Thursday, March 27, 2008

March 13-26, 2008

Dick Cheney Strategy

After being pounded by the Obama folks for months to open her records as First Lady being held under seal at the Clinton Library, Hillary dumped 11,000 pages on us yesterday. That's out of an estimated two million pages that remain under seal.

The records released yesterday were of her personal schedules. Schedules would, one would assume, show with whom she met, for how long they met, why and where they met. One would assume.

Hillary likes to point out that, seven years after Dick Cheney met with oil company executives to develop America's energy policies, we still don't know the names of those who gave us $4 a gallon gasoline and record oil company profits.

Then yesterday Hillary tore a page right out of Cheney's hide-the-pickle playbook.

"Over time, Clinton's schedules offer less and less information. In 1993, her first year as first lady, the records include the names of people she met with. But federal archivists blotted out those names, citing privacy issues. In spring 1994, Clinton's schedulers appear to have stopped including names -- so her days are filled with one "private meeting" after another, with no mention of whom she met with or why." (LA Times)

For example, on Jan. 28, 1994, the names of the participants in a 10 a.m. meeting with her at Bally's Resort & Casino in Las Vegas had been erased. Why? Inquiring minds would like to know why the names of individuals who met with the First Lady of the United States of America, had to be obliterated from a public record.

Simple logic, and my decades as a reporter, tell me that the answers to that question fall into a very narrow range of possibilities:

  • - She was up to no good
  • - The individuals she met with were up to no good
  • - The individuals she met with were, themselves, no good
  • - All the above
But wait, there's more:

"Sometimes, even the names of people getting their pictures taken with Clinton were removed. So it is not known who had a photo op with her at 2:45 p.m. on March 10, 1994, in the White House Map Room."

Some folks wanted to have a photo taken with the First Lady of the United States of America, for reasons of their own.

But the former First Lady of the United States of America apparently does not want us to know who those persons were. Why?

Again the possibilities are limited:
  • - The person she was photographed with is now in trouble with the law
  • - A more recent photo of the person she was photographed with can now be viewed on the FBI "Most Wanted" web site.
  • - The person she was photographed would cause embarrassment for her as a candidate for President of the United States.
Am I being too cynical?

Fine. Then you give me the innocent explanation, because I sure the hell can't think of one.

Then there are all the entries in her schedule that give us no information whatsoever, with entries like these:

In later years, the records are even more spare. On June 25, 1997, for example, Clinton is shown as having taken part in three successive meetings in the White House residence, stretching from 11 a.m. to 12:30 p.m. They are labeled simply "private meeting."


On Feb. 12, 1999 -- the day the Senate voted down her husband's impeachment -- she blocked off an unusually long appointment on her daily schedule from 11 a.m. to 3 p.m. under the entry: "PRIVATE MEETING/Residence/NO PRESS/NO WH PHOTO.

Now, I can imagine situations where it would be none of our damn business what she was doing or with whom the First Lady of the United States of America was meeting with or why.
  • - She was meeting with her private physician to discuss her own personal health
  • - Her plastic surgeon had dropped by to give her botox injections to remove the worry lines caused by her husband's misbehavior(s).
  • - She was having an emergency session with her shrink-- for the same reason.
Those are the kinds of really private, entirely personal, stuff.

Even First Lady's have a personal life that, from time to time, require private moments.

For example, on July 20, 1993, Hillary Clinton was staying at her mother's house in Little Rock when she got word that friend and aide Vince Foster had committed suicide. Her schedule for the next two days is virtually empty even though they were among the most frenetic and emotionally fraught of her White House time.

I understand. I not only understand. but I'm sympathetic. One of her closest friends had just committed suicide. Hillary was in mourning. That's the kind of stuff really is none of our damn business.

But Hillary was First Lady of the United States of America. She was living on the public dole, doing the public's business. Ninety nine percent of what a President and First Lady do while in office is the public's business -- because it is public business.

All those "redactions" in her public schedule bode ill for our democracy should she become our next President. She will not only bring those habits to her new job, but many of the very people who implemented them during her terms as First Lady:

"The schedules also show the depth of Clinton's attachment to a small cadre of "Hillaryland" aides who have followed her on to the campaign. In the 1990s, most White House days began with a 15-minute meeting that included Patti Solis Doyle, Clinton's first presidential campaign manager, and Maggie Williams, who replaced Solis Doyle at the helm earlier this year. (Newsday)

Back in my day it was the press' job was to assure that the public's business remained public. I hope the media will insist that Hillary either fill in the blanks in the records she released yesterday, or supply explanations for why each of those erased names, reasons and photos should remain secret.

Otherwise all we will be doing next November if Hillary is the Democratic choice, is trading Cheney/Bush secrecy for Hillary secrecy.

What a choice.

What a Bitch

In 1932, Edward Angly published a short book filled with optimistic forecasts about the economy offered by President Herbert Hoover and his associates. The sarcastic title of his book was, "Oh Yeah?."

I've found myself echoing that title almost every day of late as I listen to President Bush and his associates try to reassure us that things are not as bad as they seem. Oh Yeah?

Anyway, as you may know by now I am a real history whore. Maybe that's why, as I enter the final third of my life, I fell like I'm living a social/economic and political version of the movie, Ground Hog Day. Wave after wave of Deja vu sweep over my conscious hours. Wars, greed, famine, self-indulgent political leaders, economic disparity and "trouble in the financial markets."

Been there. Done that, and done that, and done that, and done that. It's as though society is little more than an software program stuck in a loop, and no one around to hit the "ESC" key.

Ah, but there I go, diverging again. My purpose this morning was actually to just dip back into that loop and copy and paste a few lines of code from the past and compare them with the code that's running today to test my theory.

So, thanks to Edward Angly we can compare President Hoover's take on things then to President Bush's take on things now. (You won't be surprised, but you may be amused... and then worried.)

"Unemployment in the sense of distress is widely disappearing. . . . We in America today are nearer to the final triumph over poverty than ever before in the history of any land...There is no guarantee against poverty equal to a job for every man. That is the primary purpose of the economic policies we advocate:
August 11, 1928—Herbert Hoover, speech accepting the Republican nomination, Palo Alto,California.

"Losing a job is painful, and I know Americans are concerned about our economy; so am I. It's clear our economy has slowed, but the good news is, we anticipated this and took decisive action to bolster the economy, by passing a growth package that will put money into the hands of American workers and businesses."
(President Bush, March 7, 2008 on news that the economy lost 63,000 payroll jobs in February.)

“Prosperity is no idle expression. It is a job for every worker; it is the safety and safeguard of very business and every home. A continuation of the policies of the Republican party is fundamentally necessary to the future advancement of this progress and to the further building up of this prosperity.”
October 22, 1928—Herbert Hoover, Campaign Address, Madison Square Garden

"The economic team reports that our economy has a solid foundation, but that there are areas of real concern. Our economy is still creating jobs, though at a reduced pace. Consumer spending is still growing, but the housing market is declining. Business investment and exports are still rising, but the cost of imported oil has increased."
Jan. 18, urging Congress to quickly pass an economic-stimulus plan.

“The outlook of the world today is for the greatest era of commercial expansion in history. The rest of the world will become better customers.”
July 27, 1928—Herbert Hoover, Speech at San Francisco

"In the long run, we can be confident that our economy will continue to grow, but in the short run, it is clear that growth has slowed....This economy of ours is on a solid foundation, but we can't take economic growth for granted."
Jan. 4 after meeting with the President's Working Group on Financial Markets.

“Any lack of confidence in the economic future or the basic strength of business in the United States is foolish.”
November, 1929—Herbert Hoover

"'Every time, this economy has bounced back better and stronger than before,. In the long run, we can be confident that our economy will continue to grow."
March 14, 2008 -- President Bush.

“Definite signs that business and industry have turned the corner from the he temporary period of emergency that followed deflation of the speculative market were seen today by President Hoover. The President said the reports to the Cabinet showed that the tide of employment had changed in the right direction.”
January 21, 1930—News dispatch from Washington

"I hope you're confident about our economy. I am. We've got some short-term issues to deal with. Fourth quarter growth slowed. In other words, there are signs that our economy are slowing. We're in challenging times. But another thing is for certain — that we've taken strong and decisive action."
Jan. 30 at the Robinson Helicopter Co. in Torrance, Calif.

“While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover. There is one certainty of the future of a people of the resources, intelligence and character of the people of the United States—that is, prosperity.”
May 1, 1930—Herbert Hoover, Address at annual dinner of the Chamber of Commerce of the United States

In the long run, Americans ought to have confidence in our economy. I mean, there are some anchors that promote long-term -- that should promote long-term confidence.
First of all, the unemployment rate is relatively low. We're an innovative society with a flexible economy. There's a lot of research and development being spent here in America. There are new technologies being developed. Productivity is on the rise. We have a strong agricultural sector. The small-business sector is vibrant.
President Bush -- Florida March 17

“During the past year you have carried the credit system of the nation safely through a most difficult crisis. In this success you have demonstrated not alone the soundness of the credit system, but also the capacity of the bankers in emergency.”
October 2, 1930—Herbert Hoover, Address before the annual convention of The American Bankers Association, Cleveland

"I understand there's short-term difficulty in the credit markets," Bush said. "But I want people to understand that in the long term, we're going to be just fine."
President Bush -- March 17, 2008 -- Florida

“Economic depression cannot be cured by legislative action or executive pronouncement.”
December 1930—Herbert Hoover, Message to Congress

"If we were to pursue some of the sweeping government solutions that we hear about in Washington, we would make a complicated problem even worse. "As we take decisive action, we will keep this in mind: When you are steering a car in a rough patch, one of the worst things you can do is overcorrect and end up in the ditch."
President Bush -- March 14, 2008

“On September 8, I requested the governors of the Federal Reserve banks to endeavor to secure the co-operation of the bankers of their territory to make some advances on the security of the assets of closed banks or to take over some of these assets... Such a measure will contribute to free many business activities and in a measure reverse the process of deflation involved in the tying up of deposits.”
October 1931—Herbert Hoover

"The United States is on top of the situation. We obviously will continue to monitor the situation and when need be, will act decisively, in a way that continues to bring order to the financial markets.
Prisdent Bush -- March 17, 2008

“The depression has been deepened by events from abroad which are beyond the control either of our citizens or our government.”
October 18, 1931—Herbert Hoover, Radio address at Fortress Monroe, Virginia

"Over the past seven years, this system has absorbed shocks — recession, corporate scandals, terrorist attacks, global war. Yet the genius of our system is that it can absorb such shocks and emerge even stronger."
President Bush -- Feb. 13, 2008 in signing an economic stimulus package of tax rebates for families and businesses.

The Politics of Complexity

I just finished listening to Barack Obama's speech.

It boils down to this: The politics of simplicity vs. The politics of complexity.

Traditional politicians, on both the right and left, prefer the politics of simplicity: The simplicity of racial stereotypes. The simplicity of religious stereotypes. The simplicity of economic choices -- free enterprise or socialism. The simplicity of social class.

Obama knows better. When it comes to human beings, and the social systems we create, nothing is simple. The complexities are deep and they are wide. They are also stunning in richness and variety.

The American black experience is as rich and deep, fruitful and tragic, as any of those who came, willingly or otherwise, to this country.

The white experience too is filled with its own complexities, fruitful and tragic.

For two centuries now, we've stumbled along parallel paths, the same in many ways, different in significant ways. Thanks to the efforts of some who went before us, men and women who understood this complex relationship, those two paths have begun to merge...not yet one, but closer. The politics of simplicity wants that never to happen. Because the day it does the politics of simplity loses a powerful wedge of division and distraction.

The traditional politics of the right would have us believe white America is somehow burdened, even threatened, by changing ethnic and cultural demographic trends.

Traditional political hacks on the left would have us believe that the root of all that ails us can be found in corporate board rooms.

Both views are simplistic to the extreme, simple to use in speeches. and simple ways to get media attention. They are simple ways to cast doubt. Simple ways to divide rather than unite. Soundbite politics is the politics of simplicity.

But there's nothing simple about Iraq, or the deteriorating environment, or the now internationlized nature of the economy, or what currently ales it. Each of those issues is made up of billions of moving parts. The complexity of any one part of any one of those issues is mind-numblingly complex. And only those willing and able to see, accept, process and deal with such complexity can address them.

But simplicity works better than complexity for politicians. Forget all that complexity they say. Make your choice based on the simple problems and all that so-called complexity will take care of itself.

Politicians of simplity want us to focus on the simple-minded things:

Obama doesn't wear a flag lapel pin and doesn't put his hand over his heart when the national anthem is played."

Focus instead on the simplistic remarks by his former pastor, Rev. Wright.

Focus instead on a candidates religion... is he Christian or maybe a closet Muslim?

Focus instead on whether a candidate is black, or white, "enough."

Focus instead on whether a candidate is for or against certain medical procedures, rather than whether all Americans can even afford any significant medical procedures.

Obama was right when he said, in his speech today, that this is rare opportunity to turn our backs on the politics of simplicity and embrace the politics of complexity. Because we will never solve the complex problems facing America and the world with the simpleminded politics of the past..and present.

The only question now, is are we, all of us, mature enough to eschew the politics of simplicity and embrace the far more difficult, but certainly more productive, politics of complexity?

It's up to us now. It's up to you.

*(If you missed the speech you can watch it here)

The Good
The Bad & The Ugly

What are you going to do if Hillary Clinton succeeds bagging the Democratic Party nomination for President by playing dirty.

I've begun thinking about that more and more over the last couple of weeks. The Clintons have built their entire political lives on the premise that, if they can't win pretty, they'll settle for winning ugly.

Which is why things have gotten so ugly lately. Once it became clear she could not beat Obama in a fair fight they switched tactics. IED's (Insinuations, Exaggerations and Distortions) are now the weapons of choice for the Clinton campaign. Hardly a day goes by now when one of these IEDs doesn't explode into the news.

"Is Obama a Muslim." Hillary was asked on 60-Minutes. "No. Not as far as I know," she replied.


"Obama is not ready to become Commander-in-Chief," Hillary warns then coyly adds, if voters on the fence pick her, she'd consider putting Obama a heartbeat away from becoming Commander-in-Chief.


"I have crossed the threshold and met the national security test to be Commander-in-Chief," Hillary says. "John McCain has also met that test. Obama gave a speech."


"The reason Obama has gotten where he is today is because he's black," pronounced Clinton supporter and finance committee big shot, Geraldine Ferraro.


BTW -- that was not the first time Ferraro set off a racial IED in the midst of a presidential primary.

A Ferraro flashback
"If Jesse Jackson were not black, he wouldn't be in the race," she said.

Really. The cite is an April 15, 1988 Washington Post story (byline: Howard Kurtz), available only on Nexis.

Placid of demeanor but pointed in his rhetoric, Jackson struck out repeatedly today against those who suggest his race has been an asset in the campaign. President Reagan suggested Tuesday that people don't ask Jackson tough questions because of his race. And former representative Geraldine A. Ferraro (D-N.Y.) said Wednesday that because of his "radical" views, "if Jesse Jackson were not black, he wouldn't be in the race."

Asked about this at a campaign stop in Buffalo, Jackson at first seemed ready to pounce fiercely on his critics. But then he stopped, took a breath, and said quietly, "Millions of Americans have a point of view different from" Ferraro's.

 Discussing the same point in Washington, Jackson said, "We campaigned across the South . . . without a single catcall or boo. It was not until we got North to New York that we began to hear this from Koch, President Reagan and then Mrs. Ferraro . . . . Some people are making hysteria while I'm making history." (

A few weeks back Bill Clinton detonated an almost identical Jesse Jackson IED. Coincidence? No way...


Can you imagine!
I never thought I'd see a leading Democrat dip back to the tactics of the dark days when racist Democrats ruled the segregated South, playing the fears of whites against the hopes of blacks. Disgusting.

But insurgencies are, by necessity, ugly business. Inevitably there will be collateral damage. Innocents will be hurt. The means are ugly, but the ends will make amends --we are assured. Once they win, the insurgents promise, they will get rid of the bad and the ugly and herald in the good.

Hillary holds up her role as First Lady as the reason she's "ready to lead from day one," and there may be some truth in that. Among the things she learned during those days was how run parallel political and insurgent actions. She learned this when husband Bill helped negotiate a settlement in Northern Ireland. While the Irish Republican Army conducted the ugly part of their insurgency the leader of its political arm, Sinn Fein, Gerry Adams, stayed above it all making nice in Parliament. When his IRA fighters blew something, (or someone) up, Adams would bemoan the violence, even condemn it. Then he'd offer his political solutions/demands.

Likewise, each time one of her campaigner sets off an IED aimed at Obama, Hillary denies her campaign is behind it. If the uproar is loud enough, she even condemns it. Then she makes nice, assuring everyone that all she really wants is peace and reconciliation -- on her terms, of course.

Will she stop these IED attacks? Well, (have you ever noticed when on the spot Hillary always begins her response with "well.") Well, she'd just love to stop that kind of stuff, but -- she quickly adds -- she can't because, "you know, it's a free country and people have a right to say what ever they want."

But does she agree with the things people speaking on her behalf are saying? Well, of course not. "Well, I certainly don't agree with everything people who say the support me say," she demurely adds.

In other words, stop the IEDs -- "no way, Jose." Because this is all she's got left. Obama has already won the hearts and minds of the majority of Democratic voters. If she stops the IEDs now Obama would have a nearly unobstructed path to the nomination. She's can no longer count on just slowing him down, she's got to stop him. She needs to wound him so badly he can no longer win.

There's two ways to get this nomination: win it fair and square, or finagle it. Since she can no longer win, she's now onto finagling. Which means encouraging her surrogates to keep planting IEDs while she works the political angles -- Super-delegates, seating Michigan and Florida delegates, etc.

Meanwhile out on the field of battle her surrogates have turned to the nuclear option -- or as her own spokesmanr and snake turned snake charmer, Howard Wolfson describe it, "the kitchen sink strategy."

Call it what you like, boiled down to its essence it can be summed up as, "an IED a day keeps the nomination away" -- from Obama.

Sure it's dirty fighting. And sure, if successful it will leave the Democratic Party looking like Beirut on a bad day. And sure her victory would only reinforce the very kind of politics that have torn the nation apart since Newt Gingrich and his kind marched to power. And sure an ugly Clinton victory risks outraging Obama supporters to such an extent many will not even show up to vote in November, virtually guaranteeing another four years of GOP rule.

But those probabilities appear not to matter to Hillary Clinton. If she can't have the prize she'll make sure her opponent inherits a scorched political landscape; a party in disarray. a fractured party embroiled in a very un-civil war. It could even mean the end of the Democratic Party as a force in progressive politics -- not that the party has been much of a force in that direction anyway. But at least it would end the pretense.

Then there's African American voters who will feel betrayed, snookered and humiliated by the party they've supported through thick and thin for decades. And all those young Democrats, new to the process, who will retreat into cynical complacency. And why not? Why participate in a process where the best values and behavior are routinely trumped by the worst values and behavior?

So, have you been thinking about it too? About what you're going to do on election day next November if your choice is between the Republican version of Mr. Magoo and the Democrat's version of Imelda Marcos?

Whatya gonna do? Now would be a good time to think about it, so maybe, just maybe we can avoid such an unpalatable, unhelpful, unacceptable choice.

Thursday, March 13, 2008

March 1-12, 2008

Hillary W. Clinton
John W. McCain

Two of the pillars of our American democracy stand upon are the premise that ordinary folk -- in their role on juries and as voters -- are inherently imbued with a kind of celestial judgement claimed by only one other human on earth, the Pope. As the myth goes, once they hear all the evidence and arguments, juries and voters make the right judgement.

Well, I have at least two contempory examples why that's untrue: O.J. Simpson, and two George W. Bush terms in office. There are others -- lots of them -- but, nuf said. Sometimes we get it right, sometimes we get it wrong. Regardless the decisions stand and the consequences pile up, be they good or ill.

My apologies for just blurting out this revelation, as it will certainly come as news to most middle school civics classes. Sorry boys and girls, but ordinary Americans can be just as stupid when assembled into groups as they can be when left to their own devices-- often even more so. And sprinkling them with feel-good "justice-is-blind" and "the-people's-choice" fairy dust can't turn their occassional pig's-ear decisions into silk purses.

I only mention this because we are again in the midst of one of these exercises in mass decision making. Don't get me wrong, I prefer democracy over any other form of governance I've studied. My only point is that it's far from infallible -- which I admit, is the biggest "duh" you'll hear today.

Already this process is showing signs of trouble. Our herd of Democratic voters appears to have, again, grazed it's way into a patch of locoweed. Yes, I'm bellyaching about Hillary's alleged "come back," Tuesday night. And about all the nonsense those victories unleashed. And because, against all odds, there's a growing possiblity it can result in sending another Republican to the White House in November. .

Here's why I think the Democratic Party's herd of voters may not be leading us to the White House, but a cliff -- again. Here are my five reasons for believing so:

1) A good place to begin is to examine just who may have engineered Hillary's "comeback" in Texas and Ohio. Ask yourself why you think America's preeminent right-winger would want to help Hillary and hurt Obama.

Rush Limbaugh takes credit for Hillary's support

March 5, 2008 - Chicago Tribune: Conservative talk show host Rush Limbaugh claimed at least partial credit today for Hillary Clinton's victories in Texas and Ohio.

Limbaugh spent much of his show Monday exhorting Republican listeners to cross over and vote in the Democratic primary for Hillary Clinton to prevent Democrats from unifying around Barack Obama as Republicans have done around John McCain....“What we did, if we did anything, is to create a bunch of chaos in the Democrat Party and it worked,” Limbaugh said.

The latest numbers show Clinton won by about 3 percentage points in Texas and 10 points in Ohio. Exit polls of voters in the two states found most Republicans who crossed over and voted in the Democratic primary voted for Obama. (Full Story)

When Rush Limbaugh is your biggest booster, you gotta wonder.

2) After Hillary's twin victories Tuesday night she floated the possibility of a Hillary/Obama ticket. Of course she'd love that, since it would bring in the young and well-educated voters now supporting Obama.

(Polls show that Hillary's support comes largely from the less educated, blue-collar Democratic party demographic. Not that's there's anything wrong with that.. but it should raise at least some question in the minds of voters. Call me an eliltist but, who would you chose to make a life and death decision for you -- well-educated people or not-so well educated people. But I digress)

The idea that Obama would serve as Hillary's Veep is beyond ridiculous. In fact, I can't think of any serious person who would want the VP post under Hillary. Why? Because they would not BE the Vice President in-fact -- Bill Clinton would be the de-facto VP, huddling nightly in the WH family quarters with the President.

A Vice President Barack Obama would be rendered ridiculous, a figure of ridicule and jokes. I just don't see him, or any other serious person, putting themselves in such an untenable, career killing, humiliating situation. Period. Think about it.

3) A race between Barack Obama and John McCain would be a contest between the politics and policies of the future v, the politics and policies of the past. If you like the war in Iraq, great, McCain will give you more of the same. If you liked tax cuts for the rich, he'll give us more of that too. If you liked seeing wages fall, John W. McCain will accomodate.

If you want something completely different, vote for Obama.

But what if Hillary is the nominee instead? A race between Hillary Clinton and John McCain would be far less of a choice. Sure there would be policy differences, but trying to change policy with the politics of the past will yield more of the same in Congress -- more rancor, game playing, passive-aggressive behavior on steroids -- just same old, same old.

Hillary takes pride in describing herself as "a fighter," and I'll give her that. But fighting is what we've had in Washington since Newt Gingrich took over as House Minority Whip from Dick Cheney in 1989. Fighting works for Republicans. Republicans like nothing better than to throw some red meat on the floor and create a brawl over it creating a wedge issue they can use agianst Democrats in the next election. It's a classic fascist political tactic -- and it works.

All of which says to me that the last freaking thing we need now is another "fighter" in the damn White House. We need a calm communicator who is not easily lured into a a fight with every knuckle-dragging conservative bully who taunts them.

4) Then there's the two spouses. With Barack we get Michelle, an articulate, successful career woman and mother of two little girls who is, by all accounts, an entirely normal, well-adjusted woman.

With Hillary we get Bill, an articulate politician, husband and father who had an affair with a girl roughly the same age as his own daughter - which, while not unheard -- is not "entirely normal" behavior -- especially for a sitting President of the United States of America.

Hillary makes the argument that voters need to choose between her and Barack based on experience and judgement. What kind of "judgement" was afoot in the Oval Office when spouse Bill was having sex in there. What if the White House phone rang back then?

"Hello, this is President Bill Clinton. I can't come to the phone right now because. .. well, I just can't. Leave a message at the tone. Beeeep."

Do Hillary Clinton's supporters really think Bill will exercise better judgement today? If so they must also believe that Britney Spears would make a great ambassador to the Vatican. Come on, Bill is Bill. We love him and we hate him for it... all at the same time. That leopard still has spots.

So, think about it: First Lady Michelle Obama or First Man, William Jefferson Clinton. Your choice.

5) Early in the campaign Hillary Clinton slapped Barack Obama around for his ties to crooked Chicago businessman, Tony Rezko. It should have been a "rocks and glass houses" moment, but the media didn't pick up on it.

Let me just note here that I am not naive about this kind of stuff. Money is not the "mother's milk of politics," it's the heroin of politics and, if a politician does not arrive in office already hooked on the stuff they will be soon enough. That's why we need mass house-cleanings from time to time. Or, as they put it down in Louisiana, "time to let the fat hogs out and the lean hogs in."

But again, I digress.

Hillary has refused to release her tax returns, saying she'd do so if and when she becomes the party nominee. The reason for the foot-dragging is simple. As noted above the core of Hillary's support comes from working class Democrats, many of whom are now struggling financially. According to reliable sources, since Bill and Hillary left the White House the couple has done quite well. Estimates of the current net worth range somewhere between $32 and $60 million.

The last thing Hillary wants her blue collar supporters to know is that she's a blue nose now and no longer "one of them."

But even more to the point, she does not want anyone asking how they bagged such a bonanza in such a short time. Sure she and he wrote a successful books .. a New York Times Best Sellers even. Well, so did I, and I can tell ya, I ain't worth $40 million...or anything remotely close to it. So where did all that mulla come from?


Protecting Hillary:
Bill Clinton Severs Business Ties With Billionaire Buddy

Bill Clinton has severed business ties with Los Angeles billionaire Ron Burkle, fearful that their deals could erupt into bad publicity damaging his wife's presidential bid, according to sources who know both men...The break-up is a major development in the world of political fundraising, where Burkle has risen to the top ranks, credited with channeling $50 million or more into Democratic coffers over the past 15 years....Burkle was one of Clinton's chief fundraisers while he was in the White House, a position that earned him a place on the Lincoln Bedroom guest list. After Clinton left the White House, Burkle brought the former president on board as a senior adviser at his investment firm, The Yucaipa Companies. (Full Story)

And another..oops:

How Bill Clinton's Aide
 Facilitated a Messy Deal
Lawsuit Pending Over Spending

Wall Street Journal: For the past six years, the road to Bill Clinton has often run through Douglas Band, a 34-year-old former White House intern who has helped manage Mr. Clinton's time, accompanied him around the world and even fielded some of his calls. ... When Mr. Clinton left office in 2001, Mr. Band stayed with him. Without his young aide, Mr. Clinton said in a 2003 speech, "I could not get through the day." Adds one longtime Clinton associate: "When Doug calls up, it's like having the president call up. (Full Story)


Bill Clinton's Midas touch
Stock deal benefiting his foundation among shrouded successes

WASHINGTON -- In December 2004, former President Bill Clinton made a much-publicized appearance at a launch party in New York for Accoona, a new Internet search engine billing itself as a rival to Google...Clinton's presence at the gathering at Tavern on the Green in Central Park was a coup for the unheralded, privately held Accoona, which paid for the former president's appearance by issuing options for 200,000 shares of stock to Clinton's charity, the William J. Clinton Foundation. In 2006, the Clinton Foundation sold the shares for $700,000. (Full Story)


Bill Clinton May Get Payout of $20 Million

Wall Street Journal: Former President Clinton stands to reap around $20 million — and will sever a politically sensitive partnership tie to Dubai — by ending his high-profile business relationship with the investment firm of billionaire friend Ron Burkle. (Full Story)

Isn't that what they call a "golden parachute" in the biz, Bill? I've been asked to "go away" more than once in my life and not once did anyone hand me 20 million bucks for my inconvenience. Just how does a fella get a gig like that? Inquiring minds will want to know... or should.

None of the above is anything like the bogus, chump change Whitewater real estate deal that bedeviled Bill's two terms in office. That deal amounted to something around $26,000, if I recall correctly. The deals Bill signed onto after leaving office have been real gushers, filled with real characters and more than a few questions about precisely what was afoot and what Bill was getting paid for doing.

I'm not just blowing past Obama's involvement with the sleazy Mr. Rezko. But Obama himself has described his decision to do business with the guy as "a bonehead decision." and donated contributions from Rezko to charity.

So, how does Bill describe the business deals noted about which netted him tens of millions?. Someone should ask. In the meantime voters should keep this in mind the next time the Clinton campaign drags Mr. Rezko out for another airing.

Okay, enough. If Democrats -- or the DNC -- decide to send Hillary into battle against McCain we will have four more years of Republican rule. Obama beats McCain in national polls. Hillary loses to McCain in those same polls. I have no idea why Hillary Clinton's supporters can't or won't see that they are about to do to nation in 2008, what Ralph Nader's supporters did to us in 2000. I can only hope they'll figure it out before it's too late.

Must Read of the Day:
Rosa Brooks, LA Times

Memo to Federal Employees
When Is It Ethical to Break the Law?

When is it ethical to fight illegality with illegality? Tough question. Dangerous question.

Nevertheless history is full of now celebrated events that, when boiled down to there essence, amounted to illegal acts that changed nations, changed the world. Revolutions are, for example, the mother of all illegal acts against a state. Yet they are more often than not, celebrated -- at least by the victors.

This is dangerous territory, to be sure. Breaking the law to achieve higher ends can be a calculation of monumental subjectivity. Nearly every tyrant in history has had their own list of justifications and claimed lofty goals to justify their lawless actions -- including the current occupant of the White House.

But history also tells many a tale of oppressed, abused and exploited populations, forced by the illegal actions of their rulers, to break the law in order to break free themselves of lawless rulers.

Sadly, we live in such times, and in such a country. Over the past seven years the Bush administration and it's Neo-con supporters have broken nearly every law of State that matters. They have waged an illegal war, kidnapped people, held people without trial and without representation. They have usurped the constitution's central tenants mandating the separation of powers. They have lied to Congress, lied to the courts, lied to their own people and lied to the world community.

Oh hell, you know the list. There's more. Lots more. Likely more than we now know.

And, at least so far, they've gotten away with it. How? Simple as pie. All they've had to do is withhold or destroy the documentary evidence of their crimes.

When the GOP controlled Congress the administration had hundreds of accomplices in this crime. When Democrats regained control of Congress the administration was on its own and resorted to lying under oath, hiding documents and, when that failed, destroyed them.. as they did with the over 5-million White House emails.

When we found out they were spying on us, with the help of the nations phone companies, they demanded Congress give the telecoms immunity from prosecution. Not because the give damn about the telecom's getting sued, but because they know the telecoms, to save their asses, will spill the beans -- the administration's beans. So the administration has dug its heels in, demanding Congress immunize the telecoms -- not to keep them on their side, but to keep them quite.

(Out here in the real world that's called "obstruction of justice and witness tampering." )

Okay, but you know all this already. So what am I getting to.

Recently many of us learned about a web site with only one purpose in life: allowing whistleblowers to post documentation that the government and/or corporations don't want us to see -- ever. Those that objected tried to get it shut down and, for a couple of weeks nearly succeeded.

Wikileaks judge realizes you can’t enjoin the net
by Richard Koman March 3, 2008 @ 7:00 PM

So, the site is back online, after Federal Judge Jeffrey White dissolved his previous order, ordering the site’s U.S. registrar to pull it off the net. In reversing those orders, the judge focused on the First Amendment implications of taking the site down. But even more to the point, the judge noted with regret that his injunctions were just plain useless. (Full Story)

WikiLeaks is back and what I am about to suggest I do not suggest lightly. I am about to suggest that people break the law .. which is itself.. is breaking the law. (One of society's little Catch-22's)

Since the Bush administration is now running out the clock on its two-terms of unpunished lawlessness, time is short. I know from my years of covering Washington that that town is chuck full of good people, employees working at the agency level. They are career government employees -- Republicans, Democrats and independents. And they've had a front row seat to what's come down during the past seven years. And I am certain that many of them -- maybe most of them -- are as disgusted and outraged as you are.

(An aside: The Bush administration has used leaks to accomplish its own goals. For example, they thought leaking the identity Ambassdor Joe Wilson's CIA wife, Valerie Plame, was just the right way bolster their case for war against Iraq. So, in a strange, perverted way, the administration has shown the way for others in government who have stuff they believe could be "helpful" if released, legally or otherwise.)

Those career employees represent possibly our final hope of catching these guys red-handed. Because it is in their offices, in their files where the evidence lays .. the documents, them minutes of meetings, the executive orders, all the stuff this administration is determined never sees the light of day -- or a court of law.

Let me be perfectly clear. I'm not talking about releasing truly sensitive classified intelligence. I'm talking about the kind of documents which, under any other administration would have been fully accessible to the Congress and the public through the Freedom of Information Act. I am talking about the regular business of government, the work-a-day documents of agencies like the FDA, FEMA, Treasury, HHS, the FDA and the DOJ. It is those documents which are being withheld because they prove this administration politicized those agencies violating laws in more ways than we can now even imagine.

I am quite certain that in some file in some employee's Executive Office Building cubicle is the list of just who was on Dick Cheney's Energy Task Force. In another office are the Executive Orders President Bush signed authorizing torture. In another office are documents showing how the religious right perverted federally-funded family planning operations. Some DOJ secretary is sitting on the evidence that would prove the White House tried to use the Dept. of Justice to suppress minority voting during the past two election cycles and tried to purge US Attorney's around the country that refuse to bring politically motivated charges against Democratic candidates and office holders.

All that evidence, and mountains more, are destined for oblivion within the next nine months.

Until now federal employees in possession of evidence of a crime had no reasonably safe way of getting that evidence into the public's hands.

WikiLeaks now offers a way -- and in just the nick of time.

Of course breaking the law -- even for laudable reasons -- is inherently risky business and I can't in good conscience encourage anyone to disregard the consequences by advising them to simply break the law. M means and ends must be thought through. The ethics of withholding or releasing such materials weighed and re-weighed and the possible consequences clearly understood.

Daniel Ellsberg understood the means, the justification, the ends he wished to achieve and accepted the risks. He broke the law and so doing, changed history.

(Another Aside: When I was covering banking agencies in Washington during the S&L crisis, federal regulators, unable to get their superiors to act against politically-connected rogues like Charles Keating, would slip me restricted documents. I would write a story and suddenly the agency heads would be forced to act. Finally one day two Treasury agents (with guns even) showed up at my office. They demanded to know who was leaking documents to me. I pointed to my filing cabinet and said,

"Listen you two, it's all in those files -- everything you want to know. I dare you to subpoena's those files. Then you two better go looking for a new line of work. Beecause some of the names in those files are your own superiors."

They left and I never heard a word about it after that. Had it not been for those leaks, to me and other reporters, the looting of the S&Ls would have gone on much longer, and cost taxpayers much more. Those leakers were -- are -- heroes, of a sort.)

So, if you're one of those government workers, and you're in the mood to blow the whistle on a crime, the URL is

Time is short. The perps are already moving in the shredding machines. They are already making lists of the documents that will be sequestered in the yet-to-be-built Bush "Library" in Texas. By this November it will be too late. They will have succeeded. They will have escaped. The evidence of their crimes will be either destroyed or placed beyond reach.

The best disinfectant is, and always has been, the light of day.

Liberals Can Be Wrong Too

Hopefully we're in the closing days of a over a decade of conservative dominance in national politics. It's not coming to an end because they were wrong all the time, but rather that, when they were wrong -- which was often -- they wouldn't or couldn't see it, admit it, and correct course.

In the process they took the nation, and large parts of the world, on regular Mr. Froggy's Wild Ride. Road kill litters their journey's path and they're returning a vehicle on it's last legs with an empty gas tank.

Sadly most of those mistakes could have been avoided had they only put ideology aside long enough each time to assess the wisdom -- or lack thereof -- before forging blindly ahead. After all, there was no shortage of sane conservative Republicans who tried to get Bush/Cheney and their band of pale-conservative Moonies to do just that.

Sen. John McCain warned that Bush's tax cuts for the rich would not stimulate the economy and would widen budget deficits. And so its come to pass.

Senior Republican, Sen. Chuck Hagel saw the folly of Bush's Iraq invasion early and tried to warn Bush that "staying the course" was a political, not tactical decision... that in fact it was a monumental mistake.

And so the list goes on and on.... "Don't do it!" Don't do, Gitmo, waterboarding, renditions, deregulating financial services, making the tax cuts for the rich permanent.... they were warned, and warned and the warnings continue. Hardcore conservatives simply jammed their ideological earplugs in so deep they mingled freely with gray matter.

Liberals have exactly the same tendency. Just as the conservatives have now worn out their welcome with American voters, liberals wore their out as well the last time they had the chance. And don't tell me it ain't so. How do you think we ended up Newt Gingrich and his "Contract For America," and all that has since flowed from it, including two GW Bush terms.

Americans had clearly become disenchanted -- even disgusted -- with ideologically crippled Democrats who couldn't seem to differentiate between good, workable policies and feel-good liberal wet dreams.

Let's admit it, Democrats really were a pack of "tax and spend liberals." When they had the chance they used -- abused -- the national treasury to pay off constituent groups with social programs -- some good, some bad, some just a mystery. Then, good or bad, they paid for those programs by taxing anything that moved, or didn't move fast enough. And no one could, at the time, convince them they might be wrong on any of it.

Let's also admit that today's Republicans have proven to be "borrow and spend neo-conservatives." They looted the national treasury, passing money out to their friends and supporters and then made up the deficit those give-aways caused by flipping out the national credit card. Each time they wanted to spend money on something -- like a $12 billion-a-month war in Iraq -- they said, "just charge it."

The reason I bring this up right now is that it seems nearly certain that, come January 21, 2009, the Democrats will once again be King of Mountain in DC. Will they listen this time to those who try to warn them to be alert to the fact that ideologically-driven policies -- even liberal ones -- come in two flavors: smart policies and stupid policies?

Like what kinds of issues, you ask. Here's a couple of quick examples, each of which will, I'm certain, garner me no end of misery from some of my liberal friends. But then, that's the very point, isn't it?

Missile Defense (AKA "Star Wars" & "SDI"): Republicans like it. Democrats see it as a giant boondoggle. Who's right?

When Ronald Reagan proposed missile defense ridiculing the idea became liberal orthodoxy. Any Democrat who wondered out loud if it might not be something worth looking at, was quickly and brutally silenced. Missile defense became -- and to large extent remains -- a no-think zone for Democrats.

At the time Ronald Reagan proposed SDI it was technologically pie-in-the-sky. Hell we're talking the early 1980s when state of the art computer technology had 32K of memory on board and ran at a snail's pace of around 12 mhz. There was no way a missile could intercept another missile. So skeptics back then had a point.

But we live in different times. The technology is better, a lot better. Today a missile can, and has, hit another missile in flight. It's not perfect, and may never be perfect. But it's getting better each time they try.

And we really do have enemies -- be they of our own making or not -- they exist and likely always will exist for as long as nations compete for attention, resources and influence. Some countries that don't like us already possess missiles that can hit US territory, or soon will. And some have, or soon will have, nukes to put on those missiles. And let us not forget that, while the Soviet Union no longer exists, Russia is on the comeback trail -- big time. Russia wants a return to the bi-polar balance of power that made up the Cold War years, and thanks to soaring oil prices, now has the dough to put where it's mouth is.

Not having a tested and fully functional missile defense system when that day arrives could make all the difference by reducing our options to a literal game of "Bet Your Life," and the return of the kiss-your-ass-goodbye, "duck and cover" drills in our public schools.

It comes down to this: Will the US be in a position to take a wait-and-see attitude to nuclear saber rattling from hostile nations, or not? Conservatives will argue we need to atack now, lacking a missile defense system. And, if tensions reach that point you can bet your bottom radioactive dollar that Democrats in Congress will go along -- again. (Except of course Hillary will claim her vote in favor of preemptive attacks was a cry for additional negotiations.)

Because, when it comes to nuclear threats for which we have no defense "wait and see" is not a politically-survivable option. Lacking a missile defense system sets us up for more Iraq's. Who knows how many more, as a vulnerable US becomes increasingly trigger happy and increasingly unpopular because of it.

That's a vicious cycle which a fully tested and deployed missile defense system would make a lot less likely.

Missile defense is, of course, just one issue among a long list of hardcore liberal issues.

Immigration is another. I am sorry that the current immigration issue centers on Mexican immigration. I wish the majority of illegal immigrants flooding into the US were from Canada. Maybe then Democrats could be able to discuss this issue without one eye (or both) on a juicy and growing racial demographic.

Because the real issue at the core of the immigration debate should not be about what race is gaining in the US electoral lottery. Instead Democrats should evaluate clearly needed changes in our immigration laws based on those core issues -- jobs and security.

If liberals take over in January and proceed to mealy-mouth immigration, voters will notice, especially as joblessness explodes on this side of the boarder.

Immigration offers Republicans and Democrats the perfect issue on which to meet in the middle. Republicans would agree to strong, enforceable civil and criminal sanctions against employers that knowingly hire illegals (known to liberals by the painfully politically correct but factually-challenged term "undocumented aliens.")

In return Democrats agree to funding and implementing border enforcement. No, not a wall, but more border agents and technology that works -- for a change.

Because borders either matter or don't matter. Most Americans believe borders should matter and woe be to the party that jerks us around on this issue from here on. Go ahead, call me xenophobic, but until Mexico, Canada and the US decide to merge into Canamericico, I and most other voters expect the borders to matter and for our government to act like they matter.

Missile defense and immigration are are just a two examples of the kind of ideological sand traps liberals will face if they regain the power. Those liberal knees are going to have to stop jerking, at least long enough for brains to take stock. Not every GOP idea is a bad idea, and visa versa. It's just fine for Republicans and Democrats to fight over issues. But the "shoot-first-ask-questions-later" philosophy that's pervaded national politics of late, must stop, at least long enough for everyone involved to listen -- really listen.

Otherwise we will forever see-saw between know-it-all conservatives and know-it-all liberals, each screwing things up in their own favorite ways until voters throw them out and try the other guys again.

One last thing. Please don't email me about how some third party will eventually ride in and save us from this dismal cycle. Forget about it. Your undertaker will remove that pacifier from your clinched jaws before closing the lid. Then he'll head out to cast a vote for party that's been out of power hoping against all experience that this time they will have learned their lesson.

So, have Democrats learned that lesson? We'll see. I hope so because Gingrich, Delay, Bush, Cheney and their progeny will spend the next four years in the political wilderness sharpening their knives for their next come back. And if that come back happens it will be the fault of the new crop of Democrats we send to Washington next November.

Truth - out.

It Really IS The Economy, Stupid

As I rummaged through my morning paper I eventually reached the business ection. I say "eventually reached" because I have yet to see a daily paper that does not bury the business section. The sports section is usually right there near the top, even though sports news has absolutely no impact on our lives, beyond possibly under-pinning beer and nacho sales.

But I digress.

Once I unearthed the business section I was struck by the single theme of each headlined story:

(Well, thank you, Ben. Where would we be without your timely reports on the already painfully obvious.)

There was not a stitch of good economic news in this morning's business section to be found.

While my heart tells me this election should be about the war in Iraq and the mindset that got us into it, my head tells me that the subject better quickly become the US economy. If it does the war will end anyway. Let me explain.

First, recognition that the economy is not just heading into a one of its normal cyclical downturns. This time is different. And no candidate for the Presidency is worthy of your vote unless he can explain in the clearest and starkest terms how and why it's different this time.

Eight years of spend-borrow, spend-borrow, spend-borrow by, not just government, but by business and consumers alike, has done to our financial infrastructure just what termites do to a home when left to their own devices. The underpinnings of this economy have been hollowed out by abuse of credit, the perversion of financial instruments and a reckless disregard for consequences of all the above.

Which is why when Fed Chief, Ben Bernanke, finally broke the glass on the red EMERGENCY box in his office he found it empty. Inflation is raging like a peat fire, just below the surface. The ground under his very feet is getting too hot to bear. But he can't put the inflationary fires out with the usual Fed extinguisher, higher interest rates. Because. even as inflation consumes the value of the US dollar, business indicators are weak and getting weaker.

To boost a weak economy the Fed's tool of choice is lower interest rates. Bernanke has already cut the Fed Rate down to 3% and it's done no good. That leaves him a paltry 3 percentage-point bullets left in his gun before he hits the penultimate shot -- 0%. After that he'll have to pay people to borrow money.

I warned a full two years ago that we were heading straight into stagnation -- the worst of inflation joined at the hip with the worst of a weak economy. Prices go up and up. Wages stagnate or even drop -- a vicious cycle -- a self-replicating monster, once loose, takes on an voracious life of its own, consuming businesses, investments, jobs and lives.

The next President will, on inauguration day, be handed the worst domestic economy since Franklin Roosevelt took office in January 1933. As then the next President will have to deal with a banking industry in full meltdown, a tanking stock market, rising unemployment and the maelstrom of social welfare burdens that inevitably materialize out of such a crisis. A tired nation will turn to Washington for help -- citizens will turn to the next President for help.

Which brings me back to the war in Iraq. Recognition by the Presidential candidates of the true state of the economy would require they end this disasterous war of choice, and to do so as quickly as humanly and tactically possible.

Because there is simply no way we could afford to continue wasting nearly $12 billion a month -- every red dime of which is borrowed money -- to do for Iraqis what we can nolonger afford to do for American taxpayers themselves. (More facts on the cost of the war here.)

Things like:

- Repairing Iraqi infrastructure while America's infrastructure crumbles.

- Building and funding schools for Iraqi children while states cut education spending here at home.

- Training doctors and building hospitals and clinics for Iraqs 27 million citizens while twice that many American's go without health coverage.

The candidate for President who does not make that argument -- and make it the central pillar of their campaign -- deserves to lose this election. Even paleo-conservatives understand that charity begins at home. That you don't starve your own family to fund someone else's family and somehow argue that you are protecting your own family in the process.

That's just nuts.

It's long past time to start talking turkey on the campaign trail about both the economy and the war and how they are really the same subject. They are Siamese twins, joined at the national wallet. If either is to be save, they must be quickly separated.

If Iraq survives the operation it will be because the Iraqis nursed their nation back to normalcy -- or at least what normalcy goes for in that part of the world.

Our concern must be to see that the US survives. That our own people have jobs, good schools, good teachers, affordable healthcare and the restored and modernized infrastructure that will be required if US is to productive and competitive in the decades ahead.

A candidate who refuses to take that stand, aggressively and honestly, will reign over the mother of all economic and social meltdowns. And will share future encyclopedia entries alongside the likes of Herbert Hoover.

"The public, fortunately, doesn't understand how bad the situation is. If it did, we might have a real panic on our hands."

-- David Ignatius, Washington Post

Wednesday, February 27, 2008

Feb 8-27, 2008

February 21, 2008

John McCain

Then & Now

Way back in 1988 my co-authors and I were putting the final touches to our book, Inside Job: The Looting of America's Savings and Loans when someone slipped us a plain brown envelop. Inside was a transcript of a meeting between thrift regulators and five US senators who had interceded on behalf of Arizona S&L owner Charles Keating. At the time the regulators were warning that Keating's thrift, Lincoln Savings and Loan, was dangerously insolvent and that Keating and his cohorts -- including then junk bond king, Mike Milken, were robbing the federally-insured thrift blind -- or, more precisely, robbing the US taxpayers blind.

Keating had been generous in sharing his new-found wealth with the five senators, particularly his two Arizona senators, John McCain and Dennis DeConcini.  They became known as "The Keating Five."

Alarmed by such high-powered political arm twisting, FHLBB attorney, William Black, decided to document the meeting. He claims to this day that he did not secretly record the five senators. But over the years I've read countless transcripts and I remain certain that the following is a transcription taken off an actual recording.

Of course, once authenticating the transcript we wasted no time including it in the appendix of our book. The disclosure of the meeting and verbatim remarks by each senator caused them no end of misery.  One would have thought McCain especially had learned his lesson about messing with the work of federal regulators. And it appeared he had. But then comes the revelation that he once again chummed up to an industry group -- this time telecom -- and inserted himself into the regulatory process in ways that look distressingly similar to the Keating affair.

The Keating affair was about money and influence, not sex. This new revelation may or may not have sex in it  -- but fankly, I couldn't care less. I don't lay awake at night worrying if my senator is getting laid by the wrong people, I worry if they are getting paid by the wrong people.

In the case of Charles Keating that money and influence, and the delays caused by political pimping by people like McCain, cost American small shareholders and  taxpayers dearly:

Much has been made of the $2 billion that it will cost taxpayers to bail out Charles H. Keating Jr.'s Lincoln Savings and Loan Association. But for the people who were persuaded to invest their life savings in now-worthless securities, the cost is emotional as well as financial. (NYT- 1989)

Anyway, how often have you wished you could be a fly on the wall at one of these closed-door sit downs? Well, here's a rare glimpse at one, up close and personal.

"This meeting is very unusual... to discuss a particular company."

 (Chairman, James Cirona, Federal Home Loan Bank, San Francisco, 1987)


From: William Black, Esq.

To: Chairman, FHLBB, Edwin Gray

April 9, 1987

Meeting of FHLB-SF Personnel with:

Senators Cranston, DeConcini,

Glenn, McCain and Riegle

At your request I am providing you this memorandum, which reflects the substance of yesterday’s meeting with Senators Cranston, DeConcini, Glenn, McCain and Riegle. The Federal Home Loan Bank of San Francisco (FHLB-SF) personnel who attended the meeting were James Cirona (President and Principal Supervisory Agent), Michael Patriarca (Director of Agency Functions), myself (general counsel) and Richard Sanchez (the Supervisory Agent for Lincoln Savings Assoc. of Irvine, Calif.).

The meeting commenced at 6:00 P.M. and ended at approximately 8:15 a.m., with two breaks of approximately 15 and 10 minutes during which time the Senators voted. Senator Cranston was present only very briefly, because of his responsibilities on the Senate floor. The other Senators were present for substantially the entire meeting.

This meeting was the product of an earlier meeting among yourself and Senators Cranston, DeConcini, Glenn and McCain. At that meeting, as related by you (and by these same Senators in yesterday’s meeting) each of the Senators raised their concerns regarding the examination of Lincoln by the FHLB-SF and you noted your unfamiliarity with any specifics of the examination, your confidence in the FHLB-SF and your suggestion that the Senators hear from the FHLB-SF our supervisory concerns regarding Lincoln.

I was the only one at the April 9 meeting who took notes. While not verbatim, my notes are very extensive. At your request, I called you last night and read these notes to you. I have attached a copy of those notes to this memorandum. I have used these notes and my independent recall of the meeting to prepare this memorandum and provide the fullest possible record of the discussions at yesterday’s meeting.

 I have circulated this memorandum to Messrs. Cirona, Patriarca and Sanchez for their review to ensure the accuracy of this memorandum. I believe that his memorandum is an accurate and complete record of the substance of yesterday’s meeting.

The Transcript

CIRONA: I am Jim Cirona. I am president of the Federal Home Loan Bank of San Francisco. I have held that position for four years. I am here in my capacity as principal supervisory agent. We have jurisdiction over California, Arizona and Nevada savings and loans. Before becoming president I was in the industry for 20 years.


CIRONA: In New York.

DECONCINI: Did you know Bud Bavasi?

CIRONA: Yes. Bud is a good guy.

DECONCINI: Yes. He’s great.

CIRONA: With me is Mike Patriarca, head of our agency function. Mike has joined us recently from the Comptroller of the Currency, where he was in charge of multi-national banks. Before that he was a lawyer for seven years.

McCAIN: We won’t hold that against you.

CIRONA: You were a litigator.

PATRIARCA: No, I was in enforcement seven years.

CIRONA: Also with me is Bill Black, our general counsel. Bill was formerly director of litigation for the Bank Board for three years. Next to bill is Richard Sanchez. He’s been with the San Francisco bank for years. Before that he was an auditor for a commercial bank and before that he was in school.

DECONCINI: Thank you for coming. We wanted to meet with you because we have determined that potential actions of yours could injure a constituent. This is a particular concern to us because Lincoln is willing to take substantial actions to deal with what we understand to be your concerns. Lincoln is prepared to go into a major home loan program – up to 55% of assets. We understand that that’s what the Bank Board wants S&Ls to do. It’s prepared to limit its high risk bond holdings and real estate investments. It’s even willing to phase out of the insurance process if you wish. They need to deal with, one, the effect of your reg... Lincoln is a viable organization. It made $49 million last year, even more the year before. They fear falling below 3 percent (net worth) and becoming subject to your regulatory control of the operations of their association. They have two major disagreements with you. First, with regard to direct investments. Second, on your reappraisal. They’re suing against your direct investment regulation. I can’t make a judgment on the grandfathering issue. We suggest that the lawsuit be accelerated and that you grant them forbearance while the suit is pending. I know something about the appraisal values [Senator Glenn joins the meeting at this point] of the Federal Home Loan Bank Board. They appear to be grossly unfair. I know the particular property here. My family is in real estate. Lincoln is prepared to reach a compromise value with you.

CRANSTON: [He arrives at this point] I’m sorry I can’t join you but I have to be on the floor to deal with the bill. I just want to say that I share the concerns of the other Senators on this subject. [Cranston leaves.]

DECONCINI: I’m not on the Banking Committee and I’m not familiar with how all this works. I asked Don Riegle to explain to me how the Federal Home Loan system works because he’s on Senate Banking. He explained it to me and that’s why he’s here.

McCAlN: Thank you for coming. One of our jobs as elected officials is to help constituents in a proper fashion. ACC is a big employer and important to the local economy. I wouldn’t want any special favors for them. It’s like the Apache helicopter program that Dennis and I are active on. The Army wants to cut back the program. Arizona contractors make major components of the Apache helicopter. We believe that the Apache is important to our national defense. That’s why we met with General Dynamics and tried to keep the program alive.

I don’t want any part of our conversation to be improper. We asked chairman Gray about that and he said it wasn’t improper to discuss Lincoln. I’d like to mention the appraisal issue. It seems to me, from talking to many folks in Arizona, that there’s a problem. Arizona is the second fastest growing state. Land values are skyrocketing. That has to be taken account of in appraisals.

(Sen.John Glenn joins the meeting late,)

GLENN: I apologize for being late. Lincoln is an Ohio chartered corporation, and...

CIRONA: Excuse me. Lincoln is a California chartered S&L.

GLENN: Well, Lincoln is wholly owned by ACC. (Keating's American Continental Corp.)

DECONCINI: You said Lincoln was Ohio chartered. It’s California.

GLENN: Well, in any event, ACC is an Ohio chartered corporation. I’ve known them for a long time but it wouldn’t matter if I didn’t. Ordinary exams take maybe up to 6 months. Even the accounting firm says you’ve taken an unusually adversary view toward Lincoln. To be blunt, you should charge them or get off their backs. If things are bad there, get to them. Their view is that they took a failing business and put it back on its feet. It’s now viable and profitable. They took it off the endangered species list. Why has the exam dragged on and on? I asked Gray about his. Lincoln has been told numerous times that the exam is being directed to continue by Washington. Gray said this wasn’t true.

RIEGLE: I wasn’t present at the earlier meeting. There are things happening that may indicate a pattern that do raise questions [sic]. There is broad concern on the Banking Committee about the American Banker article on the FADA and FSLIC feud. Gray has great confidence in you as a team. He says you are some of the finest people in the system. The appearance from a distance is that this thing is out of control and has become a struggle between Keating and Gray, two people I gather who have never even met. The appearance is that it’s a fight to a death. This discredits everyone if it becomes the perception. If there are fundamental problems at Lincoln, OK. I’ve had a lot of people come through the door feeling that they’ve been put through a meat grinder. I want professionalism, and your backgrounds attest to that professionalism. But I want not just professionalism, but fairness and the appearance of fairness. So I’m very glad to have this opportunity to hear your side of the story.

GLENN: I’m not trying to get anyone off. If there is wrongdoing I’m on your side. But I don’t want any unfairness against a viable entity.

CIRONA : How long do we have to speak to you? A half-hour, an hour?

DECONCINI: As quickly as possible. We have a vote coming up soon.

CIRONA: First, if there’s any fault to be had concerning the length of the examination, it’s on my shoulders. We determine how examinations are conducted. Gray never gave me instructions on how to conduct this exam or any other exam. At this meeting you’ll hear things that Gray doesn’t know.

DECONCINI: Did Gray ever talk to you about the examination of Lincoln?

CIRONA: Gray talked to me when that article ran in the Washington Post. We received no instructions from Gray about the exam of Lincoln. We decide how to do the exam.

CIRONA: This meeting is very unusual... to discuss a particular company.

DECONCINI: It’s very unusual for us to have a company that could be put out of business by its regulators. Richard, you’re on; you have 10-12 minutes.

SANCHEZ: An appraisal is an important part of underwriting. It is very important. If you don’t do it right you expose yourself to loss. Our 1984 exam showed significant appraisal deficiencies. Mr. Keating promised to correct the problem. Our 1986 exam showed that the problems had not been corrected – that there were huge appraisal problems. There was no meaningful underwriting on most loans. We have independent appraisals. Merrill Lynch appraised the Phoenician [Hotel]. It shows a significant loss. Other loans had similar losses.

DECONCINI: Why not get an independent appraisal?

SANCHEZ: We did.

DECONCINI: No, you hired them. Why not get a truly independent one or use arbitration – if you’re trying to bend over backwards to be fair. There’s no appeal from your reappraisal. Whatever it is you take it.

SANCHEZ: If it meets our appraisal standards.

CIRONA : The Phoenician reappraisal process is not complete. We have received Lincoln’s rebuttal and forwarded it to our independent appraisers.

[At this point the senators left to vote. We resumed when Senators DeConcini and Riegle returned.]

SANCHEZ: Lincoln had underwriting problems with all of their investments, equity securities, debt securities, land loans and direct real estate investments. It had no loan underwriting policy manual in elect when we began our 1986 exam. When the examiners requested such a manual they were informed that it was being printed. The examiners looked at 32 real estate loans that Lincoln had made since the 1984 exam. There were no credit reports on the borrowers in all 52 of the loan Files.

DECONCINI: I have trouble with this discussion. Are you saying that their underwriting practices were illegal or just not the best practice?

CIRONA: These underwriting practices violate our regulatory guidelines.

BLACK: They are also an unsafe and unsound practice.

     DECONCINI: Those are two very different things.

     SANCHEZ: You need credit reports for proper underwriting.

[Senator Glenn returns at this point.]

RIEGLE: To recap what’s been said for Senator Glenn: 52 of the 52 loans they looked at had no credit information. Do we have a history of loans to folks with inadequate credit?

SANCHEZ: $47 million in loans were classified. by examiners due to lack of adequate credit to assure repayment of the loans.

PATRIARCA: They’re flying blind on all of their different loans and investments. That’s what you do when you don’t underwrite.

GLENN: How long had these loans been on the books?

SANCHEZ: A fairly long time.

GLENN: How many loans have gone belly-up?

SANCHEZ: We don’t know at this point how many of the 52 have defaulted. These loans generally have interest reserves.

GLENN: Well, the interest reserves should run out on many of these.

CIRONA: These are longer term investments.

BLACK: I know that Lincoln has refinanced some of these loans.

GLENN: Some people don’t do the kind of underwriting you want. Is their judgment good?

PATRIARCA: That approach might be okay if they were doing it with their own money. They aren’t; they’re using federally insured deposits.

RIEGLE: Where’s the smoking gun? Where are the losses?

DECONCINI: What’s wrong with this if they’re willing to clean up their act?

CIRONA: This is a ticking time bomb.

SANCHEZ: I had another case which reported strong earnings in 198%. It was insolvent in 1985.

RIEGLE: These people saved a failing thrift. ACC is reputed to be highly competent.

BLACK: Lincoln was not a failing thrift when ACC acquired it. It met its net worth requirement. It had returned to profitability before it was acquired. It had one of the lowest rations of scheduled assets in the 11th District, the area under our jurisdiction. Its losses were caused by an interest spread problem from high interest rates. It, as with most other California thrifts, would have become profitable as interest rates fall.

DECONCINI: I don’t know how you can’t consider it a success story. It lost $24 million in 1982 and 1983. After it was acquired by ACC it made $49 million in one year.

McCAIN: I haven’t gotten an answer to my question about why the exam took so long.

SANCHEZ: It was an extremely complex exam because of their various investments. The examiners were actually in the institution from March to October – 8 months. The asset classification procedure is very time consuming.

McCAIN: What’s the longest exam you ever had before?

CIRONA: Some have technically never ended, where we had severe problems with a shop.

McCAIN: Why would Arthur Young say these things about the exam – that it was inordinately long and bordered on harassment?

GLENN: And Arthur Anderson said they withdrew as Lincoln’s prior auditor because of your harassment.

RIEGLE: Have you seen the Arthur Young letter?


RIEGLE: I d like you to see the letter. It’s been sent all over the Senate. [Hands Cirona the letter.]

PATRIARCA: I’m relatively new to the savings and loan industry but I’ve never seen any bank or S&L that’s anything like this. This isn’t even close. You can ask any banker and you know about these practices. They violate the law and regulations and common sense.

GLENN: What violates the law?

PATRIARCA: Their direct investments violate the regulation. Then there’s the file stuffing. They took undated documents purporting to show under writing efforts and put them into the files sometimes more than a year after they made the investment.

GLENN: Have you done anything about these violations of law?

PATRIARCA: We’re sending a criminal referral to the Department of Justice. Not maybe; we’re sending one. This is an extraordinarily serious matter. It involves a whole range of imprudent actions. I can’t tell you strongly enough how serious this is. This is not a profitable institution. Prior year adjustments will reduce that reported $49 million profit. They didn’t earn $49 million. Let me give you one example. Lincoln sold a loan with recourse and booked a $12 million profit. The purchaser rescinded the sale, but Lincoln left the $12 million profit on its books. Now, I don’t care how many accountants they get to say that’s right. It’s wrong. The only thing we have as regulators is our credibility. We have to preserve it.

DECONCINI: Why would Arthur Young say these things? They have to guard their credibility too. They put the firm’s neck out with this letter.

PATRIARCA: They have a client. The $12 million in earnings was not unwound.

DECONCINI: You believe they’d prostitute themselves for a client?

PATRIARCA: Absolutely. It happens all the time.

[The senators left at this point for another vote.]

[We resumed when Senators DeConcini, McCain, and Riegle returned.]

CIRONA I also wanted to note that the Bank Board has had a lot of problems with Arthur Young, and is thinking of taking disciplinary action against it.

BLACK: Not for its actions here. Primarily because of its Texas office, which has never met a direct investment. They think everything is a loan. This has quite an effect on the income you can claim.

PATRIARCA: By regulation we have adopted a regulatory capital standard.

DECONCINI: And you’ll take control of them if they fail your net worth standard – you’ll take operational control of them.

CIRONA: That’s speculative. We’d take steps to reduce their risk exposure.

RIEGLE: What would require them to sell?

CIRONA: We’d probably have them decrease their growth. Time and again we’ve found rapid growth associated with loss. Lincoln has grown rapidly.

BLACK: Are you sure you want to talk about this? We haven’t made any recommendation to the Bank Board yet. The Bank Board decides what action to take. These are very confidential matters.

DECONCINI: No, then we don’t want to go into it. We were just asking very hypothetically and that’s how you [indicating Mr. Cirona] were responding.

CIRONA: That’s right.

DECONCINI: Can we do something other than liquidate them?

CIRONA: I hesitate to tell an association what to do. We’re not in control of Lincoln, and won’t be. We want to work the problem out.

McCAIN: Have they tried to work it out?

CIRONA: We’ve met with them numerous times. I’ve never seen such cantankerous behavior. At one point they said our examiners couldn’t get any association documents unless they made the request through Lincoln’s New York litigation counsel.

RIEGLE: Well, that does disturb me – when you have to go through New York litigation counsel. What could they do? Is it too late?

CIRONA: It’s never too late.

McCAIN: What’s the best approach? Voluntary guidelines instead of a compulsory order?

DECONCINI: How long will it take you to finish the exam?

PATRIARCA: Ten days.

GLENN: Have they been told what you’ve told us?

PATRIARCA: We provided them with our views and gave them every opportunity to have us hear what they had to say. We gave them our classification of asset materials and went through them loan by loan. This is one of the reasons the exam has taken so long.

SANCHEZ: We gave them our classification materials on January . On March 9 we received 52 exhibits, amounting to a stack of paper this high [indicating approximately two feet of material] responding to that. We went through every page of that response.

PATRIARCA: We didn’t use in-house appraisers. We sent the appraisals out to independent appraisers. We sent the reappraisals to Lincoln. We got rebuttals from Lincoln and sent them to the independent appraisers. I don’t think there was any case that Lincoln agreed with the re-appraisal.

SANCHEZ: None where the reappraisal indicated insufficient collateral.

PATRIARCA: In every case, after reviewing the rebuttal, the independent ap-

praiser has stood by his conclusion.

DECONCINI: Of course. They had to.

PATRIARCA: No. The rebuttals claim specific problems with the independent appraisers’ reappraisals: “You didn’t consider this feature or you used the wrong rental rate or approach to value.” The independent appraiser has come back to us and answered those specific claims by saying: “Yes, I did consider that, and here’s why I used the right rate and approach.”

DECONCINI: I’d question those reappraisals. If you want to bend over back-wards to be fair I’d arbitrate the differences. The criminality surprises me. We’re not interested in discussing those issues. Our premise was that we had a viable institution concerned that it was being over-regulated.

GLENN: What can we say to Lincoln?

BLACK: Nothing with regard to the criminal referral. They haven’t, and won’t be told by us that we’re making one.

GLENN: You haven’t told them?

BLACK: No. Justice would skin us alive if we did. Those referrals are very confidential. We can’t prosecute anyone ourselves. All we can do is refer it to Justice.

DECONCINI: They make their own decision whether to prosecute?

BLACK: Yes. I also want to mention that we are already investigating Arthur Anderson because of their role in the file stuffing. We don’t know whether they knew the purpose for which they were preparing the materials. I don’t want to get harassed... no, that’s not the right word; I don’t want to get criticized if we Find out that Arthur Anderson was involved criminally and we have to make a referral on them. We don’t want them to claim retaliation. We’re in a tough spot. With regard to what you can say to Lincoln, you might want to simply have them call us. If you really want to talk to them you can say that it will take us 7 to 10 days to Finish the exam.

RIEGLE: Is this institution so far gone that it can’t be salvaged?

PATRIARCA: I don’t know. They’ve got enough risky assets on their books that a little bad luck could nail them. You can’t remove the risk of what they already have. You can reduce what new risks they would otherwise add on.

BLACK: They have huge holdings in Tucson and Phoenix. The. market there can’t absorb them for many years. You said earlier that ACC was extremely good but ACC has gotten out of its former primary activity, homebuilding. I’m not saying they’re bad businessmen but they had to get out of one homebuilding market after another. They had to get out of Colorado when they had bad models and soil problems. They also had to get out of their second leading activity, mortgage banking. They’re now down to Arizona. That’s not a bad market but no one knows how well it will do over the many years that it would take to absorb such huge holdings in Tucson and Phoenix.

DECONCINI: So you don’t know what you’d do with the property even if you took them over?

BLACK: Bill Black doesn’t. Bill Black is a lawyer. We hire experts to do this work. Our study of their Arizona holdings was done by top experts. Our study of below investment grade corporate debt securities – what folks usually call junk bonds, but I avoid it because I don’t know where you stand on such bonds – was done by top outside experts. I see in this Arthur Young letter that they criticize us for having an accountant with “only” eight years of experience. Well, I think... I don’t see how you can claim eight years as inexperienced. But we didn’t simply rely on him. We had... wasn’t it Kenneth...

SANCHEZ: Yes. Kenneth Laventhol.

BLACK: We had Kenneth Laventhol, outside accountants, work on this. These are also some of the reasons the exam took time.

PATRIARCA: I think my colleague Mr. Black put it right when he said that it’s like these guys put it all on 16-black in roulette. Maybe, they’ll win, but I can guarantee you that if an institution continues such behavior it will eventually go bankrupt.

RIEGLE: Well, I guess that’s pretty definitive.

DECONCINI: I’m sorry, but I really do have to leave now.

[The meeting broke up at this point, approximately at 8:20 P.M.]

( Editor's note: Now with the sub-prime, credit crunch, foreclosure crisis gutting both consumer and investment banking one can wonder how many meetings like this are going on today. I don't know. No one has sent me a transcript -- yet. )

February 20, 2008

It's Over

What do Mike Huckabee and Hillary Clinton have in common?

Neither seems to have heard the old Kenney Rogers tune, the refrain of which goes:

"You got to know when to hold em, know when to fold em,

Know when to walk away and know when to run."

Last night's results from Wisconsin were stunning, and telling. But even more telling was what was going on behind the scenes. Taken together with the poll results, if Hillary Clinton took Kenney Rogers' advice above she wouldn't just walk away, she'd sprint for the nearest exit.

In case you missed it, here's what happened after the polls closed in Wisconsin.

Once it was clear to both campaigns that Obama had definitively won Wisconsin, the Obama folks let the Clinton folks know Obama would wait before he spoke to let Hillary speak first. Their assumption being that she'd concede the Wisconsin race and congratulate Obama for the win.

How little the Barackistas still understand the Clintons. Like Lucy in the Peanuts cartoon, she pulls the football away just as Charlie Brown goes for the kick. And so it came to pass, again -- Hillary, speaking before a crowd in Texas, launched right into a campaign attack speech.

Furious they'd been had again, the Obama campaign "big footed" Hillary by having Barack begin his speech right there and then. They knew that, as the winner last night, all the networks would switch from Hillary's speech to his -- and that's just what happened. Hillary was blacked out -- right in the middle of her pitch.


But it wasn't "ouch" for those of us watching on TV  --- it was deal closer. We were instantly transported from Hillary's sing-song, robotic, entirely predictable remarks, to a soaring address by Obama. (Watch it here)

As I listened to Obama I turned to my wife and said, "it's over."

It was so clear... stunningly clear. The Obama folks may have cut into Hillary's speech in a moment of anger, but in so doing they created a contrast so startling in it's starkness that only the most lobotomized Clinton Moonies could have resisted it. The contrast was so immediate and so stunning it hit me like a truck.

The contrast forced the question on me, and I suspect millions of others who saw and heard it. It reduced all the noise and posturing of this campaign down to a very simple choice:

Did I want four years of more of the same  -- the same poll-tested nostrums, the same all-talk, process-pablum that has, for the past couple of decades masked a failure of either party to govern -- the failure to solve real problems rather than use them as brickbats against "the other side?"

Was that what I wanted?

Or did I want the candidate who was giving this hard-boiled, as-cynical-as-they-come, crusty old reporter goosebumps every time he opened his mouth? Did I want the candidate that included me in his equation, the candidate who didn't just ask for my vote, but my help, should he win. Did I want the candidate that didn't tell me he/she was prepared to do it all FOR me "on day one," but rather that he could not do any of it for me, only WITH me.

It was no contest. None. Hillary offered same-old,same-old, on steroids. The same old talking points, same old "vast conspiracies" that she'd use to explain her failure to deliver and, of course, the same old loose canon, Bill, rolling fore and aft on our national -- and emotional -- decks.

Of course, there's no way for me -- or you --  to know, with any degree of certainty, if Obama can deliver on any of the high-minded promises he makes. But then he doesn't claim he can. He only claims "we can."


How surprising is this? Following so many years of hopelessness, when hope returned it arrived in a plain brown wrapper.

So it is that, after two decades of helplessly watching my country slide backwards -- backwards in education, backwards in healthcare, backwards in human rights, backwards in open government, backwards in protecting the environment, backwards in economic equity, backwards in freedom itself -- I am pushing all my chips in for the candidate who clearly believes we can reverse this decline.

Obama has convinced me, we can. Yes, we can.

Hillary, do yourself, us and the nation a favor --  fold-em. 

Yes, you can.

February 15, 2008

Harry Reid:

Shame or Disgrace?

I'm not going to take a lot of your time this morning. Not because I couldn't go on and on about this, I could. But it's not necessary. It's simple. Let's start with this:

If you should run into Hillary or Barack on the campaign trail ask them the following question:

If you become President of the United States of America, making your running mate the constitutional president of the US Senate, will you demand that the current Senate Majority Leader, Harry Reid, be  replaced immediately?

It's a critical question. Harry Reid is, to put it mildly, the worst, most ineffective, mealy-mouth,  wimp to lead the US Senate in my adult life time. And he proved that again this week when he allowed the administration's bill granting immunity to the telecoms to pass the Senate.

In effect what Reid did by allowing that legislation to pass is to ratify Richard Nixon's stated belief that, "if the President does it it's not illegal."

Fortunately the House, under Nancy Pelosi's leadership, showed more backbone than Reid and his Senate colleagues by refusing to ratify the Senate's version giving the telecom's a get-out-jail free card for aiding and abetting the administration's illegal wiretapping. Instead the House shelved the matter allowing the current authority to lapse this Saturday and took two weeks off.

This morning President Bush was on TV whining that refusing to grant the telecoms immunity will mean "it will be harder for us to get companies to cooperate with us in protecting you."

The statement is correct, though worded incorrectly. The correct way to put it is that, failing to provide telecoms protection from lawsuits will, "make it harder for us to get companies cooperate with us to protect you by illegally spying on you."

To which I say, good. It should make it harder, just as the threat of lawsuits make it's harder for companies to screw consumers, which many companies would be delighted to do if they figured they could get away with it. But also, and more importantly, the threat of lawsuits will force the telecoms to do a basic cost/benefit analysis before they pull a stunt like this again. That analysis would go something like this:

 - By helping the government spy on Americans the govenment owes us one the next time we want something from the government, be it legislation or regulatory favors.

- But, without immunity if the courts later find we broke the law it could cost of billions of dollars in damages, more than wiping out any gains we might garner by cooperating.

(Do notice that the top three recipients of telecom money are also the top three candidates for President -- Here)

What Harry Reid did last week was to assure that the telecoms would only see upside and no downside when faced with any similar requests from this or any other administration in the future.

The reason this is so important is that the nexus of big government and big business must always be viewed with the greatest attention and suspicion. If history has taught us anything it's that it is at that nexus where seeds of corporate fascism geminate, and if allowed to grow, thrive.

Those seeds took root in a startlingly aggressive way under this administration. Not only did major telecom companies comply with the administration's request for assistance in its illegal warrantless wiretapping, but they did so with frightening gusto, efficiency and enthusiasm.

AT&T built warrantless wiretap rooms for the NSA

AT&T has asked a court to suppress documents leaked to the Electronic Frontier Foundation by an ex-employee detailing how the company indiscriminately diverted domestic and international traffic to the National Security Agency for warrantless wiretapping:

AT&T built a secret room in its San Francisco switching station that funnels internet traffic data from AT&T Worldnet dialup customers and traffic from AT&T's massive internet backbone to the NSA, according to a statement from Klein.

Klein's duties included connecting new fiber-optic circuits to that room, which housed data-mining equipment built by a company called Narus, according to his statement.

Narus' promotional materials boast that its equipment can scan billions of bits of internet traffic per second, including analyzing the contents of e-mails and e-mail attachments and even allowing playback of internet phone calls.

Eventually Klein blew the whistle saying that, "We all remember Big Brother, and suddenly there I was hooking everyone up to the Big Brother Machine."

Harry Reid failed us and he violated his oath of office, the oath he took to "preserve and protect the Constitution of the United States of America from enemies foreign or domestic."

So, ask the two Democratic candidates if they would push to replace Reid immediately upon taking their oath of office.

That's all. Have a great weekend.

Your Daily Sigh

February 13, 2008

Hoisted With Their Own Petards

After decades of reporting on white collar crooks I learned something interesting. I learned that the best way to catch such otherwise respectable appearing evil-doers is to let them catch themselves. The other thing I learned is that hubris almost always guaranteed they would eventually do just that.

And so it came to pass yesterday when the Bush administration shot of an unclassified cable to it's diplomats around the world. The cable was devised to coach diplomats in how to respond to criticism of the administration's announcement last week that it would seek the death penalty against three al Qaida terrorists accused of planning and/or aiding the 9/11 attacks.

Diplomats advised to compare 9/11 cases to Nazi war crime trials sixty years ago in Nuremberg, Germany:

WASHINGTON (CNN) -- Anticipating international criticism over plans to seek the death penalty for accused September 11, 2001, terrorists, the State Department is advising U.S. diplomats to point out that Nazis were executed after their war crime trials. The memo says U.S. diplomats should draw from the points in the memo "in responding to foreign government and media requests."

One portion of the memo reads:

Q: "Doesn't the application of the death penalty to these defendants violate international law?"

A:  "No. International humanitarian law contemplates the use of the death penalty for serious violations of the laws of war. The most serious war criminals sentenced at Nuremberg were executed for their actions" at the end of World War II.    (Full Story)

Ironic, isn't it? Here's an administration that has stubbornly, and largely successfully, hidden, withheld and even destroyed, documents that could implicate it in crimes from conspiracy and collusion with energy companies to fabricating evidence to justify an illegal war against Iraq to torture.

Then what do they do? They issue an unclassified cable to diplomats containing all the reasoning and justifications for it's own future in the dock of international justice.

Their effort to justify the death penalty for three al Qaida terrorists, may become the closing argument some future prosecutor will use against defendants Bush, Cheney, Rumsfeld, Rice, et al. (Heretofore referred to as "The Gang of Four.")

Now, do I believe I will some day see the Gang of Four in the dock facing death sentences? No. Real life  doesn't work that way.  These days only defeated, weak, third-world tyrants face such ultimate justice. And even then, they rarely face a hangman's noose. At best modern tyrants simply get long prison terms -- and even that's rare.

Also these days the number of "civilized" nations that still employ the death penalty has been whittled down pretty much down to the US, China and Iran. Great company, huh?

Nevertheless, in raising Nuremberg as precedent for its desire to snuff three terrorists, they have reminded the world that, just sixty years ago, public officials guilty of war crimes were held accountable. They were put on public trial, forced to face their surviving victims, forced to listen to the suffering they caused and the millions that died because of their orders and misdeeds.

Much of the evidence presented against those Nuremberg defendants were captured documents. They were faced with their own documents, containing their own words, their own orders, all over their own signatures.

The lessons that should have been learned from Nuremberg was that liability for wrong-doing accrued to all wrong-doers, no matter how high or low they ranked on the organizational chart.

So, fast forwarding sixty years, what will become of those who followed the illegal orders of our leaders -- the CIA, the FBI, telecom companies and others? Nuremberg clearly and unequivocally established that "following orders" was no defense for committing crimes.

That should mean that more than the Gang of Four need to worry about future judicial accountability. And worried they are. That's why the CIA destroyed those torture tapes, and why the White House erased over 5 million emails. And it's why telecommunication companies are begging the White House for  immunity for complying with the administration's illegal warrantless wiretapping.

If some future tribunal finds the Gang of Four and their accomplices guilty, prosecutors will only need to present yesterday's cable to US diplomats during the punishment phase of their trial.


February 7, 2008

Chicago 1968 -- Denver 2008

On August 25 Democrats will gather in Denver for their nominating convention. Ironically it comes precisely 40 years since the party opened it's 1968 convention in Chicago. The 1968 convention was the most significant in my lifetime - until now.

The Democratic Party and the nation paid a horrible price for what transpired at that convention, a price we may be about to pay again.

The Democratic convention this August faces many of the same issues as Democrats face in 1968. Change vs. same-old, same-old.  Machine politics vs. people politics. The will of the people vs. the will of party insiders. They are all in play again.

I only mention this because the players are already setting up their plays for the August show down in Denver. Hillary Clinton has made it clear that, if Obama wins enough delegates to match her, she and her party surrogates will demand that delegates from Florida and Michigan be seated, even though she had agreed with the party's decision months ago to ban them if they moved their primaries up. They did anyway and their delegates were decertified. Now that she won Florida she wants to change the rules.

If that fight breaks out on the convention floor this August, get ready for trouble. What kind of trouble? Big trouble. That's what kind of trouble.

A brief history is required. Bear with me. Because, it's that important.

Flash Back:

Choosing a Presidential nominee in 1968 was particularly difficult for the Democrats.  As today a profoundly unpopular war raged (in Vietnam.) President Lyndon B. Johnson, who had repeatedly escalated US involvement in Vietnam, had come under so much pressure from anti-war Democrats that he decided not to seek re-election.

Robert Kennedy was a controversial upstart, anti-war candidate hated by Johnson and unpopular with party leaders who saw him as too ambitious and too young. But Robert Kennedy was assassinated in June, nearly three months before the convention.

Senator Eugene McCarthy, D-MN,  stepped up his aggressive  anti-war campaign, calling for the immediate withdrawal from the region. Kennedy's former supporters flocked to McCarthy.

On the other side was the Democratic Party bosses' choice, Vice President Hubert Humphrey. Thanks to the oddities of Democratic primary rules back then, Humphrey did not participate in any primaries but still controlled enough delegates to secure the nomination if he wanted it. Unfortunately Humphrey had been an early supporter of the war and currently mirrored Johnson's strategy of continuing the war while trying to convince North Vietnam to negotiate a settlement. Anti-war Democrats had heard enough of such, "I'll-pay-you-Tuesday-for-a-hamburger-today, nonsense. They weren't buying.

McCarthy's announcement re-ignited the hopes of a new generation of voters and political activists. A former academic and Washington outsider, McCarthy's nickname became  "Clean for Gene," leading many students to cut their hair off and shave their beards and mustaches.

McCarthy's principled stand on the war faced it's first, the New Hampshire primary. Hundreds of students rushed to New Hampshire and campaigned door-to-door for McCarthy. McCarthy won a startling 42% of the vote, something that greatly upset and stunned party loyalists. 

Meanwhile behind the scenes Vice-president Hubert H. Humphrey had been negotiating for delegates in non-primary states. The fix had been put in already by party bosses. Humphrey "won" the nomination in Chicago on August 25-29, 1968. Three-thousand anti-war demonstrators stood outside the convention hall in shocked rage.   To add insult to injury the delegates to the Democratic convention voted down a Vietnam peace plan by a 1500-1000 vote.  (You see, even 40 years ago, Democrats lived in fear of being painted as "weak on national defense," by their Republican opponents. If a few thousand more US soldiers had to die for Democrats to look tough, so be it.)

So, despite strong showings in the primaries, McCarthy was able to gather only 23 percent of the delegates -- thanks to the control over the delegates wielded by state party organizations. While   Humphrey, was not clearly an anti-war candidate, some anti-war Democrats backed Humphrey hoping he might succeed where Johnson had failed in extricating the United States from Vietnam -- just as today some Democrats hope that Hillary, who was for the war before she was against it -- might just figure out how to extricate us from Iraq.

Young McCarthy supporters quickly figured out that Democratic party insiders had fixed the contest  and vented their disappointment and anger through the streets of Chicago. The party's most experienced and notorious machine Democrat -- Chicago Mayor, Richard Daley -- was not about to allow his party's will to be thwarted by a bunch of "hippies." He turned the police and National Guard loose on the protesters. (Watch it here)

I remember watching the carnage on my black and white TV. It wasn't a hippe/yippee riot, it was a police riot. As young people were clubbed to the ground the crowd chanted, "The whole world is watching. The whole world is watching."

Those scenes radicalized me then and there, and millions more were as well. We've never entirely trusted the Democratic Party since then -- and for good and abundantly obvious reasons.

(Chronology of the 1968 Chicago convention protests here)

Party insiders "won" in 1968. The party nominated it's choice, Hubert Humphrey, as it had always intended to once Johnson decided not to run. Humphrey went on to lose the subsequent election to Richard M. Nixon by  500,000 votes. (Because of that, an additional 20,000 US soldiers would die before the war was finally brought to an end after Nixon was chased from office in 1974.)

Which brings me back to this coming August, in Denver. The similarities between 1968 and 2008 are startling:

In 1968 support for the Vietnam war had hit new lows. (Chart)

In 2008 support for the war in Iraq has reached new lows. (Chart)

In 1968 the Democratic Party insider candidate, Humphrey, had supported the war and, while public option was increasingly for withdrawal, he preached against a mandated withdrawal from Vietnam, deeming such a withdrawal as reckless and potentially dangerous to US security.

In 2008 the Democratic Party insider candidate, Hillary Clinton, who was for the war until she was against it, now argues against a rapid withdrawal or setting a hard timeline for withdrawal.

In 1968 an unconventional, anti-war candidate -- Senator Gene McCarthy, captured the imagination and rekindled the hopes of a new generation of voters, even bridging racial divides garnering support from civil rights groups including the Black Panthers.

In 2008 an unconventional, anti-war candidate -- Senator Barack Obama, has captured the imagination and rekindled the hopes of a new generation of voters, again bridging historical racial divides.

In 1968 Democratic Party insiders viewed newcomer McCarthy as an outsider and a threat to the party's pecking order. It was Hubert Humphrey's "turn" to be President, and besides, who was this rebel rousing outsider McCathy and his young hairy supporters anyway?

In 2008 the Democratic Party apparatus view Obama as an outsider and a threat to the party's insider pecking order. It's been an article of faith since Bill left office that the next time was Hillary's turn. Besides, who is this rebel rousing outsider Barack Obama and his children crusaders anyway?

In 1968 Democratic Party insiders brushed aside the hopes and aspirations for change from a new generation of voters. Instead they rammed through the nomination of the party's choice, Hubert Humphrey. How they did it is instructive -- they used their control over Democratic party state officials to swing their delegates to Humphrey.

In 2008 much the same dynamic will be in play. Already party chairman, Howard Dean (once an outsider himself) has indicated he's open to a deal that would avoid a convention-floor fight for the nomination. Welcome back to the smoke-filled rooms of 1968.

Should neither Clinton or Obama arrive in Denver with enough delegates to clinch the nomination, the dealing will begin. First there are the large number of so-called "Super Delegates," made up largely of old party hacks and those who follow orders. Super Delegates are not bound by how their states voted during the primaries. Instead many, if not most, will vote as the party leaders instruct them to vote.

If that fails to swing the nomination to Clinton party insiders hold a trump card -- a trump card that would put the party's designated hitter, Hillary Clinton, in and outsider Obama out: they will re-certify all or some of Florida and Michigan's now-banned delegates.

A redo for Mich., Fla.?

LANSING, Mich. — The Democratic National Committee is pressuring Michigan and Florida to hold presidential caucuses so the delegates they lost for holding January primaries could be seated at the national convention, a top Michigan Democrat said Wednesday. (Full Story)

Should they pull that stunt it will tear the Democratic Party apart as it did in 1968. It will also set the stage for McCain victory next November, and with it more war, more dead US GI's and more dead Iraqis.

How do I know? Because history teaches me so.

More Proof History Repeats on us: Guess who threw his hat into the GOP presidential ring in November 1967 --  Michigan Governor George Romney -- father of Mitt. Like father, like son. George Romney withdrew from the race in February 1968. Son Mitt Romney dropped out of the race today, Feb. 7, 2008. Now you know.... the rest of the story.

If Hillary wins fair and square, fine. I won't like it, but I'll learn to live with it.

But, if the party pulls a 1968, and rams Hillary Clinton down our throats, then the gloves are off. We need to let Howard Dean, et al,  know that if they play that card all hell will break loose. Like my generation 40 years ago, a new generation has been energized ... energized by endless war, by growing economic inequities and by heavy-handed government intrusions into their private lives.  They are smart. They are connected. And they will not go quietly.

My generation lost its fight, largely because we had virtually no access to mass communications or the mass media. When you told someone 40 years ago that your were "networking," it meant was that you owned phone and a phone book. All we could do to get our message on the evening news was to demonstrate, raise hell and shout insults at the police.

But this generation is all about networking and mass communication.

Sticks and stones didn't get it done for us in 68, but I suspect the tech-savvy, hyper-connected YouTube generation will make Democratic Party hacks long for those "good old days," if they cross them.

It's too soon to put out the call: "Denver. August 25-28. Be there, or be square." But be assured, we're watching.



"There is absolutely no greater high than challenging the power stucture as a nobody, giving it your all, and winning." --Abbie Hoffman