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Executive Privilege AgainThe New York Times – by William Safire – January 4, 2002
WASHINGTON -- Stephen (the Rifleman) Flemmi is a gangster who spent a generation as a valued informant for the F.B.I. in Boston. He is now awaiting trial for 10 murders he is charged with committing while on the F.B.I. payroll.
Also charged is his F.B.I. handler, John Connolly Jr., accused of tipping off Flemmi and his mobster boss before police were dispatched to pick them up. The boss, accused of 19 murders, is still a fugitive. Six years ago the Rifleman claimed that the F.B.I. had promised him immunity from prosecution for his killings — allegedly including a couple of his girlfriends — but Federal Judge Mark Wolf, in a landmark decision, ruled that nobody in law enforcement had the power to sanction murder.
The New England F.B.I.'s long-running abuse of power is "the greatest failing in federal law enforcement history," according to James Wilson, chief counsel to the House Government Reform Committee. Evidence of this sustained miscarriage of justice was the 30-year imprisonment of Joe Salvati, whom F.B.I. officials are said to have known to be innocent of the crime for which he was convicted — but they remained silent to protect Mafia sources.
John Ashcroft's Department of Justice does not want Congress to air out this long, shameful story. At the time J. Edgar Hoover belatedly began his war on the Mafia, civil liberty was set aside to meet the perceived emergency — abuses that lasted through three decades. The current F.B.I. chief, Robert Mueller, was U.S. attorney in Boston during the mid-80's and presumably did not have an inkling about the unlawful law enforcement going on around him.
Accordingly, the Bush Justice Department induced the president to sign an order asserting executive privilege over its "deliberative documents" that would inform the public of answers to questions like: Why did Justice decline to indict an F.B.I. supervisor who admitted taking money from Flemmi's gang? Why did Justice help defend a hit man in California who killed a man while in the witness protection program? Much of this systemic perversion of justice took place decades ago, but the Ashcroft-Mueller crowd is determined to keep the embarrassing institutional history hushed up. That's why department lawyers recently adopted a policy of refusing all documents relating to its declinations to prosecute.
One reason for Bush's executive privilege claim, unprecedented in its sweep, is: Such decisions are never to be examined by Congress lest politics influence prosecutors' judgments. But this power grab would eviscerate Congressional oversight.
The other reason, spoken sotto voce, is that some of the documents Chairman Dan Burton's committee is requesting deal with other cases — such as Janet Reno's decision to abort investigations into Bill Clinton's overseas fund-raising over the protest of special counsel. Burton, some of these Bush G.O.P. appointees say, is just an old Republican Clinton-hater out to beat a dead horse.
That's a red herring. At issue here is Congress's responsibility and authority to examine the misdeeds of the executive branch in a thorough manner — with an eye toward legislation to make criminal those policies evidently adopted by a regional division of our F.B.I. to subvert the law in the name of the law. (Burton, with Ashcroft's thumb in his eye, is considering legislation renaming the J. Edgar Hoover Building.)
Is the White House counsel explaining to the president the scope of the powers being asserted in his ill-advised orders? "Executive privilege" was restricted by the Supreme Court in the Nixon case and further circumscribed by the courts in Clinton's frantic attempts to place himself above the law. Why is Bush, so early in his term and with little to hide, going down this road to upset our system of checks and balances? Maybe it's hubris; popularity breeds contempt. When you're sailing up there around 90 percent, your advisers tell you that wartime is the perfect time to put those Congressional pipsqueaks of both parties in their place.
Maybe it's ultra-cleverness; by wrapping the latest self-levitation in the mantle of protecting a former administration's reputation, you dream of winning liberals' support.
It's another mistake that will come home to haunt the Bush presidency. Call me Cassandra, but history will not look kindly on those who let ends justify means — and let helpful hoodlums get away with murder.
Robin Hayes and Cass Ballenger Sell OutThe New York Times – by Robert E. Lighthizer – January 4, 2002
The narrow House vote last month to extend trade promotion authority to the president may be a hollow victory for proponents of free trade. When the blush of success wears off, they may well realize that this battle, won on a 215-214 vote, has significantly weakened the chances of Republicans — traditionally the champions of free trade — to maintain control of the House of Representatives. And only to enact a measure that is of little practical value.
The Bush administration and the House leadership badly wanted the president to have the authority that this measure would give him: power to negotiate trade agreements that Congress must vote to approve or disapprove without amending them. To win the vote, the Republican leaders used various enticements, but in the end it came down to old-fashioned arm twisting, a sudden surge of three votes by wavering Republicans and a strike of the gavel before opponents had time to react.
Given repeated polls showing that Americans believe, rightly or wrongly, that trade agreements cost jobs, this measure is likely to be a major election issue in 2002. And with the Republican majority in the House razor-thin, this vote could have a major impact.
Robin Hayes and Cass Ballenger, for example, are both Republicans from highly competitive districts in North Carolina. Their districts have many voters who work in textiles — an industry in which much production has shifted to plants and manufacturers outside the United States. Both vowed to vote no and changed their minds under White House pressure. Their votes are sure to be used against them by Democratic opponents.
Republicans whose seats may become less secure because of redistricting — including several in New York, North Carolina, Iowa, Oklahoma and Georgia — could find their votes in favor of trade promotion authority extremely damaging. And in states like Kentucky, Florida and Pennsylvania that have been hard-hit by trade-related job losses, Republican incumbents may find that a vote in favor of fast-track trade authority does not mix well with a slowing domestic economy.
No fewer than 28 Republicans who opposed fast-track in 1998 switched their votes last month. Thirty Republicans who received less than 55 percent of the vote in their 2000 contests voted in favor. Three Republican opponents of fast-track simply sat out the vote, a position sure to annoy constituents on what is seen as a critical measure.
And the fight is not over. The Senate will almost certainly make changes to the trade bill, and a new version drafted in a conference committee is likely to go before the House in the midst of the Congressional election campaign. Not only will this be another excruciating vote for House Republicans, but the measure could easily lose its one-vote majority the next time around.
Republicans should be asking themselves whether passing fast-track this winter, in this way, was worth the risk of losing the House.
There is good reason to doubt that trade promotion authority, which is simply a procedural tool, is even necessary. It is far more significant in the Senate than in the House, since House leaders, unlike their Senate counterparts, already enjoy enormous power to limit amendments and compel votes under normal floor procedures. And given the overwhelming support for free trade measures in the Senate, there is little need there for special procedures.
The conventional wisdom about the importance of fast-track trade negotiating was shown to be flawed last year, when Congress not only passed a significant and controversial trade bill liberalizing textile tariffs, but also enacted permanent normal trade relations with China — both in an election year and without fast-track.
Even to the extent one considers fast-track essential, Republicans would not have paid such a high political price in December if they had not alienated Democrats in the past, throwing up obstacles when it was Bill Clinton who wanted this authority.
Even if the consequences of last month's vote do not alter the results of the elections in November, the trade consensus that has predominated in Congress for much of the last five decades continues to erode. Indeed, we may be seeing that consensus go from fragile to totally broken before our very eyes.
Administration Kills Safety RegulationsWashington Post - by David Broder – January 3, 2002
WASHINGTON -- It was a classic stealth maneuver - and it worked. Two days after Christmas, with President Bush at his Texas ranch and most of official Washington on vacation, the White House announced the rejection of regulations that would have barred companies which repeatedly violate environmental and workplace standards from receiving government contracts.
Few in the press noticed, and those papers that printed anything about the decision buried the stories on inside pages. But this was no trivial matter. A congressional report had found that in one recent year, the federal government had awarded $38 billion in contracts to at least 261 corporations operating unsafe or unhealthy work sites. The regulations Bush killed were designed to stop that.
This is a classic example of the difference between the parties. These particular rules were issued at the very end of the Clinton administration, after being published in draft form 18 months earlier.
Former Vice President Al Gore had publicly promised organized labor he would see that they were finished before he left that office.
Business opposed them, and Bush suspended them barely two months after he moved in, finally killing them last week.
The move was a companion to the earlier 2001 action by the House and Senate, both then controlled by the Republicans, in setting aside Clinton administration regulations on ergonomics, designed to protect workers from repetitive motion injuries. The Chamber of Commerce and similar groups led the fight to spike them, too.
When I wrote about that action last March, I erred in saying Congress could have rewritten the rules that business found objectionable, instead of killing the whole package. Business lawyers later convinced me that would have been virtually impossible.
But when the ergonomics rules were killed, the administration promised that new, "more reasonable" regulations would be forthcoming. A phone call to the Labor Department last week elicited the information that no new regulations have been issued and no one could say when they will be.
That is the game: Kill the rules you don't like quickly and quietly, then take your sweet time writing new ones. Don't worry about how many strained backs or stiff wrists people suffer in the meantime. And now, don't worry if the companies that tolerate unsafe conditions are getting fat government contracts at the same time.
Here's another example of why it makes a difference who is deciding how the massive power of the executive branch is wielded: Last Oct. 25, 30 Drug Enforcement Administration agents raided the Los Angeles Cannabis Resource Center and shut down its operations. The center had opened five years earlier, after California voters approved a medical marijuana initiative. It served patients with doctors' prescriptions to use marijuana to alleviate the pain and nausea associated with AIDS, cancer and other diseases.
The raid was perfectly legal; the Supreme Court has affirmed that federal anti-drug laws, which cover marijuana, pre-empt more permissive state laws or initiatives. But no one has stepped forward to explain how busting up a center operating with the full approval of the Los Angeles County sheriff and local officials became a law enforcement priority for the federal government barely six weeks after the terrorist attacks on this country.
Two months after the raid, no one has yet been charged with any crime by the U.S. attorney's office. But the center remains inoperative, its former patients forced to seek relief in the black market.
The White House complains constantly about Congress' irresponsibility - sometimes with good reason. But often it is Congress that sets the executive branch right. The Bush budget of last April included a batch of fiscally cosmetic but phony law enforcement cuts, including a wipeout of the $60 million grant to the Boys & Girls Clubs of America for programs in public housing projects and high-crime areas, strongly endorsed by local police. Congress restored almost all those cuts and raised the clubhouse appropriation to $70 million.
Last year, Bush urged Congress to pass a bankruptcy bill that would make it easier for credit card and auto loan companies to squeeze repayments out of people. Bills similar to one Clinton had vetoed passed both the House and Senate, but have been stuck in conference - in part because even the lobbyists were embarrassed to be pushing them when so many small businesses and individuals have been hammered by the recession and the aftershocks of Sept. 11.
Believe me, if Bush had been able to rewrite bankruptcy rules with a stroke of his pen, as he did with the contracting regulations, it would have happened by now.
Elections do make a difference.
Shareholder Activism Colored by EnronReuters – by Kevin Drawbaugh – December 31, 2001
WASHINGTON - Pension funds, pressure groups and outspoken investors have been flooding the firms they own with proposals for change, in an annual test of U.S. corporate democracy likely to be colored this year by the collapse of Enron Corp.
Shareholders in Enron lost billions of dollars as the company slid into bankruptcy earlier this month, and investors are using this year's filings to try to make sure other companies don't go the same way.
``What's new this year is these auditor independence proposals. That's something that we really haven't seen before,'' Pat McGurn, vice president at proxy services provider Institutional Shareholder Services, told Reuters.
For example, pension funds affiliated with the United Brotherhood of Carpenters union have filed 12 proposals calling on companies not to hire the same accounting firm to do both audit and non-audit work. Enron, a power trader, paid Big Five accounting firm Andersen $52 million in 2000 for both audit and non-audit services, a dual relationship that has raised questions about Andersen's judgement.
Enron made the largest bankruptcy filing in U.S. history on Dec. 2.
Among the companies targeted by the carpenters pension funds are Apple Computer, Bristol-Myers Squibb, Avon Products, Dominion Resources, Liz Claiborne and Manpower, the Washington-based Investor Responsibility Research Center (IRRC) said.
The proposals are part of an annual flood that hits companies around the end of year. Their goal is to be included in the company's proxy statement, which is mailed to all shareholders, as an item to be brought to the floor of the company's annual meeting for a vote.
If companies want to exclude qualified proposals from their proxies, they need clearance from the U.S. Securities and Exchange Commission in the form of a ``no action'' letter.
The SEC said that in 2001 it handled 438 requests from companies for permission to exclude shareholder proposals from their proxies, down from 477 requests in 2000. The commission said it was too soon to tell how many it would handle in 2002.
Shareholder proposal activity ``should increase slightly'' this season, John Wilcox, vice chairman of Georgeson Shareholder, which manages shareholder communications programs for many big companies, said in an interview.
``So far, for the 2002 season, we're tracking 260 proposals,'' said IRRC spokeswoman Alesandra Monaco. ``I would guess the total will ultimately reach that 500 mark and probably exceed it.''
Companies being targeted for multiple grass roots initiatives include General Electric Co., Sprint Corp. and Walt Disney Co., the IRRC said.
Media and entertainment group Disney faces an auditor independence proposal from a plumbers union fund, as well as a proposal from shareholder activist group Responsible Wealth seeking limits on executive stock option awards, IRRC said.
Executive pay is likely to remain the top target for shareholder proposals. ``It's been a hot topic for a number of years. It's probably going to be the dominant issue this year,'' McGurn said.
Targeting so-called ``vapor profits,'' a Communication Workers of America union fund has filed a proposal with General Electric that executive pay be set without counting non-core income derived from company pension plans, said the IRRC.
Such ``corporate governance'' proposals dominate the agenda of shareholder activists. About 500 governance proposals emerge annually. Another 100 or so proposals per year are concerned with social issues.
Most proposals that get to a vote at the annual meeting fail to win approval. Even those that are approved may sometimes be ignored by company managers.
Employee Advocate note: Don Shuper, retired engineer, has presented Boeing with shareholder proposals concerning the cash balance pension plan. To read about his shareholder battle with Boeing, click on the link below:
Courage, Sacrifice and…Corporate GreedCommon Dreams – by Rep. Bernie Sanders – December 27, 2001
As we reflect on the year 2001, our minds catapult to the World Trade Center in flames and hundreds of courageous firemen and police officers racing up stairs to try to save their trapped fellow citizens. Almost all of them gave their lives in this heroic effort.
For the last several months, the nation has been impressed by the dedication and discipline of American troops in Afghanistan successfully fighting to help rid the world of international terrorism. Some of these young people have died or been wounded.
Throughout the country, in the wake of September 11th, there has been a growing sense of coming together and shared sacrifice. Hundreds of millions of dollars have been donated to special funds for the families of the victims, and Americans are taking a deeper look at the meaning of their lives.
And then of course there are the titans of corporate America. Unfortunately, for many of them, it’s the same old story. Greed, greed and more greed.
Case in point is the Enron Corporation, which, just last year, was the seventh largest company in America with revenue exceeding $100 billion and over 20,000 employees. Having contributed millions in campaign contributions to the Republican Party and the President, the company was strongly positioned to influence the direction of energy policies in the Bush Administration. One of the results of their efforts was a huge increase in electric rates in California.
Earlier this year, Enron was forced to admit that it had over-reported its profits by nearly $600 million. This led to the largest bankruptcy in history. While Enron was exaggerating its profits, and before its artificially high stock price plummeted, three top executives in the company, Lou Pai, Kenneth Lay and Jeff Skilling cashed in stock options worth some $560 million. Like rats on a sinking ship, they got their money out just in time. But they didn’t give that same opportunity to their employees. While Enron’s stock was crashing, the company forced more than 12,000 of its employees to retain Enron stock in their 401(k) pension plans. This caused massive losses for the workers and many lost their entire retirement savings.
Taxpayers will be delighted to know that the House Republicans included a $254 million corporate welfare check for Enron as part of their so-called “economic stimulus plan.” But it’s not just Enron.
The American people continue to pay by far the highest prices in the world for prescription drugs. Many of the same drugs sold in this country by American drug companies are sold abroad at a fraction of the price. The result is that millions of Americans suffer, and some die, because they are unable to afford the medicine they need.
Meanwhile, year after year, drug companies constitute the most profitable industry in our country. Last year, they had profits that exceeded $30 billion. At a time when elderly citizens cut their dosages in half, nine executives at the top pharmaceutical corporations in the U.S. were given $890 million in stock options according to Families USA. This is on top of the $169.9 million in wages, bonuses and other compensation that these executives are already receiving.
How does the pharmaceutical industry manage to rip off the American people, generate huge profits, get massive tax breaks and provide outrageous compensation packages for their top management? Easy. As the wealthiest political lobby in Washington they have spent, over the last three years, more than $200 million in campaign contributions, lobbying activities and media advertising
Even in the face of the bioterrorism attack on the United States, the drug giants are choosing profits over the health of the American people. When the federal government chose to stockpile the antibiotic Cipro, the “deal” struck with the drug companies requires the government to pay far more than is charged by generic manufacturers abroad, and, in fact, more than the federal government itself already pays under a different program.
But wait, corporate self-dealing doesn’t end there. Take, for example, Big Blue. As the holiday season approached, IBM announced a new round of job cuts. According to published news reports, the company has cut more than 5,000 jobs in the United States since July. Meanwhile, they are building two new micro-processing plants in China where workers are paid a fraction of what American workers receive. To IBM watchers, this latest act is par for the course.
Two years ago, despite record-breaking profits and a pension fund surplus of some $10 billion, IBM slashed pension and retirement health benefits for workers in 1999 and 2000 and curtailed salaries in 2001. Meanwhile, the CEO of IBM, Louis Gerstner, raked in $176 million in total compensation and stock options over the past 2 years. In addition, he has accumulated over $260 million in unexercised stock options from IBM during his tenure. While slashing the pension plans of IBM employees, he negotiated a retirement plan over $1.1 million a year for himself.
Once again, no bad deed goes unrewarded. If the House Republican leadership gets its way IBM will receive $1.4 billion in corporate welfare this year.
This country has gone through an extremely traumatic year, and we are now confronting serious economic and security issues. It would be nice if, for once, some of our corporate leaders looked out for someone other than themselves.
Editors Note: Congressman Bernie Sanders (I-VT) has the best web site of any member of Congress - http://bernie.house.gov/
SEC to Scrutinize Fortune 500Associated Press – December 26, 2001
WASHINGTON (AP) - The Securities and Exchange Commission said Friday its accountants and attorneys will examine the annual reports of all Fortune 500 companies for possible unorthodox accounting or lack of clarity.
In a brief statement, the SEC said it was taking the action, beginning next year, ``as part of its process of reviewing financial and non-financial disclosures made by public companies.''
Details of the agency's current practice regarding scrutiny of company financial reports were not immediately available.
The statement did not mention Enron Corp. The scandal surrounding the energy-trading giant's sudden collapse has brought heightened public scrutiny to the accounting and financial reports of big corporations. The SEC is investigating Houston-based Enron and the auditing of its books by Arthur Andersen LLP, notably Enron's use of complex partnerships that allowed the company to keep some $500 million in debt off its books and let executives profit from the arrangements.
Robert Herdman, the SEC's chief accountant, told a congressional hearing last week that a spate of recent accounting irregularities by big corporations ``may shake investors' confidence in our system of financial reporting and our capital markets.'' He said the SEC plans next year to adopt rules tightening disclosure requirements for companies.
The SEC said Friday that, as always, it encouraged companies to consult with agency staff before filing their reports if there are questions about financial disclosures. ``Our goal is to address problems before they happen,'' it said.
Flight School Warned F.B.I.New York Times – by Philip Shenon – December 23, 2001
WASHINGTON, Dec. 21 — An instructor at a Minnesota flight school warned the F.B.I. in August of his suspicion that a student who was later identified as a part of Osama bin Laden's terror network might be planning to use a commercial plane loaded with fuel as a weapon, a member of Congress and other officials said today.
The officials, who were briefed by the school, said the instructor warned the Federal Bureau of Investigation in urgent tones about the terrorist threat posed by the student, Zacarias Moussaoui. Mr. Moussaoui, a French citizen of Morrocan descent, was indicted last week on charges of conspiring in the Sept. 11 terror attacks.
Representative James L. Oberstar of Minnesota, who received the briefing and is the ranking Democrat on the House Transportation Committee, said the instructor called the bureau several times to find someone in authority who seemed willing to act on the information.
Mr. Oberstar said the instructor's warnings could not have been more blunt. The representative said, "He told them, `Do you realize that a 747 loaded with fuel can be used as a bomb?' "
Mr. Oberstar described the instructor as "an American hero" whose actions resulted in Mr. Moussaoui's arrest and might have prevented another suicide hijacking.
Congressional officials said the account by the school, the Pan Am International Flight Academy in Eagan, outside Minneapolis, raised new questions about why the Federal Bureau of Investigation and other agencies did not prevent the hijackings.
Officials said the Arizona branch of the school alerted the Federal Aviation Administration earlier this year after finding that a student spoke little English. The Saudi student, Hani Hanjour, has been described as being at the controls of the plane that crashed into the Pentagon.
The instructor in Minnesota has not been identified. But Congressional officials said he was a former military pilot who grew suspicious after encounters in which Mr. Moussaoui was belligerent and evasive about his background and because he was so adamant about learning to fly a 747 jumbo jet despite his clear incompetence as a pilot.
Mr. Moussaoui, 33, was arrested in August on immigration charges. But despite the urging of the school and federal agents in Minnesota and despite a warning from the French that Mr. Moussaoui was linked to Muslim extremists, F.B.I. headquarters here resisted a broader investigation until after Sept. 11. Last week, he became the first person indicted for involvement in the events of Sept. 11, charged with conspiring with Mr. bin Laden and Al Qaeda. Mr. Moussaoui faces the death penalty.
Some federal law enforcement agents said they believed that Mr. Moussaoui was intended to be the 20th hijacker.
Until now, the bureau and the flight school have been unwilling to provide details on what raised suspicions about Mr. Moussaoui. But several weeks ago, the school offered to brief a handful of House members and their aides who were involved in aviation. Two lawmakers were from Minnesota, Mr. Oberstar and Martin Sabo, a fellow Democrat, and they first discussed the briefings today in The Star Tribune in Minneapolis.
In interviews today, Mr. Oberstar and a spokesman for Mr. Sabo said the lawmakers were alarmed by what they heard. They withheld information from the public about the briefings until this week, they said, because they did not want to interfere with the inquiry that led to Mr. Moussaoui's indictment.
Mr. Sabo, ranking Democrat on the Appropriations Subcommittee on Transportation, was traveling today. His chief of staff, Michael S. Erlandson, who was at the briefing, said the flight academy's account was scary. "The Pan Am people," Mr. Erlandson said, "are heroes who worked very diligently to make themselves heard at the F.B.I."
He said Mr. Moussaoui raised the suspicions in a first encounter, when he told the instructor that he was from France but refused to converse in French with the instructor, who also spoke it. The suspicions grew, Mr. Erlandson said, when Mr. Moussaoui repeatedly proved himself incapable of understanding basic flying techniques but still insisted on learning how to fly a 747, the largest commercial jet.
Mr. Erlandson said the flight school had arranged the briefings. "They called up," he said, "and said that they were constituents and that they had an almost unbelievable story they would like to share."
A spokeswoman for the academy did not return calls for comment. Spokesmen for the Federal Bureau of Investigation and Federal Aviation Administration also had no comment.
Mr. Oberstar said he was also troubled by the F.A.A. response to the Phoenix instructors' concerns about Mr. Hanjour, who enrolled speaking little English, which is required for all commercial pilots. According to the school, it contacted the F.A.A. this year to ask what it should to do with Mr. Hanjour. Mr. Oberstar said the agency offered the services of one of its employees to help tutor Mr. Hanjour.