Mojo - September 2011

Chart: Happy Labor Day! (If you're a CEO)

| Fri Sep. 2, 2011 5:34 PM EDT

Just in time for Labor Day, here's a handy illustration of how labor is getting shafted by Corporate America:

Source: Jared Bernstein, Center for Budget and Policy PrioritiesSource: Jared Bernstein, Center for Budget and Policy Priorities

The red line is the share of the economy taken up by wages, salaries etc. The blue line is the share taken up by corporate profits. So the graph shows that corporations have bounced back from the recession even as workers' share of the economic pie continues to narrow.

Why is this happening? Jared Bernstein of the Center for Budget and Policy Priorities, who put together the graph, says companies have raked in the dough by selling into emerging markets while cutting costs through outsourcing and automating domestic jobs. I'd say the demise of unions certainly also plays a role.

As the chart also makes clear, widening income inequality in America is no longer just a matter of stratified wages. Today's investment class—the CEOs, the hedge fund managers, the bankers—owns a stake in an economic system that no longer needs to share much of its wealth with anyone else. In other words, it takes money to make money. And of course, spending some of it to buy off Washington doesn't hurt either.

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Is The Bachmann Super PAC Run By Mother Jones Fans?

| Fri Sep. 2, 2011 4:20 PM EDT
A still of the anti-Perry TV ad that references a Mother Jones blog post.

Keep Conservatives United, a super PAC supporting GOP Rep. Michele Bachmann's presidential bid, has produced an anti-Rick Perry attack ad, set to air in South Carolina after the Labor Day weekend. And it uses a Mother Jones article to make its case that Bachmann is the better—and more to the right—candidate.

The ad, which will begin airing September 7 on CNBC, Fox News, and CNN, pillories Perry for pitching himself as a fiscal conservative and friend of the tea party despite going on spending binges during his decade as Texas governor. Considering Perry's entry into the 2012 race has threatened Bachmann's share of the tea party vote, the gist and tone of the ad aren't unexpected. What is a bit surprising is that this latest Bachmann super PAC ad deploys a Mother Jones blog post to sell Bachmann. Watch the TV spot below; the MoJo promo appears at the 30-second mark, as the voice-over proclaims that "there is an honest conservative, and she's not Rick Perry":

This isn't even the first time Bachmann's super PAC has cited MoJo. But the ad makes it seem as if we were endorsing her as the "honest" one.

Leaving aside the obvious, farcical tangle of questions this presents (like, "Why didn't they just use a National Review post?"), the ad glosses over all the, well, you know... content.

The referenced blog post was written by our DC reporter Andy Kroll on July 19, and the first paragraph starts with a sarcastic jab at how "All that fact-checking must be paying off for Michele Bachmann"—a reference to her penchant for saying things that are patently not true. (This is clearly visible in the ad.)

No doubt, Keep Conservatives United will keep churning out the pro-Bachmann ads. So here are a few other Bachmann-related MoJo heds that we suggest for the super PAC's next spot:

"Michele Bachmann Is Not a Doctor"

"Michele Bachmann Said What!?"

"The Teen Suicide Epidemic in Michele Bachmann's District"

"Michele Bachmann: Crazy Like a Fox"

"Michele Bachmann's Auschwitz Warning"

And, of course:

"Does Michele Bachmann Think the Apocalypse is Imminent?"

This KCU TV spot might be the first Bachmann ad Mother Jones truly endorses. In today's economy, we'll take all the free advertising we can get.

Rick Perry's Secret Progressive Legacy

| Fri Sep. 2, 2011 12:55 PM EDT
Gov. Rick Perry (R-Texas)

Texas, as Amanda Marcotte artfully put it, "is a really big state with a lot of different people in it"—something people often forget when they write about Texas politics. Along the same lines, Rick Perry is a long-serving governor who has done a lot of different things. Many of those things are questionable—his support for the repeal of the 16th and 17th Amendments, for instance, or his penchant for hooking up big-time donors with jobs and contracts.

But some of the stuff he's done has been pretty good. Over at the excellent blog Grits for Breakfast, Scott Henson (who I spoke with for my story on Perry's dubious prison health care privatization scheme) has a helpful roundup of some Perry-approved reforms, mostly on the criminal justice front, that progressives might actually like:

2001: Signed bill requiring local law enforcement to gather racial profiling data, including information on stops and searches. Authority was later given to a state agency to gather them all and publish them online.

2001: Signed the Tulia legislation requiring corroboration for informants in undercover drug stings.

2001: Signed legislation creating Chapter 64 of the Code of Criminal Procedure that facilitated post-conviction DNA testing.

2001: Signed the Texas Fair Defense Act improving county indigent defense systems, establishing minimum qualifications for attorneys.

2001: Became the first governor to sign the DREAM Act allowing children of illegal immigrants to attend college at in-state rates.

And so on. More recently, he's signed some pretty progressive sentencing legislation designed to prevent overcrowding in state jails (by about 17,000 beds), and placing a greater emphasis on treatment versus incarceration for drug users. If this seems incongruous, there's a method to it all.

"Perry will focus his energies on supporting policies if, number one, it's not controversial, or number two, somebody who has been directly impacted manages to get his attention," explains Ana Yanez-Correa, executive director of the Texas Criminal Justice Coalition. "So for example you have the Tim Cole family [Cole was posthumously pardoned by Perry after being executed for a crime he didn't commit]. Well, his family had talked to the governor so it hit home for him... The same thing for the DREAM Act kids. In 2001, Texas was the first state to pass a DREAM Act version and Perry has defended his stance on the DREAM Act. But he's actually seen these kids that are valedictorians. So if it hits home to him...he'll be like, 'okay, let's do it."

There might be something to that. As one longtime Perry-watcher explained to Jonathan Martin for his SEO-optimized "Is Rick Perry Dumb?" story, the GOP frontrunner has a pretty linear approach to knowledge: "If he should know about John Locke, he'll know about John Locke... If it's not on his schedule, it's irrelevant to him." The difficulty is in getting him to pay attention.

On the other hand, given Perry's widely condemned record on the death penalty (presiding over the execution of Cameron Todd Willingham, who was likely innocent, and then squashing the ensuing investigation), and his cozy relationship with private prison lobbyists (see here and here), these bright spots on criminal justice do have a sort of "How was the play, Mrs. Lincoln?" quality to them.

The Fall-Out Is Far From Over in Mortgageland

| Fri Sep. 2, 2011 12:28 PM EDT

When it comes to the mortgage fraud fiasco, the federal government has a message for the nation's biggest banks: You're not out of the woods yet.

The Federal Housing Finance Agency (FHFA), which oversees housing giants Fannie Mae and Freddie Mac, is prepping lawsuits against more than a dozen large banks for allegedly deceiving the government on the quality of mortgage securities that the banks peddled during the housing bubbble, the New York Times reports. Those banks include JPMorgan Chase, Goldman Sachs, Deutsche Bank, and Bank of America, the nation's largest banking institution.

At the crux of the suits is this: The banks, which put together the securities using piles of home loans and later sold huge amounts of these securities to Fannie and Freddie, failed to properly vet the quality of the loans and missed evidence of falsified borrower income figures. In short, the feds say, the banks didn't do their homework as required by securities law.

Fannie and Freddie—that is to say, the taxpayers—lost $30 billion partly because of these disastrous securities deals, according to the Times.

Here's more:

The impending litigation underscores how almost exactly three years after the collapse of Lehman Brothers and the beginning of a financial crisis caused in large part by subprime lending, the legal fallout is mounting.

Besides the angry investors, 50 state attorneys general are in the final stages of negotiating a settlement to address abuses by the largest mortgage servicers, including Bank of America, JPMorgan, and Citigroup. The attorneys general, as well as federal officials, are pressing the banks to pay at least $20 billion in that case, with much of the money earmarked to reduce mortgages of homeowners facing foreclosure.

And last month, the insurance giant American International Group filed a $10 billion suit against Bank of America, accusing the bank and its Countrywide Financial and Merrill Lynch units of misrepresenting the quality of mortgages that backed the securities AIG bought.

Bank of America, Goldman Sachs and JPMorgan all declined to comment. Frank Kelly, a spokesman for Deutsche Bank, said, "We can't comment on a suit that we haven’t seen and hasn’t been filed yet."

As Yves Smith points out, the suits aren't a surprise; FHFA chief Ed DeMarico has been eyeing such litigation for more than a year. But they come at a difficult time for the banks and the housing industry.

There's the massive state attorneys general settlement on the way. Then there's New York Attorney General Eric Schneiderman, a favorite of consumer advocates who was kicked off the committee spearheading the mortgage settlement, who has said he'll seek to press on with fraud investigations of his own regardless of how the settlement comes out. And there are those pesky reporters who continue to dig up instances of foreclosure fraud, reporting that suggests that while banks had promised to correct fraudulent practices, in some cases they've continued fabricating crucial foreclosure documents.

Smith, one of the best chroniclers of the mortgage fiasco, sums up the state of affairs this way: "The more rocks you turn over in mortgage land, the more creepy-crawlies emerge."

Obama: (Still) Killing Terrorists the Bush Way

| Fri Sep. 2, 2011 12:10 PM EDT

On an upcoming edition of PBS' Frontline, former CIA lawyer John Rizzo argues that the CIA under President Obama is straight-up Bushian. "With a notable exception of the enhanced interrogation program, the incoming Obama administration changed virtually nothing with respect to existing CIA programs and operations," Rizzo says. (Watch a clip of the Rizzo interview here.) Glenn Greenwald points out that this shouldn't be news to anyone who's been paying attention.

The real news: Frontline also reports that, during the 2008 campaign, Obama promised the CIA that it he had every intention of staying the course set by the Bush administration. That information, if it had come out at the time, might have damaged Obama's end-the-war, stop-the-torture campaign mojo.

The Bush administration's cavalier disregard for the limits of presidential power legitimized certain parts of the playbook for future executives of either party. Who couldn't use a little more rampant, unchecked executive power? Here's Greenwald:

Not only civil libertarians but even right-wing ideologues eager to depict Obama as "Soft on Terror" have been forced repeatedly to acknowledge this continuity and to praise Obama for it.…[Former Bush Assistant Attorney General] Jack Goldsmith in The New Republic in May, 2009, made the insightful point that not only was Obama continuing these core Bush/Cheney Terrorism policies, but was actually strengthening them by, among other things, converting them from right-wing dogma into bipartisan consensus….given how much Democrats once opportunistically pretended to find these policies so deeply offensive and intolerable—the more this realization spreads, the better. 

 

One Amusing Tidbit from the CIA Rendition Lawsuit Documents

| Fri Sep. 2, 2011 11:02 AM EDT

The Washington Post, the Associated Press, and the Guardian reported Thursday on a court fight between two firms involved in the Central Intelligence Agency's extraordinary rendition program. These sorts of billing disputes between CIA contractors happen occasionally, but they don't normally make it far enough to reveal anything—usually, the government steps in and invokes the state secrets privilege and the case gets thrown out of court. But this time, someone messed up, and the case went forward, leading to the creation of hundreds of pages of almost entirely unredacted records that touch on many previously unrevealed aspects of the CIA program. (The international human rights group Reprieve first discovered the documents.)

The two firms involved in the court battle are Richmor Aviation, a New York-based company that operated charter planes, and Sportsflight Air, which served as a middleman between charter firms like Richmor and companies that needed planes—in this case, the government contracting giant DynCorp.

The plane that Richmor provided to SportsFlight, with the tail number N85VM, was just one of many used in the extraordinary rendition program. But N85VM, which was owned by Boston Red Sox co-owner Phillip Morse, was particularly notorious not only for being owned by Morse but also for being used in the case of Abu Omar, an Italian imam whose bungled 2005 rendition Peter Bergen covered for Mother Jones. (Afterward, the Italian judiciary sought to prosecute the CIA agents involved in the rendition. I interviewed Steve Hendricks, who wrote a book on the affair, last year.) The Post and the AP stories both note that the Richmor-Sportsflight records show N85VM traveling all over the world, with stops not just in Guantanamo Bay, but also in foreign countries famous for hosting secret CIA prisons or torturing prisoners on America's behalf.

The Associated Press uncovered one particularly interesting tidbit in the court records. When Richmor flew to foreign countries under the Sportsflight-Dyncorp contract, its pilots and crew were provided with letters from a State Department official, Terry A. Hogan, that said the flights entailed "global support for U.S. embassies worldwide." There's just one problem: Hogan doesn't appear to be a real person:

The AP could not locate Hogan. No official with that name is currently listed in State's department-wide directory. A comprehensive 2004 State Department telephone directory contains no reference to Hogan, or variations of that name — despite records of four separate transit letters signed by Terry A. Hogan in January, March and April 2004. Several of the signatures on the diplomatic letters under Hogan's name were noticeably different.

Lawrence Wilkerson, who was chief of staff for Secretary of State Colin Powell from 2001 to 2005 during the Bush administration, said he was not familiar with the Hogan letters and had not been aware of any direct State Department involvement in the CIA's rendition program. Wilkerson said the multiple signatures would have raised questions about the documents' authenticity.

This makes a lot of sense. The CIA is never especially eager to let other government agencies—especially the State Department—in on its most secret activities. So as ProPublica's Eric Umansky (a Mother Jones alum) notes, it's possible these documents were forged. (State declined to comment to ProPublica or the AP on the matter.)

There's some (darkly) funny stuff in the court documents, which are mostly incredibly banal. (I obtained copies of them yesterday.) When Richmor's president, Mahlon Richards, tells the judge, Paul Czaka, that Morse owned the plane used for the rendition flights, Czaka (presumably a Yankees fan) says, "I guess that concludes the case as far as you're concerned. We can go home now—or I should say, get the heck out of my courtroom."

But my favorite bit of the trial comes when William Ryan, one of the attorneys for Richmor, is questioning Richards, the firm's president. Throughout the case, all parties were fairly careful about describing exactly what Richmor was doing for SportsFlight (and for DynCorp, and ultimately for the government), referring to the passengers as "government personnel and their invitees." This bit of the trial centers around whether Richmor's ultimate client, the government, was happy with Richmor's performance. Some confusion ensues:

No, I imagine the government's "invitees" would not appreciate the service that Richmor was providing.

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Mitt Romney's Latest Endorser Called Catholic Bishop "Pedophile Pimp"

| Fri Sep. 2, 2011 9:55 AM EDT
GOP presidential candidate Mitt Romney.

GOP presidential candidate Mitt Romney's latest endorsement comes from New Hampshire State Rep. DJ Bettencourt, the number two Republican in the state's House of Representatives. "I think Gov. Romney's experience in Massachusetts best suits him to take on the challenges of the country," Bettencourt told Politico.

Bettencourt would be just another relatively obscure state legislator—especially in New Hampshire, where the state House includes a whopping 400 members—except for a particularly inflammatory remark he made in April. On his Facebook page, Bettencourt called Bishop John McCormack a "pedophile pimp" after the bishop spoke out against the state House leadership's proposed budget plan at a statehouse rally. That budget called for deep, painful cuts to health-care spending, services for the disabled, and education funding. Here's what Bettencourt wrote on his Facebook page:

"Would the Bishop like to discuss his history of protecting the 'vulnerable'? This man is a pedophile pimp who should have been led away from the state House in handcuffs with a rain coat over his head in disgrace. He has absolutely no moral credibility to lecture anyone."

Bettencourt's criticism referred to a 2002 settlement with New Hampshire prosecutors in which the diocese that included McCormack admitted to shielding abusive priests. It agreed to audits of its handling of complaints that minors had been sexually abused. Bettencourt later said he'd been "undiplomatic" in his attack on McCormack.

In New Hampshire's rough-and-tumble legislature, of course, Bettencourt was not alone in unleashing nasty rhetoric on budget protesters. The speaker of the state House, William O'Brien, called those protesting the GOP-backed budget "thugs"; the House finance committee chairman, Ken Weyler, told protesters to "shut up"; and a freshman state legislator, Martin Harty, said he supported eugenics and also a world without "defective people." (Harty later said his comments were a joke.)

Catholics United, a non-partisan advocacy group, has called on Romney to reject Bettencourt's endorsement based on his attack on Bishop McCormack. "[Bettencourt] attacked the character of a religious leader for choosing to stand with the poor and working class," James Salt, executive director of Catholics United, said in a statement. "By accepting this endorsement, Mitt Romney raises concerns amongst Catholic voters that he approves of Bettencourt's corrosive and disrespectful campaign tactics."

Rick Perry's 235th Execution Won't Come Yet

| Fri Sep. 2, 2011 6:00 AM EDT
Texas Gov. Rick Perry has presided over more executions than any governor in modern American history.

Update: On Monday afternoon, despite a late push for a retrial from a prosecutor who helped convicted him, the Texas Board of Pardons and Paroles denied Duane Buck's petition for clemency. Buck will be executed as scheduled on Thursday, unless Perry or the district attorney intervene to grant a 30-day stay of execution. This post was originally published on September 2 and updated on September 13 with new information.

Update II (September 15): On Thursday evening the US Supreme Court issued a temporary stay of execution, giving it time to review the case, Reuters reported.

A Texas inmate sentenced to death—in a racially charged case that now-Sen. John Cornyn (R-Texas) said was inappropriately decided—has petitioned Gov. Rick Perry and his state parole board for clemency, giving the GOP presidential candidate two days to decide whether to commute the sentence or grant a temporary stay of execution. Last week, one of the Harris County prosecutors who helped secure Buck's conviction wrote a letter to Perry urging him to grant a retrial. In 10 years as governor, Perry has presided over 234 executions, more than any other governor in modern history; only once has he granted clemency in a case where the Supreme Court hasn't already mandated it. Now, just as he steps onto the national stage, Perry will have to make what looks like a tough call—with GOP primary voters watching.

The inmate, Duane Edward Buck, is set to be executed by lethal injection on September 15 for murdering two people at the home of his ex-girlfriend in 1995. The issue at hand isn't Buck's innocence, but the means by which his death sentence was obtained. Prosecutors firmly established Buck's guilt, but to secure a capital punishment conviction in Texas they needed to prove "future dangerousness"—that is, provide compelling evidence that Buck posed a serious threat to society if he were ever to walk free. They did so in part with the testimony of a psychologist, Dr. Walter Quijano, who testified that Buck's race (he's African American) made him more likely to commit crimes in the future. (Quijano answered in the affirmative to the question of whether "the race factor, [being] black, increases the future dangerousness for various complicated reasons.")

The All-Time 10 Worst Military Contracting Boondoggles

| Fri Sep. 2, 2011 6:00 AM EDT

After three years, the bipartisan Commission on Wartime Contracting completed its business this week. In its final report to Congress (PDF), it estimates that the federal government has lost between $31 and $60 billion to contractor fraud and waste since the wars in Afghanistan and Iraq started. "The government was not prepared to go into Afghanistan in 2001 or Iraq in 2003 using large numbers of contractors, and is still unable to provide effective management and oversight of contract spending," said commission co-chairman Michael Thibault.

Beyond its bureaucratic title ("Inattention to contingency contracting leads to massive waste, fraud, and abuse"), the most interesting chapter of the commission's 248-page report reads like a greatest-hits list of expensive bloopers that make that famous $600 Pentagon toilet seat look like a bargain. In ascending order of egregiousness, here are the top 10 war-contractor boondoggles detailed in the report:

10. Welfare for warlords: When the Pentagon hired Afghan big-rig drivers to transport supplies as part of its Host Nation Trucking program, it forgot to guarantee the truckers' safety. So the truckers spent as much as 20 percent of their contract money paying off local bad guys for protection. A 2010 congressional report titled Warlord, Inc. (PDF) concluded that "The HNT contract fuels warlordism, extortion, and corruption, and it may be a significant source of funding for insurgents."

We're Still at War: Photo of the Day for September 2, 2011

Fri Sep. 2, 2011 5:57 AM EDT

Securing The Landing Zone

US Army 1st Sgt. Gerald Eagan, with the 6th Engineer Battalion, throws his rucksack in front of him while pulling security on a remote mountain landing zone during a heliborne insertion mission while participating in the Order of the Arctic Sapper competition Aug. 17, 2011, at Joint Base Elmendorf-Richardson in Alaska. Six teams of eight to 11 soldiers competed in mountain climbing, rappelling, river crossing, and other combat engineer events to be inducted into the Order of the Arctic Sapper. US Air Force photo by Justin Connaher.