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Archive for the ‘Politicians’ Category

State Treasurer John Kennedy isn’t the only one who disputes the veracity—or the political motives—of administration claims of a $178.5 million budget surplus for the fiscal year that ended on June 30.

There are a couple of Kristy Nichols’ predecessors, former commissioners of administration and a former state budget officer who have been there, done that and got the T-shirts, who are genuinely perplexed and skeptical of the whimsical claims.

Bobby Jindal (R-Iowa, R-New Hampshire, R-Anywhere but Louisiana), aka Booby Jindini, through Commissioner of Administration Nichols, is claiming the implausible “discovery” of some $360 million, dating back to 2002 that pulls the state from the jaws of a $141 million deficit in favor of the surplus explained thus far only as Immaculate Discovery.

LouisianaVoice, meanwhile, has learned that the true “discovered” money is more like $500 and that it actually goes back as far as 1998, near the end of Gov. Mike “the Jindal Creator” Foster’s second term. But, says Kennedy, the money has already been spent, which would make the real deficit more like $200 million, instead of the mere $141 hole claimed by Kennedy.

But the devil, as they say, is in the details and the details have not been readily forthcoming from the administration. And members of the Joint Legislative Committee on the Budget (JLCB) sat mutely Friday morning as committee Chairman Rep. Jim Fannin (D/R-Jonesboro) proclaimed that the committee would not be discussing the matter until it received a report from the Legislative Auditor’s office, probably sometime in December.

What?!!!!!!!” legislators should have sputtered, shouted and otherwise protested.

Sorry, guys, you should have stood as one and protested that the time to discuss this little matter is now and the place is right here. Right here, right now. We want, no, demand an explanation, an accounting of where this money suddenly came from and how it is that the administration did not know of its existence for the past seven years.

And while we’re at it, why is it that Fannin sudden decided to exercise his power to disallow a request by Rep. James Armes (D-Leesville) that a non-member of the JLCB, Rep. Kenny Havard (R-Jackson), be allowed to sit in on the committee as his proxy. Legislative observers cannot recall a time when such a request was denied. Was Fannin afraid Havard might ask some embarrassing questions about the budgetary procedure?

Or was it that Havard was not among the members who had been called in a few at a time in advance of Friday’s meeting to be reminded by the administration that capital outlay projects in their respective districts could suddenly face a lack of funding for their implementation?

Regardless, it is quite obvious from our perspective that the fix is in.

Instead, committee members sat mutely as one as Fannin, desperate to hang onto his chairmanship and reportedly considering a run at the State Senate seat currently held by Sen. Bob Kostelka (R-Monroe), allowed that rather than demanding details and explanations from the administration, there was no urgency to the issue that could not wait until December.

Retired state budget officer Stephen Winham said that in his 21 years in that office, nothing of this magnitude ever occurred.

“The hidden piles of money is a myth,” he said. “There may have been hidden pockets of money before modern accounting and information technology, but it is impossible to hide money in the state treasury today.

“This has to be the most ridiculous thing I have ever seen happen with regard to the state’s financial condition and its reputation,” he said. “How can $500 million simply have been hiding in the state treasury? Do Ms. Nichols and others have any idea how her contention totally undermines the integrity of our financial system? It makes a mockery of our accounting system and our annual Comprehensive Financial Reports for the past 16 years, if not longer, and of our state itself. People already routinely suspected the numbers they were given. Now there is no reason to believe anything.

“I cannot overstate how horrible this is.”

Raymond Laborde and Stephanie Laborde agree.

Raymond Laborde (Stephanie Laborde’s uncle) served as commissioner of administration from 1992 to 1996 under former Gov. Edwin Edwards. Before that, he served five terms in the Louisiana House, serving as Speaker Pro Tem from 1982-1984 and also served as Chairman of the House Ways and Means Committee.

He was re-elected without opposition to a sixth term in 1991 but immediately resigned to become Commissioner of Administration during Edwards’ fourth and final term as governor. In 2003, Raymond Laborde was inducted into the Louisiana Political Museum and Hall of Fame in Winnfield.

“I haven’t seen any details yet and neither, apparently has John Kennedy,” he said.

“We had surpluses each year during my tenure, but they were legitimate surpluses. If the money was there, it should have been seen. If Kennedy’s approach is correct, there is a heck of a difference between what the administration says and what he says.”

Reminded that Kennedy has said any money found from prior years has already been spent, Raymond Laborde said, “It should have been spent.”

Stephanie Laborde served as commissioner of administration during Edwards’ third term (1984-1988) when she was Stephanie Alexander.

Her observations were supportive of Winham’s and were equally critical of the administration.

“If the surplus is real, where were those dollars when the budget was being developed 15 months or so ago?” she asked, perhaps not so rhetorically.

“That is not to say when there was not extra money,” she said. “There were times when there were more taxes collected than anticipated or when the price of oil was higher than expected but for this much in surplus funds to be lying around for years? That just didn’t happen.”

She also said the sources of such revenue would have been considered one-time money and not recurring revenue. “There is a difference of philosophy, a difference of opinion with the character of funds found in the past.

“But it still comes down to where was this money during the budget writing process, where was it, in fact, for all these years?

“If it was there, it speaks to the administration’s competence, its ability—or inability—to give us an accurate budget.

“If the money was not there as is being claimed, it speaks to something else entirely,” she said.

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Call it what you will—strong-armed politics, intimidation, extortion, blackmail or bribery—the result is the same: the fix appears to be in on the administration’s claim of a $178.5 million budget surplus developed by a “new and improved” accounting procedure.

Except the numbers don’t seem to add up to a surplus, but rather the possibility of an even greater deficit that first indicated by State Treasurer John Kennedy.

LouisianaVoice has learned that the $320 million in mystery money suddenly discovered by the administration and trumpeted by Commissioner of Administration Kristy Nichols may actually be $500 million or more. But even that may be suspect in the way it affects whether or not there is an actual surplus or in reality, a deficit.

As an indication that the administration was taking care of business, LouisianaVoice also learned that members of the Joint Legislative Committee on the Budget (JLCB) had been called in by the governor’s office in groups of two and three over the past several days for “come to Jesus” meetings in order to dissipate opposition to the administration before it can develop.

In those meetings, committee members supposedly were not-so-subtly reminded of pending capital outlay projects in their respective districts that could sudden be placed in peril should the wrong questions get asked in committee.

But hey, folks, if you think the Jindal administration is the gold standard of ethics and wouldn’t really do that, you are so very wrong. Nothing that has taken place over the past six-plus years that would invalidate a comparison to Huey and Earl Long.

The circling of the wagons even went so far as JLCB Chairman Jim Fannin’s (R-Jonesboro) refusal of an otherwise routine request by one committee member to allow a fellow House member represent him as a proxy at today’s (Friday, Oct. 17) meeting in order to ensure there would be no surprises at the meeting.

Committee chairmen must approve a request from any committee member to have a non-member of that committee sit in as his or her proxy.

Even the meeting itself appeared to be a sham. When the committee convened at 9 a.m. Friday, Fannin announced he would not take up the issue over the budget surplus/deficit until the legislative auditor could provide a report on the financial picture.

It is extremely rare for a committee chairman to deny a request for a proxy, but when Rep. James Armes (D-Leesville) asked that Rep. Kenny Havard (R-Jackson) be allowed to sit as his proxy, Fannin refused. Efforts by LouisianaVoice to reach Havard for a comment were unsuccessful.

But if you watched any of the proceedings of the House Appropriations Committee on Sept. 25 which met to hear testimony about the proposed changes to the state’s group benefits plan, it’s easy to understand Fannin’s actions.

Fannin also chairs the Appropriations Committee and during that Sept. 25 meeting, Havard asked some pretty tough questions of Nichols and OGB CEO Susan West.

Havard probably represents more state employees as constituents in East and West Feliciana parishes than any other representative outside Baton Rouge because of the presence of the Louisiana State Penitentiary at Angola and the Louisiana War Veterans Home and East Louisiana State Hospital in Jackson. So naturally, he would be concerned about the hardship the OGB changes are going to impose on state employees and retirees.

Accordingly, it was only natural that Fannin would not want any surprises during the committee hearing which turned out to be no hearing at all so Armes’ otherwise routine proxy request was rejected out of hand.

Fannin, who several months ago, switched from Democrat to Republican and is firmly ensconced in the Jindal camp (though it’s difficult to understand why anyone would throw his lot in with this governor whose popularity in Louisiana rivals only that of President Obama—other than his apparent desperation to hang onto his chairmanship), so it’s understandable, in a quirky sort of way, that he would do the administration’s bidding.

In fact, LouisianaVoice has also learned that Fannin has a report from the administration that contains a year-by-year breakdown as to where the mystery dollars came from to make up the surprise surplus.

That report is not public and Fannin is supposedly the only legislator who is privy to its existence and its contents.

The numbers, we are told, go all the way back to 1998, during the latter part of the Mike Foster administration, instead of to 2002 as originally reported, and the money consists of self-generated funds the Foster, Blanco and Jindal administrations never recognized for appropriations.

So, when Jindal faced a real deficit at the end of the fiscal year just ended on June 30, he scraped the bottom of the barrel, figurative and literally, to come up with the funds and voila! The amount was more in the neighborhood of $500 million instead of the $360 first reported.

The problem is, however, the $500 million may have already been spent and if so, it would create an actual deficit of some $360 million instead of the $141 million initially claimed by Kennedy. And it certainly would not create a surplus.

And taking the scenario to its logical conclusion in this Alice in Wonderland world of Louisiana politics, State Treasurer John Kennedy, the one person who should be the one kept abreast of all budgetary developments, the one person responsible for accounting for every dollar spent, is being kept in the dark along with other legislators who would like to have some answers.

Commissioner of Administration Kristy Nichols, instead of sitting at her desk and sniping at Kennedy for questioning her numbers, could just as easily pick up the phone and call Kennedy to invite him over, or even offer to walk across Third Street, take the elevator up to the third floor of the State Capitol, and sit down with the Treasurer and explain how the administration arrived at its numbers.

A truly transparent, ethical and accountable administration owes the citizens of this state that much at a minimum.

But don’t hold your breath.

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Editor’s note: State Rep. John Bel Edwards (D-Amite) sparred verbally with Commissioner of Administration Kristy Nichols and Office of Group Benefits (OGB) CEO Susan West at the Sept. 25 hearing by the House Appropriations Committee on proposed coverage plans for OGB members. Edwards, the minority leader of the House and Chairman of the House Democratic Caucus, is an announced candidate for governor in 2015.  He wrote the following piece in an effort to display his frustration over his inability to obtain definitive answers or public documents and records from the administration—and to explain how the administration, as a matter of routine, conceals information from legislators.

By State Rep. John Bel Edwards

At a committee meeting convened last month to address the fiscal “emergency,” at the Office of Group Benefits, Commissioner of Administration Kristy Nichols testified that the premium reductions in 2013 and 2014 that drained OGB’s $500 million fund balance were fiscally sound.

At that hearing, I repeatedly asked if OGB’s actuary – Buck Consultants – had recommended those premium reductions and if they recommended reducing the fund balance. Nichols and an OGB CEO Susan West repeatedly refused to answer. I, along with other legislators at the hearing, asked for copies of Buck Consultants’ recommendations.

Weeks later and I’m still waiting for those reports.

What I do have is an email from Buck Consultants to the OGB CEO that clearly states: “We did not recommend a decrease of 7% effective August 1, 2012, or an additional decrease of 1.77% effective August 1, 2013. Further, we were not asked to provide any recommended rate adjustments for any fiscal years beyond what we provided for Fiscal Year 2012/2013.”

Of course the actuary did not recommend cutting premiums by almost 9 % while health care costs are rising by 6% a year. The consultants knew that would be irresponsible and cause claims payments to greatly exceed premium revenue and drain OGB’s fund balance.

Clearly, the OGB premium reductions that ran the fund balance into the ditch were not actuarially driven. Those premium reductions were driven by the Jindal administration’s desire to spend OGB’s fund balance elsewhere in the budget. When OGB reduced premiums, 75% of the savings went to the state and the Jindal administration was able to spend that money wherever they wanted.

Now that the fund balance is drained and still hemorrhaging at the rate of $16 million a month, the Jindal administration called this self-inflicted wound an “emergency” and proposed raising costs to OGB members – those working and those retired – by $189 million. These higher out-of-pocket expenses will not be shared by the state.

Our state workers, school teachers, support workers, and university staff and faculty and retirees cannot afford this. They do not deserve this. About 25,000 of our retired OGB members are not eligible for Medicare, and many active OGB members bring home as little as $700 per month.

I asked the Attorney General’s Office for an opinion about the legality of Jindal’s effort to unilaterally impose new plans with the exorbitant out of pocket cost increases on workers and retirees. The attorney general’s opinion shows Jindal failed to comply with the Administrative Procedure Act.

This entire debacle has thankfully been slowed down to ensure public notice, public input and legislative oversight as legally required. It is critically important that the administration act in good faith and genuinely consider the testimony and the plight of affected OGB members as well as its own culpability in needlessly causing the “emergency.”

The Jindal administration must honestly answer subsequent inquiries from the public and from legislators and seek ways to lessen the impact to OGB members. The administration must ditch the ill-conceived plan changes and start from scratch with a willingness to increase premiums reasonably and share in the costs of restoring the soundness of OGB.

The recently discovered $178.5M surplus provides the means to both shore up the fund balance and reduce the cost increases on OGB members. The illegal cost increase forced on OGB members in August must be refunded without forcing members to formally request or sue for the refund.

The legislature must finally assert itself as an independent and equal branch of government to provide exactly the kind of check and balance on the Jindal administration provided by the Louisiana Constitution and demanded by the people of Louisiana. We now have this opportunity as there will be legislative oversight hearings on both the emergency and ordinary rules. We must rise to the occasion.

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When Jeff Skilling took over as President and Chief Operating Officer of Enron in June of 1990, he did so only after insisting that the company convert from conventional accounting principles to a method preferred by his former employer, McKinsey & Co.

In 2001, hedge fund manager Richard Grubman said to Skilling, “You are the only financial institution that can’t produce a balance sheet or cash flow statement with their earnings.” By October of that same year, Enron had begun its death spiral in a historic collapse that would pull the giant accounting firm Arthur Andersen down with it.

The key to Enron’s failure was the mark-to-market accounting method, where anticipated revenues and profits are entered into the company’s books before they are ever received. The system allowed Enron to conceal losses and to inflate profits for nearly 11 years before its house of cards came crashing down.

On Thursday (Oct. 8), nearly seven years into his administration, Gov. Bobby Jindal (R-Iowa, R-New Hampshire, R-Anywhere but Louisiana) rolled out a new accounting formula with an alarmingly familiar ring to it.

Jindal, like Skilling, is a McKinsey alumnus.

Commissioner of Administration/Surrogate Gov. Kristy Kreme Nichols announced that the state, instead of having a deficit of $141 million as claimed by State Treasurer John Kennedy, will suddenly have a surplus of $178.5 million, a gaping difference of $319.5 million.

Nichols did not reveal how the $178.5 million was arrived at but Kennedy said the administration is switching to a cash balance form of accounting instead of the modified accrual basis employed by state governments. “If we use the methodology we have always used,” he said, “we don’t have a surplus. We have a $141 million deficit.

“The commissioner says the calculation has been inaccurate for years and it needs to be changed,” he said. “They have to explain why we have been doing it wrong all these years and why the Revenue Estimating Conference is doing it wrong.”

Nichols, an appointed state employee, was less than deferential to Kennedy, a statewide elected official when she sniped back at Kennedy, saying, “I’m surprised the treasurer is not reporting this.” She added that Kennedy is obligated to report available revenue. “He should probably do a review of the accounts to ensure there are no more outstanding revenues he is not reporting.”

Kennedy and Jindal have been at odds for years over fiscal policy, so it was no surprise to see Kristy Kreme, with her super-sized ego, get a little mouthy with the state treasurer. After all, she bolted from a House Appropriations Committee hearing on the Office of Group Benefits on Sept. 25 to take her daughter to a One Direction boy band concert at the New Orleans Smoothie King Arena where she watched from the comfort of Jindal’s executive suite.

Just as Enron misrepresented its finances for years, it now appears that the Jindal administration may be attempting the same tactic, prompting one political observer to say, “If cooking the books isn’t malfeasance, what is? The bond rating agencies and others rely on the CAFR (Comprehensive Annual Financial Report), where the year-end position is officially reported in decision making and they are not going to like this.”

Another Jindal critic asked rhetorically, “What happens when a state ends a fiscal year with a deficit of $141 million but the administration of the day pretends that there is actually a surplus of $178 million? I don’t think there is any precedent for such a thing ever happening anywhere. This is starting to sound like Enron!”

Odd as it may seem to make that comparison, the similarities between Jindal and Enron run much deeper than the latest developments surrounding the new accounting methods. Here are some points about Enron lifted from The Smartest Guys in the Room: the Amazing Rise and Scandalous Fall of Enron (Penguin Books, 2003), a probing book by Bethany McLean and Peter Elkind about the failed energy company: http://www.goodreads.com/book/show/113576.The_Smartest_Guys_in_the_Room

  • The Deutsche Bank once described Enron as “the industry standard for excellence.” Jindal boasted of instituting the “gold standard for ethics” in Louisiana.
  • When the chief accounting officer of Enron Wholesale expressed concern about wholesale electricity sales, she was reassigned. When another employee questioned Skilling on his claim that Enron was going to make $500 million, she was laid off that same day. When state employees or legislators complain or do not vote with the administration, they are teagued.
  • Pollster Frank Luntz said instability and chaos were defining features at Enron and the six company reorganizations in just 18 months were a “running joke” and that Enron’s lack of discipline was “destructive and demoralizing.” Jindal’s penchant for reorganization and reform has created a similar atmosphere within state government.
  • Enron sold assets and booked the one-time proceeds as recurring earnings. Nearly 40 percent of Enron’s 1998 and 1999 earnings came from sales of assets rather than from ongoing operations. Jindal over the past several years has sold state property, buildings, and entire agencies and turned state hospitals over to private entities.
  • Both Skilling and Jindal are alumni of the blue-chip consulting firm, McKinsey & Co., which wrote the Enron business plan and as far back as 1986, advised AT&T there was no future in the market for cell phones. McKinsey also was an advocate of mark-to-market accounting practices.
  • Both Skilling and Jindal thought—and think—like a consultant. Skilling felt that a business should be able to declare profits at the moment of the signing of an agreement that would earn those profits. But just because traders were reporting earnings under mark-to-market accounting, it did not necessarily follow that the money was in hand. See this link: http://theadvocate.com/news/10494146-123/jindal-budget-surplus-questioned
  • A Wall Street banker said of Skilling: “He’s either compulsively lying or he’s refusing to recognize the truth.” Another banker worried that Enron executives were not carrying out their fiduciary duties and questioned “sweetheart deals” negotiated by them.
  • Skilling believed that social policies designed to temper the markets were “wrongheaded” and counterproductive. “Wrongheaded” has been a favorite term invoked by Jindal whenever he has suffered setbacks at the hands of the courts on issues ranging from education reform to a revamp of state retirement plans.
  • When asked a question he didn’t like, Skilling, in a tactic learned from his days at McKinsey, responded by dumping “a ton of data on you.” Jindal’s one outstanding skill is to spew statistics and factoids in rapid-fire fashion that can overwhelm and confuse challengers.
  • Skilling, like Jindal, was considered brilliant and extremely articulate. He, like Jindal, always seemed to have the right answer and whenever he was asked about problems it was always someone else’s fault.
  • Skilling displayed no remorse for his own actions, nor did he have any sense that he hired the wrong people or emphasized the wrong values. (See above.)
  • Enron founder Ken Lay saw himself as a business visionary, much as Jindal portrays himself as a policy guru. Lay traveled the world to offer his wisdom on everything from energy deregulation to corporate ethics to the future of business. (Ditto)
  • At the end, Enron employees’ accounts were frozen even as top executives were walking away with fortunes.
  • Efforts by Enron and Arthur Andersen to avoid reporting $500 million in losses “only pushed the problem further off and added another tangle to the fragile web of accounting deceptions.” Do we really need to elaborate here?
  • Enron executives accepted the argument that wealth and power demanded no sense of broader responsibility which in turn led them to embrace the notion that ethical behavior requires nothing more than avoiding the explicitly illegal, that refusing to see the bad things happening in front of you makes you innocent and that telling the truth is the same thing as making sure no one can prove you lied.
  • Enron’s mission was nothing more than a cover story for massive fraud, much as Jindal’s administration is being exposed almost daily as a sham. The story of Enron, like that of Jindal, was a story of human weakness, of hubris and greed and rampant self-delusion, of ambition run amok, of a business model that didn’t work and of smart people who believed their next gamble would cover their last disaster—and most of all, of people who couldn’t—or wouldn’t—admit they were wrong.
  • Enron once aspired to be “the world’s greatest company” but rather became a symbol for all that was wrong with corporate America, exposing Lay’s flaws as a businessman that could no longer be hidden behind Enron’s impressive but misleading façade and Skilling’s glib rhetoric.
  • Despite Enron’s efforts to camouflage the truth, there was more than enough in the public record to raise the hackles of any self-respecting analyst (read: reporter). Analysts (read: reporters) are supposed to dive into a company’s financial records, examine footnotes and even elbow their way past accounting obfuscations. Their job, in short, is to analyze (re: report).

In the end, of course, Enron crumpled under the weight of its own corruption and mismanagement, destroying thousands of lives and even taking down one of the big five accounting firms in the process.

The Jindal administration with each passing day, with every revelation of some new scandal (the Edmonson Amendment, CNSI, the Murphy Painter fiasco, et al) and with each new flawed policy (the Office of Group Benefits debacle), is looking more and more like a train wreck that will adversely affect Louisiana citizens for years to come.

Just call it Enron East.

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While we have had no trouble unearthing double standards, misrepresentations, distortions and outright lies in our coverage of the Jindal administration, political campaigns often take the practice to a new level.

The mind-numbing campaign for the U.S. Senate comes to mind. At this point in the campaign, voters just wish Mary Landrieu and Bill Cassidy would both shut up and leave us alone. But those TV ads from both camps keep pounding away at us, each accusing the other of distortions, lies, misrepresentations, pro-this, and anti-that.

The comic strip Non Sequitur would well have been referencing either candidate with this submission:

nq141010[1]

Or it could have been alluding to the recently ramped-up campaign of 6th Congressional District candidate Garrett Graves, former chairman of the Louisiana Coastal Protection and Restoration Authority (CPRA) and director of the Governor’s Office of Coastal Activities, who only recently kicked off his media blitz.

Of course most observers are accustomed to grandiose promises.

For at least the past 20 years or so, the challenger in the Baton Rouge mayor-president’s election without fail has promised to improve public education in East Baton Rouge Parish—never mind the fact that the mayor’s office has absolutely nothing to do with the East Baton Rouge Parish School Board. Zero. Zilch. They are two entirely separate political entities.

And we’re all used to congressional candidates saying they are going to fight waste, work to improve infrastructure, and vote to defend the Constitution blah, blah, blah.

But Graves has taken the rhetoric to a new extreme. He has one TV spot running on the Baton Rouge in which he says not that he will “work to” or “vote to,” but that he “will” repeal Obamacare, he “will” cut spending, he “will” stop illegal immigration, and he “will” eliminate terrorism.

Those are pretty big promises, folks, and unless he’s Clark Kent in disguise, we just can’t see how one freshman tea party congressman can impose his will on 434 other members of the House and 100 senators, not all of whom are tea partiers.

And while we are on the subject of political rhetoric, there has been much said about U.S. Sen. Mary Landrieu’s ownership of an $800,000 home in Washington, D.C. while not owning a home outright in Louisiana (though she is part owner, along with her siblings, of her parents’ home in New Orleans).

But not a peep has been said about Graves’ 2005 purchase of a home at 210 11th Street SE in Washington, also appraised at more than $800,000. Nothing on his federal financial disclosure statement for Jan. 1, 2013 through July 15, 2014, indicates ownership of a home in Louisiana—not even part ownership of his father’s home—although he does list ownership of property in Gulf Shores, Alabama. And Graves has never been elected to any office, let alone one that demands his presence in Washington.

He apparently purchased the home during his tenure in Washington. He worked as a policy adviser to former U.S. Sen. John Breaux and U.S. Congressman Billy Tauzin and worked for the Senate Commerce, Science and Transportation Committee and the House Energy and Commerce Committee. He also served as staff director of the U.S. Senate Subcommittee on Climate Change and Impacts. http://www.epa.gov/gcertf/bios/graves.html

Apparently he liked Washington well enough to plan on returning because he did not sell the home when he grabbed onto Gov. Bobby Jindal’s coattails in 2008 to head up CPRA at $135,000 per year through 2012. His salary was bumped up to $147,300 in 2013, according to his financial disclosure records.

Even though he left the state’s employ on February 28, his financial statement indicates he still received $52,961 in salary from the state this year and another $31,346 from Evans-Graves Engineers, the firm owned by his father, John Graves.

Graves flew pretty much under the radar until he became a high-profile opponent of the lawsuit filed by the Southeast Louisiana Flood Protection Authority-East against 97 oil and gas companies for damage to the state’s wetlands while at the same time carping at the U.S. Coast Guard for its failure to force BP to be more responsive to the Deepwater Horizon oil disaster. http://theadvocate.com/home/8290180-125/graves-to-step-down-from

His opposition to the lawsuit seeking to hold big oil responsible for the damage it has done to the state’s coastline for the past century notwithstanding, the real story of Garrett Graves is the awarding of more than $130 million in government contracts to his father’s engineering firm while he was head of CPRA, which oversees such contracts.

That figure represented an 1800 percent increase over contracts awarded to Evans-Graves for all years prior to Garrett Graves’ tenure at CPRA.

Some might call this old news, given the fact that Jeremy Alford first reported on this as far back as 2008. http://www.houmatoday.com/article/20080203/news/659908125

But the practice went unabated for years after his story and even more curious, when an ethics opinion was sought as to the propriety of the contracts, it was not the Louisiana Board of Ethics that was consulted, but attorney Jimmy Faircloth.

Faircloth, who was Jindal’s first executive counsel before running unsuccessfully for the Louisiana Supreme Court, has done extensive legal work for the administration, collecting fees in excess of $1 million defending losing positions that Jindal has championed.

But his issuing an ethics opinion in the case of Evans-Graves Engineering appears to have been a conflict in itself: Faircloth at the time was the legal counsel for Evans-Graves.

“As we discussed, Governor Jindal has asked that we disclose and commit to avoiding even the appearance of conflict,” Faircloth said in his opinion. “Thus, as we agreed, out of an abundance of caution, the appropriate solution is that your father’s company not pursue an interest in or receive any state contract that involves coastal restoration, levees or hurricane protection while you serve in the administration. This would explicitly include such contracts overseen by DOTD (Department of Transportation and Development) and DNR (Department of Natural Resources).”

Even though Garrett Graves in February of 2008 agreed to cease pursuing projects that could cause a conflict of interest, Evans-Graves kept receiving lucrative contracts from the U.S. Army Corps of Engineers, CPRA’s primary partner. And while Garrett Graves did not actually sign the contracts, his agency did set priorities for the state on corps-related work.

“I said from the beginning there was a potential conflict of interest, and apparently that fell on deaf ears,” said John Graves when the issue first arose more than six years ago. Jindal’s office professed to know nothing of the potential conflict.

And even though Garrett Graves was working for the state and his father’s company was receiving millions of dollars in contracts with the Corps of Engineers through Garrett Graves’ agency, Garrett Graves was given a Toyota Tundra truck by the elder graves in 2009, a clear violation of state ethics rules against state employees accepting gifts from vendors.

And while Evans-Graves was receiving millions of dollars in CPRA-approved contracts with the Corps of Engineers, Evans-Graves was subcontracting nearly $66.5 million in work to 18 construction and contract companies, compared to only $3.5 million prior to Garrett Graves’ appointment. Those 18 subcontractors have combined to contribute more than $250,000 to Graves’ congressional campaign.

Additionally, 11 of those 18 companies, along with corporate officers and family members, have combined to contribute nearly $316,000 to various political campaigns of Jindal.

Here is the list of subcontractors and the amounts they and/or their corporate officers and families contributed to Jindal:

  • Daybrook Fisheries—$1,000;
  • Industrial Specialty Contractors—$29,500;
  • Bollinger Shipyards—$65,850;
  • Major Equipment and Remediation—$50,000;
  • Arkel Constructors—$4,500;
  • Delta Launch Services—$11,000;
  • Cajun Constructors—$52,000;
  • Coastal Environments—$30,500;
  • Performance Contractors—$41,500;
  • H. Fenstermaker & Associates—$20,500;

JNB Operating—$5,000.

And now Garrett Graves just wants to move back into his $800,000 home in D.C.

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Peter Schroeder, a writer for The Hill, has drunk the Kool-Aid.

The Hill is a subsidiary of News Communications, Inc. that covers the U.S. Congress with an emphasis on business, lobbying and political campaigns and is one of the first web pages accessed each day by those wishing to stay abreast of events in the nation’s capital.

But Sunday’s story by Schroeder has to leave readers in Louisiana scratching their heads and wondering about his credentials or his sanity—or both.

His story, The New and Improved Jindal, touts the prospects of Gov. Bobby Jindal (R-Iowa, R-New Hampshire, R-Anywhere but Louisiana) as a legitimate challenger for the 2016 Republican presidential nomination. http://thehill.com/homenews/campaign/219759-the-new-and-improved-bobby-jindal

Perhaps unwittingly, however, the headline to his story may have provided an insight to what’s in store for the Boy Blunder.

By invoking the term “new and improved,” we immediately are left with the idea that he is being packaged and sold like so much washing powder or toothpaste—or perhaps more appropriately, toilet paper.

To bolster his evaluation of Jindal as a real comer, Schroeder relied on people like Tony Perkins, founder of the Louisiana Family Forum, former legislator, failed U.S. Senate candidate and president of the Family Research Council and Jindal’s former chief of staff, current political adviser Timmy Teepell and Baton Rouge political pollster Bernie Pinsonat.

The fact that Jindal and Perkins are in lock step on family values issues does not exactly make Perkins an impartial observer and Teepell certainly has much to gain if he and his consulting company, OnMessage, can ride Jindal’s coattails into the White House (or as Sarah Palin would say, 1400 Pennsylvania Avenue).

Schroeder also hangs his analysis on a single speech by Jindal last week when he cracked a couple of jokes that actually got chuckles from his conservative audience at the Values Voters Summit in Washington. “Jindal showed a dynamic style as he paced across the state,” he wrote.

What!!? Really? You’re staking your writing career on that thin bit of evidence?

Well, not exactly. There is this from Teepell:

“Most people’s impression of his speaking skills go back to his State of the Union response (of 2009), which was just a terrible speech.

“You’re having to do it (speaking) all the time, and on a number of different issues every single day, and so he just gets better and better.”

So, there you have it. By Teepell’s own admission, Jindal is making these speeches “every single day,” which leaves damned little time for him to devote his attention to the mundane duties of governor—a job to which he was re-elected by 67 percent of 20 percent of the state’s voters, a veritable mandate.

If he’s such a rising star, perhaps Schroeder can explain to us how Jindal managed to finish behind “nobody” in a recent straw poll. Maybe he can tell us why he remains a bottom feeder in the polls, along with Palin who can’t seem to get the address of the White House right.

Jindal’s supporters argue that his low numbers can be attributed to the fact that voters in the heartland don’t know him, not because they don’t like him.

News flash: we know him in Louisiana and his numbers have never been lower here and it’s precisely because we do know him.

Louisiana pollster Bernie Pinsonat said Jindal simply needs an issue that will give him national exposure.

We have several such issues:

  • He was for Common Core before he decided it would be politically expedient to oppose it.
  • He regularly hopped all over north Louisiana handing out stimulus money at Protestant churches and “awarding” military veterans’ pins during his first term but has not visited a single church of any stripe nor has he delivered any military pins since his re-election where only 20 percent of registered voters even bothered to vote.
  • He has bankrupted the state with tax giveaways to corporations while attempting to rip state employees’ pensions from them with a patently unconstitutional legislative bill.
  • He is now attempting to do the same thing with state worker health benefits while at the same time depleting the fund balance of the Office of Group Benefits.
  • He has handed out hundreds of millions of dollars in questionable state contracts to consultants and favored firms.
  • His hand-picked Secretary of Health and Hospitals has been indicted on nine counts of perjury in connection with one of those contracts.
  • He has given away the state hospital system to private entities though the move has yet to be approved by the Center for Medicare and Medicaid Services (CMS).
  • He has repeatedly cut the budgets of higher education in Louisiana.
  • He has consistently promoted school vouchers and charter schools at the expense of low-income students who are left in the underfunded public schools.
  • He attempted to give the State Police Superintendent a $55,000 a year retirement raise while ignoring rank and file state police and state employees.
  • He has broken his promise not to use one-time money for recurring expenses—not once, but six times.
  • He has enveloped the governor’s office in secrecy.
  • He has cloaked himself in a mantle of self-righteousness that is betrayed by his callous lack of concern for the people of Louisiana.

“People are going to have plenty of time to get a better impression of Gov. Jindal,” Teepell said. “That (2009) speech won’t be the only thing they remember about him.”

The business of remaking or re-packaging of the new and improved Jindal reminds of the wisdom of Mark Twain who said, “If you tell the truth, you don’t have to remember anything.”

As far as we’re concerned, Jindal is going to have plenty to try to remember in his quest for the brass ring that is the GOP nomination.

Or, as we prefer to think, if you’re genuine—if you’re the real deal—there’s really no need for a makeover.

And if ever a person needed a makeover, it’s Jindal.

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Between U.S. Mary Landrieu and U.S. Rep. Bill Cassidy, the man who wants to replace her, incumbents in five of the state’s six November congressional races have received more than $21.5 million in campaign contributions, of which more than $6.5 million has come from political action committees, or PACs, according to figures provided by the Federal Elections Commission.

The number of corporate dollars that have flowed into the races is somewhat deceptive, however, because money given by corporate officers and board members are listed as individual contributions and is not counted with the PAC money.

LouisianaVoice has always maintained that political clout no longer belongs to the citizenry, but to special interest groups like corporations and corporate officers who pour money into political campaigns, in the process drowning out the voice of individual voters.

In two of the congressional races, PAC contributions to incumbents actually outpace those of individuals—Reps. Charles Boustany of the 3rd District ($984,000 to $769,000) and Cedric Richmond of the 2nd District ($723,000 to $278,000).

Even more alarming, each candidate we’ve reported on thus far has accepted money from PACs connected to corporations that have serious legal and ethical issues. Those issues include, among others, insider trading, influence peddling, environmental pollution, and fraud.

It might be of no real consequence if these were isolated occurrences, but they’re not. The same companies keep turning up in report after report is what has become a dangerous trend of corporate control of the entire Congress as the welfare of the American people has been all but crowded out of the picture and excluded from the national dialog.

Following is a partial list of some of Richmond’s PAC contributions:

ALTRIA GROUP PAC: $1,500

  • Altria Group, Inc. (previously named Philip Morris Companies Inc.) The name change alternative offers the possibility of masking the negatives associated with the tobacco business,” thus enabling the company to improve its image and raise its profile without sacrificing tobacco profits,
  • According to the Center for Public Integrity, Altria spent around $101 million on lobbying the U.S. government between 1998 and 2004, making it the second most active organization in the nation.
  • Altria also funded The Advancement of Sound Science Coalition which lobbied against the scientific consensus on climate change.
  • Daniel Smith, representing Altria, sits on the Private Enterprise Board of the American Legislative Exchange Council (ALEC).

ARCHER DANIELS MIDLAND CO.: $1,000

  • On December 20, 2013 the SEC announced that it had charged ADM for failing to prevent illicit payments (bribes) made by its foreign subsidiaries to Ukrainian government officials in violation of federal statutes. ADM agreed to pay more than $36 million to settle the SEC’s charges.
  • In 1993, the company was the subject of a lysine price-fixing investigation. Senior ADM executives were indicted on criminal charges. Three of ADM’s top officials, including vice chairman Michael Andreas were eventually sentenced to federal prison in 1999. Moreover, in 1997, the company was fined $100 million, the largest antitrust fine in U.S. history at the time.
  • One hundred percent or more of overcharges resulting from price fixing are passed through to consumers.
  • The company has been the subject of several major federal lawsuits related to air pollution. In 2001, it agreed to pay a $1.46 million fine for violating federal and Illinois clean-air regulations at its Decatur feed plant and to spend $1.6 million to reduce air pollution there.
  • The company paid $4.5 million in penalties and more than $6 million to support environmental projects. In addition, ADM agreed to eliminate more than 60,000 tons of emissions of carbon monoxide, particulate matter, organic volatile chemicals and other pollutants from 42 plants in 17 states at a cost of hundreds of millions of dollars.

AT&T PAC: $6,000

  • AT&T is the second-largest donor to United States political campaigns, and the top American corporate donor, having contributed more than US$47.7 million since 1990, 56% and 44% of which went to Republican and Democratic recipients, respectively. Also, during the period of 1998 to 2010, the company expended US$130 million on lobbying in the United States. A key political issue for AT&T has been the question of which businesses win the right to profit by providing broadband internet access in the United States.
  • Bobby Jindal rejected an $80 million federal grant for the expansion of broadband internet service in rural Louisiana even as AT&T was contributing $250,000 to the Foundation run by Jindal’s wife Supriya after Gov. Jindal signed SB- 807 into law (Act 433) in 2008 over the objections of the Louisiana Municipal and the State Police Jury associations. The bill, the Consumer Choice for Television Act removed from local and parish governments their authority and responsibility to negotiate cable franchise agreements with companies that relied largely on locally-owned public infrastructure such as utility poles. The bill also allows AT&T to sell cable television service without the necessity of obtaining local franchises.
  • Bill Leahy, representing AT&T, sits on the Private Enterprise Board of the American Legislative Exchange Council (ALEC).

CHESAPEAKE ENERGY CORP. PAC: $2,000

  • Former Chief Executive Aubrey McClendon borrowed $1.1 billion against his stake in thousands of company wells. The loans, undisclosed to shareholders, were used to fund McClendon’s operating costs for the Founders Well Participation Program, which offered him a chance to invest in a 2.5 percent interest in every well the company drills. McClendon in turn used the 2.5 percent stakes as collateral on those same loans. Analysts, academics and attorneys who reviewed the loan documents said the structure raised the potential for conflicts of interest and raised questions on the corporate governance and business ethics of Chesapeake Energy’s senior management. The company disagreed that this is a conflict of interest or a violation of business ethics.
  • Current CEO Doug Lawler was responsible for laying off over 800 employees—roughly 16 percent of the workforce—within a few months of taking the position. Lawler released waves of employees over the course of a few months. All of the layoffs culminated in October of 2013 when Lawler released a staggering 800 employees nationwide, 640 of whom were from the corporate office in Oklahoma City.
  • In June of 2014, the state of Michigan filed felony fraud and racketeering charges against Chesapeake Energy, alleging that the company canceled hundreds of land leases on false pretenses after it sought to obtain oil and gas rights. Chesapeake Energy disputed all charges.

CHEVRON EMPLOYEES PAC: $4,500

  • In 2003 a class action lawsuit against Chevron was sued in Ecuadorian court for $28 billion for making residents ill and damaging forests and rivers by discharging 18 billion US gallons of formation water into the Amazon. Chevron claimed that agreements with the Ecuadorian Government exempted the company from any liabilities.
  • In 2011, Ecuadorian residents were awarded $8.6 billion, based on claims of loss of crops and farm animals as well as increased local cancer rates. The award was later revised to $19 billion on appeals, which was then appealed to the Ecuadorean National Court of Justice. Chevron described the lawsuit as an “extortion scheme” and refused to pay the fine.
  • Chevron’s activities at its century-old Richmond refinery have been the subject of ongoing controversy. The project generated over 11 million pounds of toxic materials and caused more than 304 accidents. The Richmond refinery paid $540,000 in 1998 for illegally bypassing waste water treatments and failing to notify the public about toxic releases. Overall, Chevron is listed as potentially liable for 95 Superfund sites, with funds set aside by the EPA for clean-up.
  • Chevron’s operations in Africa have also been criticized as environmentally unsound. In 2002, Angola became the first country in Africa to levy a fine on a major multinational corporation operating within its borders when it demanded $2 million in compensation for oil spills allegedly caused by Chevron.
  • On October 16, 2003, Chevron U.S.A. settled a charge under the Clean Air Act, which reduced harmful air emissions by about 10,000 tons a year. In San Francisco, Chevron was ordered to spend almost $275 million to install and utilize innovative technology to reduce nitrogen and sulfur dioxide emissions at its refineries. In 2000, after violating the Clean Air Act at an offline loading terminal in El Segundo, California, Chevron paid a $6 million penalty as well as $1 million for environmental improvement projects.

CH2M HILL COMPANIES: $1,000

  • CH2M HILL used nearly $10 million in stimulus funding to design the elaborate Solyndra solar panel facility in Fremont, California. While CH2M HILL is in no danger of suffering the same bankruptcy plight, they also languish in a pool of mismanaged taxpayer funds. The firm has a history of fraud, kickbacks, violations, and cover-ups, not to mention one particular parallel with the Solyndra scandal—layoffs. This, despite receiving almost $2 billion in stimulus funding.
  • CH2M Hill has agreed to pay a total of $18.5 million in 2013 after admitting to defrauding the public by engaging in years of widespread time card fraud in its contract with the Department of Energy.

COMCAST: $5,000

  • Comcast’s customer satisfaction often ranks among the lowest in the cable industry.
  • With $18.8 million spent in 2013, Comcast has the seventh largest lobbying budget of any individual company or organization in the United States. Comcast employs multiple former U.S. congressmen as lobbyists.
  • Comcast also supports lobbying and PACs on a regional level, backing organizations such as the Tennessee Cable Telecommunications Association and the Broadband Communications Association of Washington PAC. Comcast and other cable companies have lobbied state governments to pass legislation restricting or banning individual cities from offering public broadband service. Municipal broadband restrictions of varying scope have been passed in a total of 20 US States, including Louisiana.

DELOITTE & TOUCHE PAC: $5,000

  • Deloitte has delayed payments to hundreds of thousands of unemployed in the State of California.
  • The firm has been working on a statewide case management system for California courts which originally had a budget of around $260 million. Almost $500 million has already been spent and costs are expected to run as high as $2 billion. No single court is yet fully operational. California’s Judicial Council terminated the project in 2012 citing actual deployment costs associated with the project and California’s budget concerns

DUKE ENERGY: $5,000

  • In 1999 the EPA initiated an enforcement action against Duke Energy for making modifications to old and deteriorating coal-burning power plants without getting permits under the Clean Air Act.
  • In 2002, researchers identified Duke Energy as the 46th-largest corporate producer of air pollution in the United States, with roughly 36 million pounds of toxic chemicals released into the air annually. Major pollutants included sulfuric and hydrochloric acid, chromium compounds, and hydrogen fluoride. The Political Economy Research Institute ranks Duke Energy 13th among corporations emitting airborne pollutants in the United States.

EMPLOYEES OF NORTHROP GRUMMAN PAC: $5,000

  • From 1990-2002, Northrop Grumman contributed $8.5 million to federal campaigns. The company gave more than $1 million to federal candidates in 2005-2006 election cycle, compared to $10.6 million given by all defense contractors in the same cycle. This was behind only General Dynamics and Lockheed Martin in the defense industry. Former Northrop Grumman Electronics Systems chief James Roche served as Secretary of the Air Force for two years under George W. Bush. Roche was eventually nominated to head the Army, but was forced to withdraw his nomination among accusations of mismanaging a contract with Boeing and of failing to properly handle the Air Force sexual assault scandals of 2003. At least seven former officials, consultants, or shareholders of Northrop Grumman held posts in the Bush administration.
  • Northrop Grumman has dealt with multiple scandals during its history. In 1995, Robert Ferro, an employee for TRW, a company acquired by Northrop Grumman, discovered that satellite components manufactured for the U.S. Air Force were faulty and likely to fail in operation. TRW allegedly suppressed Ferro’s report and hid the information from the Air Force, even after a satellite in space equipped with the faulty components experienced serious anomalies. Ferro later sued Northrop Grumman in federal court under the federal whistle-blower law. In April 2009 Northrop Grumman agreed to pay $325 million to settle the suit. Ferro was awarded $48.8 million of the settlement.
  • The company was sued in 1999 for allegedly knowingly giving the Navy defective aircraft. This suit sought $210 million in damages. Then in 2003, the company was sued for allegedly overcharging the U.S. government for space projects in the 1990s. Northrop Grumman paid $111.2 million to settle out of court.
  • In 2010, Virginia’s computer operations experienced a week-long computer outage. Northrop Grumman operated these systems under a $2.4 billion contract. As a result, as many as 45,000 citizens could not renew their driver’s licenses prior to their expiration. Computer systems for 26 of the state’s 89 agencies were affected and some data may have been permanently lost.

EXXON MOBIL CORP. PAC: $2,500

  • ExxonMobil has drawn criticism from scientists, science organizations and the environmental lobby for funding organizations critical of the Kyoto Protocol and seeking to undermine public opinion about the scientific conclusion that global warming is caused by the burning of fossil fuels. Mother Jones Magazine said the company channeled more than $8 million to 40 different organizations that have employed disinformation campaigns including “skeptical propaganda masquerading as journalism” to influence opinion of the public and of political leaders about global warming and that the company was a member of one of the first such groups, the Global Climate Coalition, founded in 1989. ExxonMobil’s support for these organizations has drawn criticism from the Royal Society, the academy of sciences of the United Kingdom. The Union of Concerned Scientists released a report in 2007 accusing ExxonMobil of spending $16 million, between 1998 and 2005, towards 43 advocacy organizations which dispute the impact of global warming. The report argued that ExxonMobil used disinformation tactics similar to those used by the tobacco industry in its denials of the link between lung cancer and smoking, saying that the company used “many of the same organizations and personnel to cloud the scientific understanding of climate change and delay action on the issue.” These charges are consistent with a purported 1998 internal ExxonMobil strategy memo, posted by the environmental group Environmental Defense, which said:

“Victory will be achieved when

  • Average citizens [and the media] ‘understand’ (recognize) uncertainties in climate science; recognition of uncertainties becomes part of the conventional wisdom;
  • Industry senior leadership understands uncertainties in climate science, making them stronger ambassadors to those who shape climate policy;
  • Those promoting the Kyoto treaty on the basis of extant science appear out of touch with reality.”

 

  • In 2003, the United States Attorney for the Southern District of New York announced that J. Bryan Williams, a former senior executive of Mobil Oil Corp., had been sentenced to three years and ten months in prison on charges of evading income taxes on more than $7 million in unreported income, including a $2 million kickback he received in connection with Mobil’s oil business in Kazakhstan. Documents filed with the court said Williams’ unreported income included millions of dollars in kickbacks from governments, persons, and other entities with whom Williams conducted business while employed by Mobil. In addition to his sentence, Williams must pay a fine of $25,000 and more than $3.5 million in restitution to the IRS, in addition to penalties and interest.

GLAXOSMITHKLINE PAC:  $1,000

  • In July 2012 GSK pleaded guilty to criminal charges and agreed to a pay $3 billion to settle the criminal charges as well as civil lawsuits in the largest settlement paid by a drug company at the time. The criminal charges were for promoting Paxil and Wellbutrin and for unapproved uses and failing to report safety data about Avandia:; GSK paid $1 billion to settle the criminal charges. The remaining $2 billion were part of the civil settlement over unapproved promotion and paying kickbacks, making false statements concerning the safety of Avandia; and reporting false prices to Medicaid. GSK also signed an agreement which obligated it to make major changes to the way it did business.

HONEYWELL PAC: $5,000

  • The EPA says that no corporation has been linked to a greater number of Superfund toxic waste sites than has Honeywell. Honeywell ranks 44th among U.S. corporations causing air pollution. The firm released more than 9.4 million pounds of toxins per year into the air. In 2001, Honeywell agreed to pay $150,000 in civil penalties and to perform $772,000 worth of reparations for environmental violations.
  • In 2003, a federal judge in New Jersey ordered the company to perform an estimated $400 million environmental remediation of chromium waste, citing “a substantial risk of imminent damage to public health and safety and imminent and severe damage to the environment.” In the same year, Honeywell paid $3.6 million to avoid a federal trial regarding its responsibility for trichloroethylene contamination in Illinois. In 2004, the State of New York announced that it would require Honeywell to complete an estimated $448 million cleanup of more than 165,000 pounds of mercury and other toxic waste dumped into Onondaga Lake in Syracuse, N.Y.

LOCKHEED MARTIN EMPLOYEES’ PAC: $5,000

  • Lockheed Martin received $36 billion in government contracts in 2008, more than any company in history. It does work for more than two dozen government agencies from the Department of Defense and the Department of Energy to the Department of Agriculture and the Environmental Protection Agency. It’s involved in surveillance and information processing for the CIA, the FBI, the Internal Revenue Service (IRS), the National Security Agency (NSA), The Pentagon, the Census Bureau and the Postal Service.
  • Lockheed is listed as the largest U.S. government contractor and ranks third for number of incidents, and 21st for size of settlements. Since 1995 the company has agreed to pay $606 million to settle 59 instances of misconduct.
  • Through its political action committee (PAC), the company provides low levels of financial support to candidates who advocate national defense and relevant business issues. It was the top contributor to House Armed Services Committee chairman Howard P. “Buck” McKeon (R-California), giving more than $50,000 in the most recent election cycle. It also topped the list of donors to Sen. Daniel Inouye (D-HI), chairman of the Senate Appropriations Committee before his death in 2012.
  • Lockheed Martin Employees Political Action Committee is one of the 50 largest in the country. With contributions from 3,000 employees, it donates $500,000 a year to about 260 House and Senate candidates.
  • In March 2013, Maryland State Senate Majority Leader Rob Garagiola, while he was said to be dating a Lockheed Martin lobbyist, cosponsored a resolution which would give Lockheed Martin tax rebate worth millions of dollars related to hotel taxes paid at its CLE facility in Bethesda, MD. This was after Montgomery County Council refused to pass a similar resolution.

MARATHON OIL EMPLOYEES PAC: $10,000

  • Marathon gave $250,000 to the Supriya Jindal Foundation and Gov. Bobby Jindal’s administration promptly awarded Marathon subsidiaries $5.2 million in state funds.

MICROSOFT CORP. PAC: $4,500

  • One of Microsoft’s business tactics, described by an executive as “embrace, extend and extinguish,” initially embraces a competing standard or product, then extends it to produce their own version which is then incompatible with the standard, which in time extinguishes competition that does not or cannot use Microsoft’s new version. Various companies and governments have sued Microsoft over this set of tactics, resulting in billions of dollars in rulings against the company.
  • Microsoft has been criticized for its involvement in censorship in the People’s Republic of China. Microsoft has also come under criticism for outsourcing jobs to China and India. There were reports of poor working conditions at a factory in southern China that makes some of Microsoft’s products.
  • To avoid providing stock options and medical and retirement benefits to employees, Microsoft hires thousands of temporary workers (temps) for the designing, editing and testing of its software. When a federal judge (upheld by the U.S. Supreme Court) outlawed the hiring of temps for longer than six months, Microsoft got around the ruling by laying off its temps for 100 days and then rehiring them.

MONSANTO CO.: $4,000

 

  • In 2003, Monsanto reached a $300 million settlement for manufacturing and dumping of the toxic chemical polychlorinated biphenyls (PCBs) in Alabama.
  • In 2004, Monsanto, along with Dow and other chemical companies, were sued by a group of Vietnamese for the effects of its Agent Orange defoliant, used by the U.S. military in the Vietnam War. The case was dismissed.
  • In 2005, the US DOJ filed a Deferred Prosecution Agreement in which Monsanto admitted to violations of the Foreign Corrupt Practices Act and making false entries into its books and records. Monsanto also agreed to pay a $1.5 million fine. The case involved bribes paid to an Indonesian official.
  • The Monsanto Company Citizenship Fund has donated more than $10 million to various candidates since 2003. In 2011, Monsanto spent about $6.3 million lobbying Congress and the U.S. Department of Agriculture about regulations that would affect the production and distribution of genetically engineered produce.
  • US diplomats in Europe have worked directly for Monsanto.
  • Monsanto gave $186,250 to federal candidates in the 2008 election.
  • Monsanto spent $8.1 million opposing the passage of Proposition 37 in California, making it the largest donor against the initiative. Proposition 37, which was rejected in November 2012, would have mandated the disclosure of genetically modified crops used in the production of California food products.
  • More recently, as of October 2013, Monsanto and DuPont Co. are backing an anti- labeling campaign with roughly $18 million so far dedicated to the campaign.

 

PFIZER, INC. PAC: $2,500

 

  • In September 2009, Pfizer pleaded guilty to the illegal marketing of the arthritis drug Bextra for uses unapproved by the U.S. Food and Drug Administration (FDA), and agreed to a $2.3 billion settlement, the largest health care fraud settlement at that time. Pfizer also paid the U.S. government $1.3 billion in criminal fines related to the “off-label” marketing of Bextra, the largest monetary penalty ever rendered for any crime. Called a repeat offender by prosecutors, this was Pfizer’s fourth such settlement with the U.S. Department of Justice in the previous ten years.

 

RAYTHEON CO. PAC: $7,500

  • In March 1990, Raytheon pleaded guilty to one felony count of illegally obtaining classified Air Force budget and planning documents. U.S. District Judge Albert V. Bryan, Jr. imposed a $10,000 criminal fine for one felony count of “conveyance without authority” and $900,000 in civil penalties and damages. The documents allegedly gave Raytheon an unfair advantage against its competitors in bidding for weapons contracts. Although the plea only involved 1983 Air Force documents, U.S. Attorney Henry Hudson said Raytheon also illegally obtained a wide range of secret Pentagon documents.
  • In October 1994, Raytheon paid $4 million to settle a U.S. government claim that it inflated a defense contract for antimissile radar. The PAVE PAWS (Precision Acquisition Vehicle Entry Phased Array Warning System) system was designed to detect incoming submarine-launched ballistic missiles. The government claimed in a federal lawsuit that Raytheon inflated a contract to upgrade two of four PAVE PAWS sites by proposing to hire higher-skilled employees than were necessary for the job.
  • Just one year earlier, on October 14, 1993, Raytheon paid $3.7 million to settle allegations that it misled the U.S. Department of Defense by overstating the labor costs involved in manufacturing Patriot missiles. “The recovery of this money is yet another warning to contractors that the Truth in Negotiations Act’s information disclosure requirements will be strictly and sternly enforced,” Assistant Attorney General Frank Hunger said.
  • The Patriot missile system was not the spectacular success in the Persian Gulf War that the American public was led to believe. There is little evidence to prove that the Patriot hit more than a few Scud missiles launched by Iraq during the Gulf War, and there are some doubts about even these engagements. The public and the U.S. Congress were misled by definitive statements of success issued by administration and Raytheon representatives during and after the war.

BOEING CO. PAC.: $2,000

  • In 2003, Lockheed Martin sued Boeing for industrial espionage to win the Evolved Expendable Launch Vehicle (EELV) competition. Lockheed Martin claimed that the former employee Kenneth Branch, who went to work for McDonnell Douglas and Boeing, passed nearly 30,000 pages of proprietary documents to his new employers. Lockheed Martin argued that these documents allowed Boeing to win 19 of the 28 tendered military satellite launches.
  • In July 2003, Boeing was penalized, with the Pentagon stripping seven launches away from the company and awarding them to Lockheed Martin. Furthermore, the company was forbidden to bid for rocket contracts for a twenty-month period, which expired in March 2005. Boeing settled with the U.S. Department of Justice for $615 million.
  • On September 15, 2010, the World Trade Organization ruled that Boeing had received billions of dollars in illegal government subsidies.

DOW CHEMICAL EMPLOYEES PAC: $10,000

  • Dow was one of several manufacturers who began producing the napalm B compound under government contract from 1965. After experiencing protests and negative publicity, the other suppliers discontinued manufacturing the product, leaving Dow as the sole provider. The company said that it carefully considered its position, and decided, as a matter of principle, “its first obligation was to the government.” Despite a boycott of its products by anti-war groups and harassment of recruiters on some college campuses, Dow continued to manufacture napalm B until 1969. The USA continued to drop napalm bombs on North Vietnam until 1973.
  • Until the late 1970s, Dow produced DBCP (1,2-dibromo-3-chloropropane), a soil fumigant, and nematicide, sold under the names the Nemagon and Fumazone. Workers at Dow’s DBCP production plants were made sterile by exposure to the compound. These effects were consistent with animal experiments showing that DBCP sterilized rabbits. The workers successfully sued the company, and most domestic uses of DBCP were banned in 1977.
  • Areas along Michigan’s Tittabawassee River, which runs within yards of Dow’s main plant in Midland, were found to contain elevated levels of the cancer-causing chemical dioxin in November 2006. In July 2007, Dow reached an agreement with the EPA to remove 50,000 cubic yards of sediment from three areas of the riverbed and levees of the river that had been found to be contaminated. In November 2008, Dow Chemical along with the EPA and Michigan Department of Environmental Quality agreed to establish a Superfund to address dioxin cleanup of the Tittabawassee River, Saginaw River and Saginaw Bay.[48]
  • According to the EPA, Dow has some responsibility for 96 of the United States’ Superfund toxic waste sites, placing it in 10th place by number of sites.

GOLDMAN SACHS PAC: $5,000

  • A federal appeals court upheld the conviction of former Goldman Sachs Group Inc director Rajat Gupta, one of the biggest successes in federal prosecutors’ long-running probe to stop insider trading on Wall Street.
  • Federal prosecutors and Securities and Exchange Commission officials also investigated whether a senior Goldman investment banker, Matthew Korenberg, fed inside information to a Galleon Group portfolio manager named Paul Yook, according to separate reports in the New York Times and the Wall Street Journal.

 

HOME DEPOT PAC: $2,500

  • In July 2005, former employee Michael Davis filed a whistleblower lawsuit against the Home Depot, alleging that his discharge was in retaliation for refusing to make unwarranted backcharges against vendors. Davis alleges that the Home Depot forced its employees to meet a set quota of backcharges to cover damaged or defective merchandise, forcing employees to make chargebacks to vendors for merchandise that was undamaged and not defective.
  • In the settlement of the litigation, Home Depot changed some of its corporate governance provisions. Home Depot also agreed to pay the plaintiff’s counsel $6 million in cash and $8.5 million in common stock.

WALMART STORES PAC: $6,000

  • Wal-Mart is the beneficiary of $96.5 million in economic development subsidies in Louisiana and $1.2 billion in tax breaks nationwide. Yet, in 2011, Walmart, four of whose owners are among the 11 richest Americans, decided to roll back health care coverage and to increase premiums for its employees. Wal-Mart still boasted that 90 percent of its employees had health coverage, neglecting to mention that more than half of those got their coverage through their spouses’ group coverage. The company provides no health coverage at all for new part time employees despite the company’s 24.7 percent gross profit martin that same year.
  • An April 2012 New York Times investigative report revealed that a former Walmart executive alleged that, in September 2005, Walmart de Mexico paid bribes throughout Mexico in order to obtain construction permits, information, and other favors. Concerns were raised that Walmart executives in the United States concealed the allegations. Reportedly, bribes were given to speed up construction permits, which gave Walmart a substantial advantage over its business competitors. A follow-up investigation by The New York Times published December 17, 2012, revealed evidence that regulatory permission for siting, construction, and operation of 19 stores were obtained through bribery.
  • A paper published in Farm Foundation in 1997 found that some small towns can lose almost half of their retail trade within ten years of a Walmart store opening.
  • A 2004 paper by two professors at Penn State University found that counties with Walmart stores suffered increased poverty compared with counties without Walmarts due to displacement of workers from higher-paid jobs in retail stores which customers no longer choose to patronize. A study in Nebraska looked at two different Walmarts, the first of which had just arrived and was in the process of driving everyone else out of business by cutting their prices to the bone. In the other Walmart, “they had successfully destroyed the local economy, there was a sort of economic crater with Wal-Mart in the middle; and, in that community, the prices were 17 percent higher.”
  • The Economic Policy Institute estimates that between 2001 and 2006, Walmart’s trade deficit with China alone eliminated nearly 200,000 U.S. jobs. Another study found that a new store increases net retail employment in the county by 100 jobs in the short term, half of which disappear over five years as other retail establishments close.
  • Walmart has been criticized by labor unions, community groups, grassroots organizations, religious organizations, environmental groups, and even Walmart’s own customers and employees. They have protested against the company’s policies and business practices, including charges of racial and gender discrimination. Other areas of criticism include the corporation’s foreign product sourcing, treatment of product suppliers, employee compensation and working conditions, environmental practices, the use of public subsidies, the company’s security policies and slavery. Wal-Mart denies doing anything wrong and maintains that low prices are the result of efficiency.

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