Thursday, October 30, 2014

LA FED Chief Resigns

Maria Elena Durazo leaving top post at L.A. County Federation of Labor

By JAMES RAINEY, DAVID ZAHNISERcontact the reporters

Maria Elena Durazo — the powerful Los Angeles County labor leader who helped elect politicians, boost wages and push through major development projects — said Wednesday that she is leaving her post to take a national union job promoting civil rights and campaigning for immigration reform.

The Los Angeles County Federation of Labor, an umbrella entity representing 600,000 workers, has arguably reached a zenith of its influence under Durazo, its first woman leader. It helped land allies on the Los Angeles City Council and county Board of Supervisors and recently pushed through a minimum wage law requiring large Los Angeles hotels to pay workers at least $15.37 an hour, one of the nation's highest base wages.

Candidates prized the support of the labor federation and its political action arms. Campaign adversaries feared Durazo's wrath. And business leaders alternately formed alliances with Durazo and complained that her demands made it untenable to do business in Los Angeles.A fierce advocate for the working class, Durazo was comfortable walking on broiling picket lines and negotiating in air-conditioned corporate board rooms. She lifted an already strong Los Angeles labor movement to a preeminent position of influence in civic affairs.

"She never left the table empty-handed," said Los Angeles City Council President Herb Wesson. "She's one of the most effective and powerful labor leaders in the country."

Durazo, 61, will leave the labor organization she has led since 2005 at the end of the year. She will become vice president for immigration, civil rights and diversity at Unite Here, the nationwide union for restaurant, hospitality and casino workers. She previously served as head of that union's Los Angeles unit, Local 11, for 17 years.

Durazo said she chose to take "the next step in my life's work," knowing that the county organization is well positioned to continue making gains on behalf of workers. Among the initiatives she hopes will soon win approval from the Los Angeles City Council is an across-the-board minimum wage hike. One proposal in the works could reach $15.25 by 2019.

"I feel that the Los Angeles labor movement is very strong, very progressive, very proactive," she said in an interview Wednesday. "Altogether, we have accomplished a lot."

Looking ahead, she said, "There is a passion I have always had for immigration and civil rights. So I have the opportunity to do this and completely focus on those issues."

Durazo has made it clear she would like Rusty Hicks, the labor federation's political director, to succeed her, according to several union activists. Durazo declined to confirm that, citing a vote on the next federation leader scheduled for November.

Hicks, 34, is considered a savvy political hand, steeped in the electoral challenges of Los Angeles. He is credited with raising large sums of money, finding able lieutenants and mobilizing union voters to get to the polls and support their candidates.

Supporters say that the biggest challenge for Hicks, a member of the U.S. Naval Reserve who deployed to Afghanistan in 2012-13, would be in areas where he has little or no experience — organizing unrepresented workers and building coalitions among the federation's sometimes fractious 300-plus locals.

Tom Walsh, president of Unite Here, Local 11, said Hicks "has demonstrated that he has a deep understanding of all of the issues that are important to the labor movement."

Like many others who have come to play a central role in the labor movement in California, Durazo got her start among farmworkers. The daughter of Mexican immigrants, she spent summers in the Central Valley fields picking peaches, strawberries and grapes. Cesar Chavez, founder of the United Farmworkers of America, inspired her.

Durazo started her union activism leading walkouts by maids and janitors and a strike by USC cafeteria workers. Her husband, Miguel Contreras, headed the county labor organization until his death in 2005 at the age of 53. After the brief tenure of another leader, Durazo was elected to the top county federation job.

She gained a reputation for packing City Hall with union members for important votes. She didn't always win. In the 2013 mayor's race, unions spent $5.8 million supporting Wendy Greuel, who lost to Eric Garcetti. But often Durazo won the contests she bet on. Last year, six of the seven City Council candidates she backed took seats on the 15-member council.

Looking to expand good-paying jobs in the construction trades, Durazo lobbied heavily for new development in Los Angeles. She has been a driving force behind a massive expansion of the rail system, the $4-billion upgrade of LAX, and subsidies for new downtown hotels.

Los Angeles City Councilman Bernard C. Parks told The Times in a recent interview that Durazo's power had become corrosive for the political process. "Very few people will talk publicly because of fear of reprisal," Parks said. "If they choose to run for public office, they will be in the position of having no support."

Carol Schatz, president of the pro-business Central City Assn., said Durazo's power had become too great. She and other business leaders noted that Durazo had criticized a rail car assembly plant in the Antelope Valley, which is now looking to move jobs out of state.

"She was willing to sacrifice jobs ... if they were not union jobs," Schatz said. "We hope that under her successor, labor and business can work more collaboratively."

Durazo's supporters argue that they have waited too long for jobs that pay living wages and say she has been their greatest champion. Lupe Luna recalled meeting Durazo in the 1980s, when she was teaching hotel workers, many of them women, how to fight for better wages and working conditions.

"For me, she was my hero," said Luna, who became an organizer herself in 2005.

james.rainey@latimes.com

david.zahniser@latimes.com

Times staff writers Soumya Karlamangla and Kate Linthicum contributed to this report.

Monday, October 27, 2014

Navajo Launch New Economy

Beating Climate Change by Retooling the Economy: The Story Begins in Navajo Country

Friday, 24 October 2014 11:09By Mary Hansen, YES! Magazine | Report

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Solar panels in the Nevada desert. (Photo: jsmoorman)

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This story is part of the Climate in Our Hands collaboration between Truthout and YES! Magazine.

“I grew up without running water,” Nichole Alex, a young woman from Dilkon, Ariz., says in a video released by the activist group Black Mesa Water Coalition. Alex grew up on the Navajo reservation in the rural Black Mesa region of Arizona, where for decades a controversial coal mine emptied the region’s aquifer, leaving local wells dry.

“I grew up traveling 20 miles to gather water,” Alex continues. “That’s not fair, that my community is being sacrificed to power the valley here.”

In 1970, the Peabody Coal Company began mining on the reservation. Although tribal members were initially enthusiastic about the jobs the mine would provide, over time the relationship grew rocky. The company built a coal slurry pipeline that cut straight through the reservation and pumped billions of gallons of water from the Navajo Aquifer. Peabody mixed the water with coal and pumped the fluid mixture to a power plant in Nevada where the coal was burned to generate electricity for the nearby cities of Phoenix and Tucson, as well as other parts of the Southwest. But local people like Alex were left without access to water.

It’s a story echoed around the country: From the East Bay in California to the mountains of Appalachia, fossil fuel companies have drilled, burned, and mined their way into towns, cities, and rural areas—especially communities of color, as well as indigenous and low-income ones—disrupting the lives of people and damaging the environment.

But local residents have fought back. In 2001, Navajo and Hopi youth created the Black Mesa Water Coalition to stop the depletion of the Navajo Aquifer. They educated their peers and neighbors about the problem, and eventually persuaded the Navajo Tribal Council to cut off Peabody Coal’s access to the aquifer. That work, combined with a lawsuit that charged Peabody with violation of the Clean Air Act, helped to force the shutdown of the Black Mesa coal mine in 2005.

The problem with that outcome was that it left many residents of the reservation without jobs. About 300 Navajo and Hopi people had worked for Peabody, according to the advocacy group Cultural Survival. Efforts by the Black Mesa Water Coalition and its allies to create green jobs through traditional livelihoods, like wool-making and farming, have made only a small dent in the unemployment rate, which hovers around 50 percent. Furthermore, the land where the coal mine had been is not suitable for living or farming.

The story of Black Mesa illustrates a realization that is sweeping through the network of organizations, individuals, and coalitions working to fight global warming: While the burning of fossil fuels causes climate change, simply shutting down these industries leaves workers and their families behind, and often result in a familiar conflict over “jobs versus the environment.” That in turn prevents many workers and low-income groups from joining the fight against climate change—something movement leaders say they cannot afford.

The late Tony Mazzocchi, a labor leader with roots in the Oil, Chemical and Atomic Workers International Union, advocated the rejection of this dichotomy and called on environmentalists to lobby for what he deemed a “just transition” in situations when environmental policies eliminate jobs. As the Institute for Policy Studies’ Chuck Collins recently wrote in YES!, a just transition “would offer benefits far beyond the pitiful job retraining programs included in trade agreements like NAFTA.”

Now, many climate justice activists are picking up on Mazzocchi’s idea and refusing to be limited by the “jobs or the environment” dichotomy. Among them is Michelle Mascarenhas-Swan, co-director of the Movement Generation Justice & Ecology Project and co-chair of the Climate Justice Alliance. The alliance is a network of 35 organizations working at the intersection of job creation and environmental protection in places like Black Mesa, where residents have been resisting oil rigs, gas wells, and coal plants, in some cases for decades. These organizations create projects that provide stable livelihoods, protect fragile environments, and, ultimately, help speed the transition away from fossil fuels.

“The central solutions to address the climate crisis are not actually going to come from looking up and counting carbon in the atmosphere,” Mascarenhas-Swan said. “They are going to come from remaking the economy, which is the root of this struggle.”

Few have thought more about just how to go about doing that than the 130 member organizations in the New Economy Coalition, which are a part of some would call the “new economy movement.” For many years, these groups have been building worker-owned cooperatives, land trusts, and community financial institutions, all designed to keep wealth local and provide good jobs. Eli Feghali, the coalition’s director of communications and online organizing, says that his members are starting to converge on the same vision as climate justice organizers.

“Folks have been imagining alternatives to capitalism for centuries,” Feghali said. “But a new context is emerging, the center of which is the climate crisis. Our economic system is fundamentally opposed to a livable future.”

Feghali says new economy groups can contribute to the push for a just transition by helping groups like the Black Mesa Water Coalition start worker-owned cooperatives and by lobbying for policies that support cooperative economies.

The new economy movement has some work to do in the way of diversity and representation of people of color and those from low-income areas, Feghali acknowledges. But, he says, “the good news is that these groups are already building alternatives and providing leadership.”

That leadership can been seen back in Arizona, where the Black Mesa Water Coalition is moving forward on a 1- to 5-megawatt solar power plant proposed for the site of the abandoned coal mine. And here’s where new economy ideas come in: The coalition hopes the facility will be owned and controlled by the Navajo people and will provide reliable jobs.

“We were once the battery for the Southwest [with our coal production],” said Roberto Nutlouis, the Black Mesa Water Coalition’s green economy coordinator. “Why not convert these reclaimed lands into something more sustainable and healthy for our community?”

The proposed project would use the money made from the utility-scale solar plant to create local reinvestment funds that would then support wool production and food sovereignty projects, whereas Peabody’s profits mostly benefitted faraway shareholders.

“There’s a deeper way of valuing things, beyond a capitalist way,” Nutlouis said. “We need an economy that restores the health of our people and the health of our land.”

If efforts like this work in Black Mesa, they could help to blaze a trail out of the climate crisis that workers can get behind.

MARY HANSEN

Mary Hansen has a hard time staying in one place but is also known to write, edit and be a die-hard Steelers fan. She is an online reporting intern at YES!

Thursday, October 23, 2014

IRS Agents Help Rich Pay Zero Taxes

IRS Whistleblowers: Agency Executives Behind Multibillion-Dollar Corporate Tax Giveaways

Thursday, 23 October 2014 00:00By Nafeez Ahmed, Truthout | Report

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IRS Commissioner John Koskinen is sworn in during a House subcommittee hearing on missing IRS staff emails related to the alleged targeting by the IRS of conservative groups that applied for tax-exempt status, on Capitol Hill in Washington, September 17, 2014. (Photo: Gabriella Demczuk / The New York Times)

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A veteran Internal Revenue Service attorney demands a congressional audit of the IRS to investigate the agency's alleged role in allowing US corporations to illegally avoid paying billions of dollars in taxes even as it cracks down on individuals and small businesses.

A 10-year veteran Internal Revenue Service (IRS) attorney has demanded a congressional audit of the IRS to investigate the agency's alleged role in allowing US corporations to illegally avoid paying billions of dollars in taxes even as it cracks down on individuals and small businesses.

In a letter to Treasury secretary Jacob Lew, IRS commissioner John A. Koskinen and IRS chief counsel William Wilkins, Jane J. Kim, an attorney in the IRS Office of the Chief Counsel in New York, accused IRS executives of "deliberately" facilitating multibillion-dollar tax giveaways. The letter, dated October 19, will add further pressure on the agency, which is under fire for allegedly targeting conservative and Tea Party groups.

Kim, who has previously blown the whistle on "gross waste of government resources" in the IRS New York field offices, wrote in her new letter that senior IRS officials have "intentionally undermined the authority of the IRS Whistleblower Office (WO)" to avoid taking action "in cases involving billions in corporate taxes due." The IRS also refuses to enforce laws for "large corporate taxpayers," resulting in giveaways of further billions, despite applying the same laws with "draconian strictness to small business, the self-employed, and wage-earning individuals."

The IRS attorney's letter was copied to Jason Foster, chief investigative counsel for the Senate Committee on the Judiciary, as well as several other senators and House representatives, including Elizabeth Warren, Maxine Waters, Alan Grayson, Bernie Sanders, Charles Grassley, Mike Lee, Rand Paul and Ted Cruz. They could not be reached for comment.

Whistle-Blowers Shut Down

Following coverage of her earlier allegations by Pulitzer Prize-winning tax journalist David Cay Johnston, Kim was approached by a private sector lawyer representing corporate whistle-blowers to the IRS, who told her that numerous legitimate investigations into corporate tax fraud were being shut down. Her letter sent on October 19 to the US Treasury and IRS described three such cases.

In one case, the IRS was auditing a US company that fraudulently underreported its profits by nearly $3 billion annually. On behalf of the IRS, the whistle-blower had drafted a detailed report proving the fraud, but the agency "closed its audit without ever asking a question or reviewing the documents submitted." As much as $4 billion in taxes were lost.

In another instance, "a solid case" involving $6 billion in taxes due was "inexplicably shut down," according to IRS criminal investigation agents. Instead, detailed evidence of fraud and malfeasance "in hundreds to thousands of specific accounts" was ignored. The agent blamed links between senior IRS executives and outside corporations associated with the case.

In the third case, $3 billion in taxes were uncollected and now accumulate year after year. The US company claimed to the IRS that it earns all profits outside the United States, which are then invested overseas, while informing foreign jurisdictions that it earns nothing outside the United States. Although US laws tax Americans "on worldwide income," the IRS simply closed the investigation despite clear evidence of taxable income.

The private sector lawyer, a former IRS attorney in the Office of the Chief Counsel for over 15 years, said on condition of anonymity - for fear of retaliation from the agency - that Kim's allegations are not isolated, but represent a deep-rooted trend: "The problem is the IRS upper management don't want a big case going forward. They are purposely not working big cases. Employees are quietly encouraged not to expedite them, and to settle or dismiss them. I've seen the IRS sit on straightforward billion dollar cases for years, and then decide not to pursue."

The IRS Whistleblower Office (WO) was created by Congress in 2006 to encourage leaks of evidence concerning large-scale corporate tax fraud. But since then, said Kim, "The office has received anywhere from 1,500 to 1,900 tips per year, the vast bulk of which are not investigated."

According to the private sector lawyer, WO director Stephen Whitlock's "hands are being tied. He is being hampered by the chief counsel and the deputy commissioner, John Dalrymple, who are making decisions not to work the bigger cases."

Robin Hood for the Rich

Kim's letter also highlighted cases exposed by her colleague, IRS attorney Bill Henck, who since 2003 has blown the whistle on IRS concessions to two major corporate energy tax scams for "clean" coal (coal sprayed with the equivalent of "watered down Elmer's glue") and "black liquor" biofuel (a byproduct of paper manufacturing with added diesel), resulting in more than $50 billion of unclaimed taxes (not to mention increased fossil fuel emissions).

According to the IRS itself, the United States loses $450 billion a year due to tax evasion. But the actual sum is probably much higher. "If we factor in the quantity of the cases that are piling up in the WO that no one is looking at, if we consider that the cases I've been made aware of are roughly representative of the scale of losses for each case, it could be much higher," Kim said. A 2008 Senate report on tax havens found that the wealthiest US companies and individuals could be hiding as much as $5 trillion in offshore accounts.

Kim's letter blamed "a lack of oversight" mechanisms by which Congress can hold the IRS to account. "If the intent of the IRS executive offices was to emasculate the WO, they seem largely to have succeeded," she wrote. The IRS Office of the Chief Counsel unjustifiably adopted "wide latitude" in "interpreting the laws and regulations . . . [to] thwart the Office's effectiveness and mandate."

Bill Henck, who has worked for 26 years in the IRS Office of the Chief Counsel, agreed. "The senior executives drive the train on all this and pal around with lobbyists," he said. "Treasury was involved with both the Elmer's glue scam and the black liquor taxability issue. IRS executives look out for themselves, which usually means protecting corporate interests, since they hire lobbyists and are close to politicians."

According to Henck, this perspective of collusion between the Treasury, IRS and corporate lobbies, is widely held by IRS employees. "I've talked to numerous revenue agents and attorneys within the IRS, who believe, like I do, that the agency has hit the skids and that senior executives are dishonest," he said.

In a detailed account published in February by Power Line blog, Henck described how he had "personally witnessed improper giveaways of billions of dollars to taxpayers with inside access at the agency" and "bullying of elderly taxpayers" despite the legal case against them being weak. The IRS's "decision to allow well connected taxpayers improperly to avoid reporting billions in taxable income,"he alleged "was covered up by high level officials." Ultimately, according to Forbes, the IRS's mishandling of the black liquor case exposed by Henck "cost the United States $25 billion."

Revolving Door

In 2010, former IRS chief counsel Donald Korb, a George W. Bush appointee, criticized the creation of the Whistleblower Office under his tenure as a "real disaster for the tax system." Describing it as "unseemly" to encourage Americans to "turn in their neighbors and employers to the IRS," he complained: "The IRS didn't ask for these rules; they were forced on it by Congress."

In Henck's view, this sort of attitude is symptomatic of a wider culture "including a complete lack of accountability on the part of IRS executives, fear of retaliation on the part of IRS employees, a general lack of integrity, and the influence of lobbyists."

Backing up Henck's concerns, the private sector lawyer and ex-IRS attorney explained that since 1998, IRS restructuring has focused on bringing in "outside people." This led to the employment of an extra layer of executives who were previously "partners from big accounting firms." Citing active IRS criminal agents, the ex-IRS attorney said: "Almost every large firm or corporation has a person inside the IRS. It's a revolving door, with the top two or three management layers all from big accounting and law firms, and this is why they won't work big billion dollar cases criminally. Private bar attorneys are, in effect, controlling the IRS. It's a type of corruption - that's the word used by one IRS agent I'm in touch with whose case was shut down by higher ups without cause."

The incumbent IRS chief counsel, William Wilkins, was previously a lobbyist at the Wilmer Hale firm where for 21 years he represented and lobbied on behalf of private sector clients including the Swiss Bankers Association. Notoriously, Swiss banks UBS and Credit Suisse have faced penalties, hearings and convictions for helping wealthy Americans illegally conceal billions of dollars of taxable income.

US attorney James Henry, former chief economist at financial consultancy McKinsey, said that Wilkins' firm "continued to represent the Swiss Bank[ers] Association throughout the 1990s and into the 2000s. Now Wilkins gets appointed chief counsel of the IRS in 2009, and he's presiding over these whistle-blower cases."

In early 2008, Treasury secretary Jacob Lew was chief operating officer at Citigroup's alternative investment services unit, where he oversaw the bank's expanding investments in Cayman Island tax havens - and even invested in one himself.

Treasury officials refused to comment on Kim's letter, but an IRS spokesperson said: "The IRS cannot comment on specific cases or investigations. However, the IRS strongly supports statutory policies providing for whistleblower rewards where information leads to the collection of additional tax proceeds. The IRS is also committed to pursuing and addressing tax evasion and fraud through all available tools, including information provided by whistleblowers."

Henck, who still works with the IRS, expressed his bitter disillusionment with the lack of meaningful action. "I'm done with the whistle-blowing because no one in authority seems to care," he said. "The vast majority of IRS employees are honest and conscientious. We used to be the good guys and it is a damn shame that we probably can no longer claim that."

NAFEEZ AHMED

Nafeez Ahmed is an investigative journalist, bestselling author and international security scholar. A regular contributor to The Guardian on the geopolitics of interconnected environmental, energy and economic crises, he has also written for The Independent, Sydney Morning Herald, The Age, The Scotsman, Foreign Policy, The Atlantic, Quartz, Prospect, New Statesman, Le Monde diplomatique, among many others. He is the author of A User's Guide to the Crisis of Civilization: And How to Save It (2010), among other books. His debut novel, ZERO POINT, is a science fiction thriller of the near future.

Saturday, October 18, 2014

French Law Limits Work to 35 Hours

MAYBE, WE SHOULD ALL WORK LESS?

By Sophie McBain

In the 1930s, economist John Maynard Keynes predicted that modern technology would give workers more leisure time. In fact, it seems it has just given bosses new ways to interrupt their employees’ holidays or evening trips to the pub.

On April 8, French employees tried to claw some of their leisure hours back, after unions and employers’ federations representing nearly one million workers signed a legally binding deal stipulating that workers should not have to check their work emails after they leave the office, and that they should turn off their work mobiles. Already under French law workers are limited to a 35-hour week, unless they sign a contract agreeing to opt out.

In Sweden too, there are experiments to reduce the working week. The city of Gothenburg has proposed a year-long trial in which half of its municipal workers will work traditional eight-hour days while the remainder will work six. The government of Gothenburg has a hunch that this could increase productivity: in the 1930s the breakfast cereal maker Kellogg’s replaced its factory workers standard eight-hour-shifts with six-hour ones and saw productivity increase.

There's no hard and fast link between working hours and productivity. It’s easier to see how six-hour shifts might boost the productivity of manual laborers or factory workers, who might physically tire, but what about office jobs? It often feels as though work expands to fill the space allocated to it—but a lot also depends on office culture. In some work places employees feel a great pressure to sit at their desks long after office hours end—even if all they’re doing is surreptitiously checking Facebook—because running out of the office at 5:01 “looks bad.”

In certain professions, such as corporate law and investment banking, unsociable hours and all-nighters are seen as a badge of honor. The UK is quite bad for this—12 percent of workers work more than 50-hour weeks, compared to an OECD average of 9 percent (although we lag behind Turkey, where almost half of workers put in more than 50 hours a week).

The OECD also publishes figures (summarized here) on the average hours worked in European countries and worker productivity. Generally, it does seem that reducing the number of hours worked increases productivity:

Greeks for instance, work the longest average hours in Europe, putting in an average of 2,032 hours a year, but they are the 8th least productive workers. After Greece, Poland and Hungary work the second- and third-longest average hours respectively, but Poland’s workforce is the least productive in the OECD, followed by Hungary. The five countries that work the fewest hours (Netherlands, Germany, Norway, France and Denmark respectively) are all in the top ten most productive OECD countries.

The UK, meanwhile, ranks 14th both in terms of hours worked and productivity. In the past five years since the start of the recession, UK productivity has fallen, and according to the Office for National Statistics output per hour worked is now 21 percent lower than the G7 average. Would it help if standard working hours were cut?

France’s inflexible labor laws are in many other ways a headache for employers, but campaigners for shorter working weeks are probably on to something. So go on, clock off early today. Not only is it perfect pub weather in London, but in the long term your boss might thank you for it.

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