Democrats Use Supercommittee As Cash Machine

Surprise surprise, the Democrats are unethical and corrupt. . . just like we figured. Not only was it obscene that Harry “the turd” Reid appointed the Honorless Pat Murray to the new Supercommittee, but Nancy Pelosi’s selection, Xavier Becerra immediately set about trying to profit from being selected to the Supercommittee. Wow, Democrats are shameless.

The Supercommittee, as you may recall, will be charged with finding $1.5 trillion in spending cuts. This could include actual cuts or the elimination of special-interest-obtained tax deductions. That means thousands of lobbyists will want to get their paws on these Congresscritters and Senators to buy them off so their plundered spoils will continue to come pouring forth from the Treasury.

Apparently, the Democrats are happy to sell themselves to these lobbyists.

Indeed, when the committee names were first announced, Harry Reid’s selection of Washington State Senator Patty Murray seemed the most cynical. She is the head of the Democratic Senatorial Campaign Committee. That means she is charged with raising money to help Democratic Senators get re-elected in 2012. Giving her a post that will cause lobbyists to fight each other to the death for a place in line to buy her off is so incredibly cynical you wouldn’t think a modern American politician would actually try to get away with doing such a thing -- indeed, this harkens back to the days of the scandals of the 1880s, when politicians were openly bought and sold. But you would be wrong. Reid did it. Nice work Harry, you sh~t. . . oh, and #$%& you Nevada.

But Murray has been a paragon of virtue compared to Pelosi appointee Xavier Becerra (which means “corrupt bastard” in Spanish). Literally within two hours of being appointed, Becerra sent out an invitation to Wall Street lobbyists inviting them to a $1,500 per-ticket event. On the invite, he highlighted his membership on the Supercommittee:

“[Becerra is] not only vice chairman of the Democratic Caucus, but who also has just been named to the new deficit reduction committee. This will be Mr. Becerra’s first event since being named to the commission and may be one of the first for any of the twelve members of the group. This event could give all attendees a glimpse into what will most assuredly be the primary topic of discussion between now and the end of the year.”

In other words, this is your first chance to give me money because I will be deciding the fate of your spoils. This is just shameless. Kenya isn’t this corrupt. Nigeria isn't this corrupt. Chicago isn't this corrupt.

Should we be surprised by this? Hardly. Pelosi is infamous for corruptly giving special treatment to her donors, see e.g. Kaiser Permanente. She is also infamous for trying to pass bills that benefit companies in which she has an ownership stake, like various natural gas bills that would directly help Clean Energy Fuels Corp (CLNE). And of course, she’s not alone in this. Indeed, using their legislative power to corruptly help their donors or enrich themselves is part of being a Democrat. The Congress Black Caucus, for example, has been particular good at illegally giving federal money to their friends and family, see e.g. Sanford Bishop and Eddie Bernice Johnson (scholarships to relatives), Charlie Rangel (tax breaks to donors) and Maxine Waters (money to relatives’ banks), and most Democrats are quite accomplished tools of big business. Chris Dodd was an infamous whore for Countrywide Financial. Obama too has been good at this (GE corruption, giving the treasury to Goldman Sachs, money for GM unions) as was Clinton and just about anyone with a "D" after their names. In fact, they should dump their Donkey mascot and replace it with a backscratcher or a cash machine.

So if you’re a Democrat, it’s time to face reality: your party is the corrupt tool of big business. You stupidly think your party stands for the little guy, but it really only stands on the little guy. You are supporting a party that steals from the poor to give to rich friends. You suck.

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Republicans Learning To Play Hardball!

For decades, the Democrats attacked Republican-supporting institutions. They spied on churches and sent the IRS to investigate their tax exempt statuses. They tried to ban corporate giving and attacked the Chamber of Commerce because they favored Republicans. They attacked wealthy Republican donors and groups like the Mormon Church and the Boy Scouts which they saw as being on the “wrong side.” And the Republicans never fought back. Now that’s changing, and it’s about time.

Unlike their ancestors, the new Republicans seem to be getting it. In the budget battle, they’ve specifically targeted federal funding for left wing bastions like NPR and Planned Parenthood. Arizona, Texas and Indiana started cleaning up the illegal immigration mess, much to the chagrin of the race lobby. Wisconsin and Ohio Republicans are going after unions, which is particularly significant because unions have become the backbone of the Democratic Party. Democrats draw money directly from taxpayers through the unions, and union bosses provide Democrats with “workers” for political campaigns. All of this will be a huge blow to the Democratic Party, as it will end their taxpayer subsidy.

Now three House Republicans are targeting another Democratic stronghold -- AARP. AARP is ostensibly a non-partisan interest group that represents old people. Indeed, they need to be non-partisan to maintain their tax exempt non-profit status. But everyone knows they aren’t non-partisan. Consider this:

● AARP opposed tax cuts under Reagan and Bush.
● AARP worked to defeat the nomination of Clarence Thomas.
● AARP helped Clinton defeat the balanced budget amendment.
● AARP supports gun control and lobbied to strengthen the Brady Bill.
● AARP supports entitlements for illegal aliens.
● AARP partnered with race-hate group La Raza to promote amnesty and drivers licenses for illegals, and to end enforcement of immigration laws.
● AARP calls homosexuality a civil right and opposes the Defense of Marriage Act.
● AARP pushed heavily for Obamacare even though it would cut $500 billion from Medicare, THE program upon which all of its members rely.
● While AARP does not contribute to candidates, AARP executives give overwhelmingly to Democrats.

AARP has 1,800 employees in Washington and they lobby. John Boehner notes that “AARP is one of the most liberal organizations in Washington, D.C.” And for their efforts, AARP gets around $83 million a year in direct payments from the federal government, not to mention their non-profit status saving them from hundreds of millions in taxes.

Now Republican Reps. Wally Herger (Ca.), Charles Boustany (La.) and Dave Reichert (Wash.) are challenging AARP’s tax exempt status and demanding the IRS investigate. They point out that while AARP claims to speak for seniors, it actually “operates in direct opposition to their senior membership.” Specifically, in lobbying for Obamacare, AARP supported a bill that would drain $500 billion out of Medicare, which would hurt seniors severely. Why would AARP do this? Because AARP stands to make an additional $1 billion over ten years as a result of Obamacare because AARP gets paid to refer seniors to insurance that fills in the gaps in Medicare. . . which will now have $500 billion in new gaps.

Moreover, AARP-sponsored insurance policies are not cheaper for seniors than policies seniors could get alone on the open market, and several AARP executives are paid seven-figure salaries. . . none of which is consistent with AARP being a non-profit. Indeed, a quick look at AARP’s funding is rather illuminating as to AARP's true nature. AARP gets most of its money from selling insurance and advertising. In 2008, AARP was paid $652 million in royalties from insurance companies for referrals. It also received $120 million for advertisements inserted in its publications. By comparison, it collected only $249 million in membership dues. Of this, Boustany said:

“During this investigation it became very clear that despite its privileged tax-exempt status, in many cases, AARP represents a for-profit entity, in fact, an insurance company.”

Of course the Democrats are screaming bloody murder as they always do whenever their allies get attacked. Democrat Sander Levin (Mich.) called this a “witch hunt.” Boo hoo hoo.

First of all, the Republicans are right that AARP is not a non-profit. It is clearly a very large for-profit insurance referral company -- so large it belongs in the Fortune 500. Secondly, its lobbying is clearly partisan. Thus, it cannot be a non-profit. Third, I don’t care if it is a witch hunt. The Democrats have tried to stifle anyone who disagrees with them for decades by passing laws against them and sending the IRS after them. It’s time the Republicans started playing the same game. As long as only Democrats are willing to use this weapon, they will continue to use it with impunity. Only by doing to their friends and allies what they have done to everyone else will the Democrats ever be stopped from playing these destructive games. And if that damages a couple of Democrat-fellow-traveler institutions in the process, then all the better.

Their next target should be the ABA and the AMA.

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Jamie Gorelick?! Is Obama Kidding?

The latest rumor has Obama looking at appointing Jamie Gorelick to be the next director of the FBI. Good grief. This pick should bother everyone. Gorelick’s career has been an unending series of conflicts of interest, abuses of power, and questionable decisions. Let’s look at the highlights of Gorelick’s reign of error.

1. Gorelick's Wall of Silence

Between 1994 and 1997, Gorelick was Clinton’s Deputy Attorney General, the number two position at the Justice Department. In 1995, Gorelick wrote a memo outlining what would become known as “Gorelick’s Wall.” This memo interpreted court decisions on the Foreign Intelligence Surveillance Act of 1978 and recommended a set of restrictions on the ability of criminal investigative organizations, like the FBI, to share information with intelligence agencies, like the CIA. Gorelick’s Wall prevented intelligence agencies from accessing the computer of Zacarias Moussaoui, a computer which could well have led to the discovery of 9/11 before it happened.

But wait, says Gorelick in an editorial, the 9/11 Commission found that this wall already existed under Reagan and Bush I, and it never found this wall to be that big of a deal. What Gorelick fails to mention, however, is that she was on the 9/11 Commission AND that she never disclosed her 1995 memo to her fellow Commissioners.

This is not only an incredible conflict of interest that never should have been allowed, but it shows exactly why such conflicts must be avoided. By accepting the position on the 9/11 Commission, Gorelick essentially placed herself in the position of investigating herself. The fact she ignored such an obvious conflict of interest speaks poorly of her judgment. Moreover, her failure to disclosed this key memo to the Commission makes any conclusion they reached on this issue meaningless.

Further, Gorelick tries to defend herself by blaming Reagan and Bush for creating the policy, even though she is the one who provided the new interpretation. Then she tries to blame Janet Reno by claiming that her memo was less restrictive than what Reno ultimately put out (an argument which contradicts her attempts to blame Reagan or Bush). Also, she attacks her critics as “partisans” and blames “public rancor” for the allegations against her, which is an evasive tactic.

This incident is an ethical disgrace, and it calls into question whether she can put the interests of the FBI and the nation above her own self-interest.

2. Gorelick Champions Governments’ Right To Know

Also while serving as Clinton’s Deputy Attorney General, Gorelick tried to give the government control over the internet. Arguing that the internet was “transmitting child pornography into our homes,” that terrorists could use the internet to communicate, and that the internet could allow hackers to “shut down the banking system,” Gorelick fought for a ban on the domestic use of strong encryption and tried to force companies to put their encryption codes into escrow so the government could get at them. This is evidence of a mind that cares little for civil liberties and Constitutional rights.

(FYI, internet expert Gorelick didn’t even know her own e-mail address at the time.)

3. Fannie Mae Pay Day

Moving on from the Justice Department, Gorelick took a job as the Vice Chairman of Fannie Mae between 1997 and 2003. Guess what Fannie Mae started doing while Gorelick was there? Yep: bundling subprime loans into securities. . . the same securities that blew up the world economy in 2008. In March of 2002, Gorelick defended this practice in an interviewed with Business Week: “We believe we are managed safely. . . . Fannie Mae is among the handful of top-quality institutions.” She was paid $26,466,834 during her time at Fannie Mae. We would pay $338 billion to bail them out (and take on $5 trillion in loan guarantees).

Moreover, during this period, a $9 billion accounting scandal arose at Fannie Mae. According to the Director of the Office of Federal Housing Enterprise Oversight, false signatures were used by Fannie Mae to shift expenses into the future and wrongly increase profits. During 1998, these false profits triggered $27.1 million in bonuses to a handful of Fannie Mae executives, including Gorelick, who received $779,625 of that.

This scandal eventually resulted in $9 billion in profits being removed from Fannie Mae’s books. And while there is no direct proof of Gorelick’s involvement, let me point out that direct proof was not considered necessary in scandals like Enron or under Sarbanes-Oxley, where executives are considered responsible for the actions that occur under their watch. Further, her senior position and the unwillingness/inability of Fannie Mae to investigate who faked these signatures or who was aware of what, call into question her role, especially as she apparently made no attempt to expose this issue.

4. Railroading White Kids At Duke

Following her departure from Fannie Mae, Gorelick returned to a big DC law firm. In 2006, she joined the defense team that represented Duke University in the 2006 Duke University lacrosse case. This was the incident where Duke railroaded 47 Duke University students on flimsy and contradictory rape allegations by a stripper with a history of mental problems, who actually identified people who were not present as the rapists, who then confessed to a friend that she was lying to get money from the “white boys,” and who later tried to set fire to her live-in boyfriend. Despite this, Gorelick’s client suspended the entire lacrosse team, took no action to stop threats made against the players, their families and the team’s coach, and sent out e-mails stoking racial tensions.

5. International Peace Through Superior Firepower

Gorelick now serves on the board of directors of United Technologies Corporation, a defense contractor with $5 billion in defense contracts, while also serving on the board of directors of the John D. and Catherine T. MacArthur Foundation and the Carnegie Endowment for International Peace, organizations dedicated to (leftist) international peace. Do you see any conflict there?

6. Student Loan Lobbyist

Finally, Gorelick is currently a lobbyist for the lending industry fighting student loan reform. Remember the whole “no lobbyist” thing from Obama? No? Well, neither does Obama apparently. Oh, and she represents BP.

Gorelick has shown a lack of judgment when it comes to conflicts of interest, a penchant for passing blame to others, questionable business ethics, and an utter indifference to the rights of individuals. This is not someone who should be running the FBI.

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Hypocrite: (noun) Obama.

Obama is an awful President. He’s also a hypocrite. From his heavy vacationing and lavish spending at the same time he’s telling the rest of us to tighten our belts, to his wife's diet-tribes, to his tax cheat cabinet, to his exempting his friends from his own policies, to his strange disparate handling of issues in the Middle East, he’s a hypocrite.

Hypocrisy One: Vacation-O-bamarama

You may recall the late unpleasantness, i.e. the recession that cost millions of Americans their jobs or significant pay cuts. Unemployment hit a level not seen since the inept Jimmy Carter. Tax revenues are down too. So both individuals and governments from Spain to China to Wisconsin to California have been forced to tighten their belts. Obama even spoke some words of sympathy to us, assuring us he felt our pain. Only, he didn’t. Obama never stopped taking luxury vacations. This week, Michelle Obama is in Vail, enjoying a wonderful skiing holiday with her fabulous friends, as they gorge on ribs.

But never fear all of the “personal expenses” were paid by the Obamas. Ok, what about the rest of it? The plane, the staff, the security and their room and board? We're paying for that.

At least she didn’t bring O’Biden, he’s in the Florida Keys for a well (un)deserved vacation.

And don’t get me started on the food hypocrisy.

Hypocrisy Two: Do As I Say Taxpayer. . .

You should have known something was wrong the moment Obama started advocating tax increases “for the rich” at the same time he tried to pack his cabinet with tax evaders. Seriously, how is it that so many of his people felt they didn’t have to pay the same taxes we do? Then came ObamaCare. Did you notice how hard Team Obama worked to make sure the healthcare plans belonging to his union buddies would not be subject to the Cadillac tax? Somehow, the taxes were good for everyone else, but not Obama’s friends. And everyone in Congress and the White House were exempted from ObamaCare. Why? Then we learned that hundreds of friends of Obama were submitting waiver requests so ObamaCare wouldn’t apply to them, and GE got a waiver from EPA rules it had been lobbying for.

Do as I say, not as I do, indeed.

Hypocrisy Three: Some Oppressors Are Worse Than Others

Remember how Obama didn’t care at all about terrorism until it hit an African country? In fact, he couldn’t even bring himself to say the word. . . “man-made disaster” my shiny butt.

Then we had a true moment of inspiration on the international front, as a people, tired of their brutally oppressive government, rose up and tried to bring down their insane dictator. I’m talking, of course, about Iran. As the protestors took to the streets in Iran, Obama said.... nothing. As the army beat the protestors, tear gassed them and shot them, Obama said.... nothing. A few days later, he went on television to proclaim his fondest hopes that both sides would play nicely. As if the protestors were the bad guys!

Obama had another chance when crowds rose up against the thuggish leader of Tunisia. He said nothing.

Then came Egypt. After an initial period where he, O’Biden and Shillary Clinton sent the mixiest of mixed signals, Obama finally got his foreign policy legs and came down firmly on the side of freedom against this not especially repressive regime, who happened to be a long term American ally. So we finally have the new Obama Doctrine, right? Obama would now side with the people?

Well, no. He hasn’t said jack about Libya. As Gaddafi’s army guns down protestors by the hundreds, Obama spent his time fretting about a dispute between Democrats and Republicans in Wisconsin. There is no legitimate foreign policy distinction to be made here. If anything, he should have be more vocal against people who aren’t our allies, like Iran and Libya, and people who are gunning down their own citizens. Yet he doesn't. Why?

Because the man is a bully. He throws his weight around against people who won’t fight back, and he remains noticeably silent as evil dictators mow down their own citizens. At the same time, let me remind you that Obama used to rail against Bush for supporting dictators throughout the world. . . the same dictators he now coddles or whose atrocities he turns a blind eye to in places like Libya, Saudi Arabia, China, Russia, Venezuela, etc.

Unless I'm missing something here, the man is a hypocrite. Is that how you see it?

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GE: Crony Capitalism Made Easy

It’s good to be the king. It’s equally good to be a friend of the king (“FOK”), as GE can attest. Indeed, you may recall GE CEO Jeffrey Immelt, was recently appointed to lead Obama’s President's Council on Jobs and Competitiveness. You may also recall that Immelt spent the last two years trying to foist cap and trade rules on the rest of us so we would be forced to buy his company’s products. Well, it gets better.

It was reported the other day that GE received a waiver from the EPA’s new greenhouse gas emissions rules for a power plant GE is building in California. Yes, the same greenhouse gas rules GE has been lobbying Congress to force upon the rest of us. That’s how you do it when you’re a FOKer.

Of course, GE wants to distance itself from the bad press this generates, so GE issued a press release, in which it claims that it did not request a waiver, nor was it given one. In fact, it says, it’s not even building the project! GE has only offered to provide turbines to the project but its offer hasn't even been accepted yet. So there, nothing to see here. Moreover, the project manager, not GE, requested the waiver.

So who is right? Well, let me say that I have no doubt that everything GE says in its press release is absolutely, technically true. But there’s a problem with GE’s claim. I spent years involved in government contracts, including construction contracts just like this one. And what GE says here is misleading.

When a company submits a bid on such a project, it already has its subcontractors lined up. Indeed, these bids are essentially the work of teams of contractors, whose efforts are coordinated by a single general contractor, who assembles and submits the final bid. Each contractor participating in the team will submit their own bid to the general contractor, usually on the condition that the bid is binding on both parties but only if the team is chosen to handle the contract. What this does is it allows the general contractor to know their costs and what capabilities they can offer, but doesn't require anyone to agree to anything unless they end up winning the overall contract, at which point everything automatically falls into place.

This is how it's always done. Indeed, it’s inconceivable that anyone would submit a bid to build a power station without having an agreement in place for GE (or some competitor) to supply the turbines at a certain price. Thus, while I don't doubt for a moment that GE is being legally correct when it claims that its offer has not been accepted, I have little doubt this is also highly misleading. The technical acceptance is a formality.

What’s more, it's also inconceivable that a project manager would request such a waiver without the full knowledge, support and participation of GE. Indeed, they would have needed GE to identify the issue for them and to guide them through the process. Thus, while it is probably technically correct that the general contractor made the request rather than GE, the general contractor would only make the request at GE’s direction.

Why would GE try to mislead the public on this? Because this is crony capitalism. GE spent $32,050,000 lobbying in 2010 and now it’s calling in those markers to get its politicians to put harmful anti-competitive regulations in place, and then to get exemptions from those regulations for itself. Keep this in mind, along with the 25,000 jobs GE shipped overseas during the last two years the next time you see a GE ad telling you about all of the good things they are doing for America and the world. And even more importantly, keep this in mind the next time some politician (Republican or Democrat) tries to tell you why we should be doing something GE wants. . . because they're FOKers.

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Deepwater Horizon: Government Failure

The explosion of the Deepwater Horizon presents us with a true teachable moment. But the lesson isn’t that offshore drilling is bad or dangerous or wrong, or that oil companies are evil. No. The oil companies do bare the brunt of the blame and should be made to pay for all of the damage they have caused. But the real lesson here is that it’s time to reform our government because it keeps failing to do the few tasks it should be doing.

Under federal law, the Minerals Management Service is charged with inspecting offshore drilling rigs to make sure that they comply with all federal safety regulations. The MMS is supposed to inspect each rig at least once per month. We are now learning that they haven’t been doing that.

The exact number of times MMS inspected the Deepwater Horizon is not clear because MMS has been giving different numbers. They originally claimed to do 26 inspection in the last 64 months. But then they mysteriously raised this number to 48 out of 64, no explanation given. In either event, MMS failed to conduct between 25% and 59% of the required inspections.

This follows a citation in July 2002, when the Deepwater Horizon was shut down because the company had failed to conduct a pressure test of the blowout preventer -- a device that is supposed to stop the kind of gusher they can’t seem to stop right now. And in September 2002, the rig was cited again for problems with the blowout preventer.

Moreover, several years ago, MMS weakened its testing requirements on the very cutoff valves that should have prevented the current disaster. Indeed, they weakened these testing requirements so much that there is virtually no oversight of these key safety features. As a result, there have been repeated failures of these cutoff valves on other rigs in recent years -- at a time when inspections have been falling. This time, it went seriously wrong, costing eleven lives and billions of dollars in damage.

So why was this rig allowed to operate? Did BP trick MMS? No. Believe it or not, it turns out that the Deepwater Horizon was allowed to operate without providing safety documentation showing that these valves were functioning. Apparently, many of these rigs are. And Team Obama has ruled out stopping the process of granting such waivers, despite all the sound and fury coming out of the White House about this incident.

The problems here are obvious. First, the government is wasting so much money doing things it shouldn’t be doing that it has lost focus on the things it should be doing. Moreover, the government is too rife with conflicts of interest. For example, last year, MMS awarded the Deepwater Horizon an award for its safety history. Aside from the obvious of “you gave an award to people who kept being cited for violations?”, is the bigger question of why is MMS giving awards in the first place? Their job is to inspect. They are to shut down those who fail and pass those who do. Their job is not to pass out awards or to play footsie with these companies.

And lest you think this is a minor point, a report by the Interior Department's Inspector General now reveals that the relationship between the agency employees and the oil companies was so close that it bordered on bribery. Apparently, agency personnel accepted sporting-event tickets, meals, and other gifts from the oil companies they were supposedly monitoring. The report also finds that agency personnel, rather than doing inspections, were using government computers to view pornography.

Further, why is the agency doing inspections with the one hand, but collecting billions of dollars in royalties with the other? How can it make sense to give the inspection role to an agency whose primary incentive is to maximize output? Where is their incentive to do honest inspections?

The time has come to remake the government. It is time to strip out the conflicts of interest, it is time to hold everyone in the agency chain of command accountable for their failures, it is time to divorce government from its incestuous relationship with industry, it is time to focus these agencies on doing the job they should be doing and doing away with all of the distractions.

It is a scandal that the government allowed defective gear to be put into place without a substantive inspection. And it is a bigger scandal that Team Obama is not planning to fix this situation.

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The Tale Of Michelle And The Cookie Jar

First Lady Michelle Obama has become the co-president to her husband that Hillary Clinton only dreamed of being. She is with him everywhere, making speeches, giving orders, running up the public debt. And if the early reports are substantiated, she's right there with him practicing crooked Chicago politics and extending them to the federal level.

The "cookie jar" that Michelle may have had her hand in is the mini-scandal that could conceivably be the Obama Watergate. Remember the dust-up awhile back about the Inspector General who was removed from office without so much as a "thank you for your loyal service?" IG Gerald Walpin was removed from his office (literally) for getting too close to proving a nefarious connection between the Obamas, a crooked California mayor, and a couple of questionable community organizations. Walpin filed suit to regain his job as watchdog over the Corporation for National and Community Service (CNCS), at least until the normal expiration of his term of office.

Walpin was investigating CNCS, its chairman, Alan D. Solomont, and most particularly former NBA star Kevin Johnson, who is now the mayor of Sacramento, California. Johnson, a personal friend and enthusiastic supporter of the Obamas, was also a director of AmeriCorps (soon to be re-named The Obama Youth Corps) which is a creature of CNCS. Even before the Obamas came into office, there was an investigation into serious allegations of misuse of AmeriCorps funds by Johnson. The Obamas, Chairman Solomont, and the new acting U.S. Attorney in Sacramento were greatly displeased by the investigation, and have since done everything possible to keep Walpin out of office and the investigation gone like the New Black Panther cases in Philadelphia.

House Member Darryl Issa (R-California) and Sen. Charles Grassle (R-Iowa) have been following the investigation and the attempt to suppress it, and are now actively informing their constituents about the latest developments. Walpin had been warned to back off the investigation by Obama administration officials, but refused. The Inspector General statute requires that any IG whose services are going to be terminated ("removed from office") must receive thirty days notice of such intention to terminate. Walpin was apparently getting too close to wait for that thirty days to pass, so instead of terminating him, they suspended him "effective immediately" (he was placed on paid administrative leave, thus avoiding the termination appellation). That, as a practical matter, stopped the investigation without the legal niceties of giving Walpin notice and opportunity to defend himself or to complete his investigation. The entire purpose of the thirty day requirement is fend off political interference with an ongoing investigation.

Among the ginned-up charges against Walpin were allegations that he had gone senile overnight and didn't express himself in a proper logical manner at a couple of meetings with the Obama nay-sayers. Walpin, on the other hand, was not so senile as to forget to demand his rights. And in doing so, he hired some attorneys to file suit to gain his position back. His legal charge against the administration is that the "suspension" was in fact a "termination" in all but name. On December 7, Obama administration lawyers filed briefs in federal court claiming that Walpin's charges were completely without merit, and should be dismissed without a hearing. It is not a big stretch to believe that the motion is an indication of how fearful the administration is that any of this dictatorial activity will be documented in court records.

So where does the unelected and unofficial co-president fit into this scenario? Michelle Obama, without being vetted by the Senate or receiving any official sanction for her position, was given "a central role in the national service agenda." That would, and does, include AmeriCorps. Walpin was removed just as the investigation was showing a close working relationship between Chairman Solomont and the First Lady. Rep Issa reacted angrily to the latest court action by the administration. On December 11, he wrote a pointed and damning official letter to Chairman Solomont, specifically accusing Solomont of making false statements about his relationships.

"After Mr. Walpin's removal, there was speculation in the press that former Chief of Staff to the First Lady Jackie Norris may have influenced the President's action because she left the White House to become a senior advisor at CNCS around the time of Mr. Walpin's removal. Accordingly, Committee investigators specifically asked if you discussed any Corporation business, including the issues relating to the Corporation's Office of Inspector General, with Ms. Norris. You indicated that you did not. The White House announced on June 4, 2009, that Ms. Norris had been appointed Senior Advisor to the Corporation. In light of all this, it seems highly implausible that you would meet with Ms. Norris on June 9, 2009 and not discuss the Inspector General who was fired the very next day."

And the plot thickens. When Congressional investigators questioned White House aides about the obvious connections, the aides terminated the sessions as soon as the questions became pointed about Michelle Obama, Solomont and Norris. Chicago-style politics have now reached the highest levels of the executive branch of the federal government.

For those of you who have searched the mainstream media for all of these developments and found little or nothing, you might be wondering why I might use the expression "Obama Watergate," I remind you that the original Watergate started out as the investigation of a common burglary, and ended up making its way all the way to the White House, resulting in the resignation of a president. With the current makeup of the Congress, there's no chance of impeachment to spur the president into resignation if this story has legs. And if the Obamas are as good at suppressing scandal as the Clintons, this one could fade as fast as Whitewater (with a few sacrificial lambs being sent to the slaughter). But the 2010 elections are less than a year away, and the situation on the ground could change radically.
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United States of America™, Property of Goldman Sachs

In 1873, Mark Twain co-authored a book called The Gilded Age: A Tale of Today, and thereby gave a name to era between Reconstruction and the Progressive Era. Were Twain alive today, he would likely name our present era “The Second Gilded Age.” And nothing illustrates this more than the many-tentacled creature known as Goldman Sachs.

The Gilded Age

Events today read like a repeat of the Gilded Age.

The Gilded Age is generally considered to have begun under the Grant administration. It was an era noted for massive corruption, dramatic social and economic upheaval, and a shocking incestuousness between big business and government. These two became so intertwined that the public came to see government action as nothing more than favoritism, bribery, kickbacks, inefficiency, waste, and corruption. Smart people.

The Gilded Age was the age of robber barons, like Andrew Carnegie, John Rockefeller, Cornelius Vanderbilt, and John Pierpont Morgan -- names that continue to mark our most powerful corporations today. It was the time of Tammany Hall and Boss Tweed, of corrupt local politics and election fraud, of Republican Mugwumps calling for an end to the spoils system in the civil service, of Bourbon Democrats calling for free market reforms, and of national parties ignoring all the cries for reform. And in 1889, this Age gave us the Billion Dollar Congress, an outrage that seems quaint compared to this year’s trillion dollar deficit.

The Gilded Age also gave us waves of immigrants to keep factory costs down, Chinese labor to build the nation’s railroads, and the birth of labor unions. The media too was changing, with the introduction of yellow press journalism, and the abandonment of factual news for sensationalism and sentimental stories. And the economy endured two depressions, the Panic of 1873, caused by the manipulation of the gold market by Jay Gould and James Fisk (“Black Friday”), and the Panic of 1893, a deep depression that ushered in the Progressive Era.

Sound familiar? Try substituting Goldman Sachs, ACORN, Tea Party, Mexicans, infrastructure, Madoff, Stafford, and reading this again.

By the 1890s, the Gilded Age was ending. Spurred on by reformers, the government imposed new regulations in response to corporate excesses, dangerous workplace and consumer conditions, exploitive labor practices, and anti-competitive behaviors. Many of those regulations remain with us today.

Goldman Sachs: The Corruption of the Revolving Door

It seems we are doomed to repeat the Gilded Age. And as history loves irony, the company at the center of this Second Gilded Age is a company formed at the tail end of the first Gilded Age: Goldman Sachs.

Goldman Sachs was founded as Marcus Goldman & Co. in 1869. It was renamed Goldman Sachs in 1882. The company made a name for itself in its pioneering use of commercial paper and it joined the New York Stock Exchange in 1896. Over the next 100+ years, it would grow to become one of the most influential companies in the world.

Now before I continue, let me be clear, I do not believe in conspiracies. There is no small group of illuminati that meet regularly to decide our fates and control the world. That said, I am not fool enough to believe that our government acts in the best interests of its citizens. It should be painfully clear to all of us that the government responds to those who have the most access to it. Thus, where we find access, and we find favored treatment for those with access, we must wonder whether the system is working or not. That is the point to this article.

Nor, is this article an attack on Goldman Sachs per se. Goldman is simply one of dozens of groups with too much influence. I have picked Goldman from the crowd only because they’ve made it very easy lately to see how they use their influence to help themselves at our expense.

How Much Influence Does Goldman Have?

How powerful is Goldman? Said one recent commenter: “It’s Goldman’s world, folks. We just live in it (at Goldman's discretion, of course).” Consider these facts. In October of last year, the New York Times reported that thirteen Goldman employees worked in senior positions with the George W. Bush administration. This included Treasury Secretary Hank Paulson, White House Chief of Staff Joshua Bolten, and the man who would oversee the TARP, Neel Kashkari. The Times called this “Government Sachs.”

The Clinton administration too was staffed with Goldman employees, including Treasure Secretary Robert Rubin. Obama, who received $918,000 from Goldman employees for his campaign, also has hired his share of Goldman alumni. Indeed, in a rather controversial move, Timothy Geithner hired former Goldman employee Mark Patterson to be the Treasury Department Chief of Staff, in direct violation of Obama’s “no lobbyists” policy.

But Goldman employees aren't just in the administration. Goldman employee Robert Zoellick is president of the World Bank. Mario Drahi is the governor of the Bank of Italy. Romano Prodi is the former Prime Minister of Italy. Mark Carney is the governor of the Bank of Canada. Michael Cohrs is the Head of Global Banking at Deutsche Bank. Malcolm Turnbull is the leader of Australia’s Liberal Party. Jim Cramer spends his days talking up Goldman Sachs on his show on CNBC, along with former Goldman alum Erin Burnett. Edward Lampert bought K-Mart in 2003. Ashwin Navin is President of BitTorrent. John Corzine, the former head of Goldman Sachs became a United States Senator and then governor of New Jersey. And there are many more.

Some are in key positions that regulate Goldman itself. Goldman alumnus Stephen Friedman and current Goldman board member, became an economic advisor to President Bush and Chairman of the Foreign Intelligence Advisory Board, before leaving the administration to become Chairman of the New York Federal Reserve Bank’s Board of Directors. . . the agency that regulates Goldman Sachs and which has a significant role in setting interest rates, which affect Goldman directly. Even worse, Friedman received a waiver, allowing him to remain on Goldman’s board during his time on the New York Fed. However, when it was learned in May 2009 that he purchased 52,000 shares of Goldman Sachs in January, he resigned from the Fed “to avoid the appearance of a conflict of interest.” Wouldn’t want that.

William Dudley, a former Goldman economist, was appointed as president of the New York Fed to replace Tim Geithner, who was mentored by former Goldman CEO and Treasury Secretary Robert Rubin. Rubin has been an economic advisor to President Obama.

Goldman executive Gary Gensler became the head of the Commodity Futures Trading Commission, replacing Brooksely Born, who was criticized for failing to regulate the derivatives market. Gensler himself stated that Born, “should have done more to reign in exotic financial instruments that have battered global markets.” What went unmentioned, however, was that Born’s efforts to regulate derivatives were blocked by Goldman alum Robert Rubin, who recommended to Congress in 1999 that the Congress strip the CFTC of its regulatory authority over derivatives. More on Goldman’s role in the derivative issue in a moment.

Goldman's Influence Equals Power

So what has Goldman gotten from all this influence? Remember cap and trade? Goldman Sachs, which gave $4,452,585 to the Democratic Party, has been pushing cap and trade because Goldman dominates the new carbon-credit market. Matt Tabbi of Rolling Stone notes that this

“is a virtual repeat of the commodities-market casino that’s been kind to Goldman, except it has one delicious new wrinkle: If the plan goes forward as expected, the rise in prices will be government-mandated. Goldman won’t even have to rig the game. It will be rigged in advance.”

In an interview in July 2009, former Assistant Secretary of Treasury Paul Craig Roberts was asked “Does the US Secretary of the Treasury work for the people or does he work for the banking system on Wall Street?” He replied: “He works for Goldman Sachs.”

Do you remember the bailout? The bailout was designed by former Goldman leader Hank Paulson. Here’s what you might not know:

• Paulson let Goldman competitor Lehman Brothers go bankrupt. The very next day, Paulson established the bailout program.

• Paulson put Goldman employee Neel Kashkari in charge of administering the bailout (TARP) funds.

• Paulson gave $300 billion in taxpayer money to Citigroup, which was run by ex-Goldman head Robert Rubin.

• Paulson gave $138 billion to help Bank of America buy, and thus bailout, Merrill Lynch, then run by former Goldman employee John Thain. According to recent testimony by Bank of American president Ken Lucas, Paulson threatened Lucas to go through with the deal and to pay off bonuses to Thain and others. Thain, by the way, was rumored to be John McCain’s choice for Treasury Secretary had he won the election.

• Goldman/Treasury employee Robert Steel was put in charge of Wachovia, which he turned around and sold to Wells Fargo after a few months, triggering $225 million in golden parachutes that went to a handful of Wachovia executives, including Steel.

Now consider the AIG shell game. As we noted above, Goldman alumnus Robert Rubin stood in the way of the CFTC regulating derivatives. A derivative is basically insurance against a bond defaulting. When the derivatives market took off, AIG became heavily involved. Goldman was the first group to realize that AIG had underestimated the risks in issuing these derivatives and it bought lustily from AIG.

When the market turned and it became clear that AIG had over extended itself and likely could not pay off these derivatives (in fact, the company appeared ready to fail), Paulson stepped in. He not only agreed to bail out AIG to the tune of $85 billion, but he put former Goldman employee Ed Liddy in charge of AIG. Liddy paid $13 billion of these moneys over to Goldman, paying off 100% of AIG’s debt to Goldman. No other institution received 100 cents on the dollar from AIG.

But this is nothing new for Goldman. According to Matt Tabbi, Goldman has been heavily involved in inflating every bubble and then profiting from the bailouts that follow the busting of those bubbles.

Nor is Goldman’s influence limited to the national level. Do you remember Goldman head John Corzine? He’s now the governor of New Jersey. Guess what company floats bonds for New Jersey? More interestingly, in November 2008, it was revealed that at the same time that Goldman was selling bonds for New Jersey, it was telling its wealthiest customers that they should short those bonds. This advice would make those bonds appear riskier than they actually were and would increase the interest rates the state needed to pay on future bonds (and Goldman profits).

At the same time, the Los Angeles Times accused Goldman of doing the same thing in California.

Conclusion

This is not an issue of Republicans or Democrats. Both sides are equally guilty. Nor is this an issue of Goldman Sachs being evil or running the world. Goldman is simply taking advantage of a system that lets people move between government and industry with amazing easy, that lets people profit from conflicts of interest, and that converts our government from a referee into a cash machine. It is time for serious ethics reform to prevent the types of arrangements that make the above possible.


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