Chamber of Commerce Buys Congress, Senate

he following is an excerpt from Shut the Chamber's new 28-page report, "Bagful of Cash: How the U.S. Chamber of Commerce Orchestrated a Corporate Takeover of Government." My goal when writing the report was to publish a one-stop-shop for everything relating to the U.S. Chamber of Commerce's domination of all institutions of merit, from Congress to the courts, to the election cycles. This report also shows how the U.S. Chamber has invested millions of corporate dollars into opposing all legislation relating to healthcare, financial reform, closing corporate tax loopholes, and climate change. The report also highlights the U.S. Chamber's support of austerity, fracking, the Keystone XL pipeline, and mostly Republican pro-corporate candidates running for Congress. You can read the full report at bit.ly/bagfulofcash.

Part III: The Corporate Takeover

People seem to listen to you more when you've got a bagful of cash.

- U.S. Chamber of Commerce President Tom Donohue, The New York Times

According to Donohue, the Chamber raises $5 million per week to keep its operations running. Most of this money, however, comes from billion-dollar corporations, not small businesses. The U.S. Chamber has spent $983 million on lobbying since 1998, and has already spent $16 million in 2013 according to the most recent quarterly reports. The most recent bills (see "Bills" tab) opposed by Chamber lobbyists included the Paycheck Fairness Act, which would have secured financial parity between women and men in the workplace, and the Corporate Tax Fairness Act, which would have closed loopholes and exemptions often used by multinational corporations to avoid paying federal taxes on their U.S. profits. While ultimately unsuccessful, the Chamber did attempt to defeat a bill providing federal disaster relief to cities hit by Superstorm Sandy.

Roughly half of the U.S. Chamber's $140 million spent in 2008 came from just 45 anonymous donors. And in 2009, out of the whopping $150 million spent on lobbying, over half of that money came from the American Health Insurance Providers (AHIP), a lobbying group consisting of the top 5 biggest health insurers. The Chamber subsequently flooded airwaves with ads full of misleading statements about the Affordable Care Act, and sent armies of lobbyists to Congress to oppose the bill. Even though health care reform still passed, the Chamber spent $33.8 million attacking supporters of the legislation in those respective congressional districts, leading to a takeover of the U.S. House of Representatives by corporate-funded candidates. The momentum created by the Chamber's furious opposition to the Affordable Care Act essentially created a Chamber-endorsed House majority that has voted to repeal the act nearly 40 times.

The U.S. Chamber brags about consistently ranking #1 in lobbyist spending for several years in the last decade. In 2012, the Chamber spent $139,000,000 on influencing congressional outcomes, as seen in figure 3.3. To compare, the two largest labor unions - the AFL-CIO and the SEIU - spent just under a combined $6 million last year.

The U.S. Chamber also spent considerable sums fighting the Dodd-Frank financial reform bill in 2009/2010, influencing Congress to vote down or neuter the bill, which was aimed at strengthening financial regulations to prevent a crisis similar to the 2008 housing collapse and subsequent bailouts of the nation's biggest banks. The Chamber specifically came out with a laundry list of amendments aimed at removing all regulatory teeth from the bill, such as removing the derivatives regulations outlined in the Volcker Rule, leaving the leadership and budgeting of the Consumer Financial Protection Bureau to the mercy of a Congress which was largely installed with the help of the Chamber's financial support, and silencing Wall Street whistleblowers, among others. As recently as April 2013, Tom Donohue was on CNBC calling for the repeal of not-yet-written rules imposed on the financial institutions that decimated the world economy.

Dodd-Frank was written in a hurry and it was written in anger. And here we are three years later ... We're already putting extraordinary stress on every kind of financial institution in this country.

- U.S. Chamber President Tom Donohue

The U.S. Chamber of Commerce's most heavily lobbied bill was in 2010, when they threw their full weight behind the Stop Online Piracy Act, or SOPA. The bill would have allowed for global entertainment companies to censor any online content at their discretion. Despite the opposition to the bill on the part of many powerful Silicon Valley tech companies who were members of the U.S. Chamber, the group's lobbyists pushed hard for its passage.

The Chamber's vast lobbying efforts have, at least indirectly, led to the early 2013 explosion at the fertilizer plant in West, Texas, which killed dozens of first responders and leveled the surrounding community. A 2009 bill aimed at strengthening safety standards at chemical and fertilizer plants like the one in West was labeled a "key vote" by the Chamber that year, and the group mobilized on behalf of fertilizer companies to successfully defeat additional safety regulations. The bill was defeated in the House, and wasn't even brought up for a vote in the Senate. The Chamber has never publicly apologized for spending millions to defeat legislation that could have potentially saved the community of West from the explosion. Thanks to the continued support of decreased regulation, the West fertilizer plant has been inspected by the Occupational Safety and Health Administration just once since 1985.

U.S. Chamber CEO Tom Donohue has been one of the most outspoken proponents of austerity, and advocates regularly for the overhaul of Social Security and Medicare to become commoditized programs in which corporations can seize more profit. Tom Donohue's Chamber also backed President George W. Bush's plan to privatize Social Security in 2005. Combining the Chamber's support for Social Security privatization and support for deregulating financial institutions, it isn't hard to imagine a much more dismal scenario in the 2008 financial crisis if Social Security funds had been plundered along with the housing market bubble burst.

The other side of the U.S. Chamber's pro-austerity coin is its vehement defense of corporate tax avoidance. Even though 32 corporations dodged enough federal income taxes to pay for the entire education budget (approximately $72 billion), the Chamber of Commerce successfully lobbied to defeat the Corporate Tax Fairness Act, which would have closed enough tax loopholes to generate approximately $70 billion in additional tax revenue every year. The contribution to federal tax revenues between payroll taxes paid by employees and income tax paid by corporations has flipped. From 1950-1960, corporations paid roughly $1.00 in income taxes to every $0.33 in payroll taxes paid by employees. Today, corporations are only paying approximately $0.07 cents in income tax to every $0.33 in payroll tax paid by employees. Essentially, the Chamber is using the budget gap to demand the gutting of earned benefits like Social Security and Medicare while lobbying to absolve its corporate members of its federal income tax obligations.

Tom Donohue has gone on record supporting the practice of hydraulic fracturing, also known as fracking, as have many of the Chamber's state affiliates. Despite well-documented risks to community drinking water supplies, the Chamber alleges that fracking provides jobs. While that may be true, the Chamber has lobbied to defeat bills aimed at investing in alternative, renewable energy sources proven to generate far more jobs.

The U.S. Chamber of Commerce has also used the jobs and domestic energy arguments in its support of the Keystone XL pipeline which would mine tar sands oil in Alberta, Canada, and pipe it 1,700 miles to Port Arthur, Texas. The pipeline's most optimistic predictions only credit it with creating 6,000 jobs over a two-year period, meaning 3,000 temporary jobs each year. And even though oil companies would get rich from the pipeline, none of the oil would actually be used in the U.S. as it has already been marked for export mostly to South American and European markets.

Current Chamber president Tom Donohue is on the board of directors for Union Pacific Railroad, which would be partially responsible for transporting tar sands oil by train to be refined in Texas should the Keystone XL pipeline never be built. Union Pacific haspaid Donohue more than $1.1 million since 1998 in retainers, and it has donated over $700,000 to the U.S. Chamber of Commerce since 2004.

Despite repeated warnings from climate scientists like NASA's James Hansen, who said that tar sands oil would mean "game over for the climate," the Chamber has actually gone on record saying that climate change can be mitigated by humans adapting their anatomies to a warmer climate.

Humans have become less susceptible to the effects of heat due to a combination of adaptations, particularly air conditioning. The availability of air conditioning is expected to continue to increase ... Populations can acclimatize to warmer climates via a range of behavioral, physiological and technological adaptations.

- U.S. Chamber of Commerce comment to the EPA

In the John Roberts Supreme Court, the U.S. Chamber of Commerce has anoverwhelming win rate of 70%, particularly in cases where it has first filed an amicus brief. During the duration of President Obama's first term, the Chamber was undefeated in Supreme Court rulings in which it was invested. The New York Times reported that the nation's highest court hasn't been this accommodating to major corporations since World War II, quietly stacking up small victories for them in a stream of 5-4 decisions.

The Chamber's lawyers successfully got the Supreme Court to make it harder for victims of corporate negligence to sue for damages, whether they are claimants in the BP oil spill or employees of corporations filing class-action lawsuits in cases of abuse. They recently ruled in favor of agribusiness giant Monsanto in a seed patent case against a farmer trying to save his seeds, ruling that Monsanto had the right to claim domain over the farmer's crops, since their genetically-modified seeds had cross-pollinated into the neighboring organic crops on the farmer's plot. Justice Clarence Thomas once worked as a corporate attorney for Monsanto. He did not recuse himself from the decision. He also didn't recuse himself when ruling against the constitutionality of the Affordable Care Act, despite his wife's having launched a lobbying group opposed to the Affordable Care Act's implementation.

Perhaps the most notable case of the U.S. Chamber of Commerce winning a Supreme Court ruling where an amicus brief was filed was in their support of the Citizens United v. FEC ruling in 2010. The Supreme Court's decision effectively reversed a century's worth of campaign laws, now allowing corporations to spend an unlimited amount of money from their vast treasuries on electioneering purposes. In the 2010 congressional midterm elections, 93% of the Chamber's contributions went to Republican candidates. Of the remaining money spent on 11 Democrat candidates, they were on non-candidate specific ads. The Chamber exclusively funded Republican candidates for the U.S. Senate in 2010. Though they endorsed West Virginia Democrat Joe Manchin, they didn't spend any money on his behalf. In the 2012 elections, the Chamber pledged to spend $50 million (but reported$33 million), ranking 8th in total outside money spent. Of the 50 House and Senate races in which the Chamber had spent money to support or oppose candidates, they lost 36 races. Among groups that don't identify their donors, the Chamber ranked second behind the Koch Industries-backed Americans for Prosperity.

Attempts to roll back the effects of Citizens United v. FEC are met with fierce opposition from the U.S. Chamber of Commerce. While successfully lobbying to kill theDISCLOSE Act, which would have required groups spending money on elections to reveal their donors, the Chamber called the attempts to regulate corporate dominance of the election cycle an attack on free speech and democracy.

What's most in need of disclosure is the real purpose behind this bill. It's nothing more than a brazen attempt to tilt the playing field in favor of the incumbent party in this fall's elections, silence constitutionally protected speech, and abridge First Amendment rights.

- U.S. Chamber President Tom Donohue

The U.S. Chamber of Commerce is also a member of the American Legislative Exchange Council (ALEC), an organization that brings together corporate lobbyists with largely Republican state legislators. At annual ALEC retreats, lobbyists and legislators break off into task forces which collaboratively write "model bills" to maximize corporate profit. Model legislation aims to privatize public assets, lower corporate taxes, and repeal environmental regulations and workers' rights. The Chamber is a member of ALEC's Civil Justice Task Force, the Education Task Force, the International Relations Task Force, and the Telecommunications and Information Technology Task Force. 

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Carl Gibson, 26, is co-founder of US Uncut, a nationwide creative direct-action movement that mobilized tens of thousands of activists against corporate tax avoidance and budget cuts in the months leading up to the Occupy Wall Street movement. Carl and other US Uncut activists are featured in the documentary "We're Not Broke," which premiered at the 2012 Sundance Film Festival. He currently lives in Madison, Wisconsin. You can contact him at carl@rsnorg.org, and follow him on twitter at @uncutCG.

NLRB Fully Staffed

Quick Links Local 1101 website In This Issue Senate Reaches Agreement...Clear the Way for Vote on NLRB Nominees Obama makes new NLRB nominations Senators Reach Agreement to Avert Fight Over Filibuster Welcome to the CWA Local 1101 email list. Stay up-to-date on important union news and mobilization alerts. Senate Reaches Agreement Clear the Way for Vote on NLRB Nominees Last night the Senate reached an agreement in which several presidential nominations, including those to the National Labor Relations Board, would be voted on, and in return Senator Reid agreed not to push for a vote to change the Senate filibuster rules. President Obama agreed to withdraw the two nominees to the NLRB who were recess appointments and to put forward two different nominees instead.  The Republicans agreed not to block the nominees The full slate of NLRB nominees will be voted on by the next week.While the agreement avoids a meaningful and permanent change to the Senate filibuster rules, we will have a functioning NLRB this fall. Thank to all of the members who responded and called their Senators. CWA led the way in this battle and it made a difference.  If we had not done so it is clear that that the big business interests in Washington would have been successful in preventing the appointment of a fully functioning NLRB and set labor back decades. See the two articles below for more details. Obama makes new NLRB nominations David Jackson, USA Today President Obama fulfilled his part of a Senate deal Tuesday to avoid major changes in the filibusterrules, making two new nominations to the National Labor Relations Board. Obama put up Nancy Schiffer, associate general counsel at the AFL-CIO, and Kent Hirozawa, chief counsel to NLRB chairman Mark Pearce. They replace nominees Richard Griffin and Sharon Block, whom Republicans had objected to because they were recess appointments. Saying that the labor board "is responsible for enforcing protections that are fundamental to growing the economy and creating jobs from the middle class," Obama praised his new nominees and said: "I look forward to the agency continuing its work to promote better wages and conditions for all American workers." Obama also praised the new Senate agreement, saying that "in the weeks ahead, I hope the Congress will build on this spirit of cooperation to advance other urgent middle-class priorities." He cited "the need to take action to pass common-sense immigration reform and keep interest rates on student loans low for families trying to afford a higher education." The NLRB was at the center of a Senate dispute over the so-called "nuclear option," a proposal by Majority Leader Harry Reid, D-Nev., to make it easier for Obama appointees to get confirmed; Republicans had threatened political retaliation if the rules were changed. Click here to read the full article  Senators Reach Agreement to Avert Fight Over Filibuster By JONATHAN WEISMAN and JENNIFER STEINHAUER, New York Times WASHINGTON - Senate leaders reached an agreement on Tuesday to preserve the filibuster in exchange for confirmation votes on President Obama's stalled nominees, ending, at least for now, months of partisan warfare that threatened the stability of several federal agencies and a generation of procedural traditions.   The deal, which paved the way for votes on seven nominees, was a classic Senate outcome: an inconclusive result that left both sides claiming some vindication. It was sealed with congratulations and awkward hugs among members who praised a private meeting Monday night attended by 98 senators for averting a parliamentary crisis. The immediate result was the confirmation, in a 66 to 34 vote, of Richard Cordray as the first permanent director of the Consumer Financial Protection Board after his nomination for a five-year term had languished for months. His approval, a decisive victory for frustrated Democrats who pushed to establish the agency in the aftermath of the financial crisis, will expand the powers of the new watchdog agency, allowing it to move forward with plans to regulate a variety of consumer lending programs. Senator Harry Reid of Nevada, who as the majority leader had forced the agreement by threatening to upend filibuster rules, said he believed the tussle had not only cleared the way for the approval of Mr. Cordray and others but had also changed the environment in the Senate for the better. "This must be a new normal," Mr. Reid said after the Senate allowed consideration of Mr. Cordray. "Qualified executive nominees must not be blocked on procedural supermajority votes." Any new Senate spirit will be severely tested in the weeks ahead as the chamber moves toward the politically charged nominations of a series of federal appeals court judges as well as a nominee for secretary of the Department of Homeland Security, a position tied closely to the immigration legislation sought by Mr. Obama. Unlike a 2005 agreement on judges that limited filibusters to "extraordinary circumstances," the new deal did not put in place any framework for restricting such procedural tactics in the future or address the larger question of how to unclog the Senate. The deal began to take shape during late-night talks on Monday between Democrats and a Republican, John McCain of Arizona, who appeared to bypass his own leadership. They ended with early-morning commitments in the Senate gym. A clear winner was Mr. Obama, who gained a functioning consumer agency created on his watch, resurrected a defunct labor board and secured confirmation of a new E.P.A. chief and a disputed labor secretary. The Senate will also vote Wednesday to confirm Fred P. Hochberg to a new term at the helm of the Export-Import Bank. Democrats withdrew two nominees for the National Labor Relations Board whom the president had appointed during a Senate recess. On Tuesday Mr. Obama nominated as replacements Nancy Schiffer and Kent Hirozawa. Ms. Schiffer retired last year as an associate general counsel at the A.F.L.-C.I.O., and Mr. Hirozawa is the chief counsel to the board's chairman. Most important to Republicans, Mr. Reid dropped his plan to change Senate rules to limit the filibuster - for now. Click here to read the full article CWA Local 1101  275 Seventh Avenue, 17th Floor New York, NY 10001 212-633-2666

Eminent Domain - Solution to Foreclosure Crisis

EMINENT DOMAIN

Many economists, including Joseph Stiglitz and Mark Zandi, agree that the best solution is “principal reduction,” where banks lower the borrower’s mortgage principal. This is not an act of charity but a way to reverse the economy’s freefall. If underwater mortgages were reset to fair-market values of homes, it would help homeowners and communities alike, and pump about $102 billion into the economy annually, according to a Home Defenders League report.

But homeowners who have asked banks to modify their mortgages typically get a cold shoulder or a bureaucratic runaround. So far, the Obama administration and Congress have been unwilling to require intransigent banks to reset loans.

Faced with this quagmire, a growing number of cities—with the support of community groups and unions—are taking things into their own hands. Thanks to a legal strategy initially formulated by Cornell University law professor Robert Hockett, city officials have discovered that they can use their eminent domain power—which they routinely use to purchase property for sidewalks, infrastructure, school construction and other projects—to buy underwater mortgages at their current market value and resell them to homeowners at reduced price and mortgage payments.

Richmond is the first city to pursue this strategy. Its city council—with the support of the Alliance of Californians for Community Empowerment (ACCE), which for years has organized homeowners against predatory banks—recently voted 6-0 (with one member absent) to make offers to buy underwater mortgages. If lenders refuse, the city will take them by eminent domain and work with a group of friendly investors (Mortgage Resolution Partners, or MRP) to refinance the loans with the Federal Housing Administration.

In this city of 103,000, dominated by a big Chevon oil refinery, home prices have plummeted by 58 percent since the 2007 peak. Homeowners lost over $264 million in wealth last year alone. Thousands of Richmond homeowners have lost their homes to foreclosure, and many others, like the Conways, are just hanging on. About 12,000 families—half of all homeowners with mortgages in the city—are underwater. The city government, which has lost millions of dollars in property tax revenues, has cut funds for road repairs and significantly reduced the number of municipal employees, including librarians. Meanwhile, it has had to spend scarce funds to deal with abandoned buildings, crime and drugs, and other problems caused by the foreclosure epidemic.

If banks reset Richmond’s underwater mortgages to fair market value, homeowners would save an average of over $1,000 per month on their payments. If those savings were spent on local goods and services, it would generate about $170 million in economic stimulus and create at least 2,500 jobs.

Full Story at WWW.TRUTH-OUT.ORG

Founding Fathers Never Had Photo IDs

The Voter ID Case Earmarked for the Supreme Court

By Peter Jackson, Associated Press

15 July 13

 
trial set to begin Monday on the constitutionality of Pennsylvania's voter identification law represents a major step toward a judicial ruling on whether the photo requirement should be enforced at polling places statewide or thrown out as unconstitutional.

Nine days are set aside for the trial in Harrisburg in Commonwealth Court. Civil libertarians challenging the law and state officials defending it say they expect the state Supreme Court will ultimately decide the case.

At issue is a voter ID law that would be one of the strictest in the nation if it is upheld but has never been enforced.

After legal jousting that reached the state Supreme Court, Judge Robert Simpson blocked enforcement in last year's presidential election and again in this year's municipal and judicial primary because of lingering concern that it could disenfranchise voters who lacked a valid photo ID.

The 2012 law was approved without any Democratic votes by the Legislature's Republican majority and signed by GOP Gov. Tom Corbett amid a bitterly contested White House race in which Democratic President Barack Obama ultimately carried Pennsylvania and was re-elected.

Critics derided the law as a cynical GOP effort to discourage voting by young adults, minorities, the elderly, poor and disabled from going to the polls. Republicans said most Pennsylvanians have driver's licenses to use as photo ID and claimed that the law would discourage voter fraud.

The judge's verdict may be reviewed by a Commonwealth Court panel before an inevitable appeal to the state Supreme Court by the losing side.

Plaintiffs in the case include the Pennsylvania League of Women Voters, the NAACP and the Philadelphia-based Homeless Advocacy Project.

A key issue in the trial will be the availability of alternative photo identification for people who lack a driver's license or other types of acceptable ID listed in the law. The Department of State has developed a special photo ID that is available free to voters who have run out of other options.

Lawyers for the plaintiffs say fewer than 20,000 such IDs have been issued so far, but many more voters still lack valid credentials. State officials say they have made the special cards easily accessible and anyone who does not have valid identification must not want it.

House Dems Fight for NLRB Nominees

201 House Democrats Join Workers to Support NLRB Nominees

6COMMENTS

07/09/2013

Sean Savett

For 78 years, the National Labor Rights Board (NLRB) has safeguarded the rights of workers to organize and collectively bargain to improve their wages, benefits and workplace environment. Next month, the NLRB’s power to protect more than 80 million private-sector workers could be further limited when the term of one of the current members is set to expire, leaving the board inoperable and without a quorum.

Frustrated by Republican attempts to prevent a vote on President Obama’s five nominees to the NLRB and a recent court decision challenging the validity of President Obama’s recess appointments, several members of Congress gathered with workers this morning to deliver a letter signed by 201 House Democrats to Sen. Mitch McConnell (R-Ky.). The letter urged him to allow a vote and end attempts to shut down the board and strip it of its ability to enforce our country’s labor laws.

Reps. Linda Sanchez (D-Calif.) and Joe Courtney (D-Conn.) organized the event, and were accompanied by Reps. Mark Pocan (D-Wis.), Rosa DeLauro (D-Conn.) and Bill Foster (D-Ill.), who all spoke about the importance of a functioning NLRB to protect America's workers from workplace discrimination and unfair labor practices.

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Joining them at the podium were several working people, including Kathleen Von Eitzen, whose story illustrates the challenges of a non-functioning NLRB. The Bakery, Confectionery, Tobacco Workers and Grain Millers (BCTGM) sends us her story:

Kathleen Von Eitzen, a 55-year-old Panera baker who makes $21,000 a year, is unable to afford health insurance for her family. Even though her husband has had two heart attacks, she often has to choose between buying food or medicine. Desperate to earn a livable wage and prevent her house from falling into foreclosure, Von Eitzen led her co-workers as they organized to form a union with BCTGM. Unfortunately, Von Eitzen's boss resisted the workers' efforts to unionize and retaliated against employees through firing, loss of pay and bonuses and negative semi-annual evaluations for the workers involved.  

The franchise was found in court to have violated labor law and the Panera workers were to receive both back pay and front pay because of the company cutting hours. The NLRB also issued a judgment against the company for refusing to recognize the union under the National Labor Relations Act. However, Panera filed an appeal and the court is in legal limbo awaiting the Supreme Court decision and the confirmation of the NLRB members.

Meanwhile, Von Eitzen and her co-workers are working without a contract and in a hostile work environment, as the franchise continues to refuse to recognize their union.

"We have pride in our work," Von Eitzen said. "We believe what the company advertises that we are artisan bakers. They have based their commercials on us. Come respect us and let us achieve a livable wage." 

Heartbreaking stories like this will continue if the NLRB is not able to fulfill its mission. As Von Eitzen said this morning, “My husband needs his prescriptions. I would like to afford his medications. Please, Sen. McConnell, confirm these nominees.”

Rep. Grayson Tackles Walmart

Walmart firings prompt Grayson to submit retaliation legislation By Sandra Pedicini Lisa Lopez and Vanessa Ferreira got involved in a national campaign calling for better pay and work schedules at Walmart stores. Then they lost their jobs. Wal-Mart Stores Inc. says they were fired because they had violated store policies, but the two Orlando-area women say the giant retailer retaliated against them for their parts in the campaign. Lopez and Ferreira have found an ally in U.S. Rep. Alan Grayson. He cited their cases when introducing a bill in Congress recently that would expand workers' legal options if they are fired after protesting employment conditions. "We have too many companies who try in all sorts of ways to punish workers who exercise their rights," said Grayson, D-Orlando. "They want docile, cowed employees, instead of employees who are willing to exercise their legal rights." Grayson wouldn't speculate on the bill's chances, but in a Republican-dominated House of Representatives, it appears unlikely to pass. "I think it would be very hard to get it passed, given our political climate," said Alayne Unterberger, associate research director of Florida International University's Research Institute for Social and Economic Policy. The bill has been referred to the House Committee on Education and the Workforce. No committee action on it has been scheduled. Employees who band together to improve workplace conditions are protected by federal law from getting fired as a result. But employees who are dismissed after fighting for better conditions must make their appeal through the National Labor Relations Board. Grayson's bill would allow fired workers to sue their employer and individuals with the company. The money they could recover would include triple their back pay or $1,000 for each day they were out of work. Both Lopez and Ferreira have been involved with OUR Walmart, a group affiliated with the United Commercial and Food Workers International Union. Walmart workers are not unionized, but OUR Walmart has organized protests demanding better pay, benefits and working conditions. Grayson joined Lopez last Thanksgiving when she was the only employee at her Kissimmee store to walk off the job to protest conditions there. She also has appeared in a video talking about how she needs food stamps to supplement her low pay. Ferreira walked out of her St. Cloud store last fall around Thanksgiving. Ferreira was fired in May; Lopez lost her job in June. "I was a voice," said Lopez, 43, who worked in her store's deli. "I actually spoke out and let them know how I felt." Wal-Mart spokesman Kory Lundberg said management fired the women because of repeated violations of store policies. Lopez's most recent problem, he said, was that she brought a "personal item" into the deli; Ferreira, he said, took overly long work breaks. Lundberg would not comment on Grayson's bill. Lopez acknowledged she brought a book of company policies in her handbag into the deli. Ferreira, who decorated Walmart cakes for eight years, disputes the company's account of her break time. Lopez is still employed by another grocery chain, where she had been working to supplement her Wal-Mart wages. Ferreira, 59, is looking for another job. Grayson is a fierce critic of Wal-Mart, saying its low wages force workers onto taxpayer-funded programs such as Medicaid. On Thanksgiving, Grayson gave out turkey sandwiches to employees at Lopez's Walmart along with pamphlets explaining their rights to unionize. Grayson wrote about his experiences on Huffington Post, saying he was escorted out of the store. Ferreira called Grayson's legislation "awesome." But both Unterberger and Patrick Muldowney, an employment specialist with the law firm BakerHostetler, said they think it has potential problems. Low-wage workers such as Lopez and Ferreira could have difficulty finding and paying for lawyers willing to take their cases, said Unterberger, whose group focuses on issues facing the working class. Muldowney said the legislation would put supervisors at risk of being ordered to pay hundreds of thousands of dollars in damages, back pay and legal fees. Also, the bill could make it easier for problem workers to keep their jobs, he said. "Obviously, employees need to be protected if they engage in protected activity," said Muldowney, a lawyer who represents employers. But "a lot of times you see employees who for one reason or another are on their way out the door because of legitimate performance-related issues all of a sudden latch onto a retaliation claim. This bill would provide a lot more cover for employees in that situation." Rep. Alan Grayson -- quite possibly the only Member of Congress who would side with two hourly employees against the largest corporate behemoth in America. Rep. Alan Grayson -- working hard to improve the lives of ordinary Americans. Rep Alan Grayson -- on our side, which is why we should be on his.

FDIC Savings in Jeopardy

FDIC Insured Savings in Jeopardy

Think Your Money Is Safe in an Insured Bank Account? Think Again

Monday, 08 July 2013 10:05By Ellen Brown, Web of Debt Blog | News Analysis

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(Image via Shutterstock )A trend to shift responsibility for bank losses onto blameless depositors lets banks gamble away your money.

When Dutch Finance Minister Jeroen Dijsselbloem told reporters on March 13, 2013, that the Cyprus deposit confiscation scheme would be the template for future European bank bailouts, the statement caused so much furor that he had to retract it. But the “bail in” of depositor funds is now being made official EU policy. On June 26, 2013, The New York Times reported that EU finance ministers have agreed on a plan that shifts the responsibility for bank losses from governments to bank investors, creditors and uninsured depositors.

Insured deposits (those under €100,000, or about $130,000) will allegedly be “fully protected.” But protected by whom? The national insurance funds designed to protect them are inadequate to cover another system-wide banking crisis, and the court of the European Free Trade Association ruled in the case of Iceland that the insurance funds were not intended to cover that sort of systemic collapse.

Shifting the burden of a major bank collapse from the blameless taxpayer to the blameless depositor is another case of robbing Peter to pay Paul, while the real perpetrators carry on with their risky, speculative banking schemes.

Shuffling the Deck Chairs on the Titanic

Although the bail-in template did not hit the news until it was imposed on Cyprus in March 2013, it is a global model that goes back to a directive from the Financial Stability Board (an arm of the Bank for International Settlements) dated October 2011, endorsed at the G20 summit in December 2011. In 2009, the G20 nations agreed to be regulated by the Financial Stability Board; and bail-in policies have now been established for the US, UK, New Zealand, Australia, and Canada, among other countries. (See earlier articles here and here.)

The EU bail-in plan, which still needs the approval of the European Parliament, would allow European leaders to dodge something they evidently regret having signed, the agreement known as the European Stability Mechanism (ESM). Jeroen Dijsselbloem, who played a leading role in imposing the deposit confiscation plan on Cyprus, said on March 13 that “the aim is for the ESM never to have to be used.”

Passed with little publicity in January 2012, the ESM imposes an open-ended debt on EU member governments, putting taxpayers on the hook for whatever the ESM’s overseers demand. Two days before its ratification on July 1, 2012, the agreement was modified to make the permanent bailout fund cover the bailout of private banks. It was a bankers’ dream – a permanent, mandated bailout of private banks by governments.  But EU governments are now balking at that heavy commitment.

In Cyprus, the confiscation of depositor funds was not only approved but mandated by the EU, along with the European Central Bank (ECB) and the IMF. They told the Cypriots that deposits below €100,000 in two major bankrupt banks would be subject to a 6.75 percent levy or “haircut,” while those over €100,000 would be hit with a 9.99 percent “fine.” When the Cyprus national legislature overwhelming rejected the levy, the insured deposits under €100,000 were spared; but it was at the expense of the uninsured deposits, which took a much larger hit, estimated at about 60 percent of the deposited funds.

The Elusive Promise of Deposit Insurance

While the insured depositors escaped in Cyprus, they might not fare so well in a bank collapse of the sort seen in 2008-09. As Anne Sibert, Professor of Economics at the University of London, observed in an April 2nd article on VOX:

Even though it wasn’t adopted, the extraordinary proposal that small depositors should lose a part of their savings – a proposal that had the approval of the Eurogroup, ECB and IMF policymakers – raises the question: Is there any credible protection for small-bank depositors in Europe?

She noted that members of the European Economic Area (EEA) – which includes the EU, Switzerland, Norway and Iceland – are required to set up deposit-insurance schemes covering most depositors up to €100,000, and that these schemes are supposed to be funded with premiums from the individual country’s banks.  But the enforceability of the EEA insurance mandate came into question when the Icelandic bank Icesave failed in 2008. The matter was taken to the court of the European Free Trade Association, which said that Iceland did not breach EEA directives on deposit guarantees by not compensating U.K. and Dutch depositors holding Icesave accounts. The reason: “The court accepted Iceland’s argument that the EU directive was never meant to deal with the collapse of an entire banking system.” Sibert comments:

[T]he precedents set in Cyprus and Iceland show that deposit insurance is only a legal commitment for small bank failures. In systemic crises, these are more political than legal commitments, so the solvency of the insuring government matters.

The EU can mandate that governments arrange for deposit insurance, but if funding is inadequate to cover a systemic collapse, taxpayers will again be on the hook; and if they are unwilling or unable to cover the losses (as occurred in Cyprus and Iceland), we’re back to the unprotected deposits and routine bank failures and bank runs of the 19^th century.

In the US, deposit insurance faces similar funding problems. As of June 30, 2011, the FDIC deposit insurance fund had a balance of only $3.9 billion to provide loss protection on $6.54 trillion of insured deposits. That means every $10,000 in deposits was protected by only $6 in reserves. The FDIC fund could borrow from the Treasury, but the Dodd-Frank Act (Section 716) now bans taxpayer bailouts of most speculative derivatives activities; and these would be the likely trigger of a 2008-style collapse.

Derivatives claims have “super-priority” in bankruptcy, meaning they take before all other claims. In the event of a major derivatives bust at JPMorgan Chase or Bank of America, both of which hold derivatives with notional values exceeding $70 trillion, the collateral is liable to be gone before either the FDIC or the other “secured” depositors (including state and local governments) get to the front of the line. (Seehere and here.)

Who Should Pay?

Who should bear the loss in the event of systemic collapse? The choices currently on the table are limited to taxpayers and bank creditors, including the largest class of creditor, the depositors. Imposing the losses on the profligate banks themselves would be more equitable, but if they have gambled away the money, they simply won’t have the funds. The rules need to be changed so that they cannot gamble the money away.

One possibility for achieving this is area-wide regulation. Sibert writes:

[I]t is unreasonable to expect the area as a whole to bail out a particular country’s banks unless it can also supervise that country’s banks. This is problematic for the EEA or even the EU, but it may be possible – at least in the Eurozone – when and if [a] single supervisory mechanism comes into being.

A single regulatory agency for all Eurozone banks is being negotiated; but even if it were agreed to, the US experience with the Dodd-Frank regulations imposed on US banks shows that regulation alone is inadequate to curb bank speculation and prevent systemic risk. In a July 2012 article in The New York Times titled “Wall Street Is Too Big to Regulate,” Gar Alperovitz observed:

With high-paid lobbyists contesting every proposed regulation, it is increasingly clear that big banks can never be effectively controlled as private businesses.  If an enterprise (or five of them) is so large and so concentrated that competition and regulation are impossible, the most market-friendly step is to nationalize its functions.

The Nationalization Option

Nationalization of bankrupt, systemically-important banks is not a new idea. It was done very successfully, for example, in Norway and Sweden in the 1990s. But having the government clean up the books and then sell the bank back to the private sector is an inadequate solution. Economist Michael Hudson maintains:

Real nationalization occurs when governments act in the public interest to take over private property. . . . Nationalizing the banks along these lines would mean that the government would supply the nation’s credit needs. The Treasury would become the source of new money, replacing commercial bank credit. Presumably this credit would be lent out for economically and socially productive purposes, not merely to inflate asset prices while loading down households and business with debt as has occurred under today’s commercial bank lending policies. 

Anne Sibert proposes another solution along those lines. Rather than imposing losses on either the taxpayers or the depositors, they could be absorbed by the central bank, which would have the power to simply write them off. As lender of last resort, the central bank (the ECB or the Federal Reserve) can create money with computer entries, without drawing it from elsewhere or paying it back to anyone.

That solution would allow the depositors to keep their deposits and would save the taxpayers from having to pay for a banking crisis they did not create. But there would remain the problem of “moral hazard” – the temptation of banks to take even greater risks when they know they can dodge responsibility for them. That problem could be avoided, however, by making the banks public utilities, mandated to operate in the public interest. And if they had been public utilities in the first place, the problems of bail-outs, bail-ins, and banking crises crises might have been averted altogether.

ELLEN BROWN  -  "Web of Debt"