Political MoJo

VIDEO: Elizabeth Warren Grills Treasury Secretary On Too Big To Fail

| Tue May. 21, 2013 5:03 PM PDT

At a Senate banking committee hearing Tuesday, Sen. Elizabeth Warren (D-Mass.) grilled Treasury Secretary Jack Lew on too-big-to-fail banks—financial institutions that are so large that their failure would endanger the entire financial system.

"How big do the biggest banks have to get before we consider breaking them up?” she asked.

Too big to fail is far from over. The largest financial institutions are still ballooning in size. In the past few years, banks have been beset by one scandal after another—from money laundering, to rate-fixing, to foreclosure fraud, and have mostly received wrist-slaps as punishment—probably because, as Attorney General Eric Holder recently warned, prosecuting too-big-to-fail banks for bad behavior might spook the entire financial system.

Too big to fail almost died three years ago. Warren noted that as the 2010 Dodd-Frank financial reform law was being crafted, an amendment was proposed that would have broken up the banks, but it didn't pass—in large part, she reminded Lew, because the Treasury Department (then under Treasury Secretary Timothy Geithner) was against it.

"Have you changed your position," Warren demanded, referring to the Treasury department. "Or are you still opposed to capping the size of banks?"

Lew responded that "ending to big to fail is our policy and we're aiming to do it." But Warren wouldn't let him weasel out of the question with generalities. "I want to focus you in here," she pushed. "My question is about capping the size of largest financial institutions."

Lew refused to commit. "Our job right now is to implement … Dodd-Frank," he said. "I think this is not the time to be enacting big changes."

"Let me try the question a different way," Warren persisted. "How big do the biggest banks have to get before we consider breaking them up?" she asked, adding that the largest American banks are 30 percent larger than they were five years ago. "Do they have to double in size? Triple in size? Quadruple in size? Before we talk about breaking up the biggest financial institutions?"

Lew said that too big to fail "is an unacceptable policy", but urged Warren to have some patience.

She'd have none of Lew's excuses: "What we've seen… is one scandal after another in these largest financial institutions," she said. "It's clear they have not changed their risk bearing practices nor have they decided that they're suddenly going to start following the law."

Advertise on MotherJones.com

Judges Strike Down Arizona's 20-Week Abortion Ban

| Tue May. 21, 2013 3:48 PM PDT

On Tuesday, judges on the US Ninth Circuit Court of Appeals struck down an Arizona law that would have banned abortions at 20 weeks. The judges called the law "unconstitutional under an unbroken stream of Supreme Court authority." This is the first 20-week ban to be struck down in court.

The judges wrote that Arizona "may not deprive a woman of the choice to terminate her pregnancy at any point prior to viability," echoing the Supreme Court's ruling in Roe v. Wade 40 years ago that abortion should be legal up to the point that a fetus is can survive outside of the womb, which is usually construed as 24 weeks.

Anti-abortion state legislatures have passed a number of laws in recent years shortening the period in which abortion is legal. Arizona's 20-week ban was not the first in the US, but it was the first one that national reproductive rights groups challenged in court. It was, at the time, the strictest in the country, as it dated the 20 weeks from a woman's most recent menstruation rather than from the date of conception. (Taking basic biology and math into account, the bill actually banned abortion 18 weeks after the woman became pregnant). But after the Arizona law was passed in April 2012, other states passed even stricter rules; Arkansas banned abortions at 12 weeks in March 2013, and North Dakota banned them at 6 weeks a few weeks later.

Meanwhile, an anti-abortion lawmaker from Arizona has been trying to export the law. Republican Congressman Trent Franks introduced a bill last week that would impose a 20-week ban in Washington, DC as well.

Reproductive rights groups hope that Tuesday's ruling sends a warning to other states that might consider similar restrictions. "Today's decision is a huge victory in the fight to protect women's fundamental reproductive rights, and it should send a clear message to anti-choice politicians that their attempts to deprive pregnant women of critical health care are clearly unconstitutional and will not hold up in court," said Nancy Northup, president of the Center for Reproductive Rights, which joined with the ACLU to challenge the Arizona law.

The Center for Reproductive Rights also filed suit against another anti-abortion law in North Dakota earlier this month, and is expected to challenge the state's 6-week ban as well. CRR and the ACLU also won a preliminary injunction last week blocking Arkansas' 12-week ban from taking effect.

Former IRS Chief: "I Certainly Am Not Personally Responsible" for Tea Party Scandal

| Tue May. 21, 2013 2:00 PM PDT
Former IRS Commissioner Doug ShulmanFormer IRS Commissioner Doug Shulman.

Former IRS Commissioner Douglas Shulman, a George W. Bush appointee who ran the tax agency when low-level employees wrongly singled out conservative groups for special scrutiny, testified on Tuesday before Congress for the first time since the scandal erupted on May 10. Senators hoping for new revelations or a mea culpa from Shulman, however, were left wanting. He said little about why IRS staffers targeted tea party groups and others for some 18 months, and he repeatedly downplayed his own role.

But one thing was clear from the hearing: The fallout from the IRS' tea party debacle isn't over, and its implications may spill over into campaign finance rules. J. Russell George, the Treasury Department inspector general who investigated the IRS' actions, said his office will be auditing how the IRS oversees politically active nonprofit groups and presumably how the agency determines which nonprofits are too political. That's potentially big news for the money-in-politics world: Nonprofits spent hundreds of millions of dollars during the 2012 campaign, and as the IRS scandal has further revealed, the agency's process for determining how much politicking by a group runs afoul of regulations is vague and confusing.

Conviction of Genocidal Dictator Efrain Rios Montt Overturned by Guatemala's Highest Court

| Tue May. 21, 2013 10:43 AM PDT
Efrain Rios Montt

On Monday, Guatemala's Constitutional Court overturned the conviction of former dictator Efraín Ríos Montt, an army general who ruled as de facto president from 1982 to 1983. On May 10, Ríos Montt, 86, was found guilty by a three-panel tribunal on charges of genocide and crimes against humanity, and sentenced to 80 years in the slammer; he is the first former head of state in the Americas to stand trial for genocide. But less than two weeks later, Guatemala's highest court threw out all proceedings in the case dating back to April 19, in part thanks to an aggressive lobbying effort by the nation's most influential business federation. Due to the court's 3-2 decision, the way forward—for Ríos Montt's opponents, for his supporters—has been thrown into question. After Monday's ruling, Ríos Montt was sent back to house arrest, where he had been since the case started in January 2012.

Here's a quick reminder of who Efraín Ríos Montt is, and what he did.

1. During his 17-month stint as military dictator, he oversaw the genocide by his armed forces of at least 1,771 members of the indigenous Maya Ixil population. Roughly 100 survivors testified during the course of his trial.

Efrain Rios Montt newspaper trial
This Guatemala City newspaper reads, "Ríos Montt charged with 11 massacres." Via Granito: How to Nail a Dictator/Facebook

2. Along with the mass murder, his military regime carried out a policy of forced displacement, forced assimilation, torture, systematic rape and sexual assault, starvation, and arbitrary execution against those labeled as political opponents.

3. Due to his staunchly anti-communist attitudes during the Guatemalan Civil War, the general received plenty of financial, military, and political support from President Ronald Reagan's administration and friends in the United States. (Ríos Montt is an alumnus of the School of the Americas, a Department of Defense-owned institute and notorious tyrant-mill at Fort Benning, Georgia that taught torture, blackmail, death-squad tactics, and counter-insurgency to numerous Latin American strongmen and human rights abusers.)

Here's Reagan speaking to reporters following his meeting with Ríos Montt in San Pedro Sula, Honduras, on December 4, 1982:

Well, ladies and gentlemen, President Ríos Montt and I have just had a useful exchange of ideas on the problems of the region and on our bilateral relations...I know that President Ríos Montt is a man of great personal integrity and commitment. His country is confronting a brutal challenge from guerrillas armed and supported by others outside Guatemala. I have assured the president that the United States is committed to support his efforts to restore democracy and to address the root causes of this violent insurgency. I know he wants to improve the quality of life for all Guatemalans and to promote social justice. My administration will do all it can to support his progressive efforts.

For all the accusations of obscene human rights violations, Reagan maintained that Ríos Montt was simply getting a "bum rap" from naïve activists.

White House Learned of IRS Tea Party Probe Early—But Didn't Tell Obama

| Tue May. 21, 2013 7:23 AM PDT

President Obama's chief of staff and the White House's top lawyer got wind of an inspector general's investigation into the IRS' singling out of tea partiers and conservative groups several weeks before the report went public. But those officials, according to press secretary Jay Carney, did not tell Obama. The president says he learned about the IRS' screw-up only after an agency director apologized on Friday, May 10, for employees having targeted conservative groups—an apology that went viral.

Carney told reporters Monday it was "appropriate" that Obama wasn't told of the damning IG report beforehand. And the president, he said, wasn't angry to not have been given early notice. "He believes it's entirely appropriate that, you know, some matters are not appropriate to convey to him and this is one of them," Carney said.

As we've reported, a Treasury Department inspector general, at the behest of angry members of Congress, spent nine months probing whether IRS staffers targeted tea party groups and other right-leaning conservative outfits who had applied for tax-exempt status under the 501(c)(4) section of the tax code. Although staffers did in fact zero in on conservative groups, the IG's report concluded that political bias did not play a role. Instead, staffers used "inappropriate criteria"—catchwords such as "tea party," "patriot," or "9/12 Project" (the latter a creation of conservative talk show host Glenn Beck)—to look for groups that might've been too involved in politics. (Groups that file their taxes under 501(c)(4) can dabble in politics, but it can't be their "primary activity.") IRS employees got away with this due to "insufficient oversight" by the higher-ups in Washington, the report found.

Testifying before Congress last week, Steven Miller, the acting IRS commissioner who will soon resign as a result of the agency's tea party debacle, echoed the IG's findings. He said IRS employees made "foolish mistakes" and that the agency's behavior was "obnoxious." But those employees did not have a grudge against conservative groups. Their errors, Miller said, "were made by people trying to be more efficient in their workload selection."

"What did they know" and "when did they know it" are two big questions looming over the IRS scandal. Here's what we know right now: Almost a month before IG's report came out last Tuesday, a staffer in the office of White House counsel Kathryn Ruemmler learned of the report. Ruemmler herself was briefed on April 24. Soon after, she informed Denis McDonough, Obama's chief of staff. Carney said the president was not told of the investigation because there was nothing to be done about it. Also the White House did not want to appear to be interfering with an inspector general's report on such a sensitive issue. There is no evidence yet that Obama or his top aides knew about the investigation before this year.

Here is the IG's report:

 

Why the Government Surveillance of Fox's James Rosen Is Troubling

| Tue May. 21, 2013 7:05 AM PDT
top secret

On Friday, I wrote a piece for Mother Jones speculating that government spying on press communications may not be "unprecedented," as Associated Press head Gary Pruitt put it, but simply rarely disclosed. The rules requiring disclosure of such surveillance, after all, only appear to apply to "subpoenas" for "telephone toll records"; they do not cover other secret tools deployed by federal law enforcement, such as National Security Letters. Even outside the shadowy world of intelligence, as federal magistrate judge Stephen Smith has observed, court orders granting government access to electronic communication records routinely remain secret indefinitely. I suggested that there could be quite a few other cases like the AP story that we've never learned about, even if the Justice Department has been scrupulously following its own rules, because such cases might not involve grand jury subpoenas for phone logs.

It is rare for someone who writes about the intelligence community to have speculation of this sort confirmed almost instantly, but a report in the Washington Post Monday has shined a spotlight on another hitherto unreported leak investigation in which the Justice Department obtained a warrant to read the email of Fox News reporter James Rosen. The warrant in that case was sealed for over a year; it appears to have remained publicly unnoticed until today—nearly three years after the search of Rosen's email was authorized. Should anyone believe this is the only such instance of the government snooping into a reporter's email that hasn't yet come to light?

The Rosen case is especially unsettling because the warrant affidavit suggests that Rosen himself could be subject to prosecution under the Espionage Act, on the grounds that his alleged encouragement to a source to provide classified information amounted to "conspiracy." The attempt to redefine a routine and necessary part of national security reporting as crime is unprecedented.

Whether Rosen is prosecuted or not, the Justice Department targeting a reporter as a possible "co-conspirator" is troubling. The case against National Security Agency whistleblower Thomas Drake—who revealed massive waste in the agency's deals with intelligence contractors—ultimately collapsed. The information he'd revealed was embarrassing to the government, not dangerous to national security. But Drake's life was shattered, and a clear message sent to others who might seek to embarrass the government. A similar dynamic is at play in this case. Reporters are already feeling the chilling effects of the AP leak investigation. The government may or may not succeed in jailing leakers (or, perhaps at some point, reporters), but the point is to ensure that government sources are too scared to talk to press without approval.

That might sound like a fine idea if at risk were only vital national security secrets whose publication would endanger the United States. But as even top intelligence officials have acknowledged, overclassification is rampant in government. Much basic information, without which effective national security reporting would be impossible, is reflexively classified, whether or not it poses any realistic security risks, and reporters routinely discuss such information with sources. In practice, that means the government can pick and choose which leakers to go after—and which ones to wink at, because they're serving the administration's interests. No doubt, the government does have an interest in—and an obligation—to protect legitimate secrets, but an aggressive campaign that targets reporters and subjects them to broad and secret intrusions (and maybe prosecutions as well) will undermine a necessary check on government power and prevent the public from learning crucial information about what is done in its name.

A version of this post was first published on Cato at Liberty.

Advertise on MotherJones.com

4 Ways Apple CEO Tim Cook Spins Tax Avoidance

| Tue May. 21, 2013 6:56 AM PDT

"I've never seen anything like this and we don't know anybody who has ever seen anything like this," Sen. Carl Levin (D-Mich.) said yesterday of Apple's baroque tax avoidance strategies. But Apple CEO Tim Cook, who will testify before the Senate Subcommittee on Investigations today, is  aggressively spinning what Levin called "gimmickry" as patriotic, commonsensical, and no big deal. Here are the most remarkable talking points from his pre-released Senate testimony:

1. Apple's taxes are straightforward.
Spin: "Apple does not use tax gimmicks."
Reality: Yet somehow, according to an analysis by Citizens for Tax Justice, Apple has paid almost no income taxes to any country on its $102 billion in offshore holdings. Between 2009 and 2012, Apple avoided paying US taxes on some $74 billion in income, an amount equal to the entire budget of Florida.

2. Paying American salaries through a subsidiary based in Ireland saves American jobs.
Spin:
Apple and its Irish subsidiaries are engaged in a "cost sharing agreement" whereby the subsidiaries "partially fund R&D costs incurred by Apple Inc." The agreements "play an important role in encouraging companies like Apple to keep R&D efforts in the US."
Reality: This is how Apple brings back money from overseas without having to pay federal taxes on it.

3. Apple is awesome because it runs huge data centers right here in the United States.
Spin: "In 2010, Apple built one of the country's largest data centers in North Carolina, and it is in the process of constructing two additional data centers in Oregon and Nevada."
Reality: Apple only agreed to build the North Carolina data center after getting a $46 million state tax break, its local property taxes halved, and  local taxes on its assets slashed by 85 percent—all for creating 50 jobs. To build its data center in deficit-plagued Nevada, it extracted an $88 million state tax break, the largest in state history. And Apple chose to build a data center in Prineville, Oregon, because Oregon has no sales tax and Prineville is in a "rural enterprise zone" that offers a 15-year property tax exemption.

4. "Apple supports comprehensive corporate tax reform."
Spin: "Apple recognizes that these and other improvements in the US corporate tax system may increase the company's taxes."
Reality: Cook wants to reduce the tax that corporations pay when they repatriate profits, which could save Apple a lot of money considering that 61 percent of its profits are earned overseas. But lowering the repatriation tax probably wouldn't benefit most Americans. After Congress enacted a one-time repatriation holiday in 2004, a study by the National Bureau of Economic Research found that 92 percent of the repatriated cash was used to pay for dividends, share buybacks, or executive bonuses.

"Mark Is Not Going To Die In Vain": New Yorkers Rally After Murder of Gay Man

| Tue May. 21, 2013 3:00 AM PDT
The site where Mark Carson was shot on West 8th Street, New York. Police say the killing was a hate crime. James West

Blinding afternoon sun lit the biggest gay rights demonstration in years in New York's West Village Monday. The LGBT community and its supporters, including a couple of mayoral candidates, marched in the wake of a murder that has capped a month-long spate of homophobic violence.

Demonstrators—police say 1,500, organizers say many hundreds more—marched through the leafy streets that gave birth to the gay rights movement to the  corner where Mark Carson, 32, was shot in the face and killed Friday night as he walked with a friend. Police have charged Elliot Morales, 33, with second-degree murder and a hate crime, accusing him of hurling homophobic slurs at Carson.

Flourine Bompars, Carson's aunt, addressed the crowd, calling Carson "a loving and caring person" who will not be forgotten.

The audience applauded and cheered loudly after Bishop Zachary Jones of Unity Fellowship Church of Christ, East New York, shouted, "There is room for everyone at the table of love... and we will march and we will come closer together to make sure everyone has the right to be who they are."

Protestors march through New York's west village. Police and community groups say there has been an upwing in "bias" crimes. James West

The randomness of Carson's death has sent a  jolt through the gay community. "It's clear that the victim here was killed only because and just because he was thought to be gay," the police commissioner, Ray Kelly, said on Sunday.

Community leaders say Carson's death is part of a worrying citywide trend: an uptick in violence against gay people, with five incidents this month alone. Police say "bias crimes" have risen this year compared to the same period last year, from 13 to 22, and advocates say that was on top of rising reports of violence from the previous year.

"The most pain is emotional," said Nick Porto, a 27-year-old fashion designer from Brooklyn, who was assaulted this month with his boyfriend Kevin Atkins, 22, as they walked near Madison Square after a Knicks game. (Police have released a video of the suspects).

"Mark is not going to die in vain. We are not going to get beat up in vain," Porto said after the rally. "Gay rights, we're still fighting for them, and the fight is not over. We need to protect each other."

Nick Porto (L) and Kevin Atkins, a couple, were assaulted after a Knicks game on May 5th. James West

But the source of the increase in violence is hard to pin down, say community leaders. Some who spoke at the rally blamed the increased visibility of gay rights: With a greater presence comes greater pushback, the reasoning goes. Sharon Stapel, executive director of the New York Anti-Violence Project, says victims are also feeling more comfortable reporting such crimes.

"But I also think we're still living in a country where it's lawful to discriminate against LGBT people, and that sends a message that it's OK to be hateful towards LGBT people," she said.

The protest also formed the backdrop to the race for New York City mayor. City Council Speaker Christine Quinn, herself a lesbian, marched alongside relatives of Mark Carson at the head of the rally, but did not speak to the crowd. John Liu, the hyperactive city comptroller who is also a candidate, was at the rally shaking hands and introducing himself.

Nick Porto, the assault victim, admitted he was moved when he looked out across the crowd that filled 8th Street, "My knees got weak, I almost fell, I was just a mess," he said. "It's proof, it's absolute hope in our community, that we will survive this."

"Gay rights isn't just about gay marriage," he told the cheering crowd. "We need to live long enough to share in that opportunity."

John Liu (L), and Christine Quinn with members of the Carson family. Both are running for New York City mayor. James West

 

Virginia Republicans Have a Vagina Problem

| Mon May. 20, 2013 2:53 PM PDT

On Saturday, Virginia state Sen. Mark Obenshain clinched his party's nomination for attorney general in the November election. And much like the rest of the GOP ticket, he's got some baggage. ThinkProgress swiftly unearthed a bill he authored in 2009 that would subject women to legal penalties if they fail to report a miscarriage to the police.

Here's the relevant portion of his bill:

When a fetal death occurs without medical attendance upon the mother at or after the delivery or abortion, the mother or someone acting on her behalf shall, within 24 hours, report the fetal death, location of the remains, and identity of the mother to the local or state police or sheriff's department of the city or county where the fetal death occurred. No one shall remove, destroy, or otherwise dispose of any remains without the express authorization of law-enforcement officials or the medical examiner. Any person violating the provisions of this subsection shall be guilty of a Class 1 misdemeanor.

The penalty for a class 1 misdemeanor is up to 12 months in jail and $2,500 in fines. Obenshain's deputy campaign manager, Jared Walczak, told the Huffington Post that the bill (which never passed) was in response to a 2008 case in which a Virginia college student disposed of her reportedly stillborn baby in a dumpster:

"As sometimes happens, the legislation that emerged was far too broad, and would have had ramifications that neither he nor the Commonwealth's attorney's office ever intended," Walczak said. "Sen. Obenshain is strongly against imposing any added burden for women who suffer a miscarriage, and that was never the intent of the legislation."

Thinking through the legal ramifications of a proposed law seems like it should be standard procedure for someone who wants to be attorney general, but maybe I'm too optimistic.

Obenshain's nomination is only the latest outgrowth of Virginia's vagina obsession, though. In 2012, the state passed an invasive ultrasound law and set ultra-strict new building codes for abortion providers. Rev. E.W. Jackson, the party's nominee for lieutenant governor, has compared Planned Parenthood to the KKK. And then, not to be outdone, there's attorney general Ken Cuccinelli, the Republican gubernatorial nominee, who thinks abortion is just like slavery.

After Girl Expelled From High School and Charged Over Lesbian Relationship, Anonymous Goes on the Offensive

| Mon May. 20, 2013 1:14 PM PDT
Kaitlyn Hunt

When Florida high school student Kaitlyn Hunt was 17, she began dating a 15-year-old teammate on her school's girls' basketball team. Kaitlyn's parents say the parents of the 15-year-old never complained to them about the (consensual) relationship. But a few months after Kaitlyn turned 18, the younger girl's parents had her arrested. She was charged with a felony—"lewd and lascivious battery of a child 12-16 years old." The girl's parents also succeeded in getting her expelled from school by appealing to the school board after the school and a judge refused to grant their request, according to Kaitlyn's mother, Kelly Hunt Smith.

"That is absolutely ludicrous," Smith wrote on Facebook last Friday in a widely shared plea for help. "We need justice in this situation, not to feed into these parents' hates and insanity."

Enter Anonymous, the global hacker collective, which recently has raised eyebrows by pursuing justice for rape victims. In this case, some of the same Anonymous members are rallying behind a girl they feel has been wrongly accused of sexual misconduct. On Saturday, they launched the twitter hashtag #OPJustice4Kaitlyn, and a press release that begins: "Greetings, Bigots."

"The truth is, Kaitlyn Hunt is a bright young girl who was involved in a consensual, same-sex relationship while both she and her partner were minors," reads the release. "She has a big future ahead of her and there are people, thousands of people in fact, that have no intention of allowing you to ruin it with your rotten selective enforcement."