The American Bear

Sunshine/Lollipops

'[O]bjectivity' in Washington journalism does not mean being free of opinions; it means the opposite: dutifully echoing the official opinions and subjective mindset of those in political power. In the eyes of official Washington and its media mavens, spouting opinions is not a sin. The sin is spouting opinions that deviate from the ones expressed by and which serve the interests of those in power. Michael Hayden, Bob Schieffer and the media’s reverence of national security officials | Glenn Greenwald

Another Layer to Rendell’s Fracking Connections | Justin Elliott

Recently, we wrote about former Pennsylvania Gov. Ed Rendell’s connections to the natural gas industry after he published a pro-fracking op-ed in the New York Daily News.

Following our story, Rendell’s column—which called on New York officials to lift a ban on the drilling technique—was updated to disclose that he is a paid consultant to a private equity firm with natural gas investments.

Rendell assured us in an interview before the first story that despite his role with the private equity firm, he had no “pecuniary interest in the natural gas industry doing well.”

But the story doesn’t end there. One entity that indisputably has an interest in the industry is Rendell’s longtime home outside of politics: the law firm Ballard Spahr of Philadelphia.

Rendell is currently special counsel at the firm, and is a member of its energy and project finance and environment and natural resources practice areas, his spokeswoman said.

The firm touts its work “on the forefront” of the development of the Marcellus Shale, the formation under Pennsylvania and other states from which a vast quantity of natural gas is now being extracted.

In 2011, the publication AOL Energy named Ballard Spahr one of the top five energy law firms in the country. AOL cited Ballard Spahr’s “deep presence in Pennsylvania” that “put it on the doorstep of the Marcellus Shale natural gas field,” a “major source of controversy and legal work as developers work in heavily populated and closely monitored areas.”

“Governor Rendell cannot comment on what areas he may or may not work on for clients of the firm,” said his spokeswoman.

A week after leaving the governor’s office in 2011, Rendell rejoined the firm, where he had given up his job as partner when he was elected in 2003. As governor, he presided over the fracking boom in Pennsylvania. [++]

Fortress of Lies | Clusterfuck Nation

History has a special purgatory where it sometimes stashes feckless nations punch drunk on their own tragic choices: the realm where anything goes, nothing matters, and nobody cares. We’ve surely crossed the frontier into that bad place in these days of dwindling winter, 2013.

Case in point: Mr. Obama’s choice of Mary Jo White to run the Securities and Exchange Commission. A federal prosecutor back in the Clinton years, Ms. White eventually spun through the revolving door onto the payroll of Wall Street law firm Debevoise & Plimpton, whose clients included Too Big To Fail banks JP Morgan, Bank of America, Morgan Stanley, and UBS AG, defending them in matters stemming from the financial crisis that began in 2008, as well as other companies that needed defending from allegations of financial misconduct, such as the giant HCA hospital chain (insider trading), General Electric (now a virtual hedge fund with cases before the SEC), and the German-based Siemens Corporation (federal bribery charges).

A republic with a sense of common decency — and common sense — would have stopped the nomination right there and checked the “no” box on Mary Jo White just for violating the most basic premise of credibility: that trip through the revolving door that shuttles banking regulators from the government agencies to the companies they used to oversee and sometimes back again.

Has there not been enough national conversation about the scuzziness of that routine to establish that it’s not okay? Does it not clearly represent the essence of dysfunction and corruption in our regulatory affairs? Didn’t President Obama promise to seal up the revolving door? So how could Mary Jo White possibly be taken seriously as a candidate for the job? And how is it possible that everyone and their uncle, from The New York Times editorial page to the Sunday cable news political shows to the halls of congress, is not jumping up and down hollering about this? Well, because anything goes, nothing matters, and nobody cares.

The funny part is that, when challenged over her past connections to the banks and companies she would now have to regulate, Mary Jo White offered to recuse herself from future cases involving them. So, from the get-go as SEC head, Ms. White would not concern herself with the doings of JP Morgan, Bank of America, and Morgan Stanley? How is it that gales of laughter did not blow Mary Jo White clean out of the hearing room? Is there not another qualified person from sea to shining sea who could come in and do the job without one hand tied behind his or her back?

Now it also turns out that upon leaving Debevoise & Plimpton, Ms. White is scheduled to collect monthly retirement checks from the company amounting to a half million dollars a year — that’s for life, by the way — while she supposedly runs the SEC. How is that not a conflict of interest? The remedy proposed by Ms. White and her attorneys was for her to take the retirement loot as a lump sum during her tenure as SEC chair, after which she could revert to collecting her pension in the $42,500 monthly payouts. Pardon me, but, well …what the fuck? What planet are we on?

As if that’s not enough, Ms. White’s husband, John W. White, is a partner at another giant Wall Street law firm, Cravath, Swaine & Moore, which frequently tangles with the SEC on behalf of its clients. Mr. White proposed to change his pay structure while his wife runs the SEC. More gales of laughter. He is also on the advisory committee of the Financial Standards Accounting Board, the group that oversees national accounting practices and which, in 2009, infamously changed its Rule157 so that TBTF banks could “mark to fantasy” the fraudulent CDOs and other bond-like “innovative” securities that they created — many of which they had to eat after the housing bubble bust when the collateral for these swindles lost its value and the “innovators” could no longer pawn the stuff off on credulous pension funds and other client “muppets.”

The silence over this disgraceful matter — and many others like it, including the dead hand in the empty suit posing as US Attorney General — indicates that not only is the rule of law extinct in this country, but so are public figures of principle and credible news organs. Nobody has made a noise about it. Anything goes, nothing matters, and nobody cares. So, the objection to it has to come from outside the authorized channels. And the consequences will mount outside the fortress of lies that the establishment has become.

Mary Jo White, Nominee for S.E.C.'s 'New Sherrif,' Has Worn Banks' Hat | Dealbook

“You don’t want to mess with Mary Jo.”

That’s what President Obama said about his pick to run the Securities and Exchange Commission, Mary Jo White. The nomination of Ms. White, a former prosecutor who took on the terrorists behind the bombing of the World Trade Center in 1993 and the Mafia boss John Gotti, was meant to signal that the S.E.C. would be getting tough on Wall Street. CBS called her “Wall Street’s new sheriff.” The Wall Street Journal said she would be “putting a tougher face on an agency still tainted by embarrassing enforcement missteps in the run-up to the financial crisis.” The New York Times said her appointment represented a “renewed resolve to hold Wall Street accountable.”

Hold on.

While Ms. White is a decorated prosecutor, she has spent the last decade vigorously defending — and billing by the hour — Wall Street’s biggest banks, as a rainmaking partner at the white-shoe law firm Debevoise & Plimpton. The average partner at the firm was paid $2.1 million a year, according to American Lawyer; but she was no average partner, very likely being paid at least double that. Her husband, John W. White, is a corporate partner at Cravath, Swaine & Moore. He counts JPMorgan Chase, Credit Suisse and UBS as clients. The average partner at Cravath makes $3.1 million. He, too, was a former official at the S.E.C. — he left Cravath to run the corporate division of the S.E.C. starting in 2006 just in time for the run-up to the financial crisis. He left in November 2008, a month after the bank bailouts, to return to Cravath.

It seems Mr. and Ms. White have made a fine art of the revolving door between government and private practice.

So how conflicted is Ms. White? Let’s count the ways. [continue]

‘Rise of the Drones’ is Mostly a PBS Infomercial for the Military Defense Industry | The Dissenter

… Before the documentary began, PBS noted the program had received funding from the David H. Koch Foundation for Science. It also received “additional funding” from Lockheed Martin, which on its face looks like a violation of PBS’ underwriting guidelines.

Lockheed Martin is one of the nation’s biggest military defense contractors and is developing drones (in secret). The test PBS is supposed to apply to programs is three-fold and as follows:

Editorial Control Test: Has the underwriter exercised editorial control? Could it?

Perception Test: Might the public perceive that the underwriter has exercised editorial control?

Commercialism Test: Might the public conclude the program is on PBS principally because it promotes the underwriter’s products, services or other business interests?

Having Lockheed Martin provide any amount of money to a program that touts the amazing potential of innovations in drone technology appears to be a violation of both the “perception” and “commercialism” tests. Is it a violation?

In 2008, Lockheed Martin teamed up with Karem Aircraft Incorporated to develop “Karem Aircraft’s Optimum Speed Tilt-Rotor (OSTR) design. It was “one of three approaches selected by the Department of Defense (DoD) Joint Heavy Lift program office to receive a Concept Design and Analysis extension contract.” Karem Aircraft Incorporated was founded by Abe Karem. He appears in the documentary and, as The Economist has described him, he is the man who “created the robotic plane that transformed the way modern warfare is waged—and continues to pioneer other airborne innovations.” Karem talks about the advancement and benefits of drone technology. This is a clear conflict of interest. [++]

Being confirmed to top DoD job can be costly | POLITICO

The position of defense secretary is one of the most high-profile jobs a president can bestow, but it can come at a high personal cost — literally.

To avoid conflicts of interest, nominees are asked to sell off their financial holdings in companies that do business with the Pentagon.

That doesn’t just mean big defense contractors like Lockheed Martin or BAE Systems. Thousands upon thousands of companies today serve as vendors to the Defense Department, which buys everything from soda to tanks for its troops and employees around the world.

This makes the department unique among other government agencies, but it also means that taking charge of it can be a costly proposition — more costly than, say, running the State Department.

For someone like Sen. John Kerry (D-Mass.), reportedly under consideration to be nominated for either defense secretary or secretary of state, the position he winds up with would have a big impact on his and his family’s personal wealth.

In 2011, Kerry was ranked the wealthiest member of the Senate, according to his financial disclosure forms, with a reported net worth of around $193 million.

His most recent disclosure form shows a wide array of publicly traded stocks and financial holdings — some in companies that do business with DoD.

A 2008 report by the Center for Responsive Politics estimated Kerry had between $29 million and $38 million invested in companies that received defense contracts between 2004 and 2006, putting him at the top of the list of lawmakers with investments in companies with DoD contracts. [++]

Scholars and spies: A disastrous combination | Mark LeVine

Buried in a just published Washington Post exposé on the expansion of spying operations by the Defence Intelligence Agency (DIA) is a sentence that should send shivers down the spine of any researcher, journalist, student or scholar working in the Muslim world, regardless of whether she or he is an American citizen:

“Having DIA operatives pose as academics or business executives requires painstaking work to create those false identities, and it means they won’t be protected by diplomatic immunity if caught.”

I’m glad to know it takes “painstaking work” to create the “false” identity of a scholar (it’s most likely not as hard to fake being a businessman, given the CIA’s long history of using front companies for its espionage activities). But I have little doubt that the US intelligence and defence communities would do so if they believed such a cover could help better collect and/or produce actionable intelligence. Indeed, it’s quite likely they wouldn’t need to fake it, as there are likely many “scholars” who would willingly sign up for the job.

[…] One might ask, given the far greater levels of violence in which the intelligence community and military are involved, is the (re)joining of scholars and spies really worth getting up in arms about?

Yes, it is.

It’s hard enough to go to a region of the world where one’s government is engaged either in violent activities through war, occupation or drone activities (Iraq, Afghanistan, Pakistan, Yemen), supports the oppressive policies of the local government (Morocco, Bahrain, Israel, Egypt, etc) or as bad, is actively engaged in espionage against it (Iran, Sudan), and try to win the trust of social, religious and/or political activists who would naturally be on the radar of their own and foreign intelligence services. Such relationships will be even harder, if not nearly impossible, to develop if it becomes known that the US government is actively using scholars (and, we can presume, journalists) as covers for intelligence operatives.

Equally bad would be the agreement by universities, without the consent or even knowledge of their faculty and students, to provide covers for clandestine intelligence operatives, thereby putting legitimate scholars at risk without them having any idea of their so being. Such a situation would permanently taint every scholar engaged in research in the field in the Muslim majority world, or with diaspora Muslim communities in Europe or North America.

However it is done, such practices would undoubtedly make it well-nigh impossible either to produce the kind of well-researched and objective knowledge that is crucial for accurate policy-making by governments, or to know when the research being produced is done explicitly to promote clandestine strategic ends, or is in fact deliberate disinformation or is otherwise tainted as the product of espionage or otherwise clandestine activities. [++]

Obamacare architect leaves White House for pharmaceutical industry job | Glenn Greenwald

When the legislation that became known as “Obamacare” was first drafted, the key legislator was the Democratic Chairman of the Senate Finance Committee, Max Baucus, whose committee took the lead in drafting the legislation. As Baucus himself repeatedly boasted, the architect of that legislation was Elizabeth Folwer, his chief health policy counsel; indeed, as Marcy Wheeler discovered, it was Fowler who actually drafted it. As Politico put it at the time: “If you drew an organizational chart of major players in the Senate health care negotiations, Fowler would be the chief operating officer.”

What was most amazing about all of that was that, before joining Baucus’ office as the point person for the health care bill, Fowler was the Vice President for Public Policy and External Affairs (i.e. informal lobbying) at WellPoint, the nation’s largest health insurance provider (before going to WellPoint, as well as after, Folwer had worked as Baucus’ top health care aide). And when that health care bill was drafted, the person whom Fowler replaced as chief health counsel in Baucus’ office, Michelle Easton, was lobbying for WellPoint as a principal at Tarplin, Downs, and Young.

Whatever one’s views on Obamacare were and are: the bill’s mandate that everyone purchase the products of the private health insurance industry, unaccompanied by any public alternative, was a huge gift to that industry; as Wheeler wrote at the time: “to the extent that Liz Fowler is the author of this document, we might as well consider WellPoint its author as well.”

[…] More amazingly still, when the Obama White House needed someone to oversee implementation of Obamacare after the bill passed, it chose … Liz Fowler. That the White House would put a former health insurance industry executive in charge of implementation of its new massive health care law was roundly condemned by good government groups as at least a violation of the “spirit” of governing ethics rules and even “gross”, but those objections were, of course, brushed aside by the White House. She then became Special Assistant to the President for Healthcare and Economic Policy at the National Economic Council.

Now, as Politico’s “Influence” column briefly noted on Tuesday, Fowler is once again passing through the deeply corrupting revolving door as she leaves the Obama administration to return to the loving and lucrative arms of the private health care industry:

“Elizabeth Fowler is leaving the White House for a senior-level position leading ‘global health policy’ at Johnson & Johnson’s government affairs and policy group.”

The pharmaceutical giant that just hired Fowler actively supported the passage of Obamacare through its membership in the Pharmaceutical Researchers and Manufacturers of America (PhRMA) lobby. Indeed, PhRMA was one of the most aggressive supporters - and most lavish beneficiaries - of the health care bill drafted by Fowler. Mother Jones’ James Ridgeway proclaimed “Big Pharma” the “big winner” in the health care bill. And now, Fowler will receive ample rewards from that same industry as she peddles her influence in government and exploits her experience with its inner workings to work on that industry’s behalf, all of which has been made perfectly legal by the same insular, Versailles-like Washington culture that so lavishly benefits from all of this.

United Nations Ambassador Susan Rice will face serious and blatant conflicts of interest if nominated and confirmed as United States Secretary of State. Rice has major financial interests in the company extracting oil from Canada’s tar sands, the company building the pipeline that will carry the oil across the U.S., and the Canadian banks financing this deadly project. As Secretary of State, Rice would be responsible for the key recommendation to President Barack Obama on lifting the president’s ban on construction of the Keystone XL pipeline imposed in January. She would make the decision knowing that there would be major impact on nearly one third of her (and her husband’s) investments. Susan Rice’s Conflict of Interest – Major Holdings in Tar Sands Oil, Keystone XL Pipeline, and Canadian Financiers

Another Fox News Contributor Isn't Disclosed As A Member Of Romney's Campaign | Media Matters for America

Fox News contributor Elaine Chao has recently appeared on Fox Business to criticize Obama over the economy and push the falsehood that he stripped the work requirement from welfare. During these appearances, Fox didn’t disclose that Chao is a national chair of Mitt Romney’s presidential campaign. Fox News has made it a regular practice to not disclose some of its frequent guests’ ties to the Romney campaign.

In an August 2 press release announcing her appointment, Chao stated that she is “honored that Governor Mitt Romney asked me to serve as the national chair of Asian Americans and Pacific Islanders for Romney” and that “it will take new leadership to put this country on a path to prosperity and full employment.”

News Corp., the parent company of Fox News, recently nominated Chao to join its Board of Directors. Chao is married to Senate Minority Leader Mitch McConnell (R-KY).

Fox News contributors John Bolton and Walid Phares, and Fox regular Jay Sekulow, have all appeared on the network to criticize Obama without disclosing they’re Romney advisers. Fox News contributor Pete Snyder is the chairman of the Republican Party of Virginia’s 2012 coordinated committee. And Fox News contributor Karl Rove is the co-founder and adviser for the super PAC American Crossroads, which is spending tens of millions of dollars to defeat Democrats.

(Source: sarahlee310, via randomactsofchaos)

Bain and Financial Industry Gave Over $565,000 To Cory Booker | ThinkProgress

Even “the good ones”, as Booker is often perceived among liberals and progressives, cannot achieve high office without falling prey to the new realities of campaign finance:

A ThinkProgress examination of New Jersey campaign finance records for Booker’s first run for Mayor — back in 2002 — suggests a possible reason for his unease with attacks on Bain Capital and venture capital. They were among his earliest and most generous backers.

Contributions to his 2002 campaign from venture capitalists, investors, and big Wall Street bankers brought him more than $115,000 for his 2002 campaign. Among those contributing to his campaign were John Connaughton ($2,000), Steve Pagliuca ($2,200), Jonathan Lavine ($1,000) — all of Bain Capital. While the forms are not totally clear, it appears the campaign raised less than $800,000 total, making this a significant percentage.

He and his slate also jointly raised funds for the “Booker Team for Newark” joint committee. They received more than $450,000 for the 2002 campaign from the sector — including a pair of $15,400 contributions from Bain Capital Managing Directors Joshua Bekenstein and Mark Nunnelly. It appears that for the initial campaign and runoff, the slate raised less than $4 million — again making this a sizable chunk.

Gore Vidal once said, “by the time a man gets to be presidential material, he’s been bought ten times over.” Booker, as a lowly mayor, may have been bought only 4 or 5 times over thus far, but it seems to be working.

In March 2011, just weeks into the crisis, Faleomavaega emerged seemingly out of nowhere — he has no history of commenting on Middle East affairs — to enter a 2,500-word statement into the Congressional Record that closely echoed the Bahraini government’s spin. “Bahrain is under attack,” he said, painting protesters as violent, Iran-backed vandals representing “the worst kind of seditious infiltration from a foreign enemy.” He praised the Crown Prince for supposedly meeting protesters’ demands for democratic reforms. “Mr. Speaker,” Faleomavaega said. “I have to ask why the demonstrators returned to protesting again, even after all their demands were agreed to.” Just days before, the government had torn down the iconic Pearl Monument at the center of the protests, and Saudi Arabian tanks had rolled into Bahrain to back the government crackdown. Meet Bahrain’s Best Friend in Congress | ProPublica

Self-Dealing and the War Service Industry, Part I | Truthout

The LOGCAP (Logistics Civil Augmentation Program) contract is the Army’s major contract to provide logistics support to troops engaged in overseas deployments, known as contingency missions. Under the LOGCAP contract, troops are housed; fed; provided with sanitation and morale, welfare and recreation opportunities. With this broad mission, it became the Army’s largest service contract ever during the Iraqi and Afghanistan wars. The contract in its third version provided KBR with over $50 billion in contract funds and approximately $1.5 billion in profits. Many of these dollars were unearned by KBR because of grossly inflated costs and poor performance.

As early as 2004, the Army had a problem with KBR. While KBR had set up Army camps in Iraq and Afghanistan and they were supplying the troops, they had wasted millions of dollars in doing so through poor subcontracting practices, poor maintenance of transportation vehicles and hiring employees at higher-than-justified salaries. The government managers for these contracts had requested the Defense Contract Audit Agency (DCAA) to audit KBR’s incurred costs - the amount of money that KBR has spent to date. DCAA reported that they could not provide accurate audits, because KBR did not have the ability to provide sufficient cost data for the audits. KBR’s cost accounting system, cost estimating system and procurement system were all incompetent and did not provide auditable data, as required by their contract. DCAA then discovered in June 2004 that $1.2 billion in KBR costs were unsupported by documentation and, therefore, should not be recognized by the Army when determining how much or even whether KBR should eligible for a bonus, known as award fees. In addition, DCAA found that $250 million in costs for KBR-run dining facilities (DFACS) should not be allowed because they were unreasonably high based upon faulty KBR procurement practices.

Controlling the initial costs under LOGCAP was crucial at this point in the wars. [These] KBR costs, however inflated, would be the cost base of what the Army would spend on follow-on contracts for KBR or another contractor. In other words, they would be the historic cost basis on how much it would cost to have contractors supply troops year after year in these two wars and future wars. KBR had all the incentive in the world to artificially run up the costs because they would make more on the follow-up contracts. It is an old, tried and true contractor trick that has made the Pentagon overpay for planes, ships, tanks, spare parts or war logistic services for years.