There’s never enough Bachmania

Via Kaili Joy Gray at DK, Salon’s Alex Seitz-Wald:

Over a year after she dropped out, Republican Rep. Michele Bachmann has refused to pay five staffers from her failed presidential bid, according to a former top campaign official. Peter Waldron, her controversial former national field coordinator, told Salon the dispute started when former Iowa straw poll staffers refused to sign a nondisclosure agreement that would bar them from discussing any “unethical, immoral, or criminal activity” they witnessed on the campaign with police or reporters.
…
A home-schooling group accused the Bachmann campaign of stealing the [group's e-mail] list, which was contained on a volunteer’s laptop, and then using it to fundraise for the campaign. The home-schooling group has sued the campaign and Waldron said there is also a criminal investigation pending, explaining that he spoke with police about the incident “several times.”

Now, I have as much expectation of the theft being prosecuted as for the Second Coming being at 9 o’clock tonight (which would, presumably, obviate any earthly prosecution). But it is truly amazing that a self-professed Christian has to demand that employees silence themselves over “unethical, immoral, or criminal activity.”

Corporate welfare vs. general welfare

Via Ritholtz, a synopsis by ataxingmatter of the social welfare vs. corporate welfare components of the fiscal cliff deal and of the tax code. It’s fascinating how so-called conservatives demand that we give money to companies, something that they themselves call “socialism.” All of Social Security and most of Medicare are paid for with taxes, while things like the R&D tax credit are not.

The tax subsidies to 27 companies for 2008-11 alone were larger than what is needed for Hurricane Sandy relief, so I guess you could say those companies are worse than a major natural disaster for this country. Depreciation, depletion, deferral and the R&D tax credit (which is supposed to help small hi-tech businesses) account for most of the tax dodging.

Let’s call this what it is: corruption.

Offshore abuses

Following up on a previous post regarding an effort to clamp down on tax evasion….

The presidential campaign might have failed to address poverty and global warming. But it did bring forward one important issue: the use of offshore shell companies to evade taxes and commit other crimes. James Ball of The Guardian has the interesting tale of a woman who is the titular head of 1200 companies:

[Mrs.] Petre-Mears does not appear to need to know much about the people for whom she passes resolutions, allots shares and helps set up bank accounts. All she has to do is sign her name.

Those names appear on activities ranging from Russian luxury property purchases, to porn and casino sites. Sometimes, such nominees even act as shareholders as well as directors.

The BBC has done a parallel investigation:

Secret filming by the BBC as part of a joint investigation with the Guardian newspaper and the Washington-based International Consortium of Investigative Journalists identified a number of corporate service providers – firms that specialise in setting up companies both in the UK and abroad – willing to facilitate tax evasion and turn a blind eye to criminal activity.

Maybe US media will discover a story someday, too. There’s enough tax evasion to substantially close the deficit without throwing a single granny into the snow.

GOP to reality: “Shut up!”

Via Rachel Maddow, the GOP has suppressed a Congressional Research Service Report saying that tax cuts do not increase economic growth. Inconvenient, that. Also inconvenient is the fact that Maddow posted a link to the report on her blog, going here:

The results of the analysis suggest that changes over the past 65 years in the top marginal tax rate and the top capital gains tax rate do not appear correlated with economic growth. The reduction in the top tax rates appears to be uncorrelated with saving, investment, and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie.

However, the top tax rate reductions appear to be associated with the increasing concentration of
income at the top of the income distribution.

I can see why the Republicans are shouting SHUTUPSHUTUPSHUTUP!

Planet Hershey: not so sweet corruption at the heart of “charitable” giving

The Nation has a blockbuster expose based on a Philadelphia Inquirer series that goes to the heart of the corruption of charitable enterprises in the US. F. Frederic Fouad:

Milton and Catherine Hershey signed the deed of trust establishing the Milton Hershey School as an orphanage in 1909, funding it with revenue from the famous candy company. Since then, the school has officially been dedicated to “the purpose of nurturing and educating children in need.” Because its founder gave MHS Trust a controlling interest in the Hershey Company, today it boasts a massive $8.5 billion in assets and also owns Hershey Entertainment & Resorts (operating hotels and an amusement park). In keeping with its mission, the Milton Hershey School serves about 1,800 students from pre-kindergarten through twelfth grade, who study in state-of-the-art school buildings in Hershey, Pennsylvania.

What the charity also does, of late, is shovel money and favors to a coterie of prominent Pennsylvania Republicans. MHS’s alleged wrongdoing is pervasive and well documented, but thanks to the GOP’s grip on power in the state—most crucially its iron lock on the attorney general’s office—the charity has never been effectively called to account. With the first real possibility of the attorney general’s office shifting to the Democrats since it became an elected position thirty-two years ago, all this may change come November.

For a sense of MHS’s alleged misdeeds and the culture of impunity surrounding the charity, consider how, in 2006, board members of the school allowed the trust fund to purchase a failing luxury golf course called Wren Dale. The $12 million investment was two to three times the appraised value of the course and bailed out as many as fifty prominent local businessmen and doctors—including a former Hershey Company CEO who also sat on the MHS board. These investors stood to lose tens of thousands of dollars if the course closed. With the purchase, the investors turned their potential losses into profits of between $15,000 and $100,000. MHS’s board then sank another $5 million into a swanky, Scottish-themed clubhouse for the money-losing course, all paid for by the charity. The charity explained the purchase as necessary to create a “buffer” between MHS students and the community, and later claimed the land was for future MHS expansion.
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Last year, an MHS administrator named William Charney Jr., who was in charge of training houseparents, went to prison for receiving and distributing child pornography. The Philadelphia Inquirer exposé described how yet another administrator, Peter Gurt, mocked a sexual act involving several students, reportedly seeking to elicit laughs from this at a senior roast. Gurt was later promoted and is rumored to be in line today to become the next MHS president. Another two MHS teachers were fined and disciplined in 2006 and ‘07 for engaging in sex with students.
…
“The problem with the Hershey Trust,” Sitkoff says, “is that its massive fund has been captured by Pennsylvania politicians to provide takeover protection for a local company. But that’s not the purpose of the trust. The purpose of the trust—which enjoys a federal tax subsidy—is to take care of needy kids.”

If Hershey were doing its task, by my calculation, it would be spending at least $300 million dollars a year on orphans. The entire Pennsylvania state budget is $27B, of which $10B is public welfare. While one cannot make out how much of that is devoted to orphans, it looks to me like about $1.6B is devoted specifically to children, not including Medicaid. So, waste on this order of magnitude (say, $100M annually) is a huge chunk of what is spent on Pennsylvania’s disadvantaged children.

While Fouad points out that this widening scandal has been protected from investigation by Republican Attorneys General, Ed Rendell also failed at leadership.

And this seems to be the trend. As the rich decide they can play by their own rules, nominally charitable functions are corrupted into personal piggybanks and political vehicles. The Milton Hershey School is being subsidized through the federal tax code and probably through state and federal spending. The Milton Hershey School is a disgrace, and it’s just one among many.

Meet your new overlords

Paul Barrett, BusinessWeek:

Rove’s position is that a SuperPac of a few dozen billionaires deserves to have its donor base protected to the same degree that a grassroots organization like the NAACP does.

Ezra Klein:

According to Harvard law professor Lawrence Lessig, only 0.26 percent of Americans give more than $200 to congressional campaigns. Only 0.05 percent give the maximum amount to any congressional candidate. Only 0.01 percent — 1 percent of 1 percent — give more than $10,000 in an election cycle. And in the current presidential election, 0.000063 percent of Americans — fewer than 200 of the country’s 310 million residents — have contributed 80 percent of all super-PAC donations.

You might want to check out Bill Israel‘s book, A Nation Seized. Maybe FDL Book Salon would be interested?

No one will care if a few kids get buggered, so long as we win those football games/keep the pews full

Chris Hayes has a new book, Twilight of the Elites, whose title he calls “aspirational,” and I think he’s sold me a copy. The point of the book is that people who can get away with things are doing so at an alarming rate. There’s a word for this which we learned from Honduras: impunity. Hayes ties together the Catholic pedophilia/ephebophilia scandal with the Penn State pedophilia/ephebophilia scandal as examples of how elites have come to believe that no matter what they do, there will be no consequences. From DemocracyNow:

CHRIS HAYES: It’s such a perfect example, again, of this concept of social distance, right? I mean, the people like Robert Gnaizda and the folks at the Center for Responsible Lending down in North Carolina that were working among communities that were on the wrong end of the subprime crisis, right, that were seeing their homes foreclosed on, that were seeing equity stripped out, that were seeing these serial refinancing with fees and fees and fees—the folks working there started ringing the alarm bells in 2002, 2003, publishing reports saying, “We’re going have 10 million foreclosures. This is going to be a total disastrous thing.” And they were meeting with the Federal Reserve, and they were waving charts in their faces, right? They were giving them data. And the Federal Reserve didn’t act.

So the question is, why didn’t the Federal Reserve act? And there’s a whole bunch of complicated reasons. But I think, partly, at the core of it, is that they, the folks in the Federal Reserve—Frederic Mishkin; Ben Bernanke, who was a Fed governor, who was saying, “Don’t worry about subprime,” more or less; Alan Greenspan, the Fed chair—were just completely removed from the world in which subprime finance was metastasizing and wreaking havoc. And that removal allowed them to sort of go along doing what they were doing, doing the things that they thought were ideologically justified or justified by the data. When they didn’t—they were not embedded in that world. And the thought experiment I have in the book is, if Ben Bernanke or Alan Greenspan were in a neighborhood where this was happening, if they were walking down their street every morning and seeing the foreclosures signs, if they had a neighbor who had been through one of these serial refinancing and had all the equity stripped out and now faced foreclosure, I can’t help but think the Fed would have cracked down much earlier and with much more vigor.

Bingo. If the elites had to see the consequences of their decisions in the lives of their neighbors, they might very well make better decisions. As long as it’s someone invisible who is getting thrown on the street or denied medical care, anything goes.

Our job is to make America’s suffering visible.

The latest corruption extravaganza

Public Citizen has correctly labeled Susan Collins’ bill S. 1100 an invitation to contractor corruption. The bill says right up front that its purpose is:

To amend title 41, United States Code, to prohibit inserting politics into the Federal acquisition process by prohibiting the submission of political contribution information as a condition of receiving a Federal contract.

Now, we know about the sewer of secret campaign finance that Citizens United opened up. But because federal contractors have to disclose how they are influencing the political process, that ruling doesn’t cover them.

They’re already free to give campaign finance bribes to people who will be voting whether or not to give them money. What they want is freedom from disclosure of that corrupt nexus.

You can take action here.

ALEC is not the only “corporate bill mill”

Sara Blaskey and Steve Horn, Truthout:

ALEC, though, is not the only “corporate bill mill” playing this game.

“Taxpayer-subsidized stealth lobbyists” have upped the ante and skillfully advanced their agendas through bipartisan “trade associations” for state government officials – in particular, the Council of State Governments (CSG) whose multimillion-dollar budget is mostly funded by taxpayers. …
…
Upon being sworn into office, all state-level legislators (there are about 7,500 of them total), as well as their respective legislative staffs, automatically become CSG members. The organization’s membership also includes representatives from the executive and judicial branches of state governments.

Between 2009 and 2011, CSG’s Internal Revenue Service (IRS) 990 forms indicate revenue between $29 and $34 million annually. … $8.4 to $9.9 million of these funds – come from what it describes as “entrepreneurial efforts” which can be loosely interpreted to mean anything from publication sales to a sizable chunk from corporate patronage.

Some perspective is warranted: 990s filed by ALEC in 2010 placed its entire budget at just under $6 million.
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To date, CSG is responsible for publishing between 30-40 model bills annually, in a process called Suggested State Legislation (SSL). These bills are distributed to the states as templates of bipartisan “best practices” often promoting the agendas of multinational corporations.
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Most recently, the 2013 SSL docket includes legislation written by and for the shale gas industry on hydraulic fracturing (fracking), as well as a corporate-backed, union-busting collective bargaining “reform” bill.
….
Until now, the virtual charter school agenda has been linked exclusively to ALEC, though this is far from the case. It is common to see corporations and special interests groups use both CSG and ALEC to promote their agenda – a two-pronged attack, if you will.
…
A little-known fact is that the NRA also played a role in promoting a slightly tamer – and much less controversial – pro-gun model through CSG.
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CSG and ALEC have also broken bread over the so-called “tort reform” agenda.
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The most damning evidence of [another organization, The National Council of State Legislatures] NCSL’s shenanigans comes from an October 2010 report from ABC News’ “Nightline” on the July 2010 NCSL Legislative Summit, which took place in Louisville, Kentucky.

NCSL – due to ABC’s reporting – was the inspiration for a broader US Department of Justice (DOJ) investigation on corruption in state politics. “Nightline” went so far as to describe state governments as the new “ground zero of influence peddling” for corporate lobbyists, using NCSL as a case in point. [Golfing, groping, dancing, drimking, and horse races]
…
Though not directly responsible for any policy positions, per se, the [And yet anotherorganization] State Legislative Leaders Foundation (SLLF), with an annual budget in the $2.5 to $3 million range, can best be described as a corporate-funded tutelage academy for majority and minority state-level legislative leaders nationwide.
(emphasis added)

I really don’t think that “FFFFFF” is too strong a statement about people who claim to be for private enterprise while using the US Treasury to bribe and indoctrinate public officials into the task of busting up the bedrock of civil society to create a one-party corporate state,

The man without a country

(Image from LATimes)

Eduardo Saverin, who fled to the United States from Brazil to escape death at the hands of gangs, has now abandoned his American citizenship to save a couple of hundred million in taxes due from capital gains on the Facebook IPO. Bruce Ackerman points out that he can continue to come and go freely to the US and proposes that people who renounce their citizenship should be banned from re-entry except for hardship.

To h–l with hardship. People to whom tax savings are more important than country should have to share the fate of The Man Without a Country. May Saverin eat his d–n money.