Feeds:
Posts
Comments

Archive for the ‘Congress’ Category

Harley Purvis, LPAARMCSBCSLC President, Watson BBQ, coffee shop emerge as inspiration behind LouisianaVoice

Posted in Campaign Contributions, Congress, Governor's Office, Legislature, Legislators, Lobbyist on June 3, 2017| 8 Comments »

I have to be honest with you and let you know—finally—that the inspiration for many of my stories comes not from my own diligent research but from my best friend who only now, after more than six years of my writing LouisianaVoice, has begrudgingly consented to my publicly acknowledging his sage observational talents.

That acknowledgement is long overdue and I am happy to tell you about my good friend and mentor, Harley Purvis, the resident political guru of John Wayne Culpepper’s Lip-Smackin’ Bar-B-Que House and Used Lightbulb Emporium in Watson, Louisiana. (John Wayne proudly boasts that he has the largest selection of used light bulbs in the state.)

If Watson was incorporated, which it is not, Harley would most surely be the mayor—if, that is, he could be talked into offering himself as a candidate, which he most probably would not. In his own words, he much prefers shaking a few bushes and jerking a half-hitch in the egos of various political officer-holders. “I’d rather be outside the tent peeing in than inside peeing out,” he says in his usual matter-of-fact tone.

The highest office he ever aspired to was his current position as President of the Greater Livingston Parish All-American Redneck Male Chauvinist Spittin’, Belchin’, and Cussin’ Society and Literary Club (LPAARMCSBCSLC). He was elected president by acclamation since he was the only member to ever read a book—several, to be accurate.

Nobody runs for office in Livingston Parish without dropping by John Wayne’s to pay homage to Harley as he occupies the booth in the back in the corner in the dark, (a phrase he readily admits he stole from the late Flip Wilson). “I liked it when he said that and I especially like it since that’s where I sit at John Wayne’s,” he says as he takes another sip from his special dark roast coffee blend (Community Coffee, of course) found only at the Bar-B-Que House and Used Lightbulb Emporium.

Coffee is a tad gamier at John Wayne’s than at those hoity-toity places like Starbucks. That’s partly because John Wayne doesn’t throw out the previous day’s coffee grounds from Monday to Saturday night. He simply adds a half measure to the previous day’s grounds and runs the water (and any leftover coffee) through again for peak financial efficiency. You almost have to scrape the stuff out of your cup but Nobody’s complained yet. That’s probably because it will take your breath away.

John Wayne’s is a natural habitat for political groupies of all stripes and nobody disrespects anybody else’s political views at John Wayne’s. Hillary supporters and Trump backers rub shoulders without incident though, admittedly, Trump supporters far outnumber those who voted for Hillary here in Livingston Parish in general and at John Wayne’s in particular. Civility is a tradition that enhances the popularity of the place.

Crowds are a lot bigger on Saturday mornings because during the week, the gravel truck drivers are busy running up and down LA. 16 picking up loads of gravel at the pit north of Watson and hauling them to their destinations. They don’t have time to dawdle over raunchy coffee and day-old Krispy Kreme Do-nuts.

Except for Harley Purvis, that is. Harley’s there every single day, rain or shine, hot or cold, from 6 a.m. to 10 a.m. He’s retired with nothing but time on his hands. In his early seventies, he has hearing aids for both ears but doesn’t wear them because he’s married—coincidentally, the same reason he occupies his regular booth at John Wayne’s on a daily basis except for Sunday. That’s church and that’s the one thing his wife Wanda Bob insists on.

He watches both CNN and Fox News. He reads the Baton Rouge and New Orleans papers as well as the New York Times and Washington Post online. There’s a sadness in his eyes these days. He’s happy to download news from the Internet but Harley’s old school and he’s disgusted with the state of the newspaper industry. But mostly, he’s frustrated that newspapers couldn’t see the Internet threat to print journalism when it first appeared on the horizon several years ago. Or if they did, they didn’t adjust, which is why the Times-Picayune only prints three days a week in New Orleans now.

Today, he sat at his booth with a Baton Rouge Advocate lying on the table in front of him. As I slid into the booth opposite him, he shook his head as he looked at the headline in the paper. “Everybody talks about a do-nothing Congress, but this Louisiana Legislature sure gave ‘em a run for their money this year,” he said. “This is just about the sorriest bunch we ever had in Baton Rouge.”

“Why do you think that is?” I asked as I took out my notebook and pen.

“I call it the Jindal Syndrome hangover,” he said. “Before we got that little twerp in the governor’s office, the legislature occasionally screwed up and did something progressive. The Stelly Tax Plan was a good example of that. So, what was the first thing Jindal did? He gutted the state’s ethics laws and let a couple of his friends off the hook when they already had ‘em on ethics violations.

“That’s the way it’s been since 2008. We thought we’d made a little progress when John Bel got elected but nothing’s changed. The Republicans aren’t going to pass any of his programs. That might be okay if they had an alternative plan. But what’s their plan? They don’t have one and we just keep kicking that can down the road. They’re Grover Norquist’s lap dogs.”

Harley got up and walked to the coffee urn and refreshed his day-old coffee. Returning, he took a sip and said, “They filed almost a thousand bills at the beginning of this year’s session. Know how many the governor’s signed into law? About a dozen,” he said, answering his own question before I could say a word.

“They spent way too much time caught up over those Confederate statues in New Orleans. That’s a can of worms in itself. You removed the statues but it could be just a start. What’s next, changing the names of Jefferson Davis Parish? Leesville? Jackson Parish? Beauregard Parish? Jefferson Parish? I dunno, Maybe the Daughters of the Confederacy have a valid complaint over the names of Lincoln, Union and Grant parishes.”

While Harley will readily offer his critique of Louisiana politicians, he, as one of the few admitted 70-year-old liberal Bernie Sanders supporters in Livingston Parish, is no less willing to offer his view of Washington.

“Whether you like Trump or hate him,” he said, leaning over the table towards me as if preparing to share some deep dark secret, “the thing that I just can’t wrap my brain around is why the Republicans in Congress can’t grow a set and think for themselves instead of obediently serving as Trump apologists every time he says or does some incredibly stupid—and that’s every day. There’re just some things you can’t defend, but they do anyway.

“They’re putting so-called party unity far ahead of the country’s interests. There are people in this country who because of circumstances over which they have no control, cannot afford health care. Yet the Republicans blindly follow Trump’s lead in taking health care away from these people. If Obamacare is broken, fix it. Don’t throw the baby out with the bath water. You have people who are on Social Security disability who are legitimately disabled. You don’t pull the rug out from under these people.

“And you want to know who’s front and center in his blind loyalty to Trump? Our very own Sen. John Neely Kennedy. The guy is an embarrassment to the entire state. And you notice that when members of Congress were holding town hall meetings during the recess, you couldn’t find Kennedy with a sheriff’s posse.

“Those guys up there in Washington are bought and sold by the lobbyists. Look what Billy Tauzin did before he left Congress. He steered a bill through Congress that prohibited Medicaid and Medicare from negotiating the price of pharmaceuticals. That was a huge win for the pharmaceutical industry. Then he quit and became head of the Pharmaceutical Research and Manufacturers (PhRMA).

“With all that special-interest influence in Washington, the only way to get a congressman’s attention is to drag a dollar bill on a string down the hall of the House or Senate. And it ain’t much different over at the State Capitol. The oil, banking, and business interests own the Legislature and the Koch brothers and Wall Street own Washington.”

I wanted to hear more but the regular monthly meeting of the LPAARMCSBCSLC was getting ready to convene in emergency session to consider the expulsion of a member who had gotten too big for his britches. As Secretary, I had to keep the minutes.

Read Full Post »

FEMA, politics and insurance form unholy alliance as storms cost policyholders, US taxpayers $10 billion in padded costs

Posted in Business, Congress, Corruption, Ethics, Fraud, Legislature, Legislators, Politicians, Taxes, Waste on May 4, 2017| 9 Comments »

To get past those cute but misleading TV ads, and arrive at a better understanding of just how the insurance industry really works, you need to understand first, that insurance companies are in the business to make money for their stockholders.

That’s it. There is no second. The policyholder is never taken into consideration when there is a claim. The mindset for the insurance company, no matter what name or logo is on its letterhead, is driven by one overriding question: How can we get out of this obligation with the least cost to shareholders?

It matters not one whit whether it is life, property & casualty, auto, or health insurance. The company’s very purpose for existing is not to see that policyholders are made whole but how the payout on claims may be minimized so as to inflict the least monetary damage to the company’s bottom line.

Do you think that life insurance claim that was slow paying off was simply to investigate whether or not the beneficiary had a part in the insured’s death? While that may be a part of it, particularly in cases of suspicious circumstances (such as falling off a cliff during a hike in Bryce Canyon), there may well be other factors involved, such as delaying payment as long as possible in order to accrue as much return on the investment of premiums as possible.

You didn’t really think the companies just leave that money lying around waiting for the insured to die, did you? No, it’s invested heavily in all sorts of things in order to earn money for the company.  https://www.paxforpeace.nl/stay-informed/news/insurers-invest-nearly-7-billion-in-controversial-arms-trade

And it’s your money they do it with.

Did you ever wonder why your auto insurance company would suggest a particular body shop for repairs to your car after an accident? Why not the body shop of the dealer from whom the car was purchased? It could be—and often is—because the recommended body shop uses what is called “after-market” parts for repairs. That means the parts are generally inferior to those of the dealership’s original parts and can diminish the resale value of your vehicle. Did you ever notice that after repairs at some of those shops, the quarter panel replacement no longer fits flush with the original undamaged part of your car? Or you have air leaks (or worse, water leaks) around the replacement door that weren’t there before? That would be the likely result of after-market parts. http://www.repairerdrivennews.com/2015/02/12/anderson-cooper-360-piece-attacks-insurers-for-steering-parts-video/

You’re not happy, but your insurance company is ecstatic. https://louisianavoice.com/2014/05/08/insurers-auto-repair-tactics-only-part-of-problem-jindal-old-firm-mckinsey-co-coached-katrina-on-claims-delays-denials/

And who hasn’t experienced battles with health insurance companies that refused to cover a certain type of treatment because it’s considered “experimental.” Now, because of changes in the Office of Group Benefits instituted by the Jindal administration, state retirees who move out of state may find themselves no longer covered because their physicians are “out of network,” meaning they are non-participants in OGB’s coverage plan. Sorry, we don’t have any doctors in Arkansas or Mississippi who are part of the plan. https://louisianavoice.com/2014/08/25/louisianavoice-learns-of-jindal-plan-to-force-state-retirees-out-of-ogb-by-raising-members-premiums-cutting-benefits/

But by far, the most subtle method of claim manipulation is in the property & casualty field, namely your homeowners and flood insurance programs.

As we wrote in April, insurers will prepare repair estimates at two costs, depending on whether the damage to a home was caused by wind or flood. Repair estimates generally run much less on wind damage claims than for floods—even though the same material is used on each claim.

That is because the companies themselves are on the hook for any wind damage while flood damage, if covered at all, is the responsibility of the National Flood Insurance Program (NFIP), claims for which are paid by the federal government, i.e. taxpayers.

But that’s not to say Allstate is averse to handling flood claims. Quite the contrary. Allstate, in fact, has had an arrangement with NFIP under which NFIP Allstate is paid for handling flood claims.

Accordingly, if Allstate found itself on the hook for wind damages, it would use a lower formula for paying claimants but if it determined the damages were caused by flooding, a second, more expensive separate formula would be employed.

In one example we found, damage was determined to be from wind and Allstate paid 83 cents per square foot for removal and replacement of drywall (sheetrock). In another claim from the same storm and in the same part of the state, it was determined to be flood damage and that same dry wall removal and replacement—paid for by American taxpayers—was $1.53 per square foot, a difference of 70 cents per square foot. Painting that drywall cost Allstate 35 cents per square foot for the wind-damage claim but cost NFIP (taxpayers) 58 cents per square foot for the flood damage claim.

That was not an anomaly. In comparing two 2011 claims from Tropical Storm Lee in southwest Louisiana, LouisianaVoice found that damage to one home was determined to be from wind. The cost of removing and replacing drywall (sheetrock) was estimated at $1.75 per square foot and painting of the drywall was estimated at 55 cents per square foot. That, of course was the cost to the insurance company, in this case, Colonial.

A second claim only a few miles away, also the result of Lee, was also for a home covered by Colonial. In this case, the damaged was determined to be the result of flooding, so the claim now belonged to NFIP. The estimate to remove and repair drywall for this home was $2.47 per square foot and the cost of painting that same drywall was estimated at 87 cents per square foot.

Assuming an area of 1000 square feet, you’re looking at a cost differential of $720 for removal and replacement of the drywall and a difference of $320 for painting, or an overall cost increase of $1,040 for repairs to a flood-damaged home compared to the wind-damaged structure.

By the time, other costs are factored in—costs for such things as replacing and painting molding, baseboards, doors and door frames, replacing electrical outlets and door hardware, removing and replacing windows and window trim, painting window frames, replacement of carpeting and/or wood flooring, the difference between a wind and a flood claim can be enormous.

And that doesn’t even include one other factor that goes into all estimates—overhead and profit (O&P) for the contractor. There has to be a profit for the contractor. That’s understandable; no one would expect him to repair your house for nothing.

But like the repairs themselves, the percentage of overhead and profit has a wide variance, depending on whether or not the damage is determined to be from wind or flooding.

LouisianaVoice has obtained three boxes of claims documents that not only reflect damning evidence of NFIP gouging on the costs of specific repairs, but in the allowance for contractor O&P, as well.

Built-in allowances for O&P for wind claims paid by the individual companies range around 20-29 percent. But for flood claims, paid by the American taxpayer through the NFIP, that O&P can range from 48 to 51 percent, according to documents in our possession.

For example, going back to 2005, O&P for one wind-damage claim was estimated at 28 percent for a Mississippi wind claim from 2005’s Hurricane Katrina. But flood damage from the same hurricane resulted in contractor O&P of 51 percent. Both estimates were done by Allstate.

Wind damage from Hurricane Ida in Texas in 2009 resulted in a claim in which contractor O&P was 29 percent, according to Allstate damage estimates. But when damage from that same storm was determined to be from flooding, the contractor O&P shot up quickly, to 49 percent, Allstate documents show.

But Allstate and Colonial were not the only practitioners of such claim manipulation—not by a long shot. Here’s a story about how the game was played in the same manner by STATE FARM.

Project these tactics over a large, densely-populated area like that destroyed by Hurricane Katrina in Louisiana and the Mississippi Gulf Coast, and at least one estimate of the increased cost from “padding” both specific damages and contractor overhead and profit has taxpayers in the two states being ripped off to the tune of approximately $10 billion.

And while strict insurance fraud laws are on the books that could result in a prison sentence if you so much as included a non-existent flat screen television on your claim, there apparently is no one minding the store to guard against raping the taxpayer-funded NFIP.

And as long as the insurance companies continue to pour money into the campaign coffers of members of Congress, state legislators and regulators, you can be sure there will never be.

Perfect.

Read Full Post »

Here’s a novel idea for all politicians, federal down to local: drop the Democrat, Republican labels and just do your jobs

Posted in Campaign Contributions, Civil Service, Congress, Elections, Ethics, Finances, Governor's Office, Legislature, Legislators, Lobbyist, Politicians, Retirement on May 3, 2017| 26 Comments »

As a recovering Republican, I feel I am in a unique position to suggest that all political party labels be abandoned in favor of candidates representing constituents as opposed to clinging stubbornly to the blind loyalty of some group of adherents referring to themselves as Democrat, Republican or Libertarian.

Civilized countries like Canada, Australia, and the United Kingdom have no legal political parties (although the media sometimes mistakenly refer to opposition groups as “parties”). If it’s good enough for them, it should suffice for us.

For once, I’d like to see a politician who is defined not by some label but by his own core beliefs and principles, formed independently and absent the dictates of a so-called “party” which is supported by special interests who dictate the philosophy of its labeled and packaged candidates.

I would much prefer to vote for someone because of he or she actually stands for something rather than putting party loyalty above all else. President Teddy Roosevelt had the political courage to stand up to his own Republican Party and demand corporate health regulations and to fight monopolistic trusts. Somehow, that courage has evaporated in the interest of party unity which, of course, encourages a more reliable flow of campaign contributions from the vested interests.

I don’t say this as a way of placing my intellect above that of my contemporaries (God knows that would be a foolish assumption on my part) but the two major parties in this country—all the way down to our petulant legislature—long ago arrived at loggerheads with each other to the detriment of those who put them in office.

It’s more than a little sickening to watch. Besides, we already have The Jerry Springer Show.

In a recent discussion with an old friend and long-time political observer, he noted that Democrats as a group refuse to accept anything proposed by Republicans and Republicans as a group counter in kind. Can anyone really wonder that Congress has a lower approval rating than porta-potty cleaner-uppers? (Coincidentally, it might be worth mentioning that the longer Congress is in session, the greater the demand for porta-potty cleaner-uppers.)

My friend, who spent his career in state government, confided in me that he promised himself long ago that if he ever became jaded with his job, he would retire. He is now retired.

So, why don’t we just be honest with ourselves and admit that our political system no longer functions as a two-party, give-and-take forum? When you had someone like Sam Rayburn as Speaker of the House, things got done in Congress even though there was Republican opposition. That’s because while there was opposition, the two sides left room for compromise. With Newt Gingrich, we instead got a governmental shutdown. (Rayburn, the longest-serving House speaker in history, by the way, died broke while our own Bobby Jindal, by contrast, became a multi-millionaire during his three years in Congress.)

Elected office is no longer considered a public service; it is instead, an avocation in and of itself, a stepping stone to the next move up. Witness the shameless pursuit of the presidency by Jindal and the equally self-serving ambition of Attorney General Jeff Landry, U.S. Rep. Garrett Graves and U.S. Sen. John Kennedy to oust John Bel Edwards as governor. Accordingly, you will not hear the first utterance by Landry, Graves or Kennedy in support of anything proposed by Edwards.

Likewise, should Donald Trump ever say or propose anything with a scintilla of original thought or meaningful purpose, you will never hear Nancy Pelosi or any other Democrat speak out in support. That just isn’t done any more. There’s no civility in politics, no room for compromise.

Witness the banal, hackneyed behavior of the Louisiana Legislature, particularly over the past 10, 20, 30 years.

Because the state has systematically failed to pay its mandated share into the state retirement system, we’re now saddled with an insurmountable unfunded liability in each of the state retirement systems.

For decades, taxpayers of Livingston, Ascension and East Baton Rouge parishes have been paying a millage to construct the Comite River Diversion Canal project to prevent flooding. The project is no nearer completion today than it was 25 years ago and we have the delays to thank, at least in part, for that horrendous flood of last August. And now guess what? After pissing away the monies that were supposed to have gone to flood control with those millage collections, some legislators, in their collective buffoonery, now want to snatch nearly $200 million from federal monies intended for flood victims to use instead for flood control.

It’s almost like gasoline taxes that were supposed to have gone to repair our roads and bridges and the revenue from gaming that was supposed to fund public education. Of course, as soon as those gaming funds were approved, the legislature jerked an identical amount from other funding, the Support Education in Louisiana First Fund, and the result for public education was another version of the old shell game. Now you see it, not you don’t.

Fast forward to the Jindal years when state employees suddenly found themselves going six years on end without a pay raise. Now those Jindal years have spilled over into the Edwards years and those same legislators are still playing a game called kick the financial can down the road and state employees are still falling further and further behind the inflationary curve. Prices are up, health insurance is up, but salaries remain stagnant—with the exception of State Police (not to be confused with Department of Public Safety officers who undergo the same training but have not enjoyed the 30 percent pay raise received by State Troopers).

And now, House Bill 302 by House majority leader Lance Harris (R-Alexandria) would assess parolees an additional $37 fee per month (from $63 to $100), the money to be used to fund a pay increase for parole officers. As has become almost a ritual, the vote was split along party lines.

It’s really a beautiful thing to watch these guys cherry pick their personal little projects—like Harris’s fee assessment. I’m sure the rest of Louisiana’s civil service employees are applauding his magnanimous gesture toward the beleaguered parole officers.

Not to diminish the seriousness of their plight, but parole officers aren’t the only state civil service employees who are hurting. And Harris is not the only member of the legislature who is completely out of touch with the daily struggles of state employees, many of whom were victims of last year’s floods.

This is serious business and Harris and his colleagues should get together and try to figure out how the state’s fiscal problems can be addressed without the same old tired political rhetoric spouted along party lines. It’s time for compromise and hard decisions and the legislature, as a body, is not showing any inclination of making those hard decisions.

The governor’s plan is not perfect—far from it. But neither is the continued petty bickering of the legislature getting anything done. You’re not being paid to come to Baton Rouge to participate in some kind of elementary school blame game. You were sent here to solve problems and put this state back on sound financial footing.

Instead, you plaster an “R” or a “D” to your respective foreheads and start squawking like a couple of tomcats in a dark alley—even as you hold out your hands for political contributions from the special interests who pay you to just keep squawking like you always have.

A hint: We can see you and we can hear you and you’re not impressing anyone.

Drop the party labels and declare yourselves not as Republican or Democrat but as Louisianans.

Do the right thing. Do your jobs.

Read Full Post »

House Bill 207 would create special exception allowing Sen. Cassidy to double dip as LSU prof despite questions of 2014

Posted in Congress, Corruption, Ethics, Fraud, LSU, Politicians, Senate on April 20, 2017| 16 Comments »

An updated variation of the infamous Mike Edmonson Amendment has made its way into the 2017 legislative session in an effort to help yet another public official scratch out a little more money from the public fisc.*

*fisc (fisk) noun: The public treasury of Rome.

It’s really amazing how these legislators can work so diligently on behalf of certain connected individuals while ignoring much larger problems facing the state.

As much as LouisianaVoice criticized Bobby Jindal during his eight years of misrule, it was the legislature that allowed him to do what he did. It was the legislature that brought about the state’s fiscal problems by refusing to stand up to his ill-advised “reforms,” and it’s the legislature that has steadfastly refused to address those problems with anything approaching realistic solutions.

But when there’s a chance to help one of their own: stand back, there’s work to be done.

Rep. Gary Carter (D-New Orleans) has introduced House Bill 207 aimed specifically at benefiting U.S. Sen. Bill Cassidy.

Louisiana, it seems, has this pesky little dual office holding/dual employment law that might otherwise prove a hindrance to Cassidy’s ability to moonlight by teaching at the LSU Health Science Center while serving in the U.S. Senate.

Carter wants to remedy and if you don’t think this bill was written specifically for Cassidy, here’s the particulars of the bill:

“To enact R.S. 42:66(E), relative to dual officeholding and dual employment; to allow a healthcare provider who is a member of the faculty or staff of a public higher education institution to also hold elective office in the government of the United States…”

The bill would provide an exception to the current law which prohibits “certain specific combinations of public office and employment, including a prohibition against a person holding at the same time an elective or appointive office or employment in state government and an elective office, appointive office, or employment in the U.S. government.”

We could be wrong, but it just seems to us that serving in the U.S. Senate is a full-time job that demands the full attention of whomever happens to be representing Louisiana in that august body.

It was just such an amendment in 2014 that helped prove the eventual undoing of Edmonson’s career and his political aspirations. The word was that Edmonson planned to seek the state’s second-highest office in 2015—and was considered a fairly viable candidate.

LouisianaVoice broke the story of State Sen. Neil Riser (R-Columbia) and his tacking an amendment onto an otherwise benign bill that would have given Edmonson between $50,000 and $100,000 per year in additional retirement income. Because of the resulting furor over that amendment, State Sen. Dan Claitor (R-Baton Rouge) successfully sued to block the increase in Baton Rouge district court.

A veteran political observer recently told us, “If you hadn’t broken that story, Mike Edmonson would be lieutenant governor today.” (We don’t know about that but at least he’d be better than what we now have in that office.)

Remember in the 2014 senatorial race between then-incumbent Mary Landrieu and challenger U.S. Rep. Cassidy when Landrieu claimed Cassidy was paid for time lecturing classes not supported by his time sheets?

Jason Berry, publisher of The American Zombie Web blog said that on no fewer than 21 occasions over a 30-month span, U.S. Rep. Cassidy billed LSU Health Science Center for work supposedly performed on the same days that Congress was in session and voting on major legislation and holding crucial committee hearings on energy and the Affordable Care Act.

“On at least 17 different occasions,” Berry wrote, “he (Cassidy) spent multiple hours in LSU-HSC’s clinics on the same days in which he also participated in committee hearings and roll call votes.”

Landrieu said at the time of the revelations that Cassidy, while claiming to serve the poor, was in fact, “serving himself an extra paycheck. That’s not right. It could be illegal and it looks very much like payroll fraud.”

The arrangement apparently also troubled then-Earl K. Long Hospital Business Manager William Livings who said in an email to Internal Medicine Department Head George Karam, “We are going to really have to spell out exactly what it is he does for us for his remuneration from us. Believe me, this scenario will be a very auditable item and I feel they will really hone in on this situation to make sure we are meeting all federal and state regulations.”

In addition to Cassidy’s salary, Berry said, LSU also paid for his medical malpractice insurance, his continuing education and his licensing fees, “expenses that can easily total in the thousands.”

And now Carter wants to make it all nice and legal—but only for Cassidy. All other state employees who would like to do a little double-dipping to supplement their income can just fuggedaboutit.

Read Full Post »

Bloomberg story of $310 billion megabank fines since 2008 doesn’t tell the complete story of Wall Street greed, politics

Posted in Attorney General, Campaign Contributions, Congress, Corruption, Crime, Ethics, Finances, Fraud, Politicians, Revenue, Uncategorized on March 5, 2017| 3 Comments »

1399909

Bloomberg News Service on March 1 published a STORY that said global megabanks have paid $321 billion in fines for such non-banking-like practices as money laundering, market manipulation and even terrorist financing since the market crash of 2008.

And while $321 billion may sound impressive, Bloomberg failed to mention that because of those same banks, President George W. Bush had little choice but to sign the Emergency Economic Stabilization Act of 2008 that pumped more than twice that amount, $700 billion of taxpayer bailout funds, into the failed banks that precipitated the Great Recession of 2008.

Most financial advisers would describe that as a negative return on investment.

Adding insult to injury, $1.6 billion of that $700 billion was used to award multi-million dollar bonuses to CEOs of the very firms that got us into the mess to begin with. http://www.cbsnews.com/news/16b-of-bank-bailout-went-to-execs/

Bloomberg also failed to mention that those fines had little effect on those who perpetuated the crimes but did have a significant impact on stockholders and retirees, those, in other words, who had nothing to do with the massive fraud carried out on such a grand scale.

In fact, in 2010, former Countrywide Financial CEO Angelo Mozilo was fined $22.5 million and ordered to pay another $45 million in restitution as his penalty for reaping a profit of $141.7 million from stock sale, according to Mary Kreiner Ramirez and Steven A. Ramirez, authors of The Case for the Corporate Death Penalty (New York University Press, 2017). So, despite the penalties, he walked away with a net gain $74.2 million, or a 52 percent return, sending a clear signal his peers that “crime does in fact pay,” the authors wrote.

There are also two questions Bloomberg neglected to address:

  1. What the total cost of the runaway greed and reckless actions of firms like AIG, Lehman Brothers, Merrill Lynch, Goldman Sachs, Citigroup, Countrywide, and J.P. Morgan to stockholders, retirees and American taxpayers in general?
  2. How many top tier officers at these firms who condoned, encouraged and/or actively participated in the illegal practices went to jail?

The answer to the first question is an eye-popping $15 trillion, according to Ramirez and Ramirez.

The answer to the second question is just as unbelievable: ONE.

In fact, as of Jan. 28, that last date that STATISTICS were updated by the Bureau of Prisons, there were exactly 555 people serving federal jail sentences for banking, insurance, embezzlement and counterfeiting. That comes to .3 percent (three-tenths of one percent) of the total federal prison population.

By contrast, there were 82,109 in federal prison for non-violent drug offenses (46.4 percent of the total), and 14,853 imprisoned on immigration charges (8.4 percent).

At this point it might be fair to ask just who did the most lasting damage to the nation’s economy?

It would also be fair to question why, if only one Wall Street banker went to jail, how is that there are 555 imprisoned for banking- and insurance-related offenses? The answer to that is those offenders, situated on Main Street instead of Wall Street, lacked the political clout in Washington that the leaders of the megabanks enjoyed.

Is that an over-simplification of the circumstances? Probably, but it’s interesting to compare the actions of different White House administrations in handling financial crises.

President Obama’s first Attorney General, Eric Holder, in his “too big to fail” proclamation, said, “I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications…it (prosecution) will have a negative impact on the economy.”

Obama, for his part, said, “One of the biggest problems about the…financial crisis and the whole subprime lending fiasco is that a lot of that stuff wasn’t necessarily illegal, it was just immoral or inappropriate or reckless.”

Wasn’t necessarily illegal? Both statements stretch credulity to its breaking point and are in themselves, disgraceful because federal laws were clearly broken knowingly and willfully.

It wasn’t always that way. For example, in the wake of the savings and loan crisis of the 1980s and 1990s, more than 1,100 bankers were indicted and 839 were convicted.

Enron, the seventh-largest company in the U.S. at the turn of the century, is another example of how the feds went after those who played fast and loose with the rules. President George H.W. Bush called on Enron CEO Kenneth Lay to run the World Economic Summit in Houston in 1990 and in 1992, Lay co-chaired the reelection campaign of Bush the First.

Enron and its affiliates also contributed more than $888,000 to the Republican National Committee in 2000, the year that George W. Bush was elected President and another $1.3 million to the Republican Party. Lay and his wife personally contributed $238,000 to George W. Bush campaigns and inauguration celebrations and raised another $100,000 from friends. To the younger Bush, Lay was known as “Kenny boy.”

Still, Enron and its top executives were not immune from prosecution by Bush the Second.

Despite the access to the highest levels of government enjoyed by Enron and Lay, he and Jeff Skilling, his successor as Enron CEO, were indicted by the Department of Justice in 2004 and though the two combined to spend some $60 million on their defense, Lay was convicted on all counts and Skilling on 19 of 28 counts of securities fraud.

George W. Bush’s Attorney General John Ashcroft recused himself from the Enron investigation because Enron and Lay both were major financial supporters in Ashcroft’s Missouri unsuccessful Senate re-election campaign. His chief of staff, David Ayers, also took himself out of the investigation of Enron. That was as it should have been.

Enron’s accounting firm, Arthur Andersen, was convicted of shredding Enron documents and both Enron and Arthur Andersen soon ceased to exist.

The same fate befell CenTrust Savings Bank, Drexel Burnham Lambert investment bank, and WorldCom—all because of flagrant violations of federal securities laws and each was prosecuted by the administrations of the two Bushes. WorldCom, in fact, was the largest bankruptcy in history when it went under in 2002.

Evidently, those firms were not considered too big to fail.

By contrast, Obama’s Attorney General Holder and Lanny Breuer, chief of the Department of Justice (DOJ) Criminal Division, did not remove themselves from DOJ’s investigation of the investment banks that brought on the Great Recession of 2008. This despite the fact that both men had worked for the same law firm of Covington & Burling which included among its clients such eminent Wall Street banking firms as Bank of America (Countrywide’s successor), Citigroup, and JP Morgan Chase.

In fact, at the time Holder was tapped as attorney general, he was co-chairing Covington & Burling’s white-collar defense unit. Good training in case you’re ever called on to investigate your former bosses.

Breuer returned to Covington & Burling in 2013 followed by his boss Holder in July 2015, giving Holder at least a reason for his strained, if not borderline unprincipled logic for not pursuing criminal indictments against the megabanks.

Following Holder’s departure, Deputy Attorney General Sally Quillian Yates (Remember her? She’s the one President Trump fired after she refused to enforce his illegal immigration order) issued a DOJ memo (turns out she was pretty good at memos that cut right to the chase) on Sept. 9, 2015, that reversed Holder and Breuer’s DOJ policy toward pursuing individual accountability, both criminally and civilly, for corporate wrongdoing. The memorandum said the policy change was to maximize DOJ’s “ability to deter misconduct and to hold those who engage in it accountable.”

The comparison between the approaches of two Bushes and Obama to bankers’ disdain for securities laws to the detriment of the entire country represents a stark role reversal for the perceived political philosophies of the Republican and Democratic administrations.

And now, President Trump has expressed his determination to roll back the Dodd-Frank bill passed after the 2008 recession for the express purpose of preventing a recurrence of the runaway greed that nearly wrecked the world economy.

In fact, he wants to remove all regulation of Wall Street banks, quite possibly the most dangerous single cartel in American society.

Read Full Post »

« Newer Posts - Older Posts »