Newt Gingrich And South Carolina Were Made For Each Other
Hot-headed South Carolina and former House Speaker Newt Gingrich are made for each other. The state first to secede from the Union about 150 years ago remains defiant, mischievous, and unreconstructed. Not all states are created equal.
South Carolina, shall we say, made its name early as the troublemaker. To this day, it doesn’t like to fall in line and sends elected representatives to Washington cut from that cloth. Down home in Charleston, men especially still brag on the firing on Fort Sumter, the shots and blockade that started the Civil War. Very nice.
So natch Newt Gingrich won the South Carolina Republican presidential primary over the front-runner, former Gov. Mitt Romney. There was no way the most viciously verbose and confrontational politician in our time was not going to win over the weekend. Just like the confident, beautiful people of the New England Patriots were going to see their football team beat the sincere, scrappy Baltimore Ravens, any which way. Gingrich’s victory was destined by the order of the political court.
The 243,398 Republicans who voted for Gingrich in the Palmetto State gave him the first statewide win of his life. Remember, the former speaker only ever faced voters in a congressional district in Georgia. He is not necessarily a man of the people, no matter what the South Carolina verdict. Not that I care, but Romney does not need to fear the writing on the wall yet.
Gingrich, like his new best friend state, is an outsider of the establishment. Gingrich, like South Carolina, home to the the Citadel, likes starting the political equivalent of war, although he never did military service. Gingrich, like South Carolina, is steeped in history which each are capable of entirely misreading and handing down like lore.
A few facts on Gingrich’s own history. As House speaker, he was awed by President Clinton’s political prowess and brilliance, as Washington Post associate editor David Maraniss pointed out on Sunday’s Post op-ed page. He knew he had met more than his match. Later in Clinton’s presidency, he masterminded the House impeachment strategy, carried out by then-Rep. Henry Hyde, that nearly doomed Clinton’s fate. The Monica Lewinsky affair was only a vehicle. No moral umbrage was involved, as we now know Gingrich was then having an affair with an aide on the Hill, now his third wife Callista Gingrich.
Vengeful hypocrisy still cuts deep. If Gingrich had his way, Clinton would be as gone as the good King Duncan in Macbeth. Sen. Lindsay Graham, then a South Carolina congressman, was one of Hyde’s dozen helpers. This was only over a dozen years ago, but it seems like “history” we have forgotten. That’s what Gingrich is counting on when he talks about God’s forgiveness and “despicable” debate queries. That’s what columnists forget when they write that Whitewater prosecutor Kenneth Starr was solely responsible for the whole tragic circus.
Some more history on South Carolina. When the greats gathered in a room to invent the Republic and its rules, South Carolina’s men were most adamant about protecting slavery as an institution. That was formative fruit on the tree since. A South Carolina congressman caned a Massachusetts senator for his abolitionist views on the Senate floor before the Civil War broke out. As noted, they were first to fight “the Yankees” and call themselves another country. Over much of the 20th century, the stubborn Strom Thurmond of South Carolina made an indelible mark as an arch-segregationist, a senator, and a presidential candidate. Former Sen. Ernest Hollings, the bright and capable junior senator with the low country in his voice, was thankfully a reminder of the good men and women from that state.
The Confederate flag has flown over South Carolina for too long. Not only up in the air but in the hearts of men. Gingrich won in a state that is, in a sense, another country.
By: Jamie Stiehm, U. S. News and World Report, January 23, 2012
Newt Gingrich: “So Busy Serving His Country That He Had To Cheat The Government To Save The Government”
While candidate Gingrich has been busy focusing on the tax return failings of his opponent, Governor Mitt Romney, a report by Forbes’ Janet Novack suggests that, once again, Newt may be using a good offense to keep from having to play some serious defense when it comes to his own failure to pay up on his tax obligations.
According to Novack, “Newt Gingrich avoided tens of thousands of dollars in Medicare payroll taxes in 2010 by using a technique the Internal Revenue Service has consistently and successfully attacked.”
Gingrich’s primary source of income, as revealed on the one tax return he has disclosed, comes from two “S” corporations owned by Newt and his wife, Callista. S Corporations are employed as a means to allow money to ‘flow through’ to the shareholder-owner as if it were a sole proprietorship or partnership, thus avoiding taxation at both the corporate level and re-taxation at the personal level.
It is a perfectly kosher way to do business.
However, according to the law, such corporations are supposed to pay out most of its earnings as direct payments to the owner/shareholder rather than as profits or dividends which are exempted from certain tax obligations— such as the 2.9 percent of earnings which are to be paid to Medicare.
As stated on the IRS website
Reasonable Compensation
S corporations must pay reasonable compensation to a shareholder-employee in return for services that the employee provides to the corporation before non-wage distributions may be made to the shareholder-employee. The amount of reasonable compensation will never exceed the amount received by the shareholder either directly or indirectly.
Distributions and other payments by an S corporation to a corporate officer must be treated as wages to the extent the amounts are reasonable compensation for the service rendered to the corporation.
The key to establishing reasonable compensation is determining what the shareholder-employee did for the S corporation. As such, we need to look to the source of the S corporation’s gross receipts.
The three major sources are:
1. Services of shareholder,
2. Services of non-shareholder employees, or
3. Capital and equipment.
There is little question that the revenues flowing through Gingrich’s companies are the direct result of the services provided by Newt and his wife, whether by way of speaking fees, book royalties, film productions, etc. Thus, it would be reasonable to expect that the preponderance of revenue coming into the Gingrich corporations would pass through directly to Mr. and Mrs. Gingrich and be subject to taxes such as the Medicare tax.
Yet, in 2010, the Gingrich corporations paid out $444, 327 as salary to Newt and Callista while reporting some $2.4 million as profit or dividends – thus allowing the Gingrichs to avoid paying the 2.9 percent Medicare tax on the bulk of their earnings.
Of course, now that Gingrich is running for president, it is unlikely the IRS will come after him as he would simply call it an attack by the Obama administration.
And while there will, no doubt, be an agreement between Romney and Gingrich not to ‘go there’ – as both are now likely to be vulnerable on their respective tax returns—expect Rick Santorum to make a fuss unless he too turns out have some tax issues.
Personally, I can’t wait to hear Newt find a way to blame this on the media.
Or maybe he’ll tell us that he was so busy serving his country that he had to cheat the government in order to save the government.
By: Rick Ungar, Contributing Writer, The Policy Page, Forbes, January 23, 2012
The Roots Of Bain Capital In El Salvador’s Civil War
A significant portion of the seed money that created Mitt Romney’s private equity firm, Bain Capital, was provided by wealthy oligarchs from El Salvador, including members of a family with a relative who allegedly financed rightist groups that used death squads during the country’s bloody civil war in the 1980s
Bain, the source of Romney’s fabulous personal wealth, has been the subject of recent attacks in the Republican primary over allegations that Romney and the firm behaved like, in Rick Perry’s words, “vulture capitalists.”One TV spot denounced Romney for relying on “foreign seed money from Latin America” but did not say where the money came from. In fact, Romney recruited as investors wealthy Central Americans who were seeking a safe haven for their capital during a tumultuous and violent period in the region.
Like so much about Bain, which is known for secrecy and has been dubbed a “black box,” all the names of the investors who put up the money for the initial fund in 1984 are not known. Much of what we do know was first reported by the Boston Globe in 1994 when Romney ran for U.S. Senate against Ted Kennedy.
In 1984, Romney had been tapped by his boss at Bain & Co, a consulting firm, to create a spin-off venture capital fund, Bain Capital.
A Costa Rica-born Bain official named Harry Strachan invited friends and former clients in Central America to a presentation about the fund with Romney in Miami. The group was impressed and “signed up for 20% of the fund,” according to Strachan’s memoir. That was about $6.5 million, according to the Globe. Bain partners themselves were putting up half the money, according to Strachan. Thus the Central American investors had contributed 40 percent of the outside capital.
Back in 1984, wealthy Salvadoran families were looking for safe investments as violence and upheaval engulfed the country. The war, which pitted leftist guerrillas against a right-wing government backed by the Reagan administration, ultimately left over 70,000 people dead in the tiny nation before a peace deal was brokered by the United Nations in 1992. The vast majority of violence, a UN truth commission later found, was committed by rightist death squads and the military, which received U.S. training and $6 billion in military and economic aid. The Reagan administration feared that El Salvador could become a foothold for Communists in Central America.
The notorious death squads were financed by members of the Salvadoran oligarchy and had close links to the country’s military. The death squads kidnapped, tortured, and killed suspected leftists in urban areas fueling an insurgency that retreated to rural areas and waged war on the government from the countryside. The war, which lasted 12 years, triggered an exodus that brought more than 1 million Salvadorans to the United States.
There is no evidence that any of Bain Capital’s original investors were involved in these sorts of activities. But the identities of some of the investors remain secret, and there are family names that raise questions.
Four members of the de Sola family were among the original Bain investors, or “limited partners” in the company, the Globe reported. Their relative and “one-time business partner,” Orlando de Sola, was an important figure in El Salvador. A well-known right-wing coffee grower with an (in his words) “authoritarian” vision for the country, de Sola spent time living in Miami but was also a founding member of the right-wing Arena party, lead by a U.S.-trained former intelligence officer named Roberto D’Aubuisson.
Craig Pyes, an investigative reporter then with the Albuquerque Journal, wrote a series on the rightist death squads based on extensive on-the-ground reporting in El Salvador in the early 1980s with Laurie Becklund of the Los Angeles Times, while the death squads were still active.
Pyes, who has since won two Pulitzer Prizes and is now a private investigator in California, says that no one has produced any proof that de Sola directly funded death squads.
“However,” Pyes says, “he was in the inner circle of the group around D’Aubuisson at the time that D’Aubuisson was well known to be involved in the death squads. De Sola’s name appears in a December 1983 FBI cable as one of 29 people suspected by State Department officials of furnishing funds and weapons to Salvadoran death squads.”
De Sola’s name also turned up in a notebook, seized from an aide to D’Aubuisson named Saravia, that detailed the finances of D’Aubuisson’s terrorist network, according to Pyes.
The Saravia notebook, reviewed by U.S. officials, listed weapons purchases, payments, and what appear to be descriptions of violent plots by rightists, including the assassination of El Salvador’s Archbishop Oscar Arnulfo Romero in 1980. Asked about the notebook by the New York Times in the late 1980s, de Sola denied that he had ever helped finance political violence. De Sola could not be reached for comment for this story.
Romney, for his part, who was much more accessible to the press in 1994, told the Globe that year that “we investigated the individuals’ integrity and looked for any obvious signs of illegal activity and problems in their background, and found none. We did not investigate in-laws and relatives.” He also said that Bain had checked the names of the Bain investors with the U.S. government. Given the policy of the Reagan administration at the time, though, it’s not clear going to the government would have been the most effective vetting mechanism.
It’s impossible to fully explore the backgrounds of the original Bain investors because we don’t know all their identities, including the names of the four members of the de Sola family mentioned by the Globe. Neither the Romney camp, Bain Capital, nor Strachan — the Bain executive who recruited the Central Americans — responded to requests for comment.
During his first presidential bid in 2007, Romney more than once touted the Central American investors in Bain while trying to woo Hispanic voters. In a speech in March of that year to the Miami-Dade Lincoln Day Dinner, Romney actually specified five of the original “partners” in Bain Capital — but the de Sola family was not among those he named.
And that August he told the Miami Herald, “The investments for the company that I started, Bain Capital, came largely from Latin America. My largest single investors came from El Salvador, Ecuador, Colombia and Guatemala. And so I feel a deep kinship to people in Latin America.”
By: Justin Elliott, Salon, January 20, 2012
Does It Matter Newt Cheated?
Newt Gingrich’s second wife, Marianne, told ABC News he’s morally unfit to be president because he cut out on her with Callista and then asked her to go along with the arrangement. She’s attacking the candidate who shut down the entire U.S. government because it was spending too much money on poor people; who thinks that “African-American” is just a synonym for food stamp recipient; and who wants to conscript impoverished children into janitorial jobs to teach them promptness. And we’re worrying about what he did with his dick? Watch out: When all morality collapses into sexual morality, the voters will become so fixated on whom the candidates are screwing they don’t notice … it’s them.
Most of the fault for this misallocation of our moral indignation lies, of course, in the unruly sexuality of fourth-century Christian theologian Augustine of Hippo. Like Newt Gingrich, Augustine’s sexual desires stood in the way of his ambition — in his case, for a career in the church. Although, like Gingrich, Augustine finally suppressed sufficiently to embrace the requisite behavior, in his struggles he left behind the wicked legacy that conflates sexual desire with moral failure. As time went by, the church agreed that sex was OK as long as you confined it to one lifelong heterosexual reproductive marriage. The monogamous marriage really took off as a moral model when Martin Luther founded the Protestant wing that Gingrich the Catholic now eschews. Like Gingrich, Martin Luther had his eye on a nun long before he nailed the theses.
And so when Gingrich decided to get married in 1962 and again in 1981 and once more in 2000, Speaker Gingrich had to commit himself to be faithful to Wife 1, Wife 2 and, now, Callista. And then he breached his contract. Again and again. Unless you live in fourth-century Italy, that’s what infidelity is. Not the sum and substance of all that’s wrong in the world. Not the only thing a Republican can do that is legitimate to criticize (enjoying all those Cayman millions, Mitt?). Not the definition of immorality. But definitely a breach of contract. It’s like walking away from your mortgage when your house is underwater or wearing a dress to the party and then taking it back to the store.
Breach of contract, like lying, is not nothing. When people try to get out from under the Catholic/Protestant order of sexual morality, they try to say Gingriching around is nothing, as long as you don’t do it in the streets and scare the horses: the right to privacy and all that. That is as foolish as saying infidelity is everything. All you have to do is look at the video of the usually unflappable Hillary Clinton walking to the helicopter to Camp David that awful day in 1997 to know that breaching the fidelity contract is not nothing.
The problem is, what with no-fault divorce, our society provides no damages for breach of sexual contract other than a suicidal divorce. In most divorces, the breacher pays about the same price as he would for forgetting to return his Netflix. Especially if he’s a big, powerful man like Newt Gingrich and the wife was foolish enough to bet all her hopes for her future on his stellar course. Or Bill Clinton. Or France’s contribution to the news category, feel-like-you-need-a-shower-after-hearing-it, Dominique Strauss-Kahn.
Their wives were smart enough not to try to enforce their contract of marital fidelity through the suicidal medium of divorce. Hillary Clinton gagged it down and she almost made it to the White House. Anne Sinclair got chosen the most admired woman in France. Don’t blame them for choosing unconditional surrender. Under the current divorce laws and social norms, those alpha males are the U.S.Army and the wives are Grenada. Why does the society treat the women who invest early in high-flying careers so much worse than the early investors in, say, Facebook? A better system would treat a Marianne Gingrich at least as well as the courts treated the Winklevoss twins.
Which is why I’m actually rooting for Marianne. When she refused to take Newt’s offer and stay on the gravy train, he tried to stick her with two grand a month they had agreed to after an earlier squabble. His earlier attempts to avoid supporting his first wife and their daughters were also legendary. Now he’s a Tiffany-patronizing, speech-making money machine, a gold mine. And as usual the ex-wife got the shaft. It’s not the definition of immorality, but her going public right before the South Carolina primary has all the appeal of asymmetrical warfare. Just as Newt was cruising down the road to victory in South Carolina his jeep hit an IED. He’ll probably be fine. But it’s so gratifying at least to see him bleed a little.
By: Linda Hirshman, Salon, January 20, 2012
The “Appeasement” Parrots Of The GOP
With the country still struggling to pull itself out of an economic recession, foreign policy has not rated the highest among issues discussed by the Republican presidential candidates. But among those foreign policy issues that have been debated, one has dominated the agenda: Iran. And other than Ron Paul, the candidates have arrived at the same verdict on President Obama’s Iran policy: It is appeasement.
Speaking at a forum last month, the candidates lined up to launch the charge at Obama. “For every thug and hooligan, for every radical Islamist, he [Obama] has had nothing but appeasement,” said former Sen. Rick Santorum. “Internationally, President Obama has adopted an appeasement strategy,” said former Gov. Mitt Romney. In September, standing alongside hard-line supporters of Israel’s settlements, Texas Gov. Rick Perry similarly condemned the administration’s “Middle East policy of appeasement” — at almost precisely the same moment that Obama was delivering a speech defending Israel at the United Nations and demanding that Iran meet its nuclear treaty. In late December, Newt Gingrich said on an Iowa radio program, “You have an Obama administration who’s dedicated to appeasing our enemies and dedicated to giving away our secrets.”
It’s not a particularly surprising line of attack. “Appeasement,” with its obvious reference to British Prime Minister Neville Chamberlain’s capitulation to Adolf Hitler at Munich in 1938, is probably the single most overworked accusation in the conservative foreign policy lexicon, a free-floating, no-evidence-required assertion of weakness and surrender. The charge has become so unmoored from any actual historical context that many who use it are not even aware of its provenance. During the 2008 presidential campaign, “Hardball’s” Chris Matthews famously humiliated right-wing shout radio jock Kevin James by repeatedly asking what had actually happened at Munich, to which a red-faced James could only repeatedly scream, “Appeasement!”
One can disagree with the Obama administration’s two-track approach of engagement with and pressure on Iran. But to describe that approach as “appeasement” is to declare oneself desperately in need of a dictionary. The Obama administration has overseen the adoption of some of the most stringent multilateral sanctions ever on Iran. It has undertaken unprecedented defense cooperation with regional allies, including the placing of a NATO missile defense radar system in Turkey, to Iran’s continued outrage. And the administration successfully facilitated the appointment of a special U.N. human rights monitor for Iran to track the regime’s continued abuses.
Iranian President Mahmoud Ahmadinejad’s recent jaunt through Latin America, intended to combat the perception that Iran is increasingly isolated, was a bust, long on photo ops and statements of solidarity from the likes of Hugo Chavez, but short on actual measures that might help Iran out. The Wall Street Journal reported Tuesday that Iranians’ efforts to protect their savings from rampant, sanctions-induced inflation by offloading rials for more stable currencies had gotten so bad that Iranian authorities cracked down on the practice.
There is a legitimate argument to be had over whether the punishing measures taken by the international community will actually push the Iranian government toward a compromise on its nuclear program, which it insists is for peaceful purposes, but about which the International Atomic Energy Agency continues to have troubling unanswered questions. At the very least, though, one would think that enacting such measures would inoculate the administration from the charge of being weak on Iran. But no, some of Obama’s conservative critics have gone so far as to redefine appeasement as simply the act of talking to one’s adversaries, as columnist Charles Krauthammer did when he insisted that the administration’s efforts at negotiations with Iran “did nothing but confer legitimacy on the regime.”
In reality, talks with Iran have served as a force multiplier for other efforts to put pressure on Iran over its nuclear program. As one Israeli defense official told me for an article last year, the Israelis themselves were very skeptical that talks with Iran would have any benefit, but now recognize that the effort “contributed to building international consensus” around the problem. Negotiations have actually done the opposite of conferring legitimacy on the regime — they made clear to the world, and to the Iranian people, that the Iranian government, not the U.S., was the central obstacle to a resolution, thereby facilitating further sanctions. On Monday, Nicholas Burns, the under-secretary of state for political affairs during the George W. Bush administration, told MSNBC’s Andrea Mitchell that “Iran is probably more isolated today than the day that President Obama took office.”
Conservative mendacity aside, it’s worth looking at what former British Prime Minister Winston Churchill, the patron saint of the anti-appeasement crowd, had to say about it. “The word ‘appeasement’ is not popular, but appeasement has its place in all policy,” Churchill told an audience in 1950. “Make sure you put it in the right place. Appease the weak, defy the strong.” Returning to the theme later that year, he noted that “Appeasement in itself may be good or bad according to the circumstances.”
It should come as no surprise that the views of Churchill the man are quite a bit more nuanced than those of Churchill the Neocon Dashboard Saint, but what might this mean with regard to Iran? It means remembering that, despite the significant self-inflicted setbacks created by our invasion of Iraq, the U.S. is still dealing from a position of considerable strength against a weaker power in Iran. The U.S. has by far the largest military in the world, with an annual defense budget of over $700 billion, while Iran spends around $9 billion per year.
This certainly doesn’t mean that the U.S. should acquiesce to an Iranian nuclear weapon, but it does suggest that the U.S. and its partners should at least consider making explicit what was implicit in the proposed 2009 deal on fuel for the Tehran Research Reactor: a recognition of Iran’s right to domestic enrichment in exchange for the complete satisfaction of the IAEA’s concerns, and a commitment to ongoing verification. At the very least, talks should continue to be pursued in the hope of establishing some line of regular communication between the U.S. and Iran as a way to calm tensions, which are running high over Iran’s provocative threats to close the Strait of Hormuz, and the assassination of another Iranian nuclear scientist.
Finally, as we face a new round of calls for preventive war against Iran, from many of the same people who advocated preventive war against Iraq, it’s very much worth remembering that the Iraq war provided a greater strategic benefit to Iran than any “appeasement” conceivably could. Some of those gains have been lost in recent years, partly as a result of the Arab Spring, partly as a result of the Obama administration’s hard diplomatic work, and partly because of Iran’s own incompetence and belligerence. Clearly, Iran continues to represent a challenge to the U.S. and its interests on a number of fronts, but it’s important to keep that challenge in perspective, and not allow ourselves to be marched into another ruinous military adventure with unforeseeable consequences through the ridiculous idea that anything short of war is “appeasement.”
By: Matt Duss, Policy Analyst , Center for American Progress, Published in Salon, January 20, 2012
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