The Nation

President Obama introduces Penny Pritzker as his nominee for Secretary of Commerce. (AP Photo/Carolyn Kaster.)

Did you know that in the early 1970s, the Internal Revenue Service investigated the Pritzker family, whose scion Penny Pritzker has just been tapped by President Obama to become Secretary of Commerce, because their Hyatt Corporation was paying no taxes? And that in the course of the inquiry, an IRS statement quoted an informant with access to the records of the offshore bank where they hid their assets that the family, “through their Hyatt Corporation, received their initial backing from organized crime”?

Did you know that this particular financial institution, Castle Bank & Trust of the Bahamas, was founded by a veteran of the wartime spy agency the Office of Strategic Services who specialized in creating front organizations for the CIA, and helped launder funds for attempts to overthrow Fidel Castro? That Castle operated by arranging for a Miami bank controlled by associates of mobster Meyer Lansky to accept the original deposits, which it then passed on to Castle with only code numbers, but not names, attached?

Did you know that the IRS dropped a major investigation of Castle in 1977, according to The Wall Street Journal, at the behest of the Central Intelligence Agency?

And did you know one of the bank’s cofounders, the late Burton Kanter, was on the board of the Hyatt Hotels Corporation, and that—as The Kansas City Times discovered in a 1982 Pulitzer Prize–winning investigation following the collapse of a shoddily constructed skywalk that killed 114 at a Hyatt in 1981—the Pritzkers were Castle Bank’s largest depositors?

Did you know that Kanter was the Pritzker family’s tax lawyer, and was able to reduce the IRS bill when patriarch A.N. Pritzker died in 1986 from the $150 million the government said the family owed for his estate only $9.5 million? (Or that family itself claimed his estate only possessed $3,000 in taxable assets?) Did you know that, twenty-four years later, a tax judge ruled that Kanter was the “architect” of “a concerted effort” to profit from kickbacks involving the siphoning off of funds managed by insurance companies? (The hustle included the invention of sham companies—“pure tax avoidance vehicles,” the judge said—the destruction of documents, and “implausible” and “incredible” testimony by Kanter.) This 2007 article by David Cay Johnston on the “overwhelming objective evidence” that led another tax judge to uphold the conviction places the Pritzker family at the center of the scam. And it notes that Kanter’s tax returns, now public, “show he never paid any significant tax. Yet he amassed a fortune big enough at one time to make him a credible bidder for the Miami Dolphins football team.”

Did you know that A.N. publicly denied ever using the legal services of fixer Sidney Korshak, for decades the notorious transit point between the mob and legitimate business interests in Chicago, before Korshak admitted to the Securities and Exchange Commission that he was in fact the family’s labor lawyer? That a Los Angeles Police investigator’s report said A.N. was “[c]losely connected with members of the Capone syndicate, Tony Accardo, and other underworld characters? It is believed by the undersigned that Pritzker may be active locally, as a front for Eastern hoodlum money to be invested in the Los Angeles Area”? That A.N.’s law partner Stanford Clinton was general counsel for the notoriously mob-connected Teamsters pension fund?

I got much of this stuff from Gus Russo’s voluminous book Supermob: How Sidney Korshak and His Criminal Associates Became America’s Hidden Power Brokers. It’s an over-the-top book, hanging all sorts of claims on insinuation and guilt by association, so I’ve only included here the stuff I consider solid. And let’s respectfully dissent from Shakespeare, who wrote in the Merchant of Venice, “The sins of the father are to be laid upon the children”: Penny is not responsible for the dodgy practices of her grandfather. It’s not her fault her late Uncle Jay, who bought Hyatt in 1957, deployed it as a platform for innovative “asset management” financial engineering that kept the family at arms’ length regarding risk and responsibility (nowadays with the assets coming from Chicago taxpayers). She can’t be held responsible for the way Jay, back before that, benefited from very questionable deals arising from his tenure in the Justice Department’s Alien Property office, responsible for assets seized by the government. Nor can she be held responsible for the mob money allegedly behind the expansion of Hyatt in the first place. “Behind every fortune lies a great crime,” is the Balzac quote Russo uses to introduce the Pritzker family in his book; but that’s not Penny’s fault either, is it?

But certain patterns still obtain. It is one of the most crucial stories for understanding our age: how tax-avoidance strategies of a previous generation that might have landed you in court are now legal—which does not make them any more ethical. In fact, it may make them less ethical—precisely because third-gen scions like Penny, born in 1959, have entered into the political establishment, where their representatives, their latter-day Korshaks and Kanters, do their laundering in the halls of government instead of in Las Vegas hotel room meetings with associates of Tony Accardo. The scumminess is the same, or, really, worse; as Charlie Savage wrote this week in The New York Times, “Republican senators are likely to be interested in the Pritzker family’s reputation as innovators in the use of offshore trusts and foreign bank secrecy laws to shelter their wealth from income, capital gains and inheritance taxes. Even after tax loopholes were closed, the family’s trusts were grandfathered in and it kept benefiting from them.” As well the Republican senators should. And, hell, Democratic senators, too.

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The crime is what is no longer a crime. Indeed, wrote David Cay Johnston, Burton Kanter regarded himself as the nation’s premier expert at “legally eliminating taxes.” He even proudly documented his techniques in legal journals.

Savage asked the White House what made Penny Pritzker suitable for a confirmation fight she was not qualified for in 2008. The spokesman responded that back then, she “had an ongoing obligation to oversee her family’s restructuring of assets to separate out the interest of various family members.” Now, that task has apparently been completed, or, as “a White House official involved in vetting her” put it, “they had since completed dividing up their finances.”

Got that? It took lawyers four years to figure out how to divest her from the sleaze. And that’s what makes her qualified for the job—a job not unrelated to the devising and interpretation of tax policy itself. And, not incidentally, a job concerned with subjects like this:

Tax evasion by individuals with unreported offshore financial accounts was estimated by one IRS commissioner to be several tens of billions of dollars, but no precise figure exists. IRS has operated four offshore programs since 2003 that offered incentives for taxpayers to disclose their offshore accounts and pay delinquent taxes, interest and penalties. GAO was asked to review IRS’s second offshore program, the 2009 OVDP. This report (1) describes the nature of the noncompliance of 2009 OVDP participants, (2) determines the extent IRS used the 2009 OVDP to prevent noncompliance, and (3) assesses IRS efforts to detect taxpayers trying to circumvent taxes, interests and penalties that would otherwise be owed. To address these objectives, GAO analyzed tax return data for all 2009 OVDP participants and exam files for a random sample of cases with penalties over $1 million; interviewed IRS Offshore officials; and developed and implemented a methodology to detect taxpayers circumventing monies owed.

That’s the abstract to a paper published two months ago and distributed by the Commerce Department’s National Technical and Information Service. I would give far more than a penny to hear Pritzker’s thoughts about that.

Read Part One of Rick Perlstein’s Pritzker commentary.

Robert Griffin III. Photo courtesy of Muhammad Ali Center.

It should be enough that Redskins quarterback Robert Griffin III is the most exciting athlete to enter professional sports since Lionel Messi and has restored the thrill of the possible to our football-obsessed community in Washington, DC. It should be enough at this moment to learn that RGIII is focused solely upon rehabilitating his knee, torn to shreds in last year’s playoffs. But the Heisman Trophy winner, who also found time in college to graduate from Baylor with a degree in political science and a 3.67 GPA, has clearly committed this off-season to exercising his mind as well. According to his running Twitter commentary, RGIII spent Saturday at the museum that in my view is the Mecca of the intersection of sports and politics: the Muhammad Ali Center in Louisville, Kentucky.

The Muhammad Ali Center is a remarkable testament to the courage of an athlete willing to take unpopular stands because of political principle. The fact that Ali took these stands at the height of his athletic powers, when he was between the ages of 22 and 26, clearly had an impact on Mr. Griffin. RGIII’s first tweet said simply that “seeing in depth what Ali did and who he was is so inspiring.” The quarterback then soaked in just how much Ali suffered for his unpopular stands against racism and the war in Vietnam and put himself in the Champ’s shoes. He wrote, “An athlete like Ali would get destroyed in today’s world even more than in his own time.” The social media–savvy RGIII then tweeted, “What Ali stood for and the way he expressed it from the boxing ring to the streets of everyday life would have him trending for weeks.” He then retweeted someone who wrote to him, “Ali transcended sports and sacrificed his most productive boxing years to stand for his beliefs. Name a modern athlete that would.”

I must say that it’s thrilling that Muhammad Ali still has such a strong effect on athletes born a decade after he last set foot in a boxing ring. It’s also quite a statement that Robert Griffin III, who comes from a proud military family, would pay tribute to the most famous war resister in human history. Yes, Ali’s radical stance in 1968 has been smoothed out for mass consumption. Yes, in today’s myriad Ali tributes, few quote him saying, “I’m not going 10,000 miles from home to help murder and burn another poor nation simply to continue the domination of white slave masters of the darker people the world over…. The real enemy of my people is here.” But the museum, to its credit, does not engage in a whitewash. RGIII was confronted with the actuality of Ali’s ideas and was deeply in awe of his sacrifice.

Lastly, I would point out that in today’s age of social media, an athlete like Ali would get far more support than in 1964. Back then, a small cabal of hard-bitten sportswriters, who were conservative, calloused and Caucasian, dominated public commentary, and were deeply resentful of the man they called “the Louisville Lip.” Today, in addition to the hate, there would be a public outpouring of support, which would also shape the coverage. The trend-lines of Ali’s resistance would have ample amplification.

There’s another side of this, however, that could not have escaped RGIII’s precise mind as he considered the concepts of sports and sacrifice: There is no way in heaven or hell Muhammad Ali, who is of African, Native American and Irish ancestry, would have ever accepted being called a Redskin. RGIII had to notice that the question of names and what we choose to call ourselves figures strongly at the Ali Center. You learn that Muhammad Ali was born Cassius Marcellus Clay Jr., named not only after his own father but also a famous nineteenth-century white abolitionist. The political history of that name didn’t stop him from changing it upon joining the Nation of Islam. As he said, “Cassius Clay was my slave name. I don’t use it because I am no longer a slave.” The museum speaks about the boxers, reporters and even members of the draft board who called him “Clay” and how he responded with, at different times, “Say my name,” “What’s my name?” and, my personal favorite, “What’s my name, fool?”

Ali’s belief that a name was something far more precious than just a brand has found echoes across the culture in multiple forms, from Destiny’s Child, to Ravens Coach John Harbaugh’s Super Bowl victory speech to perhaps the most famous scene in the classic television show The Wire. Names matter. What you call yourself and what others choose to call you is a question of respect.

I wonder if RGIII took notice that the Muhammad Ali Center has a proud history of doing traveling exhibits with the Smithsonian National Museum of the American Indian, including one called “IndiVisble: African-Native American Lives in the Americas.” The 2012 press release for the exhibit reads, “Prejudice, laws and twists of history have often divided them from others, yet African-Native American people were united in the struggle against slavery and dispossession, and then for self-determination and freedom. For African-Native Americans, their double heritage is truly indivisible.” I wonder if RGIII would ask himself how that heritage is served by the fans in feather headdresses and war paint, and the stained crimson face on the side of his helmet.

There was much made this week about a poll taken by ESPN, which showed that 79 percent of people in the US find nothing wrong with the Redskins name. RGIII—the athlete, the brand, the corporate pitchman—is someone who could look at that poll and think, “Great. Now I don’t need to say anything.” RGIII, the human being inspired by Muhammad Ali, has to look at those numbers and think, “Whether it’s 79 percent or 97 percent, right is right.” The Redskins name is racist as all hell, the creation of a segregationist owner and only possible because the people being insulted were subject to genocide: thinning their ranks, political power and voice. It’s a name RGIII’s boss Dan Snyder will only defend in the most controlled of public settings. It’s a name that Muhammad Ali would have hated because it’s a damn disgrace.

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At the end of his Twitter commentary about The Champ, Robert Griffin III wrote, “The Ali Center confirmed my belief that although we, as people around this world, are different, we can all help & learn from each other.” He’s correct. But a precondition of helping and learning from one another is respect. RGIII is under no obligation to say anything about the Redskins name. But if he learned nothing else from the Muhammad Ali Center, it should be that sometimes you just have to speak out no matter the risk, no matter the trends or trend-lines.

It’s a little known part of The Champ’s history, but In 1978, Muhammad Ali joined Buffy St. Marie, Floyd Red Crow Westerman, Stevie Wonder and Richie Havens (who has just left us) to rally at the end of the Longest Walk, a 3,600-mile protest march from San Francisco to Washington, DC, in the name of Native American self-determination. That was Muhammad Ali. He was nobody’s Redskin.

In a homage to the Freedom Rides, members of OUR Walmart will converge on Walmart’s upcoming shareholder meeting. Read Josh Eidelson’s report.

Representative George Miller. (Flickr/Nancy Pelosi)

It is rare that a member of Congress calls out a major industry, especially one with a powerful presence in his home state.

It is rarer still that a senior member of Congress, with a ranking position on a powerful committee, does so.

But Congressman George Miller has gone after a fashion industry that relies on low-wage workers in unsafe factories to produce clothing with “blood on their labels.”

The California Democrat is speaking to the heart of the matter.

As the death toll at the Bangladesh garment factory that produced clothing for US stores passed 650, the powerful California Democrat who has for the better part of forty years made workplace safety his congressional brief did what few in Congress or the media have the guts to do.

He explained in blunt, unapologetic language, who was really responsible.

“The reason factory managers keep their workers in unsafe buildings on the verge of going up in flames or collapsing is fear,” declared Miller. “Fear that the Western brands and retailers will take their orders elsewhere because of a missed day of production, late delivery or a minuscule increase in production costs. The brands know this. That’s why I believe they bear the ultimate responsibility for these horrendously unsafe working conditions.”

The senior Democratic member of the House Committee on Education and the Workforce minced no words. And he made his statement in a forum where the fashion industry could not miss his message: a Monday morning column in Women’s Wear Daily, the industry “bible.”

To their credit, the editors of WWD placed Miller’s remarkable statement front and center, making it the top story on the publication’s website.

Though he comes from a state where many apparel firms are located, Miller offered a stark assessment not just of the horrors that have already been reported in a factory that served global brands but of the horrors to come if action is not taken.

“The death toll in Bangladesh’s garment industry is staggering, with 1,000 dead over the past several years. In the latest tragedy, an eight-story building that housed five garment factories collapsed, killing more than 500 so far, injuring more than 1,000 and leaving an unknown number of people trapped in the rubble of the Rana Plaza. And just five months earlier, a devastating fire at the Tazreen Fashions factory killed at least 112 garment workers,” wrote the congressman, whose influence with the Democratic leadership in Congress, with responsible Republicans and with the White House means that he is taken seriously by corporate executive who are all too adept at neglecting pressure to change their practices. “These two tragedies are not isolated. Since Tazreen, at least 40 incidents causing death and injuries as the result of fires and explosions at garment factories have occurred. Undoubtedly more will follow unless the major fashion brands change their business models.”

To change those business models, Miller is calling on the corporations that produce major brands and that sell them to sign on to an initiative backed by the Bangladesh Center for Worker Solidarity, the International Labor Rights Forum and other groups that have for years struggled to focus attention on conditions in the garment factories of southern Asia.

“American consumers and leaders in the fashion industry have a moral imperative to ensure that these tragedies do not happen again. The only way forward for the global brands to improve conditions and worker safety is an effective, enforceable and binding commitment. That is why I have asked a number of retailers and brands to join together and sign the Bangladesh Fire and Building Safety Agreement, developed by nongovernmental organizations to prevent these types of disasters from occurring,” says Miller.

The agreement is a vehicle for addressing “the most urgent elements necessary to tackle these dangers.” As such, it includes requirements for:

• detailed public reporting of fire and building audits conducted by independent safety experts

• timely repairs to unsafe workspaces and buildings

• termination by brands of contracts with factories that defy obligations to keep workers safe

• a right of workers to refuse unsafe work without retribution

• union access to factories

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The great debates about global trade, conditions for workers and a just economy rarely get the attention they deserve. And, too often, as Miller notes, corporations lay low hoping for the attention of governments and the media to turn to other issues.

But the congressman, by speaking directly to the fashion industry, and by making all the noise he can about the issue, is seeking to keep the economic, political and moral debate focused on concerns that are too fundamental to neglect any longer.

“The major global brands now face a choice: They can attempt to weather the storm, leaving workers in continued danger, or they can take a different road—one that includes healthy profits without the human death toll by signing onto an enforceable safety agreement,” writes Miller. “It is time that American consumers understand which brands will accept blood on their labels and which will not.”

When will free-traders-gone-wild own up to their complicity in global workplace disasters? Read William Greider’s take.

New York Times columnist Bill Keller has now called for the United States to launch missiles at Syrian government installations. (Reuters/Phil McCarten.)

Hail, hail, the gang’s nearly all here. Michael Gordon, Thomas Friedman, now Bill Keller. Paging Judy Miller! The New York Times in recent days on its front page and at top of its site has been promoting the meme of Syria regime as chemical weapons abuser, thereby pushing Obama to jump over his “red line” and bomb or otherwise attack there. Tom Friedman weighed in Sunday by calling for an international force to occupy the entire country (surely they would only need to stay one Friedman Unit, or six months).

Now, after this weekend’s Israeli warplane assaults, the threat grows even more dire.

And Bill Keller, the self-derided “reluctant hawk” on invading Iraq in 2003, returns with a column today stating right in its headline, “Syria Is Not Iraq,” and urging Obama and all of us to finally “get over Iraq.” He boasts that he has.

The Times in its news pages, via Sanger, Gordon and Jodi Rudoren, has been highlighting claims of Syria’s use of chem agents for quite some time, highlighted by last week’s top story swallowing nearly whole the latest Israeli claims. Days later, Obama said evidence was far from certain—even if chemicals were used it was very limited—and some of our allies who made same claims also expressed new skepticism. The Times editorial page urged caution. Jon Stewart mocked the hawks. But that hardly halted the foreign desk!

Yesterday, Reuters reported on one of the four United Nations investigators stating that if sarin was used in Syria it was more likely by the the rebels, not the regime. Still, David Sanger, later Sunday, continued (at least in his early drafts) to push the chem claims at the top of his story—while not noting the UN prober’s charge. He also highlighted John McCain’s calls for fast action, while burying contradictory claims, an old trick for the Times and The Washington Post from the run-up to Iraq war.

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Then Bill Keller posted his Monday column. He declared that our mistakes in that country should not prevent us from intervening in Syria, which is “not Iraq.” He says he was gun-shy after his Iraq flub—but no more! Now he derides Obama for “looking for excuses to stand pat.” He also provides several reasons why Syria is “not Iraq,” and how now his hawkishness is based on reality: This time we really can hurt the terrorists gathered there, really can calm tensions in the region, and so on. Instead of a “mushroom cloud,” he warns of the next chemical “atrocity.” And he claims there’s a broader coaiition of the willing this time.

He even revives the good old “domino theory,” endorsing the view that if we don’t do something in Syria it will embolden China, North Korea and Iran. And I love this one, straight from 2003: Doing nothing “includes the danger that if we stay away now, we will get drawn in later (and bigger), when, for example, a desperate Assad drops sarin on a Damascus suburb….” If a surge in aid for those Al Qaeda–lovin’ rebels fails against Assad, then we “send missiles against his military installations until he, or more likely those around him, calculate that they should sue for peace.” Yeah, how did that work out in Iraq in the long run?

At least Keller provides some comic relief when he admits, “I don’t mean to make this sound easy.” (To grasp why Keller is turning “hawk” on Syria, see my review of his recent column on his FUBAR re Iraq.)

Keller concludes: “Whatever we decide, getting Syria right starts with getting over Iraq.” Then we can get over Syria—with Iran? Remember when Iraq was supposed to help us “get over” Vietnam?

See my book So Wrong for So Long on how the media—including the Times and Keller—helped get us into that mess for ten years.

Israel’s throwing a big war in the Middle East, and the United States is invited. Read Robert Dreyfuss on Israel’s bombing of Syrian government forces.