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Fascism and the Dangers of Economic Concentration

Tech­nocrats march­ing in sup­port of aus­ter­i­ty, ready to slash gov­ern­ment spend­ing.

A 1980 broad­cast high­lights eco­nom­ic con­cen­tra­tion and its his­tor­i­cal rela­tion­ship to fas­cism. The issue of the “1%” ver­sus the “99%” is not new.

After dis­cus­sion of the Amer­i­can cor­po­rate con­nec­tions to the Third Reich, this pro­gram con­cludes with analy­sis of the per­ils of the con­cen­tra­tion of eco­nom­ic pow­er.

Sev­er­al min­utes in length, the con­clu­sion of that pro­gram can be accessed here: Lis­ten.

Of para­mount sig­nif­i­cance is the pos­si­bil­i­ty that con­cen­tra­tion of eco­nom­ic pow­er in the Unit­ed States might even­tu­al­ly pro­duce for Amer­i­cans what it did for Ger­mans in  the 1930’s.

The fact that many of the most impor­tant U.S. com­pa­nies and indi­vid­u­als were deeply involved with Nazi indus­try and finance informs us that such a pos­si­bil­i­ty is not as remote as it  might appear at first.

(These same inter­ests attempt­ed to over­throw Franklin D. Roo­sevelt in a coup attempt in 1934, seek­ing to install a gov­ern­ment mod­eled on Mus­solin­i’s “cor­po­rate state.” Mus­soli­ni and his fascisti are pic­tured at right.)

With the very able assis­tance of co-host Mark Ortiz, Dave record­ed the first of the archive shows, Uncle Sam and the Swasti­ka (M11), on Memo­r­i­al Day week­end of 1980 (5/23/80).

The pro­gram echoes at the dis­tance of thir­ty years the warn­ing that James Stew­art Mar­tin sound­ed in his 1950 book All Hon­or­able Men. Not­ing how attempts at break­ing up Hitler’s Ger­man eco­nom­ic pow­er base had been foiled by the Ger­mans’ pow­er­ful Amer­i­can busi­ness part­ners, Mar­tin detailed the same pat­tern of con­cen­tra­tion of eco­nom­ic pow­er in the Unit­ed States that had led to the rise of Nazism in Ger­many.

In 2005, Uncle Sam and the Swasti­ka was dis­tilled into For The Record #511. Since then, the Amer­i­can and glob­al economies have tanked and may well get worse. The sig­nif­i­cance of an eco­nom­ic col­lapse for the imple­men­ta­tion of a fas­cist cabal fig­ures sig­nif­i­cant­ly in the sev­er­al min­utes of this excerpt.

At more than 30 years’ dis­tance from the orig­i­nal record­ing of Uncle Sam and the Swasti­ka, the ques­tions raised in this broad­cast loom large. Will the “calm judge­ment of busi­ness necessity”–fascism–that Mar­tin fore­saw in 1950 come to pass?

We should note that Mus­soli­ni termed the fas­cist system–which he christened–“the cor­po­rate state.” Anoth­er way of con­cep­tu­al­iz­ing it would be to think of fas­cism as “cap­i­tal­ism on full auto.”

Discussion

110 comments for “Fascism and the Dangers of Economic Concentration”

  1. Posted by Pterrafractyl | October 13, 2015, 5:02 pm
  2. The New York Times has a big new piece on the 158 ultra-wealthy fam­i­lies that have been tak­ing full advan­tage of the post-Cit­i­zens Unit­ed era of unlim­it­ed secret polit­i­cal giv­ing. Sur­prise! They most­ly give to Repub­li­cans and most­ly made their for­tunes in the finan­cial and ener­gy sec­tors. And they real­ly, real­ly, real­ly want to get rid of the reg­u­la­tions in those sec­tors.

    Plus, they’re doing all this, not for them­selves, but for the lit­tle guy (LOL) so more new for­tunes can be cre­at­ed once all those pesky reg­u­la­tions are done away with. Yep, they’re cap­tur­ing the polit­i­cal sys­tem and dereg­u­la­tion the econ­o­my for the lit­tle peo­ple. Or at least that’s what they’re telling us. Sur­prise:

    The New York Times
    Buy­ing Pow­er

    By NICHOLAS CONFESSORE, SARAH COHEN and KAREN YOURISH
    OCT. 10, 2015

    They are over­whelm­ing­ly white, rich, old­er and male, in a nation that is being remade by the young, by women, and by black and brown vot­ers. Across a sprawl­ing coun­try, they reside in an arch­i­pel­ago of wealth, exclu­sive neigh­bor­hoods dot­ting a hand­ful of cities and towns. And in an econ­o­my that has mint­ed bil­lion­aires in a dizzy­ing array of indus­tries, most made their for­tunes in just two: finance and ener­gy.

    Now they are deploy­ing their vast wealth in the polit­i­cal are­na, pro­vid­ing almost half of all the seed mon­ey raised to sup­port Demo­c­ra­t­ic and Repub­li­can pres­i­den­tial can­di­dates. Just 158 fam­i­lies, along with com­pa­nies they own or con­trol, con­tributed $176 mil­lion in the first phase of the cam­paign, a New York Times inves­ti­ga­tion found. Not since before Water­gate have so few peo­ple and busi­ness­es pro­vid­ed so much ear­ly mon­ey in a cam­paign, most of it through chan­nels legal­ized by the Supreme Court’s Cit­i­zens Unit­ed deci­sion five years ago.

    These donors’ for­tunes reflect the shift­ing com­po­si­tion of the country’s eco­nom­ic elite. Rel­a­tive­ly few work in the tra­di­tion­al ranks of cor­po­rate Amer­i­ca, or hail from dynas­ties of inher­it­ed wealth. Most built their own busi­ness­es, par­lay­ing tal­ent and an appetite for risk into huge wealth: They found­ed hedge funds in New York, bought up under­val­ued oil leas­es in Texas, made block­busters in Hol­ly­wood. More than a dozen of the elite donors were born out­side the Unit­ed States, immi­grat­ing from coun­tries like Cuba, the old Sovi­et Union, Pak­istan, India and Israel.

    But regard­less of indus­try, the fam­i­lies invest­ing the most in pres­i­den­tial pol­i­tics over­whelm­ing­ly lean right, con­tribut­ing tens of mil­lions of dol­lars to sup­port Repub­li­can can­di­dates who have pledged to pare reg­u­la­tions; cut tax­es on income, cap­i­tal gains and inher­i­tances; and shrink enti­tle­ment pro­grams. While such mea­sures would help pro­tect their own wealth, the donors describe their embrace of them more broad­ly, as the surest means of pro­mot­ing eco­nom­ic growth and pre­serv­ing a sys­tem that would allow oth­ers to pros­per, too.

    “It’s a lot of fam­i­lies around the coun­try who are self-made who feel like over-reg­u­la­tion puts these bur­dens on small­er com­pa­nies,” said Doug Dea­son, a Dal­las investor whose fam­i­ly put $5 mil­lion behind Gov. Rick Per­ry of Texas and now, after Mr. Perry’s exit, is being court­ed by many of the remain­ing can­di­dates. “They’ve done well. They want to see oth­er peo­ple do well.”

    In mar­shal­ing their finan­cial resources chiefly behind Repub­li­can can­di­dates, the donors are also serv­ing as a kind of finan­cial check on demo­graph­ic forces that have been nudg­ing the elec­torate toward sup­port for the Demo­c­ra­t­ic Par­ty and its eco­nom­ic poli­cies. Two-thirds of Amer­i­cans sup­port high­er tax­es on those earn­ing $1 mil­lion or more a year, accord­ing to a June New York Times/CBS News poll, while six in 10 favor more gov­ern­ment inter­ven­tion to reduce the gap between the rich and the poor. Accord­ing to the Pew Research Cen­ter, near­ly sev­en in 10 favor pre­serv­ing Social Secu­ri­ty and Medicare ben­e­fits as they are.

    Repub­li­can can­di­dates have strug­gled to improve their stand­ing with His­pan­ic vot­ers, women and African-Amer­i­cans. But as the cam­paign unfolds, Repub­li­cans are far out­pac­ing Democ­rats in exploit­ing the world of “super PACs,” which, unlike can­di­dates’ own cam­paigns, can raise unlim­it­ed sums from any donor, and which have so far amassed the bulk of the mon­ey in the elec­tion.

    The 158 fam­i­lies each con­tributed $250,000 or more in the cam­paign through June 30, accord­ing to the most recent avail­able Fed­er­al Elec­tion Com­mis­sion fil­ings and oth­er data, while an addi­tion­al 200 fam­i­lies gave more than $100,000. Togeth­er, the two groups con­tributed well over half the mon­ey in the pres­i­den­tial elec­tion — the vast major­i­ty of it sup­port­ing Repub­li­cans.

    “The cam­paign finance sys­tem is now a coun­ter­vail­ing force to the way the actu­al vot­ers of the coun­try are evolv­ing and the poli­cies they want,” said Ruy Teix­eira, a polit­i­cal and demo­graph­ic expert at the left-lean­ing Cen­ter for Amer­i­can Progress.

    Like most of the ultra­wealthy, the new donor elite is deeply pri­vate. Very few of those con­tact­ed were will­ing to speak about their con­tri­bu­tions or their polit­i­cal views. Many dona­tions were made from busi­ness address­es or post office box­es, or wound through lim­it­ed lia­bil­i­ty cor­po­ra­tions or trusts, exploit­ing the new avenues opened up by Cit­i­zens Unit­ed, which gave cor­po­rate enti­ties far more lee­way to spend mon­ey on behalf of can­di­dates. Some con­trib­u­tors, for rea­sons of pri­va­cy or tax plan­ning, are not list­ed as the own­ers of the homes where they live, fur­ther obscur­ing the fam­i­ly and social ties that bind them.

    But inter­views and a review of hun­dreds of pub­lic doc­u­ments — vot­er reg­is­tra­tions, busi­ness records, F.E.C. data and more — reveal a class apart, dis­tant from much of Amer­i­ca while geo­graph­i­cal­ly, social­ly and eco­nom­i­cal­ly inter­min­gling among them­selves. Near­ly all the neigh­bor­hoods where they live would fit with­in the city lim­its of New Orleans. But minori­ties make up less than one-fifth of those neigh­bor­hoods’ col­lec­tive pop­u­la­tion, and vir­tu­al­ly no one is black. Their res­i­dents make four and a half times the salary of the aver­age Amer­i­can, and are twice as like­ly to be col­lege edu­cat­ed.

    Most of the fam­i­lies are clus­tered around just nine cities. Many are neigh­bors, liv­ing near one anoth­er in neigh­bor­hoods like Bel Air and Brent­wood in Los Ange­les; Riv­er Oaks, a Hous­ton com­mu­ni­ty pop­u­lar with ener­gy exec­u­tives; or Indi­an Creek Vil­lage, a pri­vate island near Mia­mi that has a pri­vate secu­ri­ty force and just 35 homes lin­ing an 18-hole golf course.

    Some­times, across par­ty lines, they are patrons of the same sym­phonies, art muse­ums or at-risk youth pro­grams. They are busi­ness part­ners, in-laws and, on occa­sion, even pok­er bud­dies.

    More than 50 mem­bers of these fam­i­lies have made the Forbes 400 list of the country’s top bil­lion­aires, mark­ing a scale of wealth against which even a mil­lion-dol­lar polit­i­cal con­tri­bu­tion can seem rel­a­tive­ly small. The Chica­go hedge fund bil­lion­aire Ken­neth C. Grif­fin, for exam­ple, earns about $68.5 mil­lion a month after tax­es, accord­ing to court fil­ings made by his wife in their divorce. He has giv­en a total of $300,000 to groups back­ing Repub­li­can pres­i­den­tial can­di­dates. That is a huge sum on its face, yet is the equiv­a­lent of only $21.17 for a typ­i­cal Amer­i­can house­hold, accord­ing to Con­gres­sion­al Bud­get Office data on after-tax income.

    The donor fam­i­lies’ wealth reflects, in part, the vast growth of the finan­cial-ser­vices sec­tor and the boom in oil and gas, which have helped trans­form the Amer­i­can econ­o­my in recent decades. They are also the ben­e­fi­cia­ries of polit­i­cal and eco­nom­ic forces that are dri­ving widen­ing inequal­i­ty:As the share of nation­al wealth and income going to the mid­dle class has shrunk, these fam­i­lies are among those whose share has grown.

    The accu­mu­la­tion of wealth has been par­tic­u­lar­ly rapid at the elite lev­els of Wall Street, where financiers who once man­aged oth­er people’s cap­i­tal now, increas­ing­ly, own it them­selves. Since 1979, accord­ing to one study, the one-tenth of 1 per­cent of Amer­i­can tax­pay­ers who work in finance have rough­ly quin­tu­pled their share of the country’s income. Six­ty-four of the fam­i­lies made their wealth in finance, the largest sin­gle fac­tion among the super-donors of 2016.

    But instead of work­ing their way up to the exec­u­tive suite at Gold­man Sachs or Exxon, most of these donors set out on their own, estab­lish­ing pri­vate­ly held firms con­trolled indi­vid­u­al­ly or with part­ners. In finance, they start­ed hedge funds, or formed pri­vate equi­ty and ven­ture cap­i­tal firms, ben­e­fit­ing from favor­able tax treat­ment of debt and cap­i­tal gains, and more recent­ly from a ris­ing stock mar­ket and low inter­est rates. In ener­gy, some were lat­ter-day wild­cat­ters, ear­ly to cap­i­tal­ize on the new drilling tech­nolo­gies and high ener­gy prices that made it eco­nom­i­cal to exploit shale for­ma­tions in North Dako­ta, Ohio, Penn­syl­va­nia and Texas. Oth­ers made for­tunes sup­ply­ing those wild­cat­ters with pipelines, trucks and equip­ment for “frack­ing.”

    In both ener­gy and finance, their busi­ness­es, when suc­cess­ful, could throw off enor­mous amounts of cash — unlike indus­tries in which wealth might have been tied up in invest­ments. Those with­out share­hold­ers or boards of direc­tors have had unusu­al free­dom to indulge their polit­i­cal pas­sions. Togeth­er, the two indus­tries account­ed for well over half of the cash con­tributed by the top 158 fam­i­lies.

    ...

    A num­ber of the fam­i­lies are tied to net­works of ide­o­log­i­cal donors who, on the left and the right alike, have sought to fun­da­men­tal­ly reshape their own polit­i­cal par­ties. More than a dozen donors or mem­bers of their fam­i­lies have been involved with the twice-year­ly sem­i­nars host­ed by the Kochs, whose orga­ni­za­tions have pressed the U.S. Cham­ber of Com­merce and oth­er busi­ness groups to elim­i­nate the Export-Import Bank. They include Mr. Dea­son and his wife; the bro­ker­age pio­neer Charles Schwab, whose wife, Helen, is among the donors; and Karen Buch­wald Wright, whose fam­i­ly com­pa­ny makes com­pres­sors used to extract and trans­port nat­ur­al gas.

    “Most of the peo­ple at the Koch sem­i­nars are entre­pre­neurs who have built it from the ground up — they built it them­selves,” said Mr. Dea­son, who said he sup­port­ed elim­i­nat­ing cor­po­rate sub­si­dies and wel­fare, includ­ing those that ben­e­fit his own invest­ments.

    Anoth­er group of the fam­i­lies, includ­ing the hedge fund investor George Soros and his son Jonathan, have ties to the Democ­ra­cy Alliance, a net­work of lib­er­al donors who have pushed Democ­rats to move aggres­sive­ly on cli­mate change leg­is­la­tion and pro­gres­sive tax­a­tion. Those donors, many of them from Hol­ly­wood or Wall Street, have put mil­lions of dol­lars behind Hillary Rod­ham Clin­ton.

    The fam­i­lies who give do so, to some extent, because of per­son­al, region­al and pro­fes­sion­al ties to the can­di­dates. Jeb Bush’s father made mon­ey in the oil busi­ness, while Mr. Bush him­self earned mil­lions of dol­lars on Wall Street. Some of the can­di­dates most pop­u­lar among ultra­wealthy donors have also served in elect­ed office in Flori­da and Texas, two states that are home to many of the afflu­ent fam­i­lies on the list.

    But the giv­ing, more broad­ly, reflects the polit­i­cal stakes this year for the fam­i­lies and busi­ness­es that have moved most aggres­sive­ly to take advan­tage of Cit­i­zens Unit­ed, par­tic­u­lar­ly in the ener­gy and finance indus­tries.

    The Oba­ma admin­is­tra­tion, Democ­rats in Con­gress and even Mr. Bush have argued for tax and reg­u­la­to­ry shifts that could sub­ject many ven­ture cap­i­tal and pri­vate equi­ty firms to high­er lev­els of cor­po­rate or invest­ment tax­a­tion. Hedge funds, which his­tor­i­cal­ly were light­ly reg­u­lat­ed, are bound by new rules with the Dodd-Frank reg­u­la­tions, which sev­er­al Repub­li­can can­di­dates have pledged to roll back and which Mrs. Clin­ton has pledged to defend.

    ...

    Aha! So the 158 ultras-rich fam­i­lies (who are most­ly from the ener­gy and finance sec­tors, are most­ly giv­ing to Repub­li­cans, and who pro­vid­ed most of the seed mon­ey raised by can­di­dates in both par­ties) are doing all this ‘giv­ing’ because they feel that dereg­u­la­tions will make it eas­i­er for the lit­tle guys to also get wealthy. Oh how phil­antroph­ic of them:

    ...
    But regard­less of indus­try, the fam­i­lies invest­ing the most in pres­i­den­tial pol­i­tics over­whelm­ing­ly lean right, con­tribut­ing tens of mil­lions of dol­lars to sup­port Repub­li­can can­di­dates who have pledged to pare reg­u­la­tions; cut tax­es on income, cap­i­tal gains and inher­i­tances; and shrink enti­tle­ment pro­grams. While such mea­sures would help pro­tect their own wealth, the donors describe their embrace of them more broad­ly, as the surest means of pro­mot­ing eco­nom­ic growth and pre­serv­ing a sys­tem that would allow oth­ers to pros­per, too.
    ...

    And in addi­tion to their dri­ve to dereg­u­late for the lit­tle guy *guf­faw*, these fam­i­lies have also tak­en it upon them­selves to pro­vide a help­ful “finan­cial check on demo­graph­ic forces that have been nudg­ing the elec­torate toward sup­port for the Demo­c­ra­t­ic Par­ty and its eco­nom­ic poli­cies”:

    ...
    In mar­shal­ing their finan­cial resources chiefly behind Repub­li­can can­di­dates, the donors are also serv­ing as a kind of finan­cial check on demo­graph­ic forces that have been nudg­ing the elec­torate toward sup­port for the Demo­c­ra­t­ic Par­ty and its eco­nom­ic poli­cies. Two-thirds of Amer­i­cans sup­port high­er tax­es on those earn­ing $1 mil­lion or more a year, accord­ing to a June New York Times/CBS News poll, while six in 10 favor more gov­ern­ment inter­ven­tion to reduce the gap between the rich and the poor. Accord­ing to the Pew Research Cen­ter, near­ly sev­en in 10 favor pre­serv­ing Social Secu­ri­ty and Medicare ben­e­fits as they are.
    ...

    Pre­sum­ably they’re doing all that for the lit­tle guy too.

    So now we get to see how suc­cess­ful the Amer­i­can Oli­garchy is going to be in dis­man­tling the finan­cial reg­u­la­tions that were put in place fol­low­ing the melt­down. And just remem­ber, if they’re suc­cess­ful in turn­ing the reg­u­la­to­ry clock back to 2007, don’t think of it as a dis­as­ter wait­ing to hap­pen. Just think of all the new fam­i­ly for­tunes from lit­tle guys like your­self that can be made while they re-crash the finan­cial sec­tor:

    The New York Times
    The Con­science of a Lib­er­al
    Angus Deaton and the Dodd-Frank Elec­tion

    Paul Krug­man
    Oct 12 9:16 am

    Angus Deaton has won the Nobel, which is won­der­ful — dogged, care­ful empir­i­cal work at the micro lev­el, track­ing and mak­ing sense of indi­vid­ual house­holds, their choic­es, and why they mat­ter.

    Oh, and cue the usu­al com­plaints that this isn’t a “real” Nobel. Hey, this is just a prize giv­en by a bunch of Swedes, as opposed to the oth­er prizes, which are giv­en out by, um, bunch­es of Swedes.

    Any­way, Deaton is also a fine writer with impor­tant things to say about polit­i­cal econ­o­my. Cardiff Gar­cia excerpts a pas­sage in which he explains why we should care about the con­cen­tra­tion of wealth at the top:

    [T]here is a dan­ger that the rapid growth of top incomes can become self-rein­forc­ing through the polit­i­cal access that mon­ey can bring. Rules are set not in the pub­lic inter­est but in the inter­est of the rich, who use those rules to become yet rich­er and more influ­en­tial.

    ...

    To wor­ry about these con­se­quences of extreme inequal­i­ty has noth­ing to do with being envi­ous of the rich and every­thing to do with the fear that rapid­ly grow­ing top incomes are a threat to the well­be­ing of every­one else.

    As if to illus­trate his point, this remark­able piece of report­ing by Con­fes­sore, Cohen, and Your­ish doc­u­ments the remark­able fact that cam­paign finance this elec­tion cycle is dom­i­nat­ed by a tiny num­ber of extreme­ly wealthy peo­ple — more than half the total from just 158 fam­i­lies. This mon­ey is over­whelm­ing­ly flow­ing to Repub­li­cans.

    Some ana­lysts sug­gest that this is just because there’s more action on the Repub­li­can side, with the field still wide open. But I’m pret­ty sure that’s noth­ing like the whole sto­ry. The biggest piece of the super-rich-super-donor sto­ry is mon­ey from the finan­cial sec­tor. And there has, as the chart above shows, been a huge swing of finance cap­i­tal away from Democ­rats to Repub­li­cans that began in the 2012 elec­tion cycle — that is, after the pas­sage of finan­cial reform. Basi­cal­ly, we’re look­ing at the peo­ple who brought you the finan­cial cri­sis try­ing to buy the chance to do it all over again.

    “The biggest piece of the super-rich-super-donor sto­ry is mon­ey from the finan­cial sec­tor. And there has, as the chart above shows, been a huge swing of finance cap­i­tal away from Democ­rats to Repub­li­cans that began in the 2012 elec­tion cycle — that is, after the pas­sage of finan­cial reform. Basi­cal­ly, we’re look­ing at the peo­ple who brought you the finan­cial cri­sis try­ing to buy the chance to do it all over again.
    And they’re doing it all for the lit­tle guy. Yep.

    Posted by Pterrafractyl | October 13, 2015, 5:03 pm
  3. Here’s a reminder that the pri­va­ti­za­tion of the US jus­tice sys­tem has­n’t just involved pri­va­tiz­ing pris­ons and polic­ing: thanks, in part, to a 2011 Supreme Court rul­ing, the prof­it motive is increas­ing­ly get­ting to work its mar­ket mag­ic dur­ing actu­al legal hear­ings too. Espe­cial­ly for cas­es that would call for a class action law­suit in a non-pri­va­tized legal sys­tem:

    The New York Times
    In Arbi­tra­tion, a ‘Pri­va­ti­za­tion of the Jus­tice Sys­tem’

    JESSICA SILVER-GREENBERG and MICHAEL CORKERY
    NOV. 1, 2015

    Deb­o­rah L. Pierce, an emer­gency room doc­tor in Philadel­phia, was opti­mistic when she brought a sex dis­crim­i­na­tion claim against the med­ical group that had dis­missed her. Respect­ed by col­leagues, she said she had a stack of glow­ing eval­u­a­tions and evi­dence that the prac­tice had a pat­tern of deny­ing women part­ner­ships.

    She began to wor­ry, though, once she was blocked from court and forced into pri­vate arbi­tra­tion.

    Pre­sid­ing over the case was not a judge but a cor­po­rate lawyer, Vasil­ios J. Kalo­gre­dis, who also han­dled arbi­tra­tions. When Ms. Pierce showed up one day for a hear­ing, she said she noticed Mr. Kalo­gre­dis hav­ing a friend­ly cof­fee with the head of the med­ical group she was suing.

    Dur­ing the pro­ceed­ings, the prac­tice with­held cru­cial evi­dence, includ­ing audio­tapes it destroyed, accord­ing to inter­views and doc­u­ments. Ms. Pierce thought things could not get any worse until a doc­tor reversed tes­ti­mo­ny she had giv­en in Ms. Pierce’s favor. The rea­son: Male col­leagues had “clar­i­fied” her mem­o­ry.

    When Mr. Kalo­gre­dis ulti­mate­ly ruled against Ms. Pierce, his deci­sion con­tained pas­sages pulled, ver­ba­tim, from legal briefs pre­pared by lawyers for the med­ical prac­tice, accord­ing to doc­u­ments.

    “It took away my faith in a fair and hon­or­able legal sys­tem,” said Ms. Pierce, who is still pay­ing off $200,000 in legal costs sev­en years lat­er.

    If the case had been heard in civ­il court, Ms. Pierce would have been able to appeal, rais­ing ques­tions about tes­ti­mo­ny, destruc­tion of evi­dence and poten­tial con­flicts of inter­est.

    But arbi­tra­tion, an inves­ti­ga­tion by The New York Times has found, often bears lit­tle resem­blance to court.

    Over the last 10 years, thou­sands of busi­ness­es across the coun­try — from big cor­po­ra­tions to store­front shops — have used arbi­tra­tion to cre­ate an alter­nate sys­tem of jus­tice. There, rules tend to favor busi­ness­es, and judges and juries have been replaced by arbi­tra­tors who com­mon­ly con­sid­er the com­pa­nies their clients, The Times found.

    The change has been swift and vir­tu­al­ly unno­ticed, even though it has meant that tens of mil­lions of Amer­i­cans have lost a fun­da­men­tal right: their day in court.

    “This amounts to the whole-scale pri­va­ti­za­tion of the jus­tice sys­tem,” said Myr­i­am Gilles, a law pro­fes­sor at the Ben­jamin N. Car­do­zo School of Law. “Amer­i­cans are active­ly being deprived of their rights.”

    All it took was adding sim­ple arbi­tra­tion claus­es to con­tracts that most employ­ees and con­sumers do not even read. Yet at stake are claims of med­ical mal­prac­tice, sex­u­al harass­ment, hate crimes, dis­crim­i­na­tion, theft, fraud, elder abuse and wrong­ful death, records and inter­views show.

    The fam­i­ly of a 94-year-old woman at a nurs­ing home in Mur­rysville, Pa., who died from a head wound that had been left to fes­ter, was ordered to go to arbi­tra­tion. So was a woman in Jef­fer­son, Ala., who sued Hon­da over injuries she said she sus­tained when the brakes on her car failed. When an infant was born in Tam­pa, Fla., with seri­ous defor­mi­ties, a law­suit her par­ents brought against the obste­tri­cian for neg­li­gence was dis­missed from court because of an arbi­tra­tion clause.

    Even a cruise ship employ­ee who said she had been drugged, raped and left uncon­scious in her cab­in by two crew mem­bers could not take her employ­er to civ­il court over neg­li­gence and an unsafe work­place.

    For com­pa­nies, the allure of arbi­tra­tion grew after a 2011 Supreme Court rul­ing cleared the way for them to use the claus­es to quash class-action law­suits. Pre­vent­ed from join­ing togeth­er as a group in arbi­tra­tion, most plain­tiffs gave up entire­ly, records show.

    Still, there are thou­sands of Amer­i­cans who — either out of neces­si­ty or on prin­ci­ple — want their griev­ances heard and have tak­en their chances in arbi­tra­tion.

    Lit­tle is known about arbi­tra­tion because the pro­ceed­ings are con­fi­den­tial and the fed­er­al gov­ern­ment does not require cas­es to be report­ed. The secre­tive nature of the process makes it dif­fi­cult to ascer­tain how fair­ly the pro­ceed­ings are con­duct­ed.

    Some plain­tiffs said in inter­views that arbi­tra­tion had helped to resolve their dis­putes quick­ly with­out the bureau­crat­ic headaches of going to court. Some said the arbi­tra­tors had act­ed pro­fes­sion­al­ly and with­out bias.

    But The Times, exam­in­ing records from more than 25,000 arbi­tra­tions between 2010 and 2014 and inter­view­ing hun­dreds of lawyers, arbi­tra­tors, plain­tiffs and judges in 35 states, uncov­ered many trou­bling cas­es.

    Behind closed doors, pro­ceed­ings can devolve into legal free-for-alls. Com­pa­nies have paid employ­ees to tes­ti­fy in their favor. A hear­ing that last­ed six hours cost the plain­tiff $150,000. Arbi­tra­tions have been con­duct­ed in the con­fer­ence rooms of lawyers rep­re­sent­ing the com­pa­nies accused of wrong­do­ing.

    Win­ners and losers are decid­ed by a sin­gle arbi­tra­tor who is large­ly at lib­er­ty to deter­mine how much evi­dence a plain­tiff can present and how much the defense can with­hold. To deliv­er favor­able out­comes to com­pa­nies, some arbi­tra­tors have twist­ed or out­right dis­re­gard­ed the law, inter­views and records show.

    “What rules of evi­dence apply?” one arbi­tra­tion firm asks in the ques­tion and answer sec­tion of its web­site. “The short answer is none.”

    Like the arbi­tra­tor in Ms. Pierce’s case, some have no expe­ri­ence as a judge but wield far more pow­er. And unlike the out­comes in civ­il court, arbi­tra­tors’ rul­ings are near­ly impos­si­ble to appeal.

    When plain­tiffs have asked the courts to inter­vene, court records show, they have almost always lost. Say­ing its hands were tied, one court in Cal­i­for­nia said it could not over­turn arbi­tra­tors’ deci­sions even if they caused “sub­stan­tial injus­tice.”

    Unfet­tered by strict judi­cial rules against con­flicts of inter­est, com­pa­nies can steer cas­es to friend­ly arbi­tra­tors. In turn, inter­views and records show, some arbi­tra­tors cul­ti­vate close ties with com­pa­nies to get busi­ness.

    Some of the chum­mi­ness is sub­tler, as in the case of the arbi­tra­tor who went to a bas­ket­ball game with the company’s lawyers the night before the pro­ceed­ings began. (The com­pa­ny won.) Or that of the man over­see­ing an insur­ance case brought by Stephen R. Syson in San­ta Bar­bara, Calif. Dur­ing a break in pro­ceed­ings, a dis­mayed Mr. Syson said he watched the arbi­tra­tor and defense lawyer return in match­ing sil­ver sports cars after going to lunch togeth­er. (He lost.)

    Oth­er poten­tial con­flicts are more explic­it. Arbi­tra­tion records obtained by The Times showed that 41 arbi­tra­tors each han­dled 10 or more cas­es for one com­pa­ny between 2010 and 2014.

    “Pri­vate judg­ing is an oxy­moron,” Antho­ny Kline, a Cal­i­for­nia appeals court judge, said in an inter­view. “This is a busi­ness and arbi­tra­tors have an eco­nom­ic rea­son to decide in favor of the repeat play­ers.”

    With so much lat­i­tude, some orga­ni­za­tions are requir­ing their employ­ees and cus­tomers to take their dis­putes to Chris­t­ian arbi­tra­tion. There, the pro­ceed­ings can incor­po­rate prayer, and arbi­tra­tors from firms like the Col­orado-based Peace­mak­er Min­istries can con­sid­er bib­li­cal scrip­ture in deter­min­ing their rul­ings.

    The firms that run the arbi­tra­tion pro­ceed­ings say the process allows plain­tiffs to have a say in select­ing an arbi­tra­tor who they think is most like­ly to ren­der a fair rul­ing.

    The Amer­i­can Arbi­tra­tion Asso­ci­a­tion and JAMS, the country’s two largest arbi­tra­tion firms, said in inter­views that they both strived to ensure a pro­fes­sion­al process and required their arbi­tra­tors to dis­close any con­flicts of inter­est before tak­ing a case.

    The Amer­i­can Arbi­tra­tion Asso­ci­a­tion, a non­prof­it, said it allowed plain­tiffs to reject arbi­tra­tors on the ground of poten­tial bias.

    JAMS, a for-prof­it com­pa­ny, said it did the same and put extra pro­tec­tions in place for con­sumers and employ­ees. “Their core val­ue is neu­tral­i­ty — their busi­ness depends on it,” Kim­ber­ly Tay­lor, chief oper­at­ing offi­cer of JAMS, said of its arbi­tra­tors.

    But in inter­views with The Times, more than three dozen arbi­tra­tors described how they felt behold­en to com­pa­nies. Beneath every deci­sion, the arbi­tra­tors said, was the threat of los­ing busi­ness.

    Vic­to­ria Pyn­chon, an arbi­tra­tor in Los Ange­les, said plain­tiffs had an inher­ent dis­ad­van­tage. “Why would an arbi­tra­tor cater to a per­son they will nev­er see again?” she said.

    Arbi­tra­tion proved to be dev­as­tat­ing to Deb­bie Bren­ner of Peo­ria, Ariz., who believes she did not get a fair shake in her fraud case against a for-prof­it school chain that near­ly left her bank­rupt. In a ram­bling deci­sion against Ms. Bren­ner that ran to 313 pages, the arbi­tra­tor mused on singing lessons, Jell‑O and Botox.

    “It was a kan­ga­roo court,” Ms. Bren­ner said. “I can’t believe this is Amer­i­ca.”

    ...

    Com­pa­nies can even spec­i­fy in con­tracts with their cus­tomers and employ­ees that all cas­es will be han­dled exclu­sive­ly by one arbi­tra­tion firm. Big law firms also bring repeat busi­ness to indi­vid­ual arbi­tra­tors, accord­ing to doc­u­ments and inter­views with arbi­tra­tors. Jack­son Lewis, for exam­ple, had 40 cas­es with the same arbi­tra­tor in San Fran­cis­co over a five-year peri­od.

    The JAMS arbi­tra­tor in an employ­ment case brought by Leonard Aceve­do of Pomona, Calif., against the short-term lender Cash­Call simul­ta­ne­ous­ly had 28 oth­er cas­es involv­ing the com­pa­ny, accord­ing to doc­u­ments dis­closed by JAMS dur­ing the pro­ceed­ings.

    “This whole expe­ri­ence burst my bub­ble,” said Mr. Aceve­do, a 57-year-old vet­er­an, who lost his case in Octo­ber 2014. His lawyer, James Cordes, offered a more crit­i­cal take. “It clear­ly appears that the arbi­tra­tor was work­ing for the com­pa­ny,” Mr. Cordes said. “And he dis­re­gard­ed evi­dence to hand a good result to his client.”

    JAMS denied that its arbi­tra­tor had been influ­enced by Cash­Call.

    Lin­da S. Klibanow, an employ­ment arbi­tra­tor in Pasade­na, Calif., acknowl­edged the poten­tial for con­flicts of inter­est but said she thought most arbi­tra­tors, many of whom are retired judges, could remain fair.

    “I think that most arbi­tra­tors put them­selves in the place of a jury as the fact find­er and try to ren­der a fair deci­sion,” Ms. Klibanow said.

    Eliz­a­beth Bart­ho­let, an arbi­tra­tor in Boston who has han­dled more than 100 cas­es, agreed that many arbi­tra­tors had good inten­tions, but she said that the sys­tem made it chal­leng­ing to remain unbi­ased. Ms. Bart­ho­let recalled that after a com­pa­ny com­plained that she had sched­uled an extra hear­ing for a plain­tiff, the arbi­tra­tion firm she was work­ing with can­celed it behind her back.

    A year lat­er, she said, she was at an indus­try con­fer­ence when she over­heard two peo­ple talk­ing about how an arbi­tra­tor in Boston had almost cost that firm a big client. “It was a con­fer­ence on ethics, if you can believe it,” said Ms. Bart­ho­let, a law pro­fes­sor at Har­vard.

    ...

    That’s quite a trend to just sort of sneak up on the Amer­i­can pub­lic over the last decade:

    ...
    Over the last 10 years, thou­sands of busi­ness­es across the coun­try — from big cor­po­ra­tions to store­front shops — have used arbi­tra­tion to cre­ate an alter­nate sys­tem of jus­tice. There, rules tend to favor busi­ness­es, and judges and juries have been replaced by arbi­tra­tors who com­mon­ly con­sid­er the com­pa­nies their clients, The Times found.

    The change has been swift and vir­tu­al­ly unno­ticed, even though it has meant that tens of mil­lions of Amer­i­cans have lost a fun­da­men­tal right: their day in court.

    “This amounts to the whole-scale pri­va­ti­za­tion of the jus­tice sys­tem,” said Myr­i­am Gilles, a law pro­fes­sor at the Ben­jamin N. Car­do­zo School of Law. “Amer­i­cans are active­ly being deprived of their rights.”

    All it took was adding sim­ple arbi­tra­tion claus­es to con­tracts that most employ­ees and con­sumers do not even read. Yet at stake are claims of med­ical mal­prac­tice, sex­u­al harass­ment, hate crimes, dis­crim­i­na­tion, theft, fraud, elder abuse and wrong­ful death, records and inter­views show.

    ...

    “Pri­vate judg­ing is an oxy­moron,” Antho­ny Kline, a Cal­i­for­nia appeals court judge, said in an inter­view. “This is a busi­ness and arbi­tra­tors have an eco­nom­ic rea­son to decide in favor of the repeat play­ers.”

    ...

    All it took was adding sim­ple arbi­tra­tion claus­es to con­tracts that most employ­ees and con­sumers do not even read
    Yep, that’s all it took to basi­cal­ly over­turn a foun­da­tion of the jus­tice system...tricking peo­ple via the fine print. Well, that and the Supreme Court’s repeat­ed stamps of approval.

    And in case you were curi­ous, yes, Chief Jus­tice John Roberts was involved with the effort to expand arbra­tion to con­sumers and employ­ees (it was orig­i­nal­ly intend­ed just for busi­ness) back when he was a cor­po­rate lawyer. He’s build­ing one hell of a lega­cy.

    Posted by Pterrafractyl | November 2, 2015, 4:03 pm
  4. You know how the Koch’s have been try­ing to sell them­selves are friend­ly oli­garchs with things like their advo­ca­cy for sweep­ing crim­i­nal jus­tice reform. Well, while it cer­tain­ly is great when­ev­er any­one calls for sweep­ing reforms to a jus­tice sys­tem that impos­es incred­i­bly harsh sen­tenc­ing for low-lev­el offens­es, this is the Koch broth­ers we’re talk­ing about here. So...surprise!...it’s not just the low-lev­el offend­ers that the Kochs want to keep out of jail:

    The Huff­in­g­ton Post
    House Bill Would Make It Hard­er To Pros­e­cute White-Col­lar Crime
    CEOs could be off the hook for even gross neg­li­gence.

    Zach Carter
    Senior Polit­i­cal Econ­o­my Reporter, The Huff­in­g­ton Post

    Post­ed: 11/16/2015 03:23 PM EST | Edit­ed: 11/16/2015 03:26 PM EST

    WASHINGTON — House Repub­li­cans on Mon­day unveiled leg­is­la­tion that would decrim­i­nal­ize a broad swath of cor­po­rate malfea­sance, a move that injects white-col­lar crime issues into the thus-far bipar­ti­san agen­da on crim­i­nal jus­tice reform.

    The pub­lic debate over crim­i­nal jus­tice reform has focused on reduc­ing severe sen­tences for non­vi­o­lent drug offens­es. But some influ­en­tial con­ser­v­a­tive voic­es, includ­ing the bil­lion­aire Koch broth­ers and the Her­itage Foun­da­tion, have qui­et­ly advo­cat­ed for curb­ing pros­e­cu­tion of cor­po­rate offens­es as well.

    The House bill would elim­i­nate a host of white-col­lar crimes where the dam­ag­ing acts are mere­ly reck­less, neg­li­gent or gross­ly neg­li­gent. If enact­ed, it would make it more dif­fi­cult for fed­er­al author­i­ties to pur­sue exec­u­tive wrong­do­ing, from finan­cial fraud to envi­ron­men­tal pol­lu­tion.

    Depart­ment of Jus­tice spokesman Peter Carr blast­ed the leg­is­la­tion in a state­ment pro­vid­ed to Huff­Post, say­ing it “would cre­ate con­fu­sion and need­less lit­i­ga­tion, and sig­nif­i­cant­ly weak­en, often unin­ten­tion­al­ly, count­less fed­er­al statutes,” includ­ing “those that play an impor­tant role in pro­tect­ing the pub­lic wel­fare ... pro­tect­ing con­sumers from unsafe food and med­i­cine.”

    The House Judi­cia­ry Com­mit­tee will begin mark­ing up its crim­i­nal jus­tice reform pack­age, includ­ing the lat­est bill, on Wednes­day. Chair­man Bob Good­lat­te (R‑Va.) and Rep. John Cony­ers (D‑Mich.), the pan­el’s top-rank­ing Demo­c­rat, have been work­ing on bipar­ti­san leg­is­la­tion for months.

    In Octo­ber, the Sen­ate Judi­cia­ry Com­mit­tee approved relat­ed reform leg­is­la­tion that does not include lan­guage to lim­it white-col­lar crime pros­e­cu­tions, although Sen. Orrin Hatch (R‑Utah) had pressed for its inclu­sion.

    “These are not eso­teric mat­ters,” said Robert Weiss­man, pres­i­dent of the con­sumer advo­ca­cy group Pub­lic Cit­i­zen. “There is absolute­ly no rea­son for the oth­er­wise laud­able crim­i­nal jus­tice reform bill to con­tain any mea­sure to weak­en already fee­ble stan­dards for cor­po­rate crim­i­nal pros­e­cu­tion.”

    Hatch and oth­er sup­port­ers of white-col­lar decrim­i­nal­iza­tion efforts have pushed for “mens rea” reform — a ref­er­ence to the legal stan­dard of intent which a defen­dant must have in order to be con­vict­ed of a crime. While cur­rent law allows cor­po­rate crime pros­e­cu­tions of high-lev­el man­agers based on neg­li­gent or reck­less behav­ior, the House leg­is­la­tion would require many such offens­es to be “know­ing” crimes, in which exec­u­tives were explic­it­ly aware of the activ­i­ty being con­duct­ed by oth­er employ­ees. In some cas­es, pros­e­cu­tors would also have to prove that the exec­u­tives knew that the activ­i­ty was ille­gal.

    “The House lan­guage vio­lates the basic pre­cept that ‘igno­rance of the law is no defense,’ ” Weiss­man said in a writ­ten state­ment.

    Large, com­plex cor­po­ra­tions can dif­fuse respon­si­bil­i­ty for ille­gal activ­i­ty, which can make it dif­fi­cult for pros­e­cu­tors to prove that exec­u­tives know­ing­ly and will­ful­ly vio­lat­ed the law. CEOs can also pres­sure low­er-lev­el employ­ees to vio­late the law with­out explic­it­ly telling them to do so — by, say, demand­ing prof­its or oth­er results that are impos­si­ble to reach with­out break­ing the law. Under cur­rent law, pros­e­cu­tors can bring cas­es on the grounds that such behav­ior by exec­u­tives is crim­i­nal­ly reck­less or neg­li­gent, even if they can­not prove the CEO was actu­al­ly aware that under­lings were break­ing the law to meet impos­si­ble met­rics.

    In prac­tice, how­ev­er, cor­po­rate crime pros­e­cu­tions are already rel­a­tive­ly rare and fre­quent­ly skip over exec­u­tives and oth­er top man­agers. “When employ­ees are charged, it’s often low­er-lev­el employ­ees,” Uni­ver­si­ty of Vir­ginia law pro­fes­sor Bran­don Gar­rett told Huff­Post Live in Sep­tem­ber. “More the pawns than the king­pins.”

    The Jus­tice Depart­ment has been heav­i­ly crit­i­cized for its weak enforce­ment against cor­po­rate crimes dur­ing the Oba­ma years. No Wall Street exec­u­tives were charged for the mis­con­duct that caused the 2008 finan­cial cri­sis.

    ...

    “These are not eso­teric matters...There is absolute­ly no rea­son for the oth­er­wise laud­able crim­i­nal jus­tice reform bill to con­tain any mea­sure to weak­en already fee­ble stan­dards for cor­po­rate crim­i­nal pros­e­cu­tion.”
    Well, there may be no good rea­sons for an oth­er­wise laud­able crim­i­nal jus­tice reform bill to con­tain any mea­sure to weak­en already fee­ble stan­dards for cor­po­rate crim­i­nal pros­e­cu­tion. But there are rea­sons. Around 900 mil­lion of them.

    Posted by Pterrafractyl | November 17, 2015, 10:04 am
  5. While it was inevitable that the pri­va­ti­za­tion of work­place jus­tice via arbi­tra­tion claus­es was going to grow by leaps and bounds fol­low­ing the Supreme Court’s 2011 rul­ing on the top­ic, as the arti­cle below points out, that the par­al­lel growth of temp work­ers is only going to add a few more leaps and bounds to the pri­va­ti­za­tion of work­place jus­tice.

    The arti­cle also points out anoth­er key con­sid­er­a­tion with respect to the growth of arbi­tra­tion claus­es designed to replace legal recourse for employ­ees: In terms of the pub­lic know­ing about work­place abus­es that the pub­lic should know about, knowl­edge of the abus­es that get arbi­trat­ed by the pri­va­tized jus­tice sys­tem tends to remain pri­vate too:

    Boston Globe

    More employ­ers lim­it­ing work­ers’ abil­i­ty to sue

    By Katie John­ston Globe Staff
    Decem­ber 27, 2015

    In Jan­u­ary of 2014, a work­er at a New Bed­ford seafood pro­cess­ing plant died after becom­ing entan­gled in a shell­fish-shuck­ing machine.

    As with many work­place fatal­i­ties, the death was fol­lowed by a change in pol­i­cy for the work­ers. But not the kind you might expect.

    The Rhode Island tem­po­rary agency that pro­vides much of the work­force for the shell­fish com­pa­ny asked employ­ees to sign waivers agree­ing they would not sue the plant if they were injured on the job.

    Work­ers are increas­ing­ly being required to sign doc­u­ments like this that waive or lim­it their right to take legal action under cer­tain cir­cum­stances, such as in dis­crim­i­na­tion or pay dis­putes, labor lawyers and advo­cates say.

    Some doc­u­ments require them to sub­mit instead to manda­to­ry arbi­tra­tion that keeps employ­ees’ com­plaints out of court and often pre­cludes class-action law­suits.

    The num­ber of com­pa­nies using such agree­ments more than dou­bled between 2012 and 2014, accord­ing to a recent sur­vey by Carl­ton Fields Jor­den Burt, a law firm that rep­re­sents man­age­ment on employ­ment issues.

    These types of job-relat­ed waivers echo the surge in con­tracts con­tain­ing arbi­tra­tion agree­ments that com­pa­nies such as cred­it card issuers and cell­phone providers have used to pre­vent con­sumers from suing them over billing dis­putes. The US Supreme Court has upheld such agree­ments sev­er­al times in recent years, shoot­ing down a con­sumer class action against DirecTV ear­li­er this month.

    Lim­it­ing work­ers to arbi­tra­tion is prob­lem­at­ic, the advo­cates said, because that process keeps pri­vate the com­plaints that might oth­er­wise have been made pub­lic in the court sys­tem. And bar­ring class-action law­suits pre­vents work­ers from band­ing togeth­er over vio­la­tions that, indi­vid­u­al­ly, might not gen­er­ate a big enough award to make a suit worth­while.

    The Mass­a­chu­setts Employ­ment Lawyers Asso­ci­a­tion said com­pa­nies are also impos­ing oth­er restric­tions on work­ers, such as short­en­ing the time they have to file a claim or mov­ing dis­putes to oth­er states — where head­quar­ters are locat­ed, for instance — that may be more favor­able to employ­ers.

    “It’s a huge prob­lem,” said Lori Jodoin, pres­i­dent of the Mass­a­chu­setts Employ­ment Lawyers Asso­ci­a­tion, an orga­ni­za­tion of attor­neys who rep­re­sent employ­ees. “It gives [com­pa­nies] a legal loop­hole where they can make up their own rules.”

    Busi­ness groups say these agree­ments are intend­ed to man­age com­plaints in a time­ly, cost-effec­tive man­ner and are not about shield­ing com­pa­nies from law­suits. Com­pa­nies don’t always nec­es­sar­i­ly want to avoid court, added Matt Moschel­la, a part­ner at Sherin and Lod­gen in Boston who rep­re­sents employ­ers.

    “There’s a deter­rent effect when an employ­ee sees anoth­er employ­ee bring a claim and lose,” he said.

    Nonethe­less, advo­cates say more work­place claims of dis­crim­i­na­tion, sex­u­al harass­ment, and wage vio­la­tions are being han­dled pri­vate­ly, or not being report­ed at all, which they argue means employ­ers are held less account­able for treat­ing work­ers unfair­ly.

    “The real con­cern for a lot of peo­ple is what we don’t see, and that is peo­ple who opt out of the process alto­geth­er because the pro­ce­dur­al hur­dles appear or are in fact so insur­mount­able that folks are deterred from exer­cis­ing their rights,” said David Lopez, gen­er­al coun­sel for the US Equal Employ­ment Oppor­tu­ni­ty Com­mis­sion, which enforces antidis­crim­i­na­tion laws. “You’re not real­ly able to shine the sun­shine on unlaw­ful prac­tices.”

    In the past, such arrange­ments were aimed at exec­u­tives, but now they are spread­ing through the ranks. Low-wage work­ers are par­tic­u­lar­ly vul­ner­a­ble, lawyers and advo­cates say, because they tend to be more in need of work and less inclined to object.

    Even tem­po­rary work­ers are being tar­get­ed, such as those at the seafood pro­cess­ing plant in New Bed­ford. The plant is owned by Sea Watch Inter­na­tion­al of Mary­land, but many of its line work­ers are sup­plied and employed by Work­force Unlim­it­ed, a temp agency in John­ston, R.I.

    After a super­vi­sor was killed there last year, the fed­er­al Occu­pa­tion­al Safe­ty and Health Admin­is­tra­tion in June 2014 fined Sea Watch and the temp agency for mul­ti­ple safe­ty vio­la­tions, not­ing that both com­pa­nies shared respon­si­bil­i­ty for the safe­ty of the temp work­ers.

    ...

    Advo­cates say work­ers’ com­pen­sa­tion pay­ments often don’t ful­ly cov­er their expens­es. More to the point, they added, work­ers should have the right to seek dam­ages from the com­pa­ny over­see­ing the work site if some­thing goes wrong.

    “You’re cre­at­ing an atmos­phere where the peo­ple who have direct con­trol over me don’t real­ly have any great incen­tive to pro­vide for my safe­ty,” said Clau­dine Clouti­er, a per­son­al injury lawyer at Kech­es Law Group in Taunton.

    Work­ers in the on-demand econ­o­my are also being giv­en lim­it­ed access to the court sys­tem. Thou­sands of Uber dri­vers in Cal­i­for­nia who signed arbi­tra­tion agree­ments were ini­tial­ly exclud­ed from a class-action law­suit brought by Boston lawyer Shan­non Liss-Rior­dan, over their sta­tus as inde­pen­dent con­trac­tors. But a fed­er­al judge in San Fran­cis­co ruled this month that the arbi­tra­tion clause was not enforce­able due to a tech­ni­cal­i­ty in Cal­i­for­nia law.

    A bill in the Mass­a­chu­setts Leg­is­la­ture, recent­ly approved by the Labor and Work­force Devel­op­ment com­mit­tee, would make it ille­gal for com­pa­nies to require employ­ees to sign arbi­tra­tion claus­es and waive oth­er legal rights before a dis­pute aris­es.

    Asso­ci­at­ed Indus­tries of Mass­a­chu­setts oppos­es it, say­ing it could lead to more “drawn-out, friv­o­lous, and full-blown court cas­es.”

    “All it would ben­e­fit is those attor­neys who want to max­i­mize the pos­si­bil­i­ty of get­ting dam­ages and attor­neys’ fees,” said Joseph Ambash, an lawyer at Fish­er & Phillips in Boston who rep­re­sents employ­ers.

    But work­er advo­cates say that resolv­ing work­ers’ griev­ances qui­et­ly with­out being able to hold com­pa­nies pub­licly account­able is unjust.

    “Because no one finds out about it,” said Cam­bridge lawyer Tyler Fox, “what’s the incen­tive for it not to hap­pen again?”

    “You’re cre­at­ing an atmos­phere where the peo­ple who have direct con­trol over me don’t real­ly have any great incen­tive to pro­vide for my safe­ty”
    That does appear to be the case.

    Of course, if you lis­ten to the indus­tries employ­ing these arbi­tra­tion claus­es, the waivers against suing aren’t actu­al­ly about pre­vent­ing law­suits. It’s just about being more effi­cient and cost effec­tive! Also, despite the fact that arbi­tra­tion claus­es make it much less like­ly that the pub­lic will find out about sys­tem­at­ic abus­es, no one would ben­e­fit from restrict­ing the wide­spread use of arbi­tra­tion claus­es oth­er than the tri­al lawyers:

    ...

    Busi­ness groups say these agree­ments are intend­ed to man­age com­plaints in a time­ly, cost-effec­tive man­ner and are not about shield­ing com­pa­nies from law­suits. Com­pa­nies don’t always nec­es­sar­i­ly want to avoid court, added Matt Moschel­la, a part­ner at Sherin and Lod­gen in Boston who rep­re­sents employ­ers.

    “There’s a deter­rent effect when an employ­ee sees anoth­er employ­ee bring a claim and lose,” he said.

    Nonethe­less, advo­cates say more work­place claims of dis­crim­i­na­tion, sex­u­al harass­ment, and wage vio­la­tions are being han­dled pri­vate­ly, or not being report­ed at all, which they argue means employ­ers are held less account­able for treat­ing work­ers unfair­ly.

    ...

    Asso­ci­at­ed Indus­tries of Mass­a­chu­setts oppos­es it, say­ing it could lead to more “drawn-out, friv­o­lous, and full-blown court cas­es.”

    “All it would ben­e­fit is those attor­neys who want to max­i­mize the pos­si­bil­i­ty of get­ting dam­ages and attor­neys’ fees,” said Joseph Ambash, an lawyer at Fish­er & Phillips in Boston who rep­re­sents employ­ers.

    But work­er advo­cates say that resolv­ing work­ers’ griev­ances qui­et­ly with­out being able to hold com­pa­nies pub­licly account­able is unjust.

    “Because no one finds out about it,” said Cam­bridge lawyer Tyler Fox, “what’s the incen­tive for it not to hap­pen again?”

    Yes, restrict­ing this sud­den explo­sion of arbi­tra­tion claus­es for low-wage and temp work­ers in indus­tries like food pro­cess­ing would only ben­e­fit tri­al lawyers. And no one else.

    Pri­vate jus­tice. It’s an oldie but a good­ie

    Posted by Pterrafractyl | December 28, 2015, 5:29 pm
  6. Amer­i­can work­ers have long been both unhap­py and large­ly clue­less about the size of the pay gap between cor­po­rate CEOs and aver­age work­ers. Well, the CEO com­pen­sa­tion infor­ma­tion for S&P 500 CEOs is in for 2015. And unless the aver­age work­er assumes the aver­age S&P 500 CEO got a raise worth 10 times the aver­age employ­ee’s annu­al com­pen­sa­tion, they’re prob­a­bly less unhap­py than they should be but cer­tain­ly more clue­less:

    Asso­ci­at­ed Press

    CEO pay in 2015: When a $468,449 raise is typ­i­cal

    By Stan Choe|AP May 25, 2016

    NEW YORK — CEOs at the biggest com­pa­nies got a 4.5 per­cent pay raise last year. That’s almost dou­ble the typ­i­cal Amer­i­can worker’s, and a lot more than investors earned from own­ing their stocks — a big fat zero.

    The typ­i­cal chief exec­u­tive in the Stan­dard & Poor’s 500 index made $10.8 mil­lion, includ­ing bonus­es, stock awards and oth­er com­pen­sa­tion, accord­ing to a study by exec­u­tive data firm Equi­lar for The Asso­ci­at­ed Press. That’s up from the medi­an of $10.3 mil­lion the same group of CEOs made a year ear­li­er.

    The raise alone for medi­an CEO pay last year, $468,449, is more than 10 times what the typ­i­cal U.S. work­er makes in a year. The medi­an full-time work­er earned $809 week­ly in 2015, up from $791 in 2014.

    “With infla­tion run­ning at less than 2 per­cent, why?” asks Charles Elson, direc­tor of the John L. Wein­berg Cen­ter for Cor­po­rate Gov­er­nance at the Uni­ver­si­ty of Delaware.

    The answer is com­pli­cat­ed. In some cas­es, CEOs got big stock or option pack­ages after sign­ing new employ­ment con­tracts. In oth­ers, boards bumped up salaries to get clos­er to what their rivals pay. Some CEOs got larg­er bonus­es for hit­ting prof­it goals or improv­ing work­er safe­ty. CEO pay pack­ages now hinge on mul­ti­ple lay­ers of some­times eso­teric mea­sure­ments of per­for­mance. That’s a result of cor­po­rate boards attempt­ing to respond to years of crit­i­cism about exces­sive­ness from Main Street Amer­i­ca, reg­u­la­tors and even can­di­dates on the pres­i­den­tial trail this year.

    One bright spot, experts say, is the rise in the num­ber of com­pa­nies that tie CEO pay to how well their stocks per­form. “There’s progress gen­er­al­ly in align­ing com­pen­sa­tion with share­hold­er returns,” says Stu Dal­heim, vice pres­i­dent of gov­er­nance and advo­ca­cy at Calvert Invest­ments, whose mutu­al funds look for social­ly and envi­ron­men­tal­ly respon­si­ble com­pa­nies. “But I don’t think this com­pen­sa­tion is sus­tain­able long term, because the U.S. pop­u­la­tion is increas­ing­ly focused and aware of the dis­par­i­ty.”

    PAY BREAKDOWN

    More than half the medi­an com­pen­sa­tion of CEO pay is com­ing from stock and options, rather than cash. And com­pa­nies are increas­ing­ly met­ing out those stock and option awards based on per­for­mance.

    About a quar­ter of CEO incen­tive awards in the S&P 500 use total share­hold­er return as one of their mea­sure­ments of per­for­mance. That’s more than dou­ble the per­cent­age from three years ear­li­er. Com­pa­nies also use famil­iar mea­sure­ments like rev­enue and wonki­er ones like return on invest­ed cap­i­tal.

    The tie to share­hold­er return is one rea­son the rise in medi­an CEO pay last year was the sec­ond-slow­est in the past five years. Of the 341 exec­u­tives in this year’s pay sur­vey, the medi­an stock returned zero in the lat­est fis­cal year. Last year’s 4.5 per­cent raise for CEOs was faster than the pri­or year’s 0.8 per­cent, but well below the 8.8 per­cent gain of 2013.

    Even though CEO pay was up last year when stock returns were flat, big investors don’t see it as a nec­es­sar­i­ly bad thing. Many say they take a longer view, sim­i­lar to how they hope to hold onto their stock invest­ments for many years.

    Cap­i­tal Group, whose Amer­i­can Funds fam­i­ly of mutu­al funds rank among the country’s biggest, goes back at least three years when con­sid­er­ing CEO pay ver­sus per­for­mance, says Anne Chap­man, vice pres­i­dent of invest­ment oper­a­tions.

    The Stan­dard & Poor’s 500 index returned a total of 53 per­cent in the three years through 2015.

    NO. 1 ON THE CHART

    The top-paid CEO in this past year’s sur­vey, Expedia’s Dara Khos­row­shahi, made $94.6 mil­lion last year. Most of that came from stock options, which came as part of a new five-and-a-half-year employ­ment agree­ment and which vest over sev­er­al years. He’ll get a chunk of those options, cur­rent­ly val­ued at $30.4 mil­lion, only if he’s able to push the stock up to an aver­age of $170 in the run up to his contract’s end in Sep­tem­ber 2020. Expe­dia stock closed Tues­day at $113.17.

    “This is a great exam­ple of a pay-for-per­for­mance CEO com­pen­sa­tion plan,” says Sarah Gavin, spokes­woman for Expe­dia. “He’s real­ly led the com­pa­ny in a turn­around, and this is about him con­tin­u­ing to per­form and return real val­ue to cus­tomers, part­ners and share­hold­ers over the next five years.”

    Expedia’s stock returned 47 per­cent last year.

    At Via­com, share­hold­ers lost 42 per­cent in its lat­est fis­cal year, which end­ed in Sep­tem­ber. That’s even though CEO Philippe Dau­man made $54.1 mil­lion, a 22 per­cent raise from the pri­or year.

    Much of Dauman’s com­pen­sa­tion was due to a con­tract renew­al, which includ­ed stock and options that vest over sev­er­al years. With­out the con­tract renew­al, his pay would have dropped 16 per­cent.

    Via­com declined to com­ment.

    THE WIDENING GAP

    Scruti­ny has been increas­ing on CEO pay, and many Amer­i­cans say they feel left behind in the econ­o­my even though the Great Reces­sion tech­ni­cal­ly end­ed near­ly sev­en years ago. This recov­ery has meant big gains for stocks — and for CEOs — but not so much for the typ­i­cal house­hold.

    Anger is high. Near­ly three quar­ters of Amer­i­cans believe CEOs are paid an incor­rect amount, rel­a­tive to the aver­age work­er, accord­ing to Stan­ford University’s Rock Cen­ter for Cor­po­rate Gov­er­nance. And that’s even though most Amer­i­cans severe­ly under­es­ti­mate how much CEOs make. The typ­i­cal Amer­i­can believes big-com­pa­ny CEOs aver­age $1 mil­lion in pay.

    Start­ing next year, com­pa­nies will have to begin show­ing how much more their CEOs make than their typ­i­cal work­er. That’s when the Secu­ri­ties and Exchange Com­mis­sion has told pub­lic com­pa­nies to start dis­clos­ing the ratio of its CEO’s com­pen­sa­tion ver­sus its medi­an employ­ee. It’s the lat­est move by the gov­ern­ment to shed more light on exec­u­tive pay.

    GIVING THE OK ON PAY

    While many Amer­i­cans say they’re angry about how much CEOs are mak­ing, the boards of direc­tors who set their pay aren’t. They say they’re set­ting pay for per­for­mance, and in line with their com­peti­tors. That cul­ture of bench­mark­ing com­pen­sa­tion against peers is one rea­son why pay keeps esca­lat­ing, says the Uni­ver­si­ty of Delaware’s Elson.

    “Every­one is being com­pared to every­one else, and every­one wants to be high­er,” he says. “We have to get out of this Lake Wobe­gon and change chan­nels and get back to a pay scheme that’s ratio­nal­ly based.”

    Most share­hold­ers, though, seem to agree with the boards of direc­tors. Stock hold­ers, whether by them­selves or through the mutu­al funds they own, get the oppor­tu­ni­ty to vote on whether they think CEO com­pen­sa­tion is fair at com­pa­nies’ annu­al meet­ings. It’s called the “say-on-pay” vote, and com­pa­nies rou­tine­ly get more than 70 per­cent of shares vot­ing in favor of pay pack­ages.

    Often­times, mutu­al-fund com­pa­nies say they’d pre­fer to talk direct­ly with board direc­tors about chang­ing CEO pay, rather than lodge “No” votes at the annu­al meet­ing. Many say they get bet­ter results, but crit­ics have begun push­ing mutu­al-fund com­pa­nies and oth­er big stock share­hold­ers with clout to offer up more resis­tance as CEO pay sets records.

    UNANTICIPATED CONSEQUENCES

    Regard­less of whether it’s fair for CEOs to earn such large checks, a big pay­day can also be a warn­ing sign for investors. After look­ing at CEOs’ pay and per­for­mance from 1994 to 2011, researchers found that the high­est-paid CEOs in an indus­try tend to lead their com­pa­nies to weak­er stock returns in ensu­ing years.

    Michael Coop­er, a finance pro­fes­sor at the Uni­ver­si­ty of Utah and one of the paper’s authors, is quick to say that he can’t be sure whether the high pay caused the weak­er returns, or whether they’re just cor­re­lat­ed. But he says a like­ly expla­na­tion is that big pay­checks can make CEOs over­con­fi­dent and lead to waste­ful spend­ing deci­sions.

    He’s in the midst of updat­ing the data now, to run through 2015, but the trend seems to have held up. “We’re build­ing the tables right now,” he says. “It’s still very strong.”

    ...

    “One bright spot, experts say, is the rise in the num­ber of com­pa­nies that tie CEO pay to how well their stocks per­form. “There’s progress gen­er­al­ly in align­ing com­pen­sa­tion with share­hold­er returns,” says Stu Dal­heim, vice pres­i­dent of gov­er­nance and advo­ca­cy at Calvert Invest­ments, whose mutu­al funds look for social­ly and envi­ron­men­tal­ly respon­si­ble com­pa­nies. “But I don’t think this com­pen­sa­tion is sus­tain­able long term, because the U.S. pop­u­la­tion is increas­ing­ly focused and aware of the dis­par­i­ty.””
    Huh. So encour­ag­ing CEOs to jack up their stock prices in order to max­i­mize their per­son­al com­pen­sa­tion is seen a good thing again. That’s, uh, a bit retro. But, ok, maybe direct­ing their cor­po­ra­tion to buy back their own shares at record lev­els was the kind of inno­va­tion the US econ­o­my need­ed. Great job CEOs!

    And assum­ing wise invest­ments like spend­ing almost all of their prof­its on stock buy­backs in recent years ends up being the kind of deci­sions that gen­er­ate real wealth for the cor­po­ra­tions, hope­ful­ly some of that can final­ly trick­le down to the clue­less work­ers before they final­ly real­ize just how thor­ough­ly they’ve been scammed.

    Or maybe these inno­v­a­tive CEOs will prove their worth by devis­ing schemes that actu­al­ly avoid the need to raise their employ­ees’ wages at all while simul­ta­ne­ous­ly pro­ject­ing a nice and car­ing car­ing. That would be kind of impres­sive.

    Yeah, maybe it’ll be the lat­ter kind of inno­va­tion...

    Posted by Pterrafractyl | June 1, 2016, 2:57 pm
  7. Using the First Amend­ment right to free speech to jus­ti­fy sleazy cor­po­rate prac­tices is unfor­tu­nate­ly noth­ing new for Amer­i­can law. Espe­cial­ly for the Roberts court after Cit­i­zens Unit­ed used the First Amend­ment to flood the US polit­i­cal sys­tem with unprece­dent­ed amounts of mon­ey. So, with that in mind, check out the lat­est sleazy attempt to mis­use the First Amend­ment:

    In These Times

    Judge’s Rul­ing Re-Opens a Major Loop­hole that Allows Union Busters To Remain in the Shad­ows

    BY Moshe Z. Mar­vit
    Tues­day, Jul 5, 2016, 2:11 pm

    Ear­li­er this year, the U.S. Depart­ment of Labor (DOL) passed the “per­suad­er rule” that closed a major loop­hole, which has for decades allowed employ­ers to hire attor­neys and con­sul­tants to secret­ly assist them in what is polite­ly referred to in the indus­try as “union avoid­ance.” The goal of this activ­i­ty is to per­suade and pre­vent work­ers from orga­niz­ing unions.

    The new rule did not try to make the con­sul­tants’ and attor­neys’ prac­tices ille­gal, or reg­u­late the types of activ­i­ties that employ­ers and con­sul­tants could engage in; it was sim­ply intend­ed to pro­vide trans­paren­cy to work­ers who are the sub­ject of a coor­di­nat­ed anti-union cam­paign. But last week, a Texas fed­er­al dis­trict court judge issued a nation­wide injunc­tion pro­hibit­ing the DOL from imple­ment­ing the rule.

    The per­suad­er rule rein­ter­pret­ed the “advice” exemp­tion in Sec­tion 203© of the Labor-Man­age­ment Report­ing and Dis­clo­sure Act of 1959 (LMRDA), which had only required dis­clo­sure when employ­ers hired out­side con­sul­tants who direct­ly com­mu­ni­cat­ed with employ­ees. Under the pre­vi­ous inter­pre­ta­tion of the exemp­tion, the vast major­i­ty of employ­ers who hire labor consultants—sometimes referred to as “union busters”—and the con­sul­tants they hire have been able to evade their fil­ing require­ments and remain in the shad­ows by hav­ing these con­sul­tants work behind the scenes.

    As a result, the work­ers are nev­er privy to who is coor­di­nat­ing the anti-union cam­paign or how much their employ­ers are spend­ing on it. It is esti­mat­ed that employ­ers in 71–87 per­cent of orga­niz­ing dri­ves hire one or more con­sul­tants, yet because of the mas­sive loop­hole in the law, only 387 agree­ments were filed by employ­ers and con­sul­tants.

    The LMRDA was passed to deal with the per­sis­tent prob­lem of employ­ers’ inter­fer­ence with work­ers’ rights to orga­nize. A 1980 Con­gres­sion­al Sub-Com­mit­tee Report described the long his­to­ry of employ­ers using

    out­side assis­tance to com­bat union orga­niz­ing efforts since well before fed­er­al leg­is­la­tion to reg­u­late labor-man­age­ment con­flict was enact­ed. Pri­vate detec­tives and ”pro­fes­sion­al goons” were hired by employ­ers, who were also assist­ed by law enforce­ment per­son­nel. Anti-union tac­tics includ­ed spy­ing, black­list­ing, fir­ing, phys­i­cal intim­i­da­tion, vio­lence, and jail­ings.

    Twen­ty years ear­li­er, in the Final Report pre­ced­ing the pas­sage of the LMRDA, Con­gress that the out­side “spy” and “pro­fes­sion­al goons” had mor­phed, and “a new and more sophis­ti­cat­ed out­sider had appeared: the ‘labor rela­tions con­sul­tant.’ ” As a result, the 1959 Act required employ­ers and any con­sul­tants they hired to file a report if they made any arrange­ments or spent any mon­ey “to inter­fere with, restrain, or coerce employ­ees in the exer­cise of the right to orga­nize and bar­gain col­lec­tive­ly through rep­re­sen­ta­tives of their own choos­ing.”

    The new per­suad­er rule, which cov­ers all agree­ments and pay­ments after July 1, was intend­ed to close this loop­hole. The rule requires employ­ers who hire anti-union con­sul­tants (and those con­sul­tants hired) to dis­close to the DOL the agree­ment and the amounts paid. It would not require dis­clo­sure of what the con­sul­tants said or any legal advice sought. It is akin to a require­ment that polit­i­cal cam­paign ads dis­close who is pay­ing for the ad so that peo­ple know who is behind the mes­sage they are receiv­ing.

    But now, under last week’s injunc­tion, all of that is in jeop­ardy.

    “This was one of the most one-sided orders I have ever seen,” explains Seat­tle Uni­ver­si­ty School of Law Pro­fes­sor Char­lotte Gar­den. “The court found every one of the the­o­ries brought by the plain­tiffs like­ly to suc­ceed.”

    The suit was brought by the Nation­al Fed­er­a­tion of Inde­pen­dent Busi­ness, the Texas Asso­ci­a­tion of Busi­ness, the Lub­bock Cham­ber of Com­merce, the Nation­al Asso­ci­a­tion of Home Builders, the Texas Asso­ci­a­tion of Builders, and a group of GOP-con­trolled states. Some of these orga­ni­za­tions were con­cerned that their cur­rent activ­i­ties of pro­vid­ing anti-union sem­i­nars and mate­ri­als would require them to file reports iden­ti­fy­ing them­selves as labor rela­tions con­sul­tants.

    Per­haps the most sur­pris­ing group to take a side in this case was the Amer­i­can Bar Asso­ci­a­tion (ABA), whose mis­sion is “To serve equal­ly our mem­bers, our pro­fes­sion and the pub­lic by defend­ing lib­er­ty and deliv­er­ing jus­tice as the nation­al rep­re­sen­ta­tive of the legal pro­fes­sion.” The ABA cit­ed attor­neys’ eth­i­cal rules for their oppo­si­tion to the DOL Rule, and said, “by impos­ing these unfair report­ing bur­dens on both the lawyers and the employ­er clients they rep­re­sent, the pro­posed Rule could very well dis­cour­age many employ­ers from seek­ing the expert legal rep­re­sen­ta­tion they need, there­by effec­tive­ly deny­ing them their fun­da­men­tal right to coun­sel.”

    This coali­tion of busi­ness and attor­ney groups and states brought for­ward a num­ber of argu­ments, from the DOL lack­ing author­i­ty to pass the rule to the rule exceed­ing the DOL’s esti­mat­ed com­pli­ance costs by $59.99 bil­lion over 10 years. (The DOL esti­mat­ed the rule would cost all employ­ers and con­sul­tants a total of approx­i­mate­ly $826,000 per year; the plain­tiffs esti­mat­ed it at $60 bil­lion over 10 years.) Addi­tion­al­ly, in line with the grow­ing use of the First Amend­ment against gov­ern­ment reg­u­la­tion of busi­ness, the plain­tiffs argued that the rule vio­lat­ed the employ­ers’, lawyers’, and con­sul­tants’ free speech, expres­sion and asso­ci­a­tion rights. The Judge con­clud­ed that some union busters may not offer their ser­vices as freely, and some attor­neys may leave the field, if their iden­ti­ties and the terms of their arrange­ments were dis­closed.

    There is a great dis­so­nance to the judge’s extreme sen­si­tiv­i­ties to the rights of lawyers, union busters and employ­ers to have their anti-union activ­i­ties shroud­ed in com­plete secre­cy, when the new rule was intend­ed to pro­tect work­ers’ rights. Not men­tioned any­where in the judge’s 86-page order is any dis­cus­sion of work­ers’ rights to know who is real­ly speak­ing to them when they are forced to sit in on an anti-union cap­tive audi­ence meet­ing. Fur­ther, there is no dis­cus­sion of the val­ue to work­ers of being able to test the employer’s claim that it does not have mon­ey to pro­vide extra pay or ben­e­fits, when it might be spend­ing tens or hun­dreds of thou­sands of dol­lars on anti-union con­sul­tants.

    ...

    “This coali­tion of busi­ness and attor­ney groups and states brought for­ward a num­ber of argu­ments, from the DOL lack­ing author­i­ty to pass the rule to the rule exceed­ing the DOL’s esti­mat­ed com­pli­ance costs by $59.99 bil­lion over 10 years. (The DOL esti­mat­ed the rule would cost all employ­ers and con­sul­tants a total of approx­i­mate­ly $826,000 per year; the plain­tiffs esti­mat­ed it at $60 bil­lion over 10 years.) Addi­tion­al­ly, in line with the grow­ing use of the First Amend­ment against gov­ern­ment reg­u­la­tion of busi­ness, the plain­tiffs argued that the rule vio­lat­ed the employ­ers’, lawyers’, and con­sul­tants’ free speech, expres­sion and asso­ci­a­tion rights. The Judge con­clud­ed that some union busters may not offer their ser­vices as freely, and some attor­neys may leave the field, if their iden­ti­ties and the terms of their arrange­ments were dis­closed.

    So if busi­ness­es are forced to dis­close who they are hir­ing for their union bust­ing ser­vices as the law is intend­ed to require, this would be a vio­la­tion of their free speech rights because they would pre­sum­ably be too embar­rassed to hold these dis­cus­sions if they were forced to acknowl­edge them.

    Well, maybe that explains the plain­tiffs’ esti­mates that clos­ing this loop­hole would cost busi­ness $60 bil­lion over the next 10 years (And that’s com­pared the Depart­ment of Labor’s esti­mate of less than $1 mil­lion over a decade for the entire busi­ness com­mu­ni­ty). Just imag­ine how much mon­ey is being spent on the shad­ow union-bust­ing indus­try. Espe­cial­ly with this loop­hole in place. What if some of these com­pa­nies just could­n’t car­ry on in pro­vid­ing these ser­vices because of the dam­age it would do their brand image? If there was a huge shad­ow union-bust­ing indus­try, per­haps it’s some­what con­ceiv­able that it could cost that indus­try total of $60 bil­lion over a decade.

    Although that $60 bil­lion still seems like a gross over­es­ti­mate where the lawyers were just being sil­ly for the pur­pose of legal­is­tic flair. Then again, think about all the times we nev­er hear about com­pa­nies like Wal­mart hir­ing com­pa­nies like Lock­heed Mar­tin for their union-bust­ing ser­vices. That can’t be cheap.

    Posted by Pterrafractyl | July 5, 2016, 6:00 pm
  8. One of the Demo­c­rat-appoint­ed mem­bers of the Fed­er­al Elec­tion Com­mis­sion just resigned after writ­ing a scathing report. The report has a mes­sage to the pub­lic about the mes­sage the FEC is send­ing to US politi­cians: thanks to the sys­tem­at­ic inac­tion at the FEC — due to uni­fied oppo­si­tion to mean­ing­ful FEC action by Repub­li­can appointees on the Com­mis­sion — the FEC is basi­cal­ly telling every politi­cian in Amer­i­ca that the FEC isn’t going to do its job so feel free to go wild with the dark mon­ey:

    Dark Mon­ey Watch

    FEC Mem­ber Quits, Cit­ing “Free Pass” for Cam­paign Finance Vio­la­tors in Scathing Report

    Frank Bass
    Feb­ru­ary 19, 2017

    Major cam­paign finance vio­la­tions “are swept under the rug and the result­ing dark mon­ey has left Amer­i­cans unin­formed about the sources of cam­paign spend­ing,” a Fed­er­al Elec­tion Com­mis­sion mem­ber wrote in a scathing report released with her res­ig­na­tion let­ter.

    Ann Rav­el, an FEC mem­ber appoint­ed to the six-mem­ber reg­u­la­to­ry pan­el in 2013 by for­mer Pres­i­dent Barack Oba­ma, said the commission’s rou­tine dead­locked votes are send­ing clear sig­nals that cam­paign finance laws won’t be enforced.

    “This incred­i­bly sig­nif­i­cant Com­mis­sion is not per­form­ing the job that Con­gress intend­ed, and vio­la­tors of the law are giv­en a free pass,” Rav­el wrote in “Dys­func­tion and Dead­lock,” a 25-page report released with her res­ig­na­tion let­ter to Pres­i­dent Don­ald Trump. “Because of this, can­di­dates and com­mit­tees are aware that they can ignore the laws enact­ed to pro­tect the integri­ty of our elec­tions.”

    The report by Ravel’s office, sub­ti­tled “The Enforce­ment Cri­sis at the Fed­er­al Elec­tion Com­mis­sion Reveals the Unlike­li­hood of Drain­ing the Swamp,” not­ed that the panel’s three Repub­li­can com­mis­sion­ers had vot­ed togeth­er 98 per­cent of the time in cas­es closed since 2015. The three-mem­ber GOP bloc “rou­tine­ly thwarts, obstructs, and delays action on the very cam­paign finance laws its mem­bers were appoint­ed to admin­is­ter,” she said.

    In her res­ig­na­tion let­ter, Rav­el asked Trump to live up to his cam­paign promis­es of “drain­ing the swamp” by curb­ing the influ­ence of mon­ey in pol­i­tics.

    Fist­ful of Obsta­cles

    Rav­el cit­ed a hand­ful of obsta­cles that have kept the com­mis­sion from enforc­ing cam­paign finance laws. Under the Water­gate-era reforms that cre­at­ed the FEC in 1975, seats on the pan­el are even­ly divid­ed between Repub­li­cans and Democ­rats.

    Repub­li­cans have opposed much of the agency’s enforce­ment agen­da over the last decade, Rav­el said, not­ing that White House Coun­sel Don McGahn admit­ted in 2011 that dur­ing his tenure as a mem­ber of the FEC, he was “not enforc­ing the law as Con­gress passed it.” And she observed that anoth­er Repub­li­can-appoint­ed com­mis­sion­er, Lee Good­man, said the agency was “func­tion­ing as Con­gress intend­ed. The democ­ra­cy isn’t col­laps­ing around us.”

    The ide­o­log­i­cal dif­fer­ences have caused per­sis­tent dead­locks. A lit­tle more than 10 years ago, votes were tied in less than 3 per­cent of sub­stan­tive votes on enforce­ment cas­es closed that year. Last year, com­mis­sion­ers tied in 30 per­cent of such votes, Rav­el said. The dead­locked votes have allowed the GOP mem­bers to “delay and dis­miss fla­grant vio­la­tions, impose sig­nif­i­cant­ly low­er penal­ties, and leave major cas­es with­out res­o­lu­tion,” she con­tend­ed.

    And in some cas­es, Rav­el charged that the FEC hasn’t even been able to start inves­ti­ga­tions into alle­ga­tions of cam­paign finance vio­la­tions since the stan­dard of proof need­ed to launch inves­ti­ga­tions has been changed by the three Repub­li­cans. “Con­se­quent­ly, major vio­la­tors are rou­tine­ly let off the hook at this ear­ly stage,” she said.

    Even when inves­ti­ga­tions are com­plet­ed, the amount of mon­ey that the agency col­lects in fines has plum­met­ed. Ten years ago, the FEC levied more than $5.5 mil­lion in penal­ties. Last year, it imposed less than $600,000 in fines, or rough­ly two-thirds of the amount col­lect­ed by a sin­gle state — California’s Fair Polit­i­cal Prac­tices Com­mis­sion.

    Final­ly, Rav­el said, the pan­el hasn’t act­ed to cre­ate reg­u­la­tions that would require vot­ers to be informed about the source of cam­paign funds. Although the U.S. Supreme Court’s 2010 Cit­i­zens Unit­ed deci­sion opened the flood­gates for an unlim­it­ed amount of mon­ey to pour into elec­tions, the FEC could draft rules to require greater dis­clo­sure for more than $800 mil­lion in “dark mon­ey” spend­ing by non­prof­it orga­ni­za­tions and lim­it­ed lia­bil­i­ty com­pa­nies.

    Real­i­ty vs. Rhetoric

    Rav­el, a for­mer U.S. Jus­tice Depart­ment lawyer who led California’s Fair Polit­i­cal Prac­tices Com­mis­sion from 2011–13, remind­ed Trump in her res­ig­na­tion let­ter that he had described the cam­paign finance sys­tem as “bro­ken” and had described super PACs as “a scam.”

    ...

    Trump, who spent more than $50 mil­lion of his own mon­ey on his suc­cess­ful bid for the GOP pres­i­den­tial nom­i­na­tion, cam­paigned as an advo­cate of dis­clos­ing mon­ey con­tributed to polit­i­cal can­di­dates. “Every­body should be known,” he said at an August 2015 press con­fer­ence in New Hamp­shire. “If some­body gives $1 mil­lion or $2 mil­lion or $5 mil­lion, it should be known.”

    Even so, Trump ben­e­fit­ed from the flood of mon­ey into the 2016 elec­tion. The pres­i­dent received more than $75 mil­lion in sup­port from inde­pen­dent expen­di­ture groups, which can raise unlim­it­ed amounts of mon­ey but are pro­hib­it­ed from coor­di­nat­ing with a candidate’s cam­paign.

    Two of the super PACs that sup­port­ed Trump were the sub­ject of a com­plaint by the Cam­paign Legal Cen­ter, a Wash­ing­ton-based non­par­ti­san watch­dog. The cen­ter claimed that one of the groups failed to fol­low rules designed to pre­vent cam­paign staff from imme­di­ate­ly join­ing a super PAC and that anoth­er had improp­er­ly shared com­mon ven­dors with the Trump cam­paign.

    Repub­li­cans, how­ev­er, don’t appear eager to address the issue of mon­ey in pol­i­tics, even though 84 per­cent of Amer­i­cans believe it has too much influ­ence. Ear­li­er this month, a GOP-con­trolled House com­mit­tee vot­ed to end pub­lic financ­ing of pres­i­den­tial cam­paigns, as well as elim­i­nate the agency that ensures the integri­ty of U.S. elec­tions.

    “Repub­li­cans, how­ev­er, don’t appear eager to address the issue of mon­ey in pol­i­tics, even though 84 per­cent of Amer­i­cans believe it has too much influ­ence. Ear­li­er this month, a GOP-con­trolled House com­mit­tee vot­ed to end pub­lic financ­ing of pres­i­den­tial cam­paigns, as well as elim­i­nate the agency that ensures the integri­ty of U.S. elec­tions.

    Yep, the same mes­sage that the GOP-appoint­ed wing of the FEC is send­ing to politi­cians across the US — that the FEC has no inter­est in seri­ous­ly enforc­ing cam­paign finance law — just hap­pens to be the same mes­sage the GOP-con­trolled House is also send­ing to politi­cians across the US. Although note that the mes­sage the GOP-con­trolled sent was more like “feel free to vio­late cam­paign finance law and hack vot­ing machines, we won’t real­ly look into it.”

    And that laugh­ably leaves Don­ald Trump as the only major GOP­er left who has at least expressed an inter­est recent­ly in get­ting the flood of dark mon­ey out of Amer­i­can pol­i­tics. At least that’s what he said dur­ing the cam­paign. So will he fol­low through with pledge? Well, let’s just say that Trump appears to have ‘found Jesus’ (Repub­li­can Jesus) on the issue of cam­paign finance and block­ing the avenues of dark mon­ey flow­ing into US elec­tions. So prob­a­bly not.

    Posted by Pterrafractyl | February 23, 2017, 4:37 pm
  9. Remem­ber how the Koch broth­ers con­sid­ered pur­chas­ing Tri­bune Media a few years ago but even­tu­al­ly dropped their bid? Well, Sin­clair Broad­cast Group, the right-wing media giant known for forc­ing local TV new broad­cast­er to play pre-pack­aged right-wing pro­pa­gan­da pieces across the US as part of the local new con­tent, is poised to dra­mat­i­cal­ly increase its nation­al audi­ence after the FCC approved its pur­chase of Tri­bune Media. And Sin­clair was already the largest TV broad­cast­er in the US, with an esti­mat­ed reach of 38 per­cent of US house­holds. And now it’s going to 72 per­cent of US house­holds. Oh goody.

    So what com­pelling argu­ment did Sin­clair use to get the FCC to five the stamp of approval? Well, there was an old loop­hole in the anti-monop­oly reg­u­la­tions from back when high-fre­quen­cy broad­cast­ing of sta­tions high­er than chan­nel 13 had poor recep­tion and lim­it­ed audi­ences. The rule allowed broad­cast­ers oper­at­ing on that high-fre­quen­cy specrum to count only part of their mar­ket share when assess­ing a com­pa­ny’s “nation­al reach”. And the FCC’s new GOP-appoint­ed busi­ness-friend­ly chair­man, Ajit Pai, decid­ed to revive the rule and make way for Sin­clair to his 72 per­cent “nation­al reach”, vast­ly exceed­ing the 39 per­cent fed­er­al lim­its on media own­er­ship. And the argu­ment for doing that was that Sin­clair is actu­al­ly a “lit­tle fish” com­pared to the big broad­cast­ers and need­ed the abil­i­ty to expand to 72 per­cent of mar­kets just to com­pete. Yes, local news needs to be owned by a nation­al behe­moth to com­pete in mod­ern Amer­i­can accord­ing to Sin­clair and the FCC appears to agree.

    Iron­i­cal­ly, giv­en the low-qual­i­ty/high-fre­quen­cy ori­gin of the loop­hole, one of the oth­er moves by the FCC is allow­ing TV sta­tions the abil­i­ty to offer a new trans­mis­sion stan­dard for high­er-qual­i­ty, over-the-air video, some­thing Sin­clair has been keen­ly inter­est­ed in. And the com­pa­ny says the Tri­bune deal approval will help speed the roll­out of those next-gen­er­a­tion ser­vices.

    So the largest broad­cast­er in the US — which just hap­pens to be a cryp­to-Fox News-style orga­ni­za­tion ded­i­cat­ed to mis­in­form­ing its audi­ence with right-wing garbage con­tent — just suc­cess­ful­ly argued that it need­ed to almost dou­ble its nation­al reach to almost 3/4 of the US in order to com­pete:

    Politi­co

    How Trump’s FCC aid­ed Sin­clair’s expan­sion

    Use of a reg­u­la­to­ry loop­hole will allow Sin­clair to reach 72 per­cent of U.S. house­holds after buy­ing Tribune’s sta­tions.

    By MARGARET HARDING MCGILL and JOHN HENDEL

    08/06/2017 07:03 AM EDT

    Sin­clair Broad­cast Group is expand­ing its con­ser­v­a­tive-lean­ing tele­vi­sion empire into near­ly three-quar­ters of Amer­i­can house­holds — but its aggres­sive takeover of the air­waves wouldn’t have been pos­si­ble with­out help from Pres­i­dent Don­ald Trump’s chief at the Fed­er­al Com­mu­ni­ca­tions Com­mis­sion.

    Sin­clair, already the nation’s largest TV broad­cast­er, plans to buy 42 sta­tions from Tri­bune Media in cities such as New York, Chica­go and Los Ange­les, on top of the more than 170 sta­tions it already owns. It got a crit­i­cal assist this spring from Repub­li­can FCC Chair­man Ajit Pai, who revived a decades-old reg­u­la­to­ry loop­hole that will keep Sin­clair from vast­ly exceed­ing fed­er­al lim­its on media own­er­ship.

    The change will allow Sin­clair — a com­pa­ny known for inject­ing “must run” con­ser­v­a­tive seg­ments into its local pro­gram­ming — to reach 72 per­cent of U.S. house­holds after buy­ing Tribune’s sta­tions. That’s near­ly dou­ble the con­gres­sion­al­ly imposed nation­wide audi­ence cap of 39 per­cent.

    The FCC and the com­pa­ny both say the agency wasn’t giv­ing Sin­clair any spe­cial favors by reviv­ing the loop­hole, known as the “UHF dis­count,” which has long been con­sid­ered tech­no­log­i­cal­ly obso­lete. But the Tri­bune deal would not have been viable if not for Pai’s inter­ven­tion: Sin­clair already reach­es an esti­mat­ed 38 per­cent of U.S. house­holds with­out the dis­count, leav­ing it almost no room for growth.

    The loop­hole is a throw­back to the days when the ultra-high-fre­quen­cy TV spec­trum — the part high­er than Chan­nel 13 — was filled with low-bud­get sta­tions with often-scratchy recep­tion over ana­log rab­bit ears. That qual­i­ty gap no longer exists in today’s world of dig­i­tal tele­vi­sion, but under the pol­i­cy that Pai revived, the com­mis­sion does not ful­ly count those sta­tions’ mar­ket size when tal­ly­ing a broad­cast­er’s nation­al reach.

    Crit­ics includ­ing the FCC’s most recent for­mer chair­man, Tom Wheel­er, say the change amounts to a reg­u­la­to­ry sleight-of-hand.

    “Con­gress was explic­it in black let­ter say­ing 39 per­cent view­er­ship would be the max­i­mum,” said Wheel­er, a Demo­c­rat who got rid of the dis­count last year. But instead, he said, “There was fun­ny math cre­at­ed to allow the count to come up to still be below 39 per­cent, wink wink.”

    The FCC and Sin­clair say a wide array of broad­cast­ers — not just Sin­clair — pushed for the return of the UHF dis­count, and they say Pai has been con­sis­tent in argu­ing that the agency should­n’t scrap the dis­count with­out first under­tak­ing a broad­er review of media own­er­ship lim­its.

    Pai, whom Trump ele­vat­ed to chair­man ear­ly this year, told House Democ­rats at a July 25 hear­ing that the com­mis­sion didn’t sin­gle out Sin­clair for spe­cial treat­ment. “If you look at any of our reg­u­la­to­ry actions, they’re not designed to ben­e­fit any com­pa­ny or seg­ment of the indus­try,” he said.

    Still, the FCC action removed the most seri­ous obsta­cle for Sin­clair, which has been a tar­get for Democ­rats and lib­er­al groups dis­turbed by reports that the com­pa­ny favored Trump in its elec­tion cov­er­age. While Sin­clair does­n’t spend much on tra­di­tion­al lob­by­ing, it has donat­ed gen­er­ous­ly over the years to con­gres­sion­al Repub­li­cans, who have shown lit­tle incli­na­tion to throw up any road­blocks to the deal.

    The Wash­ing­ton Post in Decem­ber report­ed that Sin­clair “gave a dis­pro­por­tion­ate amount of neu­tral or favor­able cov­er­age to Trump dur­ing the cam­paign” while air­ing neg­a­tive sto­ries on Hillary Clin­ton. That fol­lowed POLITI­CO’s report­ing on a boast by Trump son-in-law Jared Kush­n­er that the pres­i­den­t’s cam­paign had struck a deal with the broad­cast group for bet­ter media cov­er­age. (Sin­clair dis­put­ed the char­ac­ter­i­za­tion, say­ing it was an arrange­ment for extend­ed sit-down inter­views that was offered to both can­di­dates.) In April, Sin­clair hired for­mer White House aide Boris Epshteyn, who had orga­nized Trump’s TV sur­ro­gates, as an on-air polit­i­cal ana­lyst.

    Con­tro­ver­sy over Sin­clair’s pol­i­tics pre­dates Trump. The broad­cast­er came under fire in 2004 over reports it planned to air a doc­u­men­tary crit­i­cal of then-Demo­c­ra­t­ic pres­i­den­tial nom­i­nee John Ker­ry’s Viet­nam-era anti­war activism, though the com­pa­ny instead aired a news spe­cial on some sta­tions rather than the full doc­u­men­tary. But the com­pa­ny’s bid to get big­ger via the Tri­bune deal has focused new atten­tion on the com­pa­ny.

    The broad­cast­er cul­ti­vat­ed its ties with the FCC’s Pai in the weeks after Trump’s elec­tion, when the Repub­li­can com­mis­sion­er was viewed as a top con­tender to lead the agency. Pai addressed Sin­clair’s Nov. 16 gen­er­al man­ag­er sum­mit in Bal­ti­more, where he also met with the com­pa­ny’s then-CEO, David Smith, accord­ing to a copy of Pai’s cal­en­dar obtained through a Free­dom of Infor­ma­tion Act request. Pai held a sec­ond meet­ing with Smith and new­ly named Sin­clair CEO Chris Rip­ley in Arling­ton, Vir­ginia, on the day before Trump’s inau­gu­ra­tion, the records show.

    A Sin­clair spokes­woman said Pai was invit­ed to speak at the gen­er­al man­ag­er sum­mit before the elec­tion, and not­ed that FCC Com­mis­sion­er Mignon Clyburn, a Demo­c­rat, addressed a sim­i­lar gath­er­ing in the past.

    On Pai’s first week on the job as chair­man in late Jan­u­ary, Sin­clair urged the agency to rein­state the UHF dis­count, which allows ultra-high-fre­quen­cy sta­tions to count for only half their actu­al audi­ence when cal­cu­lat­ing their nation­al reach. Pai had dis­sent­ed when the FCC’s then-Demo­c­ra­t­ic major­i­ty abol­ished the dis­count in 2016, argu­ing that the com­mis­sion should also review and adjust the nation­al own­er­ship cap.

    Once installed as head of the agency, Pai brought back the dis­count in a 2–1 par­ty-line vote in April over the objec­tions of Clyburn, who point­ed out the irony that a chair­man who has empha­sized slash­ing out­mod­ed reg­u­la­tions was reviv­ing a “rel­ic of a bygone era.” A lit­tle over two weeks after the FCC vote, Sin­clair announced its acqui­si­tion of Tri­bune Media.

    The FCC said mul­ti­ple broad­cast­ers, includ­ing CBS, NBC and Uni­vi­sion, sup­port­ed the move, and said Pai was sim­ply act­ing on his long-held posi­tion. “Had the Com­mis­sion teed up both the UHF dis­count and the nation­al cap in 2013 as he had request­ed, then this entire sit­u­a­tion could have been avoid­ed,” an FCC spokesper­son said in a state­ment.

    Echo­ing that stance, Sin­clair said Pai’s call for a broad review of the entire own­er­ship cap was well estab­lished.

    “The major­i­ty Com­mis­sion­ers’ posi­tions that media own­er­ship reform is need­ed has been wide­ly known for many years,” Sin­clair Senior Vice Pres­i­dent of Strat­e­gy and Pol­i­cy Rebec­ca Han­son said in a state­ment. “There­fore, any sug­ges­tion that the rein­state­ment was done on Sinclair’s behalf is false.”

    Pai, who is viewed as friend­ly to broad­cast­ers, also moved quick­ly to advance TV sta­tions’ abil­i­ty to offer a new trans­mis­sion stan­dard for high­er-qual­i­ty, over-the-air video. That’s of par­tic­u­lar inter­est to Sin­clair, which has invest­ed more than $30 mil­lion in the next-gen­er­a­tion TV tech­nol­o­gy and says its expan­sion via the Tri­bune deal will help speed the roll­out of the ser­vice.

    The FCC chair­man has fur­ther pro­posed elim­i­nat­ing a rule that requires each TV sta­tion to have a main stu­dio in or near the com­mu­ni­ty it serves, argu­ing that mod­ern tech­nol­o­gy allows com­mu­ni­ty inter­ac­tion with­out an in-per­son vis­it to a local stu­dio. Crit­ics charge that’s anoth­er hand­out to Sin­clair, with Wheel­er warn­ing in a July blog post that “Sin­clair — long known for requir­ing their sta­tions to car­ry right-wing pro­grams pro­duced by head­quar­ters — will have an open field to replace local voic­es with nation­al con­trol.”

    With the reg­u­la­to­ry path eased for its Tri­bune trans­ac­tion, Sin­clair is look­ing at rel­a­tive­ly smooth sail­ing in GOP-dom­i­nat­ed Wash­ing­ton. Rip­ley, the CEO, has expressed con­fi­dence the deal will receive reg­u­la­to­ry approval from the FCC and the Jus­tice Depart­ment, while acknowl­edg­ing that the com­pa­ny might still have to drop some TV sta­tions in select mar­kets to ful­ly adhere to own­er­ship rules.

    Sin­clair isn’t show­ing signs of mas­sive­ly boost­ing its bare-bones lob­by­ing oper­a­tion in Wash­ing­ton, though it’s increas­ing its invest­ment. The com­pa­ny spent rough­ly $60,000 on lob­by­ing in the first half of this year, near­ly the amount it spent in all of 2016, and recent­ly brought back a sec­ond, in-house lob­by­ist who pre­vi­ous­ly lob­bied for the broad­cast­er. One of the lob­by­ists, Han­son, has most­ly focused on tamp­ing down any Demo­c­ra­t­ic oppo­si­tion in Con­gress.

    In June, Sen. Maria Cantwell (D‑Wash.) led sev­en Demo­c­ra­t­ic col­leagues in call­ing for hear­ings on the deal. Sin­clair’s KOMO TV sta­tion in Seat­tle, in Cantwell’s home state, has become a focal point for local sta­tion resis­tance to demands from the cor­po­rate office, accord­ing to a New York Times sto­ry in May that described how KOMO jour­nal­ists would rebel against “must-run” con­tent by air­ing it at times of low view­er­ship.

    “We just want local con­tent. We want the folks to be local — we don’t want this metro­plex of con­tent just com­ing in,” Cantwell said in an inter­view.

    “Local tele­vi­sion broad­cast­ers have long served the pub­lic inter­est. The Sin­clair-Tri­bune merg­er threat­ens to upend this respon­si­bil­i­ty by con­sol­i­dat­ing local news into a sin­gle voice that reach­es into 70 per­cent of Amer­i­can homes,” Rep. David Cicilline of Rhode Island, the top Demo­c­rat on the House Judi­cia­ry Com­mit­tee’s antitrust pan­el, told POLITICO. “It’s no secret that Sin­clair has used its large plat­form to push extreme­ly con­ser­v­a­tive pro­gram­ming, while cut­ting deals with the Trump cam­paign to pro­vide favor­able cov­er­age.”

    Sin­clair, which says con­sol­i­da­tion will allow it to invest more in local pro­gram­ming, has argued that TV broad­cast­ers need to get big­ger to sur­vive. The largest TV broad­cast­er in the coun­try is still the lit­tle guy when com­pared with the oth­er com­pa­nies in the media land­scape with which it nego­ti­ates and com­petes, includ­ing Com­cast-NBCU and AT&T‑DirecTV, the com­pa­ny says.

    So far, there’s lit­tle indi­ca­tion Repub­li­can lead­er­ship in Con­gress intends to apply much scruti­ny to the Tri­bune deal. Sin­clair, which began as a fam­i­ly-owned TV sta­tion in Bal­ti­more in the 1970s, has endeared itself to many Repub­li­cans with its con­ser­v­a­tive lean­ings — and has a long his­to­ry of donat­ing to GOP can­di­dates over the years.

    In the 2016 elec­tion cycle, Sin­clair and its exec­u­tives donat­ed near­ly $300,000 to Repub­li­cans, accord­ing to the Cen­ter for Respon­sive Pol­i­tics. The com­pa­ny gave to the fundrais­ing efforts of House Speak­er Paul Ryan and Sen­ate Major­i­ty Leader Mitch McConnell. Its vice pres­i­dent, Fred­er­ick Smith, gave to the pro-Trump Great Amer­i­ca PAC as well as to Mon­tana Repub­li­can Rep. Greg Gian­forte’s cam­paign a day after the law­mak­er was charged with assault­ing a jour­nal­ist this year.

    But the com­pa­ny and its exec­u­tives have also giv­en to Democ­rats, chip­ping in $120,000 to the par­ty and its can­di­dates dur­ing the 2016 cycle. One week after announc­ing the Tri­bune deal in May, for­mer CEO Smith, now the exec­u­tive chair­man, cut a per­son­al check of $30,000 for the Demo­c­ra­t­ic Sen­a­to­r­i­al Cam­paign Com­mit­tee.

    With resis­tance to Sin­clair’s trans­ac­tion mut­ed so far in Wash­ing­ton, crit­i­cism is pop­ping up out­side the Belt­way.

    John Oliv­er, host of HBO’s “Last Week Tonight,” devot­ed near­ly 20 min­utes in a July show to mock­ing Sin­clair’s “must run” seg­ments and warn­ing about the poten­tial impact of the deal. “[I]n con­trast to Fox News, a con­ser­v­a­tive out­let where you basi­cal­ly know what you’re get­ting, with Sin­clair, they’re inject­ing Fox-wor­thy con­tent into the mouths of your local news anchors, the two peo­ple who you know, and who you trust, and whose on-screen chem­istry can usu­al­ly best be described as two peo­ple,” Oliv­er quipped.

    Sin­clair has pushed back hard against such crit­i­cism. Epshteyn blast­ed Oliv­er’s seg­ment, and Sin­clair tripled the num­ber of week­ly seg­ments fea­tur­ing the for­mer Trump aide’s com­men­tary. A Sin­clair exec­u­tive sent a memo to sta­tion news direc­tors defend­ing the must-runs against what he said were irre­spon­si­ble media reports.

    ...

    ———-

    “How Trump’s FCC aid­ed Sin­clair’s expan­sion” by MARGARET HARDING MCGILL and JOHN HENDEL; Politi­co; 08/06/2017

    “Sin­clair, which says con­sol­i­da­tion will allow it to invest more in local pro­gram­ming, has argued that TV broad­cast­ers need to get big­ger to sur­vive. The largest TV broad­cast­er in the coun­try is still the lit­tle guy when com­pared with the oth­er com­pa­nies in the media land­scape with which it nego­ti­ates and com­petes, includ­ing Com­cast-NBCU and AT&T‑DirecTV, the com­pa­ny says.

    Yep, that hor­ri­ble argu­ment just won the day, thus ensur­ing that the moun­tain of hor­ri­ble argu­ments upon which the con­tem­po­rary right-wing ide­ol­o­gy that dom­i­nates US pol­i­cy-mak­ing con­tin­ue to be unwit­ting­ly fed to US audi­ences. And also ensur­ing that the grow­ing issue of the monop­o­liza­tion of the US econ­o­my won’t ever get the atten­tion it deserves. It’s the con­tem­po­rary ‘main­stream mediain action.

    Posted by Pterrafractyl | August 7, 2017, 2:02 pm
  10. Chap­man Uni­ver­si­ty just released its annu­al sur­vey of things Amer­i­cans fear and top­ping the list is a fear of cor­rupt gov­ern­ment offi­cials, feared by 75 per­cent of respon­dents. It was the same top fear in 2016, but it was 60 per­cent last year. Peo­ple are appar­ent­ly sig­nif­i­cant­ly more fear­ful of cor­rupt gov­ern­ment offi­cials this year, no why might that be? And yet they were still quite fear­ful of them in the pre-Trump era, not with­out rea­son.

    What is with­out rea­son, how­ev­er, is the reflex­ive response exhib­it­ed by so many Amer­i­cans where fear of cor­rupt gov­ern­ment offi­cials morphs into a fear of all gov­ern­ment and a desire to, as Steve Ban­non would put it, “decon­struct the admin­is­tra­tion state”. An admin­is­tra­tive state, i.e. gov­ern­ment reg­u­la­tors, is one of the most valu­able things a democ­ra­cy can cre­ate for itself. Aban­don­ing the fight to cre­ate and main­tain a min­i­mal­ly cor­rupt gov­ern­ment, even a big one, is just stu­pid because you’re aban­don­ing all sorts of invalu­able func­tions that only a gov­ern­ment real­is­ti­cal­ly pro­vide. Func­tions like pro­tect­ing con­sumers from a rapa­cious finan­cial indus­try with a long track record of preda­to­ry behav­ior. The pri­vate sec­tor isn’t the place to turn for that kind of pro­tec­tion.

    It’s a reminder that, while Amer­i­cans should indeed fear cor­rupt gov­ern­ment offi­cials, the cor­rupt gov­ern­ment offi­cials they often need to fear the most are the offi­cials who move to get rid of the gov­ern­ment agen­cies that are there to pro­tect peo­ple from preda­tors. For exam­ple, the Repub­li­can Sen­a­tors who just vot­ed to block a rule from the Con­sumer Finan­cial Pro­tec­tion Bureau (CFPB) from tak­ing effect that would have made it eas­i­er for con­sumers to sue banks to coun­ter­act the wide­spread abuse of arbi­tra­tion claus­es hid­den in finan­cial con­tracts are indeed the kind of cor­rupt gov­ern­ment offi­cials Amer­i­cans should fear, unlike the bureau­crats work­ing for the CFPB who are just there to help you (which is why the cor­rupt GOP­ers want to thwart them):

    The Wash­ing­ton Post

    Con­gres­sion­al Repub­li­cans vote to block CFPB rule against manda­to­ry arbi­tra­tion claus­es

    By Renae Mer­le and Tory Newmy­er
    Octo­ber 25 at 7:21 PM

    To secure a rare leg­isla­tive vic­to­ry this week, Sen­ate Repub­li­cans turned to a strat­e­gy that has paid off for them in the recent past: killing pol­i­cy rather than writ­ing it.

    This time, Repub­li­cans took aim at a reg­u­la­tion giv­ing U.S. con­sumers more flex­i­bil­i­ty to sue their banks and oth­er finan­cial insti­tu­tions. The rule is wide­ly loathed by the busi­ness com­mu­ni­ty and con­ser­v­a­tive law­mak­ers, many of whom opposed the cre­ation of the agency that wrote it, the Con­sumer Finan­cial Pro­tec­tion Bureau.

    So Sen. Mike Crapo (R‑Idaho) turned to an arcane leg­isla­tive tool — 1996’s Con­gres­sion­al Review Act. The law gives leg­is­la­tors a lim­it­ed peri­od of time to block a new reg­u­la­tion before it goes into effect. Law­mak­ers have used the mea­sure more than a dozen times already to roll back rules issued at the end of the Oba­ma admin­is­tra­tion, often at the urg­ing of the Trump admin­is­tra­tion, which has pushed to elim­i­nate reg­u­la­tions it says are sti­fling eco­nom­ic growth.

    Late Tues­day evening, the Sen­ate used it again, approv­ing Crapo’s mea­sure block­ing the CFPB’s rule and send­ing the mat­ter to Pres­i­dent Trump, who is expect­ed to sign it. Trump “applauds” the legislation’s pas­sage, accord­ing to a White House state­ment.

    The vote was the biggest vic­to­ry yet for the bank­ing indus­try dur­ing the Trump admin­is­tra­tion. After years of suf­fer­ing under tough reg­u­la­tions imposed after the glob­al finan­cial cri­sis, bankers had been gid­dy at the prospect of a reg­u­la­to­ry reprieve. But many of those efforts stalled in the Sen­ate, which has not tak­en up some of the more com­plex reg­u­la­to­ry changes the indus­try has favored.

    Block­ing the CFPB rule like­ly embold­ens the agency’s crit­ics, but it is not like­ly to speed oth­er, more com­pli­cat­ed, reg­u­la­to­ry roll­backs, indus­try ana­lysts say. “The coun­try is still too pop­ulist and too dis­trust­ful of big banks,” Jaret Seiberg, a Cowen Wash­ing­ton Research Group finan­cial ser­vices ana­lyst, said in a report Wednes­day.

    But even this leg­isla­tive vic­to­ry proved tricky for Repub­li­cans. Sen. Lind­sey O. Gra­ham (R‑S.C.) emerged as an ear­ly “no” vote, leav­ing the par­ty with lit­tle wig­gle room. To win pas­sage with­out Demo­c­rat sup­port, the GOP could lose no more than two votes from mem­bers of its par­ty.

    At issue was the fine print in many of the agree­ments that con­sumers sign when they apply for cred­it cards or bank accounts. These con­tracts typ­i­cal­ly require con­sumers to set­tle any dis­putes they have with the com­pa­ny through arbi­tra­tion, in which a third par­ty rules on the mat­ter, rather than going to court or join­ing a class-action law­suit.

    The 2010 finan­cial reform law, known as the Dodd-Frank Act, called on the CFPB to study the use of manda­to­ry arbi­tra­tion claus­es. After five years, the agency moved to ban such claus­es, poten­tial­ly allow­ing mil­lions of Amer­i­cans to file or join a law­suit to press their com­plaints.

    The mea­sure was wide­ly dis­liked by banks and among many Repub­li­cans in Con­gress, who called it a gift to plain­tiffs’ attor­neys. Crit­ics argued the rule would trig­ger a flood of friv­o­lous law­suits and dri­ve up cred­it card rates. Arbi­tra­tion, they argued, was a faster, cheap­er way to set­tle dis­putes.

    The House passed leg­is­la­tion to block the rule’s imple­men­ta­tion in July, but in the Sen­ate the mea­sure appeared to lan­guish. Fear­ing law­mak­ers might not meet an ear­ly Novem­ber dead­line to block the rule, the U.S. Cham­ber of Com­merce and sev­er­al oth­er busi­ness groups filed suit against the CFPB last month.

    Com­pli­cat­ing Repub­li­can efforts was the grow­ing unpop­u­lar­i­ty of Wells Far­go and Equifax. Wells Far­go has been under pres­sure since admit­ting last year that employ­ees had opened mil­lions of sham accounts cus­tomers didn’t ask for, and Equifax is strug­gling to recov­er from a mas­sive hack that poten­tial­ly exposed the data of more than 145 mil­lion peo­ple.

    Democ­rats and con­sumer groups, who had been mobi­liz­ing to defeat the bill for months, used the cor­po­rate mis­steps as a ral­ly­ing cry against arbi­tra­tion claus­es. Crapo, the chair of the Sen­ate Bank­ing Com­mit­tee, acknowl­edged to reporters that the Equifax breach had become “an issue” in secur­ing enough votes to repeal the rule.

    “It didn’t help,” said one finan­cial ser­vices lob­by­ist work­ing the issue, who spoke on the con­di­tion of anonymi­ty to dis­cuss behind-the-scenes con­cerns. “It detract­ed from the under­ly­ing prin­ci­ple of why arbi­tra­tion is impor­tant.”

    ...

    Mean­while, Repub­li­cans and the bank­ing indus­try were mobi­liz­ing too. Cred­it unions and com­mu­ni­ty banks began to weigh in against the CFPB rule. While repeat­ed­ly apol­o­giz­ing for their com­pa­nies’ mis­deeds, Wells Far­go and Equifax exec­u­tives refused to back away from their use of arbi­tra­tion claus­es in their con­tracts. Pressed to dis­avow manda­to­ry arbi­tra­tion dur­ing a Sen­ate com­mit­tee hear­ing this month, Wells Far­go CEO Tim Sloan said “No, I won’t, sen­a­tor.”

    The rule also faced unusu­al resis­tance from oth­er bank­ing reg­u­la­tors. The Office of the Comp­trol­ler of the Cur­ren­cy asked the CFPB to halt the rule, argu­ing it was not well thought out and would raise costs for con­sumers. While it is not uncom­mon for reg­u­la­tors to dis­agree, those clash­es typ­i­cal­ly don’t spill out into pub­lic view.

    This week, as both sides began to pre­pare for a final Sen­ate show­down, the Trea­sury Depart­ment took the unusu­al step of crit­i­ciz­ing the CFPB’s work, issu­ing an 18-page report that argued the arbi­tra­tion rule “would upend a cen­tu­ry of fed­er­al pol­i­cy favor­ing free­dom of con­tract to pro­vide for low-cost dis­pute res­o­lu­tion.”

    The crit­i­cism from reg­u­la­tors gave Repub­li­cans more ammu­ni­tion to call for the rule’s repeal, indus­try ana­lysts said.

    By Tues­day evening, it appeared Repub­li­cans had secured enough sup­port to move for­ward with a vote. Gra­ham, as expect­ed, sided with Democ­rats against the mea­sure, as did Repub­li­can Sen. John Neely Kennedy of Louisiana, leav­ing the vote at 50 to 50 at about 10 p.m. Vice Pres­i­dent Pence cast the decid­ing vote.

    The bat­tle over the rule has laid bare lin­ger­ing divi­sion between the CFPB and the White House.

    Under the Trump admin­is­tra­tion, many agen­cies have begun tak­ing steps to roll back or at least slow reg­u­la­tions. But the CFPB, a watch­dog agency estab­lished after the glob­al finan­cial cri­sis and still led by an Oba­ma-era appointee, has con­tin­ued to draw the ire of busi­ness groups with its aggres­sive tac­tics.

    The debate has often tak­en an unusu­al­ly per­son­al tone. After the Sen­ate vot­ed to over­turn the rule, CFPB Direc­tor Richard Cor­dray said in a state­ment that “Wall Street won and ordi­nary peo­ple lost.”

    Sen. Tom Cot­ton (R‑Ark.), a co-spon­sor of the Sen­ate repeal leg­is­la­tion, fired back at Cor­dray, who many expect to run for gov­er­nor of Ohio next year. “The unelect­ed Mr. Cor­dray issued yet anoth­er stu­pid reg­u­la­tion that would have hurt con­sumers, the people’s demo­c­ra­t­i­cal­ly elect­ed rep­re­sen­ta­tives vot­ed to stop the reg­u­la­tion, and now Mr. Cor­dray whines that Con­gress stopped his stu­pid reg­u­la­tion,” Cot­ton said in a state­ment. “It’s well past time for Mr. Cor­dray to resign and begin his long-expect­ed los­ing cam­paign for Gov­er­nor of Ohio. If he won’t, Pres­i­dent Trump should fire him.”

    ———-

    “Con­gres­sion­al Repub­li­cans vote to block CFPB rule against manda­to­ry arbi­tra­tion claus­es” by Renae Mer­le and Tory Newmy­er; The Wash­ing­ton Post; 10/25/2017

    The vote was the biggest vic­to­ry yet for the bank­ing indus­try dur­ing the Trump admin­is­tra­tion. After years of suf­fer­ing under tough reg­u­la­tions imposed after the glob­al finan­cial cri­sis, bankers had been gid­dy at the prospect of a reg­u­la­to­ry reprieve. But many of those efforts stalled in the Sen­ate, which has not tak­en up some of the more com­plex reg­u­la­to­ry changes the indus­try has favored.”

    The biggest vic­to­ry for the bank­ing indus­try yet. That’s what just hap­pened and, sur­prise!, Trump applauds it:

    ...
    Late Tues­day evening, the Sen­ate used it again, approv­ing Crapo’s mea­sure block­ing the CFPB’s rule and send­ing the mat­ter to Pres­i­dent Trump, who is expect­ed to sign it. Trump “applauds” the legislation’s pas­sage, accord­ing to a White House state­ment.
    ...

    And that means if you join the grow­ing ranks of peo­ple wan­ton­ly screwed over by the finan­cial indus­try there’s a very good chance that you get to find jus­tice via an arbi­tra­tor hired by the insti­tu­tion that screwed you over. And you won’t know about this fun lit­tle sur­prise until you decide to sue because this will be hid­den away in the maze of legal lan­guage you signed when you signed up for that cred­it card or bank account or what­ev­er:

    ...
    At issue was the fine print in many of the agree­ments that con­sumers sign when they apply for cred­it cards or bank accounts. These con­tracts typ­i­cal­ly require con­sumers to set­tle any dis­putes they have with the com­pa­ny through arbi­tra­tion, in which a third par­ty rules on the mat­ter, rather than going to court or join­ing a class-action law­suit.

    The 2010 finan­cial reform law, known as the Dodd-Frank Act, called on the CFPB to study the use of manda­to­ry arbi­tra­tion claus­es. After five years, the agency moved to ban such claus­es, poten­tial­ly allow­ing mil­lions of Amer­i­cans to file or join a law­suit to press their com­plaints.
    ...

    So after study­ing the issue for five years the CFPB moves to block these arbi­tra­tion claus­es only to be blocked by Trump and the GOP. Prov­ing once again that when you put the GOP in charge of the gov­ern­ment the gov­ern­ment effec­tive­ly becomes the Big Finance Finan­cial Pro­tec­tion Bureau.

    It’s a reminder that the kind of gov­ern­ment we should prob­a­bly fear the most is the one run by the kind of peo­ple who clear­ly don’t under­stand that one of the rea­sons we can’t aban­don the fight for good gov­ern­ment, includ­ing good ‘big’ gov­ern­ment when need­ed, is that good gov­ern­ment is the best proven defense for aver­age peo­ple against the kind of preda­tors that trick the pub­lic into tear­ing down the gov­ern­ment so every­one is eas­i­er to prey upon.

    Posted by Pterrafractyl | October 25, 2017, 11:01 pm

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