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The Big Con: Ohio Pension Manipulation Part I
I got this one nailed and good. Take a breath and if you are from Ohio and are a union public worker — go to your union and get legal counsel. The good stuff is in Point Two where Lehman Brothers got their sticky fingers on Ohio’s Public Pension funds. Point Three is about Wisconsin and illustrates how pension funds have been mismanaged and likely violated the fiduciary relationship of Wisconsin’s Investment Board with the unions.
You know, state governments use actuaries, comptrollers, treasurers, investment boards, and economic analysts in figuring budgets and pensions. Contrary to what Governor Walker, or Rick Snyder, or Ohio’s John Kasich thinks, it’s not one person behind a desk and a computer figuring out all the angles or making all the decisions. It seems no one is interested in talking about the fact that these pension agreements — legally binding agreements – have been in force for decades with virtually no problems. And most public pensions have been tied to safe, low risk bonds. So, how is it that there is suddenly a crisis? Oh, you say, it’s because of the 2008 Global Financial Collapse. Seems plausible enough, but here are some facts about what is going on that just are not being paid attention to and that actually shows it was not the pensions, but who managed them and many pension still retain multi-billions of dollars. Let’s take a look, eh?
The market has recovered much of its losses, so future years’ pension reports are likely to show that most of the shortfall has already been eliminated.
I quite that to show THERE IS NO PENSION CRISIS.
The real fallout of the 2008 global financial collapse is unemployment – widespread and deep unemployment — 25 million unemployed or underemployed Americans. This affects tax revenues. Tax revenues are used by states to fund their budgets and are most definitely way down due to widespread unemployment. The answer to that problem is to invest and create jobs – more jobs, more tax revenues. Corporations need to spend money to create jobs. But no, instead they are sitting on close to $3 trillion and show no sign of making the big move to reinvest in America. They are investing overseas; opening plants overseas; creating new mergers; and engaging in acquisitions. So, no investment – no new jobs and tax revenues will remain anemic until we have — Fed Reserve Chairman Bernanke says — 250,000 jobs being created per month, OTHERWISE he has stated that we will remain in stagflation for another 4-10 years. So, where is the money going to come from to run the governments? Oh, I know, let’s raid the public pensions! Just like what is happening in Europe — raiding of PRIVATE PENSIONS – Republicans see that pool of public pension money and lick their chops. They feel entitled to what is not theirs!
Some states – like Ohio – decided to tie the pension funds to risky mortgage backed securities offered by the too-big-to-fail banks (Lehman Brothers), and when the house of cards fell, investments linked to MBSs took a nasty hit. So, shame on Governors like Gov. Kasich of Ohio who tries to hide this fact. There is also a little conflict of interest in his case – he worked for Lehman Brothers at one time.
Here is a clip to wet your appetite for the real dirty story involved here. And remember, the crash happened in September and October 2008.
In late July and early August 2008, Ohio treasurer, Amer Ahmad said he received calls from two senior management officials at Lehman Brothers: Erin Callan, chief financial officer, and Paolo Tonucci, corporate treasurer. “They said, ‘Things are fine at Lehman Brothers. We would encourage you to buy our commercial paper and help us with the liquidity issues we have on Wall Street.’”
But Corday and Ahmad decided to “distance ourselves” from the commercial-paper holdings, Ahmad said. Ahmad said he found it “shocking” that such high-level officials would call to pitch investments to the state.
Shortly after arriving at the Ohio treasurer’s office in early 2008, Amer Ahmad discovered a ticking time bomb: $800 million in risky short-term investments, including some with Lehman Brothers.
Fresh off 12 years working for two large Wall Street firms, the deputy state treasurer and chief financial officer immediately saw red flags.
In less than a week, the treasurer’s office, then headed by Richard Cordray, disposed of all assets that Ahmad considered toxic.
“I made a choice that we should not be investing in these companies,” Ahmad said, “because in the world I just came from, everybody knew these companies were toxic assets.”
But it was a different story at Ohio’s five pension funds. For a number of reasons, the funds could not or did not move quickly enough to sell off questionable assets. As a result, the treasurer’s office, which acts as custodian but does not invest pension monies, calculated that the funds had a combined $480 million loss in market value solely from Lehman investments.
Officials at the pension funds, in response to questions from The Dispatch, calculated direct losses at about $220 million. The difference between the two figures essentially represents the higher value the investments reached before plummeting when the markets fell in September 2008.
Ahmad said the types of investments at the treasurer’s office and the pension funds were different. The treasurer had short-term commercial paper, including some from Lehman Brothers, while the pension funds generally had longer-term mortgage- or asset-backed securities, or investments in failed or failing financial institutions.
Some states actually borrowed from their solvent pension funds. What? Yes indeed.
Add to those scenarios the report from the Center for Economic Policy and Research that says for most states there is no pension crisis [see Part II] and then goes on to actually explain the issues surrounding public pensions, and you realize that someone, alot of someones, certain someones, and coincidentally Republican someones, are not telling the truth. And when people do not tell the truth it usually means they are lying to get something, or to cover something up – or both.
Wisconsin Pension Funds – from Stateline
Wisconsin may have a budget deficit, but its pension system does not. Studies show that Wisconsin’s state pension program is one of the most solid in the country and has enough funds to cover the promises made not only to current retirees but to those in the future. Wisconsin was hailed as a “national leader” in managing its long-term liabilities for both pensions and retiree health care in “The Trillion Dollar Gap,” a Pew Center on the States report last year.
“The Wisconsin Retirement System is one of the better funded plans in the nation,” says Jean-Pierre Aubry, a research associate at the Center for Retirement Research at Boston College, which tracks state and local pensions. He says Wisconsin has consistently contributed 100 percent of the amount of money that actuaries calculate is needed each year, and has a funded ratio well beyond the 80 percent benchmark that experts consider healthy.
“It is surprising that this pension debate is happening here,” says Jerry Allen, executive director of the City of Milwaukee’s Employees’ Retirement System. “There is no crisis.”
The thing is, Wisconsin state government borrowed from its solvent pension fund and created the crisis. Here’s the story, after taking a hit on 2008 financial crisis, someone in Wisconsin state government did a no-no.
January 27, 2010 WSJ reports:
Public pension funds needing to boost their returns but frustrated with hedge funds and private-equity investments are turning to one of the oldest investment strategies – using borrowed money to boost performance.
The strategy calls for leveraging pension funds’ safest asset – government or other high-grade bonds – while reducing exposure to stocks.
[Understand what was done. The pensions were invested in low risk bonds that had a low return, so someone decided to BORROW against those bonds]
The State of Wisconsin Investment Board, which manages $78bn (€56bn), became among the first to adopt the strategy when it approved the plan on Tuesday. The fund will borrow an amount equivalent to 4% of assets this year, and as much as 20% of its assets over the next three years.
Fund officials say that use of leverage could eventually go higher – in theory, at least, up to 100% of assets, according to the staff analysis. But chief investment officer David Villa said that level wouldn’t be palatable for the Wisconsin fund. He said the pension fund was advised by four money managers, including Connecticut hedge-fund firms AQR Capital and Bridgewater Associates.
Here’s the warning:
That public pension funds would contemplate the use of borrowed money so soon after a credit crisis stoked by financial leverage is already setting off alarms for some in the industry.
These analysts wonder if this is little more than the latest gimmick peddled by investment consultants. In previous years, consultants pitched a strategy called portable alpha, an aggressive bet involving leverage and hedge funds that magnified returns when the stock market was surging but aggravated losses when the market turned down.
During much of the previous decade, many pensions thought they found the answer in private equity, which put up big numbers. But these funds collapsed in value in 2008 alongside the stock market while locking up pension fund capital for 10 or more years.
“We started talking to the board about this two years ago,” said David Villa, Wisconsin’s investment chief. “It would have been nice to have this in a place prior to the crisis.” That’s because the strategy calls for leveraging assets that held value in 2008, Treasuries and other highly rated bonds.
State of Wisconsin Investment Board
The State of Wisconsin Investment Board is a state owned investment manager. The firm primarily provides its services to Wisconsin retirement system. It also manages accounts for state investment fund and other state trust funds, including injured patients and families compensation fund, state life insurance fund, local government property insurance fund, the state historical society of Wisconsin endowment fund, and tuition trust fund (EdVest). The firm manages focused equity and balanced funds. It also manages index funds. The firm invests in the public equity, fixed income, and alternative investment markets across the globe, with a focus on the United States.
Financial News – Public pensions look at leverage strategy
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If you are a regular reader here at Path to Well Being you will know I am a proponent of localization, self-reliance, green-alternative energy, and rainwater recapture. I am clearing two bushes on the north side of my house to locate two rain barrels. I will use the rainwater to supplement my usage in the summertime for my gardens. Like solar from the Sun, rainwater from the sky is free — at least for now. But, it is not in other parts of the world. I also have been writing lately about privatization, the transfer of ownership to business or corporations. Under the category, Word History, you will find a more complete description of privatization.
Here is an example of what can happen when corporations overreach and privatize mother nature herself. How serious is the problem of privatization? Monsanto has already patented many natural seeds for growing. Common Dreams reported in January 2004:
BROOKLIN, Canada – Agribusiness giant Monsanto has sued more than 100 U.S. farmers, and its “seed police” have investigated thousands of others, for what the company terms illegal use of its patented genetically engineered seeds, and activists charge is “corporate extortion”. Monsanto has a budget of 10 million dollars and a staff of 75 devoted solely to investigating and prosecuting farmers, the report said. Entire article, click here.
How does privatization take root?
What is happening in Wisconsin is a prime example of how exorbitant wealth can influence politics, policy, environmental regulations and laws which affect the way we live, how we live, AND what access we have to life sustaining elements – energy, food, mineral resources, and even water, BUT more importantly, its about WHO controls the way we live: our collective publicly run government or private interests and monopolies. Buried within Wisconsin’s SB11 is a provision which ” would allow the State to exempt some state wetlands from environmental oversight. It would be too much to say that the fact that a prominent Republican owns part of the wetlands that will be exempted.” Read all the provisions in SB11, click here.
Also in SB11 is this:
(1) Notwithstanding ss. 13.48 (14) (am) and 16.705 (1), the department may sell any state−owned heating, cooling, and power plant or may contract with a private entity for the operation of any such plant, with or without solicitation of bids, for any amount that the department determines to be in the best interest of the state. Notwithstanding ss. 196.49 and 196.80, no approval or certification of the public service commission is necessary for a public utility to purchase, or contract for the operation of, such a plant, and any such purchase is considered to be in the public interest and to comply with the criteria for certification of a project under s. 196.49 (3) (b).
This provision opens the door to companies like Koch Industries who supported Governor Walker in his election bid to purchase Wisconsin PUBLIC ASSETS on the cheap.
So, this is how it works. Influence peddling $$$ from wealthy interests insinuate their desires upon elected officials — public servants — to include provisions in bills that when passed by those elected officials (who are supported by special interests) nudge along their agendas – and that in this case, favors privatization. THIS is why lobbying should be outlawed.
What’s Next? Water, the Most Valuable Resource and Commodity on Earth
Three intertwined stories should alert us to the dangers of privatization of water.
Privatization sparks a deadly protest in the town of Cochabamba when the Bolivian government sells off its water system to a private, multi-national consortium Aguas del Tunari. New Yorker writer William Finnegan travels to Cochabamba to learn why people took to the streets and what happens next.
The spark was privatization. A private consortium, dominated by the Bechtel Corporation of San Francisco, had taken over Cochabamba’s water system and raised water rates. Protestors blamed Bechtel for trying to “lease the rain.”
The world is running out of fresh water, and the fight to control it has begun.
In this “Letter from Bolivia” New Yorker correspondent William Finnegan describes the intersection of global freshwater shortages and efforts to privatize utilities in third world countries. After hearing news of the Cochabamba water revolts, Finnegan traveled to Bolivia “to find out how the global water business looks from ground.”
Who Is Bechtel?
I first heard of Bechtel in the 70s and then more in the 80s when Reagan was President.
Confessions of an Economic Hit Man by John Perkins, 2004, Excerpts:
George Schultz was secretary of the treasury and chairman of the Council on Economic Policy under Nixon, served as Bechtel president, and then became secretary of state under Reagan. Caspar Weinberger was a Bechtel vice president and general council, and later the secretary of defense under Reagan. Richard Cheney served as secretary of defense under George H. W. Bush, as Halliburton president, and as U.S. vice president to George W. Bush. George H. W. Bush, began as founder of Zapata Petroleum Corp., served as U.S. ambassador to the U.N. under presidents Nixon, Ford, and was Ford’s CIA director.
Reagan was most definitely a global empire builder, a servant of the corporatocracy. He catered to men who shuttled back and forth from corporate CEO offices to bank boards and into the halls of government. He served the men who appeared to serve him but who in fact ran the government – men like Vice President George H.W. Bush, Secretary of State George Schultz, Secretary of Defense Caspar Weinberger, Richard Cheney, Richard Helms, and Robert McNamara, He advocated what those men wanted: an America that controlled the world and all its resources, a world that answered to the commands of America, a U.S. military that would enforce the rules as they were written by America, and an international trade and banking system that supported America as CEO of the global empire.
The Bechtel Group, inc. is a prime example of the cozy relationship between private companies and the U.S. government. Bechtel was the United States’ most influential engineering and construction company. Its president and senior officers included George Shultz and Caspar Weinberger, who despised Torrijos because he brazenly courted a Japanese plan to replace Panama’s existing canal with a new, more efficient one. Such a move not only would transfer the ownership form the United States to Panama but would also exclude Bechtel from participation in the most exciting and potentially lucrative engineering project of the century.
Bechtel – loaded with Nixon, Ford, and Bush cronies, pulls the strings of the Republican Party.
Film: The Corporation
This topic is explored in the 2003 documentary film The Corporation, in the 2010 Spanish film Even the rain by Icíar Bollaín and on Bechtel’s website. In January 2006, Bechtel and the other international partners settled the lawsuit against the Bolivian government for a reported two bolivianos, after intense protests that followed a ruling on jurisdiction favorable to Bechtel by the International Centre for the Settlement of Investment Disputes.
Take a breath and watch this trailer and you will get a hint at the dangers of corporatism, privatization, and monopolies. Visit the filmmakers website, click here
This is a segment that covers the news coverup of this documentary AND further reporting on the Bolivian Privatization of Water by Bechtel.
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UPDATE MARCH 1, 2011
Here is the complete interview with Matt Taibbi from which we played an excerpt on our Feb. 22 show. Taibbi explains how the American people have been defrauded by Wall Street investors and how the financial crisis is connected to the situations in states such as Wisconsin and Ohio. Let me read a sentence from a recent paper by Dean Baker, who concludes, “Most of the pension shortfall using the current methodology is attributable to the plunge in the stock market in the years 2007-2009. If pension funds had earned returns just equal to the interest rate on 30-year Treasury bonds in the three years since 2007, their assets would be more than $850 billion greater than they are today.”
Privately educated in grammar schools, the College of William and Mary, and primarily the world of books, Thomas Jefferson was an ardent advocate of public education as a cornerstone of a free republican society. Throughout his life Jefferson promoted reform in public education as a prerequisite for an enduring republican nation. The founding of the University of Virginia (chartered in 1819) was the capstone of Jefferson’s educational advocacy, and he devoted most of the last decade of his life to its establishment and well-being.
Education has been one of the principal tenets of American Democracy encouraged by the Jeffersonian vision. So important is it that in 1979 the Department of Education was established by President Carter, then called the Department of Health, Education, and Welfare (HEW).
The Big Con
Why are Republican Governors going after their own state’s public employees, and especially teachers? Is it because public employees have overburdened their states with unreasonable and unsustainable pension burdens? NO-NO-AND-NO! That is a convenient lie conservatives and Tea Partyists would like people to believe. A January 2011 study from the Center on Budget and Policy Priorities states otherwise. Read the report for yourself, click here. The purpose of this nefarious lie is conservatives, whether Republican or Tea Partyist, wish to eliminate public education. Yes indeed. The recent spate of attacks on public employees, unions, and collective bargaining is a means to a long wished for end. The key word here is, “collective”. Read on.
History of Attacks on the Department of Education
The Washington Times reported in October 2010: Past attempts to shutter the Cabinet department have fallen short, and the GOP effort largely lapsed under President George W. Bush. President Reagan promised to defund the department – formerly part of the Health, Education and Welfare Department – in his 1982 State of the Union address, and the GOP platform in 1996 backed elimination, but the department has survived.
The new wave of attacks is centered in states where there are Republican governors and where Republicans hold majorities in the state legislatures. But it is no surprise that they started in Wisconsin for it is the home of the John Birch Society of which the billionaire Koch brothers father was a co-founder. Furthermore, we come to find out this past week that the billionaire industry giants, and also the founders of the Cato Institute, were also involved in bankrolling Wisconsin Governor Scott Walker’s election campaign. But the Koch brothers are not Republicans – they are at their core, John Birchers marauding as Tea Partyists. Never heard of the John Birch Society?
The John Birch Society
From their web site: For more than 50 years, the Society has educated and informed its members and others, who have worked together to bring about major changes in national policy. Direction of our volunteer leaders — and our paid field staff — in pursuing the action agenda campaigns of The John Birch Society is provided from our headquarters based in Appleton, Wisconsin. One of the co-founders was Fred Koch, founder of Koch Industries and father to David and Charles Koch. Koch Industries is valued at close to $100 billion. The Koch brothers are the second wealthiest family in America.
The main founder of JBS was Robert Welch. According to Source Watch, ” Welch saw “collectivism” as the main threat to western civilization, and liberals as secret communist traitors who provide the cover for the gradual process of collectivism, with the ultimate goal of replacing the nations of western civilization with one-world socialist government. “There are many stages of welfarism, socialism, and collectivism in general,” he wrote, “but communism is the ultimate state of them all, and they all lead inevitably in that direction.”
And unions are part of the “collectivism”. Public education too. Thus, we find the Koch Brothers carrying out the mandate of the JBS: to eliminate any hint of collectivism in the United States of America.
Republicans and JBS
Republican mainstream unhappiness with the Birchers intensified after Welch circulated a letter calling President Dwight D. Eisenhower a “conscious, dedicated agent of the Communist Conspiracy.” Welch went further in a book titled The Politician, written in 1956 and published by the JBS in 1963, which declared that Eisenhower’s brother Milton was Ike’s superior within the Communist apparatus and alleging that other top government officials were also communist tools, including “ex president Truman and Roosevelt, and the last Sec. Of State John Foster Dulles and former CIA Director Allan W. Dulles.” Conservative writer William F. Buckley, Jr., an early friend and admirer of Welch, regarded his accusations against Eisenhower as “paranoid and idiotic libels” and attempted unsuccessfully to purge Welch from the JBS. Welch responded by attempting to take over Young Americans for Freedom, a conservative youth organization founded with assistance from Buckley.
In October 1964, the Idaho Statesman newspaper expressed concern about what it called an “ominous” increase in JBS-led “ultra right” radio and television broadcasts, which it said then numbered 7,000 weekly and cost an estimated $10 million annually. “By virtue of saturation tactics used, radical, reactionary propaganda is producing an impact even on large numbers of people who, themselves, are in no sense extremists or sympathetic to extremists views,” declared a Statesman editorial. “When day after day they hear distortions of fact and sinister charges against persons or groups, often emanating from organizations with conspicuously respectable sounding names, it is no wonder that the result is: Confusion on some important public issues; stimulation of latent prejudices; creation of suspicion, fear and mistrust in relation not only to their representatives in government, but even in relation to their neighbors.”
But things have changed, and with the rise of the conservative right, the JBS has re-emerged bigger and bolder. They are back to saturation messaging using Talk Radio, pundits, and repetitive rhetoric to convince Americans of their message of the dangers of collectivism. In 2008, the Koch brothers and Rupert Murdoch made a calculated move when they helped back the “progressive” Tea Party. The NY Times reported:
All three tycoons are the latest incarnation of what the historian Kim Phillips-Fein labeled “Invisible Hands” in her prescient 2009 book of that title: those corporate players who have financed the far right ever since the du Pont brothers spawned the American Liberty League in 1934 to bring down F.D.R. You can draw a straight line from the Liberty League’s crusade against the New Deal “socialism” of Social Security, the Securities and Exchange Commission and child labor laws to the John Birch Society-Barry Goldwater assault on J.F.K. and Medicare to the Koch-Murdoch-backed juggernaut against our “socialist” president.
Collectivism vs Corporatism
Collectivism is any philosophic, political, economic or social outlook that emphasizes the interdependence of every human in some collective group and the priority of group goals over individual goals. Collectivists usually focus on community, society or nation. Collectivism has been widely used to refer to a number of different political and economic philosophies, ranging from communalism and democracy to totalitarian nationalism.
Corporatism refers to a form of collectivism that views the whole as being greater than the sum of its individual parts, and gives priority to group rights over individual rights. The philosophic underpinnings of this type of collectivism is related to holism and organicism. Specifically, a society as a whole can be seen as having more meaning or value than the separate individuals that make up that society. Collectivism is widely seen as being opposed to individualism; however most philosophies, political and economic systems have a degree of both collectivist and individualist aspects. Source: Wikipedia
Koch Industries, Inc. /ˈkoʊk/) is an American private energy conglomerate based in Wichita, Kansas, with subsidiaries involved in manufacturing, trading and investments. Koch also owns Invista, Georgia-Pacific, Flint Hills Resources, Koch Pipeline, Koch Fertilizer, Koch Minerals and Matador Cattle Company.
Koch companies are involved in core industries such as the manufacturing, refining and distribution of petroleum, chemicals, energy, fiber, intermediates and polymers, minerals, fertilizers, pulp and paper, chemical technology equipment, ranching, finance, commodities trading, as well as other ventures and investments.
Koch Pollution Record
In 2010, Koch Industries was ranked 10th on the list of top US corporate air polluters, the “Toxic 100 Air Polluters,” by the Political Economic Research Institute at the University of Massachusetts Amherst.
Power and Politics
In recent years, the Koch Brothers have given tens of millions of dollars to Republican candidates. Millions more of their dollars have been given to think tanks such as the Cato Institute and Heritage Foundation, and lobbying organisations like the US Chamber of Commerce. They have also helped bankroll dozens of cleverly-named pressure groups, including Americans for Prosperity and the Institute for Justice. Americans for Prosperity is a powerful business lobbying group.
Koch Industries and its subsidiaries spent more than $20 million on lobbying in 2008 and $12.3 million in 2009, according to the Center for Responsive Politics, a nonpartisan research group.
Koch Industries record of filthy polluting, click here
SourceWatch, John Birch Society: http://www.sourcewatch.org/index.php?title=John_Birch_Society
Independent UK, Power and Politics source: http://www.independent.co.uk/news/world/americas/why-liberals-are-rising-up-against-the-koch-brothers-2200191.html
Thomas Jefferson on public education: http://www.loc.gov/exhibits/jefferson/jeffrep.html
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• FreedomWorks, whose Koch-founded precursor, Citizens for a Sound Economy, received some $5.7 million from Koch foundations.
• Americans for Prosperity, which received at least $5.1 million from Koch Foundations from 2005-2008 and is an offshoot of the Koch-founded Citizens for a Sound Economy Foundation, which itself received more than $6 million from Koch foundations.
• The American Highway Users Alliance, of which Koch Industries is a member.
• Americans for Tax Reform, which received $60,000 from Koch Foundations from 1997-2008.
• The Institute for Policy Innovation, which received $35,000 from Koch foundations.
• The National Petrochemical and Refiners Association, of which Koch Industries is a member.
• The National Taxpayers Union, which has received $20,000 from Koch foundations.
• The Natural Gas Supply Association, of which Koch Industries appears to be a member.
• The Texas Prosperity Project, on whose board of directors sits Bill Oswald, Government & Regulatory Affairs Director at Koch Industries.
• The Corpus Christi Chamber of Commerce, which recently held an event sponsored by Flint Hills Resources, a wholly-owned subsidiary of Koch Industries.
American Legislative Exchange Council, an organization counts Koch Industries as a Private Enterprise Board member, and which practically hand-writes legislation for Republican legislators to submit, including Governor Walker’s. Source: The Awl
From the Koch Industries web site:
Based in Wichita, Kan., Koch Industries, Inc. is one of the largest private companies in America according to Forbes magazine. It owns a diverse group of companies involved in refining and chemicals; process and pollution control equipment and technologies; minerals; fertilizers; polymers and fibers; commodity trading and services; forest and consumer products; and ranching. Koch companies have a presence in nearly 60 countries and employ about 70,000 people. Since 2003, Koch companies have completed more than $32 billion in acquisitions and investments, and nearly $11 billion in capital expenditures.
With about 2,300 employees in Kansas, the company’s Wichita headquarters, a 1.2 million-square-foot office complex houses specialized capabilities such as human resources; environmental, health and safety; information technology; public affairs; risk management; legal services; tax and audit services; and business development.
Does this matter? is a new series of articles that I will present from time to time on matters that get little attention in the BIG PRESS, but worthy to bring to light.
In 2009-2010 AT&T gave $377,500 to House Tea Party Caucus members. This comes from a company called CREDO Mobile who has solicited me for about two years to switch over to their service using political rhetoric to get my attention. It goes like this: certain corporations support certain political parties. Why give your hard earned money to companies who are counter to your politics? It’s an effective strategy, but I have not made the switch, yet. I also have a hard time not shopping at Target even though during the mid-terms last year they were on record with donating $150,000 to Minnesota Republican gubernatorial candidate Tom Emmer, a known anti-gay politician. I have however scaled back my purchases at Target, but not completely. An article on the HPost about MoveOn’s efforts to fight back last year had this quote:
Target has spent over $150,000 in the Minnesota Governor’s race backing state Rep. Tom Emmer, a far-right Republican who supports Arizona’s draconian immigration law, wants to abolish the minimum wage and even gave money to a fringe group that condoned the execution of gay people.
Being that corporations have been declared entities that can donate untold amounts of money to campaigns – as sanctioned by the Supreme Court -now I have to find ways to filter which companies may not be in line with my political and ethical values. So be it. It is a worthwhile effort.
To be sure, I do not make known purchases from Valero Gas stations as they are owned by the Koch brothers. I say ‘known’ as Valero gas is used by many independent gas stations and you may not know it is their gas.
To find more information about who give what to whom and more, there is a site called: OpenSecrets.org – Money in Politics ( the link is now in my blogroll in case you forget), that has all sorts of information on the money flow in politics.
– 76% Oil & Gas Industry support Republicans
– 74% of Education support Democrats
– 61% of Commercial Banks support Republicans
– 83% of Public Sector Unions support Democrats
That’s seems pretty relevant to me considering what’s going on these days.
UPDATE: FEBRUARY 28, 2011: The Washington Post caught up with my views today with their headline: Ohio, Wisconsin shine spotlight on new union battle: Government workers vs. taxpayers — click here to read their take on this sad and maddening situation.
UPDATE: FEBRUARY 25, 2011:
The bill in question is 144 pages long, and there are some extraordinary things hidden deep inside. For example, the bill includes language that would allow officials appointed by the governor to make sweeping cuts in health coverage for low-income families without having to go through the normal legislative process.
And then there’s this: “Notwithstanding ss. 13.48 (14) (am) and 16.705 (1), the department may sell any state-owned heating, cooling, and power plant or may contract with a private entity for the operation of any such plant, with or without solicitation of bids, for any amount that the department determines to be in the best interest of the state. Notwithstanding ss. 196.49 and 196.80, no approval or certification of the public service commission is necessary for a public utility to purchase, or contract for the operation of, such a plant, and any such purchase is considered to be in the public interest and to comply with the criteria for certification of a project under s. 196.49 (3) (b).”
What’s that about? The state of Wisconsin owns a number of plants supplying heating, cooling, and electricity to state-run facilities (like the University of Wisconsin). The language in the budget bill would, in effect, let the governor privatize any or all of these facilities at whim. Not only that, he could sell them, without taking bids, to anyone he chooses. And note that any such sale would, by definition, be “considered to be in the public interest.”
UPDATE: FEBRUARY 23, 2011:
Scott Walker Gets Punked By Journalist Pretending To Be David Koch.
SEE OUR SPECIAL POST TODAY ON THIS TOO GOOD TO BE TRUE MOMENT FOR AMERICAN POLITICS!
We are going to bring fiscal sanity back to this great nation.
– Tim Phillips, president of Americans for Prosperity
What we are witnessing in Wisconsin and Ohio is a classic divide and conquer strategy by very powerful wealthy interests who wish to destroy our country’s unions and advance corporatism. These interests have convinced certain groups of people that public employees created the severe fiscal problems underlying many states budgets and that those workers should not only receive reduced pay and pay more into their pension retirement fund, but also lose their collective bargaining rights in the process.
What is the bill in question?
Wisconsin SB 11: state finances, collective bargaining for public employees, compensation and fringe benefits of public employees, the state civil service system, the Medical Assistance program, sale of certain facilities, granting bonding authority, and making an appropriation.
Who is backing these efforts?
The largest stakeholders bankrolling Gov.Walker and TEA PARTYISTs are the billionaire Koch brothers: David and Charles Koch
State records also show that Koch Industries, their energy and consumer products conglomerate based in Wichita, Kan., was one of the biggest contributors to the election campaign of Gov. Scott Walker of Wisconsin, a Republican who has championed the proposed cuts.
On the surface, there is nothing wrong with Walker receiving campaign funds from the Kochs. What is highly suspect, is that influence peddling seems to be involved. Gov. Walker is advancing the Koch agenda. What is it they want? To bust the unions and strip workers of their rights to collectively bargain for decent wages and benefits which would allow them to pay their workers less in their conglomerate of businesses. The Kochs are the third wealthiest family in the country who have been advancing not only a personal corporate agenda, but a politically conservative one as well. They have all but reinvented the John Birch Society, which their father helped co-found, under the guise of the Tea Party.
“The Koch brothers are the poster children of the effort by multinational corporate America to try to redefine the rights and values of American citizens,” said Representative Gwen Moore, Democrat of Wisconsin, who joined with others in the union protests.
Who are Americans for Prosperity?
They are a powerful Koch supported lobbying group. Click here for more.
Mr. Phillips did not mention was that his Virginia-based nonprofit group, whose budget surged to $40 million in 2010 from $7 million three years ago, was created and financed in part by the secretive billionaire brothers Charles G. and David H. Koch.
What are the Koch brothers goals?
“If not us, who? If not now, when?” said the letter, which invited other conservatives to a retreat in January in Rancho Mirage, Calif. “It is up to us to combat what is now the greatest assault on American freedom and prosperity in our lifetimes.”
Campaign finance records in Washington show that donations by Koch Industries and its employees climbed to a total of $2 million in the last election cycle, twice as much as a decade ago, with 92 percent of that money going to Republicans. Donations in state government races — like in Wisconsin — have also surged in recent years, records show.
Financial Collapse Real Reason for State’s Budget Problems
The real assault is actually the effects of the 2008 financial collapse driven by massive fraud in Wall Street investment banking, global trading of risky mortgage backed securities (sub-prime mortgages), credit default swaps, and collateralized debt obligations. Many states tied their pension funds to the financial markets and when the collapse occurred, they like many Americans, lost upwards to 40% of their value. So, with depleted funds public employees were targeted to offset the losses. They were victims of the financial collapse, not because they were the perpetrators and their union pay was exorbitant or benefits too generous. To compound the problem, Wisconsin, as many states, borrowed pension fund monies to run fill gaps in their state budget! With mass unemployment, the tax revenue stream to the state coffers, as with many states, has been dramatically reduced further exasperating the problem. The reported unemployment rate as of December 2010 was hovering at 7 percent.
Americans for Prosperity Ruse
So, in rushes the Koch brothers to take advantage of the situation, promote lies about how state budgets were upended by public employees, and then sit back and watch while Americans turn against other Americans. Do you see how this works? This is classic manipulation. The stakes are very high here.
By creating lobbying groups and marketing them as grass roots organization, the Kochs appear to be supporting “people’s rights” but in fact, are doing the opposite, they are attempting to strip people of their rights to collectively bargain with large corporations (collective by definition).
“This is a dangerous moment in America history,” Bob Edgar, a former House Democrat said. “It is not that these folks don’t have a right to participate in politics. But they are moving democracy into the control of more wealthy corporate hands.”
And we find Americans for Prosperity are against things that actually would support Americans prosperity like healthcare, fair taxes, and financial regulation that would rein in the banks and credit card companies.
The grass-roots-activists wing of the organization today has chapters in 32 states, including Wisconsin, and an e-mail list of 1.6 million supporters, said Mary Ellen Burke, a spokeswoman. She would not say how much of last year’s $40 million budget came from the Koch family, but nationwide donations have come in from 70,000 members, she said, offering it as proof that it has wide support.
The organization has taken up a range of topics, including combating the health care law, environmental regulations and spending by state and federal governments. The effort to impose limits on public labor unions has been a particular focus in Ohio, Indiana, Pennsylvania and Wisconsin, all states with Republican governors, Mr. Phillips said, adding that he expects new proposals to emerge soon in some of those states to limit union power.
It would behoove my readers to spread the word about the Koch brothers and what corporatism and oligarchy means for our democracy. Make no mistake, American democracy is under siege. It is democracy, not corporatism, or capitalism, or oligarchy that protects our freedom and our rights. The right to self-determination through making a decent living, free from the oppression of wealthy interests is fundamental to American democracy. It was a founding principal of our nation and one we must fight to protect from those who would usurp our rights.