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“Caught In Another Lie”: Mitt Romney Invested In Medical Waste Firm That Disposed Of Aborted Fetuses

Mitt Romney’s Bain problem just got a lot worse.

According to a new report by Mother Jones’ David Corn, Bain Capital made a $75 million investment in Stericycle — a medical waste disposal firm that has been attacked by right wing groups for disposing of aborted fetuses — while Romney was still actively involved in the company in 1999. This news is sure to upset social conservatives, and it also directly contradicts Romney’s account of when he left Bain.

Romney’s connection to Stericycle was first reported in January by The Huffington Post, but the story never gained traction because Bain Capital claimed that Romney left the firm to run the Winter Olympics in February of 1999 — meaning that he had nothing to do with the deal. According to SEC documents unearthed by Corn, however, Romney was still actively involved in the firm’s leadership through the end of that year:

The SEC filing lists assorted Bain-related entities that were part of the deal, including Bain Capital (BCI), Bain Capital Partners VI (BCP VI), Sankaty High Yield Asset Investors (a Bermuda-based Bain affiliate), and Brookside Capital Investors (a Bain offshoot). And it notes that Romney was the “sole shareholder, Chairman, Chief Executive Officer and President of BCI, BCP VI Inc., Brookside Inc. and Sankaty Ltd.”

The document also states that Romney “may be deemed to share voting and dispositive power with respect to” 2,116,588 shares of common stock in Stericycle “in his capacity as sole shareholder” of the Bain entities that invested in the company. That was about 11 percent of the outstanding shares of common stock. (The whole $75 million investment won Bain, Romney, and their partners 22.64 percent of the firm’s stock—the largest bloc among the firm’s owners.) The original copy of the filing was signed by Romney.

Another SEC document filed November 30, 1999, by Stericycle also names Romney as an individual who holds “voting and dispositive power” with respect to the stock owned by Bain. If Romney had fully retired from the private equity firm he founded, why would he be the only Bain executive named as the person in control of this large amount of Stericycle stock?

As Corn points out, the SEC documents have implications that reach farther than Stericycle. The Romney campaign repeated its assertion that Romney left Bain in February 1999 when rebutting a recent Washington Post story reporting that Bain acquired companies that outsourced jobs. According to these SEC filings, that is not true.

The issue here is not that Romney was investing with a company that disposed of aborted fetuses; after all, abortion is legal, something must be done with the medical waste produced by them, and according to Corn the investment was quite profitable for Bain and its investors.

The issue is that Romney has once again been caught in a lie about his past, and once again he has given voters a reason to be suspicious over his record at Bain — which he’s used as the central thesis of his campaign.

Romney is already having a difficult time talking about his tenure as governor of Massachusetts, given that he is now running against the signature achievement of his term. If voters reject his version of the Bain Capital story as well, then it is hard to see what his campaign’s message could be moving forward.

 

By: Henry Decker, The National Memo, July 2, 2012

July 3, 2012 Posted by | Abortion, Election 2012 | , , , , , , | 1 Comment

Wall Street Is Still Playing Us For Suckers

As a mere youth, I bought a used car in New York to drive to California to be with the woman of my dreams. Inexplicably, she decided to rush back to New York, so I promptly took the car back to the dealer. He made a shockingly low offer. The car had been in an accident, he explained. The chassis was bent. I was flabbergasted. I had just bought the car from him. If the chassis was bent, it was bent when I bought it. The salesman offered me a take-it-or-leave-it shrug. He probably now works on Wall Street.

That the morality of the used car lot has been adopted by Wall Street is now abundantly clear. Citigroup recently settled a civil complaint in which it was accused of selling mortgage-related investments that it knew were dogs. It was so certain that the investments were the financial equivalent of my used car that it bet against them — heads I win, tails you lose — and even selected the investments themselves, choosing from a cupboard of depleted and exhausted financial instruments. An investment in the Brooklyn Bridge would have been safer.

These investments are known as collateralized debt obligations (CDOs), and they consisted of the sort of mortgage securities that nearly sunk the U.S. financial system. According to federal regulators, they were sold with the full knowledge that they were careening toward worthlessness and that, by deduction, their buyers were patsies. The bank made substantial profits on them. But when the Securities and Exchange Commission decided to act, it got Citigroup to pony up a mere $285 million fine that, to presumed chuckles, will doubtlessly be taken out of petty cash. The bank last quarter reported a profit of $3.8 billion.

Mirth must have turned to guffaws when Citigroup read on. It did not even have to admit guilt — “without admitting or denying” is the language the SEC used — and no single executive was held culpable. The CDOs, apparently, were contrived by no one and sold by no one. There’s a Nobel Prize in something (maybe alchemy) for anyone who can explain how that happened.

The Citigroup settlement is being reviewed by a perplexed U.S. District Court Judge Jed S. Rakoff. Among other things, he wants to know why he should authorize a settlement “in which the SEC alleges a serious securities fraud but the defendant neither admits nor denies wrongdoing.” This is a marvelous question that goes to the heart of the matter. The settlement is itself a CDO, a legal version of a black hole in which next to nothing is disclosed. Why no guilt? Why no guilty people? Why such a non-punishing punishment? The SEC will have to tell it to the judge.

I do not want to be excessively harsh on dear Citigroup. It was not the only one selling smoke. Goldman Sachs and JPMorgan did something similar. In the words of Jesse Eisinger of the online journalistic group ProPublica, “This was the Wall Street business model.” And it was a model permitted and encouraged from the top, by people who became filthy rich from filthy practices and now take umbrage when President Obama calls out their industry for approbation. They should first spend a year in community service and then, if they still feel slighted, denounce Obama.

As for Obama’s government, it has been too gentle with these miscreants. Why not a single major banker has been cuffed and frog-marched to some Financial District Guantanamo is unclear. Why their firms have gotten off with modest fines and non-confession confessions is not clear, either. That, in itself, is a crime.

Somebody has to break this culture. In this sense, Wall Street is no different than the New York Police Department, where it apparently has been customary to fix traffic tickets for friends, family and — almost certainly — the odd person with some cash. When 16 of the alleged ticket-fixers were arraigned last week, hundreds of off-duty cops came to cheer them, denounce the DA and manhandle reporters. Their union took a firm position in defending this behavior. An appalled city awaits firm action by the mayor and police commissioner.

An appalled nation awaits a similar response to what went on in the financial sector. What we would like to see is some version of a public hanging, the appropriate reaction to the breathtaking fleecing of investors. In the end, those investors got their money back.

That’s more than we can say about our lost faith in justice.

By: Richard Cohen, Opinion Writer, The Washington Post, October 31, 2011

November 2, 2011 Posted by | Banks, Class Warfare, Financial Institutions | , , , , , | Leave a comment

Standard And Poor’s Goes Tea Party

Big headlines for a Friday night: “U.S. Loses Top Credit Rating!” Yes, as most now know, Standard & Poor’s went ahead with its warnings of the past weeks and downgraded the sovereign debt of the United States government from its pristine triple-A to a still stellar but one notch less so AA+. And after a miserable week in global equity markets that was almost as ugly as it gets, a week that began with the conclusion of a universally reviled debt-ceiling deal, the late-night downgrade was the fitting end.

The symbolism is undeniable. This is the first downgrade in history, as commentators rushed to remind us. But of course, that history goes back only to the late 1930s, when the ratings agencies began to hold sway. And S&P is the only one of the major three—Fitch, Moody’s, and S&P—to downgrade. So this was big bad news, a bad coda to a bad week, but only as news and not as a trenchant analysis of the creditworthiness of the United States or its ability to meet its debt obligations going forward.

Let’s be clear: Congress and the White House did not cover themselves with glory during the debt debate throughout July. The United States has a stalled economy and a large amount of debt. But on so many levels, this downgrade is absurd.

First there is the question of math. When S&P informed the White House of its intention to downgrade on Friday afternoon, the Treasury Department took issue with S&P’s math and claimed that their assessment of the trends of the U.S. debt burden and its ratio to GDP was off by trillions of dollars. No matter. After a brief review, the wizards at S&P went ahead and removed an A.

A news ticker reads “Standard & Poor’s downgrades US credit rating from AAA to AA+” in Times Square on August 5, 2011 in New York City., Andrew Burton / Getty Images

Second, what’s with the fetish for a so-called proper ratio of debt-to-GDP. Academic economists have done no favors here. Carmen Reinhart and Kenneth Rogoff have become the go-to economists for their work showing how countries that reach a 90% ratio slide into recession and see slowing growth well before. The U.S. current level according to S&P is 74% and will rise to 85% by 2021. The explanation of the downgrade closely tracks this academic logic.

I have no criticism of an academic theory about how nations function economically. But when debatable theories become the underpinnings of decisions by unelected individuals who run organizations with significant sway (sway ceded to them by governments throughout the 20th century), then we have a problem. We have a problem when that argument gives short shrift to the debt-servicing burden. The current interest rate that the U.S. government pays to service its massive debts is hovering around 2.5%, which makes interest payments as a percentage of GDP as low as they have been since the mid-1970s.

Servicing the debt does not enter into the analysis, yet that and current interest rates make all the difference. Dismissing that counterargument, warning that rates will of course rise (yet even if they double, that will still leave the U.S. more than able to meet its obligations), and drawing on theories about the “right” level of debt puts S&P in a strange bedfellow alliance with the Tea Party.

The people who run the ratings agencies are welcome to their analysis, as is the Tea Party. But if Rogoff and Reinhart or the Tea Party announced that they were downgrading U.S. sovereign debt, they would be laughed for their audacity. Yet when it is one of the anointed ratings agencies, there is this sudden need to genuflect.

This is largely because covenant after covenant in both SEC rulings and institutional money management (pensions especially) dictate that many types of capital can only be invested in credit-worthy instruments as determined by Moody’s, S&P and Fitch. The downgrade doesn’t remotely begin to threaten the “investment grade” status of U.S. debt, and there is little reason to suspect that borrowing costs will go up as a result. Still, the reason we are in this situation of having to genuflect to S&P is because an entire structure of credit and investments, and the issuance and purchase of bonds above all, has been built on the shaky and questionable foundation of the ratings agencies.

The worst part of the downgrade is this: S&P spent considerable time in the body of their explanation about debt and GDP and growth. But they didn’t lead with that. That wasn’t the kicker. No, this was: “the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges.” The company assailed the Washington culture of “brinkmanship” so in display during the debt ceiling fiasco, and used that as the primary reason to take us down a notch.

Excuse me, but since when is a pristine political process a key ingredient to good credit? Are we supposed to have civil politics in order to maintain the rating? Are we supposed to have some mythic Scandinavian concord? Washington has usually been a mess, and arguably more now than ever. Nonetheless, the great distortion of the debt-ceiling imbroglio was that failure to do a deal would have led to a default. It would have led to a partial and then increasing complete shut down of the government, which would have soon enough forced a resolution. At no point would there have been insufficient tax revenue to meet the $20 billion of so in monthly interest payments on the debt, unless the crisis had gone on for months and months, which barring collective national psychosis simply could not have happened.

So S&P doesn’t feel comfortable that the American political process is conducive to dealing with long-term debt issues and so issued a downgrade. Yet S&P is a ratings agency, not a political arbiter. Olympic judges rule on athletic aptitude, not the politics of the athletes (usually). There is not a scintilla of evidence that the political process has yet impeded the ability of the United States to meet its debt obligations, even with the debt ceiling brinkmanship. The political process may indeed be contributing to the morass of the American economy, but the larger causes are the challenges of emerging economic centers and changing patterns of global commerce. Those are long-term issues that have little bearing on current ability to manage debts.

Finally, as a symbol that the United States is sliding off the rails, the downgrade is potent. It’s hard to argue with the reality that America is in a challenging moment that looks and feels a lot like decline. Whether that proves false and a new dawn awaits, we’ll find out soon enough. But the actions of S&P are part of problem and not just an independent verification that one exists.

These agencies have been elevated to heights that should not ascend; they have been chronically wrong and late in the past; and their rationale for a downgrade sounds more like a prim distaste for a dysfunctional political process that a reasoned assessment of the ability of the United States to discharge its obligations. No defense can be offered of our current political system or near-term economic prospects. But S&P—already on overreach as “neutral” judge of American creditworthiness—has no special standing to rule on the political system, and using that as a cudgel to prove their own power is a destructive act.

 

By: Zachary Karabell, The Daily Beast, August 6, 2011

August 7, 2011 Posted by | Congress, Conservatives, Consumers, Debt Ceiling, Debt Crisis, Deficits, Democracy, Economy, Federal Budget, GOP, Politics, Republicans, Right Wing, Teaparty | , , , , , , , , , , , , , , | Leave a comment

The Limits Of Free-Market Capitalism

Until a few years ago, my spiritual devotions were  limited to the free market and the music of Patsy Cline. I’m sorry to say it’s  just me and Patsy now.

Karl Marx may have been wrong where it really mattered—communism, to paraphrase Churchill, is government “of the duds, by the duds,  and for the duds”—but he was spot on about the pitfalls of capitalism,  particularly when it came to the entrenchment of social classes, the fetish of  consumption, the frequency of recession, and the concentration of industry. Yet,  like trained seals, we continue to leap through the flaming rings of a system  that is contemptuous of the public good while rewarding those who feed off  “free” markets and the politicians who rig them. Nearly three years after the  global economy almost collapsed under the weight of a corrupt and inbred  financial order, Washington is still mired between the false choice of the  state or private enterprise as the proper steward of the general welfare.

It should be clear to anyone who has lost a cell phone  signal in our nation’s capital or been denied health coverage because of a  pre-existing ailment that capitalism’s endgame is not freedom of choice and  efficiency, but oligarchy. Many of America’s top industries—agriculture,  airlines, media, medical care, banking, defense, auto production,  telecommunications—are controlled by a handful of corporations who fix prices  like cartels. As Marx predicted, the natural inclination of players in a  market-driven economy is not to compete but to collude.

Reporting in Asia and the Middle East for many years, I  prayed to the same kitchen gods of untrammeled commerce that now bewitch the  Republican Party faithful and the neoliberals who inhabit the Obama White House. In Asia more than a decade ago, I covered the liquidation of state  assets as prescribed by the International Monetary Fund, perhaps the  largest-ever transfer of wealth from public to private hands, as if it were a  new religion that would transform economies from the Korean peninsula to the  Indian subcontinent. Laissez-faireism, I wrote, would liberate consumers and  domesticate once overweening state-owned enterprises.

In fact, privatization merely shifted economic control  from corrupt apparatchiks to their allies in business, a transaction lubricated  with kick-backs and sweetheart deals. That’s what happened in the Middle East,  and it became the spore that engendered the Arab uprising.

The corruption of capitalism in America is all the more  appalling for its legality. With the economy still struggling to recover from a  housing crisis fomented largely by Wall Street’s craving for mortgage-backed  securities, prosecution of those responsible has been confined to a single lawsuit filed by the Securities Exchange Commission against a  lone financier. The system is still lousy with loopholes, and the Republican  Party, which demographically as well as ideologically is becoming a gated  community for white, southern males, is calling for more deregulation, not  less.

Which brings us to the central failure of American  capitalism: the excoriation of the state.

So deep is the mythology of the free market that we  ignore the consequences of starving our schools, libraries, public media, and  roads and railways. We expect our teachers to assume the burdens of parenthood  and then blame them for failing education. We lament our dependence on foreign  oil and the aviation cartels, but we refuse to underwrite a passenger-rail  equivalent of the interstate highway system. We disparage the coarse  reductionism of corporate-owned news outlets while neglecting public  broadcasting, an isolated archipelago of smart, responsible journalism.

Our hostility to the public sector—fountainhead of  the Hoover Dam, Mount Rushmore, the Golden Gate Bridge, the Los Angeles  Coliseum, our national parks, and countless other public utilities and services  in addition to the federal highway system—is inversely proportional to our  reverence for private consumption. As the economist John Kenneth Galbraith wrote in his 1958 book The Affluent Society, “Vacuum cleaners to ensure clean houses are  praiseworthy and essential in our standard of living. Street cleaners to ensure  clean streets are an unfortunate expense. Partly as a result, our houses are  generally clean and our streets are generally filthy.” Galbraith also noted the  uniquely American conceit of sanctioning debt when households and private  investors hold it but condemning it when  governments do.

Should the feds nationalize banks and appropriate soy  fields? Certainly not. At its essence, there is probably no more efficient way  of establishing the price of a particular good or service than market  economics. Not all transactions are so simple, however, and there are some  services—healthcare, for example, or transportation—that often fare better  more as public goods than as private commodities. In order to save American capitalism,  we must appreciate its limits even as we struggle to harness its power.

By: Stephen Glain, U. S. News and World Report, June 2, 2011

June 3, 2011 Posted by | Businesses, Capitalism, Conservatives, Consumers, Corporations, Democracy, Democrats, Economic Recovery, Economy, Financial Institutions, GOP, Government, Health Care, Ideologues, Ideology, Politics, Republicans, Wall Street | , , , , , , , , , , , , | Leave a comment

The Republican Supreme Court Sticks It To The Little Guy (Again)

Once again the United States Supreme Court under Chief Justice John Roberts has shown the nation it will always favor corporations over people even if it means conjuring new law out of thin air.  Like Citizens United, the recent 5-4 ruling in AT&T’s favor gutting the power of consumers to file class-action lawsuits against giant corporations tips the scales of justice against the people and renders the enormous power of corporations even more enormous.

When I first heard about the case, AT&T Mobility v. Concepcion there was little doubt in my mind that the Gang of Five — John Roberts, Antonin Scalia, Samuel Alito, Anthony Kennedy, and Clarence Thomas would figure out a way to ignore Supreme Court precedent and again apply their judicial activism in service to the corporations, and by extension, to the oligarchy they apparently believe the “founders” intended.

It’s kind of funny when we see Republican presidential candidates like Mitt Romeny, Tim Pawlenty, and Newt Gingrich pandering to the “little guy” denouncing “elites” who are trampling on their rights only to remain mute on the fact that their beloved Republican Supreme Court never, ever rules in favor of the “little guy.”

The Republican president Ronald Reagan gave us Scalia and Kennedy; the Republican president George Herbert Walker Bush gave us Thomas; and the Republican president George W. Bush gave us Roberts and Alito.  This cabal has shown over and over again where its true loyalties lie, not to “the law,” not to “the Constitution,” not to “calling balls and strikes,” but to a 21st century version of corporate feudalism.  This new corporate feudalism that the High Court is determined to thrust on the nation is even more exploitative than the earlier brand of Medieval feudalism because it is absent noblesse oblige.

The serfs toiling on the corporate plantation can only continue to pay Chase and Bank of America for their underwater mortgages, ExxonMobil and Chevron for their $4 a gallon gas, and AT&T, Comcast, T-Mobile and the rest for the privilege of communicating in a modern society.  And if the serfs seek redress the High Court will slap them down before they can get anything substantial off the ground.  With Citizens United placing a stranglehold of corporate power over our state, local, and federal system of elections, we cannot turn to our political “leaders” for redress, we can’t turn to the courts, and we certainly can’t turn to trying to morally persuade sociopathic non-human entities called corporations — so where does that leave us?

In the current context of unrestrained corporate dominance it’s unconscionable that the Obama administration has not done more to blunt its disastrous effects.  The Justice and Treasury Departments, the Securities and Exchange Commission, the Internal Revenue Service, etc. could be doing a hell of a lot more in bringing balance to the equation of corporations versus people.  The administration’s lagging performance in holding Wall Street accountable is well known, but it won’t even lift a finger to block grotesque mergers like the one between Comcast and NBC Universal, and AT&T and T Mobile.  In all these mergers and acquisitions it’s always the consumers and the employees who lose, while the CEOs and a select few of shareholders and financiers make out like the bandits they are.

Nothing illustrates the corruption rampant in Washington more than the recent resignation of Federal Communications Commission member, Meredith Attwell Baker, a Republican who Obama appointed to show how “bipartisan” he can be, who is now going to work as a lavishly paid shill for the very industry she was supposedly “regulating.”  Ms. Baker will now make the big bucks serving Comcast/NBC Universal after she voted for the merger of Comcast and NBC Universal.  Sweet.   And few in the Beltway see anything unsavory about it.

Our political leaders, our Supreme Court, our captains of industry and finance, are so out of touch it’s going to be a long, long time before ordinary working people see any relief.  All of our institutions, political, economic, even religious, social, and cultural, all of them, are failing the people miserably in pursuit of the Almighty Buck.  The cunning game of appointing young ideologues to the bench has paid off handsomely for the corporate power structure.  Someone should tell those people running around in tri-cornered hats and talking about the “founders” that it might be wise to save an ounce of their collective wrath for the Republicans who have appointed five Justices who are trampling on individual freedoms in service of corporations.

By: Joseph A. Palermo, The Huffington Post, May 15, 2011

May 15, 2011 Posted by | Big Business, Businesses, Congress, Consumers, Corporations, Elections, Justice Department, Lawmakers, Politics, Regulations, Supreme Court | , , , , , , , , , , , , , , , , , , , | Leave a comment

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