Category: Bureaucracy

CalPERS Blinks

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After an increasing chorus of criticism the largest pension fund in the nation, CalPERS, has abandoned its plans to relax standards in order to favor private equity:

The state’s biggest public pension fund has repeatedly missed a key performance goal for its controversial private equity investments.

But a CalPERS committee said Monday that the fund’s staff could not strip language from a written policy that required them to aim to meet that benchmark – returns roughly 3% higher than the stock market to compensate for private equity’s risk.

By voice vote, the committee defeated the proposal to change the policy so that the new objective would have been simply “to enhance” the pension fund’s private equity returns.

………

The suggested policy change had been criticized by financial experts who said it would clear the way for CalPERS to continue to invest in the complex Wall Street sector – the buying and selling of companies — without requiring higher returns to compensate for the added risk.

“This is outrageous,” Eileen Appelbaum, a senior economist at the Center for Economic and Policy Research, a Washington think tank, said before the meeting. “CalPERS can’t get over the goal, now plans to do away with goal post.”

………

The proposed policy change came after many years where CalPERS failed to meet the so-called “risk-adjusted” benchmark.

For the year ended June 30, for instance, private equity earned a seemingly healthy 8.9%, but that was lower than the 11.1% goal.

A recent report by a CalPERS’ consultant acknowledged that the private equity investments had also failed to beat benchmarks over the last three, five and 10 years.

Appelbaum said that CalPERS would have made the same amount over the last 10 years if it would have just invested in the stock market – but without the added risks or high fees.

(emphasis mine)

I would note that the abuse of private equity by CalPers, and the increasing furor over its backflips to favor private equity is a direct result of the investigations, and aggressive use of freedom of information act requests, by Yves Smith and the Naked Capitalism team, who have been on this like white on rice.

One think that I have not figured out yet is why CalPERS has been so insistent in pursuing a failed strategy.

The cynic in me assumes that there is some sort of corruption involved.

The realist sees this being driven by blind panic as a historically underfunded institution flails around searching for a magic bullet.

I’m not sure which analysis frightens me more.

This is a Feature, not a Bug

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What a surprise. Obama’s Jihad on whistle-blowers, and openness has led to a situation where there is no accountability in government programs:

Justice Department watchdogs ran into an unexpected roadblock last year when they began examining the role of federal drug agents in the fatal shootings of unarmed civilians during raids in Honduras.

The Drug Enforcement Administration balked at turning over emails from senior officials tied to the raids, according to the department’s inspector general. It took nearly a year of wrangling before the D.E.A. was willing to turn over all its records in a case that the inspector general said raised “serious questions” about agents’ use of deadly force.

The continuing Honduran inquiry is one of at least 20 investigations across the government that have been slowed, stymied or sometimes closed because of a long-simmering dispute between the Obama administration and its own watchdogs over the shrinking access of inspectors general to confidential records, according to records and interviews.

The impasse has hampered investigations into an array of programs and abuse reports — from allegations of sexual assaults in the Peace Corps to the F.B.I.’s terrorism powers, officials said. And it has threatened to roll back more than three decades of policy giving the watchdogs unfettered access to “all records” in their investigations.

“The bottom line is that we’re no longer independent,” Michael E. Horowitz, the Justice Department inspector general, said in an interview.

The restrictions reflect a broader effort by the Obama administration to prevent unauthorized disclosures of sensitive information — at the expense, some watchdogs insist, of government oversight.

………

n a rare show of bipartisanship, the administration has drawn scorn from Democrats and Republicans. The Obama administration’s stance has “blocked what was once a free flow of information” to the watchdogs, Senator Patrick J. Leahy of Vermont, the ranking Democrat on the Judiciary Committee, said at a hearing.

They have it wrong.

Obama simply does not believe in accountability for his administration, because he believes that they, and he, are honorable men, so we have the war on all forms of public accountability.

This is counter to both common sense, and to the intentions of the founders when they created the Constitution, who understood that a balance of powers, for which regulatory authorities need knowledge of what is going, is crucial to that idea.

Why I say that Barack Obama is the Worst Constitutional Law Professor Ever™.

And this is Mild Compared to the Trans-Pacific Partnership

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The WTO has just ruled that requiring the labeling of dolphin safe tuna is an unacceptable restraint of trade:

International trade deals like the Trans-Pacific Partnership (TPP) need to be carefully examined piece by piece because they can take precedence over a country’s own laws.

Case in point: the World Trade Organization (WTO) on Friday ruled that dolphin-safe tuna labeling rules — required by U.S. law, in an effort to protect intelligent mammals from slaughter — violate the rights of Mexican fishers.

As a result, the U.S. will have to either alter the law or face sanctions from Mexico.

I wrote a few weeks ago about how the “investor-state dispute settlement system” baked into trade agreements can force countries to compensate corporations when regulations cut into their profits.

The long-running quarrel over tuna reveals another way that domestic laws can be overturned by trade agreements: when countries can file trade challenges on behalf of domestic industries.

“This should serve as a warning against expansive trade deals like the Trans-Pacific Partnership that would replicate rules that undermine safeguards for wildlife, clean air, and clean water,” said the Sierra Club’s Ilana Solomon in a statement.

This short of crap is a feature of trade deals, not a bug.

And Here Might be a Part of the Problem

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Rear Admiral Brian Losey engaged in an illegal, and wide ranging campaign of retaliation in an attempt to punish whoever reported him for minor travel irregularities, but he still got his promotion.

This lack of accountability is pretty much an archetypal example of senior leadership acting in a manner in opposition to good order and discipline of the force, but that does not matter. General officers cover for each other:

The Navy is poised to promote the admiral in charge of its elite SEAL teams and other commando units even though Pentagon investigators determined that he illegally retaliated against staff members who he mistakenly suspected were whistleblowers.

Rear Adm. Brian L. Losey was investigated five times by the Defense Department’s inspector general after subordinates complained that he had wrongly fired, demoted or punished them during a vengeful but fruitless hunt for the person who had anonymously reported him for a minor travel-policy infraction, according to documents obtained by The Washington Post.

After conducting separate, years-long investigations that involved more than 100 witnesses and 300,000 pages of e-mails, the inspector general upheld complaints from three of the five staff members. In each of those cases, it recommended that the Navy take action against Losey for violating whistleblower-protection laws, the documents show.

The Navy, however, dismissed the findings this month and decided not to discipline Losey, a preeminent figure in the military’s secretive Special Operations forces who once commanded SEAL Team 6, the clandestine unit known for killing terrorist targets such as Osama bin Laden. He now leads the Naval Special Warfare Command and has served in Afghanistan, Iraq, Panama, Bosnia, Somalia and other conflict zones.

Senior Navy leaders reviewed the inspector general’s investigations but “concluded that none of the allegations rose to the level of misconduct on Admiral Losey’s part,” Rear Adm. Dawn Cutler, the Navy’s chief spokeswoman, said in a statement. She added that “no further action is contemplated.”

………

Critics say the previously undisclosed investigations into one of the Navy’s top SEALs underscore the weakness of the military’s whistleblower-protection law and how rarely violators are punished.

Under the law, commanders or senior civilian officials are prohibited from taking punitive action against anyone who has reported wrongdoing in the armed forces to the inspector general or members of Congress.

In comparison with other federal employees, whistleblowers working in the military or national security agencies must meet a higher burden of proof to win their cases. The odds are stacked against those who seek redress.

………

The complaints against Losey also illustrate the Pentagon’s long-standing reluctance to discipline top brass for wrongdoing and how the military typically conceals misconduct investigations from public view. The armed forces rarely disclose the existence of such cases­ except in response to public-records requests, which usually take months to process.

………

The turmoil began in July 2011, three weeks after Losey took charge of the military’s Special Operations Command for Africa, headquartered in Stuttgart, Germany.

Someone filed an anonymous complaint with the inspector general alleging that Losey had improperly sought a government-paid plane ticket for his adult daughter when his family relocated to Germany.

In fact, Losey had paid for the plane ticket himself, and the complaint was soon dismissed. But enraged by what he saw as an act of disloyalty, the admiral became determined to find out who had reported him, according to the inspector general reports.

………

“I don’t understand why Brian did what he did. He went hard over stupid on it,” said a senior military official who knew Losey well and served at the time with the U.S. Africa Command, the parent command for Losey’s group.

“He was concerned about disloyalty. But as I had another commander tell me, loyalty goes both ways,” said the military official, who spoke on the condition of anonymity because of the confidentiality of the investigations.

In the end, it turned out that Losey had the wrong people on his list of suspects.

Investigators determined that none of the people he retaliated against had filed the original complaint about his daughter’s plane ticket.

………

The official said the Navy issued Losey a formal letter of counseling this month, advising him to be thoughtful and careful when handling such matters in the future but finding no wrongdoing on his part.

Meanwhile, the inspector general also recommended that the armed forces take action against two colonels who served as senior aides to Losey. Investigators determined that they had punished suspected whistleblowers, effectively acting on behalf of the admiral.

This sort of crap is one of the reasons that our military has had a long run of failures since 2001.

We no longer fire Generals for incompetence or for malfeasance, Losey is a poster child for this, and as a result we have a force that, for all of its technical acumen, is far less effective than it should be.

The Worst Job in Washington, DC

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The Zombie Eyed Granny Starver from Wisconsin has aggred to take the job of Speaker of the House, but he has laid out conditions that resemble those of a Heisman winning first round draft pick:

On Tuesday night, Rep. Paul Ryan announced that he’ll run for speaker of the House — if he gets the endorsement of every major Republican caucus by this Friday, and they agree to sign on to rules changes making it much harder for the far right to depose the speaker in the middle of a session.

 In a meeting with his House Republican colleagues, Ryan laid out several conditions that he’d want in exchange for taking the job. According to a statement issued by Ryan’s office, he said:

  • That the next speaker should be “visionary” and “needs to use the platform to create a clear policy choice for the country”
  • That rules should be changed to make it much more difficult to challenge the speaker’s leadership in the middle of a House term
  • That he wanted to spend “less time on the road” (meaning less than the three weekends a month Boehner spends fundraising)
  • And that the next speaker should be “a unifying figure across the conference”

The last of those is particularly important. The statement from Ryan’s office says he will only run “if he is a unity candidate — with the endorsement of all the conference’s major caucuses,” and that members should “make clear whether they support” him by Friday.

So I guess that we can add prima donna to his resume as well.

It’s kind of amusing, the Teabagger caucus finally gets Boehner’s scalp, and discovers that they are now at the point where no one is willing to take the job.

Charlie Pierce notes that Ryan wants to ignore the basic history and responsibilities of the office:

………
Comes now Paul Ryan, the zombie-eyed granny-starver from the state of Wisconsin, who apparently will deign to become Speaker of the House, but only if the entire Republican caucus in the House supports him, and only if the more recalcitrant members of the caucus agree not to turn on him. This very much includes the 40 members of the so-called “Freedom Caucus,” the prion-addled Patient Zeroes of movement conservatism, and the people who defenestrated John Boehner and also ended Kevin McCarthy’s aspirations. So far, these folks seem reluctant to accept the conditions proposed by “Uncle Paul” Ryan.

Ryan’s conditions include rules changes that would make it more difficult to overthrow a sitting speaker – a provision that Rep. Raul Labrador, R-Idaho, a leader of the Freedom Caucus, said is a “non-starter.” “We have to remember everything in the House and everything in Congress is about checks and balances,” Labrador said. “We have two houses of Congress for that reason. We have three branches of government for that reason, and one of the reasons that every board has the freedom to vacate (the chair).” And fellow Freedom Caucus member Rep. Mo Brooks said in addition to that concern, he takes issue with Ryan’s track record on immigration. “Paul Ryan’s support for amnesty and open borders, that is a significant factor,” the Alabama Republican said.

​Plainly, Paul Ryan wants to be granted the authority and prerogatives of a being powerful Speaker without having to earn them through the process of persuasion that became a requirement of the office beginning with the breaking of [Despotic House Speaker from the turn of the last century] Joe Cannon. Now, having Paul Ryan two heartbeats from the presidency is a goddamn awful idea merely on its merits. But, beyond that, his demands seem to me to be based on a fundamental misreading of the current political landscape. For the past 30 years, through the deliberate development of the political identity that infected the party with the prion disease, no Republican politician ever will be allowed to be truly safe. The party handed the skunks the weapons, and the skunks learned how to use them. You’re their huckleberry now, sport.

This really is going to be the worst job in the world, and at the rate that this is going, I would expect half of the Republican Caucus to exhume the body of Ronald Reagan, and make him Speaker.

It is a f%$#ing mess.

F%$# Me. I Agree with Mitch McConnell

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He is looking at further restricting the filibuster.

Notwithstanding the assertions by Senators that the US Senate is “The Word’s Greatest Deliberative Body,” the filibuster, and its routine use has made it nothing more than a petri dish for psychopaths:*

Senate Majority Leader Mitch McConnell (R-Ky.) is opening the door to changing the filibuster in response to growing pressure from Republicans angered that Democrats have blocked legislation from reaching the White House.

McConnell has appointed a special task force to explore changes to the filibuster rule and other procedural hurdles — including whether to eliminate filibusters on motions to proceed to legislation. That’s a tactic the minority often uses to shut down a bill before amendments can be considered.

McConnell has tapped his close ally, Sen. Lamar Alexander (R-Tenn.), and Senate Rules Committee Chairman Roy Blunt (R-Mo.) to form a task force with Sen. James Lankford (R-Okla.) and two other freshmen to weigh various reforms. They hope to implement the changes at the start of next year.

“We’re going to take a serious look at whether Senate rules ought to be changed in order to make the Senate work more effectively,” Alexander said.

The filibuster is an accident of history, and it has done far more harm than good.

To the degree that the filibuster returns to the fetid swamps of history, it is a good thing, regardless of party.

*Understand that this is not a formal diagnosis. I am an engineer, not a doctor, dammit!†
†I LOVE IT when I get to go all Doctor McCoy!!!

Can Someone Primary this Ninny?

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Dem debate 1: During Game 4 of NLDS Debate 2: College football Saturday Debate 3: Saturday Debate 4: NFL playoff Sunday

— Brett LoGiurato (@BrettLoGiurato) October 12, 2015

I am referring, of course, to Debbie Wasserman Schultz.

Whether it is her refusal to support challenges to right wing Republicans to placate the Cuban Community, preventing a DNC vote on the Iran Deal, her structuring the debates in a way to ensure that they would be as meaningless as possible so as to help Hillary Clinton.

Now, it turns out that she is retaliating against people in the DNC who have the temerity to suggest that this is a bad idea:

Representative Tulsi Gabbard of Hawaii, a vice chairwoman of the Democratic National Committee, said she was disinvited from the first Democratic presidential primary debate in Nevada after she appeared on television and called for more face-offs.

Ms. Gabbard confirmed on Sunday that her chief of staff received a message last Tuesday from the chief of staff to Representative Debbie Wasserman Schultz, the chairwoman of the national committee, about her attendance at the debate. A day earlier, Ms. Gabbard had appeared on MSNBC and said there should be an increase beyond the current six sanctioned debates.

A person close to the committee who asked for anonymity to discuss internal discussions insisted, however, that Ms. Gabbard had not been disinvited. Instead, the person said, an aide to Ms. Wasserman Schultz expressed a desire to keep the focus on the candidates as the debate approached, rather than on a “distraction” that could divide the party, and suggested that if Ms. Gabbard could not do that, she should reconsider going.

Ms. Gabbard insisted otherwise.

“When I first came to Washington, one of the things that I was disappointed about was there’s a lot of immaturity and petty gamesmanship that goes on, and it kind of reminds me of how high school teenagers act,” Ms. Gabbard said in a telephone interview on Sunday night. She said she would watch the debate in her district in Hawaii, which elected her to her second term last year.

“It’s very dangerous when we have people in positions of leadership who use their power to try to quiet those who disagree with them,” she added. “When I signed up to be vice chair of the D.N.C., no one told me I would be relinquishing my freedom of speech and checking it at the door.”

………

People who disagree with Mr. O’Malley have pointed out that he infrequently debated his challenger for governor in Maryland. And they note the number of sanctioned debates is the same as in the 2008 race for the Democratic presidential nomination.

But there were more than a dozen unsanctioned debates and forums back then. This time, the candidates could be excluded from the sanctioned debates if they take part in ones that are not approved by the national committee.

(emphasis mine)

Obama got more than 60% of the vote in her district in 2008 and 2012.

This is a about as safe as a Congressional district for Democrats as you can find.

It’s ridiculous that she is a sitting member of Congress, much less head of the DNC.

She is the very definition of the term “worthless party apparachik”>

I’m Sure That the Pentagon Will Conduct a Full Investigation with All the Thoroughness and Integrity of the Pat Tillman Investigation

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Ashton Carter is promising a full investigation of what led to a 30 minute long barrage of munitions on a hospital run by Doctors Without Borders (MSF):

U.S. Defense Secretary Ash Carter on Sunday promised a full and transparent investigation into whether a U.S. aircraft providing support for American and Afghan commandos was responsible for the explosions that destroyed a hospital in northern Afghanistan, killing 22 people.

Speaking to reporters traveling with him to Spain, Carter said, “the situation there is confused and complicated, so it may take some time to get the facts, but we will get the facts.”

He said he spoke to Gen. John Campbell, the top U.S. commander in Afghanistan, and to Marine Gen. Joseph Dunford, the chairman of the Joint Chiefs of Staff, during his flight to Madrid, adding that “there will be accountability as always in these incidents, if that is required.”

Carter said he told Campbell to make sure that the U.S. provides any medical care needed for those in the northern city of Kunduz.

U.S. officials said American special operations forces advising Afghan commandos in the vicinity of the hospital requested the air support when they came under fire in Kunduz. The officials said the AC-130 gunship responded and fired on the area, but Carter said it’s not certain yet whether that was what destroyed the hospital.

Carter said he believes the U.S. will have better information in the coming days, once U.S. and international investigators get access to the hospital site. Officials said the senior U.S. military investigator is in Kunduz but hasn’t yet been able to get to the site because it continues to be a contested area between the Afghans and the Taliban militants.

If Mr. Carter is really interested in investigating what happened at this hospital, and I rather doubt that he is serious about a full and honest investigation, he will be dealing with an officer corps determined to obstruct him, and to the degree that they fail, they will be determined to ensure that any consequences flow as low on the chain of command as possible.

Nothing to see here, move along.

The Flies Return to the Sh%$

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By which I mean that homophobic bigot Kim Davis is officially changing her party affiliation to Republican.  Good riddance:

A county clerk in Kentucky who was briefly jailed for refusing to issue marriage licenses to gay couples said on Friday that she and her family have switched to the Republican Party because the Democrats no longer represented them.

Rowan County Clerk Kim Davis, 50, who has said her beliefs as an Apostolic Christian prevent her from issuing marriage licenses to same-sex couples, said they had changed parties last week. She was a long-time Democrat in eastern Kentucky.

“My husband and I had talked about it for quite a while and we came to the conclusion that the Democratic Party left us a long time ago, so why were we hanging on?” she told Reuters in an interview at a hotel in Washington, where she has traveled to be feted at a Family Research Council event later on Friday.

Not a surprise, really.

Since she is now making bank on being a bigot, she has to get that official American bigot membership card.

Zombie Ideas

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The New York Times editorial board notices that Republicans are trying to privatize IRS tax collection yet again:

Buried in the Senate-passed version of the big highway bill is a provision that would require the Treasury secretary to use private debt collectors to collect unpaid back taxes.

The provision, added to the bill by Republican leaders, is ostensibly intended to help pay for highways. But it’s a bad idea that should be kept out of the House version of the bill and out of any final compromise version.

Private tax collection was tried in the 1990s and in the 2000s. Both times it lost money. It increases the cost of handling complaints and appeals at the Internal Revenue Service, and it is far less efficient than simply increasing the collection budget of the I.R.S.

Worse, it fosters taxpayer abuse. The debts involved are ones that the I.R.S. has not been able to collect, in part because the taxpayers are too hard-pressed to pay up. A private company is probably not going to have better luck unless it uses abusive tactics.

And yet, private tax collection is an idea that keeps resurfacing. Why? One reason is that it would be a cash cow for the four companies likely to win tax-collection contracts, two in New York, one in California and one in Iowa.

Senator Chuck Schumer, Democrat of New York, has argued in the past that using federal money to pay private companies for tax collection would create jobs at those companies. But it would be better to increase the I.R.S. budget to create middle-class public-sector jobs in professional tax collection than to throw money at low-paying private-sector contractors who cannot do the job as well.

 Thank you Senator Schumer for whoring for your debt collector campaign contributors.

This sh%$ is just evil.

What Danielle Brian and Pete Sepp Said

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Specifically, they said that, “To Safeguard the Military, Congress Must Protect Whistleblowers:

This year the Department of Defense requested $585.3 billion from taxpayers, but it is no secret that Pentagon spending is rife with waste, fraud and abuse.

As Congress considers raising the debt ceiling yet again this fall, it’s essential for taxpayers to know that this money will be spent responsibly and that leaders are setting budgetary priorities instead of rubber-stamping wish lists.

Necessary oversight depends upon the ability of those on the front lines to blow the whistle on waste and mismanagement of funds without fear of reprisal. However these courageous military whistleblowers are endangered, not by some far-flung enemy, but by their own superiors.

The Department of Defense is the only federal agency unable to pass a single audit since the government began the practice over 20 years ago. Congress’s watchdog, the Government Accountability Office, has identified more than 1,000 recommendations for reforms to save taxpayer dollars that the Department of Defense has yet to implement.

………

The former Special Inspector General for Iraq Reconstruction told the Center for Public Integrity that he largely credits tips from whistleblowers for his ability to uncover crimes on overseas government contracts in Iraq. However, most of those whistleblowers were not willing to be identified in court documents due to their fear of retaliation.

Military whistleblowers are vital to managing our enormous investment in the Pentagon. Even more important, they are key to protecting our national security and the lives of our service members.

However, these brave Americans face a unique set of challenges when they come forward to report fraud, waste, abuse and illegality within the armed services. Congress addressed many of the most significant shortfalls for civilian whistleblowers when it passed the Whistleblower Protection Enhancement Act in 2012. But the safeguards for members of the military to exercise their constitutional rights remain hopelessly antiquated.

One expert told a Senate committee last month that such provisions remain “the lowest common denominator in the U.S. code for accountability.”

The Pentagon is arguably the worst run bureaucracy in in the Federal government, and it desperately needs to be fixed.

I am not sure here whether “Fixed” means mended, or if it means spayed or neutered, but either would be an improvement.

Russia Declares Blatant CIA Front Organization to Be “Undesirable”

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Russia has now officially declared that the National Endowment for Democracy is an undesirable organization, which limits their actions, and the actions of organizations that they fund, in that country:

Vladimir Putin! Now you’ve really done it. You have had the temerity to declare our National Endowment for Democracy (NED), America’s most important Non-Governmental Organization (NGO) to be “undesirable.” Where will this end? Don’t you respect our right, as a US Government-financed NGO, to meddle in internal Russian affairs? After all, we are the most important NGO of the world’s Sole Superpower. We can go wherever we want and do whatever we like. We are truly upset!

This is the clear reaction of Washington to the decision by the Russian Prosecutor General’s Office on July 28 to declare the activities of the US National Endowment for Democracy as “undesirable in the territory of Russia.” The official statement stated that, “the National Endowment for Democracy used Russian commercial and non-commercial organizations under its control to take part in campaigns aimed at denying the legitimacy of results of Russian elections; organize political actions designed to influence the authorities’ decisions and discredit the service in the Russian Armed Forces.” It further elaborated, “In pursuit of these goals, the fund allocated about 2.5 million US dollars to Russian commercial and non-commercial organizations in 2013-2015.”

Vladimir Putin! Now you’ve really done it. You have had the temerity to declare our National Endowment for Democracy (NED), America’s most important Non-Governmental Organization (NGO) to be “undesirable.” Where will this end? Don’t you respect our right, as a US Government-financed NGO, to meddle in internal Russian affairs? After all, we are the most important NGO of the world’s Sole Superpower. We can go wherever we want and do whatever we like. We are truly upset!

This is the clear reaction of Washington to the decision by the Russian Prosecutor General’s Office on July 28 to declare the activities of the US National Endowment for Democracy as “undesirable in the territory of Russia.” The official statement stated that, “the National Endowment for Democracy used Russian commercial and non-commercial organizations under its control to take part in campaigns aimed at denying the legitimacy of results of Russian elections; organize political actions designed to influence the authorities’ decisions and discredit the service in the Russian Armed Forces.” It further elaborated, “In pursuit of these goals, the fund allocated about 2.5 million US dollars to Russian commercial and non-commercial organizations in 2013-2015.”

Under Russia’s law on Undesirable NGOs, adopted by the Duma or parliament and signed into law by President Putin this May, any foreign or international non-governmental organization could become “undesirable” if it threatened the foundations of Russia’s constitutional order, the country’s defense capability and the security of the Russian state.

Significantly, in a statement regarding the decision, Russia’s Foreign Ministry named Carl Gershman, the neo-conservative who has been president since NED was founded in 1983. They noted that Gershman said – absolutely openly – that the NED organization was intended to be a beautiful facade for distributing funds among opposition circles in foreign countries. That suggests they have done their homework very well before banning the NED.

………

The NED, along with Freedom House, has been at the center of all major US State Department-financed ‘color revolutions’ in the world since 2000 when it was used to topple Milosevic in Serbia. The NED was created during the Reagan Administration to function as a de facto CIA, privatized so as to allow more freedom of action. Allen Weinstein, who helped draft the legislation establishing NED, said in a Washington Post interview in 1991, “A lot of what we do today was done covertly 25 years ago by the CIA.”

………

The majority of the historic figures linked to clandestine CIA actions have at some time been members of the Board of Directors or the Administrative Council of the NED, including Otto Reich, John Negroponte, Henry Cisneros, and Elliot Abrams. The Chairman of the NED Board of Directors in 2008 was Vin Weber, campaign fundraiser for George W. Bush in 2000. Gershman, head of the NED since its creation to the present, worked closely with Richard Perle, Elliott Abrams and Frank Gaffney. Gershman was in a sense ‘present at the creation’ of the political-intelligence faction known as neo-conservativism.

On September 26, 2013, weeks before Ukraine President Viktor Yanukovich announced he would join Russia’s Eurasian Economic Union rather than the less appealing EU “associate membership”, Gershman wrote an OpEd to the Washington Post where he called Ukraine “the biggest prize,” explaining that pulling it into the Western camp could contribute to the ultimate defeat of Russian President Putin. Gershman wrote, “Ukraine’s choice to join Europe will accelerate the demise of the ideology of Russian imperialism that Putin represents. Russians, too, face a choice, and Putin may find himself on the losing end not just in the near abroad but within Russia itself.”

In other words, NED is a US government-financed entity that intends to topple Russia’s elected President because he displeases the folks in the Washington neo-con war faction.

Notably, at the same time as Russia is banning NED under its new Undesirable NGO law, China has just signed into law its Overseas NGO Management Law to restrict foreign NGO’s there. Last October, the same National Endowment for Democracy financed the Hong Kong Umbrella Revolution protests and the NED is financing Uygur separatists in China’s Xinjiang Province, cross-roads of all major Chinese oil and gas pipelines from Russia and Kazakhstan.

The NED, Freedom House, and their ilk are bad for a number of reasons:

  • These government funded organizations are structured with their primary goal of removing activities promulgated by the state security apparatus from Congressional oversight.  This has been the case since (at least) William Casey took over the CIA with the goal of exempting it from all budget constraints and oversight in 1981.
  • It has the effect of tarring all NGOs with the stigma of involvement with the CIA and its ilk.
  • It makes it too easy for the CIA to overthrow and destabilize foreign governments, which almost always ends up biting us in the butt.

I Have Never Heard of Something like This in Academe Before

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One of the bigger clusterF%$#s in academe recently has been the hiring, and subsequent “un-hiring” of Steven Salaita, a professor of literature with a focus on American Studies at the University of Illinois at Champaign-Urbana.

During Operation Cast Lead, he was rather “emphatic” on the Twitter machine regarding military operations in Gaza, and as a result of pressure from the legislature and the alumni, his offer was rescinded.

It was a done deal, and Salaita had already resigned his prior (tenured) position when the offer was revoked.

In the ensuing kerfuffle,  it was discovered, it was discovered that the Chancellor, who was the bag man for this sordid affair, was conducting business over her personal email with the specific goal of evading Illinois open record laws.

After all this came out, a new president came in, and started cleaning house.

The Chancellor, Phyllis Wise, offered her resignation, but the trustees rejected her resignation, and instead fired her, which cost her a significant retention bonus and a paid sabbatical year:

University of Illinois trustees Wednesday rejected a $400,000 bonus payment for outgoing Chancellor Phyllis Wise, backpedaling on a resignation deal made last week and instead choosing to begin dismissal proceedings against her.

The unanimous decision to reject Wise’s resignation came six days after she announced she would step aside just ahead of the revelation that she had been using a personal email account to hide discussions of sensitive and controversial issues from the public. The deal had been recommended by new U. of I. President Timothy Killeen.

But the terms of her resignation, including the bonus intended to acknowledge four years in the job, were roundly criticized by Gov. Bruce Rauner and others, and the board’s three-member executive committee decided Wednesday to take the more contentious — and legally risky — path of firing Wise for cause instead.

The board will next provide Wise with “a statement of the reasons” for firing her and will hold a dismissal hearing, according to a letter U. of I. board Chair Edward McMillan sent Wise after Wednesday’s meeting. Until then, Wise will be assigned as an adviser to the U. of I. president on biomedical affairs and continue to draw her salary of $549,069. She will retain her tenured faculty appointment, as the dismissal applies only to her administrative role. The board Wednesday appointed Dean Barbara Wilson as the acting interim chancellor.

………

Killeen said discussions about Wise’s resignation began early last week when she was presented with the findings of an investigation into her deliberate use of a personal email account to hide information. Killeen said he did not “directly” ask Wise to resign and that she “indicated interest or willingness” to do so. She publicly cited “external issues” as the reason after a tumultuous year at the state’s flagship public campus.

………

U. of I. on Friday released about 1,100 pages of emails that showed Wise and other campus administrators used personal email accounts in an attempt to circumvent state public records laws, a violation of university policy. The emails were related to three of the university’s most significant and controversial decisions from the past year: the decision to withdraw a job offer to professor Steven Salaita, the hiring of felon James Kilgore and the proposal to open an engineering-based medical school on the Urbana-Champaign campus.

………

Rosenstein said he had disagreed with how Wise handled the situation with Salaita, whose job offer was withdrawn last year after he wrote dozens of critical and sometimes profane comments on Twitter about Israel and its military policies. And Rosenstein said he was further disturbed by the content of some of the emails that Wise tried to keep private.

First, let me say that I think that Wise deserved to be fired, if just for the aggressive evasion of open record acts.   (The James Kilgore thing is a typical bullsh%$ tempest in a teapot.  He’s an adjunct who has done his time)

On the Salaita matter, it is clear that just everything was handled badly, but I get the sense that she was less the boss on this than she was the bag-man, and she was also the sacrificial lamb.

As Atrios so pithly put it,  “I hate the phrase “Thrown Under A Bus, but it certainly applies here. Thanks for doing our dirty work, no thanks for making us look bad, piss off.”

Quote of the Day

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If the U.S. Institute of Peace is just an Orwellian absurdity, then Hadley is an appropriate chairman.  If it wants to demonstrate that it isn’t that, Hadley’s resignation or removal would be a step in the right direction,

—Kevin Connor, director of the Public Accountability Initiative, on the fact that frothing at the mouth war monger Stephen Hadley is heading the Institute of Peace.

Hadley is a former Bush National Security Adviser who has publicly called for massive military interventions in response to quite literally every foreign policy dispute that he has encountered.

IP Restrictions Run Amok

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The state of Georgia has characterized the act of posting its laws online as “terrorism”, clearly this is absurd:

Government officials have threatened “rogue archivist” Carl Malamud with legal action many times for his efforts to make public government documents widely available for free, but the state of Georgia has set a new standard for fighting this ridiculous battle: It’s suing Malamud for infringing its copyright of state laws by — horrors — publishing them online.

The state’s lawsuit, filed last week in Atlanta federal court, accuses Malamud of piracy — and worse, of “a form of ‘terrorism.'” His offense: Through his website, public.resource.org, he provides members of the public access to a searchable and downloadable scan of the Official Code of Georgia Annotated — that is, the entire body of state law. The state wants a court order forcing Malamud to stop.

Georgia and Malamud have been waging this battle for a couple of years, or ever since Malamud sent thumb drives bearing the scans to the speaker of the state House of Representatives in 2013. A cease-and-desist order, which Malamud rebuffed, came virtually by return mail.

This isn’t the first such battle Malamud has waged. For roughly two decades he’s been working to make public laws, codes and court documents, well, public. At almost every turn he’s been fought by government agencies that prefer to extract a fee from taxpayers for access, even though, as Malamud points out, the public pays for the work in the first place, via taxes.

………

The state’s own lawsuit acknowledges that the annotations are “valuable analysis and guidance regarding … state law.” And the core of its case isn’t that the annotations shouldn’t be broadly accessible, only that the state doesn’t want to pay the cost itself. LexisNexis shoulders the cost and in return gets the right to charge users, earning a profit.

If LexisNexis can’t recoup those costs because Malamud is providing a free alternative, the lawsuit asserts, the state “will be required to either stop publishing the annotations altogether or pay … using tax dollars.”

Well, yes. Isn’t that what taxes are for?

This is not something that the the state of Georgia should be playing anyone for this.

The state government has to have a copy of the laws and official interpretations in electronic form with annotations as a part of conducting business.

They don’t need to have LexisNexis extracting tolls from the citizenry to make this public.

The costs here are negligible to non-existent, and the assertion of copyright is absurd.

And Once Again, Obama Bails out Crooked Banksters

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It looks like the Obama Administration has once again insured that there is no accountability for crooked banksters:

Three top Democrats are accusing the Department of Housing and Urban Development of quietly removing a key clause in its requirements for taxpayer-guaranteed mortgage insurance in order to spare two banks recently convicted of federal crimes from being frozen out of the lucrative market.

HUD’s action is the latest in a series of steps by federal agencies to eliminate real-world consequences for serial financial felons, even as the Obama administration has touted its efforts to hold banks accountable.

In this sense, the guilty plea has become as meaningless to banks as their other ways of resolving criminal charges: out-of-court settlements, or deferred prosecution agreements. “Too Big to Fail” has morphed into “Too Big to Jail” — and then again, into “Bank Lives Matter.”

Sens. Sherrod Brown and Elizabeth Warren and Rep. Maxine Waters fired off a letter to HUD on Tuesday, saying they believe that the timing of the change was designed to clear the way for two banks recently convicted of federal crimes — JPMorgan Chase and Citigroup — to continue to make Federal Housing Administration-insured loans. Last year, JPMorgan Chase wrote $1.67 billion in FHA loans, and Citi wrote $342 million, according to data from the Congressional Research Service.

On May 20 of this year, JPMorgan Chase and Citigroup both entered a guilty plea on one felony count of conspiring to rig foreign currency exchange trades, the largest market on the globe.

Five days earlier, on May 15, HUD slipped a notice into the Federal Register, seeking to alter its standard loan-level certification form, known as HUD-92900-A. This form must be filled out for lenders to receive FHA insurance, which reimburses them if the homeowner falls into foreclosure.

On the current HUD-92900-A form, lenders must certify that their firm and its principals “have not, within a three-year period … been convicted of or had a civil judgment rendered against them” for a variety of crimes, including “commission of fraud … violation of Federal or State antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements or receiving stolen property.”

JPMorgan and Citi’s guilty plea would fall under the antitrust statute, and according to Brown, Warren and Waters’ reading of the certification, that would make them ineligible to obtain FHA insurance on their loans.

On the updated form, this language has been excised. The notice in the Federal Register did not even mention the removal, making it impossible to discover without comparing the old form and the proposed form side by side. The Wall Street Journal ran a story about the certification changes in May, but failed to notice that the new language would let law-breaking banks off scot-free.

The day before HUD released the notice in the Federal Register, the New York Times reported that the Justice Department sought to lessen the consequences of the guilty pleas in the foreign exchange rigging case, ensuring that federal regulators would not use the pleas to bar banks from certain business lines.

The Securities and Exchange Commission then granted waivers from disqualification to JPMorgan Chase, Citi, and the other guilty banks in the case, over the objections of one SEC Commissioner that the big banks had effectively become “Too Big to Bar.”

The HUD changes would similarly take away an automatic penalty for bank misbehavior. Per Brown, Warren and Waters, they “allow HUD to turn a blind eye to criminal violations — putting homebuyers and taxpayers at additional risk.”

HUD spokesperson Cameron French said the agency was not providing comment on the Democratic letter. He said HUD would review it and respond accordingly.

………

The Democratic lawmakers believe removing the certification language results in a change in policy rather than simply a change to the form. They requested that HUD withdraw the notice and issue it again under the Administrative Procedures Act, giving an explicit rationale for the change, and how it would affect JPMorgan and Citigroup’s FHA loan status. The public would then have an additional 60-day comment period.

This sort of crap needs to end.

Someone at the IMF Gets It, but It Ain’t Lagarde

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In response to the mindlessly punitive deal for the Greek bailout, IMF staff have released a report that calls for massive debt write-downs, and an anonymous source at the IMF implied that such a write-down is a requirement for IMF participation:

The International Monetary Fund threatened to withdraw support for Greece’s bailout on Tuesday unless European leaders agree to substantial debt relief, an immediate challenge to the region’s plan to rescue the country.

 The aggressive stance sets up a standoff with Germany and other eurozone creditors, which have been reluctant to provide additional debt relief. The I.M.F role is considered crucial for any bailout, not only to provide funding but also to supervise Greece’s compliance with the terms.

 A new rescue program for Greece “would have to meet our criteria,” a senior I.M.F. official told reporters on Tuesday, speaking on the condition of anonymity. “One of those criteria is debt sustainability.”

 Debt relief has been a contentious issue in the negotiations over the Greek bailout.

 Athens has pushed aggressively for creditors to write down the country’s debt, which now exceeds €300 billion. Without it, Prime Minister Alexis Tsipras has argued the debt will remain a heavy weight on Greece’s troubled economy.

 But Germany and other countries, including the Netherlands and Finland, are loath to grant Greece easier terms, which are a tough sell to their own voters. German Chancellor Angela Merkel has ruled out a “classic haircut” on Greece’s debt.

 The I.M.F. is now firmly siding with Greece on the issue. In a report released publicly on Tuesday, the fund proposed that creditors let Athens write off part of its huge eurozone debt or at least make no payments for 30 years.

 ………

 In going public, the I.M.F. is making a tactical move, adding pressure to the negotiations over the bailout deal. But its aggressive position also complicates efforts to complete a deal, with Greece’s Parliament scheduled to vote on Wednesday whether to accept the creditors’ conditions.

One thing that we can be sure of, however, is that whoever leaked the need for debt relief was not the Managing Director of the International Monetary Fund Christine Lagarde, because she has walked back this assessment:

In general, when discussing large complicated institutions distinctions must be made between parts of this institution. The mainstream press is particularly bad at that kind of nuance because these organizations are already complicated: making further distinctions between IMF managing directors, IMF staff and the IMF executive board gets needlessly obscurant in their view. However, these distinctions are important. The report that was leaked two weeks ago and the latest update to that report was written by IMF staff and specifically “neither discussed with nor approved by the IMF’s Executive Board”. Additionally, Christine Lagarde or her title “managing director” appear no where in this document. Thus to say that the “IMF” is saying anything in this report is deeply misleading.

The reporting of this latest update was even more muddled because it was combined with an anonymous statement from a “senior IMF official” by the Financial Times. The Financial Times lede reads as follows:

The International Monetary Fund has warned that it might not be able to participate in Greece’s bailout if the programme does not include substantial debt relief, setting itself on a collision course with the country’s eurozone creditors.

This (and the rest of the document) suggests to me that it is the Managing Director (ie Christine Lagarde) who goes to the board and ask for authorization. Is the anonymous official claiming to speak on behalf of Christine Lagarde? If so why is she not making this statement publicly? In my mind this anonymous official’s statements only make sense in three situations:

  1. Christine Lagarde is both unwilling to sign on to a deal the Eurogroup would currently agree to and unwilling to overtly and strongly pressure them to create a “better” deal they could sign. Thus she is aiming for a Grexit and no deal.
  2. Christine Lagarde is willing to sign on to whatever deal the Eurogroup would currently agree to but wants to covertly pressure them to offer more debt restructuring. In other words it’s a point of contention but not a dealbreaker.
  3. Many on the IMF staff don’t want Lagarde to sign whatever deal the Eurogroup is currently considering and specifically want much more debt restructuring. They have and are willing to leak things to the media to attempt to create this outcome whether by embarrassing their own Managing Director or putting indirect pressure on the Eurogroup.

To me option three seems like the most plausible. The same FT reporters (Peter Spiegel in Brussels and Shawn Donnan in Washington) reported over three weeks ago that a “senior [IMF] official” says many staff at the IMF “would rather cut off their little finger” than continue being involved in Greek bailouts. The use of similar descriptions (“senior official” and “IMF senior officials”) implies that the same sources at the IMF that said this over three weeks ago have been leaking the Debt Sustainability analysis and interpreted them for the press. This suggests a revolt among the rank and file of the IMF that doesn’t extend to the people who will ultimately make the decision. Remember that the definition of a “senior official” is necessarily vague to preserve anonymity and could easily be someone who can’t directly influence the decision made and certainly doesn’t speak for Lagarde. Thus, in this scenario this statement makes sense as a calculated lie by IMF staff to influence events. This also may suggest that my intuition earlier this week was wrong: it may not be the Obama administration crafting a narrative with the leaked reports and selective interpretations of official statements, but simply off the record comments from these same IMF staff sources (or at least, a complicated combination of both these sources).

What we are seeing here is a conflict between people who understand the underlying economics, and the “Very Serious People”, like Lagarde, or her predecessor Dominique Strauss-Kahn, who was in charge when the original deal with Greece was signed,  who are somehow operating out of a sense of European Union exceptionalism.

I would note that when DSK approved the original deal, he actually violated some basic IMF rules about requiring a creditor haircut, because, unlike dealing with, for example, Thailand, they know the creditors, and go to cocktail parties with them.

Tribalism is truly corrosive to good governance.

There are Lies, Damned Lies, Statistics, and Official Chinese Government Statistics

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Is there anyone with two braincells to rub together who believes that China actually hit a 7% growth rate in the last quarter? I don’t,

Not only are the Chinese stats suspect at the top levels, but every regional and local government is feeding them data that is driven by what they think their higher-ups want to hear:

China’s economy grew an annual 7 percent in the second quarter, steady with the previous quarter and slightly better than analysts’ forecasts, though further stimulus is still expected after the quarter ended with a stock market crash.

It has been a difficult year for the world’s second-largest economy. Slowing growth in trade, investment and domestic demand has been compounded by a cooling property sector, deflationary pressure, and most recently a stock market crash, so the recent sequence of data releases showing signs of improvement may help buttress faltering confidence in the effectiveness of prior policy support measures.

Analysts polled by Reuters had forecast gross domestic product (GDP) in the world’s second-largest economy would grow 6.9 percent in April-June from a year earlier, compared with 7.0 percent in the March quarter.

On a quarterly basis, the economy grew 1.7 percent compared with 1.4 percent in the March quarter, the National Bureau of Statistics said on Wednesday.

Monthly activity data, released alongside the GDP report, also beat expectations across the board to show signs of a rebound, with factory output hitting a five-month high.

Yeah, right.  And the Chinese stock market is not melting down right now.

I Think That Someone Has Whispered the Words “Obstruction of Justice” in His Ear

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New York Governor Andrew Cuomo has backtracked on his 90 days and then delete email policy:

The emails of New York officials will no longer be automatically deleted after 90 days, aides to Gov. Andrew Cuomo announced last week in response to political pressure over the purge policy.

It’s been a slow burn leading to the policy shift. The purge policy was first reported by the Albany Times Union back in mid–2013, but didn’t stir much protest until more recently, following coverage by ProPublica and Capital New York.

At a public meeting Friday, aides to the governor said they had reviewed the policies of other states and, going forward, any email deletion would be manual. That means more communications should be retained and be accessible in response to public records requests or in the case of investigations of wrongdoing.

Good government groups welcomed the move, writing in an open letter that it “shows the power the governor has to lead by example to increase transparency” – rare praise for Cuomo, whose administration has generally been marked by secrecy.

Since the purge policy was in effect for about two years in some state agencies, it’s probable some public records have been lost.

The cynic in me thinks that Cuomo has already managed to delete records that he wanted deleted.

The optimist in me thinks that someone, perhaps his counsel, or perhaps someone from the US Attorney’s office told him that they would either take actions to protect the data, which would be profoundly embarrassing to Hizzoner.

In either case, this is good news, and I am hoping to see Cuomo indicted, because he is clearly corrupt, at least by the ordinary standards of decency, if not the letter of the law.

I’m Shocked, Shocked to Find That Gambling Is Going on in Here

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Cue Captain Renault

A whistle blower at Tiversa is alleging that the company manufactured false evidence of breaches to gin up business:

A bombshell lawsuit is raising eyebrows in the cybersecurity industry.

A former cybersecurity forensic examiner named Richard Wallace is claiming that his former employer — cybersecurity company Tiversa — “would typically make up fake data breaches to scare potential clients,” CNNMoney reports.

Wallace claims that Tiversa would routinely do this then “pressure firms to pay up” by buying its cybersecurity services, according to a federal courtroom transcript obtained by CNNMoney. This came to a head when Tiversa allegedly approached cancer testing services company LabMD about a supposed hack. LabMD refused to buy into Tiversa’s services, so Tiversa allegedly reported the cancer-testing company to the FTC for having a data breach.

………

This lawsuit raises some potentially worrisome issues about practices in the cybersecurity industry.

Gee you think?

It’s the f%$#ing Wild West out there, with no standards of what constitutes a breach, and no meaningful certification of the security firms.

People have been selling cyber Armageddon, with only one concrete example of their horror stories panning out (Stuxnet which was created by the US and Israeli government), why is it a surprise when we discover that people are selling “breaches” that are either non existent or minor.

I guess being a cybersecurity consultant beats working for a living.