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I remember bonus time back 20 or so years ago when an extra amount of money would miraculously appear in your paycheck and you had been rewarded for "doing your job."
Yay.
Today, not so much.
Those getting the bonuses now seem to be the people who've done US out of our jobs.
Sniffing the Ethical Rot in Wall Street’s Culture
By Jim Hightower
Not too many years ago, any news story about bonus money would've been about some 20-year-old baseball player — an up-and-coming superstar getting $100,000 or so on top of his salary as an extra incentive to join the Yankees, Giants, Red Sox or whatever team. Sportswriters dubbed them: "Bonus Babies."
How quaint. These days, stories about bonus money don't elicit cheers, for they feature some of society's least admirable people: Wall Street bankers. Far from superstars, they can be subpar performers or even what amounts to crime syndicate bosses overseeing everything from simple fraud to laundering money for drug cartels. Yet, in the first part of each year, we witness this cluster of greedmeisters quaffing champagne, laughing uproariously and shouting, "It's bonus time, baby!"
This year, even though the Wall Street bosses have presided over a 30 percent drop in their banks' profits, they've extracted a 15 percent raise in overall bonus money, totaling a ridiculous $27 billion. That averages out to $165,000 in extra pay to each Wall Street banker. But averages deceive, for thousands of lower-level bankers are given a dab, while those up in the executive suites make off with the bulk of the bonus heist.
Michael Corbat, CEO of Citigroup, for example, didn't just grab a 15 percent increase in bonus pay, but nearly three times that. His total haul was $16 million. Then there's Jamie Dimon, boss of JPMorgan Chase. He had a really terrible year in 2013, forcing his shareholders to shell out some $22 billion in penalties for tallying up a long list of illegalities. But that didn't stop Jamie from taking a 74 percent hike in bonus money this year — he pulled in a cool $18.5 million.
In a time when the 90 percent majority of Americans see their income falling, you'd think Wall Street might show a bit of modesty.
But, instead, they choose to show us just how much Wall Street crime really does pay.
Let's review the rap sheet of Wall Street banks: Defrauding investors, cheating homeowners, forgery, rigging markets, tax evasion, credit card ripoffs ... and so sickeningly much more.
At last, though, some of the cops on the bank beat seem to be having regulatory epiphanies. The New York Times reports that some financial overseers are questioning "whether such misdeeds are not the work of a few bad actors, but rather a flaw that runs through the fabric of the banking industry. ... Regulators are starting to ask: Is there something rotten in bank culture?"
Really? Where've they been?
Millions of everyday Americans had no problem sniffing out that rot back in 2007 at the start of the Wall Street collapse and nauseating bailout. Imagine how pleased they are that it took only seven years for the stench of bank rot to reach the tender nostrils of authorities. Still, even sloooww progress is progress.
Both the head of the New York Fed and the Comptroller of the Currency are at least grasping one basic reality, namely that the tightened regulations enacted to deal with the "too big to fail" issue do nothing about the fundamental ethical collapse among America's big bankers. The problem is that, again and again, Wall Street's culture of greed is rewarded — bank bosses preside over gross illegalities, are not punished, pocket multimillion-dollar bonuses despite their shoddy ethics and blithely proceed to the next scandal.
More restraint on bank processes miss a core fact: Banks don't engage in wrongdoing; bankers do. As Comptroller Tom Curry says, the approach to this problem is not to call in more lawyers, "It is more like a priest-penitent relationship."
Public shaming can be useful, but it should include actual punishment of the top bosses — take away their bonuses, fire them and prosecute them!
Speaking of rot.
What other word do you have for Rahmbo? The Chicago gangbanksters make the Al Capone mob look like pikers.
And no one's auditing their taxes in the Department of Justice (you can bet big on that one).
Shades of Dubya's real estate/political dealings! Does this affect everyone in those positions of power now?
Because if this is any type of lesson at all, it's a cautionary tale about how those in power need tough rules and regulations about their ability to profit from schemes implemented under their direction. Or those whom they appoint.
And speaking of Chicago, and Rahmbo's run for office way back when he was looking for a reason to get out of D.C., I remember thinking then that there must be a lot of money to be made in running Chicago.
Words fail me.
Rahm Emanuel’s Top Donor Bought Stock in Marriott Just Before It Was Awarded Huge Chicago Contract (from Emanuel)
By David Sirota and Ben Joravsky
April 8, 2014
On March 5, Chicago’s city council overwhelmingly voted to approve Mayor Rahm Emanuel’s proposal to divert $55 million of taxpayer resources into a new privately run hotel in the city’s south loop. Coming just before Emanuel pled poverty to justify his push for pension cuts and property tax increases, the hotel handout was part of the mayor’s expensive development plan that also features a basketball arena for DePaul University.
The vote followed a September decision by the mayor’s appointees on the Metropolitan Pier and Exposition Authority to give Marriott the coveted contract to run the new hotel. The decision by the state-city entity could be a huge financial windfall for Marriott. After all, the company will be running one of America’s largest hotels next to America’s largest convention center – and doing so with massive taxpayer subsidies, but without having to pay to construct the hotel and without having to pay property taxes.
Amid self-congratulatory press releases, what Mayor Emanuel did not mention – and what has gone completely unreported until now – is what a joint investigation by PandoDaily and the Chicago Reader has now confirmed: in the year leading up to Chicago’s lucrative giveaway to Marriott, the hedge fund of one of Emanuel’s largest campaign contributors bought millions of shares of stock in the hotel company.
A Billionaire at the Intersection of Technology, Finance and Politics
That hedge fund, Citadel Advisors, is run by billionaire Kenneth Griffin, who is reputedly the wealthiest man in Illinois. He made his fortune at the intersection of technology and financial speculation, where his firm’s computers now reportedly process one out of every eight stock trades made in the United States.
In recent years, he has become famous in the financial world for marshaling computing power to make a killing on the kind of high-frequency trading Michael Lewis investigates in his recently published book, “Flash Boys.”
Griffin, though, is not just a financial speculator. He’s also a savvy political investor. At the national level, he was a major fundraiser for Mitt Romney and in February he hosted a fundraiser at his home for New Jersey Gov. Chris Christie, whose state domiciles the East Coast stock exchanges that Citadel owns.
In Illinois, Griffin is an equally big political wheeler dealer, having given major campaign contributions to everyone from Mayor Daley to former Governor Rod Blagojevich to investor-turned-gubernatorial-candidate Bruce Rauner. That said, out of all the relationships Citadel has forged with politicians, few appear to be as close as the one the firm has developed with the Chicago mayor behind the Marriott deal.
Over the last three years, Griffin and his wife, Anne Dias Griffin, have donated more than $200,000 to Mayor Emanuel’s campaign.
Griffin describes the mayor as his “good friend.” Other Citadel employees have donated about $178,000 to Emanuel’s campaign. Additionally, in December, Emanuel appointed Dan Widawsky, then a top Citadel executive, as the city’s comptroller, overseeing the Department of Finance.
A Timeline of the Marriott Deal & Citadel Stock Purchases
On February 19, 2013, Mayor Emanuel and Illinois Governor Patrick Quinn (D) announced that the Exposition Authority would be building a giant hotel not far from the McCormick Place convention center. In May of 2013, they announced DePaul would be constructing the basketball arena events center.
And on September 13, 2013, the Authority’s board of directors, who are appointed by the mayor and governor, announced that they had chosen Marriott — over Hyatt and Hilton — to run the hotel. According to the Authority’s spokeswoman Mary Kay Marquisos, the board did its due diligence through “a two phase process” of review.
In the months before the development deal was announced, Griffin’s hedge fund was buying up large blocs of Marriott stock. According to SEC filings, Citadel purchased 1.6 million shares of Marriott stock in late 2012. By September of 2013, SEC filings showed the hedge fund owned 2.3 million shares of Marriott.
As of the last SEC filings at the end of 2013, Citadel still owned roughly 1.6 million shares of Marriott stock worth an estimated $88 million.
According to Nasdaq figures, Citadel became – and remains – one of the 25 largest institutional owners of Marriott stock.
To give you a sense of the Chicago deal’s potentially huge upside for Marriott and its shareholders, consider some key facts.
This will be a 1,200 room luxury hotel on prime land not far from a huge convention center in the third largest city in America – and it will be right near a new stadium. There’s also the prospect of even more business down the road for the hotel, should the mayor get state approval to put a casino in the vicinity, as is rumored (Griffin has been a strong opponent of bringing a casino to downtown Chicago).
Among the hotel’s amenities will be a 300-seat restaurant, a roof-top bar, a coffee shop, several banquet rooms, a fitness center and an indoor swimming pool. Best of all, from Marriott’s perspective, someone else is picking up the construction tab — the public.
Indeed, with Mayor Emanuel’s subsidies and tax exemptions, Chicagoans property taxes will rise to pay for Marriott’s new crown jewel and to compensate for the property taxes Marriott will not be paying.
Contradicting Griffin’s “Free Market” Ideology
Ironically, Griffin’s hedge fund bought stock in a hotel corporation benefiting from precisely the kind of taxpayer handout that runs counter to Griffin’s stated political ideology.
Remember, this is a guy who promotes himself as a right-of-center free market advocate. To that end, he has financed conservative causes like the charter school movement (he donated $500,000 to Stand for Children); he has given $300,000 to American Crossroads, Karl Rove’s Super PAC; and he has put roughly $1.5 million toward causes backed by the Koch Brothers, the billionaires who have funded efforts to bust unions, roll back environmental protections and defeat President Obama.
In speeches and interviews, Griffin has lashed out at business executives who put the needs of their companies over Illinois, when accepting tax breaks and public subsidies.
“Government being involved in picking winners and losers invariably leads to a loss of economic freedom and encourages corruption,” he told the Tribune last year.
Yet, the taxpayer financed Marriott project is very much one of those deals, directing public resources into a Tax Increment Financing (TIF) scheme that subsidizes a private hotel chain.
Pando and the Chicago Reader contacted Citadel to request Griffin’s comment.
After noting that Citadel had acquired Marriott stock, we asked if Griffin had an ideological objection to using public dollars to benefit the hotel corporation.
In response, a Citadel spokesperson said via email: “We appreciate the opportunity to contribute to your story but are going to pass at this time.”
The Chicago Mayor’s office did not respond to telephone and email requests for comment from Mayor Emanuel.
How TIFs Enrich the Already Rich
As previously reported by Pando and the Reader, TIF is a program in which Chicago annually diverts roughly $500 million in property taxes–paid in the name of schools, parks, police, etc. – into bank accounts largely controlled by the mayor. The money is supposed to be used to subsidize development in blighted communities that are so poor they would receive no development — but for the TIF.
However, state laws governing TIFs are so riddled with loopholes that Chicago’s mayor is free to spend them virtually wherever and however he wants. That explains why the south loop — a relatively vibrant, well-off community — qualifies for TIF funding in the first place.
Keep in mind – TIFs divert property tax dollars from public schools that are so dead broke many of them can’t afford to buy basic supplies, like toilet paper.
Moreover, the mayor is earmarking money to build the Marriott at the very moment he says he has to jack up property taxes and cut payments to pensioners because the city can’t afford to make good on its pension obligations.
In short, the city claims it doesn’t have money for its school children or retirees, but it somehow has plenty of cash to enrich a hotel corporation – one that just so happens to be part owned by the hedge fund of the mayor’s largest contributors.
In his speech last year to the Economic Club of Chicago, Griffin said that Mayor Emanuel should not have only closed 53 schools when he engaged in the largest school closure in Chicago’s history. Griffin insisted that at least 100 schools should have been closed.
If Emanuel’s south loop mega project for Marriott keeps siphoning off more desperately needed property tax dollars from the school system, Griffin may ultimately get his wish.
Words don't fail here.
White flight is now a watch phrase for privatizing schools for white religious groups?
Also, a pretty nice pile of public money for the loot?
The right words come from Rumproast:
Coming To A Deserted Schoolyard Near You
An interesting item caught my eye this morning regarding the state of public education in The Peach State. The article had to do with the mess that has resulted since Georgia passed HB 1133 a little piece of ALEC boilerplate designed to “starve the beast” of public education by siphoning off huge amounts of tax revenue that used to support public schools and bestowing it on private schools instead.
In fact, Georgia’s public education has been so negatively impacted that four taxpayers have filed suit against the state for failing to adequately fund under-achieving public schools, while diverting public funds to help pay for private religious schooling. And that is only the tip of the iceberg . . .You see ALEC’s task force on education, chaired by a for-profit private school corporation, sees the American educational system as a $500 billion sector of the US economy that is just ripe for the picking.
According to PRWatch.com:
Despite widespread public opposition to the education privatization agenda, at least 139 bills or state budget provisions reflecting American Legislative Exchange Council (ALEC) education bills have been introduced in 43 states and the District of Columbia in just the first six months of 2013, according to an analysis by the Center for Media and Democracy, publishers of ALECexposed.org. Thirty-one have become law.
And they’ve been at this for quite awhile — Milwaukee, under Gov. Tommy Thompson [an ALEC alum] was the first city in the US to enact a school voucher program, in 1990.
Since then, similar programs have sprouted up all over the US. In the 2012-2013 school year there were 16 states and DC offering “choice” programs covering nearly a quarter million students.
And for ALEC this is a two-bagger because not only does it divert public money to for-profit schools, those schools are typically non-union workplaces which undermines the power of public teachers’ unions.
And ALEC is nothing if not nimble when it comes to marketing the benefits of the Corporatocracy. When it became clear that American voters were not exactly enamored of the private school voucher schemes that ALEC initially floated, they went back to the drawing board and came up with the scheme that passed in Georgia because . . . who doesn’t love a tax credit?
Georgia legislators promoted HB 1133 as a way to level the educational playing field and give poor children the same education choices as the wealthy. They would do that by setting up scholarships — a time-honored American tradition — supported by donations to non-profits specifically set up to dole out scholarships fairly.
Under the law, donors would receive dollar-for-dollar tax credits up to $2,500.00 a couple. That money, about $50 million per year, would normally be destined for the Georgia State Treasury but, under the new law, it would now be awarded to children attending struggling public schools in poor neighborhoods so that they could matriculate to much better private schools.
That was the marketing . . .
This, according to a 2012 article in The New York Times, is the reality presented in an informational meeting with parents in a Georgia school district:
A very small percentage of that money will be set aside for a needs-based scholarship fund,” Wyatt Bozeman, an administrator at the school near Atlanta, said during an informational session.
The rest of the money will be channeled to the family that raised it.
A handout circulated at the meeting instructed families to donate, qualify for a tax credit and then apply for a scholarship for their own children, many of whom were already attending the school.
If a student has friends, relatives or even corporations that pay Georgia income tax, all of those people can make a donation to that child’s school,” added an official with a scholarship group working with the school.
The exchange at Gwinnett Christian Academy, a recording of which was obtained by The New York Times, is just one example of how scholarship programs have been twisted to benefit private schools at the expense of the neediest children.The Times also reported that in states passing programs like Georgia’s, a cottage industry of non-profit administrators or SSO’s — Student Scholarship Organizations — pop up over night and start collecting hundreds of thousands of dollars in administrative fees to process the “scholarships.”
Sure enough, in the five years that the Georgia program has been in place, some 30 SGOs have popped up to get in on the action. More about that, a little later . . .
Last year the The Southern Education Foundation completed an excellent two year study on the rollout of the scholarship tax credit program in Georgia.
Their report is entitled, aptly enough, A Failed Experiment: Georgia’s Tax Credit Scholarships for Privated Education. It’s a long read but well worth it, especially if ALEC is making these kinds of inroads in your state.
Some of the larger problems that the report exposes are:
There is little or no evidence to demonstrate that SSO's in Georgia have used tax‐funded grants to distribute scholarships primarily to low income students during the last three years.
The Georgia law fails to set income limits for eligibility act that makes Georgia today the only state in the nation with tax credit scholarships that does not limit at least some tax credit scholarships to students with real financial need.
None of the SSO's raising tax‐diverted funds in Georgia since 2008 has voluntarily restricted their grants to schools that will provide only need‐based scholarships, and none of these SSO's has established household income as even one of several necessary criteria for eligibility for tax‐supported scholarships.
Georgia GOAL has recommended that participating schools provide need‐based scholarships with tax credits, but it allows affiliated schools to ignore their recommendation.The lead sponsor of HB1133, State Rep. Earl Ehrhart (R-GA), has called the SEF report “sophistry” but, then, I’d expect that because State Rep. Ehrhart, who just happened to serve as ALEC’s National Chairman in 2005, thinks that this is such a great law that he has become the CEO of his very own Student Scholarship Organization - Faith First GA. Which, according to the IRS, paid out $162,000 for “administration” in 2011.
Another Georgia Representative, Delvis Dutton has a sister Mandy who also figured that being an SSO would be a good business to get into, so she set up Learning to Serve — haven’t been able to find her IRS 990.
These problems are symptomatic of many, many ALEC laws passed in state legislatures. They are just not very good at writing workable, comprehensive policy legislation.
As a result, this law is being challenged in the courts. The lead plaintiff, Raymond Gaddy, claims the scholarship organizations, which are not state-regulated, administer state tax money in violation of the Georgia Constitution.
According to the complaint
“Absent the constitutionally required state administration, the SSO's and the private schools that receive their funds are free to do virtually as they please. “The abuses that can follow from such unfettered discretion are many. For example, private schools receiving tax-funded tuition payments can deny students admission based on the schools’ individual admission requirements, in contrast to Georgia public schools, which must admit any student wishing to attend.
“In this regard, although supposedly intended to benefit underprivileged children, the SSO's and private schools receiving the funds can, and generally do, award scholarships to students who already can afford private schools.
“Also, because the majority of private schools in the state are faith based, many enrollment decisions are conditioned on commitment to specific religious beliefs and practices.”Decisions like whether or not to turn down a child who acts or looks gay; or a child who isn’t Christian enough; or to award a scholarship to a child who happens to excel in sports. In Georgia, where Friday Night Lights are sacred, all of a sudden private school football teams are dominating public schools.
Posted by Bette Noir on 04/07/14
The Air Force has my sister’s husband stationed on an airbase in Georgia- the two of them are very concerned about the quality of education their sons are receiving. They will be moving to the LA metro area soon, and their firstborn is going off to college next year… and they are breathing a sigh of relief to be leaving Dixiestan.
@B4 Dixiestan is truly the Laboratory of the Mad Scientists of Democracy.
That’s not even the dirtiest thing that’s been done in Georgia the past few years. Cobb County is building the Braves a stadium they don’t need because there are too many black people at Turner Field. Say what you will about Ted Turner, he’d never go for that underhanded bullshit.
Comment by Hunter Gathers on 04/07/14
_ _ _ _ _ _ _
Behind the GOP's Unhealthy Attack
Emily Schwartz Greco and William A. Collins
“Why are they so mad about the idea of people having health insurance?” One way to answer Obama’s question is to figure out what’s driving the GOP to keep beating this dead horse.
Although it’s not often discussed, the taxes on the rich that are partly funding the Affordable Care Act are one likely motive.
As William Safire penned for Spiro Agnew about those nabobs, GOP politicians who keep trying to repeal the ACA have “formed their own 4-H Club — the ‘hopeless, hysterical hypochondriacs of history.’”
Click here to read the whole essay.
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