Thursday, December 5, 2013

ALEC 

stands its ground

It was like going into the belly of the beast.
This week in Washington is the annual “policy summit” of the American Legislative Exchange Council, a powerful, secretive organization funded by the Koch brothers and other corporate interests that is famous for drafting conservative legislation that Republican state legislatures adopt down to the last semicolon. And the news media were invited to attend!  

I descended the escalators at the Grand Hyatt downtown, two floors below street level, excited by the possibilities listed on the ALEC agenda:
  • The environment and energy task force, led by private-sector American Electric Power. 
  • The tax and fiscal policy task force, headed by Altria. 
  • The international relations task force, run by Philip Morris. 
  • The commerce and insurance task force, by State Farm. 
  • The health and human services task force, by Guarantee Trust Life Insurance.
Alas, I was quickly regurgitated from the belly of the beast. Outside the meeting rooms, a D.C. police officer, stationed to keep out the riffraff, turned me away. 

“Our business meetings are not open, and so the subcommittee meetings and task force meetings are not open,” explained Bill Meierling, an ALEC spokesman. I could wait a few hours and then attend a luncheon and some workshops, as long as I promised not to record them. 

But Meierling wanted to assure me that there was nothing untoward about this arrangement, and that it was absolutely not true that the corporations that fund ALEC were behind closed doors, handing their legislative wish lists to the conservative state legislators who then pass them, rubber-stamp style, from coast to coast. 

“What you fundamentally need to know about this organization is it’s completely legislator driven,” he said.   Uh-huh. And ALEC is proving that by keeping reporters from the rooms where the legislators are or are not receiving their marching orders from corporate patrons. 

This probably won’t fly much longer. ALEC has been a major force behind the conservative swing in state capitals, and it claims 82 alumni in the House — including Speaker John Boehner (Ohio) and Majority Leader Eric Cantor (Va.) — and 11 in the Senate. Its advisory council includes Exxon Mobil, Pfizer, Diageo, AT&T, Peabody Energy, Koch Industries and UPS, and exhibitors at its conference this week include the Charles Koch Institute, the Family Research Council and the Heritage Foundation. Sen. Ted Cruz (R-Tex.) and Rep. Paul Ryan (R-Wis.) are addressing the conference. 

But ALEC’s fortunes began to change with the killing of Trayvon Martin and the resulting attention to the danger of “stand your ground” laws, one of many initiatives ALEC spread from sea to shining sea. Some corporate sponsors, including Amazon, Coca-Cola, General Electric, Kraft, McDonald’s and Wal-Mart, quit ALEC. 

On Tuesday, the Guardian newspaper published a trove of internal ALEC documents showing how grim its situation has become:
  • The group has lost almost 400 state legislators in the past two years and more than 60 corporations. 
  • Its income fell a third short of projections in the first six months of this year.  
  • To raise money, the documents showed, ALEC considered expanding its policy portfolio to gambling.
  • Concerned about potential tax problems with its designation as a 501(c)(3) charity, it is considering 501(c)(4) status, which would allow it to lobby more openly.
Among the ALEC documents obtained by the Guardian: a draft loyalty oath for legislators who serve as the group’s state chairs, declaring that “I will act with care and loyalty and put the interests of the organization first.”

When I first dealt with ALEC as a state government reporter 18 years ago, it was right of center but known for thoughtful policy research. But it adopted an aggressive agenda to pass legislation expanding gun rights and voter-identification requirements, and limit the reach of public-employee unions, social-welfare programs, consumer and environmental protections, and Obamacare.

Emboldened by the Guardian report, liberal politicians held an anti-ALEC teleconference Wednesday afternoon. “ALEC,” said Rep. Mark Pocan (D-Wis.), a former member of the group, “is nothing more than a corporate-funded and dominated group that operates much like a dating service, only between legislators and special interests.”

Danielle Conrad, a Nebraska state senator who quit ALEC, called it a “shadowy group” that made a “radical shift” in its agenda.

At the Grand Hyatt, Meierling, who joined ALEC from the United Way in January, told me that he’s gradually introducing transparency but that ALEC “can’t just kick the doors open.” 

Actually, it can — unless it doesn’t want people to see what’s behind those doors.


BLOGGER'S NOTE :


    
 Trayvon Martin did not die in vain.
His death, by many estimates, has brought national attention to the ill conceived efforts of ALEC and other organizations like it.  May God Bless Trayvon Martin, and may his family take some comfort in the changes his death has, and will continue to bring.


 


Wednesday, December 4, 2013

The context: House and Senate committees are investigating abuses of administratively uncontrollable overtime. The Senate federal workforce subcommittee will have a hearing on it next week, following the House hearing last month.

Border Patrol union advocates overtime changes that would cut officers’ pay

 

By Joe Davidson, Published: December 3
It’s not every day that a federal labor organization tells Congress to reduce union members’ pay.But that’s what the National Border Patrol Council advocates.

“Frankly, I am asking you for a pay cut,” Brandon Judd, president of the council, recently told members of the House Oversight and Government Reform subcommittee on national security. “I am coming to you and I am telling you, agents are willing to take a pay cut.”

The context: House and Senate committees are investigating abuses of administratively uncontrollable overtime. The Senate federal workforce subcommittee will have a hearing on it next week, following the House hearing last month. 

This type of overtime, commonly called AUO, is meant to cover Border Patrol agents and other Department of Homeland Security (DHS) law enforcement officers who must work longer than scheduled hours when, for example, chasing suspects through the desert. 

But rather than a method used to compensate employees for the unexpected circumstance, it turned into a regular pay trough even for the desk-bound. That dirtied its reputation for the officers who legitimately needed it.

In an October letter to President Obama, Special Counsel Carolyn Lerner said “AUO problems are ongoing and pervasive.” She called the abuse “a violation of the public trust and a gross waste of scarce government funds.”

Judd and others could see what was coming. 

It’s not that he and other leaders of the Border Patrol Council, which is part of the American Federation of Government Employees, are trying to curry favor with Congress at the expense of their membership. But they do know how to get in front of a situation.

“We see the writing on the walls,” said Shawn Moran, a council spokesman. “We know that the alternative is far worse than what we are pushing for.”

The stinging report from the Office of Special Counsel leaves AUO in its current form a wounded bureaucratic creature with diminished chances of survival. 

Perhaps sensing change was coming, union leaders started working with Congress on fixes to the overtime system well before Lerner issued her report. The result is legislation that has the support of Democrats, Republicans and labor, but not management, at least not yet. 

DHS spokesman Peter Boogaard said “while many frontline officers and agents across the department require work-hour flexibility,” often through the use of AUO, “misuse of these funds is not tolerated.”
DHS is examining the overtime system, and the Obama administration is reviewing the bill. Its chief sponsors are subcommittee chairman Jon Tester (D-Mont.) and John McCain (R-Ariz.) in the Senate and subcommittee chairman Jason Chaffetz (R-Utah) in the House, where there also are Democratic co-sponsors.

“Establishing this new pay schedule will make our borders more secure and save taxpayer dollars,” Tester said. 

The legislation would provide agents three overtime options: 1) work 100 hours per pay period and get 25 percent overtime; 2) work 90 hours with 12.5 percent overtime; or 3) work no overtime. Comp time could be taken for unscheduled overtime worked beyond 80 to 100 hours per two-week pay period, depending on the option. 

Judd said “this legislation will ensure that Americans have a Border Patrol that is properly trained, adequately equipped and fairly compensated.”

Fairly, but not as lucratively.

Moran said most of the union members would lose about $6,500 annually compared with their income before this year’s budget cuts. 

So what do they get in return?

“It brings a lot of long-term stability in terms of pay,” Moran said. “That will increase morale.”
Chaffetz said the bill would save taxpayer money.

“In addition to saving $125 million a year, we are looking to bring more consistency to those who risk their lives everyday protecting the border,” he said. “This new pay scale is a long-term solution that will iron out the kinks of the current system through old-fashioned planning and time management. These changes will both reduce opportunities to abuse the system and provide compensation for unanticipated emergencies such as capturing criminals.” 

For many years, AUO, which amounted to a 25 percent increase in pay, was routinely expected by agents and promoted by the agency. Union leaders say many field agents generally work 10-hour days.

“When I applied for the job, it was actually a part of the compensation package that you were told that you would earn,” Judd told the House hearing. “ It said that you would earn a substantial amount of irregular overtime in the form of administrative uncontrolled overtime. So, yes, all Border Patrol agents,” until changes about year ago, “were told that this was part of your compensation package.”
But simply ending the overtime system without a fair replacement would be a deal-breaker for many agents.

“If you remove the overtime system that we currently have,” Judd said, “you wouldn’t be able to retain employees. . . . We need an overtime system that would be cost effective to taxpayers, increase border security and include incentives to retain our employees.”

Low bank wages costing the public millions, report says

Almost a third of the country’s half-million bank tellers rely on some form of public assistance to get by, according to a report due out Wednesday.  Researchers say taxpayers are doling out nearly $900 million a year to supplement the wages of bank tellers, which amounts to a public subsidy for multibillion-dollar banks. The bank workers collect: 

 $105 million in food stamps 

$250 million through the earned income tax credit

$534 million by way of Medicaid and the Children’s Health Insurance Program 


Committee for Better Banks organizers say they are in the early stages of their fight and trying to make the public aware of workplace conditions. The release of the report Wednesday will kick off a week of events, including a rally in front of a Bank of America branch to protest the increasing reliance on ATMs with videoconference tellers. Officials at Bank of America declined to comment

The University of California at Berkeley’s Labor Center provided the data to the Committee for Better Banks, a coalition of labor advocacy groups that published the broader study, to be released Wednesday, on the conditions of bank workers in the heart of the financial industry, New York. In the that state alone, 39 percent of tellers and their family members are enrolled in some form of public assistance program, the data show.

“This is the wealthiest and most powerful industry in the world, and it’s substantially subsidized by our tax dollars, money that we could be spending on child care or pre-K,” said Deborah Axt, co-executive director at Make the Road New York, one of four coalition members. 

Profits at the nation’s banks topped $141.3 billion last year, with the median chief executive pay hovering around $552 million, according to SNL Financial. In contrast, the U.S. Bureau of Labor Statistics pegs the median annual income of a bank teller at $24,100, or $11.59 an hour. 

For its report, the committee spoke with 5,000 bank tellers, customer service representatives and technicians about their pay, benefits and treatment in the workplace. Workers bemoaned their poor wages and long hours without overtime pay.

Alex Shalom, 20, works part time at a Bank of America branch in Manhattan, where he makes $13.50 an hour, or $14,000 a year. The pay is barely enough to pay rent and cover his tuition at Hunter College, Shalom said. 

“It’s not a livable wage,” he said. “Bank of America is making all of this money . . . but we’re not getting paid for holidays.” 

Another common complaint among bank workers was the intense pressure to meet sales quotas. One Wells Fargo employee, Victoria, who would only give researchers her first name, claimed she received more than 50 e-mails a day from managers pushing sales goals. Employees, she said, had to aggressively peddle products “just to be able to keep our jobs.”

Wells Fargo spokeswoman Richele Messick said: “Wells Fargo works hard to create a positive work environment for our team members and a culture of doing what is best for our customers.”

Although banks have rebounded from the depths of the recession, analysts say they are still contending with economic headwinds that are placing pressure on revenues. As a result, they say, institutions may be less inclined to raise wages and maintain full-time staff.

“The interest-rate environment is very unfavorable to banks. There is an increasing amount of regulation that has further squeezed profit margins,” said Greg McBride, senior financial analyst at Bankrate.com. “When margins are tight and you’re looking for maximum efficiency, you have to make tough decisions.”

The committee’s report arrives as fast-food workers, retail employees and other low-wage workers stage strikes across the country, including one planned for Thursday. They are fighting to have their pay raised to $15 an hour and for an easier path to forming unions. 

“As this low-wage policy spreads beyond fast food into banking and other sectors, it makes it much tougher for the economy to grow,” said Gregory DeFreitas, an economics professor at Hofstra University. “People are scrapping by on so little, so the demand for products remains low and the broader economy is hurt.”

Committee for Better Banks organizers say they are in the early stages of their fight and trying to make the public aware of workplace conditions. The release of the report Wednesday will kick off a week of events, including a rally in front of a Bank of America branch to protest the increasing reliance on ATMs with videoconference tellers. 

The bank stepped up the use of remote video tellers in the past year, raising concerns that the machines would eliminate branch workers. 

Officials at Bank of America declined to comment, but in the past the bank has said that the technology is meant to supplement, not replace, its branch employees.

BLOGGER'S NOTE:   THIS IS WHY A FEDERAL SAFETY NET (that addresses basic human needs - health care, food & nutrition assistance, housing, and education) IS SO IMPORTANT.  The GOP wants to get the government out of the business of looking out for our neighbors; but with incomes declining, and affordable medical care, food and housing nonexistent, what options do working class people have?  Do we wait until their untreated health care needs cause epidemics; until substantial numbers of Americans can neither read nor write; until they are literally dying by the thousands on our streets?  At what point do we step up to the plate?

Friday, November 22, 2013

Drug testing is a great idea. 

Thanks, Rep. Radel.

By , Published: November 21

 

Rep. Trey Radel voted in favor of drug-testing the folks who get food stamps.  In that case, why don’t we drug-test all people who get federal money? Let’s start with members of Congress!

Radel, the Florida Republican whose campaign was heavy on balancing the budget, would be the first to save the government some money on that plan.

The 37-year-old congressman who describes himself on Twitter as a “Hip Hop Conservative” — whatever that is — lasted just 10 months in the nation’s capital before his Nose Snow Rewards Card balance tripped the radar of law enforcement.

He was busted last month after buying $250 worth of cocaine from a federal agent. And it apparently wasn’t his first time on this particular sleigh ride.  Radel was described in charging documents as a routine buyer in Dupont Circle, purchasing for himself and for his pals.  He pleaded guilty in D.C. Superior Court this week, was sentenced to a year of probation and announced a leave of absence.

Ho-hum. Nothing new, politics and drugs. Thanks to former D.C. mayor Marion Barry and Toronto Mayor Rob Ford, we can mention more than just weed in this list. And the roll call of politicians who’ve admitted to smoking pot — whether they inhaled or not — is too huge to tackle in this space.

Radel, a former TV reporter and conservative radio gabber, isn’t an aberration when it comes to using coke. About 1.6 million Americans admitted to being regular cocaine users in a survey by the  Substance Abuse and Mental Health Services Administration last year.

The same survey said that about 1,800 try cocaine for their first time every day. It’s not just boxy boyfriend blazers that are coming back from the ’80s.  Plus, Radel was described as an energetic new lawmaker who was quickly making a name for himself on Capitol Hill. And he’s got a 2-year-old at home. Who couldn’t use a little coke to stay wired?

Radel’s drug use isn’t even his worst transgression. It’s attaining a level of hypocrisy that usually takes politicians years — decades — to achieve.  This is a guy whose campaign ads lambasted “typical politicians.”  “Washington’s full of them,” he lamented.
 
He said he’d bring American values to Washington, “Values that come with integrity, especially when we talk about cuts.” Like, the kind you make with a razor blade, Hip Hop Man?  Seriously — this is a guy who preaches about the dysfunction in Washington, and then look at what he does once he gets to Our Town.

The tea party darling is one of the Republicans who voted in favor of a devastating $39 billion cut to the nation’s food stamp program and later voted for another bill requiring mandatory drug testing for food stamp recipients.

Yup, in Radel’s version of Absurdistan, it’s totally okay for a guy in a suit to use coke and collect a government paycheck, but a single mom who needs help buying milk for her kids has to be drug-tested before she gets one government dime.

Drug-testing food stamp and welfare recipients is a mean-spirited, political potshot at our nation’s most vulnerable families. And it doesn’t work.  In Utah, from August 2012 to July, the state spent more than $30,000 testing nearly 5,000 welfare applicants for drug use. The haul? Twelve people.
 
The same thing was tried in Florida, where drug tests cost the state more money than was saved. Those tests turned up more positives than in Utah. (Come on, it’s Florida!) There, about 100 of 4,000 recipients tested dirty. Maybe Radel was a ringer, taking that test to increase the numbers and bolster his spending cuts.
 

Why, exactly, don’t we require a drug test for our lawmakers?


They get paid by the taxpayers. They make important decisions. I’m sure the electronic voting machines they use to cast their yeas and nays count as heavy machinery. Or the members-only elevator does.  In America, if you stack apples, cut meat, pitch a baseball, carry a weapon, drive a forklift, answer phones, sweep streets or do any number of other jobs, you’ve got to pee in a cup to assure your employer that you are drug-free and worthy of the job.

The Partnership at Drugfree.org estimated that 84 percent of employers in America drug-test their employees. Why don’t we hold our members of Congress to the same standards?

I’m not alone in thinking this. Go to petitiononline.com, find the petition to drug-test members of Congress and read the comments of people angry about the consistent double standard that politicians live by.

If we tested everyone in Congress at an average cost of $40 a test, the bill would be about $21,400. And even if Radel was the only one (ha!) who tested positive for drugs, the taxpayers would come out ahead by withholding his $174,000 salary.

You were right, congressman Radel. Drug testing is an excellent idea.  Just make sure you target the right people.

Friday, November 8, 2013

Home Depot apologizes for racist tweet

Friday - 11/8/2013, 3:58pm  ET
NEW YORK (AP) -- Home improvement maker Home Depot Inc. on Thursday apologized for a tweet that showed a picture of two African-American drummers with a person in a gorilla mask in between them and asked: "Which drummer is not like the others?"

The tweet, from Home Depot's official Twitter account, @HomeDepot, was part of a "College Gameday" college football promotion on ESPN. It was quickly pulled, but not before people took screen shots of it and it was widely circulated on social media. NBC and CNBC, among others, reported on the Tweet.

Home Depot said Friday that it has fired the person and outside agency that was responsible for the tweet, but did not disclose their names.

"We have zero tolerance for anything so stupid and offensive," said Stephen Holmes, spokesman for the Atlanta-based company.

Holmes said the company is "closely" reviewing its social media procedures to determine "how this could have happened, and how to ensure it never happens again."

Allen Adamson, managing director of branding firm Landor Associates, said the tweet is "the worst possible message Home Depot can send out ... even if it gets attributed to stupidity."

"In a Twitter world where everyone can see everything instantly I think you'll see more rather than less of this because people tweet before they think," Adamson said.

Home Depot is not the first company to get in trouble for offensive tweets. In September, AT&T apologized for a Twitter message that commemorated the Sept. 11 attacks because of complaints the company was using the event to promote itself. And KitchenAid faced backlash in 2012 when one of its employees mistakenly posted a tweet about President Barack Obama's grandmother death on the official KitchenAid Twitter account.

BLOGGER"S NOTE:

Yes you are correct, "In a Twitter world where everyone can see everything instantly...," WE KNOW EXACTLY WHO YOU ARE.

Thursday, October 24, 2013

Bank of America is found liable for Countrywide mortgage fraud

A civil jury finds Bank of America liable for mortgage fraud at Countrywide Financial, which the bank bought in 2008. The verdict could embolden other investigations.


Verdict against Bank of America, Countrywide
A Countrywide office in Beverly Hills in 2008. Bank of America bought the mortgage lender that year during the height of the housing crisis. (Kevork Djansezian, Associated Press / June 25, 2008)

 

NEW YORK — Bank of America has been found liable for fraud in the sale of faulty loans by its Countrywide mortgage unit, a major victory for the federal government as it continues to pursue cases stemming from the financial crisis.

A federal jury in Manhattan sided with prosecutors who alleged Countrywide Financial Corp. churned out risky home loans in a process called "the Hustle" and then sold them to mortgage giants Fannie Mae and Freddie Mac.

The Calabasas company, once considered the crown jewel of American mortgage lending, made big profits unloading loans that were later rendered worthless during the housing crisis in 2008.
The decision is the first civil fraud verdict against Countrywide, and experts said the decision would probably invite more aggrieved investors to sue and could embolden other investigations aimed at Countrywide or other banks.

"That's a very significant win for the government," said Thomas Gorman, a partner at law firm Dorsey Whitney in Washington. "This kind of verdict will only strengthen government's negotiating position and probably make other major banks reevaluate what their position is."

In addition to ruling unanimously against BofA, jurors found former Countrywide executive Rebecca Mairone liable for her role in the case.

Federal prosecutors in Los Angeles had been unable to construct a criminal fraud case against Countrywide executives, including co-founder and Chairman Angelo Mozilo.

But three years ago, the Securities and Exchange Commission obtained what it said was the biggest-ever civil penalty from a corporate boss when Mozilo agreed to pay $67.5 million to avoid going to trial on allegations of fraud and insider trading. The SEC also settled with two of Mozilo's top executives at Countrywide, which had been the nation's largest home lender.

Countrywide was acquired by BofA during the height of the housing crisis. Preet Bharara, the U.S. attorney in Manhattan, whose office sued the bank, said the lender's practices treated "quality control and underwriting as a joke."

"In a rush to feed at the trough of easy mortgage money on the eve of the financial crisis, Bank of America purchased Countrywide, thinking it had gobbled up a cash cow," Bharara said in a statement. "That profit, however, was built on fraud, as the jury unanimously found."

Bharara's office, which filed the suit a year ago this week, is seeking $848 million in damages from the bank. Any penalties will be determined by a federal judge.
During the four-week trial, the bank contested the number of faulty loans and total losses at the heart of the case.
"The jury's decision concerned a single Countrywide program that lasted several months and ended before Bank of America's acquisition of the company," the bank said in a statement. "We will evaluate our options for appeal."

The suit highlighted Countrywide programs aimed at getting employees to churn out mortgages as fast as possible.

Countrywide's practices were some of the most egregious among subprime lenders, said Arthur Wilmarth Jr., a George Washington University law professor who consulted for the Financial Crisis Inquiry Commission.

"They along with Washington Mutual were [among] the worst of the banks," Wilmarth said.
The courtroom victory could strengthen the federal government's hand as it confronts other major Wall Street banks for conduct that contributed to the financial crisis.

The Justice Department and JPMorgan Chase & Co. have been working on a $13-billion settlement that would resolve a raft of federal and state probes stemming from faulty mortgage investments that fueled the financial crisis. A source familiar with the negotiations has said the deal could be announced as soon as this week.

In addition, the verdict may inspire the federal government to continue using a new weapon to fight Wall Street misdeeds.

After the financial crisis, prosecutors dusted off a 1980s law — the Financial Institutions Reform, Recovery and Enforcement Act — to pursue wrongdoing, said Jeffrey Manns, a law professor at George Washington University. Prosecutors used the law in the Countrywide case. The law was passed after the savings and loan crisis and allows the government to more easily prosecute for fraud that affects federally insured financial institutions.

"This is potentially a landmark case because it shows the government can successfully sue under this act," Manns said.

Manns said the Countrywide case could have fallout for other cases, such as the Justice Department lawsuit against ratings firm Standard & Poor's filed in Los Angeles. In that case, the government alleges that S&P helped inflate the housing bubble by assigning dubious ratings to mortgage investments chock-full of faulty loans.

"That case will now take place in the shadow of the Bank of America decision," Manns said.

andrew.tangel@latimes.com.
Times staff writer E. Scott Reckard contributed to this report.

Wednesday, October 23, 2013

The Cry of the True Republican

Five generations of Tafts have served our nation as unwaveringly stalwart Republicans, from Alphonso Taft, who served as attorney general in the late 19th century, through William Howard Taft, who not only was the only person to be both president of the United States and chief justice of the United States but also served as the chief civil administrator of the Philippines and secretary of war, to my cousin, Robert Taft, a two-term governor of Ohio. 

As I write, a photograph of my grandfather, Senator Robert Alphonso Taft, looks across at me from the wall of my office. He led the Republican Party in the United States Senate in the 1940s and early 1950s, ran for the Republican nomination for president three times and was known as “Mr. Republican.” If he were alive today, I can assure you he wouldn’t even recognize the modern Republican Party, which has repeatedly brought the United States of America to the edge of a fiscal cliff — seemingly with every intention of pushing us off the edge. 

Throughout my family’s more than 170-year legacy of public service, Republicans have represented the voice of fiscal conservatism. Republicans have been the adults in the room. Yet somehow the current generation of party activists has managed to do what no previous Republicans have been able to do — position the Democratic Party as the agents of fiscal responsibility. 

Speaking through the night, Senator Ted Cruz, with heavy-lidded, sleep-deprived eyes, conveyed not the libertarian element in Republican philosophy that advocates for smaller government and less intrusion into the personal lives of citizens, but a new, virulent strain of empty nihilism: “blow it up if we can’t get what we want.” 

This recent display of bomb-throwing obstructionism by Republicans in Congress evokes another painful, historically embarrassing chapter in the Republican Party — that of Senator Joseph McCarthy, chairman of the Senate Permanent Subcommittee on Investigations, whose anti-Communist crusade was allowed by Republican elders to expand unchecked, unnecessarily and unfairly tarnishing the reputations of thousands of people with “Red Scare” accusations of Communist affiliation. Finally Senator McCarthy was brought up short during the questioning of the United States Army’s chief counsel, Joseph N. Welch, who at one point demanded the senator’s attention, then said: “Until this moment, Senator, I think I never really gauged your cruelty or your recklessness.” He later added: “Have you no sense of decency, sir? At long last, have you left no sense of decency?” 

Watching the Republican Party use the full faith and credit of the United States to try to roll back Obamacare, watching its members threaten not to raise the debt limit — which Warren Buffett rightly called a “political weapon of mass destruction” — to repeal a tax on medical devices, I so wanted to ask a similar question: “Have you no sense of responsibility? At long last, have you left no sense of responsibility?” 

There is more than a passing similarity between Joseph McCarthy and Ted Cruz, between McCarthyism and the Tea Party movement. The Republican Party survived McCarthyism because, ultimately, its excesses caused it to burn out. And eventually party elders in the mold of my grandfather were able to realign the party with its brand promise: The Republican Party is (or should be) the Stewardship Party. The Republican brand is (or should be) about responsible behavior. The Republican party is (or should be) at long last, about decency. 

What a long way we have yet to go.

John G. Taft is the author of “Stewardship: Lessons Learned From the Lost Culture of Wall Street.”

 --------------------------------------------------------------------------------------------------------------

In Utah, tea party favorite Sen. Lee faces GOP backlash over government shutdown

Video: Speaking on the Senate floor before a vote to raise the debt ceiling and end the government shutdown last week, Sen. Mike Lee (R-Utah) made no apologies for trying to defund and delay Obamacare. "This is not over," he said.
SALT LAKE CITY — When Mike Lee toppled longtime Republican Sen. Robert F. Bennett here in 2010, it was the tea party’s first big triumph. But now, after a 16-day government shutdown, it’s Lee who faces a revolt within his own party.

Utah, one of the most Republican states in the nation, has a long tradition of being represented by pragmatic, business-minded conservatives in the U.S. Senate. Lee broke that pattern by governing as an ideological firebrand — standing alongside Sen. Ted Cruz (R-Tex.) in the push for a shutdown in a failed bid to undermine President Obama’s health-care law.

As a result, Lee’s approval ratings in Utah have cratered, and prominent Republicans and local business executives are openly discussing the possibility of mounting a primary challenge against him. Top Republicans are also maneuvering to redesign the party’s nomination system in a way that would likely make it more difficult for Lee to win reelection in 2016. 

To hear grievances with Lee’s no-compromise, no-apology governing style, just head to the executive floor of Zions Bank, founded by Mormon settler Brigham Young. Bank President A. Scott Anderson, who raised money for Lee three years ago, sat in his corner office this week harboring second thoughts.

“I think people admire him for sticking to his guns and principles, but I think there are growing frustrations,” Anderson said. “If things are to happen, you can’t just stick to your principles. You have to make things work. . . . You’ve got to be practical.”

Spencer Zwick, a Utah native and national finance chairman for Mitt Romney’s 2012 presidential campaign, was more direct, calling Lee a “show horse” who “just wants to be a spectacle.”

“Business leaders that I talk to, many of whom supported him, would never support his reelection and in fact will work against him, myself included,” Zwick said.

If Lee is worried, he isn’t showing it. The freshman senator strongly defended the strategy of demanding that Democrats agree to defund the new health-care law, commonly known as Obamacare, or see the government shut down.

“This fight was worth fighting,” said Lee, 42, a lawyer whose father served as U.S. solicitor general during the Reagan administration. “The country wasn’t built by fighting only those battles where victory was certain.”

This battle has taken a toll on his popularity, however. A Brigham Young University survey conducted during the shutdown found that 57 percent of Utahans wanted Lee to be more willing to compromise. The senator’s approval rating dropped to 40 percent — down from 50 percent in June — with 51 percent disapproving.  At the same time, the online poll found, the vast majority of Utah residents identifying with the tea party still backed Lee.

Lee waved off the findings. “The only number I worry about is how many people are being hurt by Obamacare,” he said.

But Lee acknowledged that voters disapproved of the shutdown — especially in Utah, where the federal government is the largest employer. Shuttered national parks hurt the tourism industry and thousands of workers at military installations were furloughed.

“I understand that people in Utah — and people in America, for that matter — don’t like fighting in Washington,” Lee said. “But if we don’t have these fights, nothing changes.”

Lee came to office as part of the 2010 tea party wave, benefiting from Utah’s unique nomination system in which delegates chosen at neighborhood caucuses pick the party’s candidates at a state convention rather than in a primary.

Establishment figures in Utah have long loathed the convention system and are launching a well-funded effort to change it. A bipartisan group including former governor Michael O. Leavitt (R), a George W. Bush Cabinet official and close Romney adviser, has launched Count My Vote, a ballot initiative to overhaul Utah’s nominating process. The group has raised more than $500,000, most from major GOP donors.

A shift to an open primary could hurt Lee, who supports the convention system because his most passionate supporters are the conservative activists who become delegates. Rich McKeown, a longtime Leavitt aide and chairman of the effort, insisted that Count My Vote is designed not to target the senator, but rather to enlarge the voting population over the long term.

One beneficiary could be Thomas Wright, who stepped down this spring as chairman of the Utah Republican Party. Wright said he is considering running against Lee in 2016 because he has grown “exasperated” with the junior senator’s governing style.

“We can’t keep going on like this,” Wright said. “I want to work with people to get things done. I want to go be a leader and build bridges, not burn them down.”

Former state senator Dan Liljenquist and Josh Romney, one of Mitt’s sons, have also been mentioned as possible challengers, Utah Republicans say. Liljenquist enjoyed tea party backing when he ran unsuccessfully against Sen. Orrin G. Hatch (R) in last year’s primary.

Liljenquist criticized Lee’s handling of the shutdown. “I’m struggling to see what was gained from it for Utah,” he said. “An all-or-nothing approach makes people uncomfortable here.”

Although Cruz attracts more attention, Lee is one of the main intellectual forces behind the tea party in Washington. His Utah supporters say they’re proud that he is uncompromising.

“He’s done everything he said he was going to do — one of the rare politicians, I might add, who has kept all of his promises,” said David Kirkham, a tea party organizer who unsuccessfully challenged Utah Gov. Gary R. Herbert (R) last year.

But Lee has not cultivated the party’s business and establishment wings. Consider John Price, a businessman who once sat on the Republican National Committee and later served in Africa as an ambassador under Bush.

“With Mike Lee, no matter how many times I see him, he still doesn’t know who I am,” Price said. “He treats me like I don’t exist.”

Former Republican governor Jon Huntsman Jr., a 2012 presidential candidate who once employed Lee as counsel in the governor’s office, said Lee has bucked a trend of senators who work to grow this small state in a way that makes people proud.

“You don’t have ideological wack-jobs,” Huntsman said. “For all of its labeling as a red state, underneath it all Utah is a pretty pragmatic Western state, a just-get-it-done ethos.”

Many business leaders here said they wish Lee were more like Hatch, a conservative with a penchant for working across the aisle. In a statement, Hatch said the two “might not always agree,” but he did not criticize Lee. “There’s a unity of purpose amongst all Republicans that Obamacare is a dog of a law,” Hatch said.

In the budget debate, Lee championed repealing a medical-device tax that is part of the health-care law. So, one might imagine the senator would find support at Merit Medical, an international device manufacturer based in the Salt Lake City suburb of West Jordan.

In an interview at Merit’s headquarters, chief executive Fred Lampropoulos called the tax “egregious” and “unfair.” But he also said Lee’s crusade went too far.

“I’m an Army officer and I’m a businessman,” said Lampropoulos, a major GOP fundraiser. “Tactics and strategy are very important. You’ve got to pick your fights.”

Asked whether he would back Lee’s reelection, Lampropoulos leaned back in his leather chair and sat silent for about 20 seconds. “He has to convince me to vote for him again,” he said.

Sunday, October 13, 2013


21 surprising effects of the government shutdown you haven’t heard about

The government shutdown will temporarily slash the staffs and operations of every “nonessential” federal program — which, as you can imagine, adds up to a whole lot of programs. There are the ones you know about, like the national parks and the panda cam. Then there’s everything else.
A right whale sounds in Cape Cod Bay. (Bill Greene/Boston Globe via Getty Images)
A right whale sounds in Cape Cod Bay. The advisory committee that protects whales and other marine mammals is one of many cutting back for the government shutdown. (Bill Greene/Boston Globe via Getty Images)
Here’s 21 effects of the shutdown you might not have heard about.
1) No one will oversee the program that makes sure your organic food is actually organic. That’s called the National Organic Standards Program, and its entire staff was furloughed. Also on the Department of Agriculture furlough list: the people who check that your meats, shellfish, produce, nuts and ginseng are labeled with their country of origin.
2) The Department of Homeland Security will stop civil liberties complaint lines, investigation and training. The training will affect employees on the state, local and federal level.
3) Wild horse and burro adoptions will stall. (Yes, wild horse and burro adoptions are a real thing.)
An employee of the wild horse and burro program shows off a mustang at the Nevada County Fair in 2009. (Bureau of Land Management)
An employee of the wild horse and burro program shows off a mustang at the Nevada County Fair in 2009. (Bureau of Land Management)
4) A series of recreational trips and events for veterans, including an Antique Car Show and “Saloon Night,” were cancelled at the Armed Forces Retirement Home facilities in D.C. and Gulfport, Miss. The average AFRH resident is 82 years old.
5) New distilleries, breweries and wineries won’t open. Certain businesses that manufacture or distribute alcohol — and firearms, ammunition and tobacco products — require permits from the Alcohol and Tobacco Tax and Trade Bureau, which won’t accept new applications during the shutdown.
6) Space will go silent. The NASA social media staff behind @MarsCuriosity, a prolific and wildly popular account, have been furloughed. Nasa.gov, the site that gave you Karen Nyburg washing her hair in space, is also offline.
7) Businesses that operate on federally managed lands or public parks — such as privately owned campgrounds, concession stands and tour companies — will close.
8) Twenty-four American war cemeteries, including the Normandy American Cemetery at the site of the D-Day invasion, will close. The cemeteries are operated by the American Battle Monuments Commission and are where nearly 125,000 U.S. soldiers who died abroad during battles are interred.
9) The Dodd-Frank Wall Street Reform and Consumer Protection Act will be back-burnered. Dodd-Frank was designed to overhaul the financial regulatory system and provide more government oversight in the wake of the recession, but the U.S. Commodity Futures Trading Commission (CFTC) says it won’t work on the act’s implementation during the shutdown.
10) The Department of Agriculture will not operate its popular 25-year-old“Meat and Poultry Hotline.”
11) Most research activities at the National Institute of Standards and Technology and the National Oceanic and Atmospheric Administration will go dark. Those agencies study topics including long-term climate change. Real-time hurricane and flight-planning models will still be available.
12) Towns impacted by the recent flooding in Colorado could wait longerfor assistance.
13) No one from the Office of the Pardon Attorney will be available should President Obama want to issue a presidential pardon. The Justice Department adds that, in an emergency, someone from that office could be recalled from furlough.
14) The Department of Transportation will not drug test its employees.
15) Charges of on-the-job discrimination complaints will not be investigated. The U.S. Equal Employment Opportunity Commission, which oversees these investigations, will record the charges and hold them until after the shutdown.
16) Only 15 people will care for the White House and the Obama family, down from their usual 90.
The (empty) East Room of the White House. (Chuck Kennedy/White House)
The (empty) East Room of the White House. (Chuck Kennedy/White House)
17) No one will advise the government on “matters pertaining to the arts.” And there is, in fact, an entire commission devoted to just that type of advice.
18) E-Verify will go offline. More than 400,000 employers use the popular system to check their employees’ immigration and eligibility status.
19) The U.S. Coast Guard will delay licenses for both recreational and for-profit boaters.
20) The Office of Surface Mining Reclamation and Enforcement will stop monitoring  coal mines … except in an emergency or if someone complains.
21) Whales will be on their own. The scientific advisory committee that monitors their safety will shutter all operations, save for a few members, appointed by the president, who will watch for emergencies.

Friday, September 27, 2013

SEC investigations will place 

more emphasis on individuals

Nikki Kahn/The Washington Post - Mary Jo White, chair of the Securities and Exchange Commission, is focusing the agency’s enforcement program on the pursuit of individuals, not just companies.
Wall Street’s top cop said Thursday that her agency is sharpening its focus on individual wrongdoers and making a “subtle shift” in the way it pursues them.

Securities and Exchange Commission Chairman Mary Jo White said she has asked her enforcement staff to start probes, when possible, by first taking a hard look at the people suspected of misdeeds within a company, and not just the company itself.

“I want to be sure we are looking first at the individual conduct and working out to the entity, rather than starting with the entity as a whole and working in,” White said at a conference of the Council of Institutional Investors in Chicago. “It is a subtle shift, but one that could bring more individuals into enforcement cases.”

In the wake of the financial crisis, the SEC has repeatedly come under attack for failing to hold enough high-profile executives accountable for their roles in sinking the global economy. Since joining the agency in April, White has pledged to flex the SEC’s muscle, a message she reinforced Thursday.

The speech was one of the most thorough public statements White has made about the agency’s agenda under her watch, and it touched on several SEC priorities, including more robust monitoring of the financial markets and speedy implementation of the many regulations demanded by Congress in recent years.

But White’s most forceful statements were about the enforcement arena.  The former federal prosecutor said the agency should not shy away from tough cases, ignore smaller ones or cut off any legal avenues when it detects wrongdoing — even if that means bringing cases of negligence instead of more serious fraud charges.

“If we do not have the evidence to bring a case charging intentional wrongdoing, then bring the negligence case that does not require intent,” White said.

Although the SEC pursues only civil cases, and therefore cannot put executives behind bars, the agency should impose meaningful penalties on wrongdoers that make “companies and the industry sit up and take notice of what our expectations are,” White said.

Earlier this year, White announced that the agency would start demanding admissions of wrongdoing in certain types of cases — a major departure from a previous policy that routinely allowed defendants to settle cases without admitting or denying liability. White said Thursday that she expects the new approach to lead to more trials.

“We recognize that we may see more financial firms that say, ‘We’ll see you in court,’ ” she said. “But that will not deter us. The SEC has a well-established record of winning when we go to trial.”
Soon after White joined the SEC, the agency went after one of its most high-profile targets when it charged hedge-fund billionaire Steven A. Cohen with ignoring “red flags” indicating that two of his employees engaged in insider trading.

Last month, the SEC won a huge trial victory when a federal jury found former Goldman Sachs executive Fabrice Tourre liable for duping investors about a shoddy mortgage deal, handing the SEC a major win in one of the few cases to emerge from the financial crisis.  However, some critics downplayed the victory, faulting the SEC for going after a mid-level trader instead of his higher-level Goldman bosses.

A similar complaint arose this month after JPMorgan Chase agreed to pay the SEC $200 million — one of the largest SEC penalties ever — as part of a broader $920 million settlement with federal regulators involving the bank’s handling of the disastrous “London Whale” trading losses. As part of the settlement, the bank admitted wrongdoing. But none of the bank’s senior managers were named in the SEC order.