Tag: Corporations

With the Supreme Court ruling Citizens United, the flood doors for campaign spending were sprung open that has allowed the moneyed class and multinational companies to fund super PACs for candidates and legislation that they favor. It also put the Federal Elections Commission (FEC) in a bind trying to regulate the few laws left that govern campaign finance. The Democratic chairperson, Ann Ravel told the New York Times that the agency is “worse than dysfunctional”.

The leader of the Federal Election Commission, the agency charged with regulating the way political money is raised and spent, says she has largely given up hope of reining in abuses in the 2016 presidential campaign, which could generate a record $10 billion in spending. [..]

Her unusually frank assessment reflects a worsening stalemate among the agency’s six commissioners. They are perpetually locked in 3-to-3 ties along party lines on key votes because of a fundamental disagreement over the mandate of the commission, which was created 40 years ago in response to the political corruption of Watergate.

Some commissioners are barely on speaking terms, cross-aisle negotiations are infrequent, and with no consensus on which rules to enforce, the caseload against violators has plummeted.

The F.E.C.’s paralysis comes at a particularly critical time because of the sea change brought about by the Supreme Court’s decision in 2010 in the Citizens United case, which freed corporations and unions to spend unlimited funds in support of political candidates. Billionaire donors and “super PACs” are already gaining an outsize role in the 2016 campaign, and the lines have become increasingly stretched and blurred over what presidential candidates and political groups are allowed to do.

Watchdog groups have gone to the F.E.C. with complaints that probable presidential candidates like Jeb Bush and Martin O’Malley are skirting finance laws by raising millions without officially declaring that they are considering running.

The FEC is obviously gridlocked and that is exactly what congress intended. Democratic commission member Ellen Weintraub spoke with MSNBC’s Rachel Maddow about the partisna gridlock and why she thinks the problem is not hopeless. In the first part of the video, Ms. Maddow discusses the political candidates and their run for the money and how the money is being raised and spent. The substantial discussion of the Super PACs and the FEC starts around 11:00.

The US government works closely with thousands of corporations to bring you everything from national security to the drivers of climate change.  The connections between these entities are diverse and often quite opaque making it difficult for citizens to tell who is really in charge.  Is it the corporations with their ultimate responsibility to make a profit for their owners and shareholders, or is it the government with its ultimate responsibility to the electorate?  Do the principles of government or business apply to joint decision making processes when government invests in businesses and sits on their boards, or when government agencies have representatives of business sit on task forces and decision making structures?

The economist and moral philosopher Adam Smith wrote, “people of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

What happens when the interests of business and government so align, that they are fundamentally, “in the same business?”

Cooperation

Disclosures by whistleblowers have led to a heightened interest by the press in these government-corporate linkages particularly in relation to intelligence gathering.  Bloomberg recently posted this article which describes in some detail cooperation between government spies and industry:

Thousands of technology, finance and manufacturing companies are working closely with U.S. national security agencies, providing sensitive information and in return receiving benefits that include access to classified intelligence, four people familiar with the process said. …

Makers of hardware and software, banks, Internet security providers, satellite telecommunications companies and many other companies also participate in the government programs. … Along with the NSA, the Central Intelligence Agency, the Federal Bureau of Investigation and branches of the U.S. military have agreements with such companies to gather data that might seem innocuous but could be highly useful in the hands of U.S. intelligence or cyber warfare units, according to the people, who have either worked for the government or are in companies that have these accords. …

Some U.S. telecommunications companies willingly provide intelligence agencies with access to facilities and data offshore that would require a judge’s order if it were done in the U.S., one of the four people said. [hmmm. think carefully about the ramifications of that statement, could the spy agencies just maybe be evading the law on collecting our information by collecting it from outside of our borders? pfffttt]… The extensive cooperation between commercial companies and intelligence agencies is legal and reaches deeply into many aspects of everyday life, though little of it is scrutinized by more than a small number of lawyers, company leaders and spies.

The article also points out the minimal oversight that these programs receive and quotes Senator Rockefeller’s cybersecurity assistant explaining that most congresspeople and their staffs charged with overseeing these programs lack the technical background and expertise to fully understand what they are responsible for overseeing.  Further, the article notes that within the companies that are entering into “arrangements” with the government, knowledge of these agreements is very closely held, suggesting that corporate governance structures are undermined and unable to perform their duty to oversee the activities of their corporation or withhold consent in behalf of the (kept in the dark) shareholders for actions taken by management. The secrecy involved creates a situation where loosely supervised government officials are allowed to compel or conspire with corporate chieftains to hijack corporations and undermine democratic governance structures.

Many of the corporations that have cooperated with the government are now, since being exposed, struggling with the public relations fallout that has come from customers finding out that the corporations have helped the government spy on them.  Surely they understood this risk, which is why many of these corporations demanded legal immunity for their cooperation.

So what made it worth the risk, because, as the Bloomberg article reveals, much of the participation by these firms was voluntary?  From the same article:

Michael Hayden, who formerly directed the National Security Agency and the CIA, described the attention paid to important company partners: “If I were the director and had a relationship with a company who was doing things that were not just directed by law but were also valuable to the defense of the Republic, I would go out of my way to thank them and give them a sense as to why this is necessary and useful.”

Ah, there was a corporate rewards program…

One is left to speculate about what sort of rewards might be handed out to corporations from a government with trillions of dollars to spend.  They probably aren’t just giving out key chains and coffee mugs.  Hmmm… Facebook cooperates with the NSA.  Was its precipitous rise in the market due to Zuckerberg’s ideas and business acumen or… something else?

“When the madness is directed towards the likes of you and me,

Then our blindness may be lifted and we might begin to see.

For when others are afflicted, with the scourge that has no end,

Then we practice our denial — and the purging, we defend.

So the powers and the peoples of the nations of this Earth

Could be fully in connivance — or denial of the hurt…

And even, in our hubris, in our information age,

We are blinded by our bias — and at petty issues rage.

So the workers were divided and they voted Nazis in,

And so many were the workers, who paid dearly for this sin!

And we see now in Wisconsin, there’s a Walker riding high,

And there’s cash enough from coffers to propagate the lie.”

(excerpted)

Arjun Jalah

Sometimes you would give anything not to be right!  When I started writing this diary three weeks ago, I predicted that Scott Walker would win the recall election for governor in Wisconsin. Walker, with unlimited corporate money, was challenged by a massive people’s movement when he outlawed most collective bargaining rights in what was usually considered a progressive state.  I knew, with the certainty of a cynic that that much money would out-weigh people power.   It was the fight between John Henry and the steel driving machine all over again. Yet, there I was, Tuesday night, praying that the people power would, in the end, win.  Not.  Walker beat Tom Barrett, the Democratic candidate 53%-46%, winning by a whopping 6% points. As Ed of the Ed Show so colorfully pointed out, there was no way to put lipstick on that pig. Or as Chris Hedges had said a couple of weeks earlier: “We lost. They won.”

Everyone one of these Democrats should lose the support of the DCCC and be primaried.

Blue Dogs backing corporate tax holiday

House Blue Dogs are on board with a temporary corporate tax holiday they argue will boost economic growth.

The group joined a growing bipartisan chorus pressing the congressional deficit-reduction committee to give U.S. multinational corporations a tax break in exchange for investing at home.

[]

The Blue Dog Coalition is backing a bipartisan bill sponsored by Reps. Jim Matheson (D-Utah) and Kevin Brady (R-Texas) that would remove a barrier keeping upwards of $1.4 trillion in American private-sector money overseas, which is similar to a Senate bill introduced last week by Sens. Kay Hagan (D-N.C.) and John McCain (R-Ariz.).

I have no idea what experts they are citing the article doesn’t say. I do know the history if the last time this was done in 2004 when they gave 92% of the money to themselves. Nor did the law which stated the money could not be used to raise dividends or to repurchase shares, stop them.:

There is no evidence that companies that took advantage of the tax break – which enabled them to bring home, or repatriate, overseas profits while paying a tax rate far below the normal rate – used the money as Congress expected.

“Repatriations did not lead to an increase in domestic investment, employment or R.& D., even for the firms that lobbied for the tax holiday stating these intentions,” concluded the study by three economists, including a former official of the Bush administration who took part in the discussions leading to enactment of the plan in 2004.

The study, titled “Watch What I Do, Not What I Say: The Unintended Consequences of the Homeland Investment Act,” was released this week by the National Bureau of Economic Research. It was written by Dhammika Dharmapala, a law professor at the University of Illinois; C. Fritz Foley, an associate professor of finance at Harvard Business School; and Kristin J. Forbes, a professor of economics at the Massachusetts Institute of Technology who was a member of the president’s council of economic advisers from 2003 to 2005.

“The restrictions on how the money will be spent seem to have been completely ineffective,” Ms. Forbes said in an interview this week.

“Dell was a great example,” she added, referring to Dell Computer. “They lobbied very hard for the tax holiday. They said part of the money would be brought back to build a new plant in Winston-Salem, N.C. They did bring back $4 billion, and spent $100 million on the plant, which they admitted would have been built anyway. About two months after that, they used $2 billion for a share buyback.”

The give away also cost the country more than 500,000 jobs:

Following a tax holiday on repatriated foreign earnings in 2004, 58 corporations that benefitted from the holiday slashed a total of nearly 600,000 jobs. These 58 giant corporations accounted for nearly 70 percent of the total repatriated funds and collectively saved an estimated $64 billion from what they otherwise would have owed in taxes.

According to the Joint Committee on Taxation this current clamor by for a tax holiday by the multinational corporations that barely pay any taxes now, would cost the US $80 billion and would do nothing to reduce the deficit and wouldn’t protect or create jobs:

Representative Lloyd Doggett, a Texas Democrat who is a senior member of the Ways and Means Committee, yesterday circulated an estimate from the Joint Committee on Taxation pegging the cost of a repatriation bill at $78.7 billion. An unsuccessful effort to create a similar holiday in 2009 would have cost the U.S. government about $30 billion over a decade in forgone revenue.

“This means we will have to borrow more from foreign creditors or shift a greater burden to American small businesses and families,” Doggett said. Congressional estimators projected that companies would repatriate about $700 billion if offered a 5.25 percent rate, compared with $300 billion during the tax holiday enacted in 2004.

[]

Democrats also maintain that the bill does too little to protect jobs at companies that repatriate overseas funds. They have pointed to such examples as Hewlett-Packard Co. (HPQ), which returned $14.5 billion to the U.S. at a low rate in 2004 and cut its workforce by 14,500 employees in 2005.

Primary these idiots