Good article Atypical, and I agree. This ("offshoring") is one subject that I feel we've been left aside on. It is a pity that it hasn't been addressed on a larger scale prior. Plainly and simply, we need to make $hit (that people buy).
Good article Atypical, and I agree. This ("offshoring") is one subject that I feel we've been left aside on. It is a pity that it hasn't been addressed on a larger scale prior. Plainly and simply, we need to make $hit (that people buy).
In a must-read report, Greenpeace details how Koch Industries has “become a financial kingpin of climate science denial and clean energy opposition,” spending over $48.5 million since 1997 to fund the anti-science disinformation machine. Brad Johnson has the story.
Climate Progress and the Wonk Room have long detailed the role of the billionaire brothers of Koch Industries, Charles and David Koch, in destroying American prosperity. Their pollution-based fortunes have fueled a network of right-wing ideologues, from McCain mouthpiece Nancy Pfotenhauer to loony conspiracy theorist Christopher Monckton. In public, the Kochs like to burnish their reputations by buying museum and opera halls.
In private, however, they’ve outspent Exxon Mobil to fund organizations of the climate denial machine, as Greenpeace details in a new report:
Although Koch intentionally stays out of the public eye, it is now playing a quiet but dominant role in a high-profile national policy debate on global warming. Koch Industries has become a financial kingpin of climate science denial and clean energy opposition. This private, out-of-sight corporation is now a partner to Exxon Mobil, the American Petroleum Institute and other donors that support organizations and front-groups opposing progressive clean energy and climate policy. In fact, Koch has out-spent Exxon Mobil in funding these groups in recent years. From 2005 to 2008, Exxon Mobil spent $8.9 million while the Koch Industries-controlled foundations contributed $24.9 million in funding to organizations of the climate denial machine.
This report, “Koch Industries: Secretly Funding the Climate Denial Machine” documents roughly 40 climate denial and opposition organizations receiving Koch foundation grants in recent years, including:
- More than $5 million to Americans for Prosperity Foundation (AFP) for its nationwide “Hot Air Tour” and “Regulation Reality Tour” campaigns to spread misinformation about climate science and oppose clean energy and climate legislation.
- More than $1 million to the Heritage Foundation, a mainstay of misinformation on climate and environmental policy issues.
- Over $1 million to the Cato Institute, which disputes the scientific evidence behind global warming, questions the rationale for taking climate action, and has been heavily involved in spinning the recent ClimateGate smear campaign.
- $800,000 to the Manhattan Institute, which has hosted Bjorn Lomborg twice in the last two years. Lomborg is a prominent media spokesperson who challenges and attacks policy measures to address climate change.
- $365,000 to Foundation for Research on Economics and the Environment (FREE) which advocates against taking action on climate change because warming is “inevitable” and expensive to address.
- $360,000 to Pacific Research Institute for Public Policy (PRIPP) which supported and funded “An Inconvenient Truth”¦or Convenient Fiction,” a film attacking the science of global warming and intended as a rebuttal to former Vice-President Al Gore’s documentary. PRIPP also threatened to sue the US Government for listing the polar bear as an endangered species.
- $325,000 to the Tax Foundation, which issued a misleading study on the costs of proposed climate legislation.
The blockbuster report covers the role of Koch’s dirty network in promoting the ClimateGate smear campaign, pushing junk science about polar bears, fueling supposedly independent Spanish and Danish studies that attacked green jobs, and selling a pack of lies about the costs of climate legislation.
That was a Wonk Room repost. A response by Koch Industries Communications Director Melissa Cohlmia is here. Climate Science Watch has two good posts on the subject:
Koch Industries multibillionaire Koch brothers bankroll attacks on climate change science and policy…. Koch Industries is the second largest private company in the U.S., with estimated 2008 revenues of $100 billion. Started as a petroleum business by their father Fred Koch, who was also a founder of the right-wing extremist John Birch Society, Koch Industries has become a diversified enterprise that funds large-scale lobbying and a range of libertarian policy and activist groups that play a significant role in the global warming denial machine.
Americans for Prosperity: Distorting climate change science and economics in well-funded campaign
Money can get you the power to say 'up is down, black is white and light is dark'.
That should be frightening to all of us.
CEO pushes for a repatration holiday while working hard to move profits overseas.
By Ryan Chittum
Cisco’s billionaire CEO John Chambers has led the recent campaign to let multinationals repatriate their overseas profits to the U.S. at an 85 percent discount.
So it’s particularly awesome that Bloomberg News has an investigation today showing how Chambers and Cisco have gamed the tax system to park $32 billion in profits in low-tax countries.
We have several stories rolled into one powerful one here: A piercing of the PR campaign for a tax holiday led by Chambers, a corporate story about how Cisco avoids paying its fair share of taxes, and most importantly, a piece showing clearly how repatriation holidays incentivize bad behavior. That last is evident from the headline on:
Biggest Tax Avoiders Would Win on Tax Break
That’s a tough headline, and my old Journal colleague Jesse Drucker has the goods to back it up. He reports that:
Cisco Systems Inc. (CSCO) has cut its income taxes by $7 billion since 2005 by booking roughly half its worldwide profits at a subsidiary at the foot of the Swiss Alps that employs about 100 people…
Cisco’s techniques cut the effective tax rate on its reported international income to about 5 percent since 2008 by moving profits from roughly $20 billion in annual global sales through the Netherlands, Switzerland and Bermuda, according to its records in four countries. The maneuvers, permitted by tax law, show how companies that use such strategies most aggressively would get the biggest benefit from the holiday, said Edward D. Kleinbard, a law professor at the University of Southern California in Los Angeles.
This is the latest in Drucker’s series of reports on how American companies use loopholes to avoid paying taxes.
For instance, here’s one thing Cisco does, and it’s perfectly legal:
Cisco transfers a portion of the patent rights to technology developed in the U.S. to a Dutch unit, which sells some of the resulting products back to its parent for eventual distribution in the U.S., according to annual reports filed by the Amsterdam subsidiary. That means Cisco credits about $5 billion in U.S. sales annually to the Netherlands.
Drucker reports that Cisco’s Amsterdam hub has just 2 percent of its global workforce but gets credited with more than 50 percent of its global revenues. But that’s not the end of it. Cisco then transfers most of the profit from the Netherlands to low-or-no-tax countries like Switzerland and Bermuda, in the process shortchanging countries like France and Germany. Its Swiss unit has just a hundred workers and its Bermuda unit is a shell company.
There’s lots of great context here too, like how much the repatration holiday is estimated to cost U.S. taxpayers ($79 billion over ten years), what that would pay for (all federal cancer research), how much these schemes cost taxpayers every year ($90 billion), what corporations did with the windfall they got from the last repatration holiday (gave it to shareholders), and how the revolving door is at work here: Obama’s former communications director Anita Dunn is advising the tax-holiday campaign.
And this is just funny:
On earnings calls, in speeches and in national media, Chambers has made the case for the tax break, saying it would help overcome a corporate tax system he calls “a dinosaur” and “put more than two million Americans back to work.”
It’s unclear whether any jobs would come from Cisco, which announced plans in May to shed an unspecified number of workers.
This is one of those stories that ought to totally alter the debate in Washington, but the interests are powerful, the stakes are high, and Bloomberg is one of the few outlets left with the resources to take these kinds of stories on.
Don’t underestimate how hard it is to produce a story like this. Tax investigations are time-consuming and mind-numbing. The issues are arcane and opaque. There’s a ton of work that goes into this kind of thing.
In other words, it doesn’t just pop out of a toaster, as Audit Chief Dean Starkman likes to say. All the more reason to applaud this one.
This article shows how much money the country has lost from these schemes, who are some of those now working to help corporations get further tax breaks (former White House advisors) and the fact that this is LEGAL.
Now ask yourself: who wrote laws allowing this and who is now trying everything around the country to destroy all social programs for the middle and lower classes?
Answer: Those that think corporations deserve whatever they ask for because they get paid by them. These are the same people who also think people don't deserve any help; pull yourself up by your bootstraps, they say.
The wealthy and powerful always get pretty much what they want and we get - almost nothing.
Was the Supreme Court's Wal-Mart case a bellwether? Or an instruction manual?
By Dahlia Lithwick
Depending on how you count "big cases," the Supreme Court has just finished off either a great(according to the U.S. Chamber of Commerce) orspectacularly great (according to a new study by the Constitutional Accountability Center) term for big business. The measure of success here isn't just the win-loss record of the Chamber of Commerce, although that's certainly part of the story. Nor is it news that—in keeping with a recent trend—the court is systematically closing the courthouse doors to everyday litigants, though that's a tale that always bears retelling. The reason the Roberts Court has proven to be Christmas in July for big business is this: Slowly but surely, the Supreme Court is giving corporate America a handbook on how to engage in misconduct. In case after case, it seems big companies are being given the playbook on how to win even bigger the next time.
Start with one of the most important cases of the term, therecently deceased class-action suit filed by a million and a half women employed by Wal-Mart. The headlines—including mine—contended that the import of the court's decision lay in the ways class-action suits would be severely limited in the future. But dig a little deeper. In his majority opinion on behalf of the five conservatives on the court, Justice Antonin Scalia found that Wal-Mart could not be held accountable for discrimination in pay and promotions because the plaintiffs lacked "convincing proof of a companywide discriminatory pay and promotion policy." Then Scalia went one further and offered Wal-Mart, the largest private employer in the country, a virtual guidebook on how to discriminate better: Do it in bulk up and down the chain of command, and make certain to do it at every possible level. As SCOTUSblog's Lyle Denniston pointed out almost immediately after the decision came down:
For large companies in general, the ruling in Wal-Mart … offered a second message: the bigger the company, the more varied and decentralized its job practices, the less likely it will have to face a class-action claim. Only workers who have a truly common legal claim may sue as a group, the Court majority made clear—and, even that claim will require rigorous proof that every single worker suffered from exactly the same sort of bias. Sample statistics and anecdotes won't do.
The greatest impact of the Wal-Martdecision isn't the blow dealt to class-action suits. It's the guidance it provides employers: Immunize yourself from claims of gender discrimination with a written policy that says "we don't discriminate" and a system of decentralized decision-making. The decision doesn't discourage future corporate discrimination. It just makes it harder to identify and prove it.The same is true for the court's remarkable 5-4 holding in AT&T Mobility v. Concepcion. In that decision, the court read a federal statute to mean that consumers may not participate in class action suits if their contract—in this case, with a cell phone company—contains an arbitration agreement (by which, I promise you, you are currently bound). In AT&T, a class of California plaintiffs tried to bundle together their claims alleging that AT&T had engaged in false advertising and fraud by charging sales tax on phones it had promoted as free. California law provided that the mandatory arbitration provision was not enforceable and that the parties should be allowed to litigate as a class. But the court—Scalia writing again—determined that the California rule was pre-empted by the Federal Arbitration Act. "It was important [for the court] to protect defendants, such as corporations, from the 'in terrorem' effects of class actions, which pressure them into settlements," writes Erwin Chemerinsky, dean of the UC-Irvine School of Law. "In fact, the Court went further and said that the Federal Arbitration Act requires that claims be arbitrated on an individual basis and that class arbitration is not allowed."
Yes, the AT&T case will make class-action suits vastly less likely, as Justice Stephen Breyer pointed out in his dissent: "What rational lawyer would have signed on to represent the Concepcions in litigation for the possibility of fees stemming from a $30.22 claim? The realistic alternative to a class action is not 17 million individual suits, but zero individual suits, as only a lunatic or a fanatic sues for $30." Even more important, however, the case provides corporate America with another useful tip on how to avoid costly litigation: If you haven't already done so, rush to lock your customers and /or employees into invisible mandatory arbitration agreements that will bar them from challenging your misconduct in a class-action suit. As Nan Aron at Alliance for Justice explained when the AT&T case first came down, the real winner here was not "justice":
Corporations will now be able to decide on their own which civil rights and consumer protections they want to obey, knowing that there will be no effective means available to their victims to find redress. Even worse, not only has the radical conservative majority damaged the ability of consumers or employees to find justice, it has effectively removed any incentive for corporations to behave within the law in the first place. Why act lawfully if your victims are helpless, especially in cases like this when the harm to each individual is small but the potential for profit is huge?
Think Progress' Ian Millhiser put it even more starkly. After AT&T, he writes, big corporations "need never worry about a class action again. They can simply tell all of their workers to sign away their rights or they're fired. Likewise, cell phone companies, banks, credit card companies, nursing homes—indeed, anyone who requires you to sign an agreement before they will do business with you—can completely immunize themselves from class actions simply by adding a few magic words to the agreement." We may need a new metaphor. This is not merely closing the courthouse doors anymore. It's turning the civil justice system into a hostage situation.
Which brings us to the third case in this trifecta, a case that has gone largely unnoticed in the blur that is the end of the 2010 term: In yet another 5-4 decision last week, Janus Capital Group, Inc. v. First Derivative Traders, the court not only immunized big business from yet more awkward and messy litigation; it gave them an instruction manual on how best to lie to consumers. Millhiser again:
Securities and Exchange Commission regulations make it illegal to "make any untrue statement of a material fact … in connection with the purchase or sale of any security." And according to a complaint filed by the New York Attorney General's office, an investment company named Janus did exactly that. Essentially, the complaint maintains, Janus promised its investors that it would prevent any new investors from engaging in a particular kind of price manipulation while secretly entering into agreements permitting that manipulation to occur.
In a 5-4 opinion written by Justice Clarence Thomas, the court found that the false and misleading statements made by Janus were not in fact "made" by Janus but by a second company Janus had set up, which acted—in Thomas' view—more like … a speechwriter. And, as a mere speechwriter, of course, it couldn't be held responsible for its statements.
Even though Janus Capital Management did indeed produce the false prospectuses, the court found that they were actually filed by a separate legal entity—the Janus Investment Fund. And even though the Janus Investment Fund is run by Janus Capital Management, Janus Capital Management is not on the hook for the lies. Wrote Thomas, "Even when a speechwriter drafts a speech, the content is entirely within the control of the person who delivers it. And it is the speaker who takes credit—or blame—for what is ultimately said."
Don't even bother asking how huge financial companies will benefit from the holding in the case. It's as easy as setting up a dummy corporation to make your false statements for you. In the wake of the holding, William A. Birdthistle, an associate professor of law at Chicago-Kent College of Law, told Bloomberg columnist Susan Antilla to expect "corporations outside of the investment-management business to alter their legal structures to gain the same protection that funds now enjoy." As he put it, "In Delaware, with 30 minutes and $50, you can create a legal entity."
As the Boston Globe editorialized, the new rule "lets Janus and similar companies hide false information in a complicated organization chart [and] can only undermine public confidence in the mutual fund industry over time." Ask yourself whether you really want the Supreme Court to be in the business of teaching corporate giants how better to deceive you about your investments. Yet Thomas, like Scalia in the AT&T case, was more worried about Janus, and its possible exposure to burdensome new lawsuits, than he was about the investors who were deceived. The purpose of civil litigation isn't solely to redress past wrongs. It's also to encourage better future conduct, particularly in situations where the parties have vastly unequal power. When you obliterate the very possibility of civil litigation, you are, by definition, helping big business screw over the little guy. But when you teach big business precisely howto screw over the little guy, and how to do it faster, cheaper, and without detection … well, that's not even an illusion of justice anymore. It's enabling.
Now say after me; I pledge allegiance to the Corporate States of America, who own us all, if not now, soon.
By Roger Bybee
The federal government has just released its report on the Massey Energy mine explosion, which killed 29 West Virginia miners in April 2010. The key revelation is shocking even for those familiar with Massey’s willingness to endanger miners’ lives whenever greater profits could be attained by ignoring risks.
The feds' explosive finding: Massey kept two sets of safety records in order to prevent federal inspectors from learning about the severe hazards in the Upper Big Branch mine that Massey officials already knew about. For its own needs, Massey had to keep a record of safety problems, malfunctioning equipment, maintenance needs and other operational details in the mine.
But in a separate record book required by the federal Mine Health and Safety Administration and regularly reviewed by the MHSA, Massey officials systematically deleted any references to the dangers that they had observed first-hand.
As the New York Times’ Sabrina Tavernise explains,
Kevin Stricklin, administrator for coal at the Mine Safety and Health Administration, described a dual accounting system practiced by Massey before the deadly explosion, in which safety problems and efforts to fix them were recorded in an internal set of books, out of sight of state inspectors, and off the official books that the law required them to keep.
Even with Massey officials hiding safety problems with the falsified safety record, the Upper Big Branch mine had compiled an appalling history. “In the year before the blast, the mine received more orders to shut down unsafe areas than any other coal mine in the country," the Times noted.
As I reported here a month ago, a report commissioned by the West Virginia governor’s office, conducted by the former MHSA director J. Davitt McAteer, documented how deviance from sound safety practices became the norm at Upper Big Branch.
While concurring with McAteer that the fatal explosion was caused by an avoidable buildup of volatile coal dust touched off by a small flare-up of methane gas, the new MHSA report is even stronger, Tavernise reports that
Some of the findings echoed a report issued by an independent team of state investigators this month, which blamed Massey and a culture of impunity for the explosion. But these findings went further, saying that Massey took systematic and premeditated steps to circumvent government inspections.
Falsifying such records is a felony under federal law. Further, high-ranking Massey officials were notorious for forcing supervisors to maintain peak production levels regardless of the safety hazards they face. Repeated, serious safety violations at Upper Big Branch suggest a corporation that brazenly viewed its miners as expendable.
WHAT'S NEXT FOR PERPETRATORS?
But what kind of justice will Massey executives responsible for the 29 deaths in this explosion face? The case against Blankenship and other officials appears damning.
However, can we realistically expect that Attorney General Eric Holder and the federal Justice Department will take this case seriously? Holder and Co. have not exactly shown much zeal in convicting and jailing millionaire Wall Street con artists, who helped to bring on the meltdown of 2008 still plaguing America's working class.
Moreover, former Massey CEO Don Blankenship still has plenty of clout. He has been able to depict himself as a “job creator” in a region afflicted by some of the worst poverty in the nation and desperate for jobs. (About one out of four West Virginians lives in poverty, with rate closer to 34% among children.)
In the last three presidential elections West Virginia, the Republicans have been remarkably successful in diverting popular frustrations toward alleged “cultural elites” and environmentalists depicted as threatening job rather than corporations like Massey who are imposing horrible working conditions and wrecking the land.
The combination of economic desperation and cultural resentment has served to shield rapacious mine owners like Blankenship from serious punishment for union-busting, rampant violations of miner safety and “mountaintop removal” mining projects which despoil the land, clog rivers and endanger communities with mudslides.
The big chieftains from Massey have maintained a unified stone wall against federal investigations thus far. Top Massey officials have been practicing what the Mafia calls “omerta,” the code of silence. While two small-fry Massey officials—a foreman and the chief of security—have been indicted, the most important Massey officials have been very careful not to point fingers at each other and not to say nothin’ to nobody:
Massey managers, including the former chief executive, Don Blankenship, have not been charged, including 18 executives who refused to be interviewed for the federal investigation, invoking their Fifth Amendment rights.
Holder's background as a fighter against white-collar crime is less than stellar: he was the former chief counsel for Chiquita at a time when it was making payoffs to a right-wing death squad in Colombia which targeted union organizers for torture and death, as exposed by journalist Charlie Cray.
I have a hard time imagining a Holder crusade against Blankenship and his crew without massive pressure from labor and West Virginia's elected officials and citizenry.
You mean corporations actually kill people? Evade responsibility? Then try to hide it showing they don't care about human life?
Bittman has a great column this week about the ridiculous proposed laws to ban filming and photography at farms. Animal rights and sustainable food activists have embarrassed corporate farms by publishing footage of how corporate farms actually treat animals, and the disgusting and cruel conditions that they maintain (the footage is often shot by brave employees of the farm who are offended by what they see at work every day). In response, the food industry pushed legislators to just make it illegal to record what goes on in their facilities. The laws haven’t passed, but it’s still nearly impossible for journalists (or anyone else) to get into factory farms to see how things are run. Bittman tried, and was repeatedly refused.
When a journalist can’t see how the food we eat is produced, you don’t need ag-gag laws. The system’s already gagged.
The videographers that have made it into closed barns have revealed that eggs are laid and chickens are born and raised in closed barns containing (literally) hundreds of thousands of birds; an outsider wouldn’t even know what those barns were. Pigs are housed cheek-to-jowl, by the many thousands, in what are called concentrated animal feeding operations, where feeding, watering and monitoring are largely mechanized. Pregnant sows are confined in small concrete cells. Iowa is industrial agriculture’s ground zero. But when it comes to producing animals, zero is pretty much what you’re going to see.…
Which would bring us a step closer to China, whose Health Ministry is trying to clamp down on news media outlets that “mislead” the public about food safety issues. (It’s worth noting, on the other hand, that the Chinese Supreme Court has called for the death penalty in cases of fatal food poisoning.) “Mislead” apparently means reporting about pork tainted with the banned drug clenbuterol, which sent a couple hundred wedding guests to the hospital; watermelons exploding from the overuse of chemicals; pork disguised as beef, or glowing blue; and — my favorite — cooking oil dredged from sewers.
Our watermelons don’t explode and, for now, I can write about it. Yet when a heroic videographer breaks a horror story about animal cruelty, as happens every month or so, the industry writes off the offense as an isolated incident, and the perpetrators — usually the workers, who are “just following orders” — are fired or given wrist slaps. Business continues as usual, and it will until the public better understands industrial animal-rearing techniques.
And until the food industry stops intimidating journalists, suing anyone who speaks ill of them, and using their economic and political might to obliterate small ethical farmers.
Corporations treat animals like shit. Really? For money? Because they're greedy? Because they don't care about the pain and suffering of animals?
Read about this stuff. It will make you sick!
Just 1% to Workers
By Bryce Covert
This week’s credit check: Corporate profits have taken in 88% of the raise in national income since the recovery began, while household incomes only took in 1%.
Whether or not this feels like a recovery, we’re technically in one. And it’s true that some money is flowing again. But where exactly is that money going? Not necessarily to those who need it.
It’s going to corporations. The recovery began in the second quarter of 2009, and between then and the fourth quarter of 2010 national income rose by $528 billion — and $464 billion of that, or 88%, went to pretax corporate profits, according to economists at Northeastern University. In fact, corporate profits have been growing quite rapidly in the post-crash period. The NYTimes reported in November of 2010, “Since their cyclical low in the fourth quarter of 2008, profits have grown for seven consecutive quarters, at some of the fastest rates in history.” In the third quarter of 2010, they grew at an annual rate of $1.659 trillion, the highest figure recorded in noninflation-adjusted terms.
It’s going to the pocketbooks of the richest of the rich. The Guardian reports: “The globe’s richest have now recouped the losses they suffered after the 2008 banking crisis. They are richer than ever, and there are more of them — nearly 11 million — than before the recession struck.” According to the annual world wealth report by Merrill Lynch and Capgemini, the wealth of high net worth individuals — those who have more than $1 million in free cash — rose nearly 10% last year and surpassed 2007’s peak of $40.7 trillion, topping out at $42.7 trillion. It was even better for “ultra-high net worth individuals,” those with $30 million to spare, as their numbers surged by 10% and the total value of their investments rose by 11.5% to $15 trillion.
Where is it not going? To wages and salaries. As compared to corporate profits, household incomes only saw 1% of the $528 billion in national income growth, or $7 billion. The NYTimes reports, “The share of income growth going to employee compensation was far lower than in the four other economic recoveries that have occurred over the last three decades.” In fact, the Bureau of Labor Statistics reports that average real hourly earnings declined by 1.1% percent from the beginning of the recovery to May 2011. This comes on top of the fact that real wages have been faring worse in the last ten years than during the Great Depression — incomes fell by almost five percent and wages barely budged. These facts don’t escape the public. In a recent poll by Democracy Corp, 43% of likely voters said that either they or someone in their family had experienced “reduced wages, hours or benefits at work” in the last year.
As I’ve pointed out before, when wages fall or stagnate for the average worker, it only leads to an increased need to take on debt. The typical family spends more today on the unavoidables — energy, housing, health care, etc. — than a generation ago, and have taken on debt to finance it. In 2007, the typical American owed 138% of their after-tax income. Our total revolving debt now comes to $796.1 billion, and that number will only rise as less money comes into households in real wages.
So let's see. Corporations getting huge profit increases. Taxes lower on them (and individuals) than in many past years. Hmm...WHERE ARE THE JOBS? Conservatives preach jobs will be created when taxes are cut. Well, they have been and they have money. WHERE ARE THE JOBS?
As usual, the conservatives lied again.
So Why Are They Still Using Robo-Signers to Engage in Foreclosure Fraud?
After halting foreclosures for a time last fall, the banks have continued to submit mortgage papers "of questionable validity."
July 19, 2011 | Advertisement In what was dubbed last year as "foreclosuregate," banks began relying more heavily than ever on so-called robo-signers and foreclosure mills -- offices staffed by underqualified foreclosure "experts" -- to cut corners during the foreclosure process, often wreaking havoc on homeowners' lives. In response, the big U.S. banks promised to clean up their act. According to a new report from Reuters, that has not come to pass:
SPECIAL REPORT: Banks still robo-signing, filing doubtful foreclosure documents
NEW YORK/IMMOKALEE, Florida, July 18 (Reuters) - America's leading mortgage lenders vowed in March to end the dubious foreclosure practices that caused a bruising scandal last year. But a Reuters investigation finds that many are still taking the same shortcuts they promised to shun, from sketchy paperwork to the use of "robo-signers."
You might remember that last fall, banks halted foreclosures in 23 states, ostensibly so they could address allegations of foreclosure fraud. Throughout the fall and winter, the banks started to engage in foreclosures once again, claiming they had reviewed their procedures and were confident they could move forward without incident.
This spring, 14 of the banks signed consent orders at the behest of the federal Office of the Comptroller of the Currency, promising "further internal investigations, remediation for some who were harmed and a halt to the filing of false documents. All such behavior had stopped by the end of 2010, they said."
However, Reuters reports that at least five of those 14 banks, plus a half dozen other large institutions, have continued to submit mortgage papers "of questionable validity."
The AP has dug up similar findings. According to an article published Tuesday, "[c]ounty officials in at least three states say they have received thousands of mortgage documents with questionable signatures since last fall, suggesting that the practices, known collectively as 'robo-signing,' remain widespread in the industry."
Since then, suspect paperwork has been filed not only with foreclosures, but also with new purchases and refinancings. Critics say the new findings point to a systemic problem with the paperwork involved in home mortgages and titles. And they say it shows that banks and mortgage processors haven't acted aggressively enough to put an end to widespread document fraud in the mortgage industry.
"Robo-signing is not even close to over," says Curtis Hertel, the recorder of deeds in Ingham County, Mich., which includes Lansing. "It's still an epidemic."
Robo-signing isn't the only problem with the banks' foreclosure processes. Reuters also reports that "troves" of original mortgage documents are missing or non-existent. Apparently the documents were a casualty of the 2004-2006 rush to hand out home loans so the banks could sell them to Wall Street investors for shady "mortgage-securitization trusts." Therefore, courts are starting to find that the trusts don't actually own the mortgages in question.
The result is that trusts may be out many billions of dollars, says Matthew Weidner, a lawyer who specializes in mortgage litigation. If proper procedures are followed now, foreclosures could slow to a trickle. And a cloud would hang over title to millions of homes, potentially further depressing the housing market.
There are many confusing aspects to the foreclosure fraud crisis, but what's at stake -- the livelihoods of American homeowners -- is not complicated at all. The banks have proven that slaps on the wrist and the weak regulations imposed on them will not stop them from conducting business as usual. It's time that the government stop letting them get away with it.
Let's see if I understand this.
Some people are being foreclosed unfairly. Banks are not trying to prevent this and recently have started to do it more aggressively. Government is not stopping them. Banks don't care.
Hmm. Okay, just another day in our capitalist-obsessed society where the wealthy and powerful screw everyone else.
It's the republicans according to Hava-gafa-kasha.
Hey, my only complaint about getting screwed has to do with 30% compulsory taxes. I must be wealthy and powerful??? Me and my tomatoes.............. two kids, wife............... Are we all getting screwed?
Hey thanks for posting. Hava-gafa-kasha is on an argumentative bender. If a republican were to say, "man is it hot", he would tell them it wasn't.
Gerri Willis on Fox Business News covered this topic yesterday; check it out - http://video.foxbusiness.com/v/1066129366001
By Harold Meyerson, Published: July 19
If you’re wondering why American consumers are still flat on their backs, rendering the economy similarly supine, the answer is both fundamental and simple: It’s not just that so many of them are unemployed. The ones who are employed are also underpaid.
Don’t take my word for it — take that of Michael Cembalest, the chief investment officer of J.P. Morgan Chase. He asserted in the July 11 edition of “Eye on the Market,” the bank’s regular report to its private banking clients, that “US labor compensation is now at a 50-year low relative to both company sales and US GDP.”
The primary subject of Cembalest’s report isn’t wages. It’s profits — specifically, the fact that profit margins (the share of a company’s revenue that goes to profits) of the Standard & Poor’s 500 companies are at their highest levels since the mid-1960s, despite the burdens of health-care costs, environmental compliance and other regulations that are presumably weighing down these large companies.
How can that be? To find the answer, Cembalest studied the rise in profit margins “from peak to peak” — that is, from their high point in 2000, just before the dot-com bust, to their high point in 2007, just before the financial crisis. In those seven years, profit margins rose from just under 11 percent of the S&P 500’s revenue to just over 12 percent. (Today, they’re near 13 percent.)
Why the increase? “There are a lot of moving parts in the margin equation,” Cembalest writes, but “reductions in wages and benefits explain the majority of the net improvement in margins.” This decline in wages and benefits, Cembalest calculates, is responsible for about 75 percent of the increase in our major corporations’ profit margins.
Or, to state this more simply, profits are up because wages are down. That’s not the only reason profits are up — innovation and offshoring factor in as well — but among the reasons, it’s a doozy.
What’s behind this drop in the share of revenue going to wages? After all, the workforce of the S&P 500 companies contains many more college graduates today than it did in earlier decades. Cembalest cites high unemployment and the addition of 2 billion Asians to the world’s labor force since 1980 as the reasons for workers’ declining ability to secure their former share of company revenue. He’s right, of course, but his list is hardly exhaustive. Surely the fact that the great majority of American employers no longer have to sit down and hammer out collective bargaining contracts with their workers has contributed to the increase in profits at wages’ expense. And many of those employers want to keep it that way.
On Monday and Tuesday, the National Labor Relations Board (NLRB) heard testimony from 61witnesses at a hearing on a board proposal that would diminish management’s ability to delay union elections. Opponents made dire predictions that the rule would enable unions to run roughshod over employers, but the America they described — awash in union goons — bears no resemblance to the nation in which we actually live. In the real America, union elections have declined 80 percent since 1970, as employers have become adept at delaying and opposing — often by illegally threatening their workers with job loss — their employees’ attempts to unionize. In the America of 2011, there are scarcely any union organizing campaigns. There are fewer union members: Just 7 percent of private-sector employees are unionized, down from 35 percent in the 1950s. And what was the last strike you recall? The strike as a bargaining tool for workers is now the province of professional athletes, the last American employees who have enough clout even to contemplate taking a walk.
Too bad Cembalest wasn’t a witness at the NLRB hearing. The redistribution of wage income to profits during recent decades — something that higher levels of unionization might reverse — laid the foundation for our economic disasters: To bolster the otherwise sagging purchasing power of the American people, banks extended credit — on homes, cars, you name it — any which way they could. When home values stopped rising and the gap between debt and income grew too great, everything came tumbling down.
In Sunday’s New York Times, Tom Friedman wrote that “there is a deep sense of theft” in both Greece and Egypt that their nation’s capitalism was rigged to benefit only a connected few. In America, we don’t do things that way. Here, we just look the other way as the power of workers to claim their share of the proceeds declines. It’s not, strictly speaking, theft. But it has brought our economy down just the same.
Corporate Greed, Corporate Power Grab, Corporate Greed, Corporate Power, Lack Of Corporate Empathy...Oh, I repeat myself. Never mind.