A Syrian rebel stands atop rubble outside Damascus. (Reuters/Ahmed Jadallah.)
Is history repeating itself? As I noted earlier this week here, The New York Times, as it did in the run-up to the 2003 Iraq invasion, seems to be promoting (if a little less strenuously) some kind of dramatic US intervention in Syria, based on WMDs. Once again we’ve seen overheated front-page news stories, based on slim evidence, and columns by Thomas Friedman, Bill Keller and others. And, again as in 2003, the newspaper’s editorials express caution.
Also in a replay, reporters for McClatchy’s DC bureau are expressing sensible skepticism (back in the day the outfit was still owned by Knight Ridder) about evidence of WMDs, in this case, the Syrian regime’s alleged use of chemical agents against the rebels.
One of the reporters in those much-hailed, in retrospect, Iraq stories is still at it on Syria: Jonathan S. Landay. His Knight Ridder editor Clark Hoyt moved on (including a gig as public editor at the Times), and so has one of his chief colleagues, John Walcott. Warren Strobel moved to Reuters, the excellent Hannah Allam, former Middle East bureau chief and now based in DC, remains. Landay highlighted caution about new evidence at least as far back as April 26.
When I was editing Editor & Publisher we were one of the few mainstream news outlets to highlight the Knight Ridder team (for the full story see my book, So Wrong for So Long: How the Press, the Pundits and the President Failed on Iraq). Later I appeared on Bill Moyers’s show with Walcott and Landay. Basically, they got the Iraq WMD story right because, unlike virtually every other major media outlet, they relied on experts outside the usual old-boy network of Pentagon, CIA, military and congressional sources.
I hope to chat with Landay and Allam and maybe others in the days ahead, but for now, consider yesterday’s McClatchy story by those two plus Matthew Schofield. It is quite at odds with the tone and substance of much of the New York Times coverage. It’s almost a response to it.
Despite rising calls for some kind of increased US military involvement in Syria, scant evidence exists, at least in public, that Syria’s vicious civil war has breached President Barack Obama’s “red line” on the use of chemical weapons.
In the ten days since the Obama administration notified Congress that it suspected, with “varying degrees of confidence,” that chemical weapons had been employed in Syria, no concrete proof has emerged, and some headline-grabbing claims have been discredited or contested. Officials worldwide now admit that no allegations rise to the level of certainty.
Yet political rhetoric on Syria has overtaken actual evidence in a high-stakes Washington debate that’s increasing pressure on Obama to lend more military support to the rebels fighting to topple Syrian President Bashar Assad.
On Monday, Senate Foreign Relations Committee Chairman Robert Menendez, D-NJ, alluded to chemical weapons as he proposed a measure to provide limited arms to the rebels, asserting that Assad’s regime “has crossed a red line that forces us to consider all options.”
That assertion, however, appears far less certain than it did only a week ago. British, French and Israeli experts who expressed more confidence in their assessment than the Obama administration had in its judgment have in recent days qualified their positions, said Greg Thielmann, a former State Department intelligence analyst now with the Arms Control Association, a private organization that provides analysis of weapons issues. “That should make everyone suspicious,” he said. “And the reality may be lot more complicated.”
Thielmann added, “Do you really risk going to war without knowing who has used what and in what circumstances?”
Existing evidence casts more doubt on claims of chemical weapons use than it does to help build a case that one or both sides of the conflict have employed them.
Senator John Cornyn, who is pushing an amendment guaranteeing federal reimbursement for immigrant detentions. (AP Photo/J. Scott Applewhite.)
One of the most closely watched amendments, offered by Democrats, will be a measure for US citizens to sponsor their same-sex partners for green cards. While pundits say the LGBT-related amendments may determine the fate of the bill, Republicans are also sponsoring amendments that could have far-reaching ramifications.
Senator John Cornyn (R-TX) has an amendment to reimburse “states and municipalities for costs incurred in incarcerating undocumented criminal aliens.” By guaranteeing federal money for immigrant detention, Cornyn’s amendment could incentivize the incarceration of immigrants in both private and public prisons. The amendment even provides for the federal government to make prompt payments: “Any funds awarded to a State or a political subdivision of a State, including a municipality, for a fiscal year under this subsection shall be distributed to such State or political subdivision no later than 120 days after the last day of the application period for assistance.”
This is nothing new for Cornyn, who began the year fundraising with private prison lobbyists. In previous immigration debates, the senator has proposed legislation to appropriate more funds for immigrant detention facilities. As we’ve reported, the private prison industry has influenced immigration policy in the past and may use its significant clout in Congress to shape the bill debated this week.
Cornyn has a separate amendment to require more drones. Cornyn’s Amendment ARM13593 requires the government to purchase unmanned aerial vehicles for surveillance “along the Southern border for 24 hours per day and for 7 days per week.”
Of course, there are many GOP amendments to increase criminal penalties for immigrants, to exclude them from government services and to develop biometric security and tracking measures. Overall, Republicans have nearly 200 amendments, including one by Senator Ted Cruz (R-TX) to completely remove the path to citizenship for any undocumented immigrant.
But there’s one that exemplifies Republican antipathy to the immigrant community. Senator Orrin Hatch (R-UT), who led the opposition to background check legislation defeated last month, has an amendment that increases the penalties for the possession of firearms in connection with drug-related offenses on federal lands. Get that? One of the senators opposed to even the most meager gun control efforts is willing to increasingly criminalize gun ownership when it comes to immigrants. While I’m sure Hatch would defend his legislation by claiming it keeps guns out of the hands of criminals, couldn’t the same be said about the background check legislation he blocked?
Read Lee Fang on the Koch brothers’ interest in buying the Chicago Tribune and Los Angeles Times, and why this is no ordinary media takeover.
Secretary of State John Kerry, who met with President Vladimir Putin and Foreign Minister Sergei Lavrov in Moscow this week. (AP Photo/Jacquelyn Martin.)
It’s an open question whether the new US-Russian initiative to convene a peace conference over Syria can work or not. But it’s the right move at the right time. It was welcomed by Lakhdar Brahimi, the beleaguered United Nations representative on Syria, who’s hinted that he might resign over the diplomatic impasse thus far. “This is the first hopeful news concerning that unhappy country in a very long time,” said Brahimi.
The peace conference would be based on a 2012 joint resolution issued by the United States, Russia and others.
The bombs-away crowd isn’t happy. Elliot Abrams, the neoconservative hardliner who worked for George W. Bush and then somehow found his way into the Council on Foreign Relations, issued a fiery blast at President Obama and Secretary of State Kerry, who met in Moscow this week with President Vladimir Putin and his foreign minister, Sergei Lavrov:
Faced with this challenge what did Mr. Obama and Mr. Kerry do? They asked Putin for help. This is astonishing in itself, for the last four years offer proof that Putin is an enemy of the United States and seeks to weaken us, not to help us. The notion that we have common interests in Syria beggars belief.
The picture of an American secretary of state hanging around for three hours, desperate to see Putin and seek his help, is pathetic–and suggests a profound misjudgment of Putin (who has nothing but contempt for weakness) and of Russian policy.
According to The New York Times, the “the aim would be to push the government of President Bashar al-Assad and the Syrian opposition to attend.” The paper added:
Russia and the United States announced on Tuesday that they would seek to convene an international conference within weeks aimed at ending the civil war in Syria, jointly intensifying their diplomatic pressure on the combatants to peacefully settle a conflict that has taken more than 70,000 lives and left millions displaced and desperate.
Russia is, it seems, increasingly unhappy with the turn of events in Syria, where its ally, the government of Bashar al-Assad, is using heavy weapons against a lesser-armed, civilian armed resistance. It’s an important breakthrough for the United States and Russia to demand that both the government and the rebels attend a conference, because if either side refuses to do so it will reflect badly on the patron of the side that won’t attend. For Russia, were Assad or his representatives to refuse to negotiate, it might mean that Russia would be forced to abandon them; if the rebels refuse to attend, the United States would be hard pressed to continue to support them.
The rebels ought to be careful. Already, some of them are expressing unhappiness and skepticism about the conference, since many of them refuse to talk to Assad and they don’t want to see Assad remain in power, either temporarily—in a transitional period—or permanently.
So far, despite intense political pressure from neoconservatives and the right, including John McCain et al., and from Israel—which bombed the Syrian capital over the weekend—Obama has resisted getting more directly involved. However, there’s little doubt that the United States is using the possibility of stepped-up American involvement, including arming the rebels directly, in order to convince Russia to co-sponsor a last-ditch conference. Russia, though, has reasons of its own to seek some sort of stability in Syria, since the last thing it wants is a takeover in Damascus by ultra-militant, Al Qaeda-led rebels who might form alliances with Muslim extremists in Russia.
The neocons are apoplectic over the fact that Obama, having said that the use of chemical weapons would be a “game-changer” and a “red line,” still hasn’t decided to bomb Syria. Obama is being properly cautious, and he’s backed by public opinion polls that show that Americans don’t want to get involved in yet another Middle East war.
Read Robert Dreyfuss on how Israel’s bombing of Syria has invited Obama to take sides in a growing region-wide conflict.
Bill McKibben's April 28 climate change sermon delivered at New York City's historic Riverside Church was both brilliant and inspiring. But was it too late? In a sane society, his call would be required viewing coast to coast and urgent action would immediately follow. Do your bit and and share this video, then join the growing fossil fuel divestment movement and make every effort to get your school, municipality, company and/or organization on board.
Speaker of the House John Boehner has promised to pass Martha Roby’s Working Families Flexibility Act. (AP Photo/J. Scott Applewhite.)
House Republicans are launching their first concerted effort to win back female voters on Tuesday with the Working Families Flexibility Act of 2013, a bill that’s being packaged as a lifeline to working moms across the country.
Unfortunately, the legislation is a particularly cruel hoax—a slick attempt to give employers more power, and hourly workers much less.
At first blush, the idea sounds good. The bill would allow hourly workers to convert overtime pay into time off: in other words, instead of getting paid for extra hours, they could stockpile additional vacation time. The pitch here is that working parents could have more flexibility in their schedule and an enhanced ability to balance work and family. “This week, we’ll pass [Representative] Martha Roby’s bill to help working moms and dads better balance their lives between work and their responsibilities as parents,” House Speaker John Boehner said Tuesday.
The GOP is specifically invested in convincing women this bill is for them. The GOP spent $20,000 last week on a digital ad campaign focusing on so-called “mommy blogs,” like Ikeafans.com and MarthaStewart.com, and geo-targeting Democrats in swing districts. “Will Rep. Collin Peterson stand up for working moms?” one iteration of the ad asked.
A fawning National Review profile of Roby, the bill’s sponsor, explains how she wasn’t sure she could handle a run for Congress in 2009 because of concerns about taking care of her children while running for a House seat and potentially becoming a member of Congress—and how those concerns have now inspired her to push this important legislation.
But it’s not too hard to see how pernicious this legislation truly is. “Flexibility” is a word that should make hourly workers check for their wallets—employers hold most of the power in the relationship with hourly workers, which is all the more true if they are not unionized. So “flexibility” to decide if you want to get paid for overtime work, instead of getting fewer hours later on, can quickly become a way for employers to withhold payment for overtime work while also cutting your hours down the road.
Over 160 labor unions and women’s groups sent a letter to members of Congress on Monday, protesting that the Working Families Flexibility Act is “a smoke-and-mirrors bill that offers a pay cut for workers without any guaranteed flexibility or time off to care for their families or themselves.”
Republicans say this isn’t true, and that there are safeguards in the bill that would prevent employers from muscling their employees into surrendering overtime pay. “It is illegal for them to do that. There are enforcement mechanisms in the bill,” Eric Cantor said in February.
But this is where they’re being really tricky—the bill does give workers the right to sue over such intimidation, but denies them the right to use much quicker, and cheaper, administrative remedies through the Department of Labor. It also gives the Department of Labor no additional funds to investigate nor enforce provisions of the act.
So if hourly workers get intimidated into giving up overtime pay in exchange for working even fewer hours down the road, they’re more than welcome to hire a lawyer and sue—a rather improbable outcome given how expensive that might be. Otherwise, tough luck.
There also isn’t quite as much flexibility in the act as it seems. As the National Partnership for Women and Families points out, while the bill does allow hourly workers to turn overtime pay into as much as 160 hours of comp time, it gives them no right to decide when they can use that time—even if there’s a family emergency. That’s still entirely up to employers.
Further hampering workers’ flexibility is that once they bank more than eighty hours in comp time, employers can unilaterally decide to cash out any additional hours. Also, workers who decide later that they need to cash out the comp time they’ve earned can do so—but employers have thirty days to cut the check, which could certainly be a problem for hourly workers on a tight budget.
Moreover, this isn’t even a new idea. Republicans proposed this same bill ten years ago, prompting the late Molly Ivins to remark “the slick marketing and smoke on this one are a wonder to behold.”
The legislation, simply, is a straightforward boon to big employers. “It pretends to offer time off but actually asks [employees] to work overtime hours without being paid,” Judy Lichtman of the NPWF told reporters on a conference call Monday. She added that it’s simply a “no-cost, no-interest loan to the employer.”
House Democrats will be nearly, if not entirely, unified in opposition. “The Working Families Flexibility Act sounds good, but it is a sham and we are going to call it out for what it is. It would cause more harm than good and we are going to reject it,” Representative Rose DeLauro said yesterday during the same conference call.
Due to the Republican majority in the House, the bill is likely to pass on Tuesday, but Senate passage seems dubious at best, and the White House has already issued a veto threat.
Of course, if Republicans are indeed interested in providing extra flexibility to help hourly workers balance family concerns with their jobs, they could pass paid family leave legislation. Only 11 percent of all private industry workers have access to paid family leave, and the United States is the only high-income country in the world not to mandate it. Unlike the Working Families Flexibility Act, paid family leave is generally something the employee has the unilateral ability to exercise.
Unfortunately, that’s something Congressional Republicans are deeply opposed to enacting. They blocked a proposal from President Obama in 2011 that would have created a $1.5 billion fund to push paid family and medical leave programs at the state level, and several similar efforts to enact such laws at the federal level.
In 1993, when Congress considered and ultimately passed the Family and Medical Leave Act—which mandates only twelve weeks of unpaid family time off—Republicans were apoplectic. One House member from North Carolina called it “nothing short of Europeanization—a polite term for socialism.” A young John Boehner, years from becoming House Speaker, said the legislation would “be the demise of some [businesses].
“And as that occurs,” he said, “the light of freedom will grow dimmer.”
Additional reporting by Nation DC intern Anna Simonton.
UPDATE: The final vote on the Working Families Flexibility Act of 2013 has been pushed back to Wednesday.
Also, it's worth knocking down a particular Republican talking point on the bill, as expressed by Eric Cantor's communications director to me over Twitter, among many other places. They argue that, since federal workers already enjoy the ability to trade overtime pay for extra time off, workers in the private sector should enjoy the same rights.
The problem with this argument is that the federal government is not a profit-driven employer likely to muscle workers into giving up overtime pay in return for reduced hours. If that did happen, federal workers are unionized and enjoy many employment protections that Walmart workers, for example, do not.
It's important to note here that, during the mark-up for this bill last month, Representative Timothy Bishop, a Democrat from New York, offered an amendment that would make the Working Families Flexibility Act apply "only if the employer enters into an employment contract with the employee that provides employment protections substantially similar to those provided to Federal, State or local employees under civil services laws."
Every Republican voted against it, and the measure was defeated.*
*A prior version of this story said four Democrats also voted against the Bishop amendment, but they were just not present for the vote.
UPDATE 2: The House passed the Working Families Flexibility Act on Wednesday afternoon, 223-204.
For better news, read George Zornick on Obama’s promising pick for FHFA director.
A storefront mural of Assata Shakur. (Flickr/Gary Soup, CC 2.0.)
“My name is Assata Shakur, and I am a 20th century escaped slave.”
So begins an open letter written by Assata Shakur, formerly of both the Black Panther Party and Black Liberation Army, currently exiled political prisoner. The letter itself dates back to 1998, but in the past week there has been renewed interest in reading Shakur in her own words, as the FBI added the iconic figure to their list of Most Wanted Terrorists and, alongside the New Jersey State Police, announced a $2 million reward (up from the $1 million offered in 2005) for any information that might lead to her capture.
Shakur’s infamy began after the May 2, 1973, killing of a New Jersey state trooper. In her letter, as well as in her autobiography, she recounts what happened that night, when she, along with Zayd Malik Shakur and Sundiata Acoli, were stopped on the New Jersey Turnpike for having a faulty tail light. One trooper drew his gun and told them to put their hands in the air, which Assata did. Moments later a shootout ensued, ending with the deaths of Zayd and state trooper Werner Foerster. Assata was also shot while her hands were up. Though the forensic evidence backed up her account, the state was able to convict her, and in 1977 she was sentenced to life plus thirty-three years. She has lived in Cuba, where she was granted asylum, since 1984, having escaped (or in the language of the movement, been liberated) from Clinton Correctional Facility for Women in New Jersey in 1979. Shakur and her supporters, myself included, maintain her innocence.
“It’s incredibly frustrating that the first woman to be on the FBI’s most wanted terrorist list, the same list as Osama bin Laden, would be a 65 year-old grandmother in Cuba,” writer and filmmaker dream hampton told radio host Davey D. I would add that it’s also incredibly frightening. We have seen the way this country has prosecuted the “war on terror,” even after moving away from using that specific phrase, with a blatant disregard for civil liberties, human rights, international law and the rights of sovereign countries. It’s enough to make one very concerned for the safety of Shakur and those around her. If deemed dangerous enough, could an invasion of Cuba be far behind? A drone strike? How far is this government willing to go to capture (kill?) someone whose guilt in the crime for which she was convicted is not clear and poses no threat to the country’s security?
“Assata is not a threat,” scholar and activist Angela Davis, who herself once occupied a spot on the FBI’s 10 Most Wanted Fugitives list, told Democracy Now! “If anything, this is a vendetta.”
The United States doesn’t like to lose and holds a hell of a grudge. This goes beyond J. Edgar Hoover’s declaring the Black Panther Party the “greatest threat to the internal security of the country” and vowing to eradicate them. This is the fate of anyone, particularly those with black and brown skin, who holds views deemed anti-American—which for them only reflect their status as an oppressed people (there’s controversy in asserting that all people deserve the right to food, clothing and shelter). Because what of her actions qualifies Shakur as a terrorist? Even if you believe she is responsible for Foerster’s death, that would make her responsible for one death in the early morning hours on a New Jersey highway forty years ago. If that is terrorism, if the definition is such that this purported crime fits, then in the process of labeling Assata Shakur a terrorist, the FBI has rendered the word all but meaningless. According to Davis, “the attack on [Shakur] reflects the logic of terrorism, because it precisely is designed to frighten young people, especially today, who would be involved in the kind of radical activism that might lead to change.” But there’s no one around to put law enforcement on a wanted list.
“I am only one woman,” Shakur wrote in her open letter, but the FBI has decided to make her more than that. She is a symbol of what it means to be a black woman who dares fight back. You don’t need to be sporting one of those “red, black and green liberation jump-suits” that Gil Scott-Heron talked about in order to see that this ramped up manhunt is unnecessary and an abuse of power. But it should also remind us that the struggle Shakur and her comrades took bullets for is still not over. We’re still needed on the frontlines.
Hands off Assata, now and forever.
Read Mychal Denzel Smith on Arizona’s new gun-buyback law, which illustrates why the federal government should take the lead on gun control.
John Carlos (right) commemorated on a mural in Brisbane, Australia. (Flickr/Rae Allen)
Yesterday, I spoke with Dr. John Carlos, one of the “fists of freedoms” at the 1968 Olympics in Mexico City. (Full disclosure, I had the privilege of co-writing his memoir, The John Carlos Story: The Sports Moment That Changed the World, 2011.) Dr. Carlos is as “old school” as they come: someone who believes strongly that athletes have obligations to give their time, money and physical presence to “impoverished communities, black, brown or white” and work to make the world a better place. He believes in honesty, fairness and the value of courage as a staple of whether or not a person actually has character. He taught me that over the course of your life, it’s far more important “to be a human being than to be a brand.” With that in mind, I was very curious what Dr. Carlos would say about the story scorching the sports world: the “coming out” of Jason Collins.
I simply asked old-school John Carlos what his thoughts were about Collins’s announcement that he would be the first active male athlete in North American sports to come out of the closet. Dr. Carlos’s “old school” answer was beautifully “new school,” with an old-school warning to the National Football League. Here are his words. They made me smile, and I hope they do the same for you.
I have so much respect for Jason Collins because he is telling the world that he is proud of who he is. He’s telling the world, “This is who I am. Deal with it.” That’s real courage. I support him to the upmost! I heard someone on the television say, “The NFL isn’t ready for an openly gay player.” We should answer that with, “Why the hell not? You better get ready!”
I think we all look forward to the day when a player—male or female—coming out isn’t news at all. But now it is. Jason Collins matters. And given that Collins has gone out of his way to say that he owes a debt to those in both the African-American and LGBT movement who “paved the road for me,” the support from the generation of 1960s activist athletes matters as well.
Walmart workers are heading to Bentonville headquarters, Freedom Ride–style, to speak up to shareholders. Read Josh Eidelson’s report.
Investigators are blaming ammonium nitrate for the massive explosion that devastated most of the town of West, Texas, on April 17. The chemical, which was stored in large amounts at the West Fertilizer Co., is used to make fertilizer. It’s also used by coal companies to blow up mountains.
Ammonium nitrate poses a threat to human and environmental health not only when it catalyzes fatally in a dangerous stockpile but also when particles of the stuff shatter into the air and seep into groundwater from strip mining, say residents of mining communities. Opponents of so-called “mountaintop removal” are in DC this week, taking that message to the Obama administration in a week of action culminating May 8 with a delivery of toxic water to the Environmental Protection Agency.
GRITtv was in Central Appalachia the week after the Boston Marathon bombing and the West, Texas, fire. While terrorism of the bomb-plots sort seemed far away, explosions there were a daily occurance. Vernon Haltom of Coal Mountain River Watch, who showed us around, cited estimates that more than a million acres and tens of thousands of streams have been affected since so-called mountain top removal began. Having depleted the area’s rich underground seams, in the late 1970s coal companies in Central Appalachia began blasting the tops of the mountains to get at coal just beneath the surface.
Since then, more than twenty peer-reviewed studies have raised alarms, some linking trace amounts of ammonium nitrate, benzine and silica to health problems, including low birth weights and elevated death rates in mining areas of Virginia, West Virginia and Kentucky.
People living near mountaintop mining have cancer rates of 14.4 percent compared to 9.4 percent for people elsewhere in Appalachia, studies by the West Virginia University, among others, show. “Birth defects are over twice as high than if the mother smokes during pregnancy,” says Vernon Haltom, who served in the US military as an explosives expert.
But just like giant agribusiness, Big Coal would rather keep ammonium nitrate unregulated. Activists are hoping that the explosion in West and the homemade bomb blasts in Boston will turn up the heat on regulators.
Mining companies aren’t the only ones who know ammonium nitrate’s blasting power. Readily available and easy to assemble, it’s what Timothy McVeigh used to blow up the Oklahoma City federal building and it’s what improvised explosive devises, or IEDs, are usually packed with.
In 2011, Obama’s EPA vetoed the largest single mountaintop removal permit in West Virginia history, slowing production but issuing no binding regulations. Democrats have introduced an Appalachian Community Health Emergency Act (ACHE Act, H.R. 526) which would effectively impose a moratorium. The current week of Appalachia Rising action is calling for the EPA to step in. There’s no earthly reason why the agency isn’t charged with monitoring ammonium nitrate. Under the Clean Air Act, the agency is mandated to reduce the risk from explosive chemicals.
Why isn’t ammonium nitrate already on the EPA’s list? That was one of Senator Barbara Boxer’s questions to the agency in the wake of the Texas fertilizer plant disaster. Informed fingers have pointed at lobbying by the Agricultural Retailers Association and the Fertilizer Institute but up to now, Big Coal has avoided tough questions. No industry uses more ammonium nitrate for underground and above-ground explosions.
The last and, so far, the only time a federal agency proposed monitoring the chemical, the National Mining Association lobbied against it. After the Department of Homeland Security proposed regulating the of the sale and transfer of ammonium nitrate for security reasons, the National Mining Association requested an exemption, citing the “undue burden on the mining industry.”
Texans and Appalachians don’t need another tragedy to know it’s long past time the “undue burden” on human life received priority. In West Virginia, GRITtv spoke with Vernon Haltom and Vernon “Hoot” Gibson, uncle of famed mountain defender Larry Gibson, whose family’s cabins sit on some of the last surviving peaks of the Kayford Mountain.
Occupy the Pipeline activists are working to prevent a New York City fracking nightmare. Read Allison Kilkenny’s report.
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.
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.