“It is 1969 in a high school history class in Palo Alto, California. The teacher, Ben Ross, is discussing the horrors of the holocaust. The students ask why it happened. If all the Germans weren’t Nazis, why did they just stand by and watch? The teacher goes home thinking about how to answer the question.
His answer is The wave.
The next day Ben Ross introduces his students to a new system based on discipline, community, and action. Students are to sit up straight with their hands on the desks. They must spring from their seats and give quick answers to the teacher’s questions. There’s a membership card and a special salute. What Ross never expected was that the students would love the new system. The discipline felt good. The new wave community was a kind of secret family, elite and special.
Like a kind of cancer, The wave moved beyond the classroom. Other students wanted to get involved and original members brought in new recruits with missionary zeal. At football games, if you weren’t a wave member you were forced to sit elsewhere. Anyone who said anything against the wave was considered an enemy. Anti-wave students were threatened or beaten up.
The experiment goes too far and the teacher is told to stop it. A school assembly of wave members is announced, coupled with promises of the appearance of the national leader of the wave. The lights dim and films of Hitler and the Holocaust appear. The film stops with the image of Hitler and his faithful followers still on the screen. Ross comes forward and asks the students to look at the soldiers surrounding Hitler. ‘Yes, you all would have made good Nazis. ...Fascism isn’t something those other people did, it is right here in all of us.’"
This reminds me of another post from elsewhere a couple months ago:
"Two old friends of mine -- a Jewish couple in their 80s, both retired university professors who fled Nazi Germany in the late 1930s and eventually became U.S. citizens -- made a stunning remark to me a few months ago: 'You know, all our lives we have blamed our parents and our parents' generation for allowing Hitler to gain control. Now we're beginning to see how powerless they must have felt to stop what was happening all around them.'"
Convicted Watergate figure Chuck Colson returned to the White House Wednesday for a meeting with President Bush on Colson's post-prison endeavor - ministering to inmates.
"I felt quite emotional coming back here after my experiences in this building - and leaving it,'' Colson told reporters gathered on the White House driveway after his 40-minute meeting inside.
[...]
Colson was White House counsel for former President Nixon and spent seven months in prison for his role in the 1972 Watergate scandal. In 1976, he founded Prison Fellowship Ministries. Now an author and radio commentator, Colson was part of a group invited to the White House to talk with Bush about helping former inmates find work and keeping them from returning to prison.
Colson's Reston, Va.-based organization operates the InnerChange Freedom Initiative, a rehabilitation program for inmates that is based on fundamentalist Christianity. The program was begun under then-Gov. George W. Bush in 1997 at a Texas prison and now is also offered at prisons in Iowa, Kansas and Minnesota.
Colson praised Bush for allowing the program to start.
"At that time, I didn't believe he'd be willing to fight it through - the church-state issues and all that were involved in it,'' he said.
Participants live in a separate prison unit and follow a curriculum of religious study, other education and work for up to 18 months. After an inmate's release, the program continues for at least six months with guidance from a mentor and local church support.
An advocacy group, the Washington-based Americans United for Separation of Church and State, has filed suit against Iowa, contending state funding for the program is unconstitutional.
Bush asked Attorney General John Ashcroft to work on ways that such efforts could be expanded to the federal prison system, said Jim Towey, head of the White House faith-based office.
The plan, especially the appeal to Ashcroft, smells not only a bit too Christian, but too fundamentalist Christian. Even though we've studiously ignored the Saudi influence on 9-11-01, aren't we all a little sick of government-sponsored fundamentalists yet?
Besides, shouldn't Buddhist or Shinto or Jewish or Islamic prisoners be entitled to the same availability of religious study?
Colson's penal Christianity is all a ruse. He has much bigger ambitions beyond the superficial prison-prayer nonsense, and he's hoping President Gump will bite the bait.
What Colson really wants is $5 billion to preach abstinence to Africans, the amount he envisions as his portion of the vague $15 billion AIDS in Africa relief package Dubya proposed during the State of the Union address.
[C]onsider AK Steel Holding Corp., the country's third-largest publicly traded steel manufacturer. Until recently, the Middletown, Ohio, company's executive bonus plans contained a simple ground rule: If the company doesn't report net income, its executives don't receive bonuses that year.
For several years, the company's pension plans helped drive executive pay higher. Pension plans can boost earnings because, under accounting rules, companies must indirectly record as income some of the investment gains that pension-plan assets earn, a benefit that really took off during the torrid bull stock market of the late 1990s.
AK Steel benefited more than many: In 2000, for example, the company reported total pretax profit of $212 million -- 22% of which could be traced to its pension. By 2001, however, that changed. The company started recording pension expense, which rose to $625 million in 2002, contributing to a full-year loss of $502.4 million.
AK Steel executives didn't need to worry, however, because the terms for receiving bonuses quietly changed, too.
In describing the plan, the company effectively overrode the clause prohibiting payment of long-term bonuses if the company had no net income, inserting the words "except as otherwise approved by the Compensation Committee," according to a proxy filed with the SEC in April of 2002. The changes became official earlier this year.
In January 2003, two weeks before announcing the full-year loss for 2002, the company amended the terms of its annual bonus plan, so that bonuses would be pegged to net income "excluding special, unusual and extraordinary items." (The company similarly amended its long-term incentive plan.)
As a result, bonuses went unharmed by the new pension expense, which AK Steel classified as "unusual." Over the past two years, under the new rules, AK Steel has paid bonuses to its top five executives totaling $12.2 million, $7.7 million for me, a 77% loss for you.including $7.7 million to Chief Executive Richard M. Wardrop Jr., according to proxies filed with the SEC.
AK shareholders haven't been quite so fortunate: The company's shares are off 77% during the past two years, well behind its larger rivals U.S. Steel Corp. and Nucor Corp.
A spokesman for AK Steel declined to discuss the company's moves, including how much the bonuses would have been reduced if pension expense had been taken into account. Compensation consultants say it is nearly impossible to determine that from company filings.
So if you owned $1,000 worth of AK Steel stock in your 401(k) account over the last two years, it would now be worth $230 — while CEO Wardrop "quietly" took home $7.7 million in bonuses (in addition to his salary of $2 million).
Do these actions demonstrate business competence? I don't think so. But what do we do with a CEO who decimates his investors' confidence (not to mention their investments) and endangers the health of his company?
If you're Bush, you want to tap into that special Wardrop business magic, so you nominate him to a trade policy advisory committee.
AK Steel today [12/12/02] said that President George W. Bush intends to appoint Richard M. Wardrop Jr., Chairman, President and CEO of AK Steel, to the Advisory Committee for Trade Policy and Negotiations (ACTPN) for a two-year term.
The purpose of the ACTPN is to provide the U.S. Trade Representative with overall policy advice on matters concerning objectives and bargaining positions on trade agreements, according to a statement released Tuesday by the White House. According to the statement, the ACTPN consists of representatives of non-federal governments and labor, industry, agriculture, small business, service industries, retailer and consumer interests. Mr. Wardrop is the only representative of a steelmaker among the appointees.
According to Bush, Richard M. Wardrop Jr. is qualifed to give "overall policy advice on matters concerning objectives and bargaining positions on trade agreements," having given himself $7.7 million in bonuses over the last two years while losing $41 million in the first quarter of 2003 alone.
This is Bush's America, the Peter Principle writ large: not so much an avoidance as a hatred of competence — a culture and a national economy of meritopathy, nominally led by the AWOL business-failure son of a one-term president.
The actual legislation that will be voted on in committee on JUNE 19TH is S.1046, and according to Common Cause...
...it would overturn some of the most egregious parts of the FCC rule change. This bipartisan bill would keep a single company from owning broadcast outlets that reach more than 35% of American households (as opposed to 45% post-rule-change). A crucial amendment sponsored by Senators Dorgan and Snowe would keep newspapers and TV stations from merging.
CauseNet at Common Cause is providing two easy ways for you to get your support for the bill and your opposition to the Honorable Commissioner Abernathy and her honorable cohorts registered where it'll count:
If you live in any of the states represented on the committee — Alaska, Arizona, California, Florida, Hawaii, Illinois, Kansas, Louisiana, Maine, Massachusetts, Mississippi, Montana, Nevada, New Hampshire, New Jersey, North Dakota, Oregon, South Carolina, Texas, Virginia, Washington, or West Virginia — Click Here, and then follow the instructions.
For everyone else: Click Here to find out what to do.
In addition, here is the link for the Communications subcommitte of the Commerce Committee. It has a web based email form as well as links to all the members.
Democrats concerned about facing a popular wartime president in next year's elections think there may be an opening in the most unusual of places: President Bush's treatment of the military.
Bush is held in high esteem by the military, because of his leadership of successful military campaigns in Afghanistan and Iraq and his unstinting defense budgets. But Bush's opponents say he has rewarded American troops' heroism by skimping on their housing benefits, their tax cuts, their health care and education for their children.
A new report by the Democratic staff on the House Appropriations Committee this week asserts that Bush, by cutting about $200 million in the program that provides assistance to public schools serving military bases, would pare education funding disproportionately for children of soldiers who fought in Iraq. That adds to several complaints the staff has assembled: Bush's signature on the latest tax cut, which failed to extend a child tax credit to nearly 200,000 low-income military personnel; a $1.5 billion reduction in his 2004 budget, to $9.2 billion from $10.7 billion, for military housing and the like; and a cut of $14.6 billion over 10 years in benefits paid through the Veterans Administration.
"They're saying they unequivocally support the military, but then they make quite clear that the check is not in the mail," said Rep. David R. Obey (Wis.), the top Democrat on House Appropriations, referring to the administration. "They're taking actions that fly in the face of the support they profess for the military."
The story goes on to quote candidate Kerry, an actual veteran, as saying, "The real test of patriotism is how you treat veterans and keep promises to people who wore the uniform."
Well, duh. But promise-keeping is not on W's agenda, it's only on Cheney's, and exclusively to multinational corporations.
Meanwhile, AWOLBush.com features this informative poster with a capsule description of W's missing year of military duty.
Sunshine State. Runny mixture of satire and drama, like an underdone Altman omelet. Many talented actors in a wide variety of thin, thankless roles. Skimble says: 4 out of 10.
Last Tango in Paris. Thematically timeless and stylistically dated. Obscene only in its intrusive use of garish music by Gato Barbieri. 8 out of 10.
8-1/2 Women. Formal experimenter Peter Greenaway at his least compelling. Ideas outnumber characters or scenes, and most of the actors provide incredibly weak performances. 5 out of 10.
13 Conversations about One Thing. One would have been too many. This thing reeks less of real life than of film school. Ebert liked it. 4 out of 10.
DUBAI, United Arab Emirates -- Mac McClelland did some quick math as he steered his Lincoln Navigator through chaotic Dubai traffic.
He'd just learned of a contract to supply food to 12,500 U.S. soldiers in Iraq. If he won it, he'd be a subcontractor to a subcontractor on a deal that originally went to Kellogg, Brown & Root, which provides support services to the military overseas.
"Twelve thousand five hundred mouths," he mused. "That's about 40,000 meals a day." He figured if he could clear 10 cents profit on each meal, he could make as much as $4,000 a day. "That's real money," he said to himself.
[...]
Mr. McClelland, a retired Marine Corps major, figures he's got three dozen deals cooking right now related to Iraq reconstruction. In the past month, he's rounded up local companies to bid on a contract to supply automobiles to the new Iraqi police force. He's signed on as a consultant to help 3M Co. and a company that makes X-ray-scanning equipment break into the Iraq market. And he's set up a deal with a scrap-metal company based in Houston that wants to bid for the remains of Iraqi tanks blown up by U.S. bombs. On the side, the 47-year-old Mr. McClelland is trying to persuade some key members of the royal family here to let him organize a Dubai jazz festival -- the U.A.E.'s first.
Mr. McClelland describes himself as a "bit player" in the Iraq gold rush. But even for the bit players, there's the potential for big money. "If 10% of the projects come through, I'll have made enough to retire twice over," he says. A couple of big ones, such as the food contract, could make his year.
Middlemen and go-betweens with strong military contacts always appear wherever there's a war and wherever there's money to be made supplying the U.S. armed forces. What makes Iraq different is the size of the rebuilding effort the U.S. has taken on and the huge number of U.S. troops involved. The U.S. government is spending several billion dollars a month on troop support, fuel, equipment and, to a lesser extent, reconstruction.
Rather than bid out each individual project, the U.S. government has awarded large contracts to a handful of corporations, including Bechtel Group Inc. -- which won a $680 million deal to coordinate the rebuilding effort -- and Halliburton Corp.'s Kellogg, Brown & Root, which has taken in about $425 million of U.S. Army work, much of it related to supporting troops with food and housing in Iraq and the Gulf. Those big players then offer hundreds of subcontracts to other companies. Bechtel, for instance, is subcontracting about 90% of its work.
[...]
Mr. McClelland supplied the company [3M] with the names of 15 senior military contracting officers in Kuwait, the U.A.E., Oman and Qatar. Mr. McClelland also gave 3M a list of names of local executives from companies such as Bechtel; Kellogg, Brown & Root and military-supply firm DynCorp, many of whom are former officers Mr. McClelland served with in the Gulf. Soon after Dr. Hoeller arrived in Kuwait for the Bechtel conference, he met a senior military officer, one of Mr. McClelland's contacts, who complained about a lack of Post-It notes in Iraq. Within days, the military had put in an order for Post-Its, electrical tape and multimedia projectors.
It's reassuring to know that American taxpayers are doing their part to address the devastating Post-It note and multimedia projector shortages in Iraq. Chalk it up to our philosophy of global humanitarianism.
The title of the above article by Greg Jaffe is "Rebuilding Iraq Proves to Be A Gold Mine for Middlemen," which only goes to show that there's more than one way for crony capitalists to loot a country without WMDs.
UPDATE: In a freak blogging coincidence, Nathan Newman cites the same article as above, but rightly calls attention to the connection between Mac McClelland and Enron.
You are the heirs of one of the country's great traditions – the progressive movement that started late in the 19th century and remade the American experience piece by piece until it peaked in the last third of the 20th century. I call it the progressive movement for lack of a more precise term. Its aim was to keep blood pumping through the veins of democracy when others were ready to call in the mortician.
•
This is what's hard to believe – hardly a century had passed since 1776 before the still-young revolution was being strangled in the hard grip of a merciless ruling class. The large corporations that were called into being by modern industrialism after 1865 – the end of the Civil War – had combined into trusts capable of making minions of both politics and government. What Henry George called "an immense wedge" was being forced through American society by "the maldistribution of wealth, status, and opportunity."
We should pause here to consider that this is Karl Rove's cherished period of American history; it was, as I read him, the seminal influence on the man who is said to be George W.'s brain. From his own public comments and my reading of the record, it is apparent that Karl Rove has modeled the Bush presidency on that of William McKinley, who was in the White House from 1897 to 1901, and modeled himself on Mark Hanna, the man who virtually manufactured McKinley. Hanna had one consummate passion – to serve corporate and imperial power. It was said that he believed "without compunction, that the state of Ohio existed for property. It had no other function...Great wealth was to be gained through monopoly, through using the State for private ends; it was axiomatic therefore that businessmen should run the government and run it for personal profit."
Mark Hanna – Karl Rove's hero – made William McKinley governor of Ohio by shaking down the corporate interests of the day. Fortunately, McKinley had the invaluable gift of emitting sonorous platitudes as though they were recently discovered truth. Behind his benign gaze the wily intrigues of Mark Hanna saw to it that first Ohio and then Washington were "ruled by business...by bankers, railroads and public utility corporations." Any who opposed the oligarchy were smeared as disturbers of the peace, socialists, anarchists, "or worse." Back then they didn't bother with hollow euphemisms like "compassionate conservatism" to disguise the raw reactionary politics that produced government "of, by, and for" the ruling corporate class. They just saw the loot and went for it.
•
The mighty progressive wave peaked in 1912. But the ideas leashed by it forged the politics of the 20th century. Like his cousin Theodore, Franklin Roosevelt argued that the real enemy of enlightened capitalism was "the malefactors of great wealth" – the "economic royalists" – from whom capitalism would have to be saved by reform and regulation. Progressive government became an embedded tradition of Democrats – the heart of FDR's New Deal and Harry Truman's Fair Deal, and honored even by Dwight D. Eisenhower, who didn't want to tear down the house progressive ideas had built – only to put it under different managers. The progressive impulse had its final fling in the landslide of 1969 when LBJ, who was a son of the West Texas hill country, where the Populist rebellion had been nurtured in the 1890s, won the public endorsement for what he meant to be the capstone in the arch of the New Deal.
I had a modest role in that era. I shared in its exhilaration and its failures. We went too far too fast, overreached at home and in Vietnam, failed to examine some assumptions, and misjudged the rising discontents and fierce backlash engendered by war, race, civil disturbance, violence and crime. Democrats grew so proprietary in this town that a fat, complacent political establishment couldn't recognize its own intellectual bankruptcy or the beltway that was growing around it and beginning to separate it from the rest of the country. The failure of democratic politicians and public thinkers to respond to popular discontents – to the daily lives of workers, consumers, parents, and ordinary taxpayers – allowed a resurgent conservatism to convert public concern and hostility into a crusade to resurrect social Darwinism as a moral philosophy, multinational corporations as a governing class, and the theology of markets as a transcendental belief system.
As a citizen I don't like the consequences of this crusade, but you have to respect the conservatives for their successful strategy in gaining control of the national agenda. Their stated and open aim is to change how America is governed - to strip from government all its functions except those that reward their rich and privileged benefactors. They are quite candid about it, even acknowledging their mean spirit in accomplishing it. Their leading strategist in Washington - the same Grover Norquist – has famously said he wants to shrink the government down to the size that it could be drowned in a bathtub. More recently, in commenting on the fiscal crisis in the states and its affect on schools and poor people, Norquist said, "I hope one of them" – one of the states – "goes bankrupt." So much for compassionate conservatism. But at least Norquist says what he means and means what he says. The White House pursues the same homicidal dream without saying so. Instead of shrinking down the government, they're filling the bathtub with so much debt that it floods the house, water-logs the economy, and washes away services for decades that have lifted millions of Americans out of destitution and into the middle-class. And what happens once the public's property has been flooded? Privatize it. Sell it at a discounted rate to the corporations.
It is the most radical assault on the notion of one nation, indivisible, that has occurred in our lifetime. I'll be frank with you: I simply don't understand it – or the malice in which it is steeped. Many people are nostalgic for a golden age. These people seem to long for the Gilded Age. That I can grasp. They measure America
Father and son, June 13, 2003, Maineonly by their place on the material spectrum and they bask in the company of the new corporate aristocracy, as privileged a class as we have seen since the plantation owners of antebellum America and the court of Louis IV. What I can't explain is the rage of the counter-revolutionaries to dismantle every last brick of the social contract. At this advanced age I simply have to accept the fact that the tension between haves and have-nots is built into human psychology and society itself – it's ever with us. However, I'm just as puzzled as to why, with right wing wrecking crews blasting away at social benefits once considered invulnerable, Democrats are fearful of being branded "class warriors" in a war the other side started and is determined to win. I don't get why conceding your opponent's premises and fighting on his turf isn't the sure-fire prescription for irrelevance and ultimately obsolescence. But I confess as well that I don't know how to resolve the social issues that have driven wedges into your ranks. And I don't know how to reconfigure democratic politics to fit into an age of soundbites and polling dominated by a media oligarchy whose corporate journalists are neutered and whose right-wing publicists have no shame.
•
What will it take to get back in the fight? Understanding the real interests and deep opinions of the American people is the first thing. And what are those? That a Social Security card is not a private portfolio statement but a membership ticket in a society where we all contribute to a common treasury so that none need face the indignities of poverty in old age without that help. That tax evasion is not a form of conserving investment capital but a brazen abandonment of responsibility to the country. That income inequality is not a sign of freedom-of-opportunity at work, because if it persists and grows, then unless you believe that some people are naturally born to ride and some to wear saddles, it's a sign that opportunity is less than equal. That self-interest is a great motivator for production and progress, but is amoral unless contained within the framework of community. That the rich have the right to buy more cars than anyone else, more homes, vacations, gadgets and gizmos, but they do not have the right to buy more democracy than anyone else. That public services, when privatized, serve only those who can afford them and weaken the sense that we all rise and fall together as "one nation, indivisible." That concentration in the production of goods may sometimes be useful and efficient, but monopoly over the dissemination of ideas is evil. That prosperity requires good wages and benefits for workers. And that our nation can no more survive as half democracy and half oligarchy than it could survive "half slave and half free" – and that keeping it from becoming all oligarchy is steady work – our work.
Ideas have power – as long as they are not frozen in doctrine. But ideas need legs. The eight-hour day, the minimum wage, the conservation of natural resources and the protection of our air, water, and land, women's rights and civil rights, free trade unions, Social Security and a civil service based on merit – all these were launched as citizen's movements and won the endorsement of the political class only after long struggles and in the face of bitter opposition and sneering attacks. It's just a fact: Democracy doesn't work without citizen activism and participation, starting at the community. Trickle down politics doesn't work much better than trickle down economics. It's also a fact that civilization happens because we don't leave things to other people. What's right and good doesn't come naturally. You have to stand up and fight for it – as if the cause depends on you, because it does. Allow yourself that conceit - to believe that the flame of democracy will never go out as long as there's one candle in your hand.
So go for it. Never mind the odds. Remember what the progressives faced. Karl Rove isn't tougher than Mark Hanna was in his time and a hundred years from now some historian will be wondering how it was that Norquist and Company got away with it as long as they did – how they waged war almost unopposed on the infrastructure of social justice, on the arrangements that make life fair, on the mutual rights and responsibilities that offer opportunity, civil liberties, and a decent standard of living to the least among us.
"Democracy is not a lie" – I first learned that from Henry Demarest Lloyd, the progressive journalist whose book, "Wealth against Commonwealth," laid open the Standard trust a century ago. Lloyd came to the conclusion to "Regenerate the individual is a half truth. The reorganization of the society which he makes and which makes him is the other part. The love of liberty became liberty in America by clothing itself in the complicated group of strengths known as the government of the United States." And it was then he said: "Democracy is not a lie. There live in the body of the commonality unexhausted virtue and the ever-refreshed strength which can rise equal to any problems of progress. In the hope of tapping some reserve of their power of self-help," he said, "this story is told to the people."
This is your story – the progressive story of America.
Pass it on.
Yes, pass it on. This is our story — the story of those who would create a fairer society, an effective society, a true democracy.
For more on Karl Rove's obsession with McKinley and Mark Hanna, see Harold Meyerson's "The Cult of Karl" in The American Prospect.
Thanks to the indispensable Cursor and also the proprietor of bigEastern.com for calling the speech to my attention.
With all of the dissension regarding the Florida Comprehensive Assessment Test and Jeb Bush's inexplicable infatuation with it, why isn't anyone commenting on the connection that the governor's (and the president's) brother, Neil Bush, has with the FCAT?
I recall reading in this newspaper last year that Neil Bush was the CEO of Ignite Inc. of Texas, the company that developed program software that helps students prepare for the test. It costs $30 per student per year and was being tested in Orlando.
Based on my recollections of Neil Bush's banking difficulties back around the time of his daddy's term as president, I'm wondering why this angle hasn't been investigated? How many schools have opted to buy this?
It certainly appears from talk around the communities and the editorial pages that the majority of us feel that the FCAT is given too much weight and are wondering how to reconcile it with the "No child left behind" motto.
Linda DeTroyer
I suppose it's left to vigilant letter-writers and obsessive bloggers to connect the dots, to reconcile these stories, and to create context and perspective in a soundbite world.
Mainstream journalists and editors are still AWOL, not unlike the young George W., whose porous and doubt-riddled history, deceptive or (at best) meaningless pronouncements, and blank stare characterize America as a hollow facade that allows an imbecilic dynasty to mock its own citizens as well as the rest of the world.
Remember, anthrax = bacteria, monkeypox = virus. Remember too that alleged anthrax suspect Steven Hatfill was a medical doctor, a biomedical scientist, a monkeypox expert, and an unpublished novelist, having written...
a novel about a bioterror attack on the United States, titled "Emergence" and set in Washington. The weapon used in the fictional attack is bubonic plague.
In the manuscript, an Iraqi terrorist acquires a significant cache of the bacteria, then builds a wheelchair with a hidden spray gun, which he dispenses while touring the White House.
The manuscript goes into minute detail about the size of the droplets in the spray and how many bacteria each droplet holds. The novel's protagonist, an American biodefense scientist, helps bring the epidemic under control.
Plague, like anthrax, is bacteria. An educated novelist like Hatfill would know enough to go "into minute detail" about weaponizing bacteria, despite his publicly trumpeted virological background.
Neither the anthrax nor the monkeypox events have been adequately explained. There is nothing concrete to say that they are related — or unrelated.
An uneasy feeling tells me that Steven Hatfill's plot is still thickening.
The former top executives at WorldCom ruled with unquestioned authority, steering the telecommunications company into multibillion-dollar acquisitions on a whim and intimidating underlings who questioned their conduct, according to two reports released Monday.
A report by former Attorney General Richard Thornburgh outlined a corporate culture thoroughly dominated by former Chairman Bernard Ebbers and ex-Chief Financial Officer Scott Sullivan, fostering an environment that led to the largest U.S. bankruptcy and an $11 billion accounting scandal.
A second investigative document, produced by lawyer William McLucas at the request of the company's new board, offered searing details about how Sullivan and other key finance executives cooked WorldCom's books to hide that the real numbers were falling short of Wall Street's expectations.
In one incident cited by the investigators, accounting executive Buford Yates told an underling who questioned the company's books, "Show those numbers to the damn auditors and I'll throw you out the (expletive) window."
Just how ineffectual a business was Worldcom? Besides those whimsical multibillion dollar acquisitions, there were also whimsical investments in the Trent Lott Leadership Institute (Guardian):
WorldCom's gala contribution [$100,000 to the Republicans at a fundraising gala attended by President Bush] was a routine part of its $3m a year lobbying effort in Washington, aimed at influencing tax policy and the planned deregulation of the long-distance telephone market – legislation to which WorldCom is opposed.
The company focused on cultivating Mississippi politicians, particularly the Republican leader in the Senate, Trent Lott.
Three years ago WorldCom contributed $1m to the University of Mississippi to help set up the Trent Lott Leadership Institute, just a few weeks after the Mississippi senator had appointed a company official to an advisory panel on the issue of taxing internet sales.
Another recipient of WorldCom largesse was the attorney general, John Ashcroft, who took $10,000 in contributions from the firm for his 2000 Senate campaign. It was unclear yesterday whether Mr Ashcroft would excuse himself from the investigation of WorldCom, as he had done in the case of Enron, another campaign contributor.
Cowards, liars and thieves, every one of them. Like "military intelligence" of the Vietnam era, "corporate culture" is the signal oxymoron of our (expletive) times.
Q: So we're not out of the woods [with respect to the risk of an economic depression]. A: You know the expression "You should live so long?" After a 16-year cycle of boom, it is unreasonable to expect the readjustment to take less than 16 years. We are in for a very long period where the economy will not grow very much. This is intensified on a world basis by the deteriorating caliber of our political leaders. Bush has no fiscal sense whatsoever and is radical in his approach. The Republicans live solely to make the rich richer. The Democrats have no leaders or leadership and are barely conscious of the major issues of the day, which include growing unemployment, lack of affordable housing for the poor and the low end of the middle class, lack of health insurance, deterioration of our infrastructure -- our bridges, roads and sewer systems -- growing water shortages, drugs and crime. Just to name a few of the major issues. One of the major things they overlook is that we are currently spending $350 billion for military purposes. Meanwhile, Russia spends something on the order of $40 billion and China spends $20 billion. We spend more than all other countries together. At the same time, we are spending no more than $20 billion or so for children's health and correspondingly very small sums for education. Congress also spends all its time debating whether we should spend billions on anti-ballistic missiles, which any knowledgeable scientist would tell you cannot possibly work. The public, on the other hand, doesn't feel that extra submarines and needless new fighter planes really increase their standard of living. I am not a pacifist, and I want us to be strong, but we could easily save $200 billion a year by rationalizing the Pentagon and still be far and away the strongest nation in the world.
Q: What are your thoughts on Iraq? A: We all wanted to get rid of Hussein, who is a very evil man. However, the price that is being paid in human lives and properties and the chaos that is inevitably ensuing in Iraq was far too great a price to pay for this war. It is totally unjustified. If we were to take on every evil man who runs a country, we would have at least 15 or 20 wars on our hands.
Q: Are you worried that we'll invade Iran or Syria? A: The public thinks we won the war and that it is over. They don't realize we are going to keep more troops in Iraq than we thought. The deficit will grow. We are not going to win the peace. Iraq is so divided internally it makes Afghanistan look like one unified group. Do you think soldiers know how to straighten out a country? They know how to make war. Do you think the State Department has the people and the training to help the country rebuild? Do you think we have anything like that? No, of course not. Another evil that exists today, and one that is going to prolong our recession and one we could do something about, is the situation of the municipalities and the states, which in the boom period built up tremendous costs and activities and now don't have enough revenues and are, as a group, facing a shortfall of $70 billion a year. This will entail substantial contractions in many important areas of public employment, even after the tax-cut bill, which gets them about $20 billion.
Q: We have elections coming up next year. If the downturn persists, won't people vote their pocketbook? A: In elections, 60% of the people don't vote. The 40% who do vote are people who are beholden to one political party or the other. What is in the public's interest is not represented in the electoral part of our so-called democracy.
Q: Isn't it when times are tough that people finally get interested in the issues? A: Well, you are young, and you have optimism. I don't have it anymore. I lost it. I tried awfully hard to kindle interest in these things. I supported them. I've worked for them, and I've failed. The public seems indifferent to what could be a very severe collapse of the economy and political system. The United States may go under. Look at Zimbabwe. In Zimbabwe, people don't have water. There is a 300% or so inflation rate per annum, transportation is broken down, people cannot get to their jobs, 65% of their industry is shut down and the black market in food is soaring. Although this is an extreme case, the Congo and other African countries are similarly situated. The tax-cut bill will ultimately have negative effects on the our economy, because it increases the disparity of income and wealth between the wealthy and poor.
Q: You can't be suggesting that we'll end up like Zimbabwe? A: I'm suggesting we may end up like Zimbabwe. Or Japan. When you consider that some major iconic industries in this country -- the automobile business, the steel business, the telephone business -- are lost or have at least suffered enormously.
Q: But isn't this part of a long cyclical trend? Manufacturing has been moving offshore for some time. Won't these industries be replaced with new "icons?" A: Technology is a replacement, to some degree, but even there we are beginning to get very strong competition from abroad. We are becoming like England. We are becoming less important. The dollar is depreciating, and it is just beginning its descent because of our perpetual trade deficits and federal budget deficits. Foreigners will not only not invest in our bond and stock markets but will be pulling money out.
Q: Except that raises the question of where are they going to put it? A: Gold. Perhaps diamonds. Old Master paintings.
Q: What's your solution? A: Spend money for the infrastructure, reduce government, cut military spending by $200 billion, repair and build housing for the poor and middle class.
[…]
Q: People seem to feel that Europe is much more at risk than the U.S. A: They face the same risks we do.
Q: But at least we are pulling out all the stops. A: What are we doing? Giving the rich a tax cut and the poor a very tiny one -- is that pulling out the stops? Have you seen a program to build public housing? Have you seen a program to fight drugs intelligently?
Q: What about the monetary stimulus? The low interest rates? A: That cannibalizes the future.
Q: You don't think any of that is useful? A: We would have had a real recession sooner but it might have been over already if Greenspan hadn't lowered interest rates. The best thing that can happen is a good fat recession because that produces the changes that we are hoping for but that are not yet happening.
[…]
Q: What do you expect come fall 2004? A: I expect we will be sitting here and having the same interview. I don't see any change in sight. I don't see the Democratic Party trying to revolutionize itself. The Democrats have all become sheep. Young people have the expression about living outside the box. No one is living outside the box here. There is only one great country: Norway. I didn't come from Norway, but I lived there. It is monolithic. There are 3.5 million people. It is the most constructive country in the world. They're for peace and they were just named as part of the enemy by al Qaeda. If you want a wonderful country, it's Norway. In my next incarnation, I hope to be born a Norwegian.
Very entertaining, if you like this sort of thing. It should still be on newsstands all week.
Bill Gates owns 1.19 billion shares of Microsoft stock. Without the [legislative] change, his tax bill on Microsoft's 16-cent dividend would be roughly $73.4 million. After the change: $28.5 million, a savings of $44.9 million.
One needn't be the richest man in America to get a windfall. Sanford Weill will see his tax bill for dividends on Citigroup stock cut by about $4 million. Michael Eisner's bill for Disney dividends will drop by $692,000.
In contrast, the typical American* with earnings between $50,000 and $100,000 had $855 in dividend income in 2001, according to the Tax Foundation, a nonpartisan** group in Washington that monitors tax policy. That household's dividend tax savings would be just over $200. The typical $50,000 a year household would save about $100.
*Lie #1: There is no typical American. Half of Americans own stocks, half don't. So who is typical? The ones without stocks and therefore without any newly tax-free dividend income?
**Lie #2: The Tax Foundation is not nonpartisan: it is a fanatically partisan and ideological group that subsists on financial support from the usual right wing suspects, a cadre of foundations bearing the names Scaife, Bradley, Olin, Koch, and the rest of the miserly misanthropes.
Considering the unreliable source of the figures, even the ridiculous $100 to $200 savings that an imaginary "typical" American would receive are a lie, an exaggeration, or both at once.
"This case is about lying, lying to the FBI, lying to the SEC and lying to investors," [U.S. Attorney Jim] Comey said. "Martha Stewart is being prosecuted not because of who she is but because of what she did."
It's always about "lying." Clinton was not charged with having been fellated, and Stewart is likewise not charged with criminal insider trading — only conspiracy, obstruction, and making false statements.
Once again, we are being distracted from anything substantive with a legal sideshow. This is all pure bullshit meant to make voters forget Enron, Halliburton, Harken, Chevron, and all of the other real insider crimes being committed.
Previous posts about Martha Stewart here and here.
Laura L. Callahan, now senior director in the office of department CIO Steven Cooper, states on her professional biography that she “holds a Ph.D. in Computer Information Systems from Hamilton University.” Callahan, who is also president of the Association for Federal IRM and a member of the CIO Council, is commonly called by the title “Dr.”
Callahan’s resume says she began her civil service career in 1984. Before joining HSD, she was deputy CIO at the Labor Department.
Hamilton University, according to an Internet search, is located in Evanston, Wyo. It is affiliated with and supported by Faith in the Order of Nature Fellowship Church, also in Evanston. The state of Wyoming does not license Hamilton because it claims a religious exemption. Oregon has identified Hamilton University as a diploma mill unaccredited by any organization recognized by the U.S. Department of Education.
In July 2000, Mark Belnick, then the top in-house lawyer at Tyco International Ltd., received a $2 million payment toward a $12 million bonus. For Mr. Belnick, it was the latest reward in a meteoric legal career that ran from some of the highest-profile business cases of the 1980s and 1990s to Tyco, a hugely successful conglomerate and Wall Street darling.
Today prosecutors say that payment bought Mr. Belnick's silence about the looting of Tyco by its extravagant former chief executive, L. Dennis Kozlowski. Mr. Belnick, facing criminal charges, has become one of the most celebrated casualties of the recent wave of corporate wrongdoing.
But few people know just what he did with that $2 million. Almost immediately, he gave most of it to a small Catholic college in California and to the Culture of Life Foundation, a Catholic pro-life group in Washington, according to e-mails to and from Mr. Belnick at the time and interviews with people involved with the donations.
Three months earlier, Mr. Belnick, formerly an observant Jew, had quietly converted to Catholicism and become an active supporter of Opus Dei, a conservative group within the church. While prosecutors accuse his boss, Mr. Kozlowski, of taking millions from Tyco to buy artwork and posh homes and to entertain friends in Sardinia, Mr. Belnick was using some of his allegedly unlawful Tyco haul for an entirely different purpose. In addition to his donations to the Catholic college and foundation, he gave money to a Catholic television network, two parishes and an Opus Dei bookstore and information center. It was all part of a midlife transformation that Mr. Belnick, the former president of a suburban Westchester, N.Y., synagogue, long kept secret from most of his friends and even his own family.
For Mr. Belnick, two journeys intersected at Tyco: He became embroiled in one of the messiest corporate scandals ever, and simultaneously pursued a sudden conversion and devotion to Catholic philanthropy.
The article goes on to describe Belnick's background, including his role in the US Senate investigation into the Iran-Contra affair. But the call of corporate life was too great, because "In his three years and nine months at Tyco, Mr. Belnick made $37.2 million, not including $14 million in no-interest loans from the company." Such capital rapidly converts an ex-Jew not into a Catholic but into a Catholic VIP, and indeed in 2001 he got his private chapel mass with the Pope in Rome.
Perhaps the most fascinating character in the long article is the recruiter:
Father [C. John] McCloskey, who has an economics degree from Columbia, worked as a stockbroker for Merrill Lynch & Co. in the late 1970s, before joining the priesthood in 1981. His official job is running the Catholic Information Center of the Archdiocese of Washington. But he is best known for shepherding prominent people into the church. "The Holy Spirit uses me as a conduit," says the priest, whom many refer to by his first initial and middle name.
"C. John is the most effective converter of high-profile people in the country," says Dr. Nathanson, who, decades before his 1996 conversion from Judaism, had helped start the organization now known as the National Abortion Rights Action League. "He wants to bring well-educated, affluent people to the Pope."
Some of the others the priest has helped through the conversion process are conservative publishing executive Alfred Regnery and financier Lewis Lehrman. Father McCloskey says that his Wall Street experience, as well as church postings in Manhattan, Princeton, N.J., and now Washington "put me in a circle I wouldn't otherwise be in."
This story, although extremely strange in its particulars, demonstrates the banality of corporate evil as leveraged by concentrated wealth. Unlike your routine televangelist or Hare Krishna captain, cult leader McCloskey recruits from a richer caste of sad people to staff his army of functionaries.
Besides what's happening in faith-based government initiatives, the net effect of the theocratization of the Tycos of America is that the money from your 401(k) — already a quasi-privatization of retirement funding — has been siphoned off to assist radical religious groups.
The story is another example of criminal lying and theft with a secret agenda — the chief characteristic of corporate omnipotence.
Harassment of Martha Stewart continues. With the threat of indictment now imminent, Martha Stewart is being turned into a public example of corporate insider wrongdoing, despite the fact that her alleged "crimes" are literally thousands of times smaller than those of prominent administration officials or their supporters. The insider trades of the former Secretary of the Army, Thomas White, whose documented connections to Enron were obscenely profitable, dwarf anything Martha Stewart did with respect to her ImClone trades. So far she has lost in the vicinity of $400 million for a trade that gained her $228,000. The triviality of her ImClone profit relative to the billions made by the Enron cabal should remind us that justice is not being served.
Regardless of what Martha Stewart has done wrong, nobody was harmed, and if prosecutorial resources are to be wisely used, there are far bigger fish to fry. Her trial by media is another smokescreen meant to distract us from the real perpetrators of the unindicted CEO class: the Ken Lays and Jeff Skillings who roam free like dethroned zombies, having sucked the life out of the employees and shareholders who unwittingly provided sustenance to their executive evils.
UPDATE 6/4/03: The Smoking Gun provides Martha's indictment.
Last month, Viacom President Mel Karmazin told the Senate Commerce Committee that network television is "not a very good business." A few weeks later, Viacom's CBS sold $2 billion in commercials to advertisers wanting to buy time on the network's fall schedule.
The record $9 billion that Viacom and the other broadcast networks took in last month in ad sales for the coming television season doesn't appear to have swayed the Federal Communications Commission, which is expected to approve further deregulation of the industry on Monday. The rollback of those rules not only will further pad the coffers of entertainment conglomerates; it also likely will lead to more homogenized television programming.
Network television executives and big broadcasters long have complained that regulators have tied their hands, and crimped their profits, by restricting the number of stations they can own. Those restrictions, they contend, have become obsolete in the age of cable and the Internet. And it's true that the broadcast networks face much greater competition than they did 20 years ago. Much of that competition, however, is owned by the very same broadcasters pushing for more deregulation.
Currently, broadcasters are allowed to own stations that reach no more than 35% of television households. If the measure before the FCC passes on Monday as expected, that limit will be eased to 45%. Rules that made it difficult for one company to own more than one television station in a city also are set to be relaxed. Under the revised guidelines, some companies will be able to own up to three television stations in big cities like Los Angeles and New York.
As big broadcasters expand their reach, the remaining smaller production companies willing to take risks in programming are likely to be squeezed out. That's because it's easier for conglomerates to make money by carrying programs they own themselves.
By owning two or more stations in a market, big broadcasters also will have more incentive to cut back on news operations. Although broadcasters tend to boast that such combinations mean more local news programming, they often lead to having reporters use the same material for two stations instead of one.
Ten years ago, the FCC began to ease longstanding rules that prohibited the broadcast networks from owning the shows they aired. With the barriers to vertical integration discarded, the networks often muscled out the middleman -- independent producers -- in favor of shows the networks could own, and profit from, outright. The impact has been undeniable: A decade ago, less than 20% of prime-time programming was owned by the networks. Today, that figure is close to 80%.
With no safeguards in place, networks are apt to favor shows they own over better ones owned by someone else. Already, independent production companies have gone the way of the horse and buggy. If pioneering television producer Norman Lear were to pitch "All in the Family" today, he would have to recast the entire show and turn over ownership to a network before it would have a chance to get on the air.
Radio has undergone a similar transformation. There, a handful of companies dominate the industry, generating stations and playlists that are virtually indistinguishable from one another across the country.
In making the case for deregulation, companies such as Mr. Karmazin's Viacom and Rupert Murdoch's News Corp. usually point to the explosion of media outlets, both in cable and the Internet, as evidence that the current restrictions are outdated. But these companies, along with AOL Time Warner, NBC parent General Electric and ABC parent Walt Disney, control some of the biggest and most successful cable networks, and have a big Internet presence as well. Aside from CBS, Viacom's holdings include MTV, Nickelodeon, VH1, Black Entertainment Television, Comedy Central and radio giant Infinity Broadcasting. AOL Time Warner, for its part, owns CNN, HBO, the WB Network, TNT, as well as cable systems reaching more than 10 million homes. Disney owns ABC, ESPN, the Disney Channel and has stakes in several other big cable networks, including Lifetime and A&E. NBC owns CNBC, MSNBC, Bravo, Telemundo ... you get the idea.
In moving to ease ownership restrictions, regulators are traveling a slippery slope. Already, the government is poised to approve News Corp.'s proposed takeover of satellite company DirecTV, a deal that would give the biggest owner of television stations in the country even more power in negotiating with the entertainment industry's few remaining independent suppliers of programming.
In his testimony before the committee, Tom Fontana, who created the groundbreaking dramas "Homicide" and "Oz" (for production companies, he noted, that no longer exist), he said that "sometimes by deregulating a big business, you can choke the life of a small one. And with that you lose energy, imagination and entrepreneurial spirit of that small business." Energy, imagination and entrepreneurial spirit -- everything that seems to be missing from television these days.
Energy, imagination and entrepreneurial spirit are just three of the things being choked out of existence by FCC Chairman Michael Powell and his two fellow Republican commissioners. Cultural diversity, artistic risk-taking and all stories of local interest will also disappear as a thin gruel of homogenized corporate spittle, determined by a vanishingly smaller group of people, dominate the landscape of news and entertainment.
Today is the last chance for you to tell the FCC what you think prior to the vote. Stop the FCC!
Lisa at RuminateThis has offered some of the most comprehensive coverage and commentary on this issue. See her many posts there.
