Is privatization really cheaper?

Buck Naked Politics has a great post exploring the idea that privatization always saves money. A taste:

Why does anyone still blindly assume that corporate employees are more efficient?

Enron employees, for example, thought a corporate art collection would be a fine use of 20-million shareholder dollars. Former Tyco CEO Dennis Kozlowski spent a million shareholder dollars on his wife's weekend birthday bash (he relocated to prison after looting Tyco of $600 million).

Examples such as those, which are hardly uncommon, should cast doubt on the notion that corporate employees are, by nature, more careful than government employees with other people's money.

Moving on to actual government contractors, it continues:

contractor profits -- even reasonable ones -- add to the taxpayers' costs of privatizing government services. Consider Booz Allen Hamilton, a major contractor in intelligence and defense. Booz Allen charged us taxpayers $42 - $383 per hour for its employees to do the same work that government employees would do for about half that pay range.

Blackwater CEO Erik Prince told a congressional committee that about 10% of its roughly $1 billion in State Department security contracts was profit. (See hearing video.) That's $100 million. Blackwater paid its security guards about $600 a day and billed the government about $1,200. Basically, Blackwater acted as an employment agency. If the State Dept. directly hired those same security guards for $600 a day, the taxpayers' costs would drop significantly.

The critique leaves out one main motivation of hiring contractors: when the work goes away, it's easier to dismiss a contractor than to fire government employees. And contracting can give you access to a higher quality of talent than you can sometimes find on a government payroll. In addition, sometimes contractors have a particular expertise that is worth paying for because it's either unavailable within government or saves money in the long run. That's why we hired Red Adair to put out burning oil wells after the end of the first Gulf War. We don't tend to keep Hellfighter teams hanging around the federal services building.

But the overall point is solid. Outsourcing work sometimes makes sense. It can sometimes save money. But it doesn't always. And it certainly isn't true to the extent that some people have fetishized it into a mantra -- along with the idea that the answer to any fiscal problem is to always cut taxes.

The former turns the reasonable principle of "a government only as big as necessary" into the unreasonable "always shrink government." Similarly, the latter turns "taxes only as high as necessary" into "always cut taxes."

Privatize when it makes sense. But make sure it makes sense.

privatization, politics, midtopia

Follow the money

Christmas has come early for political bloggers, in the form of USASpending.gov, a new web site that contains a searchable database of every federal contract -- including who got paid, when, how much and what for.

It's a government site, but it's the result of a remarkable bipartisan effort by the conservative Heritage Foundation and the liberal group OMB Watch to make government more transparent and accountable, which culminated in Senate passage of a bill sponsored by Sen. Tom Coburn, R-Okla., to create the site.

Combined with new databases on FEC reports and earmarks, we now have an unprecedented ability to follow the money trails that wind in and out of government. It isn't perfect -- it still takes a fair bit of legwork, and the databases aren't linked -- but it's far better than what existed (or rather, didn't exist) before.

One hitch is that you have to search by contractor name, which is usually a company, not a person. For instance, you need to know that Sen. Dianne Feinstein's husband, Richard Blum, owns Perini Corp. -- a construction contractor -- before you can plug the company name into the database and find out that the company lands millions of dollars worth of federal contracts every year: from a low of $24 million or so in 2002 to a high of $459 million in 2004 (and declining since).

But once you know that, you can freely dream up conspiracy theories that the contracts are somehow related to Feinstein's Senate perch.

There's also an "Assistance" tab, which lets you find out who are the recipients of federal grants, loans, etc. You can search by name, congressional district, type o recipient and other criteria.

So thank Santa for the gift and go investigate your favorite politician or company. I've added the link to my "Resources" list in the sidebar so it's easy to find.

spending, politics, midtopia

Sharpton under scrutiny

The FBI is taking a close look at the finances of the Rev. Al Sharpton, subpoenaing 10 aides and associates and demanding to see his financial records for the last six years.

The subpoenas are in support of two separate probes:

The FBI and IRS are investigating whether Sharpton improperly misstated the amount of money he raised during his 2004 White House run to illegally obtain federal matching funds, a source familiar with the probe said....

The feds are also looking into allegations of tax fraud, including whether Sharpton commingled funds from his nonprofit National Action Network with several of his for-profit ventures, the source said.

The first charge doesn't appear to be all that serious -- the major penalty would be forcing Sharpton to return some matching funds. But the second could be a biggie. The IRS has had a lot of its teeth pulled in recent years, but it can still deliver a nasty bite when aroused. But a lot will depend on whether the impropriety, if any, was deliberate or simply negligent.

Me, I consider Al to be an occasionally substantive blowhard whom I still haven't fully forgiven for his antics in the Tawana Brawley case -- though he has grown up a bit since then. It wouldn't surprise me much to find out he played fast and loose with his finances.

But he still deserves his day in court. If that ever arrives; given the complexity of things, I'd expect any charges to eventually be settled out of court unless Al pisses someone off.

Sharpton, politics, midtopia

Making online pay

Rumor has it that the New York Times is abandoning its pay-only Times Select experiment. Let's hope so.

The New York Times is poised to stop charging readers for online access to its Op-Ed columnists and other content, The Post has learned.

After much internal debate, Times executives - including publisher Arthur Sulzberger Jr. - made the decision to end the subscription-only TimesSelect service but have yet to make an official announcement, according to a source briefed on the matter.

The timing of when TimesSelect will shut down hinges on resolving software issues associated with making the switch to a free service, the source said.

Personally this wasn't a huge deal, because we subscribe to the Sunday Times and get TimesSelect access thrown in as part of the deal.

But as a blogger it was very annoying, since nobody likes being linked to content they can't read. That led to three options: annoy my readers, don't blog about Select stories and columns, or quote so much of the story that it defeated the purpose of the firewall (and left me open to charges of copyright violation). It was especially annoying when I would read something in the dead-tree version that I wanted to write about, only to discover that the online version was in SelectLand.

Because I had access, I referred to TimesSelect articles when necessary. But I'm sure many, many people simply learned to live without the content -- and their lives were not noticeably poorer because of it.

The Wall Street Journal has the same problem with its Online Journal service. It's good content, but not so good that I can't live without it. The result is that WSJ content gets a lot less consideration in my blogging than it would otherwise.

I fully sympathize with both the Times and the Journal and all online publications, who are still trying to find ways to get people to pay for high-quality content. As bloggers, we're in the same boat -- and the lack of paying customers is why most of us do this as a hobby rather than a profession. The $30 or so I've earned on this blog in the last year doesn't exactly pay the bills.

Of course, there are other considerations. For instance, I like writing, which is one reason I blog. But even with that excuse blogging is a poor investment. Last year I earned $474 from selling a short story. If I was making rational decisions about my writing time, I'd ditch blogging and spend those hours writing fiction instead. Even if I only sold one story every 10 years, I'd be ahead of the game.

In the end I blog because I enjoy it, it makes me feel engaged in the political process, and I'm full of ideas and opinions that I want to share. But it sure would be nice if the market rewarded those efforts, instead of reserving its love for the sites that can draw a gajillion hits -- enough to make decent money despite the paltry online ad rates.

That's a long-winded way of saying that I'm all for coming up with ways to make money on quality content. But requiring registration seems to be a losing proposition. A lot of people -- myself included -- hate having to register at sites in order to view content, even when doing so is free. If people are resistant to registering when it's free, they're even more resistant to registering when it costs money.

Requiring registration also hamstrings the great strength of the Web -- the ability to surf multiple sites, gathering information from disparate sources. Registration encourages people to concentrate into segregated communities, an overall ill in a diverse democracy.

Admittedly, the problem is more one of reader perception than an actual legitimate gripe. People have no problem paying to subscribe to the Times, but balk at registering to read it online; that makes no logical sense. Why are we willing to pay for information in one form, but not in another, more convenient form?

Nonetheless, it's the reality. And it may remain that way until content starts to disappear because there's not enough money to support it.

But I think companies will find a middle way -- indeed, they've already begun. Notice how the online ads are getting more and more annoying? I especially hate the ones that expand to cover the article you're trying to read until you click on it to make it go away.

But that's the point. If the ads are really annoying, you'd probably be more willing to register in order to make them go away. And if registering brought other perks as well -- expanded comment options, access to sortable databases instead of static articles, expanded photo galleries, discussion boards -- suddenly registering might start to have value. For the best sites, people might even be willing to pay a reasonable fee. And publications could charge a premium for those non-annoying ads that they show to subscribers.

The basic idea -- free-but-annoying content to nonsubscribers, a much more rewarding experience for subscribers -- would preserve the publicity (and public influence) value of free content while providing a way for the creators to make money.

Even better would be if sites banded together to form a registration cooperative. That way, instead of having to register at dozens of different sites, you could register once and gain access to them all. Most of my objection to registering at multiple sites is the hassle of keeping track of them all.

Establishing a system of micropayments would help, too. If we all had something like a Paypal account, and accessing an article cost a penny, and payment was automated, most people would gladly pay without thinking about it. Reading 30 articles a day would cost you less than $10 a month. But for a blogger like me who gets about 3,000 hits a month, that would translate into $30 a month -- not a lot, but an order of magnitude more than I get now.

A site that got 1,000 hits a day would earn $3,600 a year -- not enough to live on, but not total chump change, either.

A site that got 10,000 hits a day would earn enough ($36,000) for the blogger to live on.

A site like Captain's Quarters, which gets 30,000 hits a day, would earn enough ($110,000) to be quite comfortable.

Any such micropayment system would be a huge target for fraud, as it would be very tempting to steal a penny or two from millions of people and end up with some serious cash. The safeguards would have to be robust. But again the general principle applies: people will start paying for content when the price is right and the mechanism is extremely convenient.

Now that the Times has abandoned its initiative, maybe it will throw its weight behind a push for such developments -- developments that are needed if the Internet is to mature into a true communications node, where great content -- provided by fairly compensated producers -- is just a click away.

blogging, politics, midtopia

Congress passes ethics reform

The House finally joined the Senate in passing its ethics reform bill. Because objections from Republican Sen. Jim DeMint prevented the bill from going through conference committee, we have two curious effects: The law features different rules for the House and Senate, and the Senate will now have to vote on the new version before a unified bill becomes law.

The House on Tuesday overwhelmingly approved a sweeping lobbying and ethics reform bill on a 411-8 vote.

“We have kept our promise to drain the swamp that is Washington, D.C.,” Speaker Nancy Pelosi (D-Calif.) said, adding that the legislation is “historic.”

Among the few dissenters was (of course) John Murtha. And for pure ironic humor, you can't beat this: over in the Senate, Ted Stevens has threatened to place a hold on the legislation.

Pelosi's grandiose words aside, this is a work in progress, not a finished product. For one thing, at least some of DeMint's fears appear justified: the House version appears to be less stringent than the Senate version in a few respects. (Here's the text (pdf) of the revised bill that the above link is working from.)

Are they key respects, however? Not really. Let's go through their objections:

The old version (passed by the Senate) required conference / committee reports to list all earmarks and required the chairman of the relevant committee to distribute the earmark list. But the new version of the bill allows the Majority Leader (as opposed to the Senate parliamentarian, a more objective judge) to determine whether or not a conference report complies with the disclosure requirements.

True, but minor. Somebody has to certify it. The Senate parliamentarian is by tradition nonpartisan and accorded a fair bit of deference, but s/he serves at the pleasure of the majority leader, so the distinction is less material than it might seem. That said, I'd support changing it back to the original.

The new version removes the requirement for earmark lists posted online to be in searchable format.

This appears to be simply wrong. For example, Page 68, line 6 and Page 69, line 3 expressly require a searchable format. The exception seems to be when a bill emerges from conference committee. The earmark data is still required to be publicly available 48 hours prior to vote, but the "searchable" requirement is missing (page 69, lines 22-24). Whether that's deliberate or simply a mistake, I don't know. But again it's a minor, easily fixed problem that doesn't change the underlying reporting requirement.

The new version removes the provision that prevented any bill from being considered at all prior to the disclosure of earmarks; now the text only prohibits a formal motion to proceed, which leaves open a procedural loophole that would allow bills to slip through without disclosure.

I'm no parliamentarian, but I'm not sure what loophole the writer envisions here. In the Senate, procedure is everything. Can someone tell me how a bill could reach the Senate floor for debate without a motion to proceed?

The old version prohibited earmarks which benefit a Member, their staff, or their family/their staff’s family. The new version waters that down and only prohibits earmarks that would “only” affect those parties --- which means so long as you can make a case that your shiny new project affects at least one person other than you positively, you’re all set.

This again appears to be wrong. Page 73, lines 8-11 require senators to certify that their relatives do not have a monetary interest in the item. That prohibition is fleshed out (and weakened somewhat) on Page 76, lines 3-12. But it does not go as far as the writer suggests.

It says no member may knowingly request an earmark if "a principle purpose" of the earmark is to benefit "only" the member, or members of his family, or (and this is the biggie) a "limited class of persons or enterprises" of which the member or his family is a member.

That language seems pretty reasonably drawn to prohibit narrowly directed self-benefit. It wouldn't, for instance, outlaw the kind of earmarks I wrote about a year ago, in which a project in a member's district benefits the member. Which only makes sense. Lawmakers live in their districts; a rule that banned earmarks that benefited lawmakers even indirectly or in a small way would be unworkable.

So this list appears to be a collection of mostly minor complaints, the strongest of which is the issue with the parliamentarian.

Now that we know what the bill doesn't do, here's what it does do:

1. Lawmakers must disclose "bundled" contributions of $15,000 or more from lobbyists.

2. Earmarks must be disclosed 48 hours in advance of a bill's consideration, along with the name of the Congressmember that requested it, the cost and a description of the project and the beneficiaries.

3. Senators and candidates would have to pay full charter fare to fly private jets. House members cannot fly in private planes.

4. Legislators and their staff may not accept gifts from lobbyists.

5. Senators must wait two years after leaving office to become lobbyists; House members must wait one year.

6. Lawmakers may not attempt to influence hiring decisions at lobbying firms -- a direct blow at the K Street Project idea.

Those are real reforms. Could Congress do more? Of course. Severe statutory restrictions on the number and value of earmarks would be a great idea, for instance, as well as some basic rules for justifying them. But Democrats can honestly say they've enacted more reforms than any Congress in recent memory. And Republican criticisms ring pretty hollow considering it was their misbehavior that led to Democrats promising such reform. Anything this Congress does will be more than the previous Republican Congresses did.

The next step -- after passage of the final bill -- is to watch and see how and if members try to get around the rules. There will almost certainly be some unintended consequences that will need to be fixed, which could be an opening for weakening some of the rules. Democrats have talked the talk and walked the walk as far as passing the legislation goes; now we have to see if they'll walk the walk as far as following it.

But it's a good start, and deserving of praise.

ethics, politics, midtopia

Stop making me defend Bush

The Gun-Toting Liberal has a post up today expressing outrage over a recent executive order that freezes the assets of, and prohibits aid or donations to, groups or individuals seeking to undermine the government of Iraq.

GTL's up in arms because, on his reading, people could find themselves in trouble for even tenuous links to organizations on Bush's enemies list.

But this isn't as big a deal as GTL makes it sound. It simply extends existing practice regarding anti-U.S. terrorist activities to cover activities aimed at the government of Iraq. And it doesn't criminalize donors -- it simply prohibits them from donating to such groups or individuals.

If you read the referenced laws, you'll find that he's merely exercising authority granted him by Congress, specifically section (b)(2)(A).

One can disagree with the underlying assertions -- whether we are properly in the midst of a "national emergency", whether the identified groups are actually terrorist supporters, how donations of humanitarian aid "seriously impair" Bush's ability to deal with terror.

But his legal authority is clear. He declared a national emergency regarding Iraqi reconstruction efforts back in May 2003, and later amended it in various fashions.

If you've got a problem with it (and I don't, unless and until we find problems with the execution -- for instance, that the list of groups and persons is overbroad) contact Congress. They're the ones who gave him the authority.

Iraq, Bush, politics, midtopia

One-liners

The story: Larry Flynt claims he has 30 solid leads on names from the D.C. Madam's list, including at least one more senator.
The comment: You know the world is a weird place when Larry Flynt is the conscience of a nation.

The story: In Washington, D.C., vandals trash a man's Hummer, leaving an illiterate protest note: "FOR THE ENVIRON."
The comment: Grow up and learn to spell. Since when is property damage a liberal value?

The story: Rep. Don Young of Alaska -- he of the "bridge to nowhere" -- loudly defends an earmark as "my money" on the House floor. He suggests that one reason Republicans lost control of the House in November is because conservative members had challenged too much such spending.
The comment: It isn't your money, Don; it's the taxpayers' money. Time to retire.

Don Young, Hummer, Flynt, politics, midtopia

Coleman 1, Galloway 0

Minnesota Sen. Norm Coleman is enjoying some vindication for his May 2005 confrontation with British MP George Galloway. Coleman, then the chair of the Senate's investigative subcommittee, had accused Galloway of profiting from shady oil-for-food deals with Saddam Hussein.

Galloway appeared before Coleman's committee (pdf) and angrily denied the allegations -- while refusing to address specifics -- and later claimed victory in op-ed pieces.

Fast forward two years. The British House of Commons completed its own investigation into the matter and reached a conclusion quite similar to Coleman's: that Galloway had, in fact, profited from oil-for-food deals. The committee involved has recommended that Galloway be suspended from Parliament for 18 days -- which seems like a slap on the wrist, but is apparently one of the most severe punishments that can be visited on an MP.

Galloway dismissed the report as the work of "a pro-sanctions and pro-war committee of a pro-sanctions and pro-war Parliament passing judgment on the work of their opponents."

Coleman did a bit of crowing, as he had every right to:

The Parliament report, Coleman said, "confirms what we've known all along: Galloway was neck-deep in the oil-for-food deals, he kowtowed to Saddam Hussein, and his bombastic denials were nothing more than a web of misleading statements."

Coleman also said it shows that Galloway was trying to mislead the Senate with his 2005 testimony and create the impression that he did not benefit from Iraqi oil deals.

"As Parliament's report states, he at best turned a blind eye, and 'on balance, was likely to have known and been complicit in what was going on,' " Coleman said. "In response, Galloway will huff and puff, but he can't blow away the facts of this report."

I'm not a Coleman fan -- I consider him an opportunistic weasel -- but I've never had any use for Galloway, either. Galloway was a lightweight, dislikable bully during the hearings, answering questions with rhetoric and bombast rather than relevancy. It was an entertaining spectacle, and one came away impressed with Galloway's forceful assertion of innocence. But one also was aware of all the questions he dodged.

Iraq, Galloway, Norm Coleman, politics, midtopia

The government wants your cash

About a year ago, I wrote about the case of a motorist who was found carrying a large sum of money. The police seized it, arguing that it just had to be drug money. They were allowed to keep it without ever bothering to prove an underlying crime, thus establishing the cherished legal principle that police can take your money anytime they like as long as the sum is large enough and the defendant is poor enough.

Now it's happened again, this time in Michigan. But there's a twist: the search that uncovered the money was illegal, which turns this into a case with broader civil-liberties implications.

No matter.

The Michigan Supreme Court on Tuesday denied the appeal of a motorist who had to forfeit nearly $181,000 that was found in a backpack during a traffic stop, even though the money was seized illegally....

Tamika Smith, who was stopped by a Michigan State Police trooper, lost the money when a judge ruled prosecutors presented enough other evidence to show it was intended to buy illicit drugs.

That evidence involved such legal activities as being poor, in possession of a large sum of money, while driving a rental car in a known drug-trafficking area.

Some details from Detroit Free Press columnist Brian Dickerson:

Five years ago, the 33-year-old Detroit woman was driving her boyfriend and her two small children to Chicago when a state trooper stopped her for speeding on I-94 outside Paw Paw. A license check revealed that the boyfriend had been arrested for cocaine possession and weapons offenses. In a subsequent (and apparently unauthorized) search of the couple's trunk, the trooper discovered a backpack containing $180,975 in cash.

Smith and her boyfriend denied the money was theirs and speculated that someone had left it in the car they had rented just a few hours earlier. But when prosecutors petitioned the state to keep the money, Smith contested the seizure, arguing that the search in which Trooper James Lass discovered the cash was illegal.

Van Buren County Circuit Judge William Buhl agreed, but eventually ruled the prosecutor's forfeiture suit could proceed, so long as the cash was never offered as evidence. When Smith, who had never earned more than $14,000 in a year, offered vague and unconvincing accounts of the money's origins, Buhl concluded that she was most likely a drug courier and ordered the money forfeited to the state.

Now I agree that Smith acted suspiciously and couldn't provide a good explanation of where the money came from. I'll even agree that she's most likely a drug courier. She also lost some standing by first denying that the money was hers.

But that's not the point. Before the government can seize private property, they should have to prove that it is tainted or ill-gotten. It's not up to the individual to prove the money is legitimately theirs; it's up to the government to prove it's not.

Question Smith about the money? Sure. Prosecute her if a crime can be established? Of course. I'd even support putting the money in the state's unclaimed funds account on the grounds that Smith denied it was hers, so she doesn't have a claim to it.

But taking property simply because, in a judge's opinion, someone is "most likely" a drug courier should offend anyone who believes in civil liberties or property rights.

You don't even have to go that far. Justice Stephen Markman, the state Supreme Court's most conservative member, wrote a stinging dissent on the narrow grounds that illegally obtained evidence cannot be used as evidence to support the seizure of said evidence. Here's the full opinion in the case (pdf); Markman's dissent begins on Page 30. In it he notes the bizarre logic used in the main opinion, which asserts that "while the cash itself was excluded from evidence, the trial court could properly consider the implications of the presence of such a large amount of cash in the vehicle." In other words, though the cash itself was excluded from evidence, the cash itself could be included as evidence.

The upshot:

Oak Park attorney Karri Mitchell, who represented Smith in her unsuccessful appeal, said the high court's ruling leaves every Michigan resident's property rights in jeopardy.

"This means that John Q. Public can be stopped for a traffic violation and, if the policeman thinks he can't afford the watch he's wearing, it becomes the property of the state unless he can prove he came by it legitimately," Mitchell said.

But Van Buren County Assistant Prosecutor Michael Bedford, who at one point offered Smith about $30,000 to drop her claim to the $180,000, called Mitchell's scenario far-fetched.

"Theoretically, a person could be forced to prove they came by an [illegally seized] asset legally," Bedford conceded.

"But hopefully, we don't have anybody out there abusing the forfeiture statute and putting people in a position where they have to do that."

Oh, I feel safer already, knowing that the state's best defense is that "hopefully, nobody will abuse the statute."

civil liberties, politics, midtopia

Kendrick Meek shoots back

Responding to revelations of shady moves by a developer he supported, Rep. Kendrick Meek defended himself Friday in an op-ed piece in the Miami Herald.

Recent Herald articles establish that the promoter of the Poinciana Biopharmaceutical project had a shady past, made promises he didn't keep, double billed for expenses and had neither tenants nor financing; that the developer hired my mother, former U.S. Rep. Carrie Meek, as a consultant and provided her with a leased car and free rent to her nonprofit foundation; and that I sought and obtained federal funds and loans for the project.

Some have interpreted this information in the worst light: that Carrie Meek sold out to a developer for her gain and that of her charitable foundation, and that I used my office to enrich my mother and the developer by funding a phony project at public expense.

Well, yeah.

Meek, though, doesn't beat around the bush:

This is utterly, totally and completely false.

A little redundant there, but we get his point. No equivocating.

My mother and I are very close. However, while her predecessors in Congress were paid consultants and lobbied her, she has never lobbied me nor asked me to support a grant, bill or other kind of funding or government decision, precisely because her congressman is also her son.

Fair enough. But if you're so close, how come she didn't tell you she was being paid by a developer you were supporting? She had to have known you were supporting the project, and she had to have known how bad it would look if the payments to her became public.

Columnist and novelist Carl Hiaasen, for one, isn't buying it.

Back to Meek:

Poinciana is in my congressional district. It is my job to support development there -- no easy task. For decades there have been no prospects, despite the fact that we have three major chambers of commerce and strong growth elsewhere in the county.

Based on all of the information available to me, the biopharmaceutical project appeared to me and to a lot of other responsible people to have a good chance for the public-private partnership we need.... I was not informed of the overdue reports, missed deadlines, pending audits and other concerns apparently known for months by other officials until just two weeks before The Miami Herald's story appeared.

Agreed. This is why so many legislators have financial connections in their district that can look very bad. Constituents give money to legislators; legislators' own businesses, if they have them, are in their district; and legislators try to bring money home to their district. The interplay -- especially in poor districts where the number of power players is few -- can look very bad indeed even if it's all aboveboard.

I also agree that actually overseeing the project was the county's job, not Meek's.

That said, Meek doesn't seem to have done any due diligence on the developer or the project. And he should take great care to avoid the appearance of impropriety in his efforts.

Because of my commitment to economic development, the former Miami-Dade mayor asked me to chair the Urban Revitalization Task Force, which approved loans for the developer's project in Opa-locka.... One lesson I have learned is not to agree to chair any entity in which I do not personally participate. Because of my duties in Washington, over the entire three years I was chairman, I attended only two Task Force meetings.

Translation: "I wasn't corrupt; I simply accepted a job I didn't have time for, overseeing a group that seemed to have suffered from.... lack of oversight."

Meek's explanations are plausible, even if they do show a representative willing to accept titles without doing the accompanying work, and one who was remarkably incurious about projects he was seeking funding for. Whether they hold up under scrutiny is another matter. And beyond that is the bigger question of "what steps is he taking to ensure this never happens again?"

P.S.: In his continuing efforts to distance himself from the matter, Meek is donating to charity a $5,500 donation from the developer in question. As the story notes, $5,500 was pocket change to Meek's campaign, so it's unlikely it bought any influence.

His mom, meanwhile, chose to attack the messenger.

Both Meeks, interestingly, say they learned about Stackhouse's misdeeds about 10 days before the Herald published its stories on him. That probably means the Herald led to their learning, either directly (the reporters called them) or indirectly (people contacted by the Herald knew the story was going to come out, and told those involved). Which raises a secondary question: Did they wait until the Herald articles came out to do something about it? And if so, why?

Meek, Florida, politics, midtopia

Former Alabama governor sentenced

Don Siegelman, a Democrat who was governor of Alabama from 1999 to 2003, was sentenced to seven years in prison and $230,000 in fines for taking bribes during his governorship.

If I were so inclined, I could take a cue from Republican defenders of Lewis Libby and Tom DeLay and decry the "political motivation" behind Siegelman's prosecution, given revelations of a potential Karl Rove connection, other Republican connections to his case, prosecution attempts to have his sentence calculated based on the charges on which he was acquitted, and the fact that a judge entirely threw out -- with prejudice -- the prosecution's first attempt to charge Siegelman in 2004. Or that when a Republican governor, Guy Hunt, was convicted of pocketing $200,000 in 1992, the state (indeed, the same prosecutor) sought probation, not jail time.

But I won't, because the motivation of the prosecution doesn't matter as much as the facts of the case and the conviction that resulted. The man took bribes; he deserves to go down. The fact that someone else in a similar situation got off lightly is irrelevant.

Partisans might take a lesson from that.

Hall of Shame has been updated.

Siegelman, politics, midtopia

Democratic corruption in Miami

The Miami Herald has written an expose of fraud and corruption in the poor neighborhood known as Liberty City, and tangled up in the center of it is three-term Democratic Congressman Kendrick Meek.

While Meek was seeking federal funds for a massive development project, the developer was diverting money for personal use and giving Meek's mom -- former Congresswoman Carrie Meek -- $40,000 and a car as payment for consulting services related to the project.

Some details to make you pull your hair out:

• After the county spent millions preparing one of its last open stretches of public land for development, the trust gave Stackhouse's company control over half of it for 75 years -- then allowed him to use the land as collateral for a $4.2 million private loan while paying just $1,500 a month in rent.

• A year later, the trust provided Stackhouse's company with a $3 million interest-free county loan despite the developer's financial record, which is marred by foreclosures, liens, and a bankruptcy totaling more than $20 million.

• Once he had access to the county's money, Stackhouse diverted more than $500,000 from the project by submitting more than 40 bills to the trust that had already been paid with the private loan, including construction expenses, architectural fees and property taxes.

In one case, he turned in the same $26,000 invoice three times -- collecting a total of $78,000 from the trust.

• Stackhouse pitched the project to local leaders by claiming multinational companies and world-class universities would lease thousands of square feet and employ hundreds of people.

But most of the tenants touted by Stackhouse told The Miami Herald they have no plans to lease space at the park. Two of the companies said they had no knowledge of the project at all.

• In fact, the only biotech firm committed to moving into the park is a Massachusetts company called MediVector, which Stackhouse said will serve as the anchor tenant, creating 150 biotech jobs while leasing thousands of square feet to test and manufacture drugs.

But MediVector is little more than a small consulting firm run by one of Stackhouse's longtime business partners from a 300-square-foot office in Cambridge.

It's clear the developer duped a lot of people, and county officials and both Meeks are claiming they are among the victims. Kendrick Meek, for example, says he had no idea his mom was being paid, and said she never lobbied him about the project.

That stretches credibility. But even if you believe them, then you're talking about extremely poor oversight and incredibly bad financial judgement by county officials, a failure by Meek to do even minimal due diligence, and a failure by his mom -- who should have known better -- to disclose an obvious conflict of interest.

Here's hoping this investigation gets more national attention. Meanwhile, Meek is a prospective candidate for the Hall of Shame.

(h/t: Debate Link)

corruption, politics, midtopia

Good news

It's Friday, so why not ring out the week with a good news roundup?

HABEAS CORPUS
The House is finally producing legislation that would match a Senate provision passed out of committee earlier this month. Both bills face tough floor fights and possible vetos, but it's yet another small step on reasserting the rule of law and putting terrorism back on a criminal footing, where it largely belongs.

PORK REFORM
Even as earmark reform and other ethics measures work their slow and creaky way through Congress, far more sweeping reform is taking place at the state level -- both providing an example for and increasing pressure on Congress to clean up its act. Whether you think pork is a valid government function, a necessary evil or simply evil, you have to agree that transparency in the process is a good thing. Though there's this caveat:

Even with greater transparency, will the humiliation factor work? Amid all House Appropriations Chairman David Obey's unconvincing reasons for keeping the public in the dark, he did make the fair point that even when embarrassing earmarks have been disclosed, Congress rallies around its porksters and approves the money. It's hard to shame people who have no shame.

And that's the next stage of the earmark debate. Forcing national politicians to admit to their bad spending habits is clearly difficult. Forcing them to stop, or pay the price at the polls, is the real test of "earmark reform."

Let's find out.

ENERGY INDEPENDENCE
The Senate passed an energy bill Thursday that includes a provision raising the average gas mileage requirement to 35 mpg by 2020 -- a significant increase over today's 25 mpg, even if the time frame is a long one. On the other hand, Republicans blocked the "tax hike" (see second item in link) on oil companies, as well as measures requiring electrical utilities to use far more renewable power sources. The latter item won't actually matter much, considering state regulators are already well down that path. But it does make one wonder why Republicans think the status quo is so great.

habeas corpus, earmarks, energy, politics, midtopia

General silliness

Stories to make you shake your head:

SAVAGELY WRONG
Michael Savage's ego blasts C-SPAN for being "left-wing" -- resulting in his getting demolished by C-SPAN's mild-mannered president and prompting prominent conservatives to call him nuts.

TAX BREAKS ARE FOREVER
Senate Republicans blocked what they claimed were unjustified, burdensome "tax hikes" on large oil companies. Except the "hikes" were largely made up of two things: a repeal of tax breaks given to oil companies in 2004 (apparently targeted tax breaks are fine, but removing those same breaks is unfair), and a recouping of lease money that should have been paid by oil firms for the right to drill in the Gulf of Mexico, but which was lost because of errors in the lease contracts.

HOW ABOUT 'FORCIBLY NONCONSENSUAL INTERCOURSE'?
A Nebraska judge overseeing a rape trial has banned the word "rape" from the courtroom as potentially prejudicial to the jury -- along with "sexual assault," "victim", "assailant" and "sexual-assault kit." You might ask how one can discuss a rape without using any of those words. The answer, in this case anyway, was to use the word "sex". So instead of "he raped me", you'd say "we had sex without my consent" or something along those lines. You might ask if such locutions, besides obscuring actual meaning, aren't themselves prejudicial in the other direction. And you'd have a point.

politics, midtopia

Another eminent domain outrage

Stubborn Facts has crossposted a Rich Horton interview with Philip Klein, maker of the eminent-domain documentary "Begging for Billionaires."

It contains one of the most absurd uses of eminent domain ever: declaring some of suburban St. Louis' most valuable real estate "blighted" so that the city could seize it and hand it over to a developer as part of a redevelopment plan.

Abuses like this have generated bipartisan support for eminent-domain reform, more clearly spelling out the conditions under which property may be taken. I think the issue is murkier than some purists would like you to believe, but the general principle is sound: the state should be allowed to seize private property only in very limited circumstances and for very limited purposes.

The linked post has much, much more. Give it a read.

eminent domain, politics, midtopia

Berger, assault and earmarks

Ethics-related stories are just tumbling out today, so rather than give each a separate post I'll round them up here.

SANDY BERGER
Sandy Berger accepted disbarment yesterday, giving up his license to practice law after stealing classified documents from the National Archives. Doing so means he doesn't have to answer further questions about his actions there, which undoubtedly will fuel further speculation about what he might have stolen.


STATEHOUSE FISTICUFFS
A Republican lawmaker in Alabama, Sen. Charles Bishop, punched another senator in the head yesterday. He said he was provoked when Sen. Lowell Barron called him a "son of a bitch." "I responded to his comment with my right hand," Bishop said. While expressing regret, he has so far declined to apologize.

Barron denies he said it, and claims it was Bishop who swore at him. His version has some credence, because everyone agrees that the confrontation came during a time when Republicans were angry at Democrats for blocking a Republican bill, and it was Bishop who approached Barron, not the other way around.

Makes you wonder if Bishop was channeling the U.S. Congress in 1856, when a Democrat, Preston Brooks, nearly beat Republican Charles Sumner to death with a cane. Though if so Bishop should probably be very cautious, because while Sumner eventually recovered and enjoyed a long career in Congress, Brooks died a year later of the croup.

In any event, perhaps criminal assault is not the best way to express opinions in the Senate chamber.

Update: We've got video!

SHINING A LIGHT ON EARMARKS
Finally, the Hill details the earmark requests of members of the House Armed Services Committee, and compares it with campaign contribution records. Turns out earmarks are a bipartisan smorgasbord. But the implication of wrongdoing is a bit off, in my opinion. There's no indication that the earmarks were tit-for-tat favors, and it's to be expected that members would seek help for large employers in their district, while large employers will naturally have more employees contributing to a given candidate's campaign.

The main thing this story does is serve as a test: will sunlight actually discourage earmarks? I guess we'll find out.

Berger, earmarks, ethics, politics, midtopia

9/11 bullies

Coyote Angry has a wonderful post on the abuse of the victim card being perpetrated by Ed Root, president of the Families of Flight 93, which is trying to build a memorial at the crash site in Pennsylvania.

Some excerpts:

[Root is] whining because a landowner doesn't want to give away 273 acres of his land to the National Park Service to build a memorial.

I'm truly sorry that innocent people died on that flight and I'm sorry for the pain that has caused their friends and families but I have to tell you: innocent people die every single day and we do not confiscate private property from people in order to build them shrines.

What caught my eye is that Root is trying to assemble 1,300 acres for the memorial.

Excuse me? 1,300 acres? What the heck for? The impact site is the size of a couple of football fields. The memorial design looks nice and all, but it includes a huge amount of space that has nothing to do with the crash except that it lies under the plane's flight path. And a huge amount of land that doesn't even have that much relevance.

I have no problem with him wanting to assemble a big memorial. And I fully understand the Park Service taking the opportunity to create more parkland. But 1,300 acres is a want, not a need.

That said, the land in question is the actual site of the crash. So it's "must-have" land. Because of that, Root claims the landowner is "holding the American people hostage" by refusing to sell. Coyote Angry's response:

No he is not "holding the American people hostage". You are trying to hold him hostage. It's his land, he can jolly well tell you to jump off a cliff if it suits him. Why on earth would he want to try and negotiate any sort of deal with a whiny windbag like you. You'd probably turn right around and look for some reason to sue him as soon as the deal was closed.

Meanwhile, the families have criticized a donation box the landowner has placed near the site, saying it "degrades the memories" of their loved ones. The landowner says he's trying to recoup some of the $200,000 in lost mining income and $10,000 a month in site security costs that being a neighbor to history has saddled him with.

Now, there's plenty of reason to think the landowner isn't exactly an angel. He knows his land is crucial. A memorial negotiator says he wants $10 million for it, not the $500,000 or so they say is market value; his donation box is apparently misleadingly marked, so people think they're donating to the memorial when they put money in it; and the Park Service says the security he's paying for is unnecessary.

Still, the landowner allows people on to his property to visit the site and isn't demanding compensation for lost income and increased security costs. His major crime appears to be that he won't simply sell his land to the family group, preferring instead to deal with the Park Service.

Further, I'm not sure how it's degrading to the memory of the dead to put out a donation box, but it's not degrading to their memory to use them as a club in an effort to strongarm said landowner.

First the $1 billion memorial at Ground Zero, now this. Stuff like this is going to hasten the onset of 9/11 Victim Fatigue.

Flight 93, 9-11, politics, midtopia

Lobbying reform runs into hurdles

Attempts are afoot in Congress to weaken the lobbying reforms passed with such fanfare in the first days of the 110th Congress.

The culprits? Democrats.

Now that they are running things, many Democrats want to keep the big campaign donations and lavish parties that lobbyists put together for them. They're also having second thoughts about having to wait an extra year before they can become high-paid lobbyists themselves should they retire or be defeated at the polls.

The growing resistance to several proposed reforms now threatens passage of a bill that once seemed on track to fulfill Democrats' campaign promise of cleaner fundraising and lobbying practices....

They include proposals to:

* Require lobbyists to disclose details about large donations they arrange for politicians.
* Make former lawmakers wait two years, instead of one, before lobbying Congress.
* Bar lobbyists from throwing large parties for lawmakers at national political conventions.

First, the bill has not been voted on yet. What we're seeing here are the behind-the-scenes disputes about the final language, and how to reconcile it with the Senate version.

That said, let's be clear: If the Democrats fail to deliver on this promise, they will and should be toast in 2008. If there's one thing voters wanted when they voted in November, it was a real clean-up of Washington's money culture. The Democrats promised to do so, and if they back away from key provisions it will simply have been a lie. Maybe all that money is nice now that they're in power; but they won't remain in power long if they don't take steps to lessen the lure of its siren song. And quickly.

ethics, politics, midtopia

Income gap widened in 2005

In case you wonder why the American public isn't all that excited about their economic outlook despite an economy that's doing well on the macro level, here's the reason.

While total reported income in the United States increased almost 9 percent in 2005, the most recent year for which such data is available, average incomes for those in the bottom 90 percent dipped slightly compared with the year before, dropping $172, or 0.6 percent.

So despite what looks like healthy wage gains, very little of it was actually wages. All of the income increase and more went to the top 10 percent. Actually most of it went to the top 1 percent, whose income grew 14 percent.

That explains the following statistics from the article:

1. Both the top 10 percent and top 1 percent have hit income shares not seen since 1928 -- shortly before the 1929 stock market crash and the Great Depression.

2. The top 300,000 Americans -- one tenth of one percent of the population -- earned almost as much as the bottom 50 percent -- 150 million people. On average, each of those 300,000 people earned 440 times as much as one of those 150 million.

And the numbers probably understate the situation:

The Internal Revenue Service estimates that it is able to accurately tax 99 percent of wage income but that it captures only about 70 percent of business and investment income, most of which flows to upper-income individuals, because not everybody accurately reports such figures.

Defenders of the current tax system argue that the problem isn't tax levels -- even though federal income taxes, measured as a share of income, has stayed largely flat for middle-income workers over the past 40 years while dropping by half for the affluent.

They make two main claims:

1. The numbers simply reflect the demands of the global economy, where skilled workers command ever more of a premium and unskilled workers fall behind.

2. The numbers don't count benefits, such as health insurance, that make up a much larger share of total income for poorer Americans than they do for the wealthy.

There is probably some truth to #1, but it's a stretch to argue it accounts for the entire difference. And even if it did, it's not an argument for complacency or acceptance. Extreme income inequality is a hallmark of unstable societies. Too much wealth concentrated in too few hands sparks unrest.

#2 is mostly bogus. The reason health insurance makes up a larger share of worker income is because health costs have gone up sharply. My employer paying 20 percent more for health insurance doesn't leave me better off if my health costs go up that much; it's a wash as far as disposable income is concerned. Never mind that I'm probably worse off because health-care costs also are eating into my take-home pay, in the form of higher premiums, co-pays, deductibles and all the other ways hard-pressed employers are devising to push more such costs on to workers.

While there can be plenty of principled disagreement about what causes the situation and what should be done about, two things seem obvious:

1. The tax system that conservatives often criticize as "punitive" toward the wealthy or successful has turned out to be nothing of the sort. Despite such "confiscatory" measures, the wealthy have increased their share of income -- to the point of hoovering money out of the pockets of the less affluent.

2. Given #1, as well as the gigantic federal deficit and the consequences of extreme income inequality, it makes zero sense to prolong or enhance tax cuts for the wealthy. The estate tax should be retained, and the AMT fixed instead. The cap on Social Security taxes should be removed, and income caps on benefits should be added. Marginal rates should be re-examined. Tax enforcement should be beefed up to capture more of that non-wage income.

Perhaps you think this is somehow a socialist redistribution of wealth downward, ignoring the fact that the current situation is a socialist redistribution of wealth upward, which simply makes no sense.

Dealing with the national debt will require work on both the spending and revenue side of the federal ledger. But as far as the revenue goes, it is only logical to take the most money from those most able to pay. Everyone's second $100,000 should be taxed more heavily than everyone's first $100,000. Doing so will not only restore our federal finances to health; they will head off a building social convulsion that benefits nobody -- especially the rich.

deficit, AMT, class, income, taxes, politics, midtopia

What was he thinking?

Massachusetts Gov. Deval Patrick seems to have some difficulty separating the public's business from his own.

Governor Deval Patrick, who was criticized during the gubernatorial campaign for his involvement with a controversial subprime mortgage lender, called a top official at Citigroup, former US Treasury secretary Robert E. Rubin, two weeks ago to intercede on behalf of the owners of Ameriquest Mortgage as they sought urgent financial assistance from the global financial giant.

Patrick's defense?

In a statement to the Globe, Patrick said he made the Feb. 20 call to Citigroup not in his role as governor but after a personal request to him from a top official at ACC Capital Holdings, the firm that owns Ameriquest Mortgage, which has frequently been accused of predatory lending.

That's funny. As long as he's not making the call "in his role as governor", there's no reason to think Citigroup would feel pressured by his day job. Uh-huh.

It could have been worse. Rubin is pretty high-powered himself, after all, and Patrick didn't pressure him to do a deal: he simply offered himself as a personal reference.

But besides the questionable ethics of vouching for a company known for predatory lending, it was an improper intervention. The governor -- whether acting in that role or not -- should not involve himself in the private dealings of private companies.

It's depressing that that apparently isn't obvious.

Massachusetts, Rubin, Deval Patrick, politics, midtopia