The Darth Vaders of Business Law

Writers of the Fine Print
By RALPH NADER

It is time to shine the light on the big, affluent corporate lawyers who anonymously create those non-competitive fine print contracts we all have to sign to purchase goods and services.

It's time for an open letter to these Darth Vaders of business law who have destroyed our freedom of contract and built a new road to serfdom made of corporate cement.

Dear Attorneys for Contract Incarceration:

Remember when you were at law school studying contracts? Your professor pressed you socratically to understand Hadley vs. Baxendale, et al. You spent just one or two classes on what are called "contracts of adhesion"—those fine print one-sided contracts that only make up 99% of all the contracts we'll ever sign.

There they are—page after page exuding the silent message of "take it or leave it." If you "leave it", then you must cross the street to a competitor—an insurance company, credit card firm, bank, auto dealer, hospital, realtor, airline, student loan company or cell phone company, awaiting you is the same fine-print contract designed to nail you to the mast. Then there are the shrink-wrap software contracts you can't even see before you buy.

If your contracts professor bothered to explain why so little course time is spent on these standard form contracts involving trillions of dollars in annual sales, he/she might have used the French phrase—"fait accompli." After all, the consumer signed or acquiesced in some way. That met the basic principle of a binding contract, say the courts (with a rare exception now and then) which is a meeting of the minds between the willing seller and the willing buyer.

Discussion over! As a shopper, prepare for the daily coercive harmony.

Imagine all the times you've "met the minds" of Bank of America, Metropolitan, Aetna, General Motors, Wal-Mart, American Express, AT&T, Sallie Mae, U.S. Air and your favorite time-sharing company for that vacation trip to Antigua. What a myth!

In this legal fiction land, the law presumes that you've read the fine print and understood it. Inscrutability is no defense. It doesn't matter that law professors, Supreme Court Chief Justice Roberts and your partners admit to not reading the dense legalese when they shop. Why waste their time? They can't get out of contractual prison anymore than you can. But you make zillions figuring out how to lock millions of Americans into one-side anti-consumer contracts.

You misuse your intellect to create a modern contract straitjacket that gets tighter year by year. Your innovations are enforced by status-quo judges, credit ratings, credit scores and the absence of any competition over contracts between companies in the same industry.

The straitjacket is made of figurative steel fibers composed of enforceable words. Here is a partial list of your inventions which Harvard Law Professor Elizabeth Warren aptly calls "mice type" the equivalent of "shrubbery for muggers!"

They include (1) seller's power to unilaterally change terms or assign the contract, (2) waiver provisions of the seller's liability and payment of seller's attorney fees, (3) acceleration and delinquency clauses, (4) binding arbitration and blocking the consumer's resort to the courts and right to jury trials, (5) liquidated damage clauses. On and on go the layers of incarceration.

Pretty clever maybe, but, you aren't being fair to the powerless consumers. Remember, you've got a professional code of ethics that informs you of the obligation sometimes to say no—enough already—to your demanding corporate clients even if they can always go to another law firm that they can pay handsomely to say yes. It can be, for you, a dilemma.

Listen, I've got an exit plan for those of you pondering quitting or retiring because you can no longer stand destroying peoples' freedom of contract—one of the main pillars of our democracy—with their consequential losses of money, time, health and safety.

Come to the other side. A movement for consumer contract justice is heading your way. Don't laugh as General Motors once did in the Nineteen Sixties. Don't think that the complexity of these fine prints cannot be communicated to the buying public. ABC's Peter Jennings showed the opposite with a crisp five part TV series a few years ago. This fall, a sure best seller by David Cay Johnston titled "The Fine Print" is coming out. He has prior best sellers on tax laws that clarify the abstruse to arouse readers.

There is a huge compression of repression and resentment ready to be unleashed and converted into a widely perceived injustice. Ridding themselves of the feeling that "that's the way it is," this consumer uprising will be holding you and your companies responsible by name.

Quit and join the right side of the coming historical change breaking the chains of contract bondage. Bring your knowhow and stored archives (names redacted) of "mice type" to faircontracts.org, directed by the relentless lawyer, Theresa Amato. Soon!

Your brother in law,
Ralph Nader, Esq.

Government Has Run Amok Since 9/11

Feeding Frenzy
By SHELDON RICHMAN

Those who understand the exploitative nature of big government suspected that the U.S. response to the 9/11 attacks had little to do with the security of the American people and much to do with power and money. Still, the magnitude of the scam, as revealed by the Washington Post last week, is astonishing.

Naturally, the politicians justify the growth in intelligence operations on national security grounds. To make sure such attacks never happen again, they said, new powers, agencies, personnel, and facilities were imperative.

Now the truth is out: the post–9/11 activity has been an obscene feeding frenzy at the public trough. Any resemblance to efforts at keeping Americans safe is strictly coincidental.

“The top-secret world the government created in response to the terrorist attacks of Sept. 11, 2001, has become so large, so unwieldy and so secretive that no one knows how much money it costs, how many people it employs, how many programs exist within it or exactly how many agencies do the same work” the Post’s Dana Priest and William Arkin write. “After nine years of unprecedented spending and growth, the result is that the system put in place to keep the United States safe is so massive that its effectiveness is impossible to determine.”

It would be a mistake to chalk up the government’s conduct to bureaucratic bumbling. This is not bumbling. It is highway robbery. Everyone who was well connected, either in government or the “private” sector, wanted a piece of the action, and chances are that he — and many others — got it. It doesn’t matter that multiple agencies do the same work and keep their findings secret from one another. It doesn’t matter that the volume of paperwork is beyond anyone’s capacity to absorb it. What matters is money, power, and prestige. This is the mother of all boondoggles.

Chew on some of the numbers from the Post investigation and see if it sounds as though protection of American society was a national-intelligence priority:

• “Some 1,271 government organizations and 1,931 private companies work on programs related to counterterrorism, homeland security and intelligence in about 10,000 locations across the United States.” 

• “An estimated 854,000 people, nearly 1.5 times as many people as live in Washington, D.C., hold top-secret security clearances.” 

• “In Washington and the surrounding area, 33 building complexes for top-secret intelligence work are under construction or have been built since September 2001. Together they occupy the equivalent of almost three Pentagons or 22 U.S. Capitol buildings — about 17 million square feet of space.”

Moreover, the Post writes, “51 federal organizations and military commands, operating in 15 U.S. cities, track the flow of money to and from terrorist networks,” and “Analysts who make sense of documents and conversations obtained by foreign and domestic spying share their judgment by publishing 50,000 intelligence reports each year — a volume so large that many are routinely ignored” (emphasis added).

Since 9/11 no fewer than 263 intelligence and counterterrorism organizations have been “created or reorganized.”

And what about cost?

“The U.S. intelligence budget is vast, publicly announced last year as $75 billion, 2 1/2 times the size it was on Sept. 10, 2001. But the figure doesn’t include many military activities or domestic counterterrorism programs.” In other words, no one knows how much the whole thieving operation costs.

According to Priest and Arkin, “[Many] officials who work in the intelligence agencies say they remain unclear about what the [Office of the Director of National Intelligence] is in charge of.”

It comes as no surprise that the mega-bureaucracy isn’t even much help fighting wars: “When Maj. Gen. John M. Custer was the director of intelligence at U.S. Central Command, he grew angry at how little helpful information came out of the [National Counterterrorism Center]. In 2007, he visited its director at the time, retired Vice Adm. John Scott Redd, to tell him so. ‘I told him that after 4 1/2 years, this organization had never produced one shred of information that helped me prosecute three wars!’ he said loudly, leaning over the table during an interview” (emphasis added).

These revelations should have any professed opponent of big government screaming bloody murder. So far the silence from conservatives has been deafening.

Mission Accomplished...

Iraq Opens Up to Foreign Oil Majors
Western producers like BP, Exxon Mobil, and Shell are enjoying their best access to Iraq's southern oil fields since 1972, but a weaker government could be on the way

By Anthony DiPaola and Daniel Williams

(Bloomberg) -- BP Plc and Exxon Mobil Corp. took the best deal they could get in Iraq last year when they won the largest oil contracts since addam Hussein was toppled in 2003. Oil companies may wait a long time to get a better one.

Parliamentary elections may produce a weak or unstable government incapable of tendering new oil contracts, said Samuel Ciszuk, a London-based analyst at IHS Global Insight. He said he does expect the 10 technical-services contracts won by Exxon, BP and 20 other companies to be honored.

"One thing that's fairly certain is there won't be a strong coalition, so it may take time for the next government to get its act together," Ciszuk said in a telephone interview.

"Bottlenecks could hold up production increases" if no government forms by June.

Western producers haven't had access to oil fields in southern Iraq since 1972, when the country nationalized production including concessions owned by the companies now known as BP, Royal Dutch Shell Plc and Exxon.

The contracts awarded in two auctions, which pay a per-barrel fee for development work rather than granting a share in the production itself, will cost the companies a total of about $100 billion to develop deposits, Oil Minister Hussain al-Shahristani said in December. Iraq, with the world's third-largest oil reserves, will earn about $200 billion a year.

SERVICE FEES
A group led by BP, which vies with Shell as Europe's largest oil company, will receive $2 billion per year in fees to develop the Rumaila field. A Shell-led group will get $913 million and a group led by Exxon, the largest U.S. oil company, will receive $1.6 billion per year. Each calculation is based on the agreed-to per-barrel fee times the maximum production level.

"We see this as the beginning of a long-term relationship with Iraq and will continue to look for further opportunities," Andy Inglis, BP's chief executive for exploration and production, said on a conference call March 2.

Prime Minister Nouri al-Maliki, whose government signed last year's oil contracts, is running against an array of opponents. Sunni Muslim, Shiite Muslim and Kurdish factions, along with a pan-sectarian party, all are in the race with Al-Maliki's Shiite-based Rule of Law coalition.

The sectarian blocs are also divided one against another, making it unlikely any one group can win a majority.

"This is the most wide-open election in Iraq's history," said Faleh Abdul-Jabar, director of the Beirut-based Iraq Institute for Strategic Studies, in a telephone interview.

TROOP WITHDRAWAL
U.S. troop levels will fall to 50,000 from the current 97,000 by August of this year, according to a schedule laid out by President Barack Obama in February 2009. All troops will leave by the end of 2011 under an agreement with the Iraqi government reached by President George W. Bush.

A change in Iraq's government won't affect contracts signed last year, al-Shahristani said in a March 2 interview in Baghdad. The amount of work needed on the contracts means the oil companies can afford to wait for a new government to form and consolidate its power before pressing for fresh production or exploration contracts.

The only region where companies participate in more than fee-for-service work is in Iraq's north. Companies including Norway's DNO International ASA are pumping crude in the Kurdish autonomous region under production-sharing agreements not recognized by the central government.

Indecision over forming a government could delay investment in oil projects, said David Bender, a Middle East analyst at Eurasia Group in Washington.

MOST ATTRACTIVE
"Iraq is one of the most attractive oil markets in the world," Bender said. "The international oil companies may feel that getting in at the beginning improves their long-term prospects."

Winning contracts to explore undiscovered and untapped deposits under more favorable terms is a long-term goal for producers operating in Iraq, said two officials with oil companies that won contracts last year. The officials asked not to be identified since they aren't allowed to speak publicly about company policies in Iraq.

Iraq has much work ahead to meet its production goals, so new exploration agreements are unlikely to be signed soon, said Centre for Global Energy Studies in London.

"People are going to ask, 'Why should we sell resources that can't be reproduced? What is the rush?'" he said.

London-based BP and China National Petroleum Corp. agreed in June to produce 2.85 million barrels a day at Rumaila, the only field locked up in the first round and one of Iraq's largest.

Exxon, based in Irving, Texas, together with Shell, based in The Hague, pledged to pump 2.33 million barrels of crude a day from the first phase of the West Qurna field. Patrick McGinn, a spokesman for Exxon, said in a March 3 e-mail that the company doesn't comment on political issues.

Shell also was the lead partner with Malaysia's Petroliam Nasional Bhd., or Petronas, winning a contract to boost output at the Majnoon field to 1.8 million barrels of oil a day.

"Big or small, no company wanted to be left out of Iraq," Takin said.

Obama Applauds Mass Firing of Teachers, Just Like When He Applauded the Mass Firing of Banksters. Oh wait.

Obama Applauds Mass Firing of Teachers, Just Like When He Applauded the Mass Firing of Banksters. Oh wait.
By: Michael Whitney

This is the kind of moment for which you want your Democratic President to really step up.

In the middle of the worst jobs crisis since the Great Depression, more than 90 dedicated professional educators find themselves put out into the street. On Feb. 23, the Central Falls, R.I., school trustees fired the entire teaching staff of Central Falls High School, supposedly because of declining test scores at the school, which is located in Rhode Island’s smallest and poorest city.

In all, 93 persons were put in the street—74 classroom teachers, plus reading specialists, guidance counselors, physical education teachers, the school psychologist, the principal and three assistant principals. Negotiations over ways to improve the school between teachers and the school superintendent broke down when school officials insisted that teachers add new duties, some without any extra pay at all.

A wholesale firing of an entire school; the only ones left in the entire high school are the food service workers and the custodians.

So why is the Obama administration going out of its way to praise this mass firing?  In a speech to Colin Powell’s dropout prevention nonprofit at the US Chamber of Commerce headquarters, Obama “voiced support” for the firings.

President Obama voiced support Monday for the mass firings of educators at a failing Rhode Island school, drawing an immediate rebuke from teachers union officials whose members have chafed at some of his education policies.

Speaking at an event intended to highlight his strategy for turning around struggling schools by offering an increase in federal funding for local districts that shake up their lowest-achieving campuses, Obama called the controversial firings justified.

This wasn’t just an off the cuff remark from Obama – this is the administration’s official position. Secretary of Education Arne Duncan went out of his way to praise the firings.

Meanwhile, state and local education officials received some high-powered support of their own, when U.S. Education Secretary Arne Duncan weighed in, saying he “applauded” them for “showing courage and doing the right thing for kids.” [...]
“This is hard work and these are tough decisions, but students only have one chance for an education,” Education Secretary Duncan said, “and when schools continue to struggle we have a collective obligation to take action.”

So yeah, the position of Barack Obama’s administration is that when schools aren’t doing well, it’s totally cool to clean house and fire everyone but the food service workers, no questions asked.
And the position of Barack Obama’s administration with failing banks and financial institutions?  Keep every single one (except the guy forced out by shareholders), and hell, keep their ludicrous pay – cause it’s in their contracts.

At least he’s consistent.