A Bird-Watcher’s Guide To Where Republicans Hatch Their Schemes.
Sightings from The Catbird Seat
~ o ~
December 20, 2001
New GOP Chairman Marc Racicot Mixes Politics and Profits
By Charles Lewis, from Steve Hamm mag
Comments
We must create ways to make politicians accountable for the misleading statements they make in their bids for election. After all, isn’t it what they say that convinces the US public to vote for them?
For example, would Bush have been elected had he said things like “Once in office I will rescind the US’s agreement to the Kyoto Protocols; abandon the ABM Treaty; pursue “Star Wars”; fill my cabinet posts with corporate America’s elite; assign important posts to corporate lobbyists; and support every attempt to undermine constitutional rights and environmental protections”?
Not that this is a new practice, however, the following article highlights another way the current administration continues to concentrate power in corporate corridors. This article was taken from “The Public i”, the investigative reporting arm of The Center for Public Integrity in Washington.
Please distribute far and wide.
Thanks,
Steve Hamm
========================
New GOP Chairman Marc Racicot Mixes Politics and Profits
By Charles Lewis, on http://www.public-i.org/commentary_01_120701.htm
President Bush’s recent decision to name an active, registered lobbyist to head the Republican National Committee is a stunning metaphor about how power, money and hubris in Washington can dull the ethical judgment of an Administration that vowed to “restore honor and dignity” to the White House. It also provides a rare glimpse at the seamy side of our major political parties.
Former Montana Governor Marc Racicot is a registered lobbyist for the Houston law firm of Bracewell & Patterson, personally representing the controversial energy firm Enron, the American Forest and Paper Association, Burlington Northern Santa Fe, the National Energy Coordinating Council, the Recording Industry Association of America, and Quintana Minerals.
According to lobbying disclosure records, Racicot’s clients paid $710,000 in fees to his firm in the first half of this year.
The Los Angeles Times reported in August that Racicot had lobbied Vice President Dick Cheney on behalf of the National Electric Reliability Council and his energy task force director, Andrew Lundquist, on the Environmental Protection Agency’s attempts to require old plants to update their clean air equipment.
The Cheney task force later recommended that the Justice Department consider dropping lawsuits it had filed against certain companies for alleged environmental violations. The Bush administration continues to stonewall requests to release information about the energy task force.
(Both the DNC and RNC charters specify that the post of chairman is full time. For the relevant sections from their charters see http://www.public-i.org/commentary_02_120701.htm. To read the DNC charter in its entirety, visit the committee’s web site. The RNC charter can be found at its web site…)
Racicot, as Republican Party chairman, will not accept his $150,000 annual salary, but instead earn much more as an active partner in the law firm.
The President, said Racicot, has no problem with his wish to “continue on with my occupation.”
Chairing the party in control of the White House and the House of Representatives, and simultaneously working as a very high profile lobbyist whose lucky firm is certain to add many more eager clients, Racicot instantly will become the most powerful influence peddler in Washington.
As party chairman, he necessarily will be in regular, face-to-face contact with the President, the Vice President, Cabinet secretaries and the senior White House staff, as well as the Speaker of the House and other GOP Congressional leaders. He will know the precise vote counts of all pending legislation before the roll is called, and exactly what legislation the White House plans to introduce on Capitol Hill – pure gold for any lobbyist competing in today’s mercenary milieu. He will have infinitely more power and access than other lobbyists, but without the accountability, financial sacrifice or ethics laws of government officials.
Although political parties are major public institutions in our society, top party officials are not regulated by conflict of interest laws and are not even required by law to reveal their sources of annual income. Nor does the Freedom of Information Act apply to them, so whom they meet with, telephone or correspond with is elusive and generally unknown.
None of these issues faze Racicot, who recently told Thomas Edsall of the Washington Post, “The chairman is not a government employee. I’m going to be involved in the political activities of our nation as a volunteer.”
Under this Orwellian construct, I guess thousands of well-heeled, corporate lobbyists are all political volunteers in Washington, and in our gratitude, we will soon call such patriotic selflessness “a thousand points of might.”
The Bush White House similarly doesn’t see anything wrong with this picture. White House press secretary Ari Fleischer said, “There’s been ample history on both the Democratic and Republican side of chairmen being involved in either lobbying or having outside sources of income.”
Unfortunately, he is correct that conflicts of interest are a way of life for political party chairmen. According to the Center for Public Integrity, between 1977 and 1993 half of the national party chairmen received outside income from corporations and law firms – despite party charters expressly stipulating that the chairman’s position is “full time.”
Republicans, among others, strongly criticized the late Ron Brown’s conduct as chairman of the Democratic Party in the early 1990s, when he simultaneously maintained a corner office at the lobbying firm of Patton, Boggs as a full partner, and maintained business relationships with at least three of its clients. He solicited government contracts for both his law firm and a company he headed, while heading the party.
Because of the Brown controversy, when Washington lobbyist Haley Barbour became GOP chairman in late 1992, he publicly pledged to party leaders and on CNN that he would completely sever his ties to Barbour, Griffith & Rogers. But in fact he never sold his interest in the firm, deriving income from its tobacco, pharmaceutical and other clients. The subterfuge only became known to reporters in the final days of his four-year term, when Barbour’s firm landed a contract representing the Swiss Government and had to register ownership and other information with the Justice Department under the Foreign Agents Registration Act. In the letter of agreement stipulating that the firm would receive $20,000 a month, Barbour’s partner Lanny Griffith wrote to the Swiss Ambassador, “We are eager to assist the Swiss government managing the controversy arising out of allegations of Swiss banking practices before, during and after World War II and relating to the Holocaust.”
“According to the Center for Public Integrity, between 1977 and 1993 half of the national party chairmen received outside income from corporations and law firms – despite party charters expressly stipulating that the chairman’s position is ‘full time.'”
Barbour admitted, in an interview for The Buying of the President 2000, that he kept his equity share in the firm, but insisted that he has always operated in a carefully correct manner. “When I ran for chairman, I said I would not actively lobby because I didn’t want a Member [of Congress] to wonder whether I was coming down there for the Republican Party or for some business deal that is in Haley’s interest.”
Barbour’s counterpart, Democratic National Committee chairman Don Fowler, worked simultaneously as a lobbyist for various corporate interests, including Chem-Nuclear Systems, Inc., registered in South Carolina and Illinois. When later asked about this apparent conflict of interest not widely known during his DNC chairmanship, Fowler said, “My private business concerns never became an issue while I was there, and really haven’t since.”
Recall that when mysterious soft money donors gave millions of dollars to the Democratic Party in the 1996 presidential election, one of them, Johnny Chung (later convicted for bank fraud, tax evasion and conspiracy), said, “The White House is like a subway. You have to put in coins to open the gates.”
Fowler and his staff set up Chung’s White House meetings, and Fowler later defended “servicing” the donors in his testimony to the Senate Governmental Affairs Committee, “I have long believed that one of the principal functions of a political party is to provide a link between the people and government. I thus believe it fully appropriate for the head of a national party to secure a meeting for a supporter with an administration official and to advocate a worthy cause.”
Now Racicot has unabashedly, publicly declared at the onset of his tenure as national party chairman that he will simultaneously, actively lobby for major corporate clients with business before the federal government.
That is a first, even in ethically challenged Washington.
Forget those quaint notions that political parties exist almost entirely to elect candidates. Parties and their chairmen raise hundreds of millions of dollars each election cycle from various special interests that often want something from government. They are the enablers in this ongoing addictive process, helping their elected officials to keep drinking in the campaign cash and helping their patrons feel good about giving it. Besides being Lobbyist-in-Chief, chairmen help to deliver access and other favors to the most generous party patrons.
Candidate George W. Bush’s comments in the presidential debates now ring hollow and, in retrospect, ironically Clintonesque, “We need to have a new look about how we conduct ourselves in office. There’s a huge trust . . . We can do better than the past administration has done. It’s time for a fresh start after a season of cynicism.” …
Charles Lewis is executive director of the Center for Public Integrity in Washington, and co-author of The Cheating of America (Morrow). Gil Shochat and Katy Lewis of the Center contributed research. To write a letter to the editor for publication, send to letters@publicintegrity.org. Please include a daytime telephone number.
For more on Marc Racicot, GO TO > > > A Flock of Flying Elephants; Songs of the Drug Vultures
* * * * *
From The Buying of the President 2000: by Charles Lewis and The Center for Public Integrity:
THE REPUBLICAN PARTY
If it wasn’t the “greatest robbery in the history of mankind,” it certainly will go down as one of the most morally reprehensible.
Switzerland — the Swiss National Bank and its private banks– took in more looted Nazi gold than anyone ever remotely imagined, at least an estimated $4 billion in today’s money. It has been suggested … that World War II may have been prolonged by months as a result.
Nearly all of the gold stolen by the Nazis came from central banks in occupied countries or Germany, but one-sixth came from individuals, including Jews who were systematically murdered in Nazi concentration camps. Gold was melted down from wedding rings and gold teeth extracted from corpses at Auschwitz and other Nazi concentration camps. . . .
In 1995 this story exploded around the world, and soon the United States– with the largest number of Holocaust survivors in the world– became a hotbed of reactivity for the jittery Swiss. The Swiss were concerned about being shut out of U.S. markets. They faced class-action lawsuits and were threatened with sanctions from hundreds of local U.S. officials in New York, California, and Pennsylvania. And they were up against Senate and House Banking Committee investigations.
By late 1996 the Swiss government was reeling from revelations, and the field of action had become the U.S. Congress. Republican Alfonse D’Amato of New York, then the chairman of the Senate Banking Committee, had presented acutely embarrassing information about the Swiss banks in April and October, and hundreds of journalists from all over the world pursued him and his aides in a feeding frenzy. The Swiss were already represented by at least one prominent law firm in Washington, Wilmer, Cutler & Pickering, but clearly they needed more political muscle in the United States.
And to whom did the descendants of “Adolf Hitler’s money launderers” turn for help?
The Swiss government retained the lobbying firm of Haley Barbour, the chairman of the National Republican Committee, for $20,000 a month. In a letter of agreement with Ambassador Carlo Jagmetti at the embassy of Switzerland, Lanny Griffith, Barbour’s partner, wrote, “We are eager to assist the Swiss government managing the controversy arising out of allegations of Swiss banking practices before, during, and after World War II and relating to the Holocaust.”
“Maybe they thought if they get the former Republican National Committee chairman, he would have influence over us,” Gregg Rickman, then an aide to D’Amato who directed the Senate Banking Committee’s investigation, … told the Center for Public Integrity. . . .
Hiring Barbour’s firm was just one of many damage-control measures employed by the Swiss– for example, they also hired Ruder Finn, a New York City-based public-relations firm that represented the Israeli government and many other prominent Jewish clients– all of which proved remarkably successful. Today, after three years of “Strum und Drang” for the Swiss government and banks, the heat is mostly off. The banks agreed to pay a lump-sum settlement of $1.25 billion, and the congressional investigations are history. . . .
~ ~ ~
Barbour’s firm began representing the Swiss during his final weeks as the chairman of the Republican National Committee. But the firm, in correspondence to the Justice Department, tried to hide Barbour’s financial ties to the controversial foreign client.
But behind the subterfuge was a more serious matter. In December 1996, when Barbour’s lobbying firm informed the Justice Department of its new client, papers were also filed there showing that Barbour owned a full, equal partnership in the company. This was not illegal, but it did reveal for the first time that Barbour had lied to the public and his fellow Republicans for four years.
In 1992, when he had campaigned to become the RNC’s chairman, Barbour had pledged, if elected, to resign from the lobbying firm he had founded. Within days of his election to the chairmanship in January 1993, Barbour declared on CNN’s “Evans & Novak” program: “I’ll be selling my interest in my law firm to my partners. I’ll sever my relationship with it. I won’t have any ties to it, business ties to it at all, or financial ties.”
~ ~ ~
Throughout his chairmanship of the Republican National Committee, in other words, Barbour also had secretly been deriving income from his lobbying firm.
Just two of his firm’s clients, Glaxo-Wellcome, Inc., and the Pharmaceutical Research and Manufacturers of America, gave more than $700,000 to the Republican Party from 1993 to 1997 (the span of Barbour’s chairmanship), buying access to power via the party and its leaders in the Senate and House; they also were simultaneously paying Barbour’s firm to promote their interests in Washington.
As soon as Barbour returned to his old lobbying firm full-time in January 1997, he added more that a dozen corporate clients, many of them the most generous Republican Party patrons. . . .
By 1998, Barbour, Griffith & Rogers had become one of Washington’s hottest lobbying firms, with three dozen clients and $7.4 million in direct lobbying income, having boosted its revenues by more than 42% in one year and ranking sixth among Washington firms. . . .
~ ~ ~
During the time that he was the RNC’s chairman, Barbour also served as a director of another lobbying firm, National Environmental Strategies Company, which he had helped form in 1990.
At the same time that Republicans in the House were unsuccessfully attempting to rewrite the nation’s environmental laws, the Republican Party and a company connected to its chairman separately were getting major cash from corporations seeking to severely reduce or even eliminate federal environmental regulation.
In 1998, National Environmental Strategies racked up nearly $1.2 million in lobbying income from 23 clients, including such corporate polluter interests as Occidental Petroleum Corp; Union Carbide Corp; the Chemical Manufacturers Assoc; and the National Mining Association.
Also while Barbour was the RNC’s chairman, the National Policy Forum, a Republican Party “think tank” created by Barbour, held more than a dozen conferences, in 1995 and 1996, in which the industry perspective about the enforcement of environmental laws was ventilated. . . . Barbour, in short, wore two hats– one visible and one invisible.
~ ~ ~
One thing did light up that dim radar screen, however. As Barbour and other leading Republicans denounced Clinton and the Democrats for receiving millions of dollars in illegal foreign contributions, there were suggestions that Barbour could find himself in the same hot seat.
In March 1997 he appeared on the NBC News program “Meet the Press” and was asked by moderator Tim Russert: “And yet you will not disclose who gave how much money. Why don’t you tell the American people who gave hundreds of thousands of dollars to this National Policy Forum, and did any of that money come from overseas?”
Barbour replied, “Well, none of the money came from overseas.”
Russett: “Period?”
Barbour: “Period.”
Barbour was in a position to know, inasmuch as he created and chaired the National Policy Forum, a now-defunct organization that did not have to disclose its donors and could receive foreign money, legally.
Months later, according to Russert, Barbour called him, apologizing “that he had misled me.” Barbour said he had discovered that the Pacific Cultural Foundation, a Taiwanese entity, had contributed $25,000 to the National Policy Forum. What Barbour didn’t say– and Senate investigators later discovered– is that the RNC chairman sent a personal thank-you letter for the contributions to Ambassador Jason Hu, the U.S. representative of the Taiwanese government.
~ ~ ~
But that proved to be peanuts compared to Barbour’s relationship with Ambrous Young, a Hong Kong businessman. The National Policy Forum was in chronic financial difficulty. Young had been persuaded to put up $2.1 million in collateral, “posted by a shell corporation that had no assets other than money transferred from Hong Kong,” according to the report issued by the Democratic members of the Senate investigating committee.
Because of Young’s generosity, the National Policy Forum was able to get a $2.1 million loan, but most of the proceeds were promptly transferred to the RNC, which allegedly put the money into congressional campaigns nationwide. . . .
For the next two years, Barbour and the Republican National Committee were under a federal criminal grand jury investigation over that Hong Kong deal.
No charges have ever been filed. . . .
* * *
On 7/16/00, the AP reported: GOP Wins Fund-raising Case Dispute . . . The Republican Party waged a secret battle to withhold documents from a Justice Department fund-raising investigation of its former chairman and won a court ruling last week that will keep the materials from a grand jury.
Though the GOP has accused Democrats of stonewalling the fund-raising investigation, an appeals court ruling disclosed that Republicans have held up the prosecutors’ investigation of former party chairman Haley Barbour.
A grand jury in 1997 subpoenaed the files of the Republican National Committee’s former general counsel, seeking information on efforts by Barbour and others to arrange a loan guarantee from a Hong Kong businessman to help their efforts in the final days of the 1994 election.
Democrats have alleged the transaction funneled illegal foreign money into the U.S. election. Barbour has said he didn’t know the Hong Kong businessman used foreign money. (Duh-h?)
The former RNC general counsel argued the documents were protected by attorney-client privilege. After reviewing the documents, the judge concluded there WAS evidence of a crime.
An appeals court, however, sided with the Republicans.
The three-judge panel said the loan guarantee Barbour arranged didn’t violate laws and could not be used to pierce the client confidentiality.
“This case does not fall within the crime-fraud exception because what RNC and its officials are accused of is not criminal,” the judges ruled. (Double Duh-h-h?)
At issue is a transaction between the National Policy Forum, a group formed by Barbour, and Hong Kong businessman Ambros Young. Prior to the 1994 election, NFP had received a loan from Republican political committees. As the election drew closer, Barbour wanted to inject money into the GOP effort to gain control of Congress and sought a way to have NPF repay the money it was loaned so the GOP committee could use it to help candidates.
Barbour arranged a $2.1 million loan guarantee from Young, used that to secure a U.S. bank loan (hmmm, I wonder which bank?) and paid back the money to the GOP committee in time for them to use it for the election. . . .
The existence of the secret battle over the GOP lawyer’s files wasn’t disclosed until Friday’s appeals court ruling.
In its 3-0 ruling, the appeals court said the loan guarantee went to the NPF, not the Republican Party, and therefore “is no violation” of election laws. . . .
* * *
From The Buying of the President 2000: . . . Finally, we come to the No. 3 soft-money patron of the Republican party in the 1990s. What would it take to get the U.S. government to go to bat for your company before an international trade organization even if there were virtually no American jobs at stake? Only about $4.5 million and some friends in high places.
Don’t believe us? Ask Carl Lindner, the founder of American Financial Group, Inc., a holding company specializing in insurance that in 1998 posted more than $4 billion in revenue. Lindner’s company and family have been among the biggest political donors ever, giving more than $1 million in soft money to the Democratic party and nearly $3.5 million to the Republican Party from 1991 through June 1999. . . .
Lindner’s biggest coup came in May 1999, when the World Trade Organization ruled in favor of the United States and several Latin American countries that had brought a complaint against the European Union for unfair tariffs on bananas.
In mid-1993, when the European Union imposed a tariff on bananas not coming from former European colonies in the Caribbean, Lindner’s Latin American-based Chiquita felt the crunch. He immediately turned to the U.S. government for help, even though 39,000 of Chiquita’s 45,000 employees are in Latin America.
Linder met with then-U.S. Trade Representative Michael Kantor on Jan 13, 1994 to discuss the issue … In August 1994, Dole and 11 other Senators urged Kantor to intervene and on Nov 17 Dole, Gingrich, and House Democratic Leader Richard Gephardt wrote to the President asking for similar assistance.
Kantor was somewhat reluctant, but after Dole wrote him a personal letter asking that he intervene, he did. Kantor was quoted as saying, “This came from the big boys at the top.”
By April 1996, Kantor announced that he would bring the U.S.– that is, Lindner’s — case before the World Trade Organization. In May 1999, the WTO awarded the United States more than $190 million in punitive tariffs based on European violations of free-trade principles.
Lindner’s money had bought him access, and the access had bought him action….
OUR TOUR OF THE NESTS OF THE FILTHY-RICH AND FAMOUS BEGINS NOW!
* * * * *
THE BARBADOS CONNECTION-CORAL REINSURANCE
The link between the Arkansas Development Finance Authority (ADFA) and AIG goes beyond $5 million. An AIG affiliate has managed over one billion dollars worth of ADFA’s bonds, according to the Arkansas Democrat Gazette. An allegation that ADFA launders money for U.S. intelligence has repeatedly surfaced but without any direct documentary evidence to date . . . .
Apart from ADFA, where does AIG get its money to fund, among other things, lobbying on behalf of the Chinese government? The answer is not clear, though some indications are available. (1) In 1995, AIG became the first company to be licensed to sell insurance in China. (2) AIG is a client of Kissinger & Associates.
It was Henry Kissinger, the former Secretary of State, who advised against harsh sanctions after the Tienanmen Square massacre. . . . (3) AIG has also been the focus of SEC and BCCI investigator, Manhattan DA Robert Morgenthau’s attention . . . to explore its ties to the BCCI. (4) And finally, AIG is headed by Maurice Greenberg, one-time chairman of the NY Federal Reserve Bank, and in 1995 a candidate to head the CIA.
Greenberg is chairman of the US-China Business Council and lobbied hard (and successfully) for the Clinton administration to sever the link between China’s human rights record and renewal of China’s Most-Favored-Nation trade status. . . .~ ~ ~
Whatever AIG is, it appears to be tied into that big, bipartisan, ugly network of intelligence, money laundering, Arkansas, and Communist China. . . .
* * *
From salon.com, April 20, 2000:
Hillary Brings in a Glamorous Group of Givers in New York Senate Race.
Giuliani Raises More.
By Jesse Drucker
In what is sure to be the most expensive U.S. Senate race of all time, Hillary Rodham Clinton and Rudy Giuliani continue to raise money at a torrid pace. Giuliani has raised nearly $20 million in campaign funds — including soft-money donations — while Clinton has raised roughly $16 million in soft- and hard-money contributions.
The two candidates’ most-recent filings, made available this week, revealed the latest round of fat cats who want to influence the outcome of the election and presumably, the government.
After the reports were released, the campaigns quickly traded charges and countercharges attacking the ethical hygiene of the opposition’s contributors. The Clinton campaign said it would return $22,000 from a Miami businesswoman who once helped solicit a contribution to the Democratic National Committee from an admitted cocaine trafficker now in prison.
The Giuliani campaign, meanwhile, came under attack for accepting $100,000 from the Renco Group, a company whose holdings include Magnesium Corp. of America, which was cited in a 1998 federal Environmental Protection Agency report as the nation’s top dumper of toxic chemicals.
Both campaigns have established soft-money committees to essentially bypass the federal restrictions on campaign contributions, resulting in some enormous donations. “It is grotesque,” said Don Simon, general counsel to Common Cause, which along with Democracy 21 has filed a complaint with the Federal Election Commission about the fund-raising practices of the two campaigns.
“You have Senate candidates here openly engaged in the solicitation of contributions far in excess of what the federal rules allow. Those rules have been put there in order to protect the political process from corruption and the appearance of corruption and those rules are just being flouted,” Simon said.
Not surprisingly, donors to Giuliani’s camp include scores of businessmen, many of whom have contracts with the city.
They include real-estate developers Douglas Durst, Bernard Mendik and Edward S. Gordon, city bus franchise holder Edward Arrigoni, and builders Joseph Mattone and Lester Petracca.
Financial services company American International Group (recipient of a nearly $56 million city tax break in 1997) gave $20,000. . . .
For more, GO TO > > > The Un-American Insurance Company
In 1988, 249 individuals each gave at least $100,000, achieving a total of $25 million, to help elect George Bush president. By giving that much, they became members of “Team 100” and not only had personal access to Bush and other members of the Bush administration, but many of them — from real estate and construction to finance, from manufacturing to agribusiness to oil and gas interests — received special favors during the Bush presidency. . . .
The many quid pro quo relationships have been well documented by Common Cause magazine and others. The two largest donors were Archer-Daniels-Midland (ADM) and its chairman, Dwayne Andreas, who gave $1,072,000 and Atlantic Richfield (Arco) and its chairman, Lodwrick Cook, who contributed $862,360.
Both companies made or saved hundreds of millions of dollars from their well-placed Washington investments. . . .
Archer Daniels Midland touts itself as the “supermarket to the world.” This behemoth, based in Decatur, Illinois, has its fingers in nearly every agribusiness pie. . . . Its net sales in fiscal year 1994 exceeded $11 billion and its profits topped $1 billion. . . .
The company battled with a spate of bad publicity in the summer of 1995, when the Justice Department, using an ADM informant, made public its undercover investigation into allegations of price-fixing for sweeteners and food additives. . . .
Andreas and ADM, playing it safe, are among the largest contributors to both parties in national political campaigns . . .
In 1994, ADM alone gave approximately $2.5 million to various congressional candidates. . . .
Andreas has befriended virtually every president since Nixon. His generosity to all of them is notorious. His $25,000 check to CREEP wound up in the bank account of one of the Watergate burglars. As a result he was investigated but ultimately cleared, by the Senate Watergate Committee. . . .
One of Andreas’s well-known and closest political allies has been Senator Bob Dole. Since 1979, ADM has given Dole’s senate and presidential campaigns, as well as his leadership PAC and think tank more than $200,000 in contributions, making ADM Dole’s fourth-largest patron. That sum does not include the $275,000 Andreas and ADM have given to the Dole Foundation, the senator’s charity for the disabled.
And Andreas didn’t forget Elizabeth Dole. When she took over the reins of the Red Cross, the Andreas Foundation donated $500,000. . . .
ADM has also been generous with trips, honoraria, and in-kind contributions. Between January 1983 and March 1995, Dole took thirty-five trips on ADM corporate aircraft, for which ADM was reimbursed $75,283. Newsweek (Apr 1995) reported that Dole reimbursed the company for the equivalent of a first-class fare at “less than 25 percent of the cost of operating a private jet.”
During 1993-1994 alone, Dole took an average of a trip a month on ADM aircraft. . . .
THE FLORIDA CONDO – The most intriguing tale of the Dole-Andreas relationship is a Bal Harbour, Florida, oceanfront condominium in the “Sea View” complex that Elizabeth Dole bought from Andreas in 1982.
According to the Wall Street Journal, Elizabeth Dole and her brother John Hanford “paid $150,000 cash for a three-room, ocean-front apartment at the Sea View in a transaction handled by the hotel’s management.” Dole, however, didn’t begin payments on the apartment until seven months after the purchase occurred, and the property was actually valued at $190,000….
The most oft-mentioned return favor to ADM is Dole’s advocacy for ethanol. As of May 1995, ADM produced more than 60 percent of the country’s ethanol, an alcohol distilled from corn and added to gasoline to produce gasohol. Dole’s support of ethanol has been strong and consistent. In November 1989, he held up a steel import bill until his colleagues would agree to extend the ethanol excise tax credit to the year 2000.
An industry analyst estimated that in 1987 alone, ADM would garner $150 million from the federal government’s ethanol program. In 1995 the Department of Energy estimated that ADM had the capacity to produce 898 million gallons of ethanol, which would yield the blenders of gasohol using ADM ethanol a maximum $475 million in tax benefits. Without the subsidy, there would be no market. But Dole has done much more to help Andreas and ADM….
According to the U.S. Dept of Agriculture, ADM has raked in at least $424,541,178 in subsidies — excluding subsidies for ethanol and corn sweetner — from the federal government between fiscal years 1985-1995. Dole is a senior member of the Senate Agriculture Committee, through which these programs must pass; he has never opposed them.
Programs such as the Export Enhancement Program and the extremely lucrative grain trade with the former Soviet Union in particular, have received Dole’s enthusiastic backing and resulted in ADM pocketing hundreds of millions of dollars in subsidies.…
THE EXPORT ENHANCEMENT PROGRAM (EEP) began with the 1985 Farm Bill and was aimed at helping U.S. farmers compete with foreign farmers who received subsidies from their governments. . . .
Between fiscal years 1985 and 1995, ADM received more than $134 million from the program. In several of its annual reports, ADM executives have lauded it as a “glimmer of hope” and a “major benefit” to the company. . . .
In Senate floor speeches, in the form of amendments, and in interviews Dole has endorsed EEP. . . . urging incoming Agriculture Secretary Clayton Yeuter in 1989 to support EEP by saying, “I just think one area that we hope you’ll be very aggressive in, that’s the Export Enhancement Program”. . . .
“We all hope we are going to have an aggressive, knowledgeable person who’s going to be our salesman to the world” … pushing President Bush in 1989 to increase aid to the Soviet Union and to boost EEP, telling him, “if we’re going to trade with the Soviet Union, which we are, then we have to be competitive, we have to meet world prices”; … and writing a letter to former Agriculture Secretary Mike Espy in 1993, encouraged Espy to expand EEP to include barley exports (a commodity processed by ADM) and to release $240 million in Russian grain credits even though Russia had not made mandated payments to U.S. banks….
Another area in which ADM benefitted is in the corn sweetener market, of which ADM holds a 30 percent share. Despite ADM’s advertising campaign to the contrary, the much-debated sugar loan program reportedly costs American consumers and estimated $3 billion annually by “stabilizing” the cost of sugar at 22 cents a pound. … Producers of corn sweeteners benefit indirectly — by “shadow pricing” below the cost of sugar — gaining some $548 million annually . . . Dole also helped push through the 1986 tax bill. ADM told its stockholders in 1988 that its tax rate decreased by 6 percent because of the bill….
* * *
As reported by Corporate Predators web page, Top 100 Corporate Criminals of the 1990’s, from Corporate Crime Reporter, 10/1/96:
Archer Daniels Midland (ADM) pled guilty and paid a $100 million criminal fine — at the time, the largest criminal antitrust fine ever — for its role in conspiracies to fix prices to eliminate competition and allocate sales in the lysine and citric acid markets worldwide.
Federal officials said that as a result of ADM’s crime, seed companies, large poultry and swine producers and ultimately farmers paid millions more to buy the lysine additive.
In addition, manufacturers of soft drinks, processed foods, detergents, and others, paid millions more to buy the citric acid additive, which ultimately caused consumers to pay more for those products….
* * *
A Catbird Prediction: Look for Archer Daniels Midland and Tyson Foods to become big beneficiaries in the recently-relaxed trade restrictions with Castro’s Cuba. If this prediction comes true, ask yourself if it was worth sacrificing Elian Gonzales on the Altar of Greed. (Catbird Prediction, 6/27/00)
For more, GO TO > > > The Biotech Birds
* * *
WHO SAYS GEORGE W. BUSH DIDN’T ACCOMPLISH MUCH IN HIS FIRST 100 DAYS?
From The Honolulu Advertiser, 4/27/01: O`ahu Shipyard To Be Sold . . . United States Marine Repair, a Virginia firm owned by investors including several national political figures, yesterday announced plans to buy O`ahu shipyard Marisco Ltd.
United States Marine Repair is owned by the Carlyle Group, a Washington, D.C.-based investment firm whose chairman is Frank C. Carlucci, former secretary of defense for President Reagan.
Another principal in the firm is James A. Baker III, who served as secretary of state under former President Bush.
United States Marine Repair has shipyards in San Diego, San Francisco and San Pedro, Calif.; Norfolk, Va.; and Ingleside, Texas. The company specializes in maintaining U.S. Navy surface combat ships.
Retired Rear Adm. Dick Camacho, former commander of the Pearl Harbor Naval Shipyard, will lead United States Marine Repair in Honolulu, the company said.
“Because of Marisco’s excellent reputation and 29-year history of accomplishing quality work on difficult jobs, we are looking forward to having the yard and its employees join our family of shipyards,” B. Edward Ewing, chief executive of United States Marine and Carlyle Management Group, said in a statement.
The company said its annual revenues would grow to more than $500 million with the acquisition.
Marisco is one of two full-service private shipyards in Hawai`i. . . .
* * *
From Harper’s Magazine, Feb 2000, by Joe Conason:
HOW GEORGE W. BUSH GOT RICH
A Heartwarming Tale of Influence, Cronyism, and $1.7 Billion!
On December 6, 1994, one month after he defeated Ann Richards to become governor of Texas, George W. received a large but belated campaign contribution from an acquaintance named Thomas O. Hicks …
Hicks was easily one of the wealthiest men in Texas, and more specifically, he was the chief executive of Hicks, Muse, Tate & Furst, an investment partnership he founded . . .
Of the scores of appointments made by an otherwise weak governor under the Texas constitution, a seat on the University of Texas Board of Regents is among the most desirable. It carries significant prestige, opportunities for patronage, and preferred access to season tickets (or luxury boxes) at Longhorn football games. For someone like Tom Hicks, however, being a regent provided something far more valuable . . .
Hicks had conceived an ambitious plan for the state university system’s financial assets — more than $13 billion — that matched his own bold investment style. . . .
Friends and long-time associates of Thomas Hicks, and his firm’s past and future business partners– as well as major Republican contributors and political supporters of the Bush family– received hundreds of millions of dollars from the University of Texas investment funds.
Under the guidance of Tom Hicks, a growing portion of the university’s investment choices had a decidedly Republican tinge. On March 1, 1995, the regents voted to place what would prove to be a comparatively modest $10 million with The Carlyle Group . . .
That a firm run by his father’s associates would be awarded an investment contract only weeks after George W. to office was unseemly at best.
But the Texas governor had his own long-standing and lucrative ties to Carlyle that dated back almost a decade. Among his more obscure business activities was a corporate directorship at Caterair, one of the nation’s largest airline-catering services, which was acquired by Carlyle in 1989.
The next year, a seat on the company’s board was arranged for George W. by the former Nixon White House aide and longtime Bush associate Fred Malek, who was then an adviser at Carlyle. Although Bush remained on the catering company’s board until 1994, his earnings as a Caterair director are not specified on his personal financial forms filed with the Texas Ethics Commission. . . .
These days it is the governor’s father who benefits from the Washington investment firm’s largesse. Since leaving the White House, George Herbert Walker Bush has been paid by Carlyle for speeches at events sponsored by the merchant bank. . . .
Carlyle’s spokesman did not return calls seeking information about the firm’s relationship with the Bushes. It is known, however, that the ex-president joined up with Baker, Carlucci, and Darman on a more formal basis in early 1998 when he became a “senior adviser” to Carlyle Asia Partners (a fund set up to buy distressed businesses in the Far East).
* * *
From The Hartford Courant, 10/21/99: Top Politicians Linked to Pension Fund Deals . . .
Connecticut State Treasurer Denise L. Nappier shone the light Wednesday on seldom-seen machinations that have put millions into the pockets of well-connected “finders” in state pension investment deals — and some of the state’s best-known politicians were caught in the glare.
Nappier, responding to the scandal surrounding her now-disgraced predecessor, Paul J. Silvester, released a list of those who have received finder’s fees and other compensation in treasurer’s office deals since 1991. . . .
One firm that has given Nappier an incomplete response is the Carlyle Group — which has figured prominently in the Silvester scandal. . . .
Silvester invested $50 million in pension funds with Carlyle, which has been a client of Wayne Berman, a Washington-based consultant and major fund-raiser for Texas Gov. George W. Bush’s presidential campaign. . . . Berman gave Silvester a job with his new business consulting firm, Park Strategies, after his term ended. . . .
* * *
From Hoover’s Company Capsule: With former Defense Secretary Frank Carlucci as its chairman, it’s no surprise that The Carlyle Group is drawn to defense firms. Defense and aerospace firms such as United Defense Industries are about 30% of the private global investor’s portfolio, which also includes information technology (Federal Data), health care, real estate, and bottling companies. Since Carlucci became chairman in 1987, the firm has brought in a host of staff from the Reagan and Bush administrations, including ex-Secretary of State James Baker and ex-budget chief Richard Darman (former President Bush and former British Prime Minister John Major have also made appearances for the firm). Partners include George Soros and the Mellon family.
* * *
From Bloomberg, 09/07/00: Carlyle Group expects up to US$800m for Asian venture fund – Carlyle Group Inc, the private equity firm whose leaders include three former government chiefs, plans to raise as much as US$800 million for a venture capital fund to invest in Asian technology companies.
The fund, Carlyle Asia Venture Partners II, which will probably close in the fourth quarter is one of the Washiington-based firm’s three new Asian investment pools.
The fund will be run out of Hong Kong and a new office in Bellevue, Washington, overseen by Stephen Wu, a managing director at the firm. It will invest in closely held technology companies from early to late stages of development. The firm’s first Asian venture capital fund had US$160 million of capital.
“We’re not an Internet fund,” said Wu, who will manage the new Asian fund along with two other Carlyle managing directors, Tony Jansz and Eric Levin, both based in Hong Kong and both formerly of Intel Corp’s investment division.
Carlyle, whose board members include George H.W. Bush, John Major and Fidel Ramos, joins other US firms stepping up investments in venture capital and international private equity in search of high returns.
Carlyle has traditionally focused on buyouts, investing in undervalued companies it aims to turn around. This week, the firm and JP Morgan Corsair Inc signed an agreement to buy a 40-percent stake in Korea’s KorAm Bank for US$450 million.
Wu said he plans to assemble a “small team” in Bellevue to support the US-based business. “There is a lot of good talent we can draw from the high-tech skill set in the area,” he said.
Allocation
Carlyle’s new Asian fund plans to invest about 70 percent of its capital in Korea, Taiwan, China, and India, Wu said. The rest will go to Australia, New Zealand, and southeast Asia, including Singapore, Malaysia, the Philippines, Thailand, and Indonesia.
The fund will invest in Asian companies doing business in Asia or seeking to expand into the US, as well as US companies that want to do business in Asia, said Wu.
Since March, Carlyle has made about 12 venture capital investments totaling US$45 million in Asia, said Wu. One of them was in LinkAir, a Chinese company with Silicon Valley operations that’s developing technology for high-speed wireless telecommunications.
While the stated fund-raising target is US$500 million, Carlyle anticipates demand will be higher, said Wu, noting the firm generated average annual returns of about 35 percent since it was founded in 1987. “The fund will end up with between US$500 and US$800 million,” Wu said.
Carlyle expects to raise the new fund from wealthy families, pension funds, and other institutions, said Wu, declining to identify potential investors.
Existing Carlyle investors include the government of Singapore, the Caisse de Depot et Placement du Quebec state pension fund, and the Abu Dhabi Investment Authority.
Earlier this year, Carlyle raised a US$750-million fund, Carlyle Asia Partners, for buyouts in Asia. The firm plans to raise a separate fund of about US$1 billion for Japanese investments, including venture capital and buyouts, with the first capital commitments expected in 2001, Wu said. “Japan is such an important market, it deserves its own focus,” said Wu.
Wu joined Carlyle in May after 11 years at Microsoft Corp, where he was most recently general manager for Asia in the division that includes the MSN Internet business. . . .
For more, GO TO > > > Birds that Drink from Cesspools; Broken Trust; The Sinking of the Ehime Maru
From the FBI, Salt Lake City web posting: Crime in a White-Collar World:
Recently, the Salt Lake City Division spearheaded the investigation of the Columbia HCA network of hospitals and healthcare providers. As a result of this operation, many key players, including a few high-level officials of Columbia, are under federal indictment for Medicare fraud.
* * *
From BLB&G Columbia/HCA web posting: . . . Bernstein Litowitz Berger & Grossmann LLP, acting for the benefit of the New York State Common Retirement Fund and the California Public Employees’ Retirement System (CalPERS) and 10 other institutional investors and individual plaintiffs, filed this derivative action on behalf of Columbia/HCA Healthcare Corp against members of the Columbia Board of Directors and former senior executives of the Company.
This derivative action seeks to hold the defendants responsible for subjecting Columbia to the largest health care fraud investigation in history, extensive nationwide litigation and potential massive fines and penalties. . . .
On March 19, 1997, officials from the FBI, IRS, and HHS executed search warrants on Columbia’s offices in El Paso, Texas, as part of a long-term, on-going investigation into allegations of potential health care fraud. A fourth federal agency, the DOD’s Criminal Investigation Service later joined in the investigation.
The federal investigations uncovered illegal billing practices, illegal referrals, and illegal acquisition practices. By the middle of the summer the agents raided 35 additional facilities in six more states: Tennessee, Florida, Utah, Oklahoma, Georgia and North Carolina . . .
In late July, 1997, a federal grand jury in Florida indicted three Columbia executives, two from Florida and one from the corporate office in Tennessee, on five counts including charging the executives with conspiracy to defraud the government by falsifying cost reports used for reimbursements by Medicare and Champus. . . .
In addition to Columbia’s systematic violations of the SSA, the HIPPA, the FCA, the antitrust laws, as well as other federal and state laws, the complaint alleges that certain of Columbia’s senior level officials sold their shares of Columbia’s stock to the unsuspecting public with full knowledge that public disclosure of the investigations would have adverse consequences to Columbia’s publicly traded stock prices. . . .
* * *
On 08/14/97, CNNfn reported: For Columbia/HCA Healthcare Corp., things are going from bad to worse: This time, the new chief executive and six other officials stand accused of illegal insider trading. . . .
A lawsuit filed late Wednesday by New York State Comptroller Carl McCall accuses newly named chairman Thomas Frist of selling 3.7 million shares of Columbia stock in 1996 and 1997 for $138 million. McCall filed the suit on behalf of the New York State Retirement Fund, which owns 2.4 million shares of Columbia stock. . . .
* * *
Before Columbia and HCA merged, George W. Bush supporter Richard Rainwater put in about $125,000 in Columbia and $15 million in HCA.
On 11/17/97 the Columbia/HCA board approved an internal operating reorganization plan and Goldman Sachs assisted the company in its evaluation of restructuring alternatives. Hawaii’s giant charitable trust, Bishop Estate, became a major investor in Columbia/HCA.
* * *
From: Nurse Week/Health Week 05/10/99: . . . Fraud trial begins for four Columbia/HCA executives: Several years after its investigation started, the government is trying four executives of Columbia/HCA Healthcare Corp on charges they filed false healthcare claims in an attempt to cheat the government out of $2.8 million. . . .
The case, being heard in a Tampa, Fla., federal court, is the first to reach trial in the FBI’s largest healthcare investigation ever….
This trial is part of a larger fraud case against Columbia. That investigation has led to raids on Columbia facilities in several states and a management shakeup. The company also is facing a number of lawsuits, including seven whistle-blower fraud suits….
For much more, GO TO > > > The Dissection of Fristy
The name of one company in particular might have caught Wendy Gramm’s attention: Enron….
It’s a fairly large company, based in Houston. Of all the companies that wrote to the CFTC (Commodity Futures Trading Commission) seeking the exemption (of energy derivative contracts from federal regulation), Enron was the biggest donor to Gramm campaigns, giving $34,100 over the years. . .
After taking actions that led to the exemptions from regulation, Wendy Gramm (wife of Phil Gramm and chosen by Ronald Reagan to head the CFTC in 1987) resigned on January 20, 1993, the day Clinton was inaugurated. Five weeks later, she was named to Enron’s board of directors.
The part-time position pays her $22,000, plus $1,250 for each meeting she attends. In April 1993 the commodities commission voted 2 to 1 against regulating the business…
In its 1992 annual report, Enron calls itself the “manager of the largest portfolio of fixed-price and natural-gas derivative contracts in the world.” The company also has roughly $4.5 billion in interest-rate swaps, another exotic transaction that Wendy Gramm helped to exempt from deregulation while she was at the CFTC…
[A Catbird Note: Bishop Estate’s infamous McKenzie Methane deal was done in 1989 — during Wendy Gramm’s tenure as head of the CFTC. Hmmmm.]
* * *
Enron has another distinction — they are the #1 career patron of George W. Bush, Jr.
* * *
From The Buying of the President 2000: . . . For three decades now, hundreds of electrical power, oil refining, and chemical plants have been pumping toxic particles into the air over Texas. These plants produce as much smog-forming nitrogen oxides as 18 million cars, making Texas the state with the largest volume of air pollution in the nation. The Texas Legislature passed the Texas Clean Air Act in 1971, but plants built before the law was passed don’t have to comply with its rules.
In December 1996, staff members of the Texas natural Resources and Conservation Commission (TNRCC), the state environmental agency, began meeting with representatives from eleven companies to talk about reducing the emissions of the plants that benefitted from the grandfather clause. But when it looked like the commission was moving toward eliminating the exemption for those plants, energy-industry executives balked and headed straight for the governor’s office.
On January 14, 1997, Bush’s environmental director, John Howard, told his boss in a memo: “Industry has expressed concern that the TNRCC is moving too quickly and may rashly seek legislation this session.”
In early March, Bush tapped Vic Beghini, an executive with Marathon Oil Co., and Ansel Condray, an executive with Exxon Corp., to come up with a plan to let the industry comply voluntarily with the state’s clean-air regulations. . . .
Beghini and Condray then presented the finished proposal at a June 19, 1997 meeting of about forty industry executives. In his notes of the meeting, James Kennedy of E.I. du Pont de Nemours and Co., the giant chemical manufacturer, wrote, “Amoco presented the paper to the group at the meeting as something that has been agreed to at high levels and was not subject to change.”
On March 31, 1998, Bush appeared at a press conference flanked by executives of Exxon, Amoco, and Texas Utilities, among others, to announce that 26 companies– representing 60 of the 831 pollution-producing companies in the state, had pledged to reduce emissions by 15,000 tons a year. “We’re committed,” Bush said, “to clean air in the state of Texas.”
But whether companies cut back on emissions didn’t really matter to the governor or to the industry. … “The concept paper has no ‘meat’ with respect to actual emissions reductions,” Kennedy wrote. . . .
As far as Bush was concerned, his voluntary compliance plan was already a rousing success, a model of public-private partnership good enough to take on the road to the presidential primaries. Three weeks after Bush announced that he was a candidate for President, his spokesman, Scott McClennan, boasted: “Governor Bush was the first governor in Texas to tell grandfathered industries, ‘It’s time to clean up.’ Voluntary programs are working in Texas.”
Well, not really. A study by the Environmental Defense Fund published six months after Bush’s press conference found that only three of the 26 companies had actually scaled back their emissions. (In 1999, under increasing public pressure, Bush finally signed a bill that forces power plants to cut their emissions in half by 2003.) . . .
For more, GO TO > > > The Story of Enron
Defendant Marsh & McLennan Companies, Inc. (M&M) is the world’s largest insurance brokerage firm that conducts business throughout the United States and in many foreign countries, and is a licensed General Agent for Federal in the State of Hawaii.
On or about May 25, 1994, Plaintiff, in his capacity as Risk/Insurance & Safety Manager for KSBE, obtained a Captive Management Fee Proposal from Peter Lowe, VP, M&M Insurance Management Services, Inc. (M&MIMS), which detailed their proposed services and fees for managing P&C. Their services were to be on a time and expense basis, with an estimated annual cost of around $70,000. There was no mention in this proposal that their related subsidiary, M&M, would charge an additional flat annual fee of $200,000 for providing “brokerage”, “risk management” or other purported services to the captive. . . .
* * *
From the 10/14/99 edition of The Honolulu Star-Bulletin by Russ Lynch: Isle Insurer Sues State for Snub in Bidding.
A Honolulu insurance business is suing the State of Hawaii, charging that it was improperly dropped out of the running for work as an insurance broker for the state government. Aon Risk Services, Inc. filed suit in Circuit Court yesterday accusing the state Department of Accounting & General Services of bypassing the steps the state spelled out in its request for proposals to provide risk insurance for the state. . . .John D. Beck, president of Aon Risk, said the company is charging that the state “summarily rejected” Aon’s proposal, contrary to the recommendation of a selection committee, and “arbitrarily selected another brokerage firm,” Marsh USA, Inc. . . .
* * *
From Harper’s Magazine, Feb, 2000: How George W. Bush Got Rich — A heartwarming tale of influence, cronyism, and $1.7 billion, by Joe Conason: . . .
On December 6, 1994, one month after he defeated Ann Richards to become governor of Texas, George W. received a large but belated campaign contribution from an acquaintance named Thomas O. Hicks . . .
Of the scores of appointments made by an otherwise weak governor under the Texas constitution, a seat on the University of Texas Board of Regents is among the most desirable. It carries significant prestige, opportunities for patronage, and preferred access to coveted season tickets (or luxury boxes) at Longhorn football games. For someone like Tom Hicks, however, being a regent provided something far more valuable than any such trifling tokens of status. The prolific Hicks had conceived an ambitious plan for the state university system’s financial assets — more than $13 billion — that matched his own bold investment style, and, with the governor’s support, he parlayed his appointment into a position of unprecedented control over the university funds.
While the University of Texas invested hundreds of millions of dollars with Republican-linked partnerships under the guidance of Tom Hicks, it also placed hundreds of millions of dollars more with his friends and associates as well as with firms that did business with Hicks, Muse…
Two former classmates of Hicks’ at the University of Texas also were awarded large investments by UTIMCO. One was his old fraternity brother Bruce Schnitzer, a New York insurance man who set up Wand Partners, which received more than $60 million in at least three separate deals with UTIMCO between 1996 and 1998. Schnitzer‘s record of success was mixed at best; his companies’ rates of return lagged behind the Dow average. . . .
Nor was it reassuring that he had resigned in 1985 as the president of Marsh & McLennan, then the world’s biggest insurance brokerage, after the company lost $165 million in unauthorized trading and was fined by the New York State insurance department. . . .
Despite those problems, Schnitzer maintained close connections not only with Hicks, Muse but with Richard Rainwater and the Bass family. After quitting Marsh & McLennan he had done multimillion-dollar deals with all of them, including one of the first major partnerships put together by Hicks, Muse. . . .
* * *
(A Catbird Note: Texas University Investment Management Co. is one of the largest institutional investors in Bedford Property Management. Other large institutional investors in Bedford are Barclays Bank and Invesco Management & Research. Among the largest institutional investors in Marsh & McLennan are Barclays Bank and Invesco. Bedford is one of the nation’s largest real estate development and property management companies, doing millions of dollars a year in business with Bishop Estate.)
As reported by Pete Pichaske, Phillips News Service, on 07/29/97: Hawaii’s GOP is linked to “tainted” donations. . . .
Hawaii’s Republican Party received $456,500 in foreign-linked campaign funds from the Republican National Committee just before the 1994 elections, according to federal campaign reports. . .
The Hawaii contributions came to light last week as the Senate Governmental Affairs Committee turned its attention to Republican fund-raising. Most of the focus was on a 1994 deal engineered by RNC Chairman Haley Barbour in which money was transferred from a Hong Kong business, Young Brothers Development, to its U.S. subsidiary. The subsidiary, in turn, loaned the money to the National Policy Forum . . .
The same day, the forum gave $1.6 million to the Republican National Committee as payment on a previous debt. . . .
* * *
UPDATE >>> On 7/16/00, the AP reported:
GOP Wins Fund-raising Case Dispute
The Republican Party waged a secret battle to withhold documents from a Justice Department fund-raising investigation of its former chairman and won a court ruling last week that will keep the materials from a grand jury.
Though the GOP has accused Democrats of stonewalling the fund-raising investigation, an appeals court ruling disclosed that Republicans have held up the prosecutors’ investigation of former party chairman Haley Barbour.
A grand jury in 1997 subpoenaed the files of the Republican National Committee’s former general counsel, seeking information on efforts by Barbour and others to arrange a loan guarantee from a Hong Kong businessman to help their efforts in the final days of the 1994 election.
Democrats have alleged the transaction funneled illegal foreign money into the U.S. election. Barbour has said he didn’t know the Hong Kong businessman used foreign money. (Duh-h-h?)
The former RNC general counsel argued the documents were protected by attorney-client privilege. After reviewing the documents, the judge concluded there WAS evidence of a crime.
An appeals court, however, sided with the Republicans.
The three-judge panel said the loan guarantee Barbour arranged didn’t violate laws and could not be used to pierce the client confidentiality.
“This case does not fall within the crime-fraud exception because what RNC and its officials are accused of is not criminal,” the judges ruled. (Double Duh-h-h?)
At issue is a transaction between the National Policy Forum, a group formed by Barbour, and Hong Kong businessman Ambros Young. Prior to the 1994 election, NFP had received a loan from Republican political committees. As the election drew closer, Barbour wanted to inject money into the GOP effort to gain control of Congress and sought a way to have NPF repay the money it was loaned so the GOP committee could use it to help candidates.
Barbour arranged a $2.1 million loan guarantee from Young, used that to secure a U.S. bank loan (hmmm, I wonder which bank?) and paid back the money to the GOP committee in time for them to use it for the election. . . .
The existence of the secret battle over the GOP lawyer’s files wasn’t disclosed until Friday’s appeals court ruling.
In its 3-0 ruling, the appeals court said the loan guarantee went to the NPF, not the Republican Party, and therefore “is no violation” of election laws….
THE CASE OF THE DEPOSED DICTATOR
It isn’t too often that the public gets to look behind the scenes of material blocked from view by pretrial orders. However, several years ago the curtain of secrecy was lifted in a case involving Westinghouse Electric Corporation and the Republic of the Philippines.
On Dec 1, 1988, the Philippine government of President Corazon Aquino filed a multimillion-dollar lawsuit against Westinghouse and the New Jersey engineering firm Burns and Roe Enterprises, Inc. … The charges were serious, accusing Westinghouse and Burns and Roe of conspiring in mid-1970s to bribe former Philippine dictator Ferdinand Marcos in order to secure a contract to build a nuclear power plant.
The Philippine government contended that $17.2 million in sales commissions Westinghouse paid a Marcos crony named Herminio T. Disini, plus another $2.3 million Burns and Roe paid, were in fact bribes that were passed on to Marcos. During the pretrial stage of the trial, the Philippines and Westinghouse lawyers agreed, at Westinghouse’s request, to a protective order granting Westinghouse the power to declare which documents turned over to discovery were to be confidential. That maneuver effectively kept the evidence regarding the allegations against Westinghouse out of the public eye.
But then Westinghouse lawyers filed a written motion for summary judgment … The Philippines filed a brief opposing the motion. The judge, Dickinson Debevoise, heard oral arguments on the motion, and this hearing was open to the public. In arguing the motion, the lawyers quoted evidence from the court record.
On Sept 20, 1991, Judge Debevoise denied Westinghouse’s motion. Thereafter, Westinghouse asked the judge to seal the briefs and the documents … But by now the documents had been placed before a court as evidence. They concerned a matter of strong public interest– alleged bribery by Westinghouse, one of the United States’ most powerful defense contractors and business conglomerates, as well as relationships between the United States and the Philippines.
Two civic groups, Public Citizen and Essential Information, intervened in the lawsuit to seek public release of the documents. They requested a court order unsealing the records on the basis that the protective order was inconsistent with the long-established public right of access to judicial records, as well as with the First Amendment to the U.S. Constitution. Westinghouse appealed to the U.S. Third Circuit Court of Appeals.
The power lawyers representing the huge corporation in the case were the high-priced firms of Cravath, Swain & Moore of New York; Donovan, Leisure, Rogovin, Huge and Schiller of Washington, D.C.; Wolf, Block, Schorr and Solis-Cohen of Philadelphia; and Shanley & Fisher of Morristown, N.J. This is a lot of expensive legal capacity. . . .
Judge Debevoise’s summary of the evidence that Westinghouse wanted sealed provides a good clue. In his decision granting the request to unseal the records of the motion, the judge wrote: “First, there is evidence that by decree President Marcos had placed National Power Company, the party that made the deal with Westinghouse, directly under the control of his office.
Second, there is evidence that both Westinghouse and Burns & Roe believed that in order to obtain the PNPP contracts … they would need the assistance of a powerful person having influence with President Marcos. Disini was the person they selected …
Third, there is evidence that Disini communicated with President Marcos and obtained from him the authority to handle the PNPP contracts.
Fourth, it is undisputed that both Westinghouse and Burns & Roe entered into commission agreements with companies controlled by Disini pursuant to which millions of dollars were paid to those companies. . . .
Fifth, there is evidence that President Marcos personally intervened in the PNPP project to ensure that Burns & Roe and Westinghouse obtained the contracts …
Sixth, there is evidence that both Westinghouse and Burns & Roe took steps to cover up the payments, suggesting guilty minds … After 1977 reports in the press suggested that Westinghouse may have made improper payments to obtain the PNPP contract, Westinghouse burned the files in Manila relating to the procurement of the contract. Other records were destroyed and other efforts were made to avoid discovery of the … agreement.” . . .
Writing for the appellate court, Judge Dolores Sloviter affirmed the strong public interest in ensuring that such proceedings are open to public scrutiny. “Certainly, the allegations of bribes by a major U.S. corporation to the leader of a foreign country is a matter of public interest, which could give rise to public debate.”
Judge Sloviter concluded that openness should be the general rule because “access to the judicial process reinforces the democratic ideals of our society.” The judges had made the right decision.
Big corporations and their power lawyers cannot turn public courts into private domains simply because they are embarrassed about their own behavior….
From The Buying of the President 2000, by Charles Lewis & The Center for Public Integrity:
DAN QUAYLE
…Quale’s No. 1 career patron is Wilshire Financial Services Group of Portland, Oregon. Like FirstPlus, Wilshire Financial is in the mortgage business; it specializes in lending to high-risk borrowers with poor credit histories. Like FirstPlus, it was led by a brash chief executive officer, Andrew Wiederhorn, who at the company’s peak oversaw eight hundred employees around the world. And like FirstPlus, the company ended up declaring bankruptcy after its meteoric rise.
Wilshire Financial’s problems mirrored those of FirstPlus as well. In the fall of 1998, after enjoying a profitable run, the company started losing millions, and by March 1999, it was forced into Chapter 11.
Wilshire emerged from bankruptcy in June after arranging to give stock to its two largest creditors, American Express Financial Advisers and Capital Research and Management Group, in return for a cancellation of its debts. The two creditors ended up with a 40 percent stake in the reorganized company, but lost millions in the deal. For every $1,000 of debt owed them, they got a little less than $37 worth of stock. By August 1999 that deal had improved somewhat – the company’s stock price had gone up, improving the ration for American Express and Capital Research to $135 of stock for every $1,000 owed them by Wilshire.
Just as it was emerging from bankrjuptcy in June 1999, First Bank of Beverly Hills, F.S.B., a subsidiary of Wilshire, was designated a “troubled institution” by the Office of Thrift Supervision, a federal agency that oversees savings-and-loans. A year before, the agency had slapped a cease-and-desist order on the S&L because of the risky loans it was buying.
Two months after it emerged from bankruptcy, Wilshire Financial’s new board of directors – dominated by executives of American Express and Capital Financial – suspended Andrew Wiederhorn, the company’s whiz-kid founder, who’d made a multimillion-dollar fortune before he was thirty. The board also suspended the company’s president, Larry Mendelsohn.
Quayle met Wiederhorn at a fund-raiser. Wiederhorn was friends with several professional golfers, one of them introduced Wiederhorn to Quayle.
For Quayle, it was a valuable introduction. Around the time the company’s fortunes began to plummet, in August 1998, Wilshire Financial made a $100,000 contribution to Campaign America. The following month, the company gave Quayle another $150,000. In all, Wiederhorn and Wilshire Financial contributed $257,000 to Quayle.
The Center for Public Intergrity tried to find out why Wilshire Financial made the contribution. In August 1999, after Wiederhorn had been suspended by Wilshire’s board of directors, Sheryl Seapy, who works for Morgan-Walke Associates, a media-relations firm that now handles publicity for Wilshire, said, “Those contributions are of a personal nature in reference to Andrew.” She referred further inquiries to Wendy Gallamore, Wiederhorn’s personal assistant, whom the Center had contacted on several prior occasions.
Contacted again, Gallamore would say only that she could not comment at that time. “You’re welcome to check back in a month,” she added. “It’s a strange thing for me to say, but you’re welcome to. Then we can explain a little better.”…
# # #
For a closer look at some of the birds in these nests, go to > > >
And, don’t miss the startling sights on the other side of the fence > > >
A Flock of Donkeys & The Donkey Nests
Let your mouse nibble here to go to > > >