Andy Kroll

Andy Kroll

Senior Reporter

Andy Kroll is Mother Jones' Dark Money reporter. He is based in the DC bureau. His work has also appeared at the Wall Street Journal, the Guardian, Men's Journal, the American Prospect, and TomDispatch.com, where he's an associate editor. Email him at akroll (at) motherjones (dot) com. He tweets at @AndyKroll.

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What Sheldon Adelson and Barack Obama Have in Common

| Tue Feb. 21, 2012 1:48 PM EST
Casino mogul Sheldon Adelson

The media have jumped all over casino mogul Sheldon Adelson's remark in a new interview with Forbes that he would spend up to $100 million of his fortune to elect Newt Gingrich president. Such a donation would be unprecedented in American history and would rock the GOP presidential race. Adelson and his wife have already pumped $11 million into the pro-Gingrich super-PAC Winning Our Future, helping resuscitate Gingrich's campaign, and reportedly plan to give $10 million more.

But what pops out even more in the Forbes interview is Adelson's take on super-PACs, which can raise and spend unlimited sums of money to influence elections so long as they don't coordinate with candidates or campaigns. Put simply, Adelson doesn't like them. "I'm against very wealthy ­people attempting to or influencing elections," he says. "But as long as it's doable I'm going to do it." That sounds an awful lot like the man Adelson is trying to defeat: President Barack Obama.

Earlier this month, Obama, who had railed against super-PACs, changed his tune, urging his donors to give to the pro-Obama super-PAC Priorities USA Action. Obama's campaign manager, Jim Messina, explained that the president's shift grew out of the realization that "we can't allow for two sets of rules in this election whereby the Republican nominee is the beneficiary of unlimited spending and Democrats unilaterally disarm." Obama didn't suddenly warm to super-PACs; he realized, as Sheldon Adelson has, that to compete you have to use the tools available to you.

Adelson, for his part, is unabashed about his support for Gingrich. "I have my own philosophy and I'm not ashamed of it," he says. "I gave the money because there is no other legal way to do it. I don't want to go through ten different corporations to hide my name. I'm proud of what I do and I'm not looking to escape recognition."

Adelson's beef with Obama, he insists, is not personal, but instead over what he calls "socialist" policies aimed at redistributing wealth in America. According to Forbes, Adelson's net worth has leapt by $21.6 billion while Obama's been president—more than any other person in America.

Occupy Wall Street's New Strategy: A Super-PAC?

| Thu Feb. 16, 2012 1:17 PM EST
Hundreds of Occupy Wall Street activists demonstrate and march against Trinity Church in the public areas of Duarte Square in Lower Manhattan.

Not long ago, John Paul Thornton, a 32-year-old mental health worker in Decatur, Alabama, was clicking around Facebook when he noticed someone had posted a video of satirist Stephen Colbert talking about his super-PAC, a long-running gag on the show. Thornton, an active member of the Occupy movement in his home state, thought to himself, "Wow, it would be really cool if Occupy had one of those."

So, last week, Thornton went ahead and filed papers with the Federal Election Commission to create...the Occupy Wall Street Political Action Committee. Unlike Colbert's Americans for a Better Tomorrow, Tomorrow, though, Thornton says in his first interview on the subject that OWS PAC is no joke.

Newly published FEC documents show Thornton requesting to establish his group as a super-PAC, the type of political outfit that can spend and raise unlimited money so long as they don't coordinate with candidates. The documents list Occupy Wall Street as a "connected organization," with a street address of "NONE AND EVERYWHERE" in the city of "ALL OF THEM." Thornton wasn't trying to be cheeky here, he says. Thornton says he plans to launch a website for the super-PAC soon. All he's waiting for is the FEC's blessing.

 

Thornton says he's no Occupy novice. He joined Occupy Huntsville, a 20-minute drive from his home in Decatur, three weeks after the occupation of Zuccotti Park in lower Manhattan began on September 17, and has been involved ever since. He's also been active opposing Alabama's draconian immigration measure, HB 56, which passed in June 2011. "My parents called me a serial dissenter," he says. "I was probably a discontent fetus."

Thornton admits that some members of the Occupy movement, which contends that the political system is broken and seeks to work outside of it, might not take kindly to OWS PAC. "I will admit it's not exactly keeping with strict Occupy ideals," he says. But Thornton doesn't subscribe to the movement's stay-out-of-politics philosophy. "The thinking is, if Occupy is going to evolve and to become an actual political player, it needs to participate in major political games."

Karanja Gacuca, a spokesman for Occupy Wall Street, says it's not surprising that, as the Occupy movement moves forward, someone like Thornton would jump into the political arena. But that's not where OWS is headed. "Occupy Wall Street as a movement rejects the political system as a broken system that needs to be overhauled from the bottom up," Gacuca says. OWS PAC, he adds, is "an alternative action which if it were to be voted on at the general assembly would never pass. But individuals are individuals and we understand that people are going to use the Occupy name to do alternative actions."

Here's the full filing:

 

Are Apple's New China Auditors Toothless Tigers?

| Tue Feb. 14, 2012 2:26 PM EST
Workers on the production line at the Foxconn factory in Shenzhen, China.

Apple caved—sort of. For the first time in its history, the beloved electronics company has started allowing labor inspectors with the Fair Labor Association into the factories that churn out Apple's most popular products, the company said Monday.

The announcement is clearly a reaction to This American Life's searing narrative on workers and working conditions in Chinese factories (including Apple's), "Mr. Daisey and the Apple Factory," as well as the New York Times' devastating "iEconomy" series, which sparked protests at Apple stores nationwide. One of the stories in the series, on the human costs of manufacturing the iPad, revealed dangerous, if not inhumane, working conditions at Apple suppliers. The story begins with this anecdote:

The explosion ripped through Building A5 on a Friday evening last May, an eruption of fire and noise that twisted metal pipes as if they were discarded straws.

When workers in the cafeteria ran outside, they saw black smoke pouring from shattered windows. It came from the area where employees polished thousands of iPad cases a day.

Two people were killed immediately, and over a dozen others hurt. As the injured were rushed into ambulances, one in particular stood out. His features had been smeared by the blast, scrubbed by heat and violence until a mat of red and black had replaced his mouth and nose.

That individual, a 22-year-old college graduate named Lai Xiaodong, would die in the hospital two days later.

It was revelations like this that ignited an outcry about working conditions at Apple suppliers, and pushed Apple into allowing the FLA to inspect suppliers such as Foxconn, the Taipei-based mega-manufacturer that makes iPads and iPhones. But how seriously should we take Apple's announcement?

The FLA, after all, has its own set of critics, who point out that the group is funded by the same companies—Apple, Adidas, and Nike—whose factories the group claims to be independently inspecting. The group also counts 200-plus universities as partners. Times labor reporter Steven Greenhouse quotes labor rights experts who call the FLA "largely a fig leaf" and hardly independent from the companies they're inspecting. FLA chief Jorge Perez-Lopez told Greenhouse the FLA's work isn't swayed by its funders.

There are also larger, more systemic problems here that won't be solved by letting FLA inspectors into Apple factories. Suppliers cooking their books to pass inspections is all-too-common in China, as is the use of off-the-books, secretive "shadow" factories that inspectors never even see. And the auditing industry itself, even self-styled independent auditors, is plagued by bribery (factory bosses paying off inspectors) and corruption, according to labor and manufacturing experts.

Apple's problems in China aren't the result of a few bad suppliers that can be rooted out by inspectors, either. As the group China Labor Watch wrote in a letter to Apple CEO Timothy Cook, the company's problems speak to a conflict at the heart of how Apple does business:

We believe the most basic cause of the problems at your supplier factories is the low price Apple insists on paying them, leaving next to no room for them to make a profit. The demand for astronomically high production rates at an extremely low price pushes factories to exploit workers, since it is the only way to meet Apple's production requirements and make its factory owners a profit at the same time.

To be fair, Apple's problems are not unique. They are faced by the entire electronics industry and its customers as they attempt to manage a global manufacturing system that locates factories wherever the cost of production is cheapest. The key choice Apple has to make as a company is whether it will try to shift the attention of journalists and the public towards the individual factories that make their products, or will sincerely acknowledge its responsibility for these factories' deplorable working conditions and make systemic changes to its supply chain.

Dispatching the FLA into supplier factories won't fix these deep-rooted problems. In a recent email to Apple employees, Cook said the company's reforms would reach "deeper into the supply chain." That's more along the lines of what it will take to truly fix labor problems in countries like China. Anything less is lip service.

The $25 Billion Foreclosure Settlement: Breakthrough or Raw Deal?

| Thu Feb. 9, 2012 5:06 PM EST

On Thursday, after months of closed-door negotiations, plenty of hand wringing, and too many leaks to the media to count, 49 state attorneys general, the Justice Department, and five mega-banks announced they'd reached a legal settlement over fraud in the mortgage servicing and foreclosure processes.

The settlement is worth an estimated $25 billion, according to the Justice Department. The banks involved—Ally Financial, Bank of America, Wells Fargo, Citigroup, and JPMorgan Chase—agreed to reduce principal home loan debt for a million homeowners while paying $2,000 to 750,000 more households that had lost their home to foreclosure. Crucially, the settlement doesn't entirely absolve banks of alleged wrongdoing, leaving the door open for AGs like New York's Eric Schneiderman to proceed with foreclosure fraud lawsuits of their own. Depending on whom you ask, the terms of settlement are a key breakthrough, a first step toward righting the foreclosure abuses of the past decade, or a total sham.

Sen. Sherrod Brown (D-Ohio) called the deal "an important victory for homeowners and communities devastated by the housing crisis." Michael Calhoun, president of the Center for Responsible Lending, said in a statement that the deal "will help build a stronger housing market while keeping more people in their homes. But while a significant step toward fixing the foreclosure crisis, this settlement was never intended or able to provide a comprehensive remedy. Much more work is required."

Some experts and observers, however, were plainly dismissive of the deal. Yves Smith, who runs the blog Naked Capitalism, rattled off 12 reasons why "you should hate" the foreclosure settlement, including the deal's overall price tag, the paltry $2,000 payout for homeowners, and her belief that the deal papers over deeper problems with property titles and the foreclosure process itself. "As we've said before," she wrote, "this settlement is yet another raw demonstration of who wields power in America, and it isn't you and me."

Then again, the AGs' foreclosure settlement was never going to fully address the myriad problems with the foreclosure process. Consider MERS, the industry-backed electronic mortgage registry that greased the foreclosure pipeline and enabled many of the dubious practices that led to the housing crisis. MERS has been in use since 1995; it's an entrenched part of the housing market. It will take much more than a nationwide settlement to tackle the many problems MERS has wrought.

There's also the problem of Fannie Mae and Freddie Mac and their role in the foreclosure crisis. As myself and others have reported, the two government housing giants spawned foreclosure mills, the assembly-line-like law firms that skirted the law as they kicked people out of their homes. They also reportedly squashed a plan to write down the debt of homeowners who owed more than their houses were worth. There's no remedying the foreclosure crisis without reforming Fannie and Freddie.

The settlement, in other words, is far from a cure-all. Best-case scenario, consumer advocates say, the deal is just the beginning of a reckoning for the fraud and abuse that ran rampant. "Today’s announcement of the mortgage foreclosure settlement represents a step toward righting the wrongs committed by the banks," said Phil Angelides, the chair of the now-defunct Financial Crisis Inquiry Commission, "but there are still miles to go. "

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