldn't need to be confirmed. Some democrats are upset enough
that they are blocking permanent confirmation for him, because he basically
opposes workplace safety rules. His term as an unconfirmed officeholder
expired, but Bush just reappointed him to the job of "acting solicitor"
with the same duties, keeping him in office until the new Repulican senate
can confirm him.
After Thanksgiving, Dubya told people to volunteer more,
and recommended the USA Freedom Corps as a good place to start. This
is an umbrella agency over the Peace Corps, Senior Corps, and others.
One of its daughter agencies, AmeriCorps, just unexpectedly ran out of
money and can't seem to say where the money went...
Drug Czar John Walters told a Mexican audience that the formation
of the Homeland Security department would revitalize the war on drugs.
Walters, by the way, has been accused of illegally using his office to
campaign in a state election, when he opposed the Nevada initiative to
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