Category: Corruption

She’s Fundraising with Theranos? Seriously?!?!?

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For a while, I have been talking about the smoke and mirrors show that is the lab test company Theranos.

The short version is that they have a multibillion dollar valuation for a technology that allows one to make blood tests from a drop of blood from a finger tip.

Unfortunately, they have not been able to make the technology work, and so they have been doing conventional tests to generate some revenue.

But they are f%$#ing this up too, having been cited by the FDA.

And now the Clinton campaign is having this den of fraud hold a fund raiser for them.

I guess that Enron was busy:

Theranos is a unicorn that may soon be sent to the glue factory. The biotech start-up was once the toast of Silicon Valley. Its signature technology — a blood-testing machine so sensitive it requires a mere pinprick of blood to make accurate diagnoses — attracted a $9 billion valuation. ……… And then, last October, The Wall Street Journal revealed that the company’s breakthrough technology doesn’t actually work.

In recent days, the Centers for Medicare and Medicaid Services found that the company’s lab in Newark, California, was in violation of five federal regulations, thereby posing “immediate jeopardy to patient health and safety.” Last week, the release of that investigation’s full report revealed that “quality control issues” may have compromised the blood-test results of 81 patients.

……… But for god knows what reason, it hasn’t cost the company the chance to host a fund-raiser for the Democratic front-runner. Next week, Chelsea Clinton will join Holmes at Theranos’s Palo Alto headquarters to help raise money for her mother’s campaign. According to an email obtained by Re/code, the event will be held next Monday night and will cost most attendees $2,700 a head.

One of Clinton’s primary liabilities in her race against Bernie Sanders is the perception that she is overly friendly with corrupt corporate interests. So it’s pretty bizarre that she has decided to have a (reportedly) corrupt corporation host her next big fund-raiser. And it’s only one of several unforced errors the campaign has made since last Friday. 

Someone in the Clinton sure picked the wrong week to stop sniffing glue.

On the bright side for the Campaign, at least this time Hillary was not caught on camera doing it, so she can blame some lowly staffer.

This really is a complete cock up.

Debbie Wasserman Schultz Needs to Be Fired ……… Out of a Cannon ……… Into the Sun ……… Part Gazillion

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As I have mentioned before, Debbie Wasserman-Schultz has a primary challenger, who I have endorsed, Tim Canova.

Well, it appears that our lady of the unmanageable hair is spooked, because she has changed DNC policies to protect her own sorry political career:

Debbie Wasserman Schultz’s reputation as DNC chair has plummeted to the point where she is being challenged in the Democratic Primary for her congressional seat for the first time ever. Her poor leadership of the DNC contributed to significant losses in the 2014 midterm elections for Democrats, and the way she has handled the 2016 Democratic presidential primaries has irked both Bernie Sanders’ and Hillary Clinton’s supporters, as well as many of her colleagues. Just a few weeks ago, Congresswoman Tulsi Gabbard, one of five DNC vice chairs, resigned from her position to support Mr. Sanders.

To help save her public image, Ms. Wasserman Schultz has authored desperate Op-Eds for various news outlets in attempts to come off as relatable. “Having a perspective of a working mother has helped in the role as a legislator,” the Florida congresswoman wrote (poorly) for US News. Ms. Wasserman Schultz’s explanation of how being a mother in government poses challenges fails to mention her privileged financial status. Most working mothers do not have the salary of a U.S. congresswoman plus a husband’s banker income to pay for things like childcare.

And now, to help rig her own election in the Democratic primaries, Ms. Wasserman Schultz is blocking any challenger to a Democratic incumbent from accessing the voter file database—a vital campaign tool for any election.

“Last week, I called the Florida Democratic Party to request access to the voter file database and software known as VAN that is routinely used by Democratic candidates across the country,” wrote Tim Canova, Ms. Wasserman Schultz’s primary challenger, in an article on Medium. “I was told that our campaign would be denied access to this database because I am running against an incumbent Democrat, Debbie Wasserman Schultz. I was also told that any Democratic candidate running against an incumbent Democrat would be denied access — even a lifelong progressive challenging an out-of-touch incumbent.”

Actually, it’s especially for an out of touch incumbent hack.

BTW, the DNC is not supposed to choose sides in a contested primary.

Seriously.  She  ……… Needs  ……… To  ……… Be  ……… Fired, both from the DNC, and from Congress.

She shouldn’t be elected dog catcher.

Speaking of Unprosecuted Banksters

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It turns out that former Secretary of the Treasury, Robert Rubin, was referred to the Department of Justice for criminal investigation by the Financial Crisis Inquiry Commission: (FCIC)

In late 2010, in the waning months of the Financial Crisis Inquiry Commission, the panel responsible for determining who and what caused the financial meltdown that lead to the worst recession in decades voted to refer Robert Rubin to the Department of Justice for investigation. The panel stated it believed Rubin, a former U.S. Treasury Secretary who has held top roles at Goldman Sachs gs and later Citigroup c , “may have violated the laws of the United States in relation to the financial crisis.” Rubin, the commission alleged, along with some other members of Citi’s top management, may have been “culpable” for misleading Citi’s investors and the market by hiding the extent of the bank’s subprime exposure, stating at one point that it was 76% lower than what it actually was.

No government action was ever brought against Rubin. And there is no evidence that Department of Justice acted on the crisis commission’s recommendations. A source close to Rubin says the former Wall Street executive was never contacted by the Justice Department in relation to the commission’s allegations. Nonetheless, the fact that Rubin was among a relatively small group of top bankers who the crisis commission referred to the Justice Department for potential wrong-doing, and the fact that is appears nothing happened, sheds new light on the financial crisis, and the government’s effort to pursue those who may have broken the law.

Seven years after the bankruptcy of Lehman Brothers, the fact that no major Wall Street figure was ever prosecuted for crimes related to the financial crisis remains an sticking point for many. It is regularly brought up by presidential candidate Senator Bernie Sanders. When the Financial Crisis Inquiry Commission released its 662-page report nearly five years ago, members of the commission said they had formerly referred evidence of possible misconduct of a number of individuals to the Department of Justice. But it declined to say who. Brooksley Born, a member of the commission and a former regulator, said at the time, “Our mandate was to refer to the attorney general any individual that our investigation found may have violated US laws. We did make several such referrals, but we are not going to talk about any of those.”

………

In the run up to the financial crisis, Citigroup aggressively expanded into the mortgage market and subprime lending. Despite warnings that a bubble was forming in housing and that lending standards had gotten to loose, CEO Prince in mid-2007 famously told the Financial Times that as long as the music is still going he would keep dancing. Rubin at the time was the chairman of the executive committee of Citi’s board. Rubin reportedly blessed the increased risk taking at Citi in the mid-2000s.

By late summer 2007, Citi’s direct exposure to subprime bonds was $55 billion, according to the crisis commission. The staff notes of the commission say that “based on FCIC interviews and documents obtained during our investigation, it is clear that CEO Chuck Prince and Robert Rubin . . . knew this information.” It says the two top officials were made aware of the extent of Citi’s exposure “no later than September 9, 2007.”

Yet, according to the commission, on October 15, Citi executives told analysts on a call that the bank’s total exposure to subprime was just $13 billion, or 76% less than it actually was. Two weeks later as pressure began to build on Citi, and values in the mortgage market fell, Citi told the market that its actual subprime exposure was $55 billion, and that its losses from mortgage-related assets could already be as big as $11 billion. Prince also announced he was resigning.

The staff notes say that “the representations made in the October 15, 2007 analysts call appear to have violated SEC Rule 10b-5,” and that Prince and Rubin, along with “members of the board” may have been “culpable” for “failing to disclose” the bank’s true subprime exposure.

Rubin should have gone to jail, and he should have been banned from the finance industry for life.

Rubin isn’t alone in this.

This wasn’t just some sort of black swan.  It was aggressive, deliberate, and systemic fraud, but there were no prosecutions.

To mind, this comes down to crass tribalism, where the regulators, and prosecutors, were, or were managed by, people who went to the same schools, and started their careers at the same firms, and so there are no prosecutions.

It’s why we are seeing the rise of populism on the right and left right now.

The corrupt elites maintained their grip on power, and so we are likely to see another financial crack-up.

More Clinton Speeches to Banksters

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Hillary Clinton’s paid speeches to Goldman Sachs Group have drawn criticism on the campaign trail, but they’re not the only talks she’s given to big banks.

Bank of America has also paid the Democratic presidential candidate and her husband more than $1 million combined to deliver talks to the Charlotte-based bank and its Merrill Lynch unit.

The Clintons collected the combined figure from Bank of America over four appearances from 2011 to 2014, according to financial disclosures posted by the nonpartisan Center for Responsive Politics. Former President Bill Clinton was the speaker on three of those occasions, once taking in $500,000 for a 2014 gathering in London.

The large fees raise concerns about potential conflicts of interest and are likely to remain a hot topic on the campaign trail, said Eric Heberlig, a political science professor at UNC Charlotte.

“Taking fees like this, particularly from banks that have been bailed out by the taxpayers, it’s certainly hard to argue to the public that you’re not acting in a self-serving way,” Heberlig said.

My point is not that Hillary Clinton is bought and paid for by the banks.

I do not think that she is.

Instead, I am suggesting that she, and Bill, are peas in a pod with the corrupt financial class (see Rubin, Robert), and the speaking fees are a reward for being a member of the tribe.

This is not someone who is going to go after Wall Street any harder than Barack Obama, and as mind boggling as it sounds, the George W. Bush administration prosecuted more financial criminals than Obama has.

Why Trump Might Become President

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For all of his bombast, Thomas Franks notes that Donald Trump has a serious and real position on trade that is unique amongst his Republican compatriots, specifically he is the only one who talks against the current regime of free trade fetishism that is the Washington Consensus.

Over the past 50 years, there has been a trajectory towards greater trade liberalization, along with a massive expansion in property rights and rents.

Ordinary Americans note that this has made their lives, and the lives of their children, measurably worse.

The Very Serious People (VSPs) among our elites argue that in the long run we will benefit, but it’s been over 2 generations with poor results, and as John Maynard Keynes said, “In the long run, we are all dead.”

The VSPs maintain that it is all racism.  It’s something more significant than that:

………

Or so we’re told. Last week, I decided to watch several hours of Trump speeches for myself. I saw the man ramble and boast and threaten and even seem to gloat when protesters were ejected from the arenas in which he spoke. I was disgusted by these things, as I have been disgusted by Trump for 20 years. But I also noticed something surprising. In each of the speeches I watched, Trump spent a good part of his time talking about an entirely legitimate issue, one that could even be called leftwing.

Yes, Donald Trump talked about trade. In fact, to judge by how much time he spent talking about it, trade may be his single biggest concern – not white supremacy. Not even his plan to build a wall along the Mexican border, the issue that first won him political fame. He did it again during the debate on 3 March: asked about his political excommunication by Mitt Romney, he chose to pivot and talk about … trade.

It seems to obsess him: the destructive free-trade deals our leaders have made, the many companies that have moved their production facilities to other lands, the phone calls he will make to those companies’ CEOs in order to threaten them with steep tariffs unless they move back to the US.

Trump embellished this vision with another favorite leftwing idea: under his leadership, the government would “start competitive bidding in the drug industry”. (“We don’t competitively bid!” he marveled – another true fact, a legendary boondoggle brought to you by the George W Bush administration.) Trump extended the critique to the military-industrial complex, describing how the government is forced to buy lousy but expensive airplanes thanks to the power of industry lobbyists.

Or so we’re told. Last week, I decided to watch several hours of Trump speeches for myself. I saw the man ramble and boast and threaten and even seem to gloat when protesters were ejected from the arenas in which he spoke. I was disgusted by these things, as I have been disgusted by Trump for 20 years. But I also noticed something surprising. In each of the speeches I watched, Trump spent a good part of his time talking about an entirely legitimate issue, one that could even be called leftwing.

Yes, Donald Trump talked about trade. In fact, to judge by how much time he spent talking about it, trade may be his single biggest concern – not white supremacy. Not even his plan to build a wall along the Mexican border, the issue that first won him political fame. He did it again during the debate on 3 March: asked about his political excommunication by Mitt Romney, he chose to pivot and talk about … trade.

It seems to obsess him: the destructive free-trade deals our leaders have made, the many companies that have moved their production facilities to other lands, the phone calls he will make to those companies’ CEOs in order to threaten them with steep tariffs unless they move back to the US.

Trump embellished this vision with another favorite leftwing idea: under his leadership, the government would “start competitive bidding in the drug industry”. (“We don’t competitively bid!” he marveled – another true fact, a legendary boondoggle brought to you by the George W Bush administration.) Trump extended the critique to the military-industrial complex, describing how the government is forced to buy lousy but expensive airplanes thanks to the power of industry lobbyists.

The most frightening thing about Donald Trump is that he is the best Republican on the issues, not his demagoguery.

This Reads Like Something from Joseph Heller’s Most Famous Novel*

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It appears that whistleblower protection legislation cannot apply to the FBI because there would be too many whistleblowers:

The Department of Justice is undercutting Chuck Grassley’s efforts to provide FBI employees whistleblower protection. That became clear in an exchange (2:42) on Wednesday.

The exchange disclosed two objections DOJ has raised to Grassley’s FBI Whistleblower Protect Act. First, as Attorney General Loretta Lynch revealed, DOJ is worried that permitting FBI Agents to report crimes or waste through their chain of command would risk exposing intelligence programs.

What I would say is that as we work through this issue, please know that, again, any concerns that the Department raises are not out of a disagreement with the point of view of the protection of whistleblowers but again, just making sure that the FBI’s intelligence are also protected at the same time

I suspect (though am looking for guidance) that the problem may be that the bill permits whistleblowers to go to any member of Congress, rather than just ones on the Intelligence Committees. It’s also possible that DOJ worries whistleblowers will be able to go to someone senior to them, but not read into a given program.

Still, coming from an agency that doesn’t adequately report things like its National Security Letter usage to Congress, which has changed its reporting to the Intelligence Oversight Board so as to exempt more activities, and can’t even count its usage of other intelligence programs, it seems like a tremendous problem that DOJ doesn’t want FBI whistleblowers to have protection because it might expose what FBI is doing on intelligence.

That’s sort of the point!

Especially given Grassley’s other point: apparently, DOJ is opposed to the bill because it will elicit too many complaints.

One of the issues that your department has raised is that allowing FBI employees to report wrong-doing to their chain of command could lead to too many complaints. You know? What’s wrong with too many complaints? … Seems to me you’d invite every wrong doing to get reported to somebody so it could get corrected.


Apparently, DOJ knows there are so many problems FBI employees would like to complain about that things would grind to a halt if they were actually permitted to complain.

We cannot protect whistleblowers, because they might whistleblow.

This does seem to be rather Helleresque, doesn’t it?

*Catch-22

Nothing to See Here, Move Along

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Is anyone surprise that the guests on Chris Matthews’ show Hardball have given over 75 thousand dollars to his wife’s campaign?

It’s an interesting racket:

One day last June, MSNBC’s Chris Matthews opened his show with some news: His wife, Kathleen Matthews, a former local news anchor and Marriott hotel executive, had announced a run for Congress, seeking to replace Chris Van Hollen in Maryland’s 8th District. Matthews enthusiastically endorsed his wife’s candidacy, and vowed to “offer Kathleen whatever help I can.”

The longtime host of Hardball added: “As a journalist, I also know how important it is to respect certain boundaries on my support for her both in my public role and here on MSNBC. And while most of you know that our show doesn’t typically cover congressional races, I will continue to fully disclose my relationship with her as part of MSNBC’s commitment to being transparent and fair in our coverage.”

In the ensuing months, Kathleen’s name has rarely come up on Hardball. But many of the guests on the show have become generous donors to her campaign. And the transparency Matthews promised has not extended to mentioning that to his audience.

Using Federal Election Commission data and Hardball transcripts, The Intercept has identified 48 frequent guests of Matthews’s program who have made donations to the Kathleen Matthews for Congress campaign. These individuals, their spouses, or their political action committees donated $79,050 as of December 31, 2015 — about 5 percent of the $1.5 million Matthews had raised as of that time.

Some of the guests made the donations after they were on the show — in some cases, long after. But in at least 11 of these cases, the Hardball guests appeared on the program after Kathleen Matthews announced her candidacy, and without any disclosure of the donations. And in at least three of those cases, the donations came within days of the MSNBC appearance.

As Atrios would say, “Time for another blogger ethics panel.”

Didn’t Expect This to Appear in Fortune Magazine

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This essay eviscerates the claims by the finance industry that it needs to cheat its customers to function:

There’s a horrendous lie being told by the brokerage industry and its army of lobbying groups. It goes something like this:

“Middle-class Americans are not worth serving if we can’t charge them egregious fees and sell them products that they do not need.”

They’re not using that exact language, but this is precisely what they’re saying. This message disgusts me personally and I’m in a unique position to comment on it professionally. As I documented in my book Backstage Wall Street, the business model of selling investment products to investors is hopelessly rife with conflicts.

………

In other industries, higher-priced products are typically superior in both quality and efficacy—think luxury watches and cars, or the difference between a roadside motel and the Ritz-Carlton. With financial services products, however, it works in exactly the opposite way. Virtually every single piece of academic research ever produced on the topic says that the less you pay for an investment product, and the simpler it is, the better off you’ll be over the long-term. 

Wall Street knows this for a fact. It’s undeniable that high fees and excessive trading costs damage the long-term potential of a retirement account and work against investors. Unfortunately, the brokerage business is predicated on selling the higher cost solutions because that’s where the profit margins are. The incentives paid by fund companies to brokerage firm sales forces across the country are a cancer that must be rooted out. This built-in conflict between advisor and client is partially responsible for the nation’s looming retirement crisis. It also plays a role in the finance industry’s almost universally negative perception among Americans.

………

The logic here is astounding. The argument is literally that some people need to be taken advantage of in order for them to be worthwhile clients. I believe Ryan is on the wrong side of this issue and on the wrong side of history. But more than that, his argument—that somehow conflicted advice is better than none at all—is wrong for at least two reasons.

It’s a righteous rant.  I suggest that you read the rest.

India Can Go Cheney Itself

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India is taking the US to the WTO over the increase in fees for H1B visas:

India has complained to the World Trade Organisation (WTO) about the United States’ decision to increase visa application fees.

The USA last year doubled the fee required to apply for an H1-B visa, a class of temporary visa for skilled workers. Fees rose to US4,000 per application.

Indian technology companies have complained long and loud about the cost of H1-B visas, arguing that they need to bring workers from India to the USA to grow their businesses. US businesses retort that Indian companies could hire locals with comparable skills, but prefer to import people who they pay lower wages.

………

India’s now formally complained to the WTO, which sets the clock ticking on a 60-day mediation process. If nothing can be resolved, the WTO can rule on the dispute.

If I had my druthers, I’d shut the whole program down.

It’s rife with abuse, and depresses wages in technical fields in the United States.

I Can Haz Prosecushuns?

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We have a new development in the Flint water crisis, the Michigan Governor has retained private counsel, including a prominent criminal defense attorney:

Gov. Rick Snyder has hired two outside attorneys in connection with the Flint drinking water crisis, including a criminal defense attorney retained to serve as “investigatory counsel,” a Snyder spokesman confirmed Thursday.

Eugene Driker, a civil defense attorney, and Brian Lennon, a criminal defense attorney, were each awarded a contract worth $249,000 through Dec. 31, after which those contracts can be extended, Snyder spokesman Ari Adler told the Free Press.

The contracts, which are to be paid with state funds, are just below the $250,000 threshold for contracts requiring approval from the State Administrative Board, which meets in public to approve state contracts and grants. Adler said that was by design because the governor wanted to hire the attorneys quickly in early February. The administration will be going to the State Administrative Board on March 8, seeking approval for additional spending on the contract with Lennon, he said.

They are claiming that this is about processing documents, but this sounds an awful lot like hizzoner is lining up a defense team in the event of a criminal prosecution.

This is Amazingly Evil

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The most evil thing in America this doesn’t come from the Republican Presidential campaign.

It came from immigration judge Jack Weil, who has asserted that 3 and 4 year old children are qualified to represent themselves before an immigration judge:

A senior Justice Department official is arguing that 3- and 4-year-olds can learn immigration law well enough to represent themselves in court, staking out an unconventional position in a growing debate over whether immigrant children facing deportation are entitled to taxpayer-funded attorneys.

Jack H. Weil, a longtime immigration judge who is responsible for training other judges, made the assertion in sworn testimony in a deposition in federal court in Seattle. His comments highlighted the plight of thousands of juveniles who are forced to defend themselves each year in immigration court amid a surge of children from Central America who cross the southwestern U.S. border .

“I’ve taught immigration law literally to 3-year-olds and 4-year-olds,” Weil said. “It takes a lot of time. It takes a lot of patience. They get it. It’s not the most efficient, but it can be done.”

He repeated his claim twice in the deposition, also saying, “I’ve told you I have trained 3-year-olds and 4-year-olds in immigration law,” according to a transcript. “You can do a fair hearing. It’s going to take you a lot of time.”

Legal and child psychology experts ridiculed Weil’s assertions, noting that key milestones for 3- and 4-year-olds include cooperating with other children, saying simple sentences and building towers of blocks.

“I nearly fell off my chair when I read that deposition,” said Laurence Steinberg, a psychology professor at Temple University, who is a witness for the plaintiffs in the Seattle case. “Three- and 4-year-olds do not yet have logical reasoning abilities. It’s preposterous, frankly, to think they could be taught enough about immigration law to be able to represent themselves in court.”

………

Lauren Alder Reid, a spokeswoman for the department’s Executive Office for Immigration Review (EOIR), said in a statement: “At no time has the Department indicated that 3 and 4 year olds are capable of representing themselves. Jack Weil was speaking in a personal capacity and his statements, therefore, do not necessarily represent the views of EOIR or the Department of Justice.”

………

Weil is not just any immigration official. As an assistant chief immigration judge in EOIR’s Office of the Chief Immigration Judge — which sets and oversees policies for the nation’s 58 immigration courts — he is responsible for coordinating the Justice Department’s training of immigration judges.

………

Ahilan Arulanantham, deputy legal director at the ACLU of Southern California and the attorney who questioned Weil in the deposition, said he initially thought the judge had misspoken “because what he said was so outrageous. As I asked further questions, he obviously meant what he said.”

“This is the person in charge of training immigration judges about how to treat children? And this is the witness the government puts forward to present their views as to how this is supposed to happen? That is horrifying,” said Arulanantham. He added that Weil’s assertions “are going to be a significant issue in the case.”

Unlike in felony criminal cases in federal court, children charged with violating immigration laws have no right to appointed counsel, even though the government is represented by Department of Homeland Security attorneys.

Although a network of pro bono organizations and a Justice Department program try to help children find attorneys — some paid for by the government — many children are forced to fend for themselves. According to Justice Department figures, 42 percent of the more than 20,000 unaccompanied children involved in deportation proceedings completed between July 2014 and late December had no attorney. It is unclear how often children 5 or under are forced to defend themselves, but attorneys and advocates for immigrants said it does happen.

This is a level of outright malice inherent in his statements that leaves me dumbstruck.

Weil should not be an Immigration Judge.  I’m not sure that he should be trusted as a pastry chef.

Debbie Wasserman-Schultz Really Needs to be Fired

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Even if you ignore her tenure at the DNC, which is marked by incompetence, careerism, and biased, her history in supporting the most egregious examples of abusive consumer is a reason to force her retirement.

In November, she voted to allow car dealers to discriminate against minorities:

Before Thanksgiving, Florida Congresswoman Debbie Wasserman Schultz helped push through congress a bill that would allow automobile dealers and auto finance companies to discriminate against minority and unsophisticated car buyers by charging them more in fees and interest rates.

 The Reforming CFPB Indirect Auto Financing Guidance Act that Wasserman Schultz voted for would basically let lenders and dealers ignore Consumer Financial Protection Bureau rules that bar dealers and auto finance companies from charging unsophisticated borrowers who are mostly minorities hundreds of dollars more in excessive interest and fees on car loans regardless if the car buyer has excellent credit.

 The National Automobile Dealers Association or NADA is pushing this bill because they realized that after dusting off an old marketing book from Wells Fargo, that their members could easily widen their profit margins by adding stealth fees and charging higher interest rates to unsophisticated minority consumers who are just happy they can own a new car.

 The bill is, as Brian O’Connor at the Detroit News points out, “a repulsive layering of racism wrapped in consumer rip-offs wrapped in a layer of lies and stuffed with lots and lots of campaign cash.”

 Like an old sub-prime mortgage, the auto finance company sets a minimum interest rate on car loan made through a dealer, and the dealer can then hike the interest rate to 2.5 percentage points or more with the lender kicking in back end points equaling 1% to 3% of the sale price of the car to the dealer and the salesman. This similar to what used to be called Yield Spread Premiums in lending. In other words, NADA wants and what Wasserman Schultz endorses is really ghetto loans for cars.

And now she’s tring to hamgstring the CFPB’s attempts to regulate the worst practices of the payday lending industry:

One of the benefits of America’s unusually stingy welfare system is that it allows our domestic payday-loan industry to thrive. Since the safety net is too threadbare to catch the working poor when they fall on troubled times, payday lenders are able to charge them exorbitant interest on subsistence loans. Nationally, the average interest rate on a payday loan is a stellar 390 percent.

But Elizabeth Warren’s Consumer Financial Protection Bureau is dead set on sapping all of the dynamism out of the payday-loan industry. The CFPB is about to issue new regulations on payday lenders that are aimed at preventing borrowers from falling into a vicious (or viciously profitable) cycle where they take out high-interest loans just to make the interest payments on their previous high-interest loans. Fortunately, DNC chair Debbie Wasserman Schultz is co-sponsoring a bill that would gut the CFPB’s regulations and allow payday lenders to keep profiting off the desperation of the impoverished.

According to a memo obtained by the Huffington Post, Wasserman Schultz is trying to rally congressional Democrats around a bill that would delay the CFPB’s new rules for two years and nullify those rules in any state that adopts its own payday-lending law, like the DNC chair’s own home state of Florida.

The key thing about such state laws is that they’re likely to be much kinder to the profits of payday lenders than what the CFPB is crafting. In Florida, the average interest rate on a payday loan is still 304 percent, according to Pew Charitable Trusts. What’s more, 76 percent of all payday loans in the state are turned loans — loans taken out to pay back another loan — according to Americans for Financial Reform. Thus, Florida’s law has left the highly profitable vicious cycle of payday borrowing intact.

………

With such brave legislators leading the Democratic Party, it’s difficult to understand how Bernie Sanders can get so mad at the “Establishment.”

H/t Naked Capitalism, where they also note that DWS recently signed onto a letter to the CFPB asking for an exemption for credit unions and banks smaller than $10 billion from consumer protecting regulations.

Seriously.  What is wrong with the Democratic Party?

I kind of understand how one might be tempted to make use of an evil person’s evil, but Debbie Wasserman-Schultz is to incompetent that her evil servs no one.

If she were were in a James Thurber novel, the Todal would have Gleeped her by now.*

Support Tim Canova, who primarying her.

*The 13 Clocks. Just go read it.

How Scalia’s Death Makes the World a Better Place

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Without Scalia on the court, business have lost a staunch defender of a business’s right to defraud its customers, and so they are settling with plaintiffs:

Dow Chemical Co (DOW.N) agreed to pay $835 million to settle a decade-long lawsuit on price fixing, saying it had less chance of winning its petition at the Supreme Court after the death of Justice Antonin Scalia.

 Dow, which is in the process of merging with Dupont (DD.N), said on Friday it decided to settle, without admitting any wrongdoing, citing “growing political uncertainties due to recent events within the Supreme Court.”

 The chemicals company was found liable by a federal jury in Kansas in February 2013 in the class-action lawsuit, which alleged Dow had conspired to artificially inflate polyurethane prices.

 ………

 Justice Scalia died earlier this month. The next justice could tilt the balance of the nation’s highest court, which was left with four conservatives and four liberals.

 “While Dow is settling this case, it continues to strongly believe that it was not part of any conspiracy and the judgment was fundamentally flawed as a matter of class action law,” the company said in a statement on Friday.

While we think of Scalia as a culture warrior, his role as the leading opponent of consumer protection and corporate accountability on the court has arguably hurt more people than anything else that he has done.*

*Except, of course for Bush v. Gore, but, as that opinion notes, it doesn’t count.  It never counts.

Another TTP/TTIP Talking Point Shown to be a Lie

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One of the claims made by the supporters of current and pending trade deals is that the US has never been sued through the Investor-State Dispute Settlement (ISDS) process, with the implication that such a suit will simply never happen.

Not so much:

A $15 billion lawsuit by the company behind the Keystone XL pipeline against the US government shows the serious threat to democracy posed by special privileges for investors, a new report has said. TransCanada is suing under investor-state dispute settlement (ISDS) clauses of the North American Free Trade Agreement (NAFTA) to demand damages following rejection of the controversial pipeline due to its climate impact.

Keystone illustrates how the increasingly common ISDS clauses, that are contained in the draft EU-Canada trade agreement (CETA) and the proposed EU-US deal (TTIP), can be used to undermine climate action, the report by T&E, Friends of the Earth Europe and Sierra Club stated.

Last year US president Barack Obama denied permission to build the US-stage of the Keystone XL pipeline, which would have transported crude oil from Canada’s tar sands to American refineries, as it was not in the interest of national security and would have undercut America’s climate leadership. TransCanada’s lawsuit is under chapter 11 of NAFTA, which allows multinational corporations to sue governments if they feel they have not been treated as a domestic company would have been.

TransCanada has reportedly invested $3.1 billion in the project but is seeking five times this amount in damages. It will be able to launch its case as early as May 2016. A three-judge tribunal will issue a ruling, which cannot be appealed to any national court. It can award damages but not force the US to grant permission for Keystone to be built.

The ISDS process as currently practiced is a morass of corruption and opacity.

It’s underlying philosophy is that government has no rights to protect the common good, and that any lost profits as a result is a taking.

It is a perverted and evil thing.

How Convenient

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Normally, when one says that a Congressman is in bed with lobbyist, it is meant as a metaphor.

Not this time:

Congressman Bill Shuster from Pennsylvania, the Chair of the House Transportation and Infrastructure Committee and the lawmaker behind pro-airline legislation like this 2014 bill to remove any transparency from advertised airfares — and whose top campaign contributors are United and American Airlines — has admitted today to being in a romantic relationship with a top lobbyist for the airline industry.

A lengthy report from Politico shines a light on the too-close-for-comfort relationship of Shuster and Shelley Rubino, VP for global government affairs for Airlines for America (A4A), an industry trade group whose members include the aforementioned United and American, along with other top Shuster donors like FedEx, UPS, and Atlas Air Worldwide.

And when you look at which politicians have most benefited from A4A’s contributions, Shuster is right at the top of the list, at $16,700 for the 2014 election cycle. That’s more than A4A gave to Senate Majority Leader Mitch McConnell. Not bad for a Congressman who represents a largely rural section of Pennsylvania.

“Ms. Rubino and I have a private and personal relationship, and out of respect for her and my family, that is all I will say about that,” said Rep. Shuster, who was recently divorced, in a statement to Politico.

The Congressman says his office has “a policy that deals with personal relationships that cover my staff and myself. This was created in consultation with legal counsel and goes further than is required by the law. Under that policy, Ms. Rubino doesn’t lobby my office, including myself and my staff.”

Even if the agreement prevents Rubino from lobbying Shuster directly, she is not prohibited from lobbying the dozens of other members of his powerful committee or their aides.

Legal experts say there is no apparent violation of House ethics rules going on here.

It does appear that the news of Congressman Shuster’s application of applied kinematics to Ms. Rubino has, temporarily at least, put the kibosh on privatizing air traffic control:

The House Republican leadership is shelving plans to pass an overhaul of the Federal Aviation Administration, a major blow to House Transportation Chairman Bill Shuster of Pennsylvania, according to multiple senior aides

Instead, the House will revert to a short-term extension of the FAA’s authority while “the Transportation Committee will continue their work on this transformative legislation,” a leadership aide said Thursday. The FAA must be renewed by the end of March.

………

The bill was also a priority for Airlines for America, the lobby that represents every mainline U.S. air carrier except Delta. Shuster is very close with A4A, as it is known, and dates one of its top lobbyists. POLITICO reported that earlier this week, Shuster spent time lounging in Miami with Nick Calio, A4A’s leader, and Shelley Rubino, the group’s vice president and his girlfriend. The trip came days after Calio testified before Shuster’s committee.

I gotta figure that the house leaders realized that this story was blowing up, and decided to put it on hold.

This is a good thing.

Air Traffic Control should not be placed in private hands, particularly when those hands are largely those of the 4 remaining large airlines, who are, after all, Shelly Rubino’s clients.

What an Unbelievably Transparent Cop-Out

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This is why, if Hillary Clinton wins the nomination, she is likely to get beaten by Donald Trump:

Democratic presidential candidate Hillary Clinton again refused to release transcripts of her paid speeches to big banks, telling a CNN town hall audience Tuesday night that she will only release her transcripts if her Republican opponents release theirs.

 “Earlier tonight, I asked Senator Sanders: Will you give your transcripts of speeches?” said host Chris Cuomo. “He said he doesn’t have the bank speeches. If he can find any of the speeches that he did give for money, he will gladly give the transcripts up. So: Will you agree to release these transcripts? They have become an issue.”

 Clinton replied: “Sure, if everybody does it, and that includes the Republicans.”

 She continued: “Because we know they have given a lot of speeches.” She then went on to offer a defense of her Wall Street regulatory plan.

 And she asked: “Why is there one standard for me, and not for everybody else?”

Because you are claiming that you are not in Wall Street’s pocket, and the Republicans are in Wall Street’s pockets as an article of faith?

Because you have made a specific claim that you told them to “Cut it out”?

Because you got over a half a million dollars for your speeches?

Because that answer makes you look like a whiny self-entitled jerk.

Because you are f%$#ing running for f%$#ing President of the f%$#ing United f%$#ing States?

Even if you believe Hillary Clinton’s argument that she is likely to be more successful at getting things through Congress, which means that you have to ignore the fact that Bernie did more in the House and Senate than she did, this means that she is pretty damn near hopeless as a candidate.

She is the Martha Coakley of Presidential campaigns.

Letting her get the nomination likely to make Donald Trump President.

So Not a Surprise

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Transparency International is a NGO whose mission is to name and shame corruption.

The state Delaware was just named one of the most corrupt organizations on earth:

Normally, when one of our 50 states gets singled out by an international body of some consequence, you would hope it would be good news and something that the locals would brag about. But that’s not likely to be the case with Delaware’s recognition by Transparency International this month as one of the world’s best examples of “grand corruption.” The dubious distinction comes in recognition of the state’s laissez faire corporate registration system, which critics say provides corporations, fraudsters and wealthy individuals secrecy and asset protection that puts it on a footing with notorious tax havens like the Cayman Islands.

Transparency International’s selection of the top nine “grand corruption” winners was based on both internal deliberations by the non-governmental organization, most famous for its global ranking of the world’s nations for corruption, and the votes of 170,000 people around the world. Other “winners” include Brazilian oil giant Petrobras, enmeshed in an octopus like $2 billion dollar scandal that has shaken the sitting government; as well as FIFA, former leaders of the Ukraine, Panama and Tunisia, and Lebanon’s entire political system.

In the statement announcing the “dirty nine,” Transparency International said all the nominees were central to an “abuse of high level power that benefits the few at the expense of the many, and causes serious and widespread harm to individuals and society” in a way “that often goes unpunished” yet “concerns millions of victims around the world.”

Delaware’s over the top pro-business Chancery Court, its statutory trust provisions, non-existent taxes, as well as its extremely user friendly limited-liability-corporation registration process, has drawn in more than 60 percent of Fortune 500 companies and over half of America’s publicly traded companies. Back in 2012, the New York Times reported that Delaware had more registered corporations than it had residents, roughly one million compared to fewer than 900,000 people.

………

Worth noting: Delaware’s functioning as America’s home-away-from-home sanctuary for all business, big and small, brings in $1.1 billion dollars a year in revenue to the state coffers, roughly a quarter of the state’s annual budget.

“This is Delaware’s industry,” says William Black, professor of Economics and the Law at the University of Missouri and Kentucky. “They sell corporate leaders protection from compliance from fiduciary obligations and the provisions of law like anti-money laundering statutes.”

Boosters of Delaware say that the major reason businesses choose Delaware is their business savvy Chancery Court, which has been sorting out commercial equity issues since the 1790s and today has jurisdiction over suits in which the massive universe of Delaware entities are named as defendants.

Black — who as a federal bank regulator blew the whistle on the role of Congress in the Keating 5 (McCain, Glenn et al) savings and loan scandal — says Delaware’s Chancery Court is at the heart of the problem, noting it has enforced trusts between parties in a way that “allows you to eliminate the fiduciary duty of standard of care for shareholders and eviscerates the fiduciary duty of loyalty through their court decisions.”

I am not sure how the US can engage in sanctions against one of its own states, but if Delaware were a foreign nation, sanctions would be well justified.

Baltimore’s Man From Teach for America

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With the rather hapless Stephanie Rawlings Blake not running for reelection as Mayor of Baltimore, it it is a bit of a free for all, with pretty much everyone, including her larcenous (she was convicted and served time) predecessor.

Needless to say, there is much opportunity for mischief, and it appears that the hedge funds first choice for pillaging the public school system, Teach for America, has a candidate in the race:

For those who’ve never paid much attention, Teach For America sounds like a benevolent and benign idea: recruit bright college grads, give them some teacher-training and place them in some of the nation’s neediest schools for a two-year commitment to teach kids.

The reality behind TFA’s sunny exterior is somewhat more sinister. Education policy experts today consider the nonprofit founded by Wendy Kopp in 1990 to be at the vanguard of the school privatization movement. TFA is also a media juggernaut in its own right, known for deploying a sophisticated public relations arsenal to advance an agenda focused on crushing teachers’ unions and privatizing public school systems. TFA’s funders, including the Waltons, Bill and Melinda Gates and top Fortune 500 corporations, all have plenty to gain from the commodification of public goods and the destruction of public service unions, and its 11,000 corps members provide a valuable service to that end.
………

When Mckesson announced his campaign for mayor of Baltimore this month, his name topped the list of trending topics on Twitter for several hours. Even without outlining a strategy to defeat better-known, more entrenched candidates, Mckesson received nearly $130,000 in online donations, met with President Barack Obama (who said Mckesson and associates “were better organizers than I was”), and secured his status as one of the country’s most closely watched political outsiders. Headlines appeared across national media, from Slate to the Guardian to the Washington Post, with the progressive online magazine Truthdig proclaiming Mckesson “Truthdigger of the Week.”

With his candidacy for a city whose public schools are a key target of the education reform movement, the time seems right to scrutinize Mckesson’s relationship with Teach for America more closely. His high-profile appearance at the TFA gala only days after filing his last-minute bid to enter the race was only the latest collaboration with the organization spearheading a sustained attack on teacher’s unions and traditional public schools.

………

As Mckesson rose to prominence, TFA was there to provide promotion through its powerful PR apparatus.

Mckesson had no connection to Ferguson when he first arrived on Aug. 16, 2014, according to an interview he gave Huffington Post later the same year. But it didn’t take him long to connect with another protester named Brittany Packnett, with whom he began working the same day. The fact that Packnett is executive director of TFA’s St. Louis chapter likely contributed to their immediate rapport.

At the time, Mckesson was senior director of human capital for Minneapolis Public Schools. He says he commuted to Ferguson on weekends before eventually quitting his job to protest full-time.

A Twitter search query produces a clear timeline of Mckesson’s subsequent transition from human resources manager to social justice talent, aided by promotion from Teach For America. It begins with a post to TFA’s official blog, in which Mckesson pontificates on his activities in Ferguson. TFA tweeted a link to that post on Aug. 21, 2014, at which point Mckesson would have been in the besieged midwestern town for five days.

………

I reached Mckesson by phone soon after he announced his candidacy for mayor. When I asked him how he funded all of his travel despite not having a job, he initially replied, “I don’t have an answer to that. There’s an answer in the New York Times article.”

After being informed that the Times offered no such answer, Mckesson stated, “You know, people ask me this, and I haven’t even had to answer this. I, you know, me and you don’t have a relationship. You know, you’re a reporter to me, you know—I’ve answered it many times. I will put that on my list of things and try to double back with you.” Several hours later, Mckesson texted me the link to a Tweet from last spring claiming that his excursions were funded by unnamed “family and friends.”

………

Mckesson the ruthless administrator is a difficult characterization to reconcile with Mckesson the protester, as he’s typically portrayed in print, nor does it come through in his television appearances. But commentary from some activists who have encountered him on the ground in Ferguson and Baltimore suggests that the public image he’s cultivated is a media fiction.

Baltimore activist Duane Davis, in a tweet addressed to DeRay, says, “[W]e crossed paths. On more than one occasion….you never engaged in conversation. [Y]ou were more focused on media attention.”

In a February 15 interview with Jared Ball on Real News Network, Hands Up United Coalition co-founder Taureen Russell offered a withering assessment of Mckesson’s alleged role as a protest organizer. “I never worked with DeRay. I’m really hard-pressed to find any local people who have worked with DeRay. All the local people that I know worked with DeRay…work with the establishment,” he said. “So when I hear him go on Colbert and Colbert is saying he’s organized protests in Ferguson…I don’t know an action or a protest that he was a part of.”

Russell is a founder of the organization that initiated the protests in Ferguson against the police killing of Michael Brown and the acquittal of the officer who gunned him down. He told Ball he was relieved that Mckesson had moved on to politics because “it makes my job [as a grassroots organizer] a little easier.”

Addressing Baltimore, Russell said of Mckesson: “He’s a proponent for charter schools. He’s not typically a fan of public schools. So the educational issue comes up. His policy, to be honest, most people see as a neoliberal kind of policy. And we know his policy comes from Teach For America.”
………

Mckesson’s political platform, which he has begun rolling out on the DeRay For Mayor website, seems modeled in part on those who have forced corporate education reforms under big-city mayors like Rahm Emanuel and Michael Bloomberg. Both of those mayors have justified unilateral takeovers of the public school districts in their respective cities using teacher evaluations based on standardized test scores, which have consistently been debunked as unreliable measures of academic performance.

The language in his section on education is typical of school privatization advocates, according to Dr. Julian Vasquez Heilig, a professor of education at California State University at Sacremento who has written extensively about Teach For America on his website, Cloaking Inequity.

………

The lack of transparency in the DeRay For Mayor campaign means the public will have to wait until March to identify all the contributors to its six-figure finances. But if history is any indicator, we can expect it to include many of the same financial interests that have waged assaults on public school teachers and students across the country. It remains to be seen if Teach For America and one of its most famous cadres will finally be held to account for their privatization agenda, before it begins to take hold in Baltimore.

Yes, I know that this sounds tin-foil hat, until one looks at the history of the charter school movement.

There is a lot of  money to made from sucking the marrow from pub lic education, and when there is a lot of money to be made, people work very hard to make it.

It’s basic economics, or to quote Willie Sutton, “Because that’s where the money is.”

Wall Street is hip deep in privatizing education, and leveraging politics to create ill gotten gains is their “A” game.

That Company Foreclosing You May Not Hold the Mortgage, Part MCMLXXVI

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The California Supreme court just ruled for a plaintiff who claimed that the company that foreclosed on her never held the mortgage:

The California Supreme Court on Thursday ruled unanimously in favor of a fraudulently foreclosed-upon homeowner in a case that should serve as a wake-up call to state and federal prosecutors that mortgage companies continue to use false documents to evict homeowners on a daily basis.

“A homeowner who has been foreclosed on by one with no right to do so has suffered an injurious invasion of his or her legal rights at the foreclosing entity’s hands,” the justices wrote.

………

In this case, Tsvetana Yvanova purchased a $483,000 mortgage in 2006 from New Century, a company that went bankrupt in 2007. Four years later, in December 2011, New Century somehow transferred the mortgage to a trust, from which thousands of pooled mortgages had created mortgage-backed securities. But by law, the mortgages placed in that pool had to be put in it by January 27, 2007.

The eventual trustee, Western Progressive, foreclosed on Yvanova and sold her house at auction in September 2012. Yvanova later argued that her foreclosure was illegal because a bankrupt company (New Century) could not have transferred the deed of trust, and because the trust had closed to new loans four years before the transfer was executed. Therefore, the assignment document was false, and the foreclosure void.

A state appeals court ruled that Yvanova lacked the ability to challenge the defective assignment, because she was not a direct party to the transfer of ownership. But the state Supreme Court rejected that analysis.

“We conclude, to the contrary,” the ruling states, that “an allegation that the assignment was void… will support an action for wrongful foreclosure.”

The 33-page ruling is narrow – the court did not rule on the validity of the assignment itself in the case, nor did it allow state homeowners to pre-emptively challenge threatened foreclosures on these issues. But it did establish that borrowers have a chance to receive compensation for a wrongful foreclosure if they find it to have been executed with false documents.

………

California Attorney General Kamala Harris filed an amicus brief last April supporting Yvanova’s right to challenge her foreclosure. But Harris, like every other state and federal law enforcement official in the country, has not stepped in to prevent the continuing flood of false documents submitted to courts.

The 2012 National Mortgage Settlement with the five largest mortgage companies (Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, and Ally Bank) included language committing the firms to end the production of false documents. But they continue to be used on a daily basis to evict homeowners. The foreclosure in the Yvanova case occurred in September 2012, seven months after the completion of the National Mortgage Settlement.

Despite promises from the banks and the mortgage servicers, mortgages and their progress through the financial system continues to be resemble nothing more than Captain Benjamin Willard meandering up stream in his pursuit of Colonel Kurtz in the movie Apocalypse Now.

Our own heart of darkness.