Many Human Rights Watch (HRW) board members are simply investment bankers, like board co-chairs Joel Motley of Public Capital Advisors, LLC, and Hassan Elmasry, of Independent Franchise Partners, LLP. HRW Vice Chairman John Studzinski is a senior managing director at the Blackstone Group, a private equity firm founded by Peter G. Peterson, the billionaire who has passionately sought to eviscerate Social Security and Medicare.
West Point professor calls antiwar legal scholars "fifth column" threats
Live by the sword. . .
By Dave Alpert
September 3, 2015
by Dave Alpert
Human Rights Watch (HRW) . . . a name that evokes thoughts of an organization that claims to defend and protect the rights of people around the globe.
If that’s the case, how would one explain why HRW’s actions and policies appear to be a reflection and support of U.S. policies, rather than an organization that offers an independent critique of U.S. actions? There is no other country that has violated international laws and human rights more than the U.S. And still, HRW remains silent.
There seems to be a contradiction between HRW’s stated mission and their actual functioning.
An example: In 2009, President Obama announced that the U.S. will continue its “rendition” program, a program in which “terrorist” suspects were kidnapped and sent to allied countries to be interrogated and tortured. Tom Malinowski, one of HRW’s executives stated, “Under limited circumstances, there is a legitimate place for renditions, and encouraged patience: They want to design a system that doesn’t result in people being sent to foreign dungeons to be tortured,” he said, “but designing that system is going to take some time.” Is he joking . . . HRW justifying rendition and torture?
In 2013, HRW focused its attention on Hugo Chavez’s Venezuela, stating that his country was unfit to serve on the UN’s Human Rights Council because it did not meet the acceptable standards of human rights protection.
The U.S. served on the same council, yet HRW accepted that the U.S.’s human rights record was acceptable. After all, all “we” did was invade Iraq and Afghanistan without cause, send drones into Pakistan to fire missiles at suspected terrorists killing hundreds of innocent people, establish weekly meetings of Obama and his military advisors to determine who to kill that week, using drones in any country they chose (“kill list”).
Tom Malinowski who was once the Washington Director of HRW is an interesting person and one whose selection to lead HRW was surprising. He was a speechwriter for Secretary of State Madeline Albright, renowned for her famous response to a question asked by a reporter regarding the deaths of approximately 500,000 Iraqi children during the U.S. blockade of Iraq. The questioner asked, “Was it worth it?” And, Madeline responded, without any hesitation, “Yes, it was.” So much for human rights. Mr. Malinowski also served, from 1994 to 1998, as a speechwriter for Secretary of State Warren Christopher.
During his Senate confirmation hearing for assistant secretary of state for democracy, human rights and labor on September 24, 2014, Malinowski promised to “deepen the bipartisan consensus for America’s defense of liberty around the world,” and assured the Foreign Relations Committee that no matter where the U.S. debate on Syria led, “the mere fact that we are having it marks our nation as exceptional.” He also served as senior director on the National Security Council. Does anyone continue to see HRW as an independent organization protecting the rights and the dignity of peoples around the world?
Mr. Malinowski is far from being independent of U.S. influence. Instead, he is deeply involved in and part of the U.S. establishment.
The current executive director of HRW is Kenneth Roth.
Under Roth’s leadership, Human Rights Watch has been criticized for perceived biases and misconstructions.
Over the years, he has been criticized by many progressives for his handling of critical events in Rwanda and in Venezuela.
Further, let us look at who serves on the HRW administration and Board of Directors.
The advisory committee for HRW’s Americas Division has even boasted the presence of a former Central Intelligence Agency official, Miguel Díaz. According to his State Department biography, Díaz served as a CIA analyst and also provided “oversight of U.S. intelligence activities in Latin America.”
Michael Shifter, who also currently serves on HRW’s Americas advisory committee, oversees $4 million a year in programming, financed in part through donations from the U.S. Agency for International Development (USAID), the embassies of Canada, Germany, Guatemala, Mexico and Spain, and corporations such as Chevron, ExxonMobil, JPMorgan, Microsoft, Coca-Cola, Boeing, and Western Union.
Many HRW board members are simply investment bankers, like board co-chairs Joel Motley of Public Capital Advisors, LLC, and Hassan Elmasry, of Independent Franchise Partners, LLP. HRW Vice Chairman John Studzinski is a senior managing director at the Blackstone Group, a private equity firm founded by Peter G. Peterson, the billionaire who has passionately sought to eviscerate Social Security and Medicare.
Let us not forget George Soros, multi-billionaire, who is a major financial contributor to HRW. Mr Soros’ reputation as a liberal is a good example of what an oxymoron stands for. George Soros is one of the richest men in the world and he didn’t achieve that by worrying about you and me.
Soros recently criticized George W. Bush saying in an article in the "Financial Times of London" that his administration’s Iraq policies were “fundamentally wrong” and that they are premised on the “false ideology that U.S. might gave it the right to impose its will on the world.” Many of us in the peace movement would say, “He got that right!” We might be inclined to praise him and to believe that this confirms that he really is a man whose motives are honorable — an image, by the way, that he carefully cultivates, especially through various NGOs. In fact numerous non-profit organizations have received funds from his foundation because they have bought into that perception.
Why then did Soros take issue with George W.? Soros is angry not at Bush’s aims—of expanding Pax Americana and making the world safe for global capitalists like himself — but with the crass and blundering way Bush went about it. Soros stated, “By making U.S. ambitions so clear, the Bush gang has committed the cardinal sin of giving the game away.” The “game” is the domination of countries and their resources throughout the globe.
But let us not continue to be fooled. Soros has established close working relationships with former National Security Director Zbigniew Brzezinski, former NATO Supreme Allied Commander Wesley Clark, former Israel lobby chief Stephen Solarz, as well as the renowned Bush team players Richard Perle and Paul Wolfowitz.
With this roster of people who make up the policy and decision-making folks in the organization (HRW), many of whom have participated in the exploitation and abuse of the human rights of people throughout the world, can we expect that their focus and mission will be to protect the rights of these same people?
Let us not be misled by the title this organization has assumed for itself, its true mission is to help implement U.S. policies through the backdoor and support U.S. interests. It is no different than right-wing, neo-fascist organizations that include words like “freedom” or “democracy” in their titles to give the impression that they are fighting for freedom and democracy.
HRW has attacked Venezuela, Cuba, and Ecuador, all countries that have moved towards a more socialist ideology, for not meeting the standards of human rights in their countries without ever mentioning the U.S.
When the U.S. supported attempted coups in Venezuela, Honduras, Haiti, and Guatemala, HRW remained silent. While African-Americans are being gunned down on a daily basis, HRW has remained silent. While people demonstrating peacefully in the U.S. have been pepper sprayed, HRW has remained silent. While many thousands of people, “illegals,” have been held in detention camps for years, HRW has remained silent. While Americans have been imprisoned for decades for non-violent crimes, HRW has remained silent.
Need I say more?
(Dave Alpert has masters degrees in social work, educational administration, and psychology. He spent his career working with troubled inner city adolescents.)
September 7, 2015
Having closely followed and chronicled the war between Azerbaijan and the Armenian population of Nagorno-Karabakh, I witnessed HRW go from simply publishing events, in the late 1980s/early 1990s, to becoming an advocate of oil-rich Azerbaijan by the mid-1990s. This was no accident. The cast of characters involved in the maintenance and transport of Azerbaijani oil and gas to the west in the early 1990s included Richard Secord, Heinie Aderholt, and Ed Dearborn, three veterans of U.S. operations in Laos, and of Oliver North’s operations with the Contras.
Actually, the list is a lot longer. General Secord actually wanted to fund military operation against Armenia, by the special training of 5,000 Azerbaijani troops in a quid pro quo for furthering his firm’s, Mega Oil, access in Azerbaijan. Additional covert operations included transport through Azerbaijan of jihadist types into the Russian republics of Chechnya and Daghestan.
After HWR published a 136 page report in 1995, called, Human Rights Watch/Helsinki Azerbaijan: Seven Years of Conflict in Nagorno-Karabakh, which was basically a white-wash of massive human right abuses in Azerbaijan (which is still going on today) I met in Cambridge, Massachusetts, with Kenneth Roth the director of HRW about the publication. Paraphrasing a well thought out answer, Roth said, well we can’t take back, or recall what has been published.
Before Azerbaijan became a western oil faucet, HRW published relatively unbiased reports. That changed when unflattering human rights reports on Azerbaijan would not have been in the interest of those states involved in oil extraction and transport from Azerbaijan, including the US, UK, and Turkey.
It is very clear that so-called mainstream human right advocates are heavily influenced by power forces. Kenneth Roth still has his same position at HRW.
September 7, 2015
It is not just HRW, but Amnesty International selectively reports on abuses as it see fit. As a followup to my previous comment, just a few miles away from where I met Kenneth Roth of HRW, I presented first-hand accounts of barbaric human right abuses in Azerbaijan to Amnesty International’s local office. The response was silence.
Think of it as wizardry from the theater of darkness.
Tom at the "Dispatch" gets us ready for this year's festivities at the coming "Winning 9/11" celebrations.
Tom makes the case - yet seems to have only a glimmer of what it really was.
Unless he's making the argument (and it's challenging to not read that into his prose) that it's all been planned from that first wayward jet airliner.
September 8, 2015
[For "TomDispatch" Readers: We’re back! And glad to be here, preparing for another busy fall in a world that, in terms of pure grim news, is the gift that never stops giving for this website. Tom]
Mantra for 9/11
Fourteen Years Later, Improbable World
By Tom Engelhardt
Fourteen years later and do you even believe it? Did we actually live it? Are we still living it? And how improbable is that?
Fourteen years of wars, interventions, assassinations, torture, kidnappings, black sites, the growth of the American national security state to monumental proportions, and the spread of Islamic extremism across much of the Greater Middle East and Africa. Fourteen years of astronomical expense, bombing campaigns galore, and a military-first foreign policy of repeated defeats, disappointments, and disasters.
Fourteen years of a culture of fear in America, of endless alarms and warnings, as well as dire predictions of terrorist attacks. Fourteen years of the burial of American democracy (or rather its recreation as a billionaire’s playground and a source of spectacle and entertainment but not governance). Fourteen years of the spread of secrecy, the classification of every document in sight, the fierce prosecution of whistleblowers, and a faith-based urge to keep Americans “secure” by leaving them in the dark about what their government is doing. Fourteen years of the demobilization of the citizenry.
Fourteen years of the rise of the warrior corporation, the transformation of war and intelligence gathering into profit-making activities, and the flocking of countless private contractors to the Pentagon, the NSA, the CIA, and too many other parts of the national security state to keep track of. Fourteen years of our wars coming home in the form of PTSD, the militarization of the police, and the spread of war-zone technology like drones and stingrays to the “homeland.” Fourteen years of that un-American word “homeland.”
Fourteen years of the expansion of surveillance of every kind and of the development of a global surveillance system whose reach -- from foreign leaders to tribal groups in the backlands of the planet - would have stunned those running the totalitarian states of the twentieth century. Fourteen years of the financial starvation of America’s infrastructure and still not a single mile of high-speed rail built anywhere in the country. Fourteen years in which to launch Afghan War 2.0, Iraq Wars 2.0 and 3.0, and Syria War 1.0. Fourteen years, that is, of the improbable made probable.
Fourteen years later, thanks a heap, Osama bin Laden. With a small number of supporters, $400,000-$500,000, and 19 suicidal hijackers, most of them Saudis, you pulled off a geopolitical magic trick of the first order. Think of it as wizardry from the theater of darkness. In the process, you did “change everything” or at least enough of everything to matter. Or rather, you goaded us into doing what you had neither the resources nor the ability to do.
So let’s give credit where it’s due. Psychologically speaking, the 9/11 attacks represented precision targeting of a kind American leaders would only dream of in the years to follow. I have no idea how, but you clearly understood us so much better than we understood you or, for that matter, ourselves. You knew just which buttons of ours to push so that we would essentially carry out the rest of your plan for you. While you sat back and waited in Abbottabad, we followed the blueprints for your dreams and desires as if you had planned it and, in the process, made the world a significantly different (and significantly grimmer) place.
Fourteen years later, we don’t even grasp what we did.
Fourteen years later, the improbability of it all still staggers the imagination, starting with those vast shards of the World Trade Center in downtown Manhattan, the real-world equivalent of the Statue of Liberty sticking out of the sand in the original Planet of the Apes. With lower Manhattan still burning and the air acrid with destruction, they seemed like evidence of a culture that had undergone its own apocalyptic moment and come out the other side unrecognizably transformed. To believe the coverage of the time, Americans had experienced Pearl Harbor and Hiroshima combined. We were planet Earth's ultimate victims and downtown New York was “Ground Zero,” a phrase previously reserved for places where nuclear explosions had occurred.
We were instantly the world’s greatest victim and greatest survivor, and it was taken for granted that the world’s most fulfilling sense of revenge would be ours. 9/11 came to be seen as an assault on everything innocent and good and triumphant about us, the ultimate they-hate-our-freedoms moment and, Osama, it worked. You spooked this country into 14 years of giving any dumb or horrifying act or idea or law or intrusion into our lives or curtailment of our rights a get-out-of-jail-free pass. You loosed not just your dogs of war, but ours, which was exactly what you needed to bring chaos to the Muslim world.
Fourteen years later, let me remind you of just how totally improbable 9/11 was and how ragingly clueless we all were on that day. George W. Bush (and cohorts) couldn’t even take it in when, on August 6, 2001, the president was given a daily intelligence briefing titled “Bin Laden determined to strike in U.S.” The NSA, the CIA, and the FBI, which had many of the pieces of the bin Laden puzzle in their hands, still couldn’t imagine it.
And believe me, even when it was happening, I could hardly grasp it. I was doing exercises in my bedroom with the TV going when I first heard the news of a plane hitting the World Trade Center and saw the initial shots of a smoking tower. And I remember my immediate thought: just like the B-25 that almost took out the Empire State Building back in 1945.
Terrorists bringing down the World Trade Center? Please.
Al-Qaeda? You must be kidding. Later, when two planes had struck in New York and another had taken out part of the Pentagon, and it was obvious that it wasn’t an accident, I had an even more ludicrous thought. It occurred to me that the unexpected vulnerability of Americans living in a land largely protected from the chaos so much of the world experiences might open us up to the pain of others in a new way. Dream on. All it opened us up to was bringing pain to others.
Fourteen years later, don’t you still find it improbable that George W. Bush and company used those murderous acts and the nearly 3,000 resulting deaths as an excuse to try to make the world theirs? It took them no time at all to decide to launch a “Global War on Terror” in up to 60 countries.
It took them next to no time to begin dreaming of the establishment of a future Pax Americana in the Middle East, followed by the sort of "global imperium" that had previously been conjured up only by cackling bad guys in James Bond films. Don’t you find it strange, looking back, just how quickly 9/11 set their brains aflame? Don’t you find it curious that the Bush administration’s top officials were quite so infatuated by the U.S. military? Doesn’t it still strike you as odd that they had such blind faith in that military's supposedly limitless powers to do essentially anything and be “the greatest force for human liberation the world has ever known”?
Don’t you still find it eerie that, amid the wreckage of the Pentagon, the initial orders our secretary of defense gave his aides were to come up with plans for striking Iraq, even though he was already convinced that al-Qaeda had launched the attack? ("'Go massive,' an aide’s notes quote him as saying. 'Sweep it all up. Things related and not.'") Don’t you think “and not” sums up the era to come? Don’t you find it curious that, in the rubble of those towers, plans not just to pay Osama bin Laden back, but to turn Afghanistan, Iraq, and possibly Iran - “Everyone wants to go to Baghdad. Real men want to go to Tehran” - into American protectorates were already being imagined?
Fourteen years later, how probable was it that the country then universally considered the planet’s “sole superpower,” openly challenged only by tiny numbers of jihadist extremists, with a military better funded than the next 10 to 13 forces combined (most of whom were allies anyway), and whose technological skills were, as they say, to die for would win no wars, defeat no enemies, and successfully complete no occupations? What were the odds? If, on September 12, 2001, someone had given you half-reasonable odds on a U.S. military winning streak in the Greater Middle East, don’t tell me you wouldn’t have slapped some money on the table.
Fourteen years later, don’t you find it improbable that the U.S. military has been unable to extricate itself from Iraq and Afghanistan, its two major wars of this century, despite having officially left one of those countries in 2011 (only to head back again in the late summer of 2014) and having endlessly announced the conclusion of its operations in the other (only to ratchet them up again)?
Fourteen years later, don’t you find it improbable that Washington’s post-9/11 policies in the Middle East helped lead to the establishment of the Islamic State’s “caliphate” in parts of fractured Iraq and Syria and to a movement of almost unparalleled extremism that has successfully “franchised” itself out from Libya to Nigeria to Afghanistan? If, on September 12, 2001, you had predicted such a possibility, who wouldn’t have thought you mad?
Fourteen years later, don’t you find it improbable that the U.S. has gone into the business of robotic assassination big time; that (despite Watergate-era legal prohibitions on such acts), we are now the Terminators of Planet Earth, not its John Connors; that the president is openly and proudly an assassin-in-chief with his own global “kill list”; that we have endlessly targeted the backlands of the planet with our (Grim) Reaper and Predator (thank you Hollywood!) drones armed with Hellfire missiles; and that Washington has regularly knocked off women and children while searching for militant leaders and their generic followers?
And don’t you find it odd that all of this has been done in the name of wiping out the terrorists and their movements, despite the fact that wherever our drones strike, those movements seem to gain in strength and power?
Fourteen years later, don’t you find it improbable that our “war on terror” has so regularly devolved into a war of and for terror; that our methods, including the targeted killings of numerous leaders and “lieutenants” of militant groups have visibly promoted, not blunted, the spread of Islamic extremism; and that, despite this, Washington has generally not recalibrated its actions in any meaningful way?
Fourteen years later, isn’t it possible to think of 9/11 as a mass grave into which significant aspects of American life as we knew it have been shoveled?
Of course, the changes that came, especially those reinforcing the most oppressive aspects of state power, didn’t arrive out of the blue like those hijacked planes. Who, after all, could dismiss the size and power of the national security state and the military-industrial complex before those 19 men with box cutters arrived on the scene? Who could deny that, packed into the Patriot Act (passed largely unread by Congress in October 2001) was a wish list of pre-9/11 law enforcement and right-wing hobbyhorses?
Who could deny that the top officials of the Bush administration and their neocon supporters had long been thinking about how to leverage “U.S. military supremacy” into a Pax Americana-style new world order or that they had been dreaming of “a new Pearl Harbor” which might speed up the process? It was, however, only thanks to Osama bin Laden, that they - and we - were shuttled into the most improbable of all centuries, the twenty-first.
Fourteen years later, the 9/11 attacks and the thousands of innocents killed represent international criminality and immorality of the first order. On that, Americans are clear, but -- most improbable of all -- no one in Washington has yet taken the slightest responsibility for blowing a hole through the Middle East, loosing mayhem across significant swathes of the planet, or helping release the forces that would create the first true terrorist state of modern history; nor has anyone in any official capacity taken responsibility for creating the conditions that led to the deaths of hundreds of thousands, possibly a million or more people, turned many in the Greater Middle East into internal or external refugees, destroyed nations, and brought unbelievable pain to countless human beings.
In these years, no act - not of torture, nor murder, nor the illegal offshore imprisonment of innocent people, nor death delivered from the air or the ground, nor the slaughter of wedding parties, nor the killing of children - has blunted the sense among Americans that we live in an “exceptional” and “indispensable” country of staggering goodness and innocence.
Fourteen years later, how improbable is that?
(Tom Engelhardt is a co-founder of the American Empire Project and the author of The United States of Fear as well as a history of the Cold War, The End of Victory Culture. He is a fellow of the Nation Institute and runs "TomDispatch.com." His latest book is Shadow Government: Surveillance, Secret Wars, and a Global Security State in a Single-Superpower World.)
And on the home front (er . . . homeland?) . . . .
By Pam Martens and Russ Martens: September 7, 2015
Faculty, Students and Community Groups Protest NYU Management at a Rally in Washington Square, September 1, 2015
New York University has devolved into a dystopian model of higher education reimagined by Wall Street knaves who serve on its Boards and their kingpin attorney, Martin Lipton, who has been NYU’s Board Chairman for 17 years.
As the university has thrown million dollar pay packages and perks like vacation homes with forgivable loans at its President, John Sexton, and an elite group of faculty, students have been buried under debt by the likes of the serially charged and now admitted felon, Citigroup, and are turning to prostitution in increasing numbers to meet the obscene hidden fees and staggering tuition piled on their shoulders by NYU’s masters of the universe. It now costs over $240,000 for a four-year degree at NYU – a nonprofit university subsidized by the taxpayer.
At a protest rally in Washington Square last Tuesday against NYU’s tyrannical conduct, you could have heard a pin drop when a young woman walked onto the stage with a mask covering her face to tell her story of being the first in her family to attend college and the first to have to turn to prostitution to pay the soaring tuition demanded by NYU.
The NYU student read from a prepared statement, saying:
“I learned at the dominatrix den and at the Tantra House, almost every single girl who worked there was a student struggling to pay for school or to pay off her crippling student loans. Some were Sarah Lawrence girls, some went to CUNY or Cooper Union, but the vast majority go to or went to NYU…We came to these universities to better ourselves, to work for a better life. No girl should have to sell herself to make that better life a reality.”
This young woman’s story comes on the heels of a report in January at the "New York Daily News" listing NYU as the third fastest growing university in the U.S. for listings at SeekingArrangement.com, a site that matches up financially struggling women with “Sugar Daddies” who are frequently hedge fund managers or Wall Street bankers – the same financial types that dominate the Boards of Trustees at NYU and its Medical Center and have made the decisions that have buried the students under one of the highest tuition rates in the country, mountains of slippery fees and student debt.
In 2013, the Consumer Financial Protection Bureau (CFPB) asked students to send it comments on their experience with privately-offered student loans, issued typically from banks as opposed to those from the Federal government. Students who had taken out loans from Citibank to attend NYU were among the respondents.
Sarah V. wrote: “In 2004 I took out both private loans from Citibank and government loans to attend NYU to study for my MA in Art Therapy. I received a letter from NYU stating that Citibank was the preferred lender of their students and they highly recommended their services.
I was offered no financial aid, but NYU ‘offered’ me $26,000 per year in loans from Citibank. They were practically pre-approved…My first full time Art Therapy position in a city hospital offered monthly take home pay of about $1800 a month. My student loan payments were $800 a month approximately. Rent with three roommates was $750. Public Transportation was about $90 a month then. I went without heat for the winter, sleeping in my coats and hats with a heating pad. I wrote to Citibank and called them. I told them I wanted to pay, but asked for a reduced payment plan. They wrote back telling me that it would be ‘illegal’ to take more than 10 years to pay. They refused all of my requests.”
Citibank’s regulators testified at a Congressional hearing in 2007 that there is no regulation prohibiting banks from modifying student loans as long as it does not impact the safety and soundness of the institution.
Another NYU student and Citibank borrower, Gina K., wrote to the CFPB in 2013, stating that “I was misinformed, manipulated and the lenders were not honest with me. They estimated that my student loans would be about $200 – 300 a month. A far cry from $1,000 a month. When the economy gets better, my variable interest rate goes up, and my payments can be as high as $1,300 or $1400 a month.” Gina told the CFPB that she has a Masters Degree from NYU but because student loan payments are consuming half of her monthly income, she is forced to live from paycheck to paycheck with no hope of getting out of debt.
In 2001 and again in 2004, Citibank was named a “Preferred” student loan lender at NYU. This status came at a time when Jack Lew, the current U.S. Treasury Secretary, was working as Chief Operating Officer at NYU. During his time at NYU, Lew received a $1.3 million mortgage from NYU, signed for by John Sexton, to buy a luxury home in the Riverdale section of the Bronx. Large amounts of the loan were forgiven and Lew was further paid $685,000 in a so-called “severance bonus” when he left NYU to become Chief Operating Officer of Citigroup, parent of Citibank that made all of those loans to NYU students.
While Lew was at Citigroup, the mega bank entered a death spiral and received over $2.5 trillion in cumulative loans, equity infusions and asset guarantees from the taxpayer to prop it up so that it could go on to be charged with future serial crimes, including admitting to a felony charge for engaging in a price rigging cartel.
When Lew decided to return to Federal government service, he accepted a $940,000 bonus from Citigroup – notwithstanding the fact that the bank was insolvent and the funds belonged to the taxpayer. Despite all of this, Lew was handily confirmed by the U.S. Senate for the post of U.S. Treasury Secretary – again proving that every facet of America has been intellectually trained to participate in its own demise.
One Senator who was not cowed by Lew was Vermont Senator Bernie Sanders, now a Presidential candidate. Sanders told the Senate floor that “we need a Treasury secretary who will stand with the working families of this country and is prepared to take on an oligarchy which now controls the economic and political life of this great nation. Is Jack Lew that person? No, he is not.”
In a front page "New York Times" article in June 2013, Ariel Kaminer and Alain Delaqueriere reported that NYU President John Sexton had received over $1 million in loans from NYU to buy a luxurious vacation home on Fire Island with some of the loans at less than one-quarter of one percent interest and others being forgiven over a five-year period. (The university was already providing Sexton with the use of an apartment on campus.) According to NYU financial statements, Sexton received a $2.5 million bonus in January of this year. On top of his typical annual pay of approximately $1.5 million in total compensation (based on the latest 2013 public tax filing with the IRS) that would mean that John Sexton will receive $4 million in compensation from NYU in one year while hundreds of young women turn to prostitution to meet their crushing debt and tuition loads.
That $4 million pay package also comes two years after five schools at NYU passed no confidence votes in Sexton’s leadership of NYU.
NYU has been in the constant glare of the media for the past three years as endless scandals have surfaced over its financial and real estate dealings. Trying to find words to capture NYU’s brand of management is becoming challenging, even for those who have carefully watched its defective moral compass repeatedly run it into the rocks. Financial writer Yves Smith of NakedCapitalism.com called NYU a “real estate development/management business with a predatory higher-education side venture.”
That sounds spot on. Wall Street On Parade conducted an in-depth investigation of NYU deals in 2013. One finding was that from 2006 through 2010, a scant five years, NYU’s five highest paid independent contractors received over $568 million for real estate construction work and an eye-popping $173 million went to clean its buildings according to its public IRS tax returns. (NYU is one of the largest owners of real estate in Manhattan.)
At the rally last Tuesday, Deborah Glick, a member of the New York State Assembly, said that NYU was “ripping off a generation” and “impoverishing adjunct professors.” Glick said the battles against NYU are enormous because “It’s like a viper at your breast, nestled close to you, trying to kill you.”
Glick’s statement called to mind economist Michael Hudson’s New Book, “Killing the Host,” which characterizes Wall Street as a parasite devouring the U.S. economy while tricking us all into propping it up so it can continue its rapacious wealth grab. Hudson writes:
“A parasite’s toolkit includes behavior-modifying enzymes to make the host protect and nurture it. Financial intruders into a host economy use Junk Economics to rationalize rentier parasitism as if it makes a productive contribution, as if the tumor they create is part of the host’s own body, not an overgrowth living off the economy. A harmony of interests is depicted between finance and industry, Wall Street and Main Street, and even between creditors and debtors, monopolists and their customers.”Where better to indoctrinate the idea of a parasite as a do-gooder than an institution of learning – or relearning. Wall Street On Parade’s 2013 investigation found the following:
“On February 2, 1999, law professor Noel Cunningham and his partner, adjunct professor Laura Cunningham, received a $1.4 million mortgage for a brownstone in the Park Slope section of Brooklyn. The loan went to $1.5 million 11 months later. The nonprofit that arranged the deal was the NYU School of Law Faculty Retention Assistance Corporation. Noel Cunningham had already been a law professor at the school for 24 years, suggesting retention was not an issue.“In 2008, Noel Cunningham wrote a paper on carried interest — the scheme under which billionaire hedge fund managers on Wall Street pay a paltry 15 percent income tax [now 20 percent] – less than most struggling middle class Americans. Cunningham’s paper came in response to a Congressional proposal to tax hedge fund managers at 35 percent, in line with other high income earners at the time. Cunningham advocated for a ‘more moderate legislative fix.’ ”The carried interest wealth transfer scheme is now a hot topic among Presidential hopefuls. The Boards at NYU, crammed to the gills with hedge fund titans, must be getting a little nervous again.
A “harmony of interests” as described by Michael Hudson is how parasitism has burrowed so deeply into the culture at NYU that it now passes for the status quo. In April of this year, Lipton and Sexton announced that the hedge fund billionaire John Paulson, who sits on the NYU Board of Trustees, would receive the “Albert Gallatin Medal for Outstanding Contributions to Society” at NYU’s 183rd Commencement ceremony. Albert Gallatin was one of the founders of NYU and a former Treasury Secretary under Thomas Jefferson and James Madison.
Paulson is the founder and head of Paulson & Co., infamously known on Wall Street as the firm that conspired with Goldman Sachs to create “Abacus,” – an investment Paulson & Co. helped to structure so that it would collapse in value. In 2010, the SEC brought charges against Goldman Sachs and one of its young vice presidents, Fabrice Tourre, for “defrauding investors” in the sale and marketing of Abacus. Paulson & Co. slipped through the net because it didn’t sell or market the product – it simply shorted it based on its inside information that it was designed to fail.
The Abacus deal closed on April 26, 2007. Nine months later, according to the SEC, “99 percent of the portfolio had been downgraded.” The SEC adds: “As a result, investors in the ABACUS 2007-AC1 CDO lost over $1 billion. Paulson’s opposite CDS positions yielded a profit of approximately $1 billion for Paulson.”
In July 2010, Goldman Sachs settled with the SEC for a payment of $550 million. Fabrice Tourre was subjected to a jury trial and ordered to pay more than $825,000 in gains and penalties. John Paulson and his hedge fund were not charged and kept their profits. Then the power brokers at NYU sprang into action. The 2010 Spring/Summer issue of the Alumni Magazine of the Stern School of Business at NYU carried a glowing tribute to Paulson, noting that he had made a $20 million gift to the school. There is no mention of Abacus or making $1 billion by shorting an investment designed to fail. Instead, the article engages in propping up parasitism by telling its readers that “during the recent subprime mortgage crisis, Paulson developed a contrarian strategy that included shorting mortgage-backed securities. It turned into one of the greatest trades in Wall Street history.”
The article goes on to note that “the School has named the first floor lobby of Tisch Hall and the School’s auditorium” in Paulson’s honor.
It’s not just students who are financially struggling at NYU; contract faculty are also straining to pay rent and buy food. Two years ago, when the vacation home scandal was swirling around NYU, Michael Rectenwald, a Master Teacher at the Liberal Studies Program at NYU, posted the following on his blog:
“Reading these reports might lead one to believe that NYU is home to a coddled, handsomely rewarded faculty, a knot of wriggling leeches living lavishly on the future debts of its students. However, nothing could be further from the truth. The reports refer to a tiny minority, and utterly miss the conditions attendant upon the vast majority of the faculty at NYU.”
Rectenwald wrote that contract faculty, not tenured or tenure track faculty, make up 70 percent of the teaching faculty at NYU. According to Rectenwald, as of 2013, “the average starting salary for a full-time contract faculty member is an estimated $60,000 to $65,000 per year. The average per-course compensation for part-time contract faculty is roughly $5,000. A member of the latter group, if ‘lucky’ enough to be offered them, might teach eight courses a year and accrue around $40,000 a year.” Without discounted housing, that amounts to considerably less than a living wage in New York City, says Rectenwald.
Further buttressing the idea that NYU is a real estate slush fund in drag as an institution of higher education, it is proposing a 2 million square foot commercial real estate expansion, which includes bulldozing over three community parks in the historic Greenwich Village community where much of its campus is located. Lipton and Sexton have turned deaf ears to four years of protests from community residents, hundreds of faculty members and students who say the expansion is not needed and will simply bury students under more debt taken on to appease real estate interests.
Speaking at last Tuesday’s rally, Mark Crispin Miller, NYU Professor of Media, Culture & Communication, called NYU’s financial practices “grotesque” and “off the charts.” Miller is one of the leaders of the faculty group known as FASP – Faculty Against the Sexton Plan – which includes more than 400 faculty determined to restore educational integrity to NYU.
In May, FASP published a devastating study titled “The Art of the Gouge,” which Miller described at the rally as providing the specifics on “what NYU does to milk the students out of ultimately billions of dollars and spends that money on real estate transactions and sky high pay for top administrators.”
From the stage at the Washington Square rally, Miller read a statement of support from author William Deresiewicz, who has just penned an article for "Harper’s Magazine" titled: “The Neoliberal Arts: How College Sold Its Soul to the Market.” Deresiewicz said in his NYU statement of support:
“We must return American higher education to the core values of shared governance, equal access irrespective of wealth, and liberal education for the sake of democratic citizenship. We must treat students like students, not ATM machines. We must treat instructors like valued professionals, not itinerant laborers. No one should be getting rich by working at a university, and no one should be made poor by going to one.”
Hedge fund titan John Paulson functioned as a Sugar Daddy to NYU. By giving the university $20 million, he got his name on a lobby and auditorium and received a commencement award for “outstanding contributions to society,” despite a repugnant record of parasitism.
The Chairman of the Board of Trustees of the NYU Medical Center, which bears his name, is Ken Langone. Langone was previously sued by the New York State Attorney General in 2004 for breach of his fiduciary duty involving an obscene compensation plan that scandalized the New York Stock Exchange.
As the scandal played out in the media, Langone had this to say to "Fortune Magazine"’s Peter Elkind in 2004:
“They got the wrong fucking guy. I’m nuts, I’m rich, and boy, do I love a fight. I’m going to make them shit in their pants. When I get through with these fucking captains of industry, they’re going to wish they were in a Cuisinart — at high speed.”
NYU’s Board apparently believes it can burnish its image with a new President with an Oxford pedigree. Andrew Hamilton, Oxford’s Vice Chancellor since 2009 and a former Provost at Yale, will become NYU’s President next year when Sexton retires with an $800,000 annual pension. Lipton is scheduled to turn over the Chairmanship of the Board to billionaire William R. Berkley this year – a selection that has already generated controversy.
As the battle for the soul of NYU continues to evolve, one facet is well worth watching. A new vocabulary will be needed to properly explain the tactics of the new-age robber barons who have tricked millions into believing they are a useful, integral part of our society, worthy of having their names chiseled into our taxpayer-subsidized institutions and trillion-dollar bailouts from a nation in hock to the tune of $18.3 trillion – in no small part owing to Wall Street’s brainwashing.
And as for the latest news on the demise of manufacturing in the homeland?
You really don't want to read any further.
From the Mauldin site (and you know how maudlin he is) . . . the news on what's happening with the makers and takers (so to speak):
September 8, 2015
The bulls are mad at me!
I’ve been heavily beating the bear market drum in this column since the spring.
The S&P 500, by the way, peaked on May 21, and this column has been generating a rising stream of hate mail from the bulls as the stock market has dropped. My hate mail falls into two general categories: (1) you are wrong, and/or (2) you are stupid.
[NOTE: Please feel free to leave your comments — good and bad — in the discussion forum at the end of the column.]
Well, I may not be the sharpest tool in the Wall Street shed, but I haven’t been wrong about where the stock market was headed.
This column, however, isn’t about me. It’s about protecting and growing your wealth—and that’s why I have been so forceful about the rising dangers the stock market is facing.
One of the themes I’ve repeatedly covered in this column is the rapidly deteriorating health of the two most basic economic building blocks of the American economy: the “makers” (see August 25 column) and the “takers” (see July 14 and August 4 columns).
There are thousands of economic and business statistics you can look at to gauge the health of the US economy, but at the economic roots of any developed country is the prosperity of its factories (makers) and transportation companies (takers) delivering those goods to stores.
This week, let’s look at the latest evidence confirming the piss-poor health of American factories.
Factory Fact #1: The Institute for Supply Management released its latest survey results, which showed a drop to 51.1 in August, a decline from 52.7 in July, below the 52.5 Wall Street forecast, and the weakest reading since April 2009.
NOTE: The ISM survey shows that raw-materials prices dropped for 10 months in a row. If you own commodity stocks—such as copper, oil, aluminum, or gold—you should consider how falling raw-materials prices will affect the profits of those companies.
Factory Fact #2: Despite all the crowing from Washington DC about the improving economy, US manufacturing output is still worse today than it was before the 2008-2009 Financial Crisis, according to the Federal Reserve.
Factory Fact #3: Business inventories increased at the fastest back-to-back quarterly rate on record. Inventories increased 0.8% in Q2, following a 0.3% increase in Q1, and now sit at $586 billion. That’s a 5.4% year-over-year increase!
Remember, there are two reasons why businesses accumulate inventory:
- Business owners are so optimistic about the future that they intentionally accumulate inventory to accommodate an upcoming avalanche of orders.OR
Factory Fact #4: The Manufacturers Alliance for Productivity and Innovation (MAPI), a trade association for US manufacturers, is none too optimistic about the state of American manufacturing.
- Business is so bad that inventory is starting to involuntarily pile up from the lack of sales.
The reason for the pessimism is simple: US manufacturers are struggling.
- US-manufactured exports decreased by 2% to $298 billion in the second quarter, as compared with 2014.
“The US $48 billion deficit increase in the first half of the year equates to a loss of 300,000 trade-related American manufacturing jobs, and the deficit is on track for a loss of 500,000 or more jobs for the calendar year,” said Ernest Preeg of MAPI.
- The US deficit in manufacturing rose by $21 billion, or 15%, compared with the second quarter of 2014.
So what does all this mean?
When I connect those dots, it tells me that American manufacturers are struggling. Really struggling.
Take a look at the Dow Jones US Industrials Index, which peaked in February and started to drop well ahead of the August market meltdown.
You know what’s really nuts? The P/E ratio for this struggling sector is almost 19 times earnings and 3.3 times book value!
Is there a way to profit from this slowdown of American factories? You bet there is.
Take a look at the ProShares UltraShort Industrials ETF (SIJ). This ETF is designed to deliver two times the inverse (-2x) of the daily performance of the Dow Jones US Industrials Index.
To be fair, I should disclose that my "Rational Bear" subscribers have owned this ETF since June 16, 2015, and are sitting on close to a 15% gain.
Critics could say that I am “talking up my book,” but I instead see it as “eating my own cooking.” My advice in this column isn’t theoretical — we put real money behind my convictions.
That doesn’t mean you should rush out and buy this ETF tomorrow morning. As always, timing is everything, so I suggest you wait for my buy signal.
But make no mistake, American “makers” are doing very poorly, and that’s a reliable warning sign of bigger economic problems.
30-year market expert Tony Sagami leads the Yield Shark and Rational Bear advisories at Mauldin Economics. To learn more about Yield Shark and how it helps you maximize dividend income, click here.
So, if you're not dead (and decomposing), there's a way to make money from this mayhem.
Which is sooooo American.