02/19/2013 archive

BP to fight government’s ‘excessive’ demands over Deepwater oil spill

Suzanne Goldenberg, The Guardian

19 February 2013 13.17 EST

The trial is the last major hurdle to BP’s efforts to move beyond the fatal blowout of the Deepwater Horizon oil rig, which killed 11 people and resulted in the biggest oil spill in US history.

BP has already accepted criminal responsibility for the disaster, pleading guilty last November to manslaughter and lying to Congress and paying $4.5bn in fines. It reached a separate $7.8bn settlement earlier last year with thousands of local individuals that suffered economic damages because of the oil disaster.

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The Justice Department has said it would set out to prove that BP was “grossly negligent” in its response to the spill – a designation that would increase the burden of fines on the oil company to $4,300 a barrel.

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Federal government scientists have estimated that 4.9m barrels of oil were released before the well was finally capped. BP, in its statement on Tuesday, repeated its argument that estimate was too high – going so far as to accuse the federal government of exaggerating its findings.

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BP has consistently argued that the government’s estimate is off by about 20% – and said that at most it should be liable for 3.1m barrels of spilled oil.

The company also demanded the federal government subtract about 810,000 barrels of oil siphoned off directly from the well, without entering Gulf waters. That would shave another $3.4bn off the maximum $21bn penalty.

In January of 2010, the US Supreme Court handed down its decision in Citizens United v. Federal Election Commission that held that the First Amendment prohibited the government from restricting independent political expenditures by corporations and unions. However, the case did not involve the federal ban on direct contributions from corporations or unions to candidate campaigns or political parties, which remain illegal in races for federal office.

Once again the US Supreme Court is about to weigh in on campaign finance agreeing to hear arguments in the McCutcheon v. Federal Election Commission which contends that limits on what individuals are allowed to give candidates and parties and PACs is an unconstitutional violation of the individual donor’s free speech rights.

Supreme Court Takes Campaign Finance Case, Will Rule On Contribution Limits

by Paul Blumenthal, The Huffington Post

The U.S. Court of Appeals already ruled in favor of keeping the biennial limits, which have been in place since 1971 and were upheld in the 1976 Buckley v. Valeo case. By accepting the case, the Supreme Court is stepping into the thick of another controversial campaign finance case just three years after ruling in Citizens United v. FEC that corporations and unions can spend freely on elections. [..]

Campaign finance reformers are already calling on the court to maintain the Buckley precedent and rule against the challenge in McCutcheon, for fear that any overturning of Buckley will eventually lead to future erosion of contribution limits and other campaign finance precedents meant to protect against corruption or the appearance of corruption. [..]

A ruling to overturn the biennial limits would not directly affect the amount an individual donor could give to a single candidate, but, thanks to the proliferation of joint fundraising committees, known as victory funds or committees, a candidate could potentially solicit a single contribution from one donor of up to — if not more than — $3,627,600.

In a recent segment of Moyers & Company, host Bill Moyers discussed how “big money” is destroying democracy with Dan Cantor, Executive Director of New York’s Working Families Party, and Jonathan Soros, co-founder of the Friends of Democracy super PAC and a Senior Fellow at the Roosevelt Institute.

“There’s so much money being spent, there’s so much cynicism about the system, but the evidence shows, in states that do have public financing systems, that candidates can run in those systems and win, and they do it by focusing on their constituents and small donors,” Soros tells Bill.

Soros and Cantor advocate for a New York State public financing system inspired by New York City’s publicly-funded program that makes it less financially prohibitive to run for city-wide office. “People should appreciate who gets to run for office when you have a system like this. Librarians run for office, ex-teachers run for office – not just people who have a rolodex of prospective donors,” Cantor says. “It’s good for the candidates and the voters alike.”

The Super PAC That Aims to End Super PACs

by Michael D. Shear, The New York Times

In the next four months, Mr. Soros and a small team at Friends of Democracy, the new Super PAC, are going to pick 10 to 15 House lawmakers whose records and public statements have not been supportive of what Mr. Soros calls a system of “citizen-led” elections.

In those districts, the new Super PAC will produce direct mail, telephone calls, Internet advertising and even a few television commercials aimed at making sure voters know the positions of the lawmaker

In addition, a separate sister organization will be picking a handful of campaign finance reform “heroes” who will receive some direct contributions to reward them for their positions.

If all goes according to plan, Mr. Soros is hoping to eventually demonstrate to politicians that there is a political cost for standing in the way of reform.

For sale to the highest bidder, the Unites States of America.

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Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

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Dean Baker: Minimum Wage: Who Decided Workers Should Fall Behind?

It was encouraging to see President Obama propose an increase in the minimum wage in his State of the Union address, even if the $9.00 target did not seem especially ambitious. If the $9.00 minimum wage were in effect this year, the inflation-adjusted value of the minimum wage would still be more than two percent lower than it had been in the late 1960s. And this proposed target would not even be reached until 2015, when inflation is predicted to lower the value by another 6 percent.

While giving a raise worth more than $3,000 a year to the country’s lowest paid workers is definitely a good thing, it is hard to get too excited about a situation in which these workers will still be earning less than their counterparts did almost 50 years ago. By targeting wage levels that roughly move in step with inflation we have implemented a policy that workers at the bottom will receive none of the benefits of economic growth through time. In other words, if we hold the purchasing power of the minimum wage fixed through time, as the country as a whole gets richer, minimum wage workers will fall ever further behind.

Josh Levy: Meet the New CISPA. Same as the Old CISPA.

The new CISPA – just like the old CISPA – would protect companies like Facebook and Microsoft from legal liability when they hand over your sensitive online data to the federal government, without any regard for your privacy. The bill would permit the government – including the National Security Agency and the Department of Homeland Security – to use that information for matters that have nothing to do with cybersecurity. The whole process would, of course, take place behind closed doors, with no accountability to the public.

Last year’s activism succeeded in improving a similar bill in the Senate, before that bill ultimately failed to move forward. At the time, President Obama vowed to veto any destructive CISPA-like bill that reached his desk.

This time around, for a number of reasons – including changes in Obama’s staff and shifting political dynamics – it’s unclear if the president would once again commit to vetoing CISPA. So if this “new” bill goes farther than it did last time around, we simply don’t know what will happen.

Guantánamo trials plunged into deeper discord as confidence in court wanes

Chris McGreal, The Guardian

Sunday 17 February 2013 11.46 EST

In recent days, the commander of the Guantánamo prison, Colonel John Bogdan, was forced to admit on the witness stand that secret listening devices disguised as smoke detectors were installed in the cell where lawyers met their clients, and that he knew nothing about them.

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“I said, Mr Guard, is that a listening device, and he said, ‘Of course not’,” she said. “Well, guess what, judge? It’s a listening device”

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The prison’s lawyer, Captain Thomas Welsh, told the court he discovered the room was fitted with hidden microphones early last year and reported it to the then warden, Colonel Donnie Thomas, to seek assurances that meetings between the accused and their lawyers were not being spied on.

Bogdan said he was not informed when he took over. He told the court that the FBI was in control of the room until 2008 and that he has since discovered that the bugs were accidentally disconnected in October during renovations but then secretly reconnected by an unnamed intelligence service two months later, suggesting they were still in use.

Bogdan denied that the microphones were eavesdropping on lawyers. “We understood that any listening to an attorney-client meeting is prohibited,” he said.

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That followed a strange incident at a hearing last month when the audio feed from the courtroom to the public and reporters was suddenly cut when a defence lawyer made a reference to torture in an unclassified motion arguing that CIA “black sites” in Poland, Afghanistan and Romania, used to interrogate and torture abducted suspects, be preserved.

The judge, Colonel James Pohl, was caught unawares and demanded to know who had cut the feed. It transpired that an unnamed intelligence agency was monitoring proceedings from an unspecified location and decided to censor the hearing, a privilege Pohl said was reserved exclusively for him.

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Defence lawyers also accused the prison authorities of using cell searches to seize confidential legal documents. Attorneys for three of the accused – Mohammed, Bin Atash and Ramzi Binalshibh – said that the men returned to their cells on Tuesday to discover that the bins they use to store documents had been searched and confidential papers removed.

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The prison lawyer, Lieutenant Commander George Massucco, confirmed that the documents had been removed and said they would be returned shortly.

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Eviatar said the military tribunal’s track record is already damaged by the use of torture and CIA black sites in interrogations, and the original Bush plans for the conduct of the trials which were struck down by the supreme court as unconstitutional.

“I think what’s happening really seriously undermines the credibility of the process,” she said. “These are new courts to begin with. The first version of these courts was struck down by the US supreme court so you’re already starting with a lot of scepticism. And this current version hasn’t been tested in the US supreme court yet. But there’s so many problems every step of the way that it’s going to be very hard for anyone to look back and say this was a fair trial.“

Yah think?

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

February 19 is the 50th day of the year in the Gregorian calendar. There are 315 days remaining until the end of the year (316 in leap years).

On this day in 1942, U.S. President Franklin D. Roosevelt signs Executive Order 9066, authorizing the removal of any or all people from military areas “as deemed necessary or desirable.” The military in turn defined the entire West Coast, home to the majority of Americans of Japanese ancestry or citizenship, as a military area. By June, more than 110,000 Japanese Americans were relocated to remote internment camps built by the U.S. military in scattered locations around the country. For the next two and a half years, many of these Japanese Americans endured extremely difficult living conditions and poor treatment by their military guards.

The Order

The order authorized the Secretary of War and U.S. armed forces commanders to declare areas of the United States as military areas “from which any or all persons may be excluded,” although it did not name any nationality or ethnic group. It was eventually applied to one-third of the land area of the U.S. (mostly in the West) and was used against those with “Foreign Enemy Ancestry” – Japanese.

The order led to the internment of Japanese Americans or AJAs (Americans of Japanese Ancestry); some 120,000 ethnic Japanese people were held in internment camps for the duration of the war. Of the Japanese interned, 62% were Nisei (American-born, second-generation Japanese American and therefore American citizens) or Sansei (third-generation Japanese American, also American citizens) and the rest were Issei (Japanese immigrants and resident aliens, first-generation Japanese American).

Japanese Americans were by far the most widely affected group, as all persons with Japanese ancestry were removed from the West Coast and southern Arizona. As then California Attorney General Earl Warren put it, “When we are dealing with the Caucasian race we have methods that will test the loyalty of them. But when we deal with the Japanese, we are on an entirely different field.” In Hawaii, where there were 140,000 Americans of Japanese Ancestry (constituting 37% of the population), only selected individuals of heightened perceived risk were interned.

Americans of Italian and German ancestry were also targeted by these restrictions, including internment. 11,000 people of German ancestry were interned, as were 3,000 people of Italian ancestry, along with some Jewish refugees. The Jewish refugees who were interned came from Germany, and the U.S. government didn’t differentiate between ethnic Jews and ethnic Germans (jewish was defined as religious practice). Some of the internees of European descent were interned only briefly, and others were held for several years beyond the end of the war. Like the Japanese internees, these smaller groups had American-born citizens in their numbers, especially among the children. A few members of ethnicities of other Axis countries were interned, but exact numbers are unknown.

Secretary of War Henry L. Stimson was responsible for assisting relocated people with transport, food, shelter, and other accommodations.

Opposition

FBI Director J. Edgar Hoover opposed the internment, not on constitutional grounds, but because he believed that the most likely spies had already been arrested by the FBI shortly after the Japanese surprise attack on Pearl Harbor. First lady Eleanor Roosevelt was also opposed to Executive Order 9066. She spoke privately many times with her husband, but was unsuccessful in convincing him not to sign it

Post World War II

Executive Order 9066 was rescinded by Gerald Ford on February 19, 1976. In 1980, Jimmy Carter signed legislation to create the Commission on Wartime Relocation and Internment of Civilians (CWRIC). The CWRIC was appointed to conduct an official governmental study of Executive Order 9066, related wartime orders, and their impact on Japanese Americans in the West and Alaska Natives in the Pribilof Islands.

In December 1982, the CWRIC issued its findings in Personal Justice Denied, concluding that the incarceration of Japanese Americans had not been justified by military necessity. The report determined that the decision to incarcerate was based on “race prejudice, war hysteria, and a failure of political leadership.” The Commission recommended legislative remedies consisting of an official Government apology and redress payments of $20,000 to each of the survivors; a public education fund was set up to help ensure that this would not happen again (Public Law 100-383).

On August 10, 1988, the Civil Liberties Act of 1988, based on the CWRIC recommendations, was signed into law by Ronald Reagan. On November 21, 1989, George H.W. Bush signed an appropriation bill authorizing payments to be paid out between 1990 and 1998. In 1990, surviving internees began to receive individual redress payments and a letter of apology.

Nearly a year ago Rolling Stone contributing editor, Matt Taibbi wrote about how the Bank of America had defrauded everyone yet the US government kept bailing it out. They got a slap on the wrist and a paltry $$137 million fine for bilking needy schools and cities all the while plotting to rig global interest rates. In that same article from March 29th, 2012, Matt noted that BoA was still failing, yet they were still being bailed out. Why? The government’s excuse then and still is that they are too big to fail and too big too jail.

This was not fixed by Dodd-Frank and the promise to investigate the mortgage fraud and hold the banks accountable for bringing down the housing market and the economy along with it never materialize.

On Saturday in her New York Times article Gretchen Morgenson revealed that, we, the American taxpayer, are still bailing out Bank of America in secret deals :

That the New York Fed would shower favors on a big financial institution may not surprise. It has long shielded large banks from assertive regulation and increased capital requirements.

Still, last week’s details of the undisclosed settlement between the New York Fed and Bank of America are remarkable. Not only do the filings show the New York Fed helping to thwart another institution’s fraud case against the bank, they also reveal that the New York Fed agreed to give away what may be billions of dollars in potential legal claims.

Here’s the skinny: Late last Wednesday, the New York Fed said in a court filing that in July it had released Bank of America from all legal claims arising from losses in some mortgage-backed securities the Fed received when the government bailed out the American International Group in 2008. One surprise in the filing, which was part of a case brought by A.I.G., was that the New York Fed let Bank of America off the hook even as A.I.G. was seeking to recover $7 billion in losses on those very mortgage securities.

It gets better.

What did the New York Fed get from Bank of America in this settlement? Some $43 million, it seems, from a small dispute the New York Fed had with the bank on two of the mortgage securities. At the same time, and for no compensation, it released Bank of America from all other legal claims.

[…] To anyone interested in holding banks accountable for mortgage improprieties, the Fed’s actions are bewildering. If the Fed intended that Maiden Lane II own the right to sue Bank of America for fraud, why didn’t it pursue such a potentially rich claim on behalf of taxpayers? The Fed made $2.8 billion on the Maiden Lane II deal, but the recovery from Bank of America could have been much greater. Why did it instead release Bank of America from these liabilities and supply declarations that seem to support the bank in its case against A.I.G.?

The New York Fed would not discuss this matter, citing the litigation. But taxpayers, who might have benefited had the New York Fed brought fraud claims, deserve answers to these questions.

[…] A New York Fed spokesman said it supported the settlement because it would generate significant value without potentially high litigation costs.

Let’s recap: For zero compensation, the New York Fed released Bank of America from what may be sizable legal claims, knowing that A.I.G. was trying to recover on those claims.

If they’re too big to fail, to big to jail then these banks should be too big to exist.