Goldman Sachs CEO Hires Lawyer

Goldman Sachs CEO Lloyd Blankfein hired a big-time lawyer creating speculation that Goldman executives may face an investigation and charges from the Justice Department for perjury and more.

 

Government Corruption - Goldman VP Name Change

A former Goldman Sachs VP named Peter Simonyi (who previously worked for the SEC) ended up working as a top staffer for Rep. Darrell Issa (R-CA) on the Oversight Committee under the name Peter Haller. He went on to argue against regulations on Wall Street.

 

Weekly Mulch: Was Cancun Climate Conference a Success?

by Sarah Laskow, Media Consortium Blogger

The United Nations-led Climate Conference at Cancun was not a diplomatic disaster, but for climate activists and grassroots groups, it wasn’t a success either. Representatives sent from around the globe to hammer out an agreement on climate change were unresponsive to grassroots concerns about how to lower carbon emissions quickly, and how to ensure fairness in the process.

“Some grassroots groups are losing their faith in the U.N.’s capacity to produce meaningful results,” Madeline Ostrader reported for Yes! Magazine. “After the United Nations expelled Native American leader Tom Goldtooth from the meeting last week, the Indigenous Environmental Network called the U.N. Framework Convention on Climate Change ‘the WTO of the sky.’”

While gloomy reports before the conference worried that international negotiations could veer entirely off course, the representatives at the conference did come up with an agreement that fleshed out last year’s Copenhagen Accord. It became clearer, though, that the United Nations Framework Convention on Climate Change process will not ultimately guard the interests of less powerful players.

Climbing over a low bar

Although diplomats congratulated themselves for their accomplishments, not everyone was so pleased,  Stephen Leahy reported at Inter Press Service.

“It’s pathetic the world community struggles so much just to climb over such a low bar,” commented [Kumi] Naidoo, [executive director of Greenpeace.] “Our only real hope is to mobilise a broad-based climate movement involving all sectors of the public and civil society before Durban.”

Indeed, this year’s conference saw a greater mobilization of outside forces than Copenhagen did. But by the end of the conference, activists were frustrated with the UN-led process, Democracy Now! reported, and began protesting in the area near the conference, under the close watch of UN guards:

When the demonstrators continued their vigil past the time allotted to them, U.N. guards moved in and dragged them towards a waiting bus. The protesters linked arms, and the scene quickly became chaotic. As they wrestled activists onto buses, U.N. guards also seized press credentials from the necks of journalists, and detained a photographer while seizing his camera.

Running REDD

There was one issue in particular, Reduced Emissions from Deforestation and Degradation or REDD, a financial tool that allows countries to offset their emissions, that caused concern among climate activists. As Michelle Chen explained at ColorLines, “From a climate justice standpoint, the deal lost credibility once it was tainted with REDD, a supposed anti-deforestation initiative that indigenous communities have long decried as an assault on native people’s sovereignty and way of life.”

The program would seek to set aside forests, through financial incentives that would make it more profitable to preserve forests than to harvest them. The problem, in essence, is that the program would take away resources in developing countries, particularly in indigenous communities, in order to mitigate negative actions in developed countries.

At IPS, Stephen Leahy reported, “REDD remains very controversial. It is widely touted as a way to mobilise $10 to $30 billion annually to protect forests by selling carbon credits to industries in lieu of reductions in emissions. … Many indigenous and civil society groups reject REDD outright if it allows developed countries to avoid real emission reductions by offsetting their emissions. “

Developed vs. Developing

Balancing the interests of developing and developed countries has always been the thorny tangle at the center of climate negotiations, and the Cancun Agreement, critics say, favors developed countries.

As Tom Athanasiou writes at Earth Island Journal, “There’s an even deeper concern, that, in the words of the South Centre’s Martin Khor, ‘Cancun may be remembered in future as the place where the UNFCCC’s climate regime was changed significantly, with developed countries being treated more and more leniently, reaching a level like that of developing countries, while the developing countries are asked to increase their obligations to be more and more like developed countries.’”

REDD is an example of that sort of bargain: Developing countries have to sacrifice, too. But developed countries have, in this conference and at its predecessors, refused to make any real sacrifices. This round, it became clear that, in addition to the United States, other key countries, like Japan, would not be willing to commit to binding legal targets for carbon emissions.

Who benefits?

What’s worse, developed countries benefit, indirectly, from the financial mechanism proposed to regulate carbon, Madeline Ostrader writes.

“Many of the proposals for financing and regulating climate are designed to earn profits for the same banks that brought the global economy to its knees,” she explains. “Goldman Sachs and JPMorgan Chase have been vying for a stake in the global carbon offset trade—a proposed economic model for cutting emissions around the world.”

The movement of non-governmental groups and activists fighting to hold rich countries accountable has gained momentum in the past year. If international leaders are ever to move away from these imbalanced agreements, that movement will have to grow and convince a vocal majority of people around the world to support its calls to action. Only then will leaders feel pressure to write stronger, fairer agreements.

This post features links to the best independent, progressive reporting about the environment by members of The Media Consortium. It is free to reprint. Visit the Mulch for a complete list of articles on environmental issues, or follow us on Twitter. And for the best progressive reporting on critical economy, health care and immigration issues, check out The Audit, The Pulse, and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

 

 

Campaign Cash: How Citizens United Will Change Elections Forever

Ed. Note: This blog is available for any organization or outlet to republish or excerpt. Please feel free to share it widely!

by Zach Carter, Media Consortium blogger

Undue corporate influence over U.S. elections has been a serious problem in American politics for decades, but this year’s Supreme Court ruling in Citizens United v. Federal Election Commission made things worse. Worst of all, we may never know the extent of the damage.

Citizens United freed corporations to spend unlimited amounts of money backing specific political candidates, and without congressional action, those expenditures can be completely anonymous. Major corporations are already capitalizing on the new legal landscape by the millions, and the public doesn’t really know who is buying what influence or why.

That’s why The Media Consortium will be carefully watching the effects of this ruling in the run up to this year’s midterm elections. Every day through Nov. 4, we’ll bring you some of the best independent reporting on the effects of corporate spending in an attempt to measure just how widespread the effect of Citizens United will be on this—and the next—election.  Keep your eye on “Campaign Cash” as we follow this issue in the coming weeks. If you want to tweet about it, use the hashtag #campaigncash.

The impact of Citizens United

As Harvard University Law School Professor Lawrence Lessig explains in an interview with The Nation’s Christopher Hayes, the Citizens United v. FEC decision represents one of many ways that corporations buy political favors.

Prior to the ruling, companies couldn’t spend money to directly advocate the election of a particular political candidate during election season. They could form Political Action Committees (PACs) to support or attack specific candidates, but those PACs had to be funded by individuals who worked for the company and couldn’t be funded from the corporation’s treasury directly. The executives of Goldman Sachs, for instance, could band together to form GoldmanPAC and spend their money on whatever candidates they wished—and many corporate employees exercised that right and spent freely on elections through their corporate PACs.

Now corporations can spend as much as they want and actual corporate funds—not just organized individuals—can also be deployed, making massive amounts of corporate cash eligible for political purchasing.

But the scariest part of Citizens United, as Lessig emphasizes, is the money that isn’t spent. That is, if a firm makes it known that they are willing spend millions of dollars to fight any politician who opposes them on a particular policy issue, representatives and senators might begin changing their voting behavior in Congress before the company actually has to put up the cash.

And ultimately, Citizens United didn’t just legalize unlimited corporate expenses on elections. It also allows those expenses to be anonymous. If companies launder their political cash through a front group, that third-party spender doesn’t have to disclose who its donors are.

This isn’t your local Chamber of Commerce

As Harry Hanbury details for GRITtv, this laundering scheme is essentially the business model for the U.S. Chamber of Commerce– a  lobbying powerhouse in the nation’s capital. Don’t be fooled by its name—the U.S. Chamber has almost nothing to do with the local small business coalitions who help strengthen local economies.

As Hanbury notes, 40 percent of the U.S. Chamber’s 2008 funding came from just 26 corporations. The group represents many of the nation’s largest and most irresponsible corporations, from those responsible for the financial meltdown on Wall Street to BP, the company that spilled millions of barrels worth of oil in the Gulf this summer. The Chamber’s branding allows them to disguise their political as a coalition of local businesses while it does dirty work for corporate titans.

When BP was publicly promising to do everything in its power to fix the massive oil disaster it created in the Gulf of Mexico, it was also funneling money to the U.S. Chamber of Commerce. And what was the Chamber up to? It was lobbying furiously to protect BP from new rules that would force the company to pay for oil disaster clean-up. The Wall Street banks did the same thing as financial reform legislation moved through Congress, and companies never have to disclose these expenditures to the public.

So it’s no surprise that the Chamber responded to Citizens United by immediately announcing a 40 percent boost in its political spending operations. So much corporate money then flowed into the Chamber that the group chose to boost this budget again by 50 percent, allocating $75 million for its 2010 war chest. So far, the Chamber’s ads have favored Republican’s 93 percent of the time. No entity spends more on politics than the Chamber—not even the political parties themselves.

Corporations top the list of big election spenders

But while the future of corporate spending in campaigns looks bleak after Citizens United, corporations are still barred from contributing directly to political campaigns. A company might take out a television ad attacking Rep. Alan Grayson (D-FL), but it can’t make unlimited contributions directly to Grayson’s challenger, Republican Dan Webster.

Nevertheless, corporate employees and company PACs have already been spending lavishly on elections for decades. In a feature for Mother Jones, Dave Gilson compiles the 75 biggest political spenders, both companies and trade groups, from 1989 through 2010, and breaks them down by industry. Goldman Sachs, Citigroup, JPMorgan Chase, and Morgan Stanley are all among the top 20 most extravagant political spenders—but the American Bankers Association, a trade group that all four belong to, is also in the top 10. If you’re wondering how Wall Street was able to secure its massive taxpayer bailout in the face of widespread voter outrage, this is your answer.

To soften the Citizens United blow, Congress has been debating the Democracy is Strengthened by Casting Light on Spending in Elections (DISCLOSE) Act, which would require companies to disclose all of their political expenditures as well as requiring front-groups like the Chamber to list the identities and amounts of its donors. The bill, sponsored by Rep. Christopher Van Hollen (D-MD) and Sen. Russ Feingold (D-WI), cleared the House this summer but was stymied by a Republican filibuster in the Senate.

Undoing the damage dealt by Citizens United through something like the DISCLOSE Act will help, but it won’t make our democracy totally safe from corporate abuse. As Lessig notes, the day before the decision was handed down, U.S. election financing was already encouraging rampant corruption and in need of serious reform.

Lessig suggests banning political expenditures by corporations altogether, and placing a hard cap on the amount that individuals can contribute. By limiting individual donations to $100, the ability of corporate PACs to funnel cash into the political process would be thwarted.

This post features links to the best independent, progressive reporting about the mid-term elections and campaign financing by members of The Media Consortium. It is free to reprint. Visit The Media Consortium for more articles on these issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Audit, The Mulch, The Pulse, and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

 

 

Understanding the People Who Bought Our Political Process

I've been having a bit of a year in the wilderness. After almost 15 years in the political arena, I stopped doing partisan political work this year. No more for me. 

Simply put, I've come to believe the game is rigged and there is nothing I can do as an operative inside the system to improve things.

This post by Ian Welsh about the possibility of Social Security "reform" in the face of huge public opposition set me off this morning:

Public opinion is not relevant to the overall direction of what Village elites do.  It DOES NOT MATTER.  Calls about the bailout ran 100:1 to 1200:1 against, they passed it anyway.  Village elites are generally unified in their preferences for policy, and when they are, all you’re arguing is fairly trivial details, not the essence of the policy.  The question about SS in the Villagers minds is not whether it should be cut, but how.

But when I was discussion Welsh's piece with a former colleague this morning, I realized that things that seem obvious if you paid close attention to the financial collapse of 2008 and its aftermath you may still be clinging to some misguided beliefs about the nature of our current polity.

With that in mind I wanted to strongly recommend two books that did a great deal to wake me up to our current reality. First, Confidence Game: How a Hedge Fund Manager Called Wall Street's Bluff by Christine S. Richard. 

Confidence Game is one of those real-life nightmare books you just can't put down. It tells the story of hedge-fund manager Bill Ackman's six year battle to warn everyone that the financial boom of the George Bush era was a house of cards. 

From the press release for the book:

In 2002, the hedge fund manager issued a critical research report on MBIA Inc., the owner of a triple-A-rated bond insurer that played a central role in the financial alchemy on Wall Street. “This company will spiral downward,” Ackman warned, and he placed a bet against MBIA that would earn his investors billions of dollars if it did.

The backlash was swift. Ackman was branded a fraud in the press and investigated by Eliot Spitzer and the SEC. Despite the scrutiny, he spent years telling anyone who would listen why MBIA was a catastrophe waiting to happen. With the onset of the credit crisis, the problems exposed turned out to be bigger than MBIA. An unquestioning acceptance of credit ratings, a blind eye to leverage, a dangerous reliance on financial models, and the abandonment of common sense had become part of a deeply flawed financial system. The collapse humbled nearly every large financial institution and plunged the country into recession.

 And if you wonder why no one has been held accountable for the sea of fraud that nearly drowned us all, Robert Scheer's The Great American Stickup: How Reagan Republicans and Clinton Democrats Enriched Wall Street While Mugging Main Street explains the bi-partisan nature of the big screw job.

Here's Scheer:

If we accept a broad dispersal of blame or a sense of inevitability -- or simply ignore the details, since they can be so confusing -- we lose the opportunity to rearrange our institutions to prevent such disasters from happening again.

That this is true has only been reinforced by the tentative response of the Obama administration in its first year. Even after a crash that economists agree is the biggest since the granddaddy of 1929, the president's proposed reform legislation stops far short of reintroducing the kind of regulation of the markets that prevented such disasters in the intervening eighty years. We still see a persistent fear, stoked by the same folks that led us into this abyss, that regulation and scrutiny will kill the golden goose of Wall Street profits and, by extension, U.S. prosperity.

If we as a people learn anything from this crash, however, it should be that there are no adults watching the store, only a tiny elite of self-interested multimillionaires and billionaires making decisions for the rest of us. As long as we cede that power to them, we can expect to continue getting bilked.

The great financial collapse wasn't something that "just happened" it was something that was done to us by a handful of bad actors at the tops of our business establishment and both political parties.

We need to understand this because they're coming for our Social Security next.

Diaries

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