Category Archives: oversight

The Problem Of Focus: Viewing the Russian Interference Issue

At the risk of redundancy, please remember the findings and suggestions in the Cardin Report:

Putin’s Asymmetrical Assault on Democracy in Russia and Europe: Implications for U.S. National Security,” finds that President Trump’s refusal to publicly acknowledge the threat posed by the Russian government has hampered efforts to mobilize our government, strengthen our institutions, and work with our European allies to counter Putin’s interference in democracies abroad.

Never before in American history has so clear a threat to national security been so clearly ignored by a U.S. president, and without a strong U.S. response, institutions and elections here and throughout Europe will remain vulnerable to the Kremlin’s aggressive and sophisticated malign influence operations.

Notice the three elements incorporated in this introduction.  We haven’t mobilized our federal agencies into preventative action. We haven’t strengthened our political institutions to prevent further incursions from Russia.  Nor have we cooperated fully with European allies to prevent more interference.

The current occupant of the Oval Office and his apologists appear to define Russian meddling only in terms of electoral results, if the Russian interference didn’t cause any change in the voting returns then there was no big problem, and hence no sense of urgency in addressing the Russian bots, trolls, and other efforts.  There has been no cabinet level meeting to date during which the Russian Interference constituted a major agenda item.  Recall AG Jefferson B. Sessions’ statement last October:

“We’re not,” Sessions said, when asked by Sen. Ben Sasse, R-Neb., if the government is taking adequate action to prevent meddling in its elections. “The matter is so complex that for most of us we’re not able to fully grasp the technical dangers that are out there.”

Sessions said he accepts the U.S. intelligence community’s findings that Russia interfered with the 2016 election and may attempt to do so again. He said the Justice Department has been aggressively looking into the stealing of trade secrets in the private sector and noted that the FBI’s computer experts are also highly trained.

“Are we at the level we need to be yet? I don’t think so,” Sessions conceded.”

Sessions made the statement in mid-October 2017, if finger counting is correct that’s 8 months since the onset of the current administration. Nor has the Cyber-security page on the DoJ been updated since that date.  “Are we at the level we need to be yet?”  I don’t think so either.

The Department of Homeland Security also has a cyber-security component.  DHS describes its concerns:

“Cyberspace and its underlying infrastructure are vulnerable to a wide range of risk stemming from both physical and cyber threats and hazards. Sophisticated cyber actors and nation-states exploit vulnerabilities to steal information and money and are developing capabilities to disrupt, destroy, or threaten the delivery of essential services.”

The idea that the Russians might be profoundly interested in disrupting the delivery of essential electoral services doesn’t seem to have moved to the top of the department’s concerns, at least not to the point of making any special reference to those instances of interference.  There is a draft of a DHS publication on cyber-security efforts (pdf) available online for the purpose of public comment, published this month.  At this point let’s review the Cardin Report summation of the problem, and then read a portion of the DHS Draft Report on what might be the same subject.

Cardin Report: “Mr. Putin has thus made it a priority of his regime to attack the democracies of Europe and the United States and undermine the transatlantic alliance upon which Europe’s peace and prosperity have depended upon for over 70 years. He has used the security services, the media, public and private companies, organized criminal groups, and social and religious organizations to spread malicious disinformation, interfere in elections, fuel corruption, threaten energy security, and more.”

 DHS Draft 1-5-18: “Given the networked nature of the risks, real coordination is necessary to fully understand the problem and identify paths to solutions. While the information technology and communications sectors do actively work to understand security risks, sectors often are unable to coordinate well with other sectors. Even though some entities coordinate domestically or regionally, there are few global mechanisms to share information about threats, solutions, and their adoption and efficacy. In many cases, lack of clarity around roles and responsibilities has impeded collective action, resulting in security failures.”

At no point in the draft does one find any specific reference to interference in political institutions and operations.  A generous interpretation might be that political interference is included in the general category of infrastructure.

In short there’s not much in the DHS Draft which would offer any Nevada voter, of any stripe, comfort as to the security of our political institutions, or our election processes.  In fact, a quick reading of the draft leaves the impression that the issue of political cyber-security is left to the private sector, and market forces, whatever that might be.

Therefore, we’re back where we started, with a federal Executive Branch unable or unwilling or un-directed to develop specific guidelines or regulations toward preventing Russian interference in political matters and a market (Google, Facebook, Twitter) adrift and stumbling around what they may perceive as business and public relations pot holes on the road to prosperity.

“Russian trolls sought to steer Facebook users toward events, even protests, around contentious issues like immigration. In its response to Congress, published Thursday, Facebook elaborated that Kremlin-aligned agents created 129 events on 13 of its pages. Roughly 338,300 unique accounts viewed these events, while 25,800 accounts indicated they were interested and about 62,500 said they would attend. “We do not have data about the realization of these events,” Facebook explained.”

“Google, meanwhile, previously informed Congress that it had discovered that Russian agents spent about $4,700 on ads and launched 18 channels on YouTube, posting more than 1,100 videos that had been viewed about 309,000 times.”

“And Twitter told lawmakers at first that it found 2,752 accounts tied to the Russia-aligned Internet Research Agency. Last week, however, the company updated that estimate, noting that Russian trolls had more than 3,000 accounts — while Russian-based bots talking about election-related issues numbered more than 50,000.”  [Recode]

There does seem to be some movement from social media operations, however nothing in the draft appears to directly address any specific assistance to state and local governments trying to secure their election rolls, ballot security, and count integrity.  Not to put too fine a point to it, but the DHS draft reads like it was crafted by the Chamber of Commerce not law enforcement agencies.  A wide and highly generalized focus such as the one presented in the DHS draft doesn’t exactly offer much satisfaction to those voters seeking an answer to the problem: What are we doing about Russian interference?

PS: “The Departments are requesting comment, asking for further insight into the issues and goals raised by the report, as well as the proposed approach, current initiatives, and next steps. The draft will be finalized based on adjudication of received comments before submission to the President. The final report is due to the President on May 11, 2018.” <https://www.ntia.doc.gov/report/2018/report-president-enhancing-resilience-internet-and-communications-ecosystem-against&gt;

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Filed under Nevada politics, oversight, Politics, Public Records, public safety

From Those Wonderful Folks Who Brought Us Enron: H.R. 3606

We have some very loud voices in the political sphere anxiously telling us that Capitalism as we know it is “under attack,” and that those who call for reforming our financial system, or those who call for the implementation of current reforms under the Sarbanes-Oxley and Dodd-Frank Acts, are inserting Big Government into our “free markets.”  The more radical among those voices apply the term “socialism” to the oversight of financial markets, without bothering to explain that a marketplace without oversight is the least likely to be profitable, and the most likely to be the territory of knaves, rogues, and thieves. Knaves, rogues, and thieves are not capitalists — they are knaves, rogues, thieves, and often felons.  We no more want our markets polluted with these types than we want our drinking water polluted by chemical contaminants.

The Pollution

Our capitalist system depends on investors who are willing to purchase shares in publicly traded corporations, individuals and groups who have a variety of interests ranging from short term profits to long range retirement investment accounts.  All investors want the financial waters to be safe.  Our government should be able to help keep our financial waters free of financialist contamination.  What we want and need is a system in which “… the fruits of thrift and industry are accumulated and invested in the creation of additional means of production, thereby generating wealth. Free market capitalism relies on the laws of supply and demand to allocate capital to its most productive uses. ” [SeekAlpha] This system is in peril.

Tom Armistead explained the danger two years ago: “Jungle-ethics or wild-west financialism results in a situation were capital that should be used to create additional means of production is diverted into gaming the system: when it becomes the spoils of a rigged card game played by cheats and scoundrels: when financial instruments become divorced from economic reality; when excessive leverage creates precarious and unstable structures; when financial predators feed off the fruits of thrift and industry, destroying value.”  Cheats, scoundrels or knaves, rogues, and thieves, none have the best interests of our free market capitalist system at heart.

The Early Gamers Gaming The System

There are about 8,ooo listed issues on the New York Stock Exchange, 550 companies are listed on the Amex Exchange, ArcaEdge offers trading in derivatives. [NYSE] The last market day’s listed volume was some 3,145,962,000 shares. [NYSE] There are also bonds for sale, and options and futures on offer.  Potential shareholders and investors have every right to know, and in some cases a duty to discern, which of the transactions are “allocating resources to their most productive uses,” and which might be more closely associated with ethics and policies of Enron, WorldCom, Lehman Brothers, AIG, and Goldman Sachs.  When bad companies go under who gets hurt?

Shareholders lost about $11 billion when Enron crashed in a bankrupt heap in November 2001.  Reckless, unaccountable management combined with auditing rife with major conflicts of interest  (Arthur Andersen, Inc., Enron’s permanent accountant, earned about $25 million in accounting fees and another $27 million in consulting fees from Enron the year before the bankruptcy), and exacerbated by a corporate culture of unrelenting greed,  destroyed the investments made by Enron’s shareholders.

Shareholders lost about $26,865,000 when WorldCom admitted to a $3.8 billion accounting fraud, as of September 2, 2002.  [Chesler pdf] See also: CRS – WorldCom, The accounting scandal, August, 2002 pdf]

Adding up such companies as Adelphia, Enron, Global Crossing, Peregrine Systems, Tyco, WorldCom and others under investigation in late 2002 yields a lost to shareholders as of September 2002 of approximately $236.389 billion. [Chesler pdf]

Sarbanes-Oxley Act and the Protection of Shareholders

The major provisions of the Sarbanes-Oxley Act were designed to prevent the kinds of accounting and management activities that caused the shareholder losses in the rash of scandals in the “Enron Era.”   Executives would have to certify their financial reports to shareholders.  The act forbid the policy of retaining a permanent accountant, requiring that corporations rotate accounting partners every five years. A firm cannot audit a publicly traded company whose officers used to work for the audit firm the previous year, and financial analysts cannot be involved in marketing securities.  So, why are we taking this trip down memory lane when the Sarbanes-Oxley Act was supposed to have resolved the issues that cost shareholders $236 billion?  Because the knaves and their acolytes are back.

The Repealers

Republican presidential candidate Newt Gingrich has been on record since 2008 supporting the repeal of the Sarbanes-Oxley Act, arguing that it has caused too many companies to go private (examples not provided), it has made accumulating capital difficult for Tech Companies (examples not provided), and it didn’t prevent the Crash of 2008 (the result of new forms of financial knavery). [SFgate] Gingrich is not alone.  As of March 3, 2012 Republican presidential candidate Mitt Romney declared his support for repealing the Sarbanes-Oxley Act.  [WSJ]  Whether this stance gets shaken in the EtchASketch remains to be seen.   As of last January Mr. Romney merely wanted to revise the law. [DB]

Corporate managers and executives are quick to proclaim that their primary duty is to secure shareholder value.  However, how is shareholder value to be protected if we revert to the accounting rules — or lack thereof — of the Enron Era?  Are shareholders better protected when executives do not have to sign off on financial reports?  Are shareholders better protected when whistleblowers who are aware of corporate mismanagement aren’t protected?  Are shareholders better protected when corporations and auditing firms can return to the days of cozy relationships while ignoring conflicts of interest?

The Nibblers

The 112th Congress has a plethora of bills designed to gut portions of the Sarbanes-Oxley Act.  The recently passed H.R. 3606 contains the following:

“Amends SA to state that an emerging growth company need not present more than two years of audited financial statements in order for its registration statement, with respect to an initial public offering of its common equity securities, to be effective. Amends both SA and SEA to state that, in any other registration statement to be filed with the Securities and Exchange Commission (SEC), an emerging growth company need not present financial data for any period before the earliest audited period presented in connection with its initial public offering.”

Thus, if a company is categorized as “emerging growth,” then it needs no more than 24 months of audited financial statements before launching its IPO — and how is a prospective shareholder supposed to determine if this corporation is a good fit for a portfolio for long term growth with only 2 years of data?  If this smacks of “Dot.Com Bubble Redux” it probably should.  But, there’s more:

“Amends the the Sarbanes-Oxley Act of 2002 to exempt a registered public accounting firm that prepares or issues a report on its audit of an emerging growth company from the requirement that it attest to, and report on, any assessment of internal controls the company’s management has made.”

What? Excuse me, the accounting firm preparing the reports on which prospective shareholders may be basing their decisions doesn’t have to evaluate the company’s internal controls?  Wouldn’t a shareholder like to know if the company has a policy of discussing risks and sharing that information with its board of directors?  Wouldn’t a shareholder need to know that fraudulent accounting will not be tolerated under any circumstances?  Why wouldn’t a shareholder want to know that the auditing functions are carried out separately from management — in a company of any size?  [IC: Journal of Accountancy] [H.R. 3606 pdf]

To make a longer story a bit shorter — H.R. 3606 doesn’t protect shareholders, and if it leaves shareholders open to losses of the Enron Ilk, then why would any investor in his or her right mind put any money into the unregulated “emerging growth company?”  The authors of the bill which is now awaiting action in the House to accept Senate amendments, appear to believe that slapping various warning labels about speculative investments will be sufficient protection.

It’s going to take more than a conference committee report to fix the problems with this Financialist serving bit of legislation.  A law that doesn’t protect shareholders doesn’t protect capitalism.

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Filed under 2012 election, conservatism, Economy, financial regulation, House of Representatives, oversight, Republicans, Romney, Securities Exchange Commission

>Congresswoman Watson’s Questions: The Oversight of Inspectors General

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On March 25, 2009 Representative Diane Watson (D-CA33), Chair of the House Subcommittee on Government Management, Organization, and Procurement (Committee on Oversight and Government Reform) asked the GAO for information concerning which agencies or departments could prevent an Inspector General from pursuing an investigation or audit, including preventing the issuance of subpoenas. She also asked the GAO to identify the extent to which such authority had been used to limit the activities of Inspectors General. She got her reply on May 8, 2009.

Table I shows seven departments and agencies with such authority: The Department of Defense; Treasury; Homeland Security; Justice; USPS; Federal Reserve; and, the CIA. All such authority is granted to the agency head, with the exception of the USPS in which the determination must be made by the Board of Governors.

In the case of the Treasury, Homeland Security, Justice, USPS, and Federal Reserve, the permissible reasons for prohibiting an investigation is as “Necessary to prevent the disclosure of certain information or to prevent significant impairment to the national interests of the United States.” The Secretary of Defense may prevent an IG investigation if “Necessary to preserve the national security interests of the United States.” The CIA chief may do so if “Necessary to protect vital national security interests of the United States.”

While the Defense Secretary has broad authority, there’s a kicker: If he or she exercises this authority then the DoD Inspector General shall notify the appropriate congressional committees, and then the Secretary must explain to those committees the rationale for the prohibition.

The Treasury Secretary may prevent an IG investigation if it would interfere with an ongoing criminal investigation, sensitive undercover operations, compromise the identity of confidential sources and protected witnesses, disclose deliberations on policy matters if the disclosure would have a significant effect on the economy or market behavior, interfere with intelligence or counterintelligence operations, or if disclosure would threaten national security or the identification of protected persons. Like the Defense Department, if the Secretary exercises the authority to shut down an IG investigation, the appropriate committees must be informed and an explanation given.

The congressional information process is similar at the Department of Homeland Security, the Department of Justice, the USPS, and the Federal Reserve. The CIA is a bit different. An IG investigation may be stopped or prevented if the CIA Director determines that this is necessary to protect vital national interests. If the Director takes such an action then he or she must submit a rationale within 7 days to the intelligence committees of Congress and advise the IG that the report to Congress has been submitted. A copy of the report must be sent to the IG “that is consistent with the protection of intelligence sources and methods.”

Have the powers been used? On January 23,1998, the Attorney General exercised “section 8E(a)(2) powers” deferring the release of a report, “The CIA-Contra Crack Cocaine Controversy: A Review of the Justice Department’s Investigations and Prosecutions,” because the report contained information on an ongoing drug investigation, and the identity of a cooperating witness. By July 14, 1998 the investigation concluded and the AG authorized the release of the report. The Inspector General made the report public on July 22, 1998.

Running Interference

If the full “section 8E(a)(2) powers” weren’t exercised by the Bush Administration, there were significant instances of political interference with investigations and reports, and their recommendations. One notable instance concerned the implementation of the Endangered Species Act. The GAO, House Natural Resources Committee, and the Department of the Interior’s Inspector General all investigated the matter and determined that economic interests of industry campaign contributors took precedence over the survival of the nation’s wildlife. The Deputy Assistant Secretary, the controversial Julie MacDonald, resigned. [CD] However, just because an Inspector General is allowed to conduct an investigation doesn’t mean the Administration has to listen, and the Bush Administration didn’t. Indeed, the Obama Administration is now swamped with a legacy of 281 candidate species that are recognized as warranting protection, but for which no action was taken during the 8 years of the Bush Administration. [CBD]

The actions of the Bush Administration during a more highly publicized investigation also shed light on how to run interference. A report issued by the Department of Justice and its Inspector General stated that during the politicization of the DoJ “a much less experienced, but politically acceptable, attorney(s) was assigned…” or, put more bluntly, Monica Goodling played Cerberus for the Bush Justice Department culling the insufficiently right wing from the list of potential hires. [BuffaloNews] Congress made an attempt to gather additional information but ran directly into individuals who appeared to have short term, mid-term, and long term memory loss, including the inability to remember what they couldn’t remember. The former Administration simply ran the clock, stalled, and stonewalled until the elections changed the landscape.

The most egregious example of Administrative interference came in 2006 when a Justice Department investigation of the NSA’s warrantless wiretapping surveillance program was derailed because the Bush White House refused to grant security clearances to the attorneys attempting to conduct the investigation. [WaPo] This story isn’t over by a long shot.

The Defense Department’s Inspector General issued a report on January 14, 2209 conveniently assessing that the Pentagon did not violate any internal policies nor regulations during the time it was giving briefings to retired military officers who served as “news commentators” during media segments on operations in Iraq and Afghanistan. [WaPo] However, by May 5, 2009 the Pentagon’s deputy inspector general for policy and oversight issued a complete reversal: “Donald M. Horstman, the Pentagon’s deputy inspector general for policy and oversight, said in a memorandum released on Tuesday that the report was so riddled with flaws and inaccuracies that none of its conclusions could be relied upon. In addition to repudiating its own report, the inspector general’s office took the additional step of removing the report from its Web site.” [NYT] Horstman bluntly concluded that the methodology was sloppy and inadequate, the former officers were uncooperative, and the testimonial evidence was “insufficient or inconclusive.” Obviously, there’s no reason to shut down an IG’s investigation if the IG can be depended upon to provide the desired results days before the inauguration of the next president.

The inauguration also precipitated the resignation of another very ‘cooperative’ Inspector General. Senator Bill Nelson (D-FL) had been calling for the ouster of NASA Inspector General Robert Cobb since the Orlando Sentinel ran its discoveries in November 2006 concerning Cobb’s mistreatment of employees and connections to NASA officials whom he was supposed to be monitoring. By January 22, 2007 a government integrity committee had concluded that Cobb “engaged in abuse of authority as an Inspector General by creating an abusive work environment.” The situation got so bad that Senators Rockefeller, Grassley, and McCaskill were opining that he “just plain wasn’t doing (his) job.” Cobb sent a letter of resignation to President Obama on April 11, 2009. [Orlando Sent]

The Bush Administration managed to compromise the Inspectors General in areas as diverse as national security, television commentary, spotted owls, wiretaps, the appointment of US Attorneys, and the space program. It’s readily apparent from this litany that the Obama Administration must support the independence and integrity of the Inspectors General, and that Representative Watson’s subcommittee must diligently exercise its oversight authority. Congresswoman Watson is off to a good start, and asking the right questions; now we can all hope her subcommittee stays on the rails.

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>Friday: Politician Tracking and Oversight Monitoring

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Representative Dina Titus (D-NV3) warned Nevada educators that while the federal economic stimulus bill may provide some bridge funding to meet immediate needs, there is a need to develop long term solutions at the state level. Titus spoke to a gathering at Del Sol High School sponsored by NSEA, CCEA, PLAN, and several other groups interested in Nevada’s educational institutions’ needs. Full article Las Vegas Sun

Rep. Titus will be conducting a District Office Open House, today at 11:30 AM at her office, 8215 S. Eastern Avenue (205) Las Vegas, NV. Titus will hold her second “Congress on the Corner” on Saturday, February 21, at Albertsons, 1008 Nevada Highway, Boulder City, NV, beginning at 1:00 PM.

Representative Shelley Berkley (D-NV1) will return to Las Vegas this weekend after a trip to Taiwan for ceremonies marking American/Taiwanese diplomatic policy. Berkley is a member of the Congressional Taiwan Caucus. [LVRJ] A quick Google search for articles about Congressman Dean Heller’s schedule or commentary (R-NV2) yielded a goose egg this morning.

Senator Harry Reid (D-NV) issued this statement on the Obama Administration housing plan: “Democrats have known for many months that voluntary measures by industry alone will not solve the problem, and the Obama Administration shares this view. President Obama’s refreshing new plan will help prevent foreclosures before they begin, improves the chances of stabilizing neighborhoods and the greater housing market, and avoids rewarding speculators. “This plan will start to rebuild the communities hurt by foreclosures because we all have a stake in curing this epidemic. It will help families with unaffordable monthly payments and those who owe more on their mortgage than their home is worth. And it importantly recognizes that because record-high foreclosures are the root of the broader economic crisis, we must responsibly commit significant resources to help Americans keep their homes if we are to prevent a bad situation from getting worse.” {Reid, press release}

There’s more to it than peanuts: In 1997, approximately 86% of FDA registered drug trials were conducted in the United States, by 2007 the number had dropped to 54%. [NYT] Several FDA officials left the agency after the Bush Administration decided to forgo enforcement of requirements that medical device tests conform to good laboratory practices regulations. [KCS] The full report “FDA’s Risky Gamble with Safety of Medical Devices” is available here from the Project on Government Oversight. And, then, of course, there’s the peanut problem – with officials at both the federal and state level reviewing legislation needed to prevent future deadly salmonella outbreaks. [AJC]

The GAO issued its report on the status of veterinary services in this country, including a warning: “…there is a growing shortage of veterinarians nationwide, particularly of veterinarians who care for animals raised for food, serve in rural communities, and have training in public health, according to several professional associations. This shortage has, according to the American Veterinary Medicine Assoc., placed the nation’s food supply at risk and could hinder efforts to protect humans from zoonotic diseases.” (pdf)

The Center for Responsible Lending is calling on Congress to abolish the Office of Thrift Supervision, noting that the agency wants expanded supervisory roles in spite of its consistent failure to acknowledge clear warning signs of the impending sub-prime loan debacle. The report notes, “In 2004…OTS director James Gilleran made it clear his agency was determined to keep a pliable attitude toward policing the home lenders. ‘Our goal is to allow thrifts to operate with a wide breadth of freedom from regulatory intrusion.’” [full report, pdf]

After abdicating responsibility for any and all oversight of Bush Administration spending, the Republicans are now launching their Stimulus Watch efforts [AP] to catch any itty-bitty (or big for that matter) waste, fraud, error, or abuse in the Obama Administration’s handling of economic stimulus funding programs. This might be a propitious time to recall Rep. Henry Waxman’s January 2006 “Congressional Oversight of the Bush Administration” report. And, “Bush Administration stalls Waxman oversight” [HuffPo] Or, to review Mother Jones’ article last month “Oversight Committee: 13,847 Recommendations that Bush Ignored.” Any American with access to an Internet Service Provider can log on to Recovery.gov and do his or her own ‘watching.’

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Filed under Berkley, Economy, FDA, oversight, Reid, Titus

>Coffee and the Papers: Gaming Goose’s Lead Eggs and other matters

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No surprise here – the Las Vegas Chamber of Commerce was pleased to tout the “stability of Nevada’s tax system” as reported by its study, [LVRJ] and then to spin the conclusions such that we don’t need to discuss any change in taxation. [LV Sun] So, what did the report conclude? “Hobbs, who co-authored the report with another of the Las Vegas Valley’s most well-respected analysts, Jeremy Aguero, doesn’t disagree with Buckley. A broader tax base might have done much to offset the current crisis, Hobbs said, because the state relied so heavily on sales tax revenue from construction, real property transfers and gaming.” Construction revenue down – check. Real estate property transfers – check. “Washoe County home values, sales drop in 3rd quarter,” The median value of all single family homes and condos in the period July through September fell 17.5% from the same period in 2007. 41.8% of the homes sold during the past year were sold for a loss. [RGJ] “Foreclosures up 25%: Realty Trac” [Reuters] Gaming revenue – check. “Washoe gaming revenue falls 20%; room occupancy drops 13.2%. [RGJ] The 41 casinos on the Las Vegas Strip reported a combined gross win down 5.1% from last year. Downtown Las Vegas casinos were off by 8.2%. [LV Sun]

Why would anyone be surprised at the numbers above? “First time claims for U.S. unemployment insurance rose last week to the highest level since September 2001… up by 32,000 to 516,000 in the week ending November 8th. The total number of people on benefit rolls jumped to the highest level since 1983.” [Blmbrg] Once more, the “U-6” number is instructive, the total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers is ….7.9% [BLS] The median weekly earnings for full time wage and salary workers were up 3.6% from this time last year, however the Consumer Price Index increased 5.3%. [BLS] “Jobless claims hit 25 year high, imports plunge” [Reuters]

The Big Three: “GM’s troubles stir question of bankruptcy vs. a bailout” [NYT] “Aiding carmakers not intent of bailout package: White House” [Reuters] “Auto leaders face test on lifeline before Congress” [DFP] “Showdown begins over lifeline to automakers: White House opposes use of financial rescue funds” [WaPo] “Shelby: Detroit woes ‘their problem’” [Pol]

Hindsight and Oversight: “Hedge fund managers to testify in Washington” [NYT] “Bailout lacks oversight despite billions pledged; watchdog panel is empty, report is unfinished” [WaPo] “NY’s Cuomo seeking data on bonuses at BofA: Report” [Reuters] “Foreclosure relief is getting lost in fine print of loans” [WaPo] “Top Swiss UBS banker indicted for US tax evasion conspiracy” [AFP] “Bridge collapse hearing opens with reassuring words from NTSB chief” [MSTrib]

No Kidding! “Obama team faces major task in Justice Department overhaul: goal is to restore confidence in law enforcement actions” [WaPo]

Political Leftfovers: “Begich takes 814 vote lead over Stevens” [Pol] “Begich takes lead in latest vote count” [AnchDN] “Cleland ad causes trouble for Chambliss” [Pol] “Recount to stretch into mid-December (Coleman – Franken)” [MST] “A politically diverse panel prepares to begin a recount in Senate race – and, if necessary, decide the outcome” [SPPP] “Group wants probe of lawsuits that mention Coleman” [MST] “Coleman welcomes federal probe of donor relationship” [SPPP]

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Filed under Bush. Justice Department, Economy, oversight, Politics

>Bush’s Mighty Veto Pen: SCHIP and H.R. 928 investigations

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Rep. Dean Heller (R-NV2), and the other members of the Sweet Sixteen, must have been pleased this morning that President Bush took out his veto pen and whacked the Children’s Health Insurance Program. [WHPR] This bill would shift SCHIP away from its original purpose and turn it into a program that would cover children from some families of four earning almost $83,000 a year. In addition, under this bill, government coverage would displace private health insurance for many children. If this bill were enacted, one out of every three children moving onto government coverage would be moving from private coverage. The bill also does not fully fund all its new spending, obscuring the true cost of the bill’s expansion of SCHIP, and it raises taxes on working Americans.” [WHPR] Just for the record: The number of children from families earning $83,000 or more covered by CHIP – Zero; CBO notation that of all the health care plans offered the current plan has the least effect on private insurers; and “the raising taxes on working Americans” part is thoroughly risible. However, this President has never let the facts get in the way of a good political moment.

Gee whiz, we just can’t have this country wasting precious resources on our children’s health when we could be squandering it in the Iraq occupation. [DB] But, wait, there’s another veto threat – number 36 – on H.R. 928.

H.R. 928, the “Improving Government Accountability Act” gives Inspectors General more independence, grants them 7 year renewable terms, and independent budgetary authority. Now, insert into the picture one Joseph E. Schmitz who resigned under heavy clouds of potential investigation for “stonewalling inquiries into contracting practices” at the Pentagon in 2005 to become the Chief Operating Officer for Blackwater USA. Coincidence? Just as the House is beginning to investigate Blackwater and other contractors, and H.R. 928 is introduced, the White House fires off another veto threat? [Kargo X Dkos]

Schmitz’s ties to the right wing go further than his membership in the Washington, D.C. chapter of the Federalist Society, he is the son of John G. Schmitz a former California Senator, who was a prominent member of the John Birch Society, and the American Independent Party candidate for President in 1972. Schmitz the Elder opposed sex-education, advocated arming all citizens, called the 1965 Watts Riots a “Communist Operation,” and broke with President Nixon over the China trip saying the Chief Executive shouldn’t bother coming back. In 1979 he advocated a military coup similar to that of Augusto Pinochet in Chile, and tangled with feminist attorney Gloria Allred in 1981 over the abortion issue – eventually paying Allred $20,000 in damages. He also bought the home of his hero, Senator Joseph McCarthy. Schmitz the Elder may hold the distinction of being the only member of the John Birch Society tossed out for extremism. For those who like titillating details: Joseph E. Smith is the brother of Mary Kay Letourneau. [Wik]

As if the connections between Blackwater USA and the radical right need more documentation, it is former Defense Department Inspector General Joseph E. Smith who is the COO of the company, and in Bush Administration, time-honored fashion, he was given a “Public Service Award” by acting Deputy Defense Secretary Gordon R. England before his resignation in 2005. This in spite of reports that “Schmitz slowed or blocked investigations of senior Bush administration officials, spent taxpayer money on pet projects and accepted gifts that may have violated ethics guidelines, according to interviews with current and former senior officials in the inspector general’s office, congressional investigators and a review of internal e-mail and other documents.” [EPIC] In short, the President of the United States is attempting to block the investigation of a company the COO of which once resigned from government for blocking investigations.

Now, we’ll get to see if Heller and the Sweet Sixteen put their votes where their mouths are: Vote for more accountability in government contracts and procurement, or vote in lock step with the Bush Administration to support its own Republican Guards?

Update: The House of Representatives passed H.R. 928 on a 404-11 vote today, roll call 937

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Nevada news round up at Blue Sage Views

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Filed under Blackwater, Health Care, Heller, oversight

>All Our Sons

>
Arthur Miller’s “All My Sons” opened on Broadway at the Coronet Theater in New York on January 29, 1947. Directed by controversial director Elia Kazan, it won the ’47 Tony and the New York Drama Critics Circle Award. Hollywood snapped up the rights and cast Edward G. Robinson, Burt Lancaster, and Mady Christians in starring roles. [source] No play, no movie, is going to garner awards merely because of an outstanding director and a star studded cast; there has to be a message with which the audience can connect. “All My Sons” connected in no small part because of the kernel of truth inside the dramatic presentation.

Miller’s then mother-in-law showed the playwright an Ohio newspaper story about a woman who informed on her father for selling faulty parts to the U.S. military during World War II. The characters Miller wrapped around this plot could as easily exemplify some of the modern profiteers, and those who enable them.

There’s the unscrupulous businessman “Joe Keller” who escaped charges initially, spends three years trying to shift the blame to his partner, and when the truth emerges tries to rationalize his behavior by claiming “he did it for his family.” Does Joe bear any resemblance to those who attended the Fairfax County VA Chamber of Commerce seminar on “Congressional Investigations: The Challenge of Responding Effectively?” [WaPo] Does the spokesman for Dyncorp, Inc. really need a brush up session on “How they (Congressional investigators) think? How do they view the process?”

Kate Keller” lives in denial. She denies that her son may be dead, she denies that her husband is profiteering. Is there sufficient denial going on that corporate representatives really needed to hear from a panel of lawyers, Congressional investigators, and an ABC news reporter about how to respond to Congressional oversight? [WaPo]

Chris Keller” returns from combat angry that the world is continuing as if nothing has happened and thwarted by his mother’s denials. Hasn’t Paul Riechkoff of the Iraq Afghanistan Veterans of America been trying to tell us that returning veterans have some difficulty adjusting to “normal” at home when no one understands the essential nature of their experiences?

Ann Deever,” Chris’s girlfriend, carries the burden of guilty knowledge throughout the play; knowledge of Joe’s deceit and culpability, and knowledge that the longed for son, Larry, committed suicide upon hearing of his father’s racket. Do the corporate consciences need to be spurred by a “significant spike in breadth, depth and scope of investigations.” [WaPo] Why would corporate spokespersons sign up for a Chamber of Commerce program in which the Republican general counsel for the House Oversight and Government Reform Committee advised that if a contract looks too good to be true — it probably is — advice generally offered by centuries of parents and grandparents. Or, why would they need to be reminded by a deputy chief investigative counsel, “Don’t promise you’re going to cooperate if you’re not going to deliver.” Or, as a cynic might question: When they signed up for the seminar were they looking for a way to put the “blame on their partners?”

Perhaps this drama is a candidate for a revival?

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Filed under Iraq, oversight, profiteering