Category Archives: White Collar Crime

The Rip Off Society

The New York Times

Fausset, Richard (5/4/20)

 

“ The state of Mississippi allowed tens of millions of dollars in federal anti-poverty funds to be used in ways that did little or nothing to help the poor, with two nonprofit groups instead using the money on lobbyists, football tickets, religious concerts and fitness programs for state lawmakers, according to a scathing audit released on Monday.”

 

According to the report, released by the state auditor’s office, the money also enriched celebrities with Mississippi ties, among them Brett Favre, a former N.F.L. quarterback whose Favre Enterprises was paid $1.1 million by a nonprofit group that received the welfare funds. The payments were for speaking engagements that Mr. Favre did not attend, the auditors said.

 

Other large sums went to a family of pro wrestlers whose flamboyant patriarch, Ted DiBiase, earned national fame performing as the “Million Dollar Man.” In a news conference on Monday, Shad White, the state auditor, said it was possible that many recipients of the money did not know it had come from the federal welfare program.

 

Mr. Favre could not be reached for comment Monday. Mr. DiBiase declined to comment.

 

Mr. White called the findings “the most egregious misspending my staff have seen in their careers.” The audit found that more than $98 million from the federal Temporary Assistance for Needy Families program, or TANF, was funneled to the two Mississippi-based nonprofit groups over three years. About $94 million of that was “questioned” by state auditors, meaning the money was in all likelihood misspent or the auditors could not verify that it had been spent legally, Mr. White said.

 

The breadth of the audit — which auditors said included funds that were “misspent, converted to personal use, spent on family members and friends of staffers and grantees or wasted” — raises broad questions about the efficacy of America’s social safety net.

 

In 1996, the TANF program converted the old federal welfare system, in which cash benefits to poor families were deemed an entitlement, to a system of block grants issued to the states. The new program created work rules and time limits on aid — and, notably, gave each state much more leeway on how to spend the money. Critics say that states do not have to clearly justify that they are spending the money on helping the poor.

 

“There’s this incredible amount of flexibility,” said LaDonna Pavetti, vice president for family income support policy at the Center on Budget and Policy Priorities. “It could allow for a lot of things to happen.”

 

Mississippi Republican lawmakers concerned about the misuse of federal funds have enacted safeguards to prevent fraud by potential welfare recipients. A ThinkProgress article found that in 2016, only 167 of the 11,700 Mississippi families who applied for a TANF payment were approved.

 

For those who support anti-poverty initiatives, the unfolding scandal has left a particularly bitter taste. “It’s just, ‘How can you?’” said Oleta Garrett Fitzgerald, southern regional director for the Children’s Defense Fund.

 

Monday’s audit comes after the arrest in February of John Davis, the former director of the Mississippi Department of Human Services, the agency that distributes the federal welfare block grants. Mr. Davis is accused of taking part in a multimillion-dollar embezzlement scheme.

 

Five other people were charged in the apparent scheme, including Nancy New, a politically connected figure who was the executive director of the Mississippi Community Education Center, one of the two nonprofit groups mentioned in the report. All have pleaded not guilty.

 

According to the auditor’s report, sub-grantees who received federal money through Mr. Davis’s group told auditors that Mr. Davis often signed off verbally on the projects they intended to fund, leaving holes in any paper trail. Mr. Davis’s nephew and brother-in-law received work contracts, either through his department, Ms. New’s group, or the other nonprofit group that received money, the Family Resource Center of North Mississippi, the audit states.

 

Mr. Davis, in a statement to a congressional committee last year, said that Mississippi welfare officials were using the program “to address the needs of those we serve. We see this as a way to eliminate one of the last barriers to finding true self-sufficiency for those who seek to not be dependent on needs-based programs.”

 

The report also shed light on payments made to entities connected to the wrestling family, and the mixture of self-help and evangelizing that the welfare money was supposedly funding. Mr. DiBiase is listed on federal tax forms as the principal officer of a religious nonprofit called Heart of David Ministries. The report shows the ministry received roughly $1.9 million over three years.

 

One of his sons, Ted DiBiase Jr., also a wrestler, is listed on state records as the registered agent and officer of a company called Priceless Ventures, which offered a self-help program, “The Law of 16.” The company received more than $2 million, auditors said.

 

A Law of 16 workbook submitted to Congress features inspirational quotes from Ted DiBiase Jr. and the Rev. Dr. Martin Luther King Jr.

 

Auditors said that another son of the elder Mr. DiBiase, Brett DiBiase, also a wrestler, was paid with welfare funds to teach antidrug classes. But Mr. DiBiase, who was one of the six people indicted in February, never gave those classes, auditors said.

 

Ms. New, the head of the Mississippi Community Education Center, is a well-connected longtime educator who ran a private school in Jackson. Her work in the welfare field was feted by conservatives for helping poor people achieve self-sufficiency.

 

Mr. White’s office, in a statement, said the group was “particularly dependent” on TANF funding “and engaged in significant misspending.” From 2016 to 2019, the statement said, the group was given more than $60 million in welfare money, and raised less than $1.6 million from other sources.

 

Among the questionable spending by the nonprofit, the statement said, was the purchase of three trucks costing more than $50,000 each, which Mr. White said were used by Ms. New and two of her sons. Her lawyer could not be reached for comment.

 

The broader scandal is one of numerous major problems the state is facing, including the coronavirus pandemic and a prison system in crisis.

 

Danny Blanton, a spokesman for the human services department, said on Monday that steps were being taken to clean it up, including a planned forensic audit. Mr. White said that a state criminal investigation into the misuse of funds continues, in coordination with federal investigators.

Disaster Economics: Part 2

pitchfork

Notes from the podcast Pitchcock Economics

 

“Disaster Economics” 23 March 2020

  • This crisis brings into focus the damage of forty years of neo-liberal politics. These policies have been corrosive.
  • The effect of a crisis reveals how well the society was prepared in the first place. If, when a hurricane is coming, the society lived in houses that were already built to withstand a hurricane and have good plumbing, the effect of the hurricane is not so disastrous.  For us, it’s like we have been living in tin huts.
  • Decades of wage suppression have left people living on the edge of financial survival.
  • If you cannot survive a $400 emergency, if you don’t have the reserves to last over a $400 emergency, you are going to have to go back to work, no matter what the risks. If people go back to work, they are going to destroy the social distancing measure effect.
  • Over the past 40 years, the richest 1% got richer. The poorer got poorer.
  • By Mid-March 18% of the workforce will lose their jobs or suffer reduced hours due to the epidemic. We could see 20% unemployment.
  • Even on the Democratic side, politicians are steeped in neoliberalism.
  • As the Republicans have been saying, they want a government so small it could be drowned in a bathtub. Well, that’s what we now have, a government that is unprepared to deal with a crisis like this.  We have underfunded all the collective capacity of the government to deal with a situation like this.  We have done so to maintain a society whose entire organizational structure is designed to make rich people richer.
  • One example of this that is particularly pertinent at the moment is massive hospital consolidation which has left us without the adequate health care capacity to deal with a pandemic. While this consolidation has made private equity guys rich, it has not benefited the rest of us..
  • The U.S. has one of the lowest per capita percentages of hospital beds in the developed world. In Italy, where there is an unmitigated disaster, they have significantly more capacity in their hospital system.
  • While it’s more “efficient” when 70% – 80% of your hospital beds are filled at any one time. In a crisis, you need more beds.  When you don’t have them you are in a situation like we are in now, where we’re choosing who gets health care and who doesn’t.  We are forced to choose who will live and who will die with people who would otherwise survive.
  • Grover Norquist said that his goal (and the goal of the Republican Party) was to establish a government that was small enough to be drowned in a bathtub.
  • But, there is no alternative to collective capacity. You can’t buy own ventilators. You can’t prepare for pandemic on your own. You can’t establish your own CDC, develop your own vaccines.
  • (Note: Quote from Mario Cuomo saying that government is like family, sharing resources between those who have and those who have not).
  • China was able to respond quickly to the crisis because they have a well established collective capacity. We, on the other hand, are still struggling just to establish social distancing.
  • We are still not testing. Only way to control this pandemics is to test and isolate those infected, but we are not doing this.
  • (Note: The notion of American exceptionalism is one of the things that blocks us from taking effective action. The assumption is that we are Americans, we won’t be affected like the rest of the world, we can go back to work in the middle of a pandemic and not be hurt.)
  • McConnell and the whole gang of libertarian idiots, at least said that they believed we would all be better off on our own, without government.
  • But, the airlines asking for a $60 billion bailout. During the past decade the airlines have had high profits, but they didn’t use those profits to prepare. They did CEO raises and share buy backs.  And now they are waiting, demanding that the government bail them out.
  • The airline industry spent $800 billion on share buy backs last year. That’s one year.  They could have chosen to pay their workers more.  But, they have established no cushion for disaster.   This is an economy where  corporations assume that any upturn is going to last forever.  “They thought it was going to go on forever.”
  • Boeing is a good example of corporate irresponsibility. Their 737 max has been grounded for a year due to incompetence.  But, during that time last year Boeing was borrowing money to buy back stock.  Going into debt, borrowing money to return “value” to shareholders.  This at a time when they were facing biggest internal management crisis in their history.
  • “The shareholders should be wiped out.” They allowed an incompetent company to run itself into the ground.  But, rather than the investors absorbing the hit, the government is going to bail them out.
  • It should be part of the bill that no company gets a bail out without giving citizens preferred stock. The government could create a joint stock company, and everyone with a social security card, would be a co-equal share holder. This would be like a Sovereign Wealth Fund.  Citizens would own the stock, not the government.  Preferred stock means that the holders are given preference over all other stock holders.  They get paid first if there’s a liquidation.
  • Individuals would own stock in any company accepting a bailout.
  • Vast majority of these companies are going to thrive, and instead of old shareholders being bailed out, middle class citizens would own shares along with the old shareholders.
  • This is a fair way to recapitalize these companies.
  • When you retire, you get your share.
  • And, by doing it this way, we would have seats on the board.
  • This is one way of turning lemons into lemonade
  • The vast majority of wealth in this country is owned by a minority. We could make this the new disaster capitalism.  For the past 40 years economic and other types of disasters have been used to disempower regular people, to disenfranchise and impoverish them.  We can re-empower regular people by making new rules in this crisis.
  • We can change the rules. We can set rules for those companies that are requiring bail outs.  We could require, for example, that labor be on boards of these companies.  Other countries do this.
  • We can make rules that these bailout companies have to keep their employees employed. We are not bailing you out so you can downsizes lay off people.
  • We could require that companies have to offer $15 minimum wage, paid sick leave. If these companies need the money they will have to take the rules. Otherwise they don’t have to take the money.
  • Crises like these make vivid past policy failures – the fact that there is no national policy on paid sick leave.

We should:

Make the tax structure make more progressive, raise the taxes on capital gains and dividend, to same level as ordinary income.  I

Increase highest tax level for those making above $1 million to 50%

There is an insane amount of money available to meet the challenges of society if we just make the tax system fair.

Have a national health care system that disintermediates private insurers – from health care transactions.

Implement common sense labor reforms, national paid sick leave, raise minimum wage, increase wages for bottom 60%.

Establish expanded unemployment programs.  The length and the amount of unemployment should be increased.

 

“Capitalism will handle it.” Right.

burr, richard

Interviewed on CNN today, a Republican member of congress dismissed the widespread alarm among the medical profession about the shortage of masks and other protective equipment for use combating the corona virus.  “Capitalism,” he said “will handle it.”

But, the corona virus crisis is a textbook example of the failure of capitalism to handle the corona virus crisis and the other underlying crises that have plagued this society for decades.

Republicans are illustrating hourly exactly what is wrong with free-market capitalist solutions to problems created by free-market capitalism.

Let’s just look at one example.

PROFITEERING

  • On 20 March 2020, it was reported that four senators (Burr, Leoffler, Inhofe and Feinstein) were selling off stock after receiving briefings about how serious the impact of the corona virus was going to be.
  • Burr and Loeffler went public with statements seeking to calm the populace about the threat of the pandemic while they were busily selling stock to cushion the blow for themselves.
  • Burr’s case was especially egregious. Burr, as Chairman of the Senate Intelligence Committee, received briefings that included the country’s most classified information about the security threat of the virus.
  • And, Burr (in a recorded talk to his wealthy donors on February 27, 2020) warned of the serious implications of the outbreak at a time when he was seeking to calm the fears of the general population by telling them that the Trump administration had everything in hand. While reassuring the general public, to his wealthy donors, Burr was comparing the corona virus to the “1918 pandemic.”
  • Burr maintained that he was using only publicly available information, but he would, wouldn’t he? He also claimed that the event at which he informed party insiders was not an event for his wealthy donors.
  • NPR, however, reported that it had obtained a copy of the RSVP list for the event and that it included dozens of invited guests representing companies and organizations from North Carolina. The companies or their political committees donated more than $100,000 to Burr’s election campaign in 2015 and 2016 (NBC News)
  • The same day Burr was giving this speech, Trump was telling reporters that the corona virus was “going to disappear.” (NBC News)
  • In early February, Burr, co-wrote an op-ed for Fox News in which he said “the United States today is better prepared than ever before to face emerging public health threats, like the coronavirus.” In mid-February he started to unload the stocks.  The unloading was about a week before the markets started to plunge (NBC News 3/20/20).
  • One of the stocks Burr unloaded was shares in Wyndham Hotels and Resorts, which has now lost two-thirds of its value according to ProPublica. Burr dumped shares of another hotel chain, Extended Stay America. (NBC News 3/20/20)
  • It is Democrats who are calling for investigations, and also a Democrat (Alexandria Ocasio-Cortez) who is calling for Burr’s resignation and a law preventing legislators from owning stock.
  • Alexandria Ocasio-Cortez said on Twitter that as chairman of the Intelligence Committee, Burr “got private briefings about Coronavirus weeks ago. Burr knew how bad it would be. He told the truth to his wealthy donors, while assuring the public that we were fine. THEN he sold off $1.6 million in stock before the fall. He needs to resign.” (NBC News 3/20/20)
  • We know about these stock sell-offs only because of a law requiring the legislators to report their stock dealings. Why not a law prohibiting them from owning stock while serving?

Sources

Gregorian, Dareh (3/20/20) “Burr, other senators…” NBC News.

Just Another Coinkydink: There are so many coincidences. Don’t believe in conspiracy theory.

 

Mitch McConnell

  • In September, Mitch McConnell announced that he would block a bill  to lower prescription drug costs.
  • By the end of December McConnell had raked in more than $50,000 in contributions from political action committees and individuals tied to the pharmaceutical industry.
  • The bill that would have allow the federal government to negotiate prices for Medicare, restrict price hikes and limit out-of-picket costs.
  • McConnell called this “socialist price controls.”
  • 80% of Americans believe that it is only right to have the federal government negotiate prices with the Drug Companies.
  • Mitch McConnell says no.
  • Then,
  • “On Oct. 16, McConnell received a $2,500 check from Takeda Pharmaceuticals’ political action committee, according to McConnell’s reports to the Federal Election Commission.
  • The same campaign finance filings show that a few weeks after that, multinational pharmaceutical company Novartis’ PAC also sent $2,500 to McConnell. Then, a PAC for another pharma company, Emergent BioSolutions, kicked in $2,500.
  • By the end of December, McConnell’s campaign reported, he had received at least $30,000 more from the corporate political action committees of Bluebird Bio ($2,500), Boehringer Ingelheim ($5,000), Greenwich Biosciences ($2,500), Teva USA ($10,000), and UCB ($2,500).
  • According to filings from his Bluegrass Committee leadership PAC, Merck & Co. also contributed $5,000 to support McConnell and Sanofi donated $2,500.
  • Over that time period, McConnell’s campaign also received $5,000 from Gilead Sciences CEO Daniel O’Day, $2,000 from Amgen lobbyist Helen Rhee, and $5,600 from his former policy director and current Pharmaceutical Research and Manufacturers of America registered lobbyist Hazen Marshall
  • Amgen, Boehringer Ingelheim, Gilead Sciences, Merck, Novartis, Sanofi, Takeda, Teva, and UCB are all members of the Pharmaceutical Research and Manufacturers of America, which has said the bill would have a “devastating effect on the industry” and would cause fewer treatments to be developed.”

But, least you all be consumed by CONSPIRACY THEORIES, all claim that there is no connection between the donations to McConnell and “positions taken on specific legislation.”

Please, don’t be a fool.  Vote Republicans out of office.  We have to end this government by corporations.  And, just another plea: don’t let the words: “I don’t believe in conspiracy theories” come out of your mouth.  Do you know how much money these corporations and the right have spent to have that scripted statement come out of our mouths?

the American Independent (2/18/20)  https://americanindependent.com/mitch-mcconnell-pharmaceutical-industry-donations-prescription-drug-costs-senate-gop-republicans/

Chris Coons, D-Delaware. One of the Snakes in the Grass.

 

chris coons

In this podcast from the Majority Report, Sam Sedar talks to the Democrat challenging Chris Coons in Delaware.  Coons first came on my radar screen when he did a deal during the Kavanaugh hearings with Jeff Flake.  The deal was for an “investigation” by the FBI into the allegations of other women accusing Kavanaugh of sexual impropriety.  This “investigation” was so circumscribed that it failed to even interview some of the woman accusing Kavanaugh.  This “investigation” provided a number of people cover to vote for Kavanaugh’s nomination.

Then, after putting off watching “The Family” the Netflix documentary on Jeff Sharlett’s book “The Family” because I knew it would drive me crazy, I was amazed to see Chris Coons all over it.  Coons is an active participant in this Christofacist organization.

Coons if one of those democrats who goes on television and assumes this holier-than-thou attitude about “bipartisanship.”  This bipartisanship evidently includes already conspiring with Republicans to block progressive economic policy which might be implemented by a Bernie Sanders presidency.

Chris Coons is a snake in the grass and we must get him out of office.

https://majorityreportradio.com/2020/02/18/2-21-workers-on-arrival-black-labor-in-the-making-of-america-w-joe-william-trotter-jessica-scarane

 

Truth May Matter, but Justice Evidently Does Not: The Stone Sentencing

roger 2

I don’t know how many more days like this I can handle.

 

Roger Stone, convicted for witness tampering, lying to Congress and obstructing an official proceeding was today sentenced to 40 months in prison.  The media immediately turned the judge, who rejected an initial Justice Department recommendation that Stone get between 7 and 9 years, into a hero.

 

Ari Melber on MSNBC (who evidently considers himself the Consoler in Chief) once again had guests on to tell the American people that the judicial branch is holding steady, the last bastion of integrity and justice.  The institutions, so he claims, are holding.

 

Well, I’ve got news for Ari F…ing Melber, the institutions are not holding.  The executive branch is a criminal enterprise masquerading as a government (Sarah Kenzior), the Congress is toothless and being led by the nose by a collection of thugs who are either being bought off or extorted or who are just so craven for power they will do anything.  This same group of thugs is appointing new federal judges at breakneck speed.  Their nominees are so inept and ignorant they would never ever get near a courtroom as a judge unless there were a thoroughly corrupt administration shoveling them into lifetime positions.  The media is controlled by corporate interests and mediocre star reporters who laugh and joke their way through crisis after crisis after crisis.  The institutions are crumbling before our eyes.

 

Neither the corporate press nor the members of Congress are brave enough to see what’s happening and convey the seriousness of the situation.  The institutions are holding, they say.  Nothing to see here.  It will all be alright.

 

It reminds me of something that happened to me in Scotland years ago.  I went along with a friend to a house where the father of the family had thrown himself out a window.  Fortunately, he fell into the lovely Scottish garden below.  I was charged with sitting with the young son.  At some point I said: It’ll be alright.  The kid’s head snapped around and he stared at me with incredulity and contempt.  “Alright,” he said.  “Alright? My father just jumped out of a window.”  I nodded.  “You have a point.”  I said.

 

Sentencing for white collar (political and corporate) criminals is already an obscene joke in this country.   Take a look at Jesse Eisinger’s recent (and totally ignored) book “The Chickenshit Club.”  Eisinger details what happens these days to prosecutors who try to aggressively prosecute white collar criminals.  It’s an endeavor which is against their career interests.    Most white collar (corporate and political) criminals are not prosecuted.  The Justice Department almost always does deals with their attorneys before they come to trial.  A trial is considered time-consuming, expensive and unnecessary.  Smart prosecutors are expert negotiators and deal makers. As Eisinger points out, not only have prosecutors learned that they put their careers on the line if they fail to negotiate a deal, the institution itself has lost the expertise to prosecute cases and take them to trial.

 

Line prosecutors in the Stone case, though, did go to trial.  These prosecutors risked their careers but they proved their case and then recommended a sentence that was squarely in the middle of (already lenient) sentencing guidelines.  Their reward?  William Barr intervened, overruled them and after they resigned in protest sent his cronies into court to claim that DOJ had reconsidered the sentence recommendation and decided a lesser sentence was appropriate.

 

Then, when most of us who are sane and love the law and the concept of justice noticed, when something like 2000 former DOJ officials wrote a letter of protest, Barr sent his minions back into court to say that it had all been a misunderstanding.

 

Nobody who has a brain can mistake this series of events for anything but what it was – an attempt by Barr and Trump to see if they could simply throw caution to the wind and direct the sentencing of one of Trump’s buddies.  They tried, they got some push back, and they backed off to some extent.  But, make no mistake about it.  They will try again, and they will probably succeed.  This is (like the pardons) a softening of the ground.

 

Because of this, what was needed from the courts was a strong statement that high-level government officials cannot just dictate prosecution and sentencing.  What we got was the same “chickenshit” response from Jackson we saw previously from Mueller (who defined his investigation so narrowly it could not really be effective).  Jackson compromised, caved, backed down.

 

Earlier in the day, Seth Abramson tweeted that Trump used professionalism against people.  He predicted that Jackson would give Stone a lenient sentence in the name of being “reasonable,” or “fair” or “unbiased” or “professional.”  In doing so, she failed to send a message that the justice system is going to fight.

 

This morning, when I first heard the reporting that she was talking tough in court, I knew we were in big trouble.  In highly publicized cases like this, when judges talk tough, they sentence light.

 

“What did you expect.”  My partner said to me as I was pacing around the house indignant at the lenient sentence and the reaction of the corporate media.

 

“I know, I know” I responded “but it’s like knowing somebody’s going to die and having it actually happen.”

 

“You thought you might be wrong?”

 

“I was hoping, hoping I might be wrong.”

 

But, I was not wrong.  Of course, I was not wrong.

 

Tuesday night, Ari Melber had Melissa Murray on his show and she told a story about lecturing students.  She was talking about Nixon vs. Fitzgerald. She told her students that in immunizing the president from civil suits the courts did not make him a king.  He was still subject to other checks – the impeachment process, the free press, the effect on his legacy.  Her students, 112 men and women learning to be lawyers, laughed at her.  Well they should have.  I would have laughed at her.

 

Murray, as much as I love her, is another of those people (like Joyce Vance, Chuck Rosenberg and others) who’s identity is bound up with believing a fairy tale.  That fairy tale is that there are people with integrity who will stand up to injustice, corruption and the destruction of democracy.  The fairy tale is that these people will step up and save us. They will not.  We live in a society largely made up of conformists, of cowards, of people who are too timid and too comfortable to rock the boat.  Their careers and their inflated salaries are more important to them than their county, democracy or justice.

 

Jackson said in her decision today that the truth matters.  Maybe, but justice evidently does not.

Scheer Intelligence Podcast: The Housing Crisis, the Real Culprits (More of Them) Clinton, Bush, Obama

mnuchin

https://podcasts.apple.com/us/podcast/bipartisan-profiteers-who-demolished-american-dream/id1054586928?i=1000459492107

Review of Home Wreckers

https://www.politico.com/news/2019/10/22/kamala-harris-attorney-general-california-housing-053716