Chumps, Marks, Fools And Suckers

Paul Waldman of the Washington Post notes that the right is up in arms over campaign finance reform and political action committees.  Up until now the screaming has been that the Obama administration was using the IRS to somehow “unfairly target” these groups as political motivation, something Republicans held a billion hearings about that were all smoke and mirrors.

Only it turns out Tea Party PACs actually were “legally” defrauding the hell out of their donors the whole time thanks to the Citizens United ruling.

In the last few years, political organizations of various kinds have proliferated, as all kinds of people seek to take advantage of the post-Citizens United world in which money can flow in so many directions. This has provided a splendid opportunity for the participants in an old game, one in which gullible conservatives are scammed out of their money by a seemingly limitless number of con artists.

Some of those con artists are obscure consultants and operators, but some of them are quite famous, which we’ll get to in a bit. But today, John Hawkins of Right Wing News released a report on a group of conservative PACs that took in millions of dollars in contributions in 2014, ostensibly for the purpose of electing Republicans, but spent almost none of it on actual political activity. Instead, the money went into the pockets of the people who run the PACs and their associates. Jonah Goldberg, reacting to the report, calls this the “right wing scam machine.”

Why, one would think these campaign finance groups should be targeted for increased scrutiny or something. Hawkins gives this situation:

For example, let me tell you how conservatives can be (and have been) ripped off by scam groups. Let’s say Ronald Reagan is still alive and someone starts the Re-Elect Ronald Reagan To A Third Term PAC. Because people love Reagan, let’s suppose that conservative donors pony up $500,000 to help the organization. However, the donors don’t know that Ronald Reagan has nothing to do with the PAC. Furthermore, the real goal of the PAC is to line the pockets of its owner, not to help Ronald Reagan. So, the PAC sets up two vendors, both controlled by the PAC owner: Scam Vendor #1 and Scam Vendor #2. Let’s assume it costs $50,000 to raise the half million the PAC takes in. Then, the PAC sends $100,000 to the first company and $100,000 to the second company to “promote Ronald Reagan for President.”

Each of the companies then goes out and spends $1,000 on fliers. The “independent expenditures” that show up on the FEC report? They’re at 40%. That’s because the FEC doesn’t require vendors to disclose how much of the money they receive is eaten up as overhead. The dubious net benefit that Ronald Reagan receives from an organization that raised $500,000 on his name? It’s $2,000. On the other hand, the net profit for the PAC owner is $448,000. Is that legal? The short answer is, “It’s a bit of a grey area, but, yes, it is legal.

Which is exactly what conservatives said they wanted, because when Democrats pointed out after Citizens United “Hey, we should probably then change the rules so that there’s more disclosure transparency in what PACs actually give to candidates” it’s people like Jonah Goldberg who happily called campaign finance reform (and everything else Democrats ever did) “liberal fascism” and an assault on “free speech” and went berserk when the Obama Administration turned to the IRS to try to see what the hell these PACs were up to and Democrats suggested that “Hey, we might want to bring in some regulation here.”

Mitch McConnell killed the DISCLOSE Act real quick last summer.

Now, you see, some conservatives think campaign finance reform might be a good idea.

Hoocoodanode?



The Protection Money Racket

Seems global number two bank HSBC has been very naughty over the years, going out of its way to providing services in “creative tax avoidance” for those who could afford it.

The private-banking unit of HSBC Holdings Plc made significant profits for years handling secret accounts whose holders included drug cartels, arms dealers, tax evaders and fugitive diamond merchants, according to a report released Sunday by an international news organization.

HSBC is among a handful of banks to face criminal prosecution in recent years for its role in a Swiss banking system that allowed depositors to conceal their identities, and in many cases dodge taxes or launder ill-gotten cash. The report, prepared by the Washington-based International Consortium of Investigative Journalists, revealed for the first time the massive sweep of HSBC’s private-banking arm as of 2007, when it controlled $100 billion in assets and served a swath of wealthy depositors from the elite to the illicit.

A whole hell of a lot of tax money got dodged thanks to these guys, and it may be time to pay the piper very soon.

The report is based on a list of HSBC clients from around that time that a onetime employee took from the bank and turned over to European officials, sparking tax investigations from Argentina to France, Belgium and Greece. While some of the list’s names have emerged before, Sunday’s report drew from a more comprehensive list of accounts associated with more than 100,000 people and legal entities from more than 200 nations, ranging from the legitimate to the illicit.

“These revelations confirm that banking secrecy has been used to avoid taxation,” Vanessa Mock, a European Union spokeswoman for tax affairs, said Monday.

Depositors included royal families and convicted cocaine dealers, ambassadors and terror suspects, entertainers and elected officials, corporate executives and athletes. To these and other clients, the bank actively promoted its accounts as an efficient way to hide assets from tax collectors, according to the report.

Bet long on tumbrels, guillotines, and various flavored popcorn.  Suddenly these tax loopholes are looking like very tasty sources of government income, at least in Europe.

In America, well, not so much, I’d think.  We’ll see.



It’s Hard Out Here For A Player

You guys, Master of the Universe Jamie Dimon is upset and stuff.

Jamie Dimon, grappling with multibillion-dollar legal costs and rising capital requirements at JPMorgan Chase & Co. (JPM), lashed out at U.S. regulators for putting his bank “under assault.”

“We have five or six regulators or people coming after us on every different issue,” Dimon, 58, said today on a call with reporters after New York-based JPMorgan reported fourth-quarter results. “It’s a hard thing to deal with.”

Other “hard things to deal with” may also include the near total implosion of the global economy caused by Jaime Dimon’s bank in 2008.

Dimon, who was lauded during the crisis for JPMorgan’s role in buying Bear Stearns Cos. and Washington Mutual Inc.’s bank units, has criticized the government for penalizing JPMorgan for those firms’ actions.

The bank settled foreign-exchange investigations with three regulators in November, paying about $1 billion, and still faces a Justice Department probe.

“In the old days, you dealt with one regulator when you had an issue, maybe two,” said Dimon, 58. “Now it’s five or six. It makes it very difficult and very complicated. You all should ask the question about how American that is. And how fair that is. And how complex that is for companies.”

YOU GUYS KEEP PICKING ON HIM.  I mean sure, the guillotines are a nice touch and all, but he has feelings too ya know.  The best part is that the new GOP Congress completely agrees with him.  There are just too many regulators bothering Jamie Dimon dammit, and we need to put a stop to it.

The bill, introduced by Rep. Michael Fitzpatrick (R-Pa.), is called the Promoting Job Creation and Reducing Small Business Burdens Act, but its name obscures what it would actually do. The legislation is a compilation of deregulatory bills that failed to pass the Democrat-controlled Senate in the last Congress. It would alter nearly a dozen provisions of the 2010 Dodd-Frank financial reform law, loosening regulation of Wall Street banks.

That seems useful, right?

Last week, House Republicans tried to force Fitzpatrick’s bill through the House using a procedure typically used for uncontroversial bills or technical fixes. This process, known as fast-tracking, requires the bill to receive a yes vote from two-thirds of the chamber, or at least 290 members. But on Friday, just 276 of the 435 members of the House voted for the measure—well short of the two-thirds majority required. Now GOP leaders have resurrected the bill, and will push it through under the normal rules, which require just a simple majority. The bill is expected to pass the House easily, although it’s unclear whether the Senate would approve it. President Barack Obama would likely veto it. But GOPers could force the legislation into law by attaching bits of it to must-pass bills—such as spending legislation—later this year.

You’ll be seeing a lot of that “attaching to must-pass bills” trick over the next two years, I think.



Republicans Are Bad For Your Health

This is just a drive-by sidelight on Richard’s brief — but its worth taking a look at this explainer from the Upshot.

The good news:  Obamacare is doing what it set out to do.  Kevin Quealy and Margot Sanger-Katz write that

The biggest winners from the law include people between the ages of 18 and 34; blacks; Hispanics; and people who live in rural areas. The areas with the largest increases in the health insurance rate, for example, include rural Arkansas and Nevada; southern Texas; large swaths of New Mexico, Kentucky and West Virginia; and much of inland California and Oregon.

Each of these trends is going in the opposite direction of larger economic patterns. Young people have fared substantially worse in the job market than older people in recent years. Blacks and Hispanics have fared worse than whites and Asians. Rural areas have fallen further behind larger metropolitan areas.

Women are the one modest exception. They have benefited more from Obamacare than men, and they have received larger raises in recent years. But of course women still make considerably less money than men, so an economic benefit for women still pushes against inequality in many ways. [all links in the original]

Rembrandt_Christ_Healing_the_Sick

The bad news:  it sucks to be ruled by the Republican cabal.  Or rather, it’s great if your state government actually managed to get used to the idea of Free Money! (h/t the indispensable Charles Pierce):

Despite many Republican voters’ disdain for the Affordable Care Act, parts of the country that lean the most heavily Republican (according to 2012 presidential election results) showed significantly more insurance gains than places where voters lean strongly Democratic. That partly reflects underlying rates of insurance. In liberal places, like Massachusetts and Hawaii, previous state policies had made insurance coverage much more widespread, leaving less room for improvement. But the correlation also reflects trends in wealth and poverty. Many of the poorest and most rural states in the country tend to favor Republican politicians. Of course, the fact that Republican areas showed disproportionate insurance gains does not mean that only Republicans signed up; there are many Democrats living in even the most strongly Republican regions of the country.

But for the rest…

There are still a lot of uninsured people remaining, many in the places that had high uninsured rates last year.

Where would those folk live?  Check out the last map in the piece.  No one here will be surprised.

Image: Rembrandt van Rijn, Christ Preaching (Christ Healing the Sick — the hundred guilder print), 1646-50.



Hoist with His Own Teaturd

I’m not sure tribble-topped presidential aspirant Rand Paul recovers from this:

In a variety of campaign appearances that were captured on video, Paul repeatedly compared Reagan unfavorably to Carter on one of Paul’s top policy priorities: government spending. When Paul was a surrogate speaker for his father, then-Rep. Ron Paul (R-Texas), during the elder Paul’s 2008 presidential quest, his sales pitch included dumping on Reagan for failing to rein in federal budget deficits. Standing on the back of a truck and addressing the crowd at the Coalition of New Hampshire Taxpayers picnic in July 2007, Rand Paul complained about Reagan and praised his father for having opposed Reagan’s budget…”

David Corn’s Mother Jones article linked above includes six video clips of Baby Doc slagging on Reagan as a spendthrift as the younger Paul campaigned for his daddy. What Paul says about Reagan exploding the debt is all true, of course.

And it’s not wise to underestimate the Republican base’s capacity to ignore facts and focus on shiny objects: That’s how they came to deify the folksy, addled, debt-exploding Z-grade actor as an exemplar of fiscal rectitude in the first place.

But imagine the field day Paul’s primary opponents will have parading this heresy before the cameras at every debate. The message that Reagan actually was a profligate spendthrift won’t sink in, but the fact that Paul unfavorably compared Baby Jeebus Reagan to Satan’s Valet Carter sure will.



Kill at Will bill moves forward in Ohio

Weapon industry lobbyists drafted a stand your ground law for Ohio. It passed the lower chamber in this state last week:

Opponents including black legislators, youth and church groups decried the dangers of an Ohio “stand your ground” self-defense proposal on Wednesday, as the expansive gun measure cleared the state House. Protesters at one point interrupted the lengthy debate, their shouts gaveled down by House Speaker William Batchelder, before the measure passed on a 62-27 vote. It now goes to the Senate.
Under current law, residents need not retreat before using force if they are lawfully in their homes, vehicles or the vehicle of an immediate family member. The measure would expand the circumstances where the use of force trumps the duty to retreat to public settings, such as stores and streets.

Industry lobbyists (both paid and the volunteers) will say that they are making only minor changes to self defense laws, but that is not true. This is what the changes to long-standing Ohio self-defense law actually look like. The traditional definition of self-defense is lined-thru and the new definition of self defense follows the part that lobbyists deleted:

Sec. 2901.09. (A) As used in this section, “residence” and “vehicle” have the same meanings as in section 2901.05 of the Revised Code.

(B) For purposes of any section of the Revised Code that sets forth a criminal offense, a person who lawfully is in that person’s residence has no duty to retreat before using force in self-defense, defense of another, or defense of that person’s residence, and a person who lawfully is an occupant of that person’s vehicle or who lawfully is an occupant in a vehicle owned by an immediate family member of the person has no duty to retreat before using force in self-defense or defense of another if that person is in a place that the person lawfully has a right to be.

The bill also lowers the standards across the board to where we’ll now issue concealed carry licenses to just about anyone who shows up and also allow these newly-licensed gun enthusiasts to patrol just about anywhere with only 4 hours of training. Apparently 12 hours of training before they appoint themselves as roving fake-police in “stores and streets” was too much of a burden for them:

Eliminate the requirement that a person reside in Ohio to receive or renew a concealed handgun license;
Eliminate the current 12-hour training requirement, substituting a minimum of four training hours in the safe handling and use of a firearm;

The Buckeye Firearms Foundation pushed the Stand Your Ground law in Ohio, along with the reduced training requirement. This weapon industry lobby group are famous for raising money to buy George Zimmerman some additional firepower after Zimmerman shot and killed an unarmed 17 year old:

zimmerman-thankyou-letter-small

Zimmerman is the brave gunslinger who has been the victim of a truly remarkable (and, frankly, completely unbelievable) series of unprovoked attacks by the following people: his former girlfriend, a law enforcement official, a 17 year old boy, his wife and/or his elderly father-in-law and, most recently, another of his girlfriends.



His “sense” is this is very much like subprime lending

Since this scam has been going on for a long, long time, I don’t think he would be my first-choice investment adviser:

Hedge fund titan and education reform activist Whitney Tilson turned his Value Investing Congress speech Tuesday into an all-out attack against technology-based education company K12, calling it “a catastrophe for education” in spite of solid financials.
But even more damning for K12, which runs online schools at various levels, was Tilson’s decision to publicly short the company’s stock—a move that can be risky for high profile investors, attracting regulators and legal action from disgruntled CEOs. If K12’s stock indeed plummets in the coming months, Tilson and other short sellers stand to make a lot of money.
Tilson outlined his exhaustive research on K12’s academic practices, including poorly paid instructors with 300-1 student-teacher ratios, the targeting of at-risk children whose parents won’t complain to administrators about poor performance, and online classes for which students merely have to switch on their phones and login to be counted as active.
But Tilson also noted K12’s financials, which up to this point have been strong: the company has experienced revenue growth of 32% annually for the past decade. What’s more, the company estimates a $15 billion market for K12 students, and average revenue per student has risen over the last four quarters.

Well, a degenerate gambler and a finance-industry felon created K12, which was a bit of a red flag for this “investor” but apparently not for the hedge fund managers who make up “Democrats for Education Reform.”

It’s strange to watch this slowly spread upward to the highest levels of reform industry leadership, because here in Ohio where ed reform is a huge business we’ve had a failing cybercharter industry sector for many years. I first became aware of this particular ed reform portfolio investment several years ago, when some of the most vulnerable kids we encountered in the court system stopped attending local public high schools and decided to leverage the free market power of “choice” by signing up for cyberschool.

That many of them are completely unsupervised at home for a variety of reasons and chose this option to avoid intrusive questions from the “educrats” at our government school on their GPA, progress toward graduation, mental health issues and chaotic and often tragic home lives didn’t seem to concern national ed reform industry leaders like Jeb Bush and John Kasich but we wondered at the time if cutting them loose like that was a very bad idea. It had come to our attention that many of them do poorly in school not because their teachers belong to a union but because their home lives are an absolute horror show. It reached the point a couple of years ago where even the most conservative juvenile judge I’m in front of took to bellowing at us that these kids should all be “IN SCHOOL!” Incredibly, ed reform industry lobbyists in Ohio just expanded cybercharters. Again.

As anyone who has watched Milton Friedman’s crackpot theories go from roundtable to reality already knows, it is really, really difficult to regulate a publicly-funded private entity once deregulation and then industry capture of politicians takes hold. We know it in Ohio, and they’re finding it out in Pennsylvania, where a cybercharter profiteer inexplicably escaped state oversight and regulation for years, until he was finally indicted by the feds last month.

I hope this reform industry leader’s shorting strategy works, because K12 just captured another student sector, in New Jersey, despite the fact that the giant ed corp has failed so miserably everywhere else. Whether the following is related to that decision I do not know:

Christie’s acting education commissioner, Christopher Cerf, has experience in public-private school partnerships. He previously led Edison Schools, a for-profit company that became the largest private-sector manager of public schools. From 1999 to 2001, Christie was a registered lobbyist at a law firm that lobbied New Jersey government on behalf of Edison Schools, according to filings with the state Election Law Enforcement Commission. While the firm was representing the multinational education company, Chris Cerf was its general counsel. The firm, Dughi, Hewit and Palatucci, also represented Mosaica Education, a for-profit charter school operator, and the University of Phoenix, a for-profit online university.

Since we already know that for-profit colleges are a predatory rip-off and nearly impossible to regulate due to industry capture of politicians on both sides of the aisle, can anyone tell me why we decided to expand this bad idea? Are we really this fucking reckless and stupid, that we’d privatize our K thru 12 public education system? Tell me there’s a responsible adult somewhere in the state or federal government who has a handle on this, because I’m not seeing anyone step up here in The Heartland and Arne Duncan seems to me to have abandoned traditional public schools completely.