The stories you want. The opinions that matter.
No, thanks
Trump Plots Potemkin Wall

Trump Plots Potemkin Wall

Reprinted with permission from TheWashingtonSpectator.

In January 2018, contractors working for the Department of Homeland Security will begin to fulfill what Donald Trump has promised: building “a big, beautiful wall” that will separate the United States of America from Los Estados Unidos de Mexico. The path of least resistance to breaking ground on the first segment of the controversial border barrier runs through the Santa Ana Wildlife Refuge, 2,080 acres of richly biodiverse federal land on a meandering stretch of the Rio Grande in South Texas.

What has played out in South Texas over the past several months is a prelude to Donald Trump’s larger wall-building project, as the DHS and U.S. Customs and Border Protection play fast and loose with the rules, and muscle anyone who gets in their way.

When site surveying began in the Santa Ana Wildlife Refuge (as first reported in The Texas Observer on July 14), DHS officials had not even filed applications for environmental waivers required to begin construction, a strategy critics described as a conscious attempt to keep the public in the dark. Nor did the department waste any time on cartography, opting instead to replicate maps created by Dannenbaum Engineering, a firm whose lavish contributions to elected officials responsible for approving contracts in South Texas have led to an ongoing investigation by the FBI.

There was no funding for the wall, as surveying proceeded, so Homeland Security officials explained that they were moving money around—most likely from $20 million in unallocated funds DHS announced it has on hand for the current fiscal year—until Congress passes an appropriations bill. But even the likelihood of funding was not assured. Rather than hold an up-or-down vote on $1.6 billion to start construction, House Republicans used a parliamentary tactic that automatically included that amount in the “Make America Secure Appropriations Act,” a four-bill “minibus” that includes defense appropriations.

All this occurred despite warnings from the Democratic leadership that bypassing a vote on funding the wall was unacceptable to the Senate Democratic Conference, which threatened to filibuster unless a discrete vote on the border wall was brought to the floor. But with Trump’s legislative agenda stalled, his approval rating in the low 30s, and every day another bad story about to break, even a small section of border wall would allow him to demonstrate to his base that he can deliver on a key campaign promise.

The politics behind this project are bad, but the policies that undergird it are worse.

The administration in its desperation is effectively constructing a Potemkin wall, a showpiece built to hoodwink a public worried about border security. What critics describe as a “Trump vanity project” will be 2.9 miles of concrete and metal barrier connected to nothing—a freestanding wall on a levee in the middle of a 10-mile gap between two other existing short segments constructed after the Bush administration signed the Secure Fence Act in 2006.

“They are building it here because they can,” Scott Nicol, co-chair of the Sierra Club Borderlands Campaign, told me. Nicol has concluded that because the Trump administration feels the need build something, CPB has set its sights on the tractable Santa Ana National Wildlife Refuge. With the exception of the vast Big Bend National Park, 900 miles upriver, most land on the U.S. side of the border is privately owned. Securing right-of-way to build a fence through someone’s cow pasture, sorghum field, oil-and-gas lease, or backyard can take years. Here, on federally owned land, it can be only months.

There are already 110 miles of metal and concrete barrier scattered along the 1,200-mile Texas-Mexico border, built during the Bush and Obama administrations. But this particular section of wall will bisect one of the most biodiverse tracts of land along the Rio Grande. Often referred to as the “crown jewel of the national wildlife refuge system,” the Santa Ana Refuge is home to more than 400 species of birds, two endangered cats (the ocelot and the jaguarundi), and 450 plant species, including one of two rare stands of the threatened Sabal palm tree (the other is in a no-man’s-land behind a stretch of border wall miles downriver near Brownsville).

Wrong Wall, Wrong Place

Approximately 95 percent of anything that might remotely be described as wilderness on the Texas side of the Rio Grande is gone. The Santa Ana refuge was acquired by the federal government in 1943 as part of a string of wildlife sanctuaries along the border. It attracts tens of thousands of visitors each year, including thousands of birders from around the world.

At the heart of the park are four hiking trails that wend their way through mesquite and live oak trees draped with Spanish moss. Taking issue with building this wall in this wildlife sanctuary, The Brownsville Herald noted, “If the wall is built on the levee there, all four trails would be cut off behind the wall and only the visitors’ center and 50 feet of the refuge would be available.” And as a former Parks and Wildlife official told The Texas Observer: “It’s not just the wall, there’s also the cleared border enforcement zone around the wall, the roads, and the light towers.” To add further insult, the wall would shut off public access to La Lomita Chapel, a historic adobe sanctuary built by an order of Catholic priests in 1865.

South Texas, with more than a dozen small towns, a network of state highways, farm-to-market roads, ranch roads, and scores of county roads, has traditionally been a preferred route for undocumented immigrants entering the United States. Yet illegal entries have declined dramatically this year and are at a 17-year low, with 21,659 people turned away or detained at the U.S. ports of entry in June—less than half the number reported in June 2016.

The layout of the wildlife refuge already makes it easy for Border Patrol agents to police. There is a Border Patrol storefront office (which is often closed) at the Santa Ana visitor center. A perimeter road around the sanctuary, which also runs along the levee on which the wall will be built, provides access for Border Patrol agents.

If there were a need for a wall in the wildlife refuge, the regional or local Border Patrol sector chief would have made the case with senior officials in Washington, D.C. As it turns out, that dynamic was reversed. According to Scott Nicol, at a late-July closed-door meeting with stakeholders, Rio Grande Valley Border Patrol Sector Chief Manuel Padilla was asked if he had decided that a wall in the wildlife refuge is a priority. “Padilla paused,” Nicol said, “then Loren Flossman [the Director of the Border Patrol Facilities, who is based in Washington] said that he, in fact, had made the decision.”

Padilla, a 32-year veteran of the Border Patrol who grew up in Nogales, Ariz., was transferred to the Rio Grande Valley in 2015 with a mandate to replicate the success he had achieved in stemming the flow of undocumented border crossers and drugs while he was sector chief in Tucson.

Flossman is a retired Air Force colonel. He has also worked for Science Applications International Corporation, a Reston, Virginia, IT and technical services firm currently under a multiyear, multimillion-dollar contract with DHS. When I contacted him at his personal DHS email account to ask about the criteria he used to select the Santa Ana refuge as a high-priority site for a wall and about potential ethical conflicts related to his years spent at SAIC, Flossman referred me to a DHS public information email address, which does not function. He did not respond to subsequent queries sent to his personal DHS email address.

“Shove the Wall Up Trump’s Ass”

The three Democratic congressmen whose districts include the Texas-Mexico border oppose the wall; Republican Will Hurd, whose sprawling district includes 800 miles of the border but a negligible border population, supports it. (Hurd’s district includes a total of 67,000 residents living in border cities, while McAllen and Brownsville alone, the two largest border cities in the Lower Valley, have a combined population of 277,000.) But Hurd hedges his support, proposing an electronic virtual wall he claims will cost $500,000 a mile, compared to the $24.5 million per mile requested in the government’s 2018 fiscal year budget.

Perhaps by coincidence, construction of the first section of Trump’s border wall will begin in the congressional district of Democratic Representative Filemon Vela, who in 2016 released a letter he had written to then-candidate Donald Trump, in which the congressman wrote: “Mr. Trump, you’re a racist and you can take your border wall and shove it up your ass.” Vela would later tell MSNBC that he would have preferred to have spoken “in more diplomatic language,” but he believed he had to “speak to Donald Trump in language he understands.”

Vela was one of 16 members of the House Hispanic Caucus who signed on to a June 25, 2017, letter to House Rules Committee Chair Pete Sessions (D-Texas), objecting to the self-executing rule, “a legislative gimmick” House Republicans used to avoid “a clean up-or-down vote on [funding for] President Trump’s Border Wall.”

The Republican House leadership used the rule, rather than an amendment, to avoid a vote on the $1.6 billion tucked into the Defense appropriation minibus bill that was sent to the Senate. A spokesperson for Vela told me the Congressman voted against the defense appropriation bill in part because he strongly objected to the parliamentary maneuver used to force the $1.6 billion into the defense-spending bill—to begin construction on a wall he stridently opposes.

The $1.6 billion is a small, initial investment on a much larger project Trump insisted Mexico would pay for, even as he drastically underestimated what the wall will actually cost.

“It’s an easy decision for Mexico: make a one-time payment of $5–$10 billion to ensure that $24 billion [in remittances] continues to flow into their country year after year,” the Trump transition team wrote in a January 2016 memo. The memo also threatened to cut off (illegally) the money that documented and undocumented Mexicans living in the United States send to their families in Mexico.

Since then, Mexican President Enrique Peña Nieto has not budged from his position that his country will not pay for a border wall. And estimates of the cost of building a wall along the 2,000-mile border have varied wildly, from Trump’s risible lowball to the price calculated by Senate Committee staffers.

Since threatening Mexico with a cutoff of remittances, Trump has said the wall will cost no more than $12 billion, and that he could build it for $10 billion. House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell predict it will cost $12 billion.

The U.S. Government Accountability Office estimates the wall will cost between $15 billion and $25 billion.

Hurd, while flogging his virtual-wall amendment that has yet to be adopted, said the wall will cost $33 billion. And the Democratic staff of the Senate Homeland Security and Government Affairs Committee extrapolated the per-mile costs in Trump’s first request for funding and published an estimate of $69 billion.

Days later, Trump repeated to the Associated Press that he could build the wall for $10 billion—or less.

Who gets the numbers right? The Democratic Senate staff’s $69 billion is perhaps too high, but Trump’s $10 billion is laughable.

The research offices of the investment firm Alliance Bernstein took an apolitical look at material and labor costs. In a July 2016 “Materials Blast,” published for construction material suppliers and investors, it politely dismissed Trump’s $10 billion estimate.

“The costs to build the ‘easiest’ sections of the existing fence were between $2.8–3.9 million per mile according to the U.S. Government Accountability Office. However, given that these figures exclude labor costs, land acquisition costs and relate to construction in accessible areas with favorable construction conditions, the cost of Trump’s Wall is widely expected to be greater than $15 billion and perhaps as much as $25 billion.”

And as the wall will be built from precast concrete, Bernstein’s researchers surveyed aggregate suppliers along the border and predicted that the biggest two winners could be Mexican companies Cemex and GCG. Cemex has a slight edge because it has plants on both sides of the border.

So Trump’s wall-building project ironically could provide some economic stimulus for Mexico, perhaps even helping to reduce the flow of economic refugees looking for work in the United States.

The Bernstein report concludes:

“As ludicrous as the Trump Wall project sounds (to us at least), it represents a huge opportunity for those companies involved in its construction.”

Meanwhile, border residents brace for a return to the Bush years, when landowners either took what the federal government offered or faced eminent domain condemnation of their property, and the only metric that mattered was “mile count.”

It is a Bush-era law that makes this accelerated pace of wall-building possible. In 2005, California Republican Congressman Duncan Hunter, impatient with the slow progress of a wall project south of San Diego, managed to pass the broadest waiver of law in American history. Hunter’s amendment to the SAFE ID Act allows the Secretary of Homeland Security to waive more than 35 laws—including the National Environmental Policy Act, the Clean Air Act, the Endangered Species Act, the Clean Water Act, the Wilderness Act, and the National Wildlife Refuge System Administration Act—to advance a departmental agenda.

To add muscle to the process, the current minibus appropriation bill includes funding for an eminent domain strike force, a team of attorneys dedicated to seizing private property. (The bill also includes a “deportation strike force.”)

This is the president’s big set piece, as he made clear at his August 22 rally in Phoenix. “If we have to shut down that government, we’re building that wall,” Trump declared. “One way or another, we’re going to get that wall.”

What the dispassionate analysts at an investment firm characterized as “ludicrous” appears to be inevitable.

Lou Dubose is The Washington Spectator’s Senior Political Writer.

 

Deforming The Law

Deforming The Law

Reprinted with permission from WashingtonSpectator.

In an urgent phone call, Ralph Nader described a Republican tort law package that is being “rammed through the House” without proper hearings and almost no attention from the press. Any hearings on the bills have been pro forma, at best. But there has been some notable reporting, in the The Washington Post and Bloomberg News.

Often, “tort reform,” the protracted and persistent campaign to limit lawsuits against the powerful (obstructing individuals’ rights to sue corporate defendants, for example, or making it harder for victims of medical malpractice to sue physicians, hospitals, and nursing homes) is an arcane topic often avoided by the media.

The Trump administration’s attempt to destroy the EPA, gut the Clean Power Plan, define all 11 million undocumented residents of the country as deportable, and pass a massive tax cut for the wealthy while eliminating health insurance for 24 million Americans, are big, compelling and competing news stories.

‘The proponents of the legislation take big risks if the public finds out what they are doing.’

So it’s a challenge to get readers or viewers to invest five or 10 minutes in a story about Iowa Congressman Steve King’s “Protecting Access to Care Act.” King is not interested in ensuring that people in need of medical attention can see a doctor.

His bill caps medical malpractice damages at $250,000, even for catastrophic errors committed by physicians. An anesthesiologist miscalculates during routine surgery and leaves a child with severe brain damage and the family gets $250,000. An orthopedic surgeon botches an amputation (the story of a Florida surgeon amputating the wrong leg has been widely reported), and the victim receives no more than $250,000.

The deceptively captioned “Lawsuit Abuse Reduction Act” filed by Texas Congressman Lamar Smith reinstates a provision put in place in 1983 and abandoned in 1993, after federal judges and plaintiffs’ attorneys complained that it had a chilling effect on individuals filing lawsuits in federal courts. Fear of being sanctioned for filing a frivolous suit, it turns out, often discouraged lawyers from filing legitimate claims. According to a survey of 3,000 federal litigators, one in five lawyers reported abandoning valid claims because they feared sanctions.

“There are so many frivolous lawsuits, ruining people’s reputations, robbing people of their livelihoods,” Smith told The Washington Post.

While Smith is appealing to the American sense of justice, he’s also lying. When the Federal Judicial Center in 2005 surveyed federal judges, 85 percent of them opposed reinstating the 1983 law and described groundless litigation as a small problem, a very small problem, or no problem at all.

The Innocent Party Protection Act sponsored by Colorado Congressman Ken Buck does nothing to protect innocent parties. It does, however, allow defendants to move cases filed in state courts to federal courts, where corporations have an advantage because proceedings are more expensive, there are longer wait times for trials, and discovery is more limited.

There are four or five additional bills in this package of legislation advanced by the U.S. Chamber of Commerce Institute for Legal Reform and the National Federation of Independent Businesses, part of their long-game to rewrite the rules of civil jurisprudence so corporate clients cannot be held liable for their wrongdoing.

The House has passed similar bills in the past, but they died in the Senate where there was less interest in passing bills that would be vetoed by President Obama. Donald Trump was a frequent defendant in federal court, and will sign any tort reform bill that reaches his desk.

When the bills move to the Senate, the corporate lobby will need 60 votes and will target Democratic senators who face election in states Trump carried in 2018: Tammy Baldwin (Wisc.), Sherrod Brown (Ohio), Bob Casey (Penn.), Joe Donnelly (Ind.), Heidi Heitkamp (N.D.), Dean Heller (Nev.), Joe Manchin (W.V.), Claire McCaskill (Mo.), and Bill Nelson (Fla.).

Opponents of the legislation are organizing grassroots campaigns focused on the same 10 senators. “The American public supports the civil justice system and the Seventh Amendment right to a jury trial by wide margins,” consumer-protection attorney Pamela Gilbert told Bloomberg News. “The proponents of the legislation take big risks if the public finds out what they are doing.”

 

The New Alien Exclusion Act

The New Alien Exclusion Act

When you have so many immigrants being admitted, they tend to cluster together, they tend to maybe be a bit more slow in learning the English language, to becoming acculturated, to becoming patriotic Americans,” Rep. Lamar Smith (R-Texas) told NPR reporter John Burnett in early February.

Smith has been a genteel nativist for decades, but the content of his character came into sharper focus in 2010 when his selection to chair the House Judiciary Committee raised the visibility of his anti-immigrant, and more specifically anti-Latino, legislation.

That year Smith put together an anti-immigrant trifecta that included: a “show-your-papers” bill that would have made ethnicity probable cause for state and local police to demand proof of citizenship or legal residency; an anchor-baby bill that would have excluded the children of immigrants from the promise of the Fourteenth Amendment, which says “all persons born or naturalized in the United States . . . are citizens of the United States”; and a bill that would have made the E-Verify employment screen mandatory, which would have been reasonable if E-Verify was not wildly inaccurate in identifying legal residents.

Smith, who has served in the House since 1987, could not win an election in a district anchored by San Antonio were it not for the gerrymandering practice known as “bleaching,” which has ensured that roughly 57 percent of his district is “Anglo” with Latinos hovering just below 30 percent.

The only firewall standing between these new nativists and public policy is the Democratic minority in the Senate.

Emboldened by a president who began his campaign with a rank, racist riff about Mexicans—“They’re bringing drugs, they’re bringing crime, they’re rapists. And some, I assume, are good people.”—Smith and other nativist Republicans in Congress are determined to extend the practice of “bleaching” legislative districts to the entire nation, to create a whiter America.

The occasion for Smith’s comments about the ghettoization of Latinos was an NPR report on an immigration reform bill he is co-sponsoring with two confederates in the Senate, Tom Cotton of Arkansas, and David Perdue of Georgia. At a time when approximately 11 million undocumented residents of the United States (and the businesses that employ them) could benefit from legislation that would normalize their residency status, the three Southern Republicans have something entirely different in mind: a rewrite of the Immigration and Nationality Act of 1965, which made legal immigration to the United States less restrictive.

And it’s legal immigration that Smith, Cotton, and Perdue are targeting. In the spirit of the Immigration Act of 1924, which closed American borders to Southern and Eastern Europeans, in particular Italians and Ashkenazi Jews, the 2017 Reforming American Immigration for Strong Employment Act (RAISE) targets the largest category of legal immigrants to the United States, green card applicants attempting to join family members. It would also reduce refugees to 50 percent of current admissions, and end the Diversity Visa Lottery, which provides visas to residents of countries with low immigration rates to the United States.

Cotton told NPR that the number of green cards issued each year, about one million, is excessive.

“In one year, this would reduce it to around 600,000. Over the span of the 10-year window, it would fall to about 500,000.”

The bill would also dramatically reduce the number of refugees offered permanent residence from 85,000 (in 2016) to 50,000. (The U.S. population is 321 million; Canada, with a population of 38 million will accept 57,000 refugees in 2017.)

The bill, and there will be more to follow from the congressional Republicans preparing exclusionary legislation, is informed by the idea that there are too many immigrants.

“The goal here is to get our immigration levels back to historical norms, to take something of a pause to allow the economy to catch up with the immigrants that we have allowed into our country over the last two generations,” Cotton told NPR, “and to focus on the well-being of American citizens, those citizens who are here today, many of whom are struggling economically.”

Republicans preparing anti-immigrant legislation are working in concert with Trump administration officials known for their aversion to immigrants: Attorney General Jeff Sessions who as a U.S. Senator advocated the reduction of the foreign population in the country; Steve Bannon, who as executive editor of the extreme-right Breitbart News enthusiastically published white supremacists; and Julie Kirchner, a special adviser to U.S. Customs and Border Protection, who previously directed the anti-immigrant Federation for American Immigration Reform, which the Southern Poverty Law Center describes as a “hate group.”

The only firewall standing between these new nativists and public policy is the Democratic minority in the Senate, and perhaps federal judges like James Robart, who promptly put Donald Trump’s “Muslim Ban” on hold.

Donald And The Ayatollahs

Donald And The Ayatollahs

Reprinted with permission fromWashingtonSpectator.

“My number-one priority is to dismantle the disastrous deal with Iran,” presidential candidate Donald Trump told the American Israeli Public Affairs Committee last March. “And let me tell you, this deal is catastrophic for America, for Israel, and for the whole Middle East.”

Earlier in the campaign, Trump had been more nuanced about the Obama administration’s diplomatic coup, which in exchange for the lifting of economic sanctions puts Iran’s nuclear weapons program on ice for a decade. In 2015 he told NBC, “It’s very hard to say ‘We’re ripping it up.’” And on MSNBC, also in 2015, he said, “We have a horrible contract, but we have a contract.”

But baited by a rabid and extreme Senator Ted Cruz, Trump’s position hardened, and his promise to the always bellicose AIPAC crowd became a campaign trope. Gradually the trope began to sound like a genuine foreign policy position.

Mike Pence underscored the threat at an October campaign rally in North Carolina: “When Donald Trump becomes president of the United States of America, we’re going to rip up the Iran deal.”

CIA Director Mike Pompeo, who led the opposition to the agreement while he was a member of Congress, was ready to shred the accord. Before he was confirmed, Pompeo tweeted, “I look forward to rolling back this disastrous deal with the world’s largest sponsor of state terrorism.” At his confirmation hearing, he said, “It was my view that the JCPOA was a mistake for American national security.”

White House Chief of Staff Reince Priebus declared the accord is “on life support,” adding that its fate will be decided through a collaborative process, but Trump will have the final word.

At the top of the Trump Team, only Secretary of Defense James Mattis, an implacable critic of Iran while he was an active duty general, seemed to grasp the complexity of the multilateral agreement. Speaking at the Center for Strategic and International Studies last April, Mattis said:

‘There was the military option; probably could have delayed it for a year or two before we would have to take more military action. Or there was the diplomatic option, where they were aiming to delay it much longer. We’re talking about a decade or more. Without the pause, and despite Iran’s denial and deception, it was clear that Iran could get a weapon.’

Yet Trump’s position is clear. As what is formally known as the Joint Comprehensive Plan of Action is neither a ratified treaty nor an executive agreement, he can declare that the United States is no longer a party to it and deliver on his campaign promise.

Campaign posturing notwithstanding, Trump is unlikely to do so. In fact, he has already informally acknowledged the agreement, unsurprisingly in a tweet, in which he put Iran “on notice,” after a missile launch in February:

Iran has been formally PUT ON NOTICE for firing a ballistic missile. Should have been thankful for the terrible deal the U.S. made with them!

— Donald J. Trump (@realDonaldTrump) February 2, 2017

There is little to gain from “dismantling” the “deal,” which the United States, in fact, can’t dismantle, but only abandon. The other parties—Iran, China, France, Russia, the United Kingdom, and Germany—wouldn’t necessarily follow Trump’s lead.

And there is a lot to lose.

Consider.

‘Without the pause, and despite Iran’s denial and deception, it was clear that Iran could get a weapon.’

In 2002, shortly after George W. Bush assigned Iran to the Axis of Evil, Tehran possessed only 200 centrifuges it could use to spin uranium hexafluoride into enriched uranium required to make nuclear weapons. By 2009, that number had grown to 7,000. By 2013, Iran had acquired 20,000 centrifuges, with more than 10,000 spinning and enriching uranium.

There was one missed diplomatic opportunity. In 2003, Iran’s reformist President, Mohammad Khatami (communicating through the Swiss ambassador in Tehran), offered to negotiate his nation’s nuclear program (and a number of other issues) with the United States. The offer came soon after U.S. forces had swept into Baghdad, when the Iraq war looked like a smashing success and Iran’s leaders assumed they were next. Vice President Dick Cheney refused, because “we don’t negotiate with our enemies.”

So there were no negotiations until Secretary of State Hillary Clinton initiated secret talks with Iran in 2013, which led to the agreement signed in Vienna in July 2014.

Today under International Atomic Energy Agency monitoring, Iran is allowed a maximum of 5,060 centrifuges; its four most advanced models are sequestered; its low-enriched uranium stockpile has been reduced by 98 percent, and its heavy water reactor has been disabled and filled with concrete.

And Israel has shelved its plan for a military strike to “take out” Iran’s nuclear facilities.

In a sobering article in the Winter 2017 issue of The Middle East Journal, Israeli scholar Gil Merom described Prime Minister Benjamin Netanyahu’s elaborate plans for a military strike that would destroy, for a few years, Iran’s capacity to create a nuclear weapon. Merom cited former Israeli Prime Minister Ehud Olmert’s description of the $11 billion that Netanyahu had invested in his plan to attack Iran, including building a strategic fleet of more than 100 F-161 and F-151 bombers, developing advanced satellite intelligence and communication capabilities, unmanned aerial vehicles, and enhanced air refueling capabilities.

“In April 2013, when Israeli Defense Force Commander Benny Gantz was asked if Israel could unilaterally attack Iran’s nuclear installations,” Merom writes, “Gantz’s response was: ‘yes, unequivocally.’”

Then Barack Obama, John Kerry, and Wendy Sherman, the chief negotiator for the United States, cheated them out of their casus belli. By 2015, Gantz, and Mossad (Israel’s intelligence service) chief Meir Dagan, and Israeli Air Force director Yuval Diskin “stood firm in opposition to striking,” Merom writes. Because an American-led deal “took the rug out from under the reasoning of a strike, at least for a while.”

Barack Obama’s patient diplomacy also took the rug from under Donald Trump, at least for a while.

A Political Hustler To Run The Department Of Energy

A Political Hustler To Run The Department Of Energy

Reprinted with permission from The Washington Spectator.

Rick Perry might have been a safe pick as Energy Secretary, but it’s hard to argue that he was a smart one. There are valid reasons—beyond the fact that he once argued that the U.S. Department of Energy should be shut down—that would, in a healthy democracy, disqualify Perry as the CEO of a federal agency with 13,000 employees, plus 93,000 contract workers, and an annual budget of $30 million.

Perry is, to put it kindly, not that bright. He lacks the experience to lead a large bureaucracy, despite the fact that he served as governor of Texas for 14 years. And he’s corrupt.

Trump was onto Perry’s questionable intelligence quotient when the Republican primary field was shaping up in July 2015 and Perry was a fresh and eager contender, just leaning into what would become his second failed attempt to win his party’s presidential nomination.

“He should be forced to take an IQ test before being allowed to enter the GOP debate,” Trump tweeted in mid-July 2015.

“He put glasses on so people will think he’s smart. And it just doesn’t work. People see through those glasses,” Trump said at a South Carolina rally a week after his Twitter swipe at Perry.

Trump was aiming at Perry’s Achilles heel: his head.

There was the “Oops” moment during a debate that undermined Perry’s 2012 primary campaign, when he could only name two of the three federal agencies he had promised to eliminate. The one that slipped his mind was the Department of Energy.

There was the college transcript, which his appointment to lead the DOE again brings into high relief.

The two men who preceded Perry as Energy Secretary were Steven Chu, a Nobel Prize- winning physicist on the faculty at Stanford University, followed by Ernest Moniz, who earned a Ph.D. in theoretical physics at Stanford and chairs the physics department at M.I.T. Perry struggled to obtain an undergraduate degree in animal science at Texas A&M, a struggle evident in a college transcript riddled with Cs and Ds, and one F (in organic chemistry).

And there was the fact that Perry had, indeed, failed an IQ test of sorts, four years before being muscled out of the 2016 primary by Donald Trump.

Today’s American presidential primary is its own test of intelligence (and stamina), although the 2016 race was exceptional, with Trump’s thuggish assaults on the other candidates, and their determination that they could rope-a-dope the heavyweight, absorbing all the punishment Trump could direct at them until an establishment candidate emerged and the vanity candidate punched himself out.

Perry’s IQ test was a “normal” Republican primary in 2012, when a much more agile (and intelligent) Mitt Romney prevailed as Perry stumbled again and again, incapable of holding his own in debates, then staggering through painfully histrionic speeches at CPAC in February 2011 in Washington, and nine months later in New Hampshire, where a bizarrely manneristic soliloquy began with Perry theatrically whipping a four-by-six facsimile flat-tax application out of his jacket pocket and waving it about, then concluded with his embrace of a can of maple syrup.

As chairman and CEO of Exxon, Texan Rex Tillerson has at least run a large organization. Rick Perry has not. The 1876 Texas Constitution created a plural executive, dividing authority among more than 20 independently elected statewide officials. The governor, as defined by the Constitution, doesn’t have a lot of power, while the independently elected lieutenant governor does.

The Texas governor’s power derives from the constitutional authority to make thousands of appointments to the boards and commissions that make the rules and render the decisions by which the state is governed. Perry used his 15 years in the governor’s mansion to enhance the power of the office, appointing every state board member and commissioner, sometimes twice—all of whom were indebted to him.

Many of those debts were paid off as Perry’s campaigns were financed, in part, by $17,115,865 in campaign contributions from 921 political appointees or their spouses, according to the non-profit Texans for Public Justice.

An appointment to the Texas A&M Board of Regents went for $610,000, the largest one-day contribution in the state’s political history, as former U.S. Senator Phil Gramm donated what remained in his campaign fund after Perry appointed Gramm’s wife Wendy Lee Gramm. San Antonio Spurs owner Peter Holt contributed $450,000 to Perry after being named to the Parks & Wildlife Board, a commission whose appointees donated $2 million to Perry during his tenure as the state’s chief executive.

Other contributors purchased agency rulings or permits. For $1,120,000, Perry’s second largest career contributor, Dallas billionaire investor Harold Simmons, got expedited approval of a nuclear waste disposal site situated in West Texas and underlain by four major aquifers. Eight of Perry’s environmental staffers were opposed to permitting the dump, because the massive Ogallala Aquifer flows 14 feet below the lower extremity of the excavated pit. Three staff members (not political appointees) of the state’s Texas Commission of Environmental Quality resigned when Simmons, known before his death in 2013 as the “king of superfund sites,” secured his permit in 2011.

Perhaps there is a logic to Trump’s appointment of Perry. Texas is the sort of unregulated, small government, tort-reformed, low-tax state that provides a model for what the United States would look like at the end of a Trump presidency. Perry’s years of experience in a state where political money greases the granting of government contracts could be useful at an agency that in the 2015 fiscal year handed out $26 billion to private contractors, an embarrassment of riches in potential political contributions for the national Republican Party.

The friendships Perry cultivates with contractors at the DOE might be helpful in the future, when he begins to raise money for a Senate race against Ted Cruz in 2018. As Texas singer/songwriter Robert Earl Keen might observe, for old political hustlers like Rick Perry, “the road goes on forever and the party never ends.”

IMAGE: Former Texas Governor Rick Perry is sworn in  before testifying at a Senate Energy and Natural Resources Committee hearing on his nomination to be Energy secretary on Capitol Hill in Washington, U.S., January 19, 2017 REUTERS/Carlos Barria

A Look At Jeff Sessions’ Shameful Past

A Look At Jeff Sessions’ Shameful Past

Reprinted with permission from the Washington Spectator.

“Read the first page of Many Minds, One Heart,” Larry Goodwyn said. It was the last time I saw the Duke University historian, at his home in Durham six months before his death in September 2013. Goodwyn, best known for his defining work on American populism, almost recited the first paragraph of Wesley Hogan’s history of the Student Nonviolent Coordinating Committee (SNCC).

It’s August 1962 and a 21-year-old Charles McLaurin, “knees shaking, mouth closed tightly, so as not to let them hear the fear in my voice,” is driving three elderly black women to the Sunflower County Courthouse in Indianola, Mississippi. They were practiced and prepared to face down a county court clerk and say, “I want to vote.” Then ask for their registration forms.

As it turned out, I knew McLaurin. At 7 a.m. on Election Day 2008, I was standing in a long, serpentine line outside the Bethune Community Center in Indianola, Mississippi, waiting for him to go inside and cast his vote. I had made the trip to see a circle closed, to witness the moment when one of the men (there were also many women) who had put their lives on the line to restore a constitutional right denied since Reconstruction cast his vote for an African-American president.

McLaurin had been jailed 35 times, “badly beaten only once,” he told me in a 2003 interview, when he also described his encounter with authority at the Indianola courthouse in 1962. The three women trying to register to vote that summer day (“Augusta Hicks for the 20th time”) were met by a court clerk who asked “What you niggers want?” then turned them away. McLaurin would spend the next four years registering voters in the Mississippi Delta—at considerable personal risk.

For Charles McLaurin, voting for Barack Obama was the fulfillment of a dream deferred. After casting his vote, he stepped out into the soft light of a cool Delta morning, raised his hands toward the sky, and said: “This is a jubilee day!”

A very old man, disappearing into a Sunday-morning suit that might have fit him 10 years earlier, lifted up his cane and echoed McLaurin.

“Mister, this is a hallelujah day!”

If there was time and place where you could know in your bones that this is not just a great country but also a good country, it was November 8, 2008, in Sunflower County, Mississippi.

C.C. Campbell, the circuit court clerk who denied three elderly black women access to a right enshrined in the Constitution, is a footnote in the history of the Jim Crow South. He was an elected official doing what was expected of him in a system that, as Ta-Nehisi Coates writes in Between the World and Me, presumes it can correctly organize a society based on “difference in hue and hair.” A foot soldier on the wrong side of history.

Jeff Sessions was a field officer in that same struggle, also on the wrong side of history. That’s why so many African-American critics of Sessions’s appointment to lead the Department of Justice tried to focus the Senate Judiciary Committee on one critical moment in his career as a U.S. Attorney, which came to light when Ronald Reagan nominated him to serve as a district court judge in 1986.

You can learn a lot about Jeff Sessions from the 585-page transcript of his 1986 confirmation hearing before the Senate Judiciary Committee. As a young U.S. Attorney angling for a lifetime appointment to the federal bench, Sessions was less than lawyerly, and often equivocating, in his responses to questions about his record.

To the best of his recollection he might have told a black Assistant U.S. Attorney on his staff: “You ought to be careful as to what you say to white folks.” But there was context to consider; the attorney, Thomas Figures, had made a “cutting remark” to a white secretary. And as Sessions recalled it, he might have said “folks,” not “white folks.”

Regarding the comment —“You know the NAACP hates white people; they are out to get them. That is why they bring these lawsuits, and they are a commie group and a pinko organization”—if Sessions actually said it, it was because “I am loose with my tongue on occasion, and I may have said something similar to that. . . .”

Regarding his comment to Figures about the Ku Klux Klan during a trial of a Klansman indicted for lynching a black man—“Those bastards; I used to think they were O.K., but they are pot smokers”—what he said was so outrageous that it was “ludicrous that anybody would think that it was supporting the Klan.”

Or regarding a Justice Department lawyer who testified that he’d heard Sessions refer to a white civil rights attorney as a “disgrace to his race,” Sessions kind of recalled a conversation in which: “I have heard him referred to as a disgrace to his race.” And perhaps he simply repeated it.

There was more. Figures testified that Sessions had called him “boy,” which Sessions denied, while another white staff attorney described Figures as “racially sensitive” and “a good attorney with a bad attitude.” Sessions observed that he could not understand why Figures had cut off communication with the office after he resigned.

Over the course of a four-day hearing, there was a lot of testimony that characterized Sessions as racially insensitive, at best. Guilty of using the everyday remarks that whites used (and continue to use: read Claudia Rankine’s Citizen) to remind African-Americans of their place in a hierarchy defined by hue and hair.

But none of it was on the public record, so these claims, although offered under oath, were not enough to persuade a bipartisan majority of a committee chaired by unabashed segregationist Strom Thurmond to block an appointment to the federal bench—which is exactly what the Senate Judiciary Committee did.

It was Sessions’s selective prosecution of three African-Americans who had conducted a voter-turnout campaign in Perry County, Alabama, that denied Sessions a lifetime appointment as a federal judge.

In what must have seemed an interminable hearing (especially to Sessions), Delaware Senator Joe Biden led scores of witnesses, including Sessions himself, through testimony that established that as U.S. Attorney for the Southern District of Alabama, Sessions’s prosecution of a legendary Alabama civil rights leader on claims that he’d tampered with 29 absentee votes cast in a local election was influenced by race and was without merit.

In March 1965, Albert Turner was walking behind SNCC leader John Lewis as he led a voting-rights protest march across the Edmund Pettus Bridge in Selma, a peaceful demonstration that club-wielding state troopers turned into “Bloody Sunday.” In April 1968, Turner was leading the mule cart carrying Martin Luther King’s casket through the streets of Atlanta.

In 1985, Turner, his wife Evelyn, and civil rights leader Spencer Houge were in a federal courtroom in Selma, confronting 29 counts, for mail fraud and altering absentee ballots—a criminal prosecution led by U.S. Attorney Sessions that could have sent the defendants to a federal penitentiary for a maximum sentence of 100 years.

Turner, who had also worked with King at the Southern Christian Leadership Conference, was known as “Mr. Voter Registration,” for the successful registration and turnout campaigns he had led in Alabama’s “black belt.”

Sessions broke new ground in filing the case. He was the first U.S. Attorney to use the federal voter fraud statute.

To prosecute a defendant who was not a corrupt public official; in a criminal prosecution that involved only local officials; in a prosecution based on so few allegedly illegal votes; in a criminal cause of action in which the candidates who allegedly benefited from the fraud had lost, rather than won, the election.

It took a jury of seven blacks and five whites less than three hours to find the defendants not guilty on all counts.

As it turned out, Sessions had “selectively” (as Joe Biden pointed out) prosecuted Houge and the Turners on threadbare evidence, after ignoring complaints filed in his office that described a batch of absentee ballots collected at an assisted-living residence which had been completed with the same felt-tip pen, and signed, according to a handwriting analyst, by the white Republican mayor of Uniontown, Alabama. Those ballots were certified by the Perry County Clerk, who appeared to be running her voting scam: simultaneously mailing campaign literature from candidates supported by the white community along with absentee ballots, sometimes even tucking campaign flyers into envelopes with the ballots, which was also reported to Sessions.

Two white public officials who appeared to be rigging elections in violation of state and federal law got a pass, while Sessions tried to put the Turners and Spencer Houge in prison for 100 years—for what a jury unanimously decided were acceptable errors in 29 of 500 absentee votes the defendants gathered and mailed in.

The symbolism of three African-American defendants on trial in Selma was not lost to Alabama’s black community. And the prosecution was using the same old hustle black voters in the South had seen for decades, but with more refined tactics. If Sessions wasn’t as rankly racist as Indianola Court Clerk C.C. Campbell, he was discouraging black voters from exercising a right enshrined in the Constitution (even if it required a war, two amendments, and the courage of thousands of voting rights activists, from Charles McLaurin to Albert Turner, to secure that right for African-Americans in the South).

Turner’s son, a county commissioner in Alabama, has worked with Sessions and has forgiven him for the prosecution of his parents 32 years ago.

Evelyn Turner hasn’t.

“Get off me,” she told Sessions when he tried to hug her at the 50th anniversary of the Bloody Sunday march.

“He hasn’t changed,” she said.

IMAGE: U.S. Sen. Jeff Sessions (R-AL) looks up during a Senate Judiciary Committee confirmation hearing for his nomination to become U.S. attorney general on Capitol Hill in Washington, U.S., January 10, 2017. REUTERS/Kevin Lamarque

GOP’s Last Shot At Iran Deal

GOP’s Last Shot At Iran Deal

Since he began his campaign for the presidency, Donald Trump has repeatedly promised to undo the multi-national agreement that has frozen Iran’s ability to build a nuclear weapon.

“My number one priority is to dismantle the disastrous deal with Iran,” Trump said recently.

In June, Iran’s supreme leader Ayatollah Ali Khamenei responded with his own inflammatory rhetoric, referring specifically to Trump’s most recent attack on the agreement. “We do not violate the deal, but if the other party violates it, if they tear the agreement up, we will light it on fire,” Khamenei said.

Iran’s foreign minister Mohammad Javad Zarif was more circumspect. The accord, Zarif said, “is not an Iran-U.S. agreement for the Republican front-runner or anybody else to renegotiate. It’s an international understanding annexed to a Security Council resolution.”

It’s unclear whether Trump knows the accord was negotiated by the permanent five members of the United Nations Security Council—the United States, China, Russia, France, and the United Kingdom—plus Germany. His grasp of foreign policy seems tenuous, at best.

It’s also unclear if he is aware of what the accord means to the U.S. economy.

In mid-June Boeing reached a tentative agreement to sell 80 commercial airplanes, and to lease an additional 29, to Iran Air. The agreement would have the American company building and delivering planes for 10 years (beyond the end of Trump’s second term in office) and is valued at $25 billion.

President Obama made the commercial aircraft deal possible, as officials in the Treasury Department issued a special permission for Boeing to negotiate with Iran, to avoid handing over the entire Iranian market to the European consortium Airbus.

Would President Trump deliver on his campaign promise if it forced the abrogation of a $25 billion deal and surrendered a lucrative market to a European business rival?

Perhaps. Absolute opposition to improved relations with Iran has been a canonical position for Republicans since Vice President Dick Cheney slapped down a 2003 proposal the Swiss ambassador delivered on behalf of Iran—to begin bilateral negotiations with the United States on Iran’s nuclear program, its hostile posture toward Israel, and handing over terrorist suspects then in Iranian custody.

Like Cheney, congressional Republicans believe “you never negotiate with your enemy.” They went to unprecedented extremes to derail the agreement, including inviting Israeli Prime Minister Benjamin Netanyahu, an implacable opponent of the accord, to address a joint session of Congress.

They narrowly lost, despite a $40-million campaign attacking the accord. Progressive organizations including J Street, Women’s Action for New Directions, the Ploughshares Fund, and MoveOn organized a national effort that built a Democratic majority in the Senate to support the President’s initiative.

With time running out, the Republicans in Congress have one last shot at Barack Obama’s most significant foreign policy achievement. (They failed in May, when the Senate voted down an amendment to an Energy Department spending bill by Arkansas Republican Tom Cotton, which would have prohibited U.S. purchase of heavy water from Iran. Heavy water is a key component in nuclear weapons development, and its purchase is part of the denuclearization of Iran.)

Republicans will now target the Iran Sanctions Act, which provided the leverage for the negotiations that led to strictly monitored limits on the fissile material Iran is allowed to possess. The act expires in 2016.

Congress is certain to extend the law, Barbara Slavin, the director of the Atlantic Council’s Future of Iran Initiative, said at a WAND webinar on the one-year anniversary of the negotiated agreement. The  sanctions act is critical, Slavin said: “What will it look like and what other sanctions will be added?”

The accord with Iran is based upon a simple premise: “Iran will shrink its nuclear program and we will shrink out sanctions.”

Republicans will attempt to add sanctions, or to extend the sanctions bill beyond a “transition day” written into the accord. On transition day, if the International Atomic Energy Agency monitoring Iranian nuclear activity issues a clean bill of health, all nuclear-related sanctions will be lifted.

Extending sanctions beyond the October 2023 transition date, or adding sanctions, will be read by the Iranians as a signal that Congress isn’t serious about the United States honoring the agreement it negotiated, Slavin said.

Iran, thus far, has honored its obligations. There have been no violations detected by the IAEA onsite, or by U.S. and European intelligence agencies monitoring from afar. Two IAEA reports have described Iran as in full compliance with all conditions stipulated in the accord.

Look for several congressional Republicans to get behind an amendment intended to kill the agreement.

If the amendment passes, look for Ayatollah Khamenei to light the agreement on fire.

 

Image Credit: European External Action Service

Mike Pence: The Magic Christian

Mike Pence: The Magic Christian

Published with permission from The Washington Spectator.

For years I’ve been picking Mike Pence when handicapping lean and hungry Republican politicians. Even when he didn’t register in the 2010 CPAC presidential poll, and was ignored by Newt Gingrich as he mentioned the potential presidential candidates who had addressed the conference—Tim Pawlenty (remember Tim Pawlenty?), Mitt Romney, Ron Paul— I was picking Pence. Let’s say I’ve been Penced, smitten, overwhelmed by the then-congressman with the linebacker’s build, the yearbook-handsome good looks, and the ability to own an audience with speeches that (even if overly sincere, jingoistic, and loaded with grace notes about “scripture,” the “Good Book,” and “His will”) are always perfectly delivered and pitch perfect for Republican audiences.

Here’s how I described Pence under the headline “Picking Pence” after he killed with his predictable but riveting speech at that Conservative Political Action Conference in 2010:

“Pence has been quietly running for the Republican presidential (or vice-presidential) nomination for four years.”

Mike Pence is the perfect pick for secular sybarite Donald Trump, who bungles biblical references, changes out wives like polo players change out mounts, and who, to borrow a phrase from “Romans 6:23,” earns his living by “the wages of sin” in glitzy casinos—yet somehow has won the hearts and souls of 80 percent of the evangelical Christian electorate, without whom the Republican Party cannot win a national election. Mike Pence locks up that other 20 percent.

Pence does not speak in public without serving up several lines carefully crafted to seize the attention of the GOP’s evangelical base.

“Our candidate must be willing to stand for the unborn and commit to appointing justices to the Supreme Court who will consign Roe v. Wade to the ash heap of history.” (2008)

“Marriage ordained by God and instituted by law is the glue of the American family and the safest harbor to raise families in, and must be defended against the onslaught of the left.” (2010)

“You’re either for protecting the right of the unborn and the religious liberty of every American, or you aren’t.” (2015)

“By enacting this legislation, we take an important step for the unborn, while still providing an exception for the life of the mother. I sign this legislation with a prayer that God would continue to bless these precious children, mothers, and families.” (2016)

Pence is (and if you don’t already know, you soon will) “a Christian, a conservative, and a Republican, in that order.”

His legislative record was less than impressive, his congressional office less than a bill mill. In his first year in the House as a member of the House Agriculture Committee, all 32 of the bills he filed were failed attempts to extend tax breaks on ag chemicals such as 4,4-dimethoxy-2-butanone and ortho-phthalaldehyde. Only a chemist or ag-chemical lobbyist could make sense of what the young congressman from Indiana was trying to legislate.

Nothing Pence proposed ever passed, but among his 90 failed attempts in 12 years his biggest hits were bills to curb internet porn, penalize child pornography, support Israel, and, of course, one of the first bills introduced in Congress to defund Planned Parenthood.

He would finally make his mark as governor of Indiana, where he has promoted and signed anti-abortion bills into law every year since he was elected in 2012.

This year, however, he hit one out of the park, supporting and signing the most extreme anti-abortion measures ever enacted in the United States, the first law enacted that bans abortions based on a diagnosed disability in a fetus.

A federal judge in Indiana issued a preliminary injunction against the bill, which Pence signed in March, the day before it was to take effect.

Never in modern history has there been such an unabashed religious extremist nominated for the vice presidency by a major party, but Pence will be broadly supported by Republicans. He has, in terms of religious belief, balanced the ticket: Trump the eccentric billionaire bribing and pranking his way to success like the protagonist of Terry Southern’sThe Magic Christian, and Pence, a Bible-quoting moralist who would nudge the nation in the direction of theocracy.

If he and Trump fail this time around, you can make book on “Pence 2020.” You read it here first. Could be divinely ordained.

 

Photo: Indiana Gov. Mike Pence speaks during the Republican Jewish Coalition Spring Leadership Meeting in Las Vegas, Nevada April 25, 2015. REUTERS/David Becker 

Nihilist Ted, Back To The Back Bench

Nihilist Ted, Back To The Back Bench

Published with permission from The Washington Spectator.

Ted Cruz, who ran for the Senate to run for president, is back in the Senate.

During his year on the national stage, Cruz’s singular accomplishment as a United States Senator, his one-man shutdown of the federal government over one issue, was correctly treated as newsworthy. Beyond that, and the over-reported story that Cruz is loathed by his Republican colleagues in the Senate, the media largely ignored the Texas Senator’s legislative record.

Yet the bills Cruz filed in his brief back bench tenure in the Senate are telling. And, never distinguished for his humility, Cruz will now recast himself as a party leader whose legislative agenda was endorsed by donors who backed him and citizens who cast their votes for him in primaries and caucuses.

After reading 55 bills and 115 resolutions filed by Cruz, here’s the takeaway. Cruz is a destroyer.

“Nihilist Ted,” Donald Trump might say.

Cruz’s first bill was revealing, and predictable. Filed within days after he took his oath of office, the ObamaCare Repeal Act, for which Cruz gathered 41 Senate cosponsors, is self-explanatory. It also fulfilled a campaign promise, played to the party groundlings on whom Cruz staked his future, and had no chance of passing.

Short and to the point at 232 words, the ObamaCare Repeal Act would have dismantled a law while providing nothing to replace it.

In the course of the 113th and 114th Congress, Cruz would sponsor seven bills targeting the Patient Protection and Affordable Care Act, each as unsuccessful as the first.

Cruz’s bills are also reactive; they set out to do rather than undo. The bills, like the man, are antagonistic, and hostile to government—and to any minority the government might protect.

Anticipating the Supreme Court’s Obergefell v. Hodges decision on same-sex marriage, Cruz filed a bill proposing a constitutional amendment allowing states to limit “marriage” to the “union of one man and one woman.”

George H.W. Bush vetoed the Motor Voter Act, Republican Senators filibustered it during the Clinton Administration, and finally agreed to a weakened version of a law intended to make it easier to register to vote.

Ted Cruz would have gutted it, with a one-sentence bill filed in response to a court challenge to an Arizona ballot initiative that targeted undocumented immigrants and as a consequence ethnically cleansed the voter rolls of 31,500 Arizonans, mostly Spanish surnamed.

In response to President Obama’s use of executive authority to defer the deportation of non-citizen U.S. residents who arrived in the country as children (Deferred Action for Childhood Arrivals), Cruz drafted legislation that would have prohibited the use of federal funds to process applicants for the DACA program.

Another 2013 bill targeted the tens of thousands of unaccompanied Central American children arriving at Texas border crossings to make asylum claims. Among other measures, Cruz’s “Protect Children and Families Through the Rule of Law Act” would have had the kids quickly deported, and provided federal funding to state governments deploying the National Guard to defend the border against immigrant children.

Cruz repeatedly promised that U.S. participation in the Iranian nuclear accord will end on his first day in office: “If I am elected president, on the very first day in office I will rip to shreds this catastrophic Iranian nuclear deal.”

Cruz targeted President Obama’s most consequential foreign policy initiative with a half-dozen bills, none of which got beyond referral to committee.

In the 113th Congress (2012–2014), for example, Cruz was author of a bill that would have curtailed the president’s authority to manage sanctions on Iran, and of a Senate resolution that defined conditions that had to be met before President Obama could meet with Iranian President Hassan Rouhani.

In the 114th Congress, he filed three additional bills, including an attempt to cut off funding to the United Nations—in protest of the ongoing negotiations with Iran.

Iran, for Cruz, was a foreign policy obsession. Beyond introducing bills and resolutions that would never see the light of the Senate chamber, he threatened to block all Obama appointees to the State Department. And he breached Congressional protocol by leading a House Republican rump caucus into a futile vote to require the president to submit the Iran accord to Congress— one of several offenses that resulted in former Speaker John Boehner describing Cruz as “Lucifer in the flesh,” and observing “I have never worked with a more miserable son of a bitch in my life.”

Cruz is almost as Obamaphobic as his father, an itinerant Cuban immigrant preacher with contrived pastoral credentials and a visceral hatred for the president.

Fourteen of the bills the itinerant preacher’s son filed in two sessions of Congress target laws the president has signed or his “unlawful” executive actions.

Cruz’s response to the centerpiece of Obama’s Climate Change Initiative, the Environmental Protection Agency rules imposing significant caps on greenhouse gas emissions from coal plants, was his most ambitious legislative effort: a 600-word bill that essentially strips the EPA of its regulatory authority.

The American Energy Renaissance Act does far more than “repeal greenhouse gas regulation,” which would render moot the new EPA clean-air regulations that mandate deep cuts in coal-fired-plant emissions. The bill is breathtakingly broad in scope, prohibiting, for example, any climate-change-mitigation measures enacted under the Clean Air Act, the Federal Water Pollution Control Act, the National Environmental Policy Act, the Endangered Species Act, and the Solid Waste Disposal Act.

Any EPA rules regulating carbon would be repealed, future regulations prohibited unless individually approved by Congress. Carbon dioxide, water vapor, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride could no longer be classified as pollutants.

The bill would permit the Keystone XL Pipeline, open Alaska’s Arctic National Wildlife Refuge to oil and gas drilling, lock the secretary of energy into a leasing schedule for federal oil and gas rights, impose steep administrative fees on anyone who would contest a lease, right of way, or permit to drill, and deny legal fees to environmental non-profits that prevail in public-interest lawsuits.

Like all of Cruz’s bills (except two), it will not pass, but it’s what would become law with a larger, more extreme Republican Senate majority.

As was reported in ThinkProgress, Cruz chairs a Senate subcommittee that has oversight responsibility over NASA, the National Science Foundation, the National Institute of Standards and Technology, and the Office of Science and Technology Policy.

If you happened to be a Cruz constituent looking for a bill that would extend broadband Internet to small towns in rural Texas, expand a National Institutes of Health program in Houston’s Medical Center, or reinforce the seawall that stands between Galveston and the Gulf of Mexico, you’d have to look elsewhere.

For Ted Cruz, government is the problem, not the solution.

 

Photo: Former Republican presidential candidate Senator Ted Cruz (R-TX) talks to the media outside of his Senate office on Capitol Hill in Washington, U.S., May 10, 2016. REUTERS/Carlos Barria 

Paranoia’s Back In Style

Paranoia’s Back In Style

This article originally appeared in The Washington Spectator. 

One day before President John F. Kennedy was assassinated in Dallas in November 1963, Richard Hofstadter was in London, delivering a lecture that a year later would appear in Harper’s as “The Paranoid Style in American Politics.”

At 47 years of age, Hofstadter was an American brand. He held an endowed chair at Columbia University—not to mention two Pulitzers. He was considered to be one of the finest historians and public intellectuals of his time.

Right-wing putschists led by Barry Goldwater (and the evidently immortal Phyllis Schlafly) had seized control of the Republican Party, muscling aside Nelson Rockefeller and the moderate wing he represented. Hofstadter was alarmed. “The Paranoid Style” was his red flag.

In the introduction to a 2007 Vintage Books collection of Hofstadter’s political writing, Princeton historian Sean Wilentz describes the 1964 essay as “a study of political cranks and zealots” in which the author described “a chronic, rancid syndrome in our political life.”

Indigenous and deeply rooted in American history, the paranoid politics Hofstadter described began with a panic among Federalists, echoed in New England’s pulpits in 1789, when preachers warned of the Bavarian Illuminati plots to undermine the new republic.

In the 1820s and 1830s the nation was seized with a fear of Masons, who were perceived to be a threat to republican government because Masonry was a secret society with its own system of loyalty and its own jurisdictions. Public hysteria about Masonic plots was followed by an anti-Catholic movement focused on the Society of Jesus, better known as Jesuits. “Anti-Catholicism has always been the pornography of the Puritans,” Hofstadter wrote.

All of this is understandable in a young nation defining itself and defending itself from external and internal threats. It’s when Hofstadter takes what he describes as the long jump to the contemporary right wing that the paranoid style of politics he describes speaks to our current political moment.

It doesn’t take much more of a leap to conclude that the same rancid syndrome, which Hofstadter chronicled as occurring in episodic waves in American political life, is upon us today, and the political cranks and zealots are Republican voters animated by Donald Trump, Ted Cruz, and Marco Rubio.

In the sixties, the country hadn’t entirely moved beyond McCarthyism, and the fear that the highest levels of the federal government had been infiltrated by communists who were selling out U.S. national interests. That particular obsession is largely a relic of the past, perhaps with the exception of religious loons such as Pat Robertson, and Rev. Rafael Cruz (father of Ted), who has referred to Barack Obama as a socialist aligned with Cuba’s Castro brothers.

Read “The Paranoid Style”—eliding the references to the communist menace—and you’ll discover an insightful analysis of the overheated rhetoric and reckless posturing that is the 2016 Republican presidential primary.

Hofstadter quoted Harvard professor Daniel Bell’s description of “the modern right wing” of the 1960s. If Bell’s description weren’t so articulate, it could be passed off as briefing notes for Sarah Palin’s speechwriter.

America has been largely taken away from them and their kind; though they are determined to try and repossess it and to prevent the final destructive act of subversion. The old American virtues have already been eaten away by cosmopolitans and intellectuals; capitalism has been gradually undermined . . . the old national security and independence have been destroyed by treasonous plots, having as their agents not merely outsiders and foreigners but major statesmen at the very centers of American power.

The “modern right wing” of 2016? You can find it at a Trump rally in a Birmingham stadium or a Cruz caucus in Iowa—even with Palin on the hustings in New Hampshire—promising to take back our country from the intellectual elites who have dispossessed “real Americans.”

The American paranoids described by Hofstadter, like today’s MSM-averse Republicans, believed a political elite entrenched in New York controlled the media and “directed the public mind through managed news.”

Like today’s Republican presidential candidates, Hofstadter’s paranoids opposed the income tax and worked to repeal it. They were anti-intellectual and anti-cosmopolitan. They had a deep-seated aversion to “the democracies of Western Europe.” They harbored a “nativist desire to develop in North America a homogeneous civilization.” They envisioned the enemy eroding our values and undermining our national security: “A perfect model of malice, a kind of amoral superman, sinister, ubiquitous, powerful, cruel, sensual, luxury loving.”

Throw in “African-American”—which was beyond even the most febrile delusions of the hysterical conservatives of the 1960s— and you’ve almost got Rev. Raphael Cruz’s description of the sybaritic, foreign-born Muslim pretender to the American presidency.

How close are we to Yogi Berra’s “déjà vu all over again?”

Hofstadter’s essay quoted a New York Times story about conspiracy theorists who warned of a covert collaboration between the Department of Defense and the United Nations:

A United States Army guerrilla warfare exercise in Georgia, called Water Moccasin III, is actually a United Nations operation preparatory to taking over our country.

At the time, only one inconsequential three-term Congressman from Orange County, California, bought into the alleged plot that had President Kennedy dismantling the U.S. military and replacing it with a U.N. peacekeeping force.

Last summer, when a group of “patriots” in the small Texas town of Bastrop claimed that a routine training operation conducted by the U.S. Army was a covert U.N. mission, and that U.N. vans had been filmed in Walmart parking lots, Governor Greg Abbott deployed the Texas Guard to monitor the operation. As senator, Cruz directed his staff to begin an inquiry at the Pentagon.

Abbott recently travelled to Israel and Switzerland, and he has drafted a revised U.S. Constitution, which he intends to bring before a Constitutional Convention. He’s obviously positioning himself for something larger than elected office in Texas. Cruz, meanwhile, has a reasonable shot at his party’s presidential nomination. And Palin is back, sounding the alarm about the “leftists in Washington destroying our military.”

“Style has more to do with the way in which ideas are believed than with the truth or falsity of their content,” Hofstadter wrote. “I am interested here in getting at our political psychology through our political rhetoric.”

If political rhetoric is any measure of the moment, a short excerpt of the speech Sarah Palin delivered when she endorsed Donald Trump on January 19 illustrates how far around the bend the extremists in the modern Republican Party have gone.

Tell me, is this conservative? GOP majorities handing over a blank check to fund Obamacare and Planned Parenthood and illegal immigration that competes for your jobs, and turning safety nets into hammocks, and all these new Democrat voters that are going to be coming on over border as we keep the borders open, and bequeathing our children millions in new debt, and refusing to fight back for our solvency, and our sovereignty, even though that’s why we elected them and sent them as a majority to D.C. No! If they’re not willing to do that, then how are they to tell us that we’re not conservative enough in order to be able to make these changes in America that we know need to be . . . Now they’re concerned about this ideological purity? Give me a break! Who are they to say that? Oh tell somebody like, Phyllis Schlafly, she is the Republican, conservative movement icon and hero and a Trump supporter. Tell her she’s not conservative. How ’bout the rest of us? Right wingin’, bitter clingin’, proud clingers of our guns, our God, and our religions, and our Constitution. Tell us that we’re not red enough?

Palin might be considered a marginal figure by sensible moderates in both parties. But she’s revered on the far right, and in the 200 words above she addresses most of the paranoid fears of today’s right: a treasonous government selling out our sovereignty, coming after our guns, eroding religious rights, inviting aliens into the country to take our jobs, treating the Constitution with contempt. Palin managed to include in one over-the top speech most of what animates today’s Republican right wing—a constituency of “political cranks and zealots” who have moved far beyond the extremists Hofstadter described in an essay written half a century ago.

Read NowShow less
Ted Cruz And The Politics Of Faith And Fear

Ted Cruz And The Politics Of Faith And Fear

[This piece was originally published inThe Washington Spectator.]

These people are, in a word, afraid. And their candidates have mastered the exploitation of their fears.

American politics is not easy for believers.

“This is a forum where our candidates can share their faith and testimony and not feel ostracized. Except maybe by the press,” Mary Frances Forrester told me. “Here, we can ask questions and candidates can include their faith when they’re talking about important social issues.”

Forrester—a state director of Concerned Women for America and the widow of James Forrester, a North Carolina state senator who led a successful campaign to pass a constitutional ban on same-sex marriage—was one of 1,500-plus Christians (and an inconsequential scattering of Jews) attending Ralph Reed’s Faith & Freedom Coalition national conference in late June. The event was co-sponsored by Concerned Women, a national organization that promotes “Biblical values among all citizens.”

Since the Spectator’s coverage of the first Faith & Freedom Coalition conference nearly five years ago, the annual event has moved from the basement of a smaller hotel in downtown Washington to the Shoreham, one of the larger conference venues in the city.

Reed earned his chops with Jerry Falwell’s Christian Coalition of America in the 1980s, escaped indictment despite billing tribes more than $1 million in the Indian-casino lobbying shakedown that landed Jack Abramoff in a federal penitentiary in 2006, then lost a race for lieutenant governor of Georgia. He is well into his fourth act, as the founding director of an organization that claims more than 700,000 members.

This year, 13 of the Republicans chasing the party’s 2016 presidential nomination pitched their candidacies at his event. The only no-shows were Mike Huckabee and Donald Trump.

Reed has created a forum in which candidates can speak freely about the intersection of religious belief and public policy.

To Out-Herod Herod

Yet something is happening here that is larger than that. At events such as this one—and this has become an A-List conference—Republican candidates meet “the base” whose support they must have to win a primary.

The conference is four days of dialogue between candidates and their supporters. Posturing is predictable: Louisiana governor Bobby Jindal’s three-minute prayer after other speakers had observed only a moment of silence was followed by public testimony that he gave himself over to Christ at six years of age.

But there’s also a dynamic in which each candidate is compelled to out-Herod Herod. To be outflanked on the right is to lose ground.

Chris Christie promised a plan to deal with ISIS. Rick Santorum said that if elected he will be a wartime president.

“Last month, I was in Israel,” Santorum said. “And one of Prime Minister Netanyahu’s advisors told me, ‘Senator, you need to tell the American people that the next president the country elects will have to be a wartime president.’”

Rand Paul promised to defend the “sanctity of life in the womb.”

Rick Perry said he’s the candidate with a record on abortion: “You know, a lot of candidates say—they say the right things about protecting life. But no candidate’s done more to protect unborn life. I helped pass a parental-consent law. I signed a sonogram law so mothers facing an agonizing choice could witness that beating heart within them. I signed a law outlawing abortion at 20 weeks.”

Issue by issue, policy position by policy position, the candidates drag their party to the right.

These People Are Afraid

Faith & Freedom congregants are more reserved than the angry political activists who turn out for hard-right ideological gatherings like the annual Conservative Political Action Conference (CPAC). Earnest men and women from their 50s through retirement age, most married couples. In 20 interviews that I did over three days, I spoke to one unattached male.

There’s a small 30-and-younger cohort, many with expenses covered by scholarships. The youngest are homeschooled. (I talked to a father of seven with two thoughtful and devout adolescents in tow.) Or they attend private Christian academies.

This event is also overwhelmingly white. During a morning session of speeches by presidential candidates, I counted 12 African-Americans in a packed hotel ballroom.

Everyone here seems to feel flown-over and disrespected. Their religious values are under attack by their government and by business forces they cannot control. They are misrepresented by the liberal news media and mocked by the liberal entertainment industry.

The single issue that dominated every interview I did was same-sex marriage, which all described as a threat to their way of life.

Another persistent preoccupation was radical Islam. A close third was threats confronting Israel, a place central to evangelical Christian faith.

These people are, in a word, afraid. And their candidates have mastered the exploitation of their fears.

The IRS Is Coming

Consider one passage in Texas senator Ted Cruz’s riveting 20-minute speech on the first day of the conference. Cruz is a brilliant and impassioned extemporaneous speaker.

A week and a day before the U.S. Supreme Court handed down its historic Obergefell v. Hodges decision, Cruz was praying that the Court would avoid “an act of naked and lawless judicial activism, tearing down the marriage laws adopted pursuant to the Constitution.”

Any ruling upholding same-sex marriage, he warned, would be the beginning of a broad assault on the Christian faith.

Cruz quoted from the oral argument in Obergefell v. Hodges to warn people of faith what will follow an adverse ruling on marriage:

“Justice [Samuel] Alito asked U.S. Solicitor General Donald Verrilli: ‘If the Obama administration prevails and you convince this court to strike down the marriage laws of every state, would the next step be that the IRS would start going after Christian schools, Christian charities, and next after that Christian churches? Any institutions that follow a Biblical teaching of marriage? Or for that matter, Jewish schools? Mormon schools? Any institution that follows religious teaching?’

“And the answer from the Obama administration was: ‘Yes, that is a very real possibility. That the next step is the IRS coming after schools, universities and charities.’”

It was an effective rhetorical device. Cruz had already described three “religious freedom” cases he had litigated at the Supreme Court before he was elected to the Senate. With his stark warnings about same-sex marriage, he was framing the fight he would undertake as president.

But that question was not asked during the Obergefell v. Hodges oral argument.

Here, from the official transcript, is the exchange the senator “quoted”:

JUSTICE ALITO: Well, in the Bob Jones case, the Court held that a college was not entitled to tax-exempt status if it opposed interracial marriage or interracial dating. Should the same apply to a university or college if it opposed same-sex marriage?

GENERAL VERRILLI: You know, I—I don’t think I can answer that question without knowing more specifics, but it’s certainly going to be an issue. I don’t deny that, Justice Alito. It is going to be an issue.

Cruz’s warnings about same-sex marriage (which were echoed by Rand Paul, who followed him), and the broader assault on the Christian faith resonated with one woman I interviewed in the hotel lobby. With her husband, she had traveled from Collegeville, Pennsylvania.

“My husband pastors a church,” she said.

“A lot of these issues involving same-sex marriage are going to affect our church in a huge way. We worry about the repercussions. Are they going to make my husband perform same-sex marriages? When he refuses, is that going to affect our IRS tax-exempt status?”

She had listened to the candidates’ speeches and was impressed by what Cruz had said about religious freedom. While he seems an unlikely nominee, the Texas senator was the overwhelming favorite in my random sampling of those attending the conference. And the extreme positions he articulates are shaping the debate.

No candidate—except Ohio governor John Kasich, who, in a quiet conversation with an audience of 1,000, explained that his faith requires that he care for those who can’t care for themselves—deviated from a requisite litany of topics: same-sex marriage, abortion, ISIS and Islamic terror in general, Obama’s “abandonment” of Israel and engagement with Iran, and the government’s encroachment on religious freedom.

These 13 candidates, declared and undeclared, competing for the support of evangelical Christians who make up 25 percent of Republican primary voters, are resuming the culture wars that began with Pat Buchanan’s speech at the party’s 1992 national convention in Houston.

“For Moses. For God. For Jesus”

With the Supreme Court poised to hand down its Obergefell decision, one topic dominated interviews and sidebar conversations.

“Do you know that two justices have already performed same-sex marriages?” Forrester asked me, referring to Elena Kagan and Ruth Bader Ginsburg.

“They have disqualified themselves and can’t vote on the issue.”

Louie Gohmert, the shrill and frequently unhinged congressman from Texas, described his legal bona fides (attorney, judge, chief justice in state courts), cited the U.S. Code, the law God conveyed to Moses as “restated by Jesus,” and expanded on the meme Forrester was working, though as a former judge he should have known better.

Any decision on same sex-marriage in which Kagan and Ginsburg participated would be, Gohmert said, “an illegal law … and not something we would have to follow.”

“America is going to have to stand up and say you were disqualified. And now you have tried to substitute your opinion for Moses. For God. For Jesus. For most states’ marriage laws.

“And we just may get you impeached.”

Gohmert has said he’s considering joining the pack of 15 Republicans (as of this writing*) pursuing the party’s presidential nomination.

It’s unlikely.

Yet as the primary begins in earnest, there’s not, as George Wallace used to say, “a dime’s worth of difference” between this member of the U.S. House who has turned himself into a cable-news curiosity and all but two or three “moderates” in the Republican class of 2016.

—

This article will appear in the August 2015 issue of The Washington Spectator.

Photo: Ted Cruz, via Facebook.

*There are now 16 Republicans vying for the nomination.

Jeb Bush’s Ethical Blind Spot

Jeb Bush’s Ethical Blind Spot

This piece was originally published in The Washington Spectator in August 2014.

Jeb Bush sat on the board of directors and served as a marketing consultant to a Florida company while it was under a criminal investigation that sent its two top executives to jail.

The collapse of InnoVida Holdings LLC in 2011 didn’t get much traction in the media. Except in South Florida, where a small group of investors lost more than $40 million on a scheme to market hurricane- and earthquake-resistant homes assembled from prefabricated plastic panels. The company CEO had promised a highly publicized rollout in Haiti followed by expansion into more lucrative markets. Neither ever occurred.

Even in South Florida, the story had receded into endless litigation (with more than 1,000 pleadings filed in bankruptcy and civil proceedings). It resurfaced in The New York Times in April, because it involved former Florida governor Jeb Bush, who is emerging as the preferred 2016 presidential candidate among establishment Republicans who consider New Jersey governor Chris Christie unelectable.

Bush was both a director on the corporate board and a marketing consultant for InnoVida Holdings LLC while it was the subject of a criminal investigation that sent its two top executives to jail.

The Times surveyed business dealings Bush pursued after leaving office in 2007. He had returned to the private sector with a modest net worth of $1.3 million, lagging behind his brothers. George W., for example, made $14 million on the sale of his partial ownership of the Texas Rangers while he was governor of Texas. Jeb, the Times reported, scrambled to make up for time lost while governor and had earned $3.2 million since leaving office.

There is much more to Jeb Bush’s role in the InnoVida scam, which wiped out every dime of shareholder wealth, than theTimes reported. Bankruptcy documents, a lawsuit filed by the Securities and Exchange Commission, and filings in criminal and civil cases suggest an ethical blind spot that led Bush to ignore the fact that the book value and returns reported by InnoVida executives were impossible under any reasonable set of financial assumptions.

Corporate board directors have a fiduciary responsibility to the shareholders whose interests they represent. Bush endorsed a company that defrauded its shareholders and the government while failing to deliver its product to market.

Continue reading: “Corporate Ponzi scheme”

“Corporate Ponzi scheme”

Before the indictment and bankruptcy, InnoVida was a quintessential South Florida story unfolding on the business and lifestyle pages of the Miami Herald. An extravagant and strikingly handsome South American CEO, arts patron, and political donor hosting A-List parties in a $12 million waterfront mansion on Star Island, a gated community on a man-made island in Biscayne Bay. The Venezuelan-born Gatsby had a $75,000 speedboat at the end of the dock. And a Maserati in the garage. He was also a major Democratic Party donor.

Claudio Osorio is now Inmate #01273-104 at the Miami Federal Detention Center. A bankruptcy trustee sold the property rights to his resilient plastic panels to a Brazilian company. Forensic accountants continue to search for funds in offshore banks. And investors are asking what became of $40-$50 million they staked on a company that promised turnkey prefabricated residential units assembled in one day.

Osorio, it turns out, was damaged goods long before Bush signed on. An unnamed Bush aide told the Times that he had done a background search on Osorio and found one bankruptcy but “nothing to suggest wrongdoing.”

Before the bankruptcy that the aide referred to, Osorio’s CHS Electronics was in federal court in Miami, defending itself against class-action suits by shareholders who claimed the company had engaged in securities fraud. Several of the shareholders’ suits were consolidated in 1999, and in 2001 a bankruptcy judge in Miami used proceeds from insurance policies that had been purchased by the company’s board of directors and officers to pay shareholders $11,750,000, according to court records.

Those records were available to anyone doing a background research and should have been a red flag regarding any Claudio Osorio business venture.

An attorney who would later sue Osorio told me that, “This is a small world down here,” and that it would almost require “willful ignorance” to miss the paper trail of litigation that led to Osorio’s corporate suite.

Offshore Alert’s financial database later published a report linking Osorio to potential criminal activities in Switzerland:

“Claudio Osorio Rodriguez et al. Application for the appointment to collect evidence for a criminal investigation in Switzerland into Claudio Eleazar Osorio Rodriguez, Marc Schurtz, John Metzger, William Ferrero and Andre Tinguely into alleged fraud and forgery regarding the bankruptcy of CHS Financial Suisse SA in May 2000.”

Seven years before he invited Bush to join InnoVida’s corporate board, Osorio was pursuing a $200 million loan in Switzerland with what was alleged to be a fraudulent application.

But the more critical story played out in federal courts in the Southern District of Florida, where plaintiffs claimed that Osorio submitted false financials based on forged documents and fake orders. And that CHS Electronics had reported near-impossible increases in profits—from $1.34 million to $4.7 billion in a four-year period. After attorneys for shareholders discovered widespread accounting irregularities, stock value evaporated and the company’s remaining assets were parceled out to creditors in bankruptcy court.

What happened at CHS foreshadowed what would happen at InnoVida. The same patterns and practices that resulted in the loss of all shareholder value at CHS would be repeated seven years later.

David Nunez, a Florida lawyer who represented several shareholders who together lost more than $5 million when InnoVida collapsed, said there was a lack of corporate due diligence.

“There’s nothing wrong with filing bankruptcy,” Nunez told me. “But if you had done your research, you would have learned that this guy [Osorio] took a multinational company into bankruptcy after he took out a $200 million loan with forged papers. The Swiss government asked the U.S. Attorney’s office here in South Florida to assist in their probe, because they felt the loan was made under fraudulent terms. To me, that would be an indication that I should look deeper.”

Why didn’t Bush or someone on his staff look deeper? The former governor wasn’t a novice. He had been involved in commercial real estate in South Florida, was the director of a business-consulting firm and he was sitting on five other corporate boards. How did he end up on the board of directors of a corporate Ponzi scheme—or so InnoVida is described in the 21-count federal indictment of Osorio and his Chief Financial Officer Craig Toll.

According to the indictment, “newly collected investor money was being used to pay annual returns on interest payments promised to investors and to repay investors’ principal in order to create the false and fraudulent impression that InnoVida was successful and profitable.”

Continue reading: “An air of legitimacy”

“An air of legitimacy”

Bush is not mentioned in the indictment that sent Osorio to prison for 12 and a half years. Nor is there any suggestion that he was culpable of criminal wrongdoing.

But a Securities and Exchange Commission lawsuit filed against InnoVida and Osorio in 2013 alleges that Bush was brought on “to add an air of legitimacy to InnoVida,” which “helped Osorio raise approximately $16.8 million from at least five investors.” More than half that money, according to the complaint, was used by Osorio to pay for private homes in Florida, Colorado, and Switzerland.

The fraudulent financial statements detailed in the SEC complaint should have set off alarms for Jeb Bush and the other board members.

  • Osorio and his CFO created one financial statement showing that InnoVida had more than $35 million in cash and more than $100 million in equity, both of which were not true.
  • Osorio informed one prospective investor that InnoVida was valued at $50 million and another that it was valued at $250 million. Neither statement was true.
  • In March 2009, one financial statement listed “more than $35 million in cash and cash equivalents” while there was only $185,000 in company accounts.
  • InnoVida executives used fraudulent statements to lure investors who were solicited at board meetings. After one meeting, “an investor subsequently increased his investment and a potential investor made his initial investment based on the fraudulent financial statements.”

Cash value and equity, according to the SEC complaint, were adjusted as needed on paper to lure investors. During a September 2009 board meeting, for example, prospective investors were told the company was valued at $250 million, although InnoVida’s most recent evaluation in December 2008 was for $20 million.

“I saw their books,” Nunez said in a phone interview. “And I’ll put ‘books’ in quotes. Their books were forged. I took an accountant to look at them. When we saw their numbers, we knew that they were a crock of you-know-what.

“Now I can’t imagine someone who has been in government, in the public sector, then in the private sector, having performed any kind of due diligence and concluded that this company was legitimate.”

Nunez wouldn’t disclose the names of his clients. According to bankruptcy filings, two of his clients were NBA power forward Carlos Boozer and his former wife, Cindy, listed as unsecured creditors in bankruptcy proceedings while suing InnoVida for $6 million.

“My clients did not rely per se on board members having done their due diligence,” Nunez said. “Having said that, I can’t imagine anyone looking at the company and saying Governor Bush is on the board, General Wesley Clark is on the board and thinking this is anything but a seal of approval. This was an all-star cast of board members.”

Miami attorney Abbey Kaplan represented a client who invested $6.3 million in the company, then loaned Osorio $1.7 million, according to court records.

In 2011, Kaplan told the Miami Herald that Osorio used his board members to attract his client. “Osorio used his apparent wealth, connections and success story to lure him in. A who’s who was listed as his board of directors: Wesley Clark, Jeb Bush, [Miami condo developer] Jorge Perez.”

In a telephone interview, Kaplan told me his client’s claim was stayed when InnoVida went into bankruptcy. “Unsecured creditors are the last to get paid,” Kaplan said.

(Among the list of unsecured clients in the Chapter 11 filings was the Overseas Private Investment Corporation, a federally backed agency that lost $3 million, the first installment of a $10 million loan to InnoVida.)

Bush repaid $270,000 of $468,901 he had earned as a consultant between 2007 and 2010. He stipulated in court documents that he was voluntarily surrendering the funds to the court and had not been compelled to repay them.

The discovery process in shareholders’ suits filed against Osorio and InnoVida ended when bankruptcy proceedings began, so Bush’s compensation as a board member was never revealed to shareholders or other creditors. Nor do documents explain why Bush repaid less than half the money he received from InnoVida.

As the company was never profitable and constantly solicited new investors, all of its money was investors’ money.

Continue reading: “A front-row seat”

A front-row seat

A spokesperson for Bush did not respond by deadline to emails or phone calls regarding InnoVida. But as Bush begins to eclipse Chris Christie as the moderate Republican alternative in the 2016 race, questions will persist.

Was the former governor of Florida in the room when Claudio Osorio wildly overstated the value of the company to secure millions from an investor who lost everything? Did it occur to Bush to inquire about a multimillion-dollar investor from a Middle East sovereign-wealth fund who never existed? Did Bush ask how company value increased from $20 million to $250 million in nine months in 2009?

Perhaps his staff bungled what should have been a simple background check on Claudio Osorio, thus missing his first shakedown of investors. But according to documents on file in state and federal courtrooms in Florida, what happened the second time around, in InnoVida’s corporate board room, put two men in jail and destroyed tens of millions of dollars in shareholder wealth.

And Jeb Bush either had a front-row seat to a corporate scam or he ignored his duty to the shareholders he represented on a corporate board.

—

Lou Dubose is the editor of The Washington Spectator, where this piece originally appeared in August 2014.

Photo: iprimages via Flickr

Net Neutrality Moves To Congress

Net Neutrality Moves To Congress

On February 26, Federal Communications Commissioner Tom Wheeler led the Democratic majority on the commission to a 3-2 net neutrality ruling that designated the internet a public utility and prohibits big internet service providers from establishing pay-to-play fast lanes for preferred content providers while slowing content for everyone else.

By classifying the internet as a public utility under Title II of the 1996 Telecommunications Act, the Democratic majority insulated the FCC against the sort of lawsuits that blocked the commission’s earlier efforts.

The fight over net neutrality now moves to the Congress, where Republican Speaker John Boehner has promised legislation that would counter the FCC ruling. The big internet service providers that oppose net neutrality have spent large sums of money lobbying Congress, now their last best hope to block net neutrality.

Between January 1, 2008, and December 31, 2014, cable giants Comcast, Time Warner, Verizon, and AT&T have together spent more than $374 million in a lobbying campaign to block net neutrality legislation or rule making.

Net Neutrality Lobbying Chart

Net neutrality legislation will move through the House Communications and Technology Subcommittee, which held a hearing on the topic the day before the FCC ruled.

Republicans in Congress, in fact, were using House committee hearings to warn the FCC of the fight that would ensue if the commission were to act on net neutrality.

Republican congressmen Fred Upton (MI) and Greg Walden (OR) chair the two House committees that oversee the FCC. A month before the commission’s February 26 ruling, they held a joint committee hearing designated: Protecting the Internet and Consumers through Congressional Action.

The four big internet service providers contributed $99,500 to Upton and $56,800 to Walden during the 2014 election cycle. House Speaker Boehner has received $75,450 in money from big cable companies.

By early March, a House Republican had delivered on Boehner’s promise of legislation aimed at the FCC. Tennessee Republican Rep. Marsha Blackburn filed the first anti-net-neutrality bill two weeks after the commission’s decision. Her Internet Freedom Act would overturn the net neutrality rules and limit FCC regulation of the internet. She received $80,000 in cable company money last electoral cycle.

Lou Dubose is the editor of The Washington Spectator.

Source: MapLight, a nonpartisan research organization that reveals money’s influence on politics.

Originally posted at The Washington Spectator.

Photo: Speaker John Boehner and Senate Majority Leader Mitch McConnell meet in the U.S. Capitol on January 7, 2015. (Official Photo by Caleb Smith; Speaker Boehner/Flickr)

 

SCOTUS v. ACA

SCOTUS v. ACA

The amicus briefs filed in the challenge to the Affordable Care Act (ACA) to be argued before the Supreme Court on March 4 illuminate the Great American Political-Cultural Divide.

Those who filed briefs in defense of Obama’s legislation are recognizable: the American Cancer Society, the American Academy of Pediatrics, et al. There is a different anthropology among those who filed briefs supporting the plaintiffs who are challenging tax subsidies for low-income buyers of health care insurance policies.

Texas’ African-Americans for Life considers abortion and contraception “a tool by some who wish to target the African-American community.”

Colorado’s Mountain State Legal Foundation is “dedicated to bringing before the courts those issues vital to the defense and preservation of individual liberties, the right to own and use property, and the free enterprise system.”

The American Civil Rights Union is “dedicated to defending all of our constitutional rights, not just those that might be politically correct.”

Senator John Cornyn of Texas is named on the amicus brief filed by 16 congressional Republicans, an unlikely choice to lead any health care pleading.

At 26.8 percent (24.81 percent after ACA enrollment), Texas leads the nation in the percentage of residents lacking health care coverage. It also leads the nation in the number of eligible residents, 1,046,430, who are shut out of Medicaid. Texas, like 25 other Republican-led states, has rejected the Medicaid expansion provided through the ACA.

King v. Burwell is a fight over five words in the statute: “Exchange established by the State.”

The ACA creates insurance-market exchanges through which anyone can purchase private health insurance policies. In an attempt to subvert the law, most states governed by Republicans refused to establish exchanges. But the law also created a federal exchange, where residents who are denied access to state exchanges can purchase insurance. Currently, state and federal exchanges provide subsidies for low-income purchasers of insurance.

According to the plaintiffs, one phrase in a section of the statute describing the subsidies — “Exchanges set up by the State” — restricts the subsidy program to state insurance exchanges, although other language indicates that Congress intended to extend subsidies to all insurance buyers who meet the law’s income qualification.

This lawsuit isn’t what it claims to be.

Contradictions and hypocrisy underlie the intent of the plaintiffs and the politicians supporting them.

Consider the plaintiffs.

David King and three other residents of Virginia, which has no exchange, qualify for subsidies provided through the federal exchange. They are asking the Court to overturn the subsidies, because, on ideological grounds, they object to the ACA’s mandate requiring individual health care coverage.

Consider the elected officials.

John Cornyn, for example. Or Florida’s Marco Rubio, or Utah’s Jake Garn, or Tennessee Rep. Marsha Blackburn. All signed the anti-subsidy amicus brief filed with the Court, and all represent states whose Republican governments refused to create exchanges. They are petitioning the Supreme Court to hand down a decision that will strip subsidies from low-income residents in the states they represent.

It requires at least four justices to decide to hear a case. The activist and Republican majority on the Roberts Court has decided to hear the appeal of a lawsuit filed and financed by ideologues determined to destroy the Affordable Care Act.

To decide on behalf of the plaintiffs, the justices will have to ignore principles by which they have decided cases requiring them to interpret the meaning of statutes. Yale Law School professor Abbe Gluck explains in an article published by Scotusblog.

Republican justices, she writes, in particular Antonin Scalia, are “textualists” who have “repeatedly emphasized that textual interpretation is to be sophisticated, ‘holistic’ and ‘contextual,’ not ‘wooden’ or ‘literal,’ to use Justice Scalia’s words.”

She quotes Scalia’s explaining textualism in an opinion handed down in June 2014, in which the justice describes “the fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.”

Gluck also quotes four of the five Republican justices who published a joint dissent in the 2012 case that upheld critical provisions of the ACA. They address the very subsidies that are now before the Court: “Congress provided a backup scheme; if a State declines to participate in the operation of an exchange, the Federal Government will step in and operate an exchange in that State. That system collapses if the federal subsidies are invalidated.”

The preceding sentence is critically important. The Republican justices know “the system collapses if the federal subsidies are invalidated.”

Lou Dubose is the editor of The Washington Spectator.

Originally posted at The Washington Spectator.

Photo: Brian Calhoun via Flickr