Exclusive: Zach Galifianakis Wants You to Know How Bad Gerrymandering Has Gotten
Exclusive: Zach Galifianakis Wants You to Know How Bad Gerrymandering Has Gotten
Here is a real shocker. AARP (formerly the American Association of Retired Persons) has been a paying member of the notorious right-wing, Koch-tied lobbying organization American Legislative Exchange Council (ALEC) since at least 2014.
Yes, that AARP, once known for protecting the interests of senior citizens and fighting to protect Social Security and Medicare. Yes, that ALEC — an organization dedicated to, among so many other things, privatizing Social Security and Medicare, and getting rid of public-employee pensions. AARP apparently joined ALEC even as many corporations were fleeing thanks to exposure of ALEC’s reprehensible actions.
AARP, the non-profit seniors organization that exists to promote the financial security, pensions and healthcare of those over 50, is secretly funding the American Legislative Exchange Council (ALEC), an organization whose bills have acted against the interests of ordinary Americans, including retirees and their families.
The Center for Media and Democracy has learned that AARP has recently joined ALEC, and that it is a named sponsor of the ALEC annual meeting taking place in Indianapolis, Indiana from July 27-29, 2016.
Why does this matter?
Michael Hiltzik, Columnist at the LA Times, explains why this matters in “Why is AARP cozying up to the right-wing group ALEC while big corporations flee?”:
Among the policies that have been promoted by ALEC are several that arguably undermine the interests of seniors and retirees, AARP’s core constituency. ALEC has pushed for the repeal of the Affordable Care Act, which has saved Medicare enrollees millions of dollars by closing the Medicare drug benefit “donut hole.” It has opposed Medicaid expansion under Obamacare. It has targeted public pensions, pushing to cap benefits and shift workers toward defined contribution plans, which layer more market risk on individual workers’ shoulders.
ALEC’s right-wing, corporate agenda is all about privatizing Social Security, gutting pension plans, turning Medicare over to insurance companies and pushing laws that would make prescription drug prices even higher for seniors.
Talk about selling out your constituency. Just wow.
Many companies dropped ALEC after the organization’s right-wing ties were exposed by CMD. These companies include Coca-Cola, Pepsi, Kraft, Google, Facebook, Amazon and Microsoft. (Click here for a list.) And then AARP apparently decided this all sounded good, and joined up.
Is This Even Legal?
Hiltzik’s column contains a revealing statement from AARP,
AARP’s statement acknowledged that it paid a fee to ALEC in 2016 to provide “an opportunity to engage with state legislators and advance our members’ priorities from a position of strength at ALEC’s annual meeting. AARP added, “given that Republicans control one or more chambers in 39 of the nation’s 50 state legislatures, we believe having a seat at the table at the ALEC annual meeting was necessary to our mission of representing the interests and needs of people 50-plus and their families.”
AARP says it paid a fee to “engage” with legislators and get “a seat at the table.” Paying the fee gives them a “position of strength.” This statement reveals how ALEC is set up as a “pay-to-play” corruption operation; the organization charges companies a fee for access to legislators, companies pay a fee so they can influence legislators, conservative legislators show up so they can be influenced. The public loses out on every side of that pay-to-play triangle of corruption.
Really? Paying a fee for an opportunity to engage with legislators? Or the other side of that equation, charging a fee? If this blatant corruption is legal at all, it is what is known as “lobbying.” But ALEC is a tax-exempt 501(c)3 charity that is prohibited from lobbying or engaging in politics at all. (Never mind a license for corruption.) Various complaints have been filed with the IRS, but nothing happens… Just wow.
CMD has a petition you can sign: Tell AARP to Dump ALEC!
For decades, ALEC has plied state legislators with disinformation about Social Security, climate change, and other issues along with bills and resolutions that undermine Americans’ financial security and our future.
Please sign the following letter (and if you are a member of AARP, please also contact the organization directly and ask that they DUMP ALEC).
Also, Social Security Works is an organization that “leads the fight every day to expand and protect our Social Security system.” They want you to click this: No organization that claims to represent retirees should be anywhere near ALEC, let alone funding them. Join us in calling on AARP to immediately end its financial support of ALEC and repudiate the group.
FYI: About CMD
The Center for Media and Democracy investigates and exposes corruption. You might know CMD for ALEC Exposed, which brought ALEC to public attention. You might know them for PR Watch, which keeps an eye on how corporations use “spin.” They also operate the SourceWatch wiki.
However you know them, they do great work. Check them out.
And click through to read the entire piece exposing AARP’s membership in ALEC as well as Michael Hiltzik’s column the LA Times. They both contain so much more in-depth information than is included here.
Last week the Treasury Department released a new rule and several proposals they said are intended to address the problem of corruption and dirty money in secret U.S. shell companies. A White House press release claimed, “Today, the Administration announced several important steps to combat money laundering, corruption, and tax evasion, and called upon Congress to take additional action to address these critical issues.” (A White House fact sheet is available here.)
The new rules initially appeared to be strong. But after examining the details several watchdog groups are warning that the new regulations and proposals leave open several glaring loopholes, and even practically provide instructions for how to get around the regulations.
Global Witness recently presented this TED talk on “how exposing anonymous companies could cut down on crime.”
Should our own government help oligarchs, billionaires and their corporations, criminals and terrorists hide their loot, launder their funds, and drain countries and their governments of needed revenue? Or should our government try to help stop this?
So far our government has too often been on the side of the bad guys.
Criminals, drug cartels, human traffickers, arms dealers, tax evaders, corrupt politicians, terrorists, oligarchs and plutocrats can use anonymous, secret shell corporations in tax-haven countries to stash, launder and hide their money. There are trillions of dollars of hidden wealth, much of it accumulated through crime and corruption. The secrecy is draining governments around the world of badly needed tax revenue, and it is enhancing and accelerating poverty and inequality.
Frederick E. Allen explains at Forbes, in “Super Rich Hide $21 Trillion Offshore, Study Says“:
A new report finds that around the world the extremely wealthy have accumulated at least $21 trillion in secretive offshore accounts. That’s a sum equal to the gross domestic products of the United States and Japan added together. The number may sound unbelievable, but the study was conducted by James Henry, former chief economist at the consultancy McKinsey, an expert on tax havens and offshoring. It was commissioned by Tax Justice Network, a British activist group.
The Panama Papers
The Panama Papers exposé by The International Consortium of Investigative Journalists has helped expose how certain countries enable the world’s plutocrats, outlaws, corrupt leaders, terrorists, warmongers, and the rest of the worst to use tax havens and anonymous shell corporations to hide their wealth, dodge taxes, dodge sanctions and even drain the wealth of countries. The reporting so far shows that just one Panama company had created up to 215,000 offshore shell companies for 14,153 clients. The reports link 143 politicians (or their families and close associates) to the use of tax havens to shield huge amounts of money. Again, this is from just one company in just one tax-haven, anonymous shell corporation-enabling country.
This also exposes how our own government is sometimes a party to enabling, even encouraging this activity. Our own government allows anonymous shell corporations here at home, and does not fight countries that enable them abroad when it negotiates so-called “trade” agreements that are supposed to lay down rules for financial interaction.
So-Called “Trade” Agreements, For Example
Our government negotiates what are called “trade” agreements with other countries. These negotiations are an opportunity to set up the rules for financial interactions between countries.
The 2012 U.S.- Panama Trade Promotion Agreement is promoted by our own U.S. Trade Representative’s office as “a comprehensive free trade agreement that provides elimination of tariffs and removes barriers to U.S. services, including financial services.” This agreement was an opportunity to fight global tax evasion, shell-corporation secrecy and other results of Panama’s bank and corporate secrecy. We could have negotiated to require an end to bank secrecy and shell corporations. But bank and corporate secrecy were not even part of the negotiations.
This demonstrates how the warped priorities of our “trade” process are hurting not just U.S. citizens and government but all citizens and governments.
Before the Panama trade agreement was approved, individuals, organizations and even politicians warned repeatedly that the agreement would enhance the ability of corporations and individuals to hide wealth and taxable income from governments and criminal investigators.
In 2011, Vermont Senator Bernie Sanders, for example, gave a speech on the Senate floor opposing the trade agreement, warning that Panama’s entire economic output at the time was obviously too low to be of any benefit to American workers. “Then why would we be considering a stand-alone free-trade agreement with Panama?” Sanders said the real reason for the agreement is that “Panama is a world leader when it comes to allowing wealthy Americans and large corporations to evade taxes.” He said it “will make this bad situation much worse.”
To show how Panama enables people and corporations to hide behind corporate secrecy, an intern at Public Citizens set up her own personal Panama shell corporation. Here’s what The Huffington Post’s Arthur Delaney wrote about this:
It’s so easy for U.S. corporations to set up an offshore tax haven in Panama, an intern could do it. Really! To make this point, Public Citizen’s Global Trade Watch division had one of its interns call up some Panamanian law firms for advice on starting up a shell company.
“Panamanian corporations basically pay no taxes on foreign-derived income,” one man explained to the intern, Jessica. Another said: “You’re protected by the strictest banking secrecy laws in the world,” thereby “totally removing you from the legal trail.”
Public Citizen was warning that the Panama Free Trade Agreement (FTA) did not fight and in fact further enabled the secrecy:
“It would give investors registered in Panama new rights to challenge U.S. anti-tax haven regulations and other initiatives for taxpayer-funded compensation,” said Todd Tucker, research director for Public Citizen’s Global Trade Watch division, in an interview with The Huffington Post.
… Tucker said that the Panama FTA would compromise the Obama administration’s recently-announced crackdown on tax havens, which the president said would save $210 billion over the next decade. (A 2008 Senate report estimated that the U.S. loses $100 billion to tax havens every year.)
With so many groups and individuals warning that the Panama agreement would boost the ability of people and corporations to dodge U.S. taxes using subsidiary shell corporations and secret bank accounts, the Obama administration announced in 2010 a “Tax Information Exchange Agreement with Panama.” This agreement had a loophole letting Panama to set aside tax transparency provisions if Panama decides they are “contrary to the public policy” of Panama. Of course, Panama invoked the loophole because so much of Panama’s income comes from bank secrecy, tax-free status and the ability to set up anonymous Panama shell corporations.
This week Public Citizen’s Lori Wallach issued a statement on the revelations in The Panama Papers:
“Nearly five years after the U.S.-Panama Free Trade Agreement (FTA) vote, the Panama Paper leak proves once again how entirely cynical and meaningless are the American presidents’ and corporate boosters’ lavish promises of economic benefits and policy reforms from trade agreements. The top promise about the benefit of the U.S.-Panama FTA was that it would end Panama’s financial crime secrecy protections and tax haven and money laundering activities, but what this leak shows is that, if anything, Panama’s outrageous financial crime facilitation has intensified while the FTA’s investor protections and official U.S. stamp of approval have increased inflows of dirty money to Panama.
Our Isaiah J. Poole writes, in “Panama Papers Controversy Offers An Opportunity To Push For Transparency“:
The silver lining in the Panama Papers scandal is that the world’s attention is being focused on a global problem in which the wealthy and powerful act beyond the reach of law, playing by a different set of rules from the rest of us. The United States does not have to go it alone in addressing this problem. But our elected officials, and the people running to be our next president, should lead. Supporting legislation that supports more transparency would be a start.
Countries that allow banking secrecy, the formation of anonymous shell corporations and tax-haven status should be considered rogue, outlaw countries. There should be international sanctions against individuals and corporations that do any business with such countries. There certainly should not be “free trade” agreements with such countries.
Harmonizing international tax law and prohibiting anonymous shell corporations should be at the center of our trade negotiations. Unfortunately, our corporate/billionaire-dominated trade process appears to have worked toward just the opposite. We the People and all of trade’s stakeholders – labor, consumer, human rights, environmental, democracy and other such groups – need to have seats alongside our businesses and government representatives at the trade negotiating table.
Republicans put a surprise sneak law into the big, last-minute “omnibus” budget bill: It bans the administration from making companies and “charities” disclose who is putting up the baksheesh money for political campaigns. The president has to sign it or the government shuts down. The result is that the rigging of our system to work only in the interests of those with big money will get even worse.
What The Public Wants
Poll after poll shows that the public wants something done about the country’s campaign finance system. Obviously just knowing who is bribing funding the politicians as they continue to rig the system against us is at the top of any list: “78 percent of Democrats and Republicans alike favoring a requirement that donor names be made public.”
What The Public Gets
The public might want something done about the campaign finance bribery corruption payoff system we have, but the bribed, corrupt, paid off politicians who owe their careers (and future lucrative corporate positions) to secret, big-money contributions want it kept the way it is, or made even “darker.”
After the Citizens United ruling (by justices who obtained their seats with the help of corporate and billionaire-funded efforts), Republicans filibustered to prevent the majority of the Senate from passing the Disclose Act. “The bill would have required disclosure of anyone who donates to independent groups that spent more than $10,000 on campaign ads – or their functional equivalent – and other election spending.”
Blocks SEC From Requiring Corporations To Disclose
The new “omnibus” budget bill contains “riders” that block the government from doing anything to bring light to the “dark money” swamping our elections. It blocks the president and the Securities and Exchange Commission (SEC) from making corporations disclose how much they are putting into the political system, and blocks the Internal Revenue Service from making nonprofits disclose which billionaires are putting money into the political system.
The Wall Street Journal has the story about the budget bill banning the administration from requiring corporations to disclose their political contributions, in “Deal Restricts SEC From Requiring Disclosure of Corporate Political Contributions”:
If signed into law, the provision would prevent the SEC from using funds authorized by the bill to “finalize, issue, or implement” a rule on disclosure of political contributions, or contributions to trade associations and other tax-exempt organizations, according to text of the bill posted early Wednesday.
However, if the President does not sign the bill, the government will shut down.
But wait, there’s more. Zach Carter reports at the Huffington Post, in “Congress Is About To Make Citizens United Even Worse”:
Another rider attached to the budget bans President Obama from issuing an executive order requiring government contractors to disclose their political spending, including donations to nonprofit groups engaged in elections, as a condition of submitting a bid. As HuffPost has previously reported, this does keep alive the prospect of an executive order mandating disclosure from contractors after they have secured their contract.
That’s right. Thanks to Republican “riders” in this budget bill, corporations do not have to disclose who they are paying to get tax breaks, subsidies, etc., and don’t even have to disclose payments they make to help them get contracts with the government.
Blocks IRS From Requiring Non-Profit Charities To Disclose
The Washington Post has the story about how this affects non-profit “charities” that are used to hide donors, in “Congress’ budget deal halts political disclosure efforts“:
The omnibus legislation would prohibit the Internal Revenue Service from using any federal funds in the coming fiscal year to revise or issue new rules governing the political spending of tax-exempt advocacy groups. The measure would effectively halt a two-year-long attempt by the IRS to set a clear limit on how much money such nonprofit groups, setup under Section 501(c)(4) of the tax code, can spend on politics.
The Post notes “a 1959 regulation that states that such groups must not be engaged in political activity, as they are meant to be ‘primarily engaged in promoting in some way the common good and general welfare of the people of the community.'” Except now they can.
The Journal fills this in a bit more, in “Spending Deal Preserves Nonprofits’ Ability to Spend Campaign Cash in Secret”:
Under the new legislation, the IRS cannot use federal funds in fiscal year 2016 to “issue, revise or finalize” any rules about how tax-exempt 501(c)(4) organizations can spend money to influence elections. Since 2013, the Obama administration has beenseeking to rein in the influence of such groups in elections by creating rules to restrict their spending on campaign-related activities.
Recent elections have seen an explosion in spending by nonprofit groups, such as the conservative heavyweight Crossroads GPS. The 2016 election is unusual in the volume of nonprofits that are spending millions to benefit specific candidates in the primary.
… Unlike super PACs, 501(c)(4)s are not required to disclose their donors, and most won’t have to file any IRS disclosure reports concerning their operations and spending until after the general election next year.
So, thanks to Republican “riders” in this budget bill, the IRS is not allowed to enforce laws already on the books against political activity by non-profits, and can’t even make them disclose who is funding that activity.
Pubic Citizen Reaction
The Post story has Public Citizen’s reaction:
“It’s outrageous that lawmakers are interfering with the most modest measures to increase disclosure of political spending,” Lisa Gilbert, who directs the watchdog group Public Citizen’s Congress Watch division, said in a statement. “The American people want – and deserve – to know who is trying to buy our elections.”
Note – many groups involved in the Democracy Initiative are working to plan a Spring 2016 mobilization in Washington combined with joint action in states – focused on voting rights and campaign finance reform.
“Collectively, we strive to build a 21st century democracy where the voice of every American is heard and counted with a government that is of, by, and for the people,” the campaign’s statement of purpose says. Note on the left side of the website where it says, “Click Here to Subscribe to our Newsletter!”
The “omnibus” budget for the next year is out. Here are some of the winners and losers.
With a Republican Congress, every budget battle is about ratcheting down the things our government does to make our lives better. Every budget battle is a defensive action, with Democrats fighting to keep things that help the public for another year or two. Republicans fight for tax cuts for the rich and corporations to defund government. Then they can claim that government doesn’t have any money, so we need to cut budgets. (Note that almost all corporate shareholders are largely the same rich people, so corporate tax cuts are really just tax cuts for the rich.)
What We The People Get
This time We the People “get to keep” tax incentives for wind and solar for another five years. The Earned Income Tax Credit (EITC) (for low income people with income from work), Child Tax Credit (CTC) (for people who have children), American Opportunity Tax Credit (AOTC) (for sending kids to college) were actually made permanent. We get to keep providing health care for 9/11 responders who got sick from helping at the World Trade Center site after the 2001 terrorist attack — all of which Republicans tried to strip out.
Making those tax credits permanent is a big win. These help lift 24 million working-class families.
The “Cadillac Tax” that was set up as a disincentive to employers to offer high-quality health insurance coverage is delayed for two years. This means people will be able to get better health insurance with lower co-pays and deductibles. (See the post “What Is This ‘Cadillac Tax’ Health Insurance Thingy?” for details.)
Because of all the tax cuts, the country’s public schools are generally underfunded to the point where teachers are using their own money to buy books for the students and supplies for the classrooms. The budget lets teachers forced to do this at least have a tax deduction from their income.
What We The People Stopped
Republicans were fighting to block the “fiduciary rule” that requires financial advisers to give advice that is in the interest of their clients, instead of tricking their customers just to make money for themselves — or at least disclose to customers if they have a conflict of interest. They didn’t get that rule blocked, so financial advisors cannot continue their fraud-based business model.
Republicans were trying to chip away at the Dodd-Frank bank-regulating rules, so Wall Street can expand its fraud-based business model. They were trying to strip power from the Consumer Financial Protection Bureau, and cut the ability of the Financial Stability Oversight Council to do its job. They didn’t get those.
Republicans Got Tax Cuts To Further Defund Government And Enrich Billionaires
Republicans fought for more corporate tax cuts and got $650 billion, including the “active finance exception” for multinational financial corporations and what Citizens for Tax Justice (CTJ) calls “the much-abused research credit.” CTJ says these “are nothing but ineffective giveaways to the nation’s wealthiest corporations.” CTJ concludes, “As a whole, this tax package is mostly a lobbyist-wrapped Christmas present for our nation’s biggest corporations.”
Republicans also won tax breaks for special interests including NASCAR, horse racing and film and television productions.
Having won another $650 billion of government defunding while handing $650 billion to big corporations, Republicans will soon come back and complain about “deficits” and demand a new round of cuts in the things our government does for us.
Oil Companies Get The Oil Export Ban Lifted
But Republicans especially fought for lifting the ban on exporting U.S. oil. This was their highest priority.
This is a typical news reports on the budget deal: “By far the biggest win for Republicans, besides the extended tax cuts, is a measure that would lift a four-decade-long ban on exporting crude oil.”
Why is this a “win” for “Republicans?” Because oil companies wanted it, period. The Republican Party is nothing if not always, always in service to oil companies. A political party placed ending the oil export ban as their highest, highest, do-or-die priority. It does nothing for the public, the country, the climate, jobs or anyone or anything else except for the oil companies, and this is what the Republican Party laid itself down to get done.
This puts more oil on world markets, just after the Paris climate talks. The reasons oil companies wanted this so much are:
1) In the short term, this gets some of the glut of oil out of the U.S., thereby raising gas and other prices within the U.S. (This was the real goal of the Keystone pipeline. Canadian oil is already coming into the U.S., the pipeline would take it to Gulf ports so it can be gotten out of the U.S., thereby reducing the glut and raising U.S. gas and other prices.)
2) The Paris climate agreement is a signal that the era of fossil fuel is ending. A lot of the oil that is still in the ground is going to have to stay there. The question is whose oil will have to stay in the ground, and producers are trying to get their oil out of the ground as fast as they can. Producers are now fighting with other producers to dump their oil before they are forced to stop. Saudi Arabia and OPEC are pumping oil as fast as they can. Lifting the U.S. oil export ban lets U.S. producers fight directly with them to get their own oil out of the ground first.
Democrats traded this in exchange for keeping tax incentives for wind and solar for another five years, and some of those other things We the People got to keep for a while longer.
P.S.: This Was Not Cool At All
By the way, the budget bill repeals a law requiring Country Of Origin Labels (COOL) on meats, because a corporate court decided We the People should not be allowed to know where the meat we purchase comes from. This cuts into the profits of giant meat producing corporations that are not U.S.-based.
For background on this see “Corporate Court Overrules U.S. Congress, Public.”
Republicans banned the government from requiring disclosure of who funds their campaigns.
From The Hill:
Language in the spending bill prevents the Securities and Exchange Commission from issuing a rule requiring publicly traded companies to disclose their political spending and the IRS from defining the activity that’s allowed by 501(c)(4) groups.
Exxon and other fossil fuel companies may have committed a crime of enormous proportions, and more and more elected officials and others are demanding an investigation.
The charge is that Exxon scientists and management knew since the late 1970s that the company’s product was helping cause our planet to warm “catastrophically,” but management responded by covering this up and disseminating disinformation – joining with other companies to commit an enormous fraud on the public for profit.
For some time, environmentalists have been warning that oil and coal companies were behind a broad campaign to deceive the public and block the government from regulating or taxing carbon pollution. Sites like ExxonSecrets, the Union of Concerned Scientists, SourceWatch and their Coal Issues portal, CoalSwarm and many others have been exposing, warning, documenting and working to get the word out.
In contrast to the Republican clown shows they call debates, last Tuesday’s Democratic presidential debate was serious and focused on policy. It let the public know that there are still adults at work trying to help deal with the country’s real problems. It helped the country move forward.
Tuesday’s debate gave the public a positive, optimistic presentation of the Democratic Party and its progressive message and how this gives hope for a positive direction for the country. For those worried about the debates helping one candidate or another one, polls tell us the debate lowered the “unfavorable ratings” of both Clinton and Sanders.
But the Democratic Party leadership still seems to want to try to limit the Democratic candidates from public exposure. Last Tuesday’s debate was on a pay TV channel (my cable/internet/phone monopoly rent-seeking bill is closing in on $200+ a month) – not a very aware move for a party that supposedly wants to represent and get votes from low-income Americans – and still 15 million Americans tuned in. Even with that audience, this viewer-suppression strategy worked; that’s almost 10 million fewer than the first Republican debate.
While Republicans chose a Republican-right TV channel with Republican-friendly moderators, the Democratic debate was on a Republican-lite channel with semi-hostile moderators. (“Will you say anything to get elected?” “You honeymooned in the Soviet Union.” “The current top prosecutor in Baltimore, also a Democrat, blames your zero tolerance policies for sowing the seeds of unrest.”)
The next debate will take place November 14 – a weekend evening that many suspect was chosen so younger members of the potential audience will be out on dates, out at the clubs, at movies, and so on. (At least it will be on a broadcast network so people can tune in without paying.) The one after that, December 19, is also on a weekend evening, but on top of that it is also on the last Christmas shopping weekend. The one after that is on a Sunday night.
Not everyone pays attention to these things so far before an election. But those who do can see this for what it is. One candidate has a big lead early on, the other has low name recognition. It looks like people at the top are helping the leading candidate “sit on” that lead and “run out the clock.” Some also think that the same people do not want the other candidate’s “message” to be heard widely because it threatens entrenched interests.
What’s in it for those helping rig this primary process? Washington politics now runs on exchanges of promises – jobs, favors, and the like. We don’t know if or what the chair of the Democratic National Committee was promised to protect Clinton’s lead and keep the public from hearing Sanders’ message. If this is what happened, it might show Clinton to be just the kind of savvy D.C. power-politics player who really can get things done. Maybe the country needs someone like that right now. Maybe, maybe not. Or maybe it is an unfortunate sign that a Clinton administration will be another pay-to-play corruption operation, people inside doing favors for the powerful. Maybe the public is sick of this kind of corruption.
The first debate was great for the country, the party – and Clinton. So how about we stop the nonsense and schedule plenty of debates, in prime time on weekdays, and let the country know that there is something available besides Trump and obstruction.
Again and again we hear about corporations doing bad things so they can make more money: polluting, selling contaminated food or otherwise harming people’s health, selling products that injure people or just don’t do what they advertise, tricking and scamming people out of their money, selling banned goods or providing financial services for terrorists or drug cartels, and so many other things that are not good for people or society.
Wouldn’t it be great if there were some entity that was more powerful than these corporations, whose purpose is to protect us, reign these corporations in, make and enforce rules, prosecute offenders and put a stop to this stuff?
This Week: VW
This week we are hearing about Volkswagen (VW). For years the company claimed they were selling “clean diesel” engines, but they were tricking their customers, the public and governments around the world. Their cars are really a public health threat, putting out up to 40 times the legal limit of pollutants that cause asthma and other disease.
VW built a “defeat mechanism” into as many as 11 million cars. This mechanism let the cars pass government tests, even though they were polluting like crazy when driven in the real world. The mechanism made the engine run clean during government tests, then when it detected that the tests were finished it set the engine to start polluting again.
For years these cars have been harming people and until now VW was getting away with (and making big profits from) this. They were finally caught, and we will see whether executives are prosecuted, or if this will be one more case of weak (or corrupted) government issuing a fine that lets a company make its shareholders pay the cost instead of holding the executives that did it accountable.
The Fix For The VW Cars
This is huge. Up to 11 million cars have these “defeat” mechanisms in them. These cars have to be fixed because their emissions can cause people to develop asthma and other respiratory diseases. But fixing this is a big problem.
According to Wired, in “VW Owners Aren’t Going to Like the Fixes for Their Diesels,” there are two choices for fixing these cars – and either choice means the car owners end up losing a lot of what they thought they had paid for.
The first is to update the software so the cars always run in the “test mode” that defeated the emissions tests. But the changes the software made to the engines to get them to operate within the legal emissions limits while being tested will cause the car to either have poor acceleration or poor gas mileage.
The second is to actually fix the problem that causes the engines to pollute. According to Wired, VW would have to add a “urea” tank and the means to inject this into the catalytic converter:
The standard way of making a diesel run cleanly is to use selective catalytic reduction, a chemical process that breaks NOx [mono-nitrogen oxides] down into nitrogen and water. Part of that process includes adding urea to the mix. The super effective system can eliminate 70 to 90 percent of NOx emissions, and is used by other diesel manufacturers like Mercedes and BMW. The downside is that it adds complication to the system, and cost — $5,000 to $8,000 per car. And you need to periodically add the urea-based solution to your car to keep it working.
… So it seems the logical way to get those cars to perform like their diesel cousins is to add a urea. VW’s unlikely to embrace that option, because adding hardware to half a million cars would be far more expensive than a computer update. It wouldn’t be any fun for the TDI owner, either. Not only do you have to spend an afternoon with your local dealer, you have to make room for the tank. That could mean sacrificing cargo space or giving up the spare tire.
The cost to VW will be huge, and the customers lose either way. Never mind all the people suffering asthma and lung disease resulting from the pollution these cars were emitting.
VW Not An Isolated Case
The New York Times reports, in “Volkswagen Test Rigging Follows a Long Auto Industry Pattern,” that,
For decades, car companies found ways to rig mileage and emissions testing data. In Europe, some automakers have taped up test cars’ doors and grilles to bolster their aerodynamics. Others have used “superlubricants” to reduce friction in the car’s engine to a degree that would be impossible in real-world driving conditions.
Automakers have even been known to make test vehicles lighter by removing the back seats.
… [In 1973 the EPA] fined Volkswagen $120,000 after finding that the company had installed devices intended specifically to shut down a vehicle’s pollution control systems. In 1974, Chrysler had to recall more than 800,000 cars because similar devices were found in the radiators of its cars.
[. . .] Beyond emissions, the industry has long been contemptuous of regulation. Henry Ford II called airbags “a lot of baloney,” and executives have bristled at rules requiring higher mileage per gallon.
VW might not even be the only company that is scamming government testing labs with “defeat mechanisms’ right now. From the report,
“We call it the tip of the iceberg,” said Jos Dings, the director of Transport and Environment. “We don’t think this will be limited to Volkswagen. If you look at the testing numbers for the other manufacturers, they are just as bad.”
The Times report lists several examples of the auto industry engaging in profit-making by endangering their customers. There was the “unexploded Pinto” problem of gas tanks blowing up. There were 271 deaths from the Ford-Firestone tire scandal. There were the Takata airbags that either don’t work or injure people. There was Chrysler selling as new cars that had been driven for 60,000 miles with the odometers disconnected. Click through, there’s plenty… But no one has been put in jail.
So what VW was caught doing is “not an isolated incident” and, in fact, VW had already been caught doing the same thing in the 1970s.
Not Just Auto Industry
VW is hardly the only company in the auto industry engaged in these practices, and the auto industry is hardly the only industry engaging in this kind of activity.
● Of course, tobacco still kills over 480,000 Americans each year and no one even talks about doing anything about it. Everyone understands this is because of the great wealth and power of the tobacco companies as well as their influence over a certain political party. More than 480,000 terrible, painful deaths each year!
● The “Obamacare” health reform was written the way it was because it was understood from the start that the insurance and pharmaceutical companies had enough power to block anything they didn’t like. So we didn’t get Medicare for All or even a “public option.” These industries had already blocked the administration of President Bill Clinton from reforming the health care system, leading to more decades of deaths, untreated illness and bankruptcies.
● In 2000, The Nation reported, in “The Secret History of Lead,” that the lead industry knew and kept secret for decades that they were poisoning people with lead in gasoline, paint and other products, and instead of doing something about it they protected their profits by covering this up and attacking government efforts to do something.
The leaded gas adventurers have profitably polluted the world on a grand scale and, in the process, have provided a model for the asbestos, tobacco, pesticide and nuclear power industries, and other twentieth-century corporate bad actors, for evading clear evidence that their products are harmful by hiding behind the mantle of scientific uncertainty.
Mother Jones’ Kevin Drum reported on just one of the societal consequences of this decades-long crime, in “America’s Real Criminal Element: Lead.” His investigative report concluded that lead may be “the hidden villain behind violent crime, lower IQs, and even the ADHD epidemic.” That whole put-millions-in-prison thing that has ruined so many lives? Oops, it might have been the lead industry’s doing. Are any lead industry executives in jail for that?
● The fossil-fuel industry is notorious for polluting and for causing climate change. The industry has captured an entire political party and has them fight the development of alternative energy sources, taxes on carbon, fuel-saving public transportation initiatives, other energy-saving efforts, etc. The industry funds a climate denial cult that threatens the entire planet.
These are just a few of so many examples.
Big Government Prosecutions Can Make A Difference
Corporations save money by cutting corners. Dumping carbon into the air. Putting lead in gasoline. You name it. They price the potential fines into the product as a cost of doing business. And company shareholders pay those fines. The executives who commit the actual wrongdoing are rarely if ever held accountable themselves.
Many companies can safely assume that the government isn’t even going to catch them or do anything if they do. Government cowed by intense anti-government propaganda. We hear that “government can’t do anything as well as business can,” that “big government threatens us,” and “government takes money out of the economy.” We hear about “burdensome government regulations” that “kill jobs” on a 24/7/365 basis. Government and democracy do not have an advertising budget to counter this relentless propaganda.
Government is underfunded because the propaganda elects corporate-backed anti-government politicians who convince people to allow tax cuts (on the corporations and their owners) paid for by cutting back on government. And especially cutting back on government regulation and enforcement. The result is government enforcement is backing down all the time.
Industry executives revolve through the door into government and then back into plush corporate offices where they collect rewards for protecting their industries. Our “captured” government notoriously refuses to bring corporate criminals to justice. Not one banker, for example, was prosecuted for obvious crimes leading to the 2008 financial crash.
However last week we saw one rare instance of a prosecution of individuals for corporate crime. The people running Peanut Corporation of America, a Georgia peanut company, were prosecuted after a salmonella outbreak that sickened and hospitalized hundreds of people and killed 9 of them. Company executives knew for years their product was made in unsafe ways that were causing contamination — but instead of spending what was needed to fix the problem they covered this up. So the owner was sentenced to 28 years in prison and other executives were sentenced to 20 years.
Thanks to an actual prosecution resulting in prison terms for company executives it is likely that the public will suffer fewer food-safety problems, at least for a while.
Our government supposedly exists to protect We the People from wealthy and powerful interests, including other countries. Our revolution against the wealthy British aristocracy and the King’s corporations testify to this. A government that is “of the people, by the people and for the people” should be big enough, strong enough and funded enough to reign in companies and billionaires, and protect We the People from the kind of corporate misbehavior we saw from Volkswagen — long, long, long before it involves 11 million cars all spewing out serious threats to public health.
While the world warms, the climate deniers are out in force, trying not only to sabotage American efforts to fight climate change but also to undermine international talks.
We are witnessing a spectacle of corruption, and the stakes literally could not be higher. It is an astonishing spectacle. The Republican party is working to sabotage efforts to fight climate change and is doing this because the fossil-fuel industry – and billionaires whose fortunes came from that industry – funds so much of their messaging and campaign infrastructure, and their candidates. This is not ideology; it is flat-out corruption.
Corruption is Legal in America
Also, Elizabeth Warren: They Don’t Represent You