ALEC Exposed: How Corporations Are Taking Over Our Democracy

Thursday, July 14, 2011 by The Progressive
by Ruth Conniff

Today the Center for Media and Democracy rolled out a new web site, ALEC Exposed, based on a massive leak of information from the American Legislative Exchange Council, the powerful coalition of corporations, right-wing foundations, and state legislators who have been literally writing the laws at the state level to push their pro-business, anti- democracy agenda.

For many years, big corporations, including Kraft, Pfizer, WalMart, and AT&T, to name a few, have been paying hefty dues to belong to a group that gives them access to state legislators. The legislators, for a much smaller fee, get to attend annual conferences, receive briefings from ALEC, and get the honor of putting their names on boilerplate legislation the groups drafts.

One of the many new pieces of information to emerge from the impressive ALEC Exposed project is that the corporate members of this group vote these bills out of their own, corporate committees before passing them on to their pet legislators.

"We've discovered through a whistleblower that these corporations actually vote on these bills behind closed doors, before legislators or the people they represent even hear about them," Lisa Graves, the director of the Center for Media and Democracy said today.

If you live in a state like Wisconsin, the results of this coordinated assault on democracy are all too evident.

Much of the group's legislation--privatizing the public schools, taking away collective bargaining rights, loosening environmental regulation, even suppressing the vote--got a huge boost when ALEC foot soldiers, including Governor Scott Walker and the heads of both of Wisconsin's legislative chambers, took power. The group's hard work and careful planning for just such an opportunity over the last two decades accounts for the head-spinning all-fronts attack ordinary citizens are currently enduring in Wisconsin.

State representative (and Progressive magazine blogger) Mark Pocan went "behind enemy lines" to write a piece about attending an ALEC conference for The Progressive Magazine back in March 2008, in a darkly comic piece titled "Through the Corporate Looking Glass".

That piece is more relevant--and less funny--now that ALEC has become even more powerful.

A big controversy erupted when Professor William Cronon at the University of Wisconsin-Madison, blogged about ALEC's corporate takeover of the state and became the target of Republican attacks and had his emails seized by Governor Scott Walker's administration.

Walker and Co. will be even less pleased when they see ALEC Exposed.

The site, which posts and analyzes more than 800 bills produced by ALEC, is a treasure trove of information, including never-released text of the actual ALEC bills broken down and organized by topic, information about the corporate membership of ALEC's task forces on particular issues, the names of ALEC's state chairmen, and the effects of the bills: on working people, schools, the environment, consumer rights, and our democracy.

"We know that we are standing on the shoulders of some tremendous investigative work," Lisa Graves said in a press conference on the roll-out, "But we believe this is a special contribution."

Reporters and citizens can now look at bills that were introduced in their states under the names of their elected officials, and trace the actual, corporate origins of these profoundly anti-democratic efforts.

"We know, for example, that Kraft has been the head of the task force for ALEC responsible for anti-union bills," Graves said.

On the schools issue, which I wrote about in a Progressive cover story a couple of months ago, it turns out that Connections Academy, the company that runs Wisconsin's virtual charter schools, which are poised to displace bricks-and-mortar public schools throughout the rural parts of the state under a Republican proposal, is the head of ALEC's task force on education.

The Center for Media and Democracy deserves a lot of credit for this tremendous addition to our understanding of what is happening to our states. Now, as ALEC Exposed puts it, it's up to us to dig in and spread the word.

New media laws could mean jail for ordinary users

Jacob Aron, technology reporter
16:30 3 June 2011

Regulating the internet is no easy task, as a recent string of technology-related bills proposed by US legislators shows. Poor wording and a lack of understanding of the underlying technology could put ordinary internet users at risk of breaking the law - even though supporters of the new bills say they wouldn't be targeted.

One bill, put forward by Senators Amy Klobuchar, John Cornyn and Christopher Coons, aims to make it a crime to stream copyrighted material, but as Techdirt points out, the wording of the bill as it currently stands could make simply embedding a YouTube video an illegal act.

The bill is intended to target streaming websites that provide entire movies for free, but uses the phrase "public performance by electronic means" without clearly defining it. Is embedding a video a performance? It's an important question, because the bill also imposes a jail term of up to five years for ten such "performances".

Another bill, recently signed into law by the governor of Tennessee, makes it illegal to share your password for media streaming services such as Netflix or Hulu. Anyone who allows friends or families to use their login details to access these services could potentially face a one-year jail sentence and a $2500 fine for stealing media worth $500 or less.

The new law updates existing legislation that makes it illegal to use services such as cable television or restaurants without paying, updating the wording to include "entertainment subscription services", but it seems Netflix doesn't see the need for such an update. The compoany told MediaBeat:

Netflix applauds any efforts to stave off video piracy... However, Netflix already has provisions in its Terms of Use that restrict passwords to the member's household.

These flawed bills come shortly after the proposal of the controversial Protect IP Act, which would give the US Department of Justice the power to block non-US websites hosting copyright-infringing material. The Act would also require search engines to remove links to such sites.

Google's chaiman, Eric Schmidt, has spoken out against the bill, saying it "sets a very bad precedent".

House Votes to Fund Obama's War Surge

(That Wikileaks story should have hit sooner...sigh...--jef)

***

by Jim Abrams | Tuesday, July 27, 2010 by the Associated Press

WASHINGTON - Months behind schedule and stripped of money for domestic stimulus programs, legislation to fund the troop surge in Afghanistan was sent to President Barack Obama on Tuesday after disgruntled Democrats failed to block it.

Democratic leaders had to rely on Republican support to pass the almost $59 billion measure to fund Obama's additional 30,000 troops in Afghanistan and other programs. The final vote was 308-114. Twelve Republicans and 102 Democrats opposed it. (How did your Congressman vote? full roll call here)

Pentagon leaders have warned that money to fund the troops could run out as early as Aug. 7, prompting the House, which is leaving at the end of the week for its August recess, to accept the pared-down Senate version of the legislation.

Last week the Senate rejected a larger, House-favored bill that would have included billions of dollars to help keep teachers on the job, provide aid for college students and enhance border security.

With the new war spending, the total amount of money that Congress has allotted for the wars in Iraq and Afghanistan surpasses $1 trillion.

House Appropriations Committee Chairman David Obey, D-Wis., said he was torn between his obligation to bring the bill to the floor and his "profound skepticism" that the money would lead to a successful conclusion of the war in Afghanistan.

Even if there were greater confidence in the Afghan government, he said, "it would likely take so long it will obliterate our ability to make the kinds of long-term investments in our own country that are so desperately needed."

Rep. Jim McGovern, D-Mass., cited recently released classified documents he said revealed some of the corruption and incompetence of the Afghanistan government.

"We're told we can't extend unemployment or pay to keep cops on the beat or teachers in the classroom, but we're asked to borrow another $33 billion for nation-building in Afghanistan," he said. "I think we need to do more nation-building here at home."

Obama urged passage of the war-funding bill, saying in a Rose Garden statement that it was needed "to ensure that our troops have the resources they need and that we're able to do what's necessary for our national security."

The president also addressed the unauthorized release of the sensitive documents - thousands of battlefield reports - saying he was concerned they "could potentially jeopardize individuals or operations."

Republicans in turn chided Democrats for delaying for months before ending up with the same bill the Senate passed in May. "We've been through all of this wrangling, and for what? All we've created is more uncertainty for our troops in the field, more uncertainty for the Pentagon, and it's all unnecessary," House Republican leader John Boehner said at a news conference.

The president requested the emergency funding last February. After the Senate passed it in May, the House on July 1 approved its own version tacking on more than $20 billion in domestic spending. The Senate last week rejected that approach, falling 14 votes short of what was needed to break a GOP-led filibuster.

The bill includes more than $33.5 billion for the additional 30,000 troops in Afghanistan and to pay for other Pentagon operational expenses, $5.1 billion to replenish the Federal Emergency Management Agency disaster relief fund, $6.2 billion for State Department aid programs in Afghanistan, Pakistan, Iraq and Haiti, and $13.4 billion in benefits for Vietnam veterans exposed to Agent Orange.

In addition to stripping out money for teachers and student aid, the final bill does not provide more than $4 billion requested by the administration to finance settlements of long-standing lawsuits against the government, including $1.2 billion to remedy discrimination by the Agriculture Department against black farmers and $3.4 billion for mismanaging Indian trust funds.

"We have a moral and legal responsibility to settle those claims," said House Majority Leader Steny Hoyer, D-Md., adding that he was "very disappointed" Senate Republicans did not go along with paying the settlements, although the costs would not have added to the federal deficit.

Blaming the blogosphere for Democratic Failures

(Boy, if nothing else does, this TOTALLY epitomizes the cliche of the "whiny Democrats." 

"Whaaaaaaa! The left-wing blogs are trying to make us keep our campaign promises! Whaaaaa! They won't let us be centrist and inneffectual. Whaaaaaaa! They don't want us to do the bidding of our corporate masters! Whaaaaaaa!" 

Boy, I know a certain "party of pussies" who's about to get their asses handed to them come November. Ouch!--jef)

***

By Ian Welsh Friday Jul 16, 2010

So. In response to a Politico piece in which the authors and White House whine about the left wing blogosphere not being happy with all of Obama's "wins" and not caring about potential losses in 2010, Kevin Drum writes:

Here's the good news: this record of progressive accomplishment officially makes Obama the most successful domestic Democratic president of the last 40 years. And here's the bad news: this shoddy collection of centrist, watered down, corporatist sellout legislation was all it took to make Obama the most successful domestic Democratic president of the last 40 years. Take your pick.

Here's the thing. What matters is whether policy works. It does not matter if what Obama did was more left wing than anything that's been done in a while (though in absolute terms I would argue it mostly wasn't left wing, the health care plan, for example, was essentially a Republican plan from the 90s), what matters is if it was left wing enough (big enough stimulus, smart enough health care plan) to improve people's lives enough that they noticed.

It wasn't, and that's all that matters. Policies such as the stimulus were not done well enough, and everyone from Nobel prize winners with good predictive records like Stiglitz and and Krugman, down to nobodies like me, predicted it at the time. The President hired the wrong people to give him advice, didn't even do as much as many of them wanted, and now we all pay the price.

Sometimes half doesn't work. Half-assed rarely does. All Obama's half assed "left wing" policies have done is discredit the left for another generation. Combined with the ability of the media, Republicans and hysterical Tea Baggers unable to use a dictionary to define him as a "socialist" this means that Obama's policies are seen as left wing, and left wing policies are seen to have failed.

I don't want Obama doing anything I agree with, because he will screw it up and discredit it. In this respect he is like Bush. He is poison because he is incompetent at policy.

As for the original Politico post, the hysterical ranting at the peanut gallery the authors clearly don't even read, says more about them and the White House than it does about the left wing blogosphere they try to blame for Democrats own failures.

The Problem is Political, Not Economic

The Stealth Bailouts
By MIKE WHITNEY
There's finally some good news on the housing front, but it has nothing to do with sales, inventory or interest rates. In fact, it has nothing to do with market conditions at all. It's a story about politics and how government can work when elected representatives do their jobs. The details are laid out in an article by Dean Baker. Here's an excerpt:

"As the Obama Administration works up its 12,487th plan for keeping underwater homeowners in their homes, Arizona’s legislation may have the courage and good sense to do the obvious: let foreclosed homeowners stay in their home as renters. A bill was just introduced in legislature that would allow homeowners in houses that sell for less than the median price to remain in their home as renters for at least one year following foreclosure. 

With this simple gesture the Arizona legislature could do more for the nation’s underwater homeowners than all the brilliant DC policy wonks have managed to accomplish in the last three years with all their billions of dollars. The legislation would give low and moderate-income homeowners security in their homes. It doesn’t make them jump through hoops and prove to bureaucrats that they were worthy. It doesn’t require them genuflect before loans servicers or bankers. 

This legislation would give homeowners the right to stay in their home. And bingo, every low and moderate-income homeowner in the state would know that the bank could not just throw him or her out on the street. If this passes the banks may also think more seriously about loan modifications, since they couldn’t just throw a foreclosed homeowner out on the street. The proposal doesn’t cost the taxpayers any money. It also doesn’t require any government bureaucracy. It’s easy to see why it’s a non-starter in Washington." ("Arizona Leads the Way in Combating Foreclosure" Dean Baker, Truthout)

This is a good first step and we can only hope that Arizona lawmakers follow-through and provide some badly-needed relief for the victims of the mortgage fiasco. But let's not kid ourselves, the banks are not going to roll over and die. They're going to fight this thing tooth-and-nail and do everything in their power to stop this mini-uprising from mushrooming into a full-blown rebellion. This is the type of populism that can leapfrog from one state house to another if it isn't nipped in the bud. Besides, the banksters have no intention of taking orders from "do-gooder" politicos or allowing people to stay in homes if it denies them their pound of flesh. They'll just ring-up their legal team and drag it out in the courts.

But the bankers have bigger problems than the mutiny in Arizona. That's near-beer compared to the boatload of non performing loans and mortgage-backed securities they still need to dump. And that's become a much more difficult process, now that the public's radar is on high-frequency and politicians are backing away from anything that smacks of a bailout. That's why most of the ideas that are currently under consideration have been kept out of the media.

One such idea--promoted by John McCain's former economic advisor--is is for the Treasury to use $75 billion from the TARP fund and lever it at 10 to 1, so that the banks can write-down the mortgage principle on millions of delinquent loans and, thus, keep the homeowners out of foreclosure. In other words, the Treasury will act as a sovereign hedge fund providing borrowed capital for cramdowns to keep the banks from losing more money. This would provide nearly a trillion dollars of public funding (which would cover most of the future losses from defaulting ARMs and Alt A mortgages) without congressional approval. Naturally, the bailout would be accompanied by a public relations campaign that would divert attention from the banks and focus on the (fictional) beneficiaries of government largess; aka. struggling homeowners.

But it's clear from Fannie Mae's recent losses, that the banks have already figured out how to shed their toxic assets without arousing undo public interest. Most people are unaware that the Bush administration dumped hundreds of billions of dollars of mortgage-backed sewage into the GSE's (Fannie and Freddie) right after the subprime meltdown. As soon as the secondary market froze-over, banks realized that their vaults were filled with worthless paper they needed to get rid of pronto. Fannie turned out to be the perfect solution, a vast and shadowy public landfill where all manner of toxic sludge could put to rest. Here's a clip from Rortybomb which explains how it all worked:

"It is likely the GSEs (Fannie and Freddie) took on some of the worst loans and mortgage-backed securities of the banks during 2007 and 2008, transferring losses from the private banking sector to the quasi-private-quasi-public GSEs. Let’s look at ... articles from the New York Times on the collapse of the GSEs... Here’s "Pressured to Take More Risk, Fannie Reached Tipping Point", by Charles Duhigg, Oct 2008:

NY Times: "Had Fannie been a private entity, its comeuppance might have happened a year ago. But the White House, Wall Street and Capitol Hill were more concerned about the trillions of dollars in other loans that were poisoning financial institutions and banks....Lawmakers, particularly Democrats, leaned on Fannie and Freddie to buy and hold those troubled debts, hoping that removing them from the system would help the economy recover......"

And also this article, "White House Philosophy Stoked Mortgage Bonfire by Becker", by Stolberg and Labaton, from Dec 2008:

"In an Oval Office meeting on March 17, however, Mr. Paulson barely mentioned the idea, according to several people present. He wanted to use the troubled companies to unlock the frozen credit market by allowing Fannie and Freddie to buy more mortgage-backed securities from overburdened banks. To that end, Mr. Lockhart’s office (ed... James Lockhart, Director of Fannie Mae) planned to lift restraints on the companies’ huge portfolios — a decision derided by former White House and Treasury officials who had worked so hard to limit them." 

One doesn’t have to be an advanced game theorist to see the adverse selection in play – the loans sold to the GSEs from the major banks, under much political pressure, in this period were almost certainly of poorer quality and too expensive." (Rortybomb, "GSE Losses as Shadow Bailout")

So, as soon as subprimes started detonating at a 6 percent rate, Treasury Secretary Henry Paulson went into crash-alert mode and began looking for a place where his buddies could offload their dodgy assets. As the article suggests, Paulson finally decided that Fannie and Freddie were the only practical option.

And that's just one of many stealth bailouts. There are others, too. Like Bernanke's quantitative easing (QE) shell game. QE was promoted as a way to increase consumer lending by building reserves at the banks. Only it doesn't work that way. What QE really does is exchange bank reserves for "unsellable" mortgage-backed securities. In other words, it trades quality, liquid bonds for illiquid assets of uncertain value. The arrangement allows the banks to earn interest on reserves at no cost to themselves, while the Fed is saddled with downgraded securities for which there is no current market. If you are the Fed; you just got taken to the cleaners.

Bernanke implemented the "good bank/bad bank" model that was recommended after the Lehman default, but without any strings attached for the banks. Since then, it's been one ginormous government-paid freebie after another. Rather than nationalize the banks so they could be cleaned up, reorganized and recapitalized. Bernanke found a way to rebuild balance sheets, restore profitability, and preserve the banks political firepower without any fundamental structural change. None of the head honchos at Morgan Stanley, Goldman Sachs, Citigroup or JP Morgan lost their jobs. The same wobbly, crisis-prone system has been reassembled without the slightest change to the blueprint.

Now all Bernanke needs to do is figure out how to get rid of all the crummy MBS he just bought and he can take a sabbatical. And that shouldn't be too hard either. Treasury Secretary Geithner, who has been working on the problem from the get-go, will probably buy the sour assets incrementally and then discreetly move them to Fannie Mae where they will reappear as quarterly losses. And that will be the end of the toxic assets.

So, how will all these stealth bailouts effect the economy?

While diverting trillions of dollars into broken institutions is a bad idea in the best of times; it's much worse during a downturn. Confidence is flagging because unemployment is high. And unemployment is high because demand is weak. That means that the money that should be going to people who will generate more economic activity, is actually going to prop up lending institutions that don't lend and banks that operate as casinos. What sense does that make?

The bailouts are not the problem, they merely indicate the extent to which the banks control all parts of the political apparatus. That's right, the problem is political not economic. Speculators will always try to bend the rules and game the system. It's human nature. But it's the public's responsibility to make sure their representatives keep a tight leash on the high-stakes gamblers and other flim-flammers. That means tough, hardnose regulations; a new regime of stop signs, speed limits and guard rails. Cross the meridian, and it's "off to the poky". Presently, the rules only apply to those who are not powerful or well-connected enough to shrug them off, which is why the system is broken.