Fed's Backdoor Giveaway

If you've been reading this blog for any time at all, you undoubtedly realize the passion I feel when it comes to our disappearing democracy. I've pretty much summed up the fundamental reason for most, if not all, of the problems that paralyze this republic. I've pointed out, adequately I hope, and have inferred that no matter the size of government, the same secretive and underlying manipulators will still control the reins of government.

Two years ago, Bloomberg News dropped a bombshell about how the American taxpayer, through Federal Reserve lending programs and guarantees, was being placed in the unenviable position of being the underwriter for over $9 trillion...yes, that's TRILLION...to the largest banks, investment houses, and multinational corporations in the world. Keep in mind, only the $787 billion stimulus legislation that became law early in 2009, the $700 billion Troubled Asset Relief Program (TARP) signed into law in October of 2008, and the $168 billion in tax cuts and rebates enacted in early 2008 had been voted on by congress to that point.

These trillions of dollars were "off balance sheet" transactions. Where the money went, exactly to whom, for what, and with what assets held as collateral, remains a mystery to this day, at least to the public, and at least to then-U.S. Congressman Allan Grayson. At a hearing early last May, Federal Reserve Inspector General Elizabeth Coleman was questioned during testimony to account for the $9 trillion in off-balance sheet transactions (which comes to approximately $30,000 for each man, woman and child in the U.S.). After a lot of dancing and hemming-and-hawing, she answered that no one at the Federal Reserve knows or is keeping track of where the money has gone.    

As Senator Bernie Sanders mentioned in an article early in December, "...the $700 billion Wall Street bailout signed into law by President George W. Bush turned out to be pocket change compared to the trillions and trillions of dollars in near-zero interest loans and other financial arrangements the Federal Reserve doled out to every major financial institution in this country. Among those are Goldman Sachs, which received nearly $600 billion; Morgan Stanley, which received nearly $2 trillion; Citigroup, which received $1.8 trillion; Bear Stearns, which received nearly $1 trillion, and Merrill Lynch, which received some $1.5 trillion in short term loans from the Fed."

The great giveaway didn't end there. Prior to January 21, 2009, the day the current administration took over the "official" reigns of government, special loans and dispensation to other non-bank multinational corporations peaked at $348.2 billion. Among the beneficiaries were Toyota Motor Corp. ($4.6 billion), Harley-Davidson Inc. ($2.3 billion) and Verizon Communications Inc. ($1.5 billion). General Electric Company used the Fed as its own revolving charge account, tapping the Fed a dozen times ($16.1 billion). Supposedly, in its scramble to keep the economy from collapsing, the Fed created the Commercial Paper Funding Facility, or CPFF, which tried to ensure that banks and industrial companies had the short-term loans they needed to fund everyday operations. GE was the biggest recipient.

Bloomberg News brought a lawsuit against the Board of Governors of the Federal Reserve System to force the Board to reveal the identities of firms for which it has provided guarantees and won at the trial level. The Fed appealed the decision, and on August 27, 2010, the U.S. Court of Appeals agreed to delay implementation of the ruling until Oct. 19 so that the Fed may appeal to the Supreme Court. Given the composition of the current high court, specifically the Gang of Five right-wing judicial outlaws who gave corporations unlimited influence over our elections just over one year ago, it's almost a sure bet that Bloomberg News will be on the losing end when a decision is handed down. As of today, a court date has not been scheduled. 

But the fun didn't end there. Between October 27, 2008 and August 6, 2009 (well into the Obama "watch") the Fed spent $350 billion in taxpayer funds to save thirty-five foreign banks and multinational corporations. The thirty-five were UBS, Dexia SA, BNP Paribas, Barclays PLC, Royal Bank of Scotland Group, Commerzbank AG, Danske Bank A/S, ING Groep NV, WestLB, Handelsbanken, Deutsche Post AG, Erste Group Bank AG, NordLB, Free State of Bavaria, KBC, HSH Nordbank AG, Unicredit, HSBC Holdings PLC, DZ Bank AG, Republic of Korea Rabobank, Sumitomo Mitsui Banking Corporation, Banco Espirito Santo SA, Bank of Nova Scotia, Mizuho Corporate Bank, Ltd., Syngenta AG, Mitsui & Co Ltd., Bank of Montreal, Caixa Geral de Depósitos, Mitsubishi UFJ Financial Group, Shinhan Financial Group Co Ltd., Mitsubishi Corporation, Aegon NV, Royal Bank of Canada, and last, but not least, Sumitomo Corporation. Amazing, huh? Is there something wrong with this picture? The fact that our central bank -- supposedly having the power and chosen role to do so -- doled out billions of dollars to foreign banking institutions, is not only unconstitutional but may also be treasonous.   

  

So the question, the "$9 trillion dollar question" to be exact, remains: Where did the money go, and why? What power, instilled by We the people, gave the Federal Reserve the right to loan and guarantee loans to...well, most of the largest banking institutions worldwide? And finally, the question needs to be asked: Who benefited? It certainly wasn't Main Street, U.S.A., was it? We, the People, ultimately came up the biggest loser.

Why do the American people, time and time again, allow themselves to be taken for the collective fool? Why is it, while tens-of-thousands have taken to the streets of major cities of Greece and France to protest government-imposed austerity programs, the real looters steal away virtually in the daylight, and while the cauldrons of revolution boil over in places such as Tunisia and Egypt, the American people continue to sit on their hands and hope...and pray...that a better day will be just down the road? Is our mindset so colonized, so propagandized, that we can't discern what is happening right in front of us? 

Matt Taibbi explained it best in a piece about our peasant mentality: "You know you’re a peasant when you worship the very people who are right now, this minute, conning you and taking your shit. Whatever the master does, you’re on board. When you get frisky, he sticks a big cross in the middle of your village, and you spend the rest of your life praying to it with big googly eyes. Or he puts out newspapers full of innuendo about this or that faraway group and you immediately salute and rush off to join the hate squad.  A good peasant is loyal, simpleminded, and full of misdirected anger.  And that’s what we’ve got now, a lot of misdirected anger searching around for a non-target to mis-punish . . . can’t be mad at AIG, can’t be mad at Citi or Goldman Sachs. The real villains have to be the anti-AIG protesters!" Mr. Taibbi's right.  

Today, during the 202nd birthday celebration of probably this country's finest president, we're reminded of just how great a leader Abraham Lincoln was. He warned us about the reign of corporate power and the corruption in high places that would follow, and he correctly saw that the moneyed interests would perpetuate its reign by working upon the prejudices of the people, fleecing our treasure and stealing our republic. Chris Hedges, in last Sunday's column articulating the way empire thrives and prospers, said "All centralized power, once restraints and regulations are abolished, once it is no longer accountable to citizens, knows no limit to internal and external plunder. The corporate state, which has emasculated our government, is creating a new form of feudalism, a world of masters and serfs. It speaks to those who remain in a state of self-delusion in the comforting and familiar language of liberty, freedom, prosperity and electoral democracy."

Mr. Lincoln foretold all this, and it's my opinion that's the true reason he lost his life to a "lone assassin's" bullet. Those in position, who stand for We the People, who speak out against corporate power and domination, all too frequently do.

Justices Thomas and Scalia Should Have Recused Themselves...But Didn't

This past weekend, at the exclusive Rancho Las Palmas resort near Palm Springs, California, the infamous Koch brothers hosted a gala for some of the largest titans of industry and government; the influential and the moneyed. It wasn't necessarily a celebratory gathering to praise and applaud those who participated in a hard-fought election, but rather a secretive planning and strategizing session for the prominent conservative elected (and un-elected) officials, donors and strategists that have been shaping American political thought and policy the last few years. The twice-a-year gathering has been framed as a session "to review strategies for combating the multitude of public policies that threaten to destroy America as we know it."

It's not known whether two Supreme Court justices, namely Antonin Scalia and Clarence Thomas, were attending the Rancho Las Palmas festivities, but it is known that both have had dealings with David and Charles Koch in the past and have been guests of the notorious pair at similar occasions. This has raised red-flags, appropriately so, by legal ethicists and other groups who want to see more disclosure. Although supreme court justices are not barred, like federal judges, from appearing at partisan events, they are ethically-bound from attending overt political planning functions. Obviously, their presence at these conferences greatly raises questions of transparency and, for some, broader concerns about judicial independence.

Last spring, in a letter to Attorney General Eric Holder and signed by Common Cause President & CEO Bob Edgar and Vice President Arn Pearson, they asked that the Justice Department promptly investigate whether Justices Thomas and Scalia should have recused themselves from the Citizens United case. If the Department finds sufficient grounds for disqualification of either Justice, they have requested that the Solicitor General file a motion with the full Supreme Court seeking to vacate the judgment.

Although sufficient evidence may be unattainable, questions included in the petition include: (1) Would a reasonable person question the impartiality of Justices Thomas and Scalia based on their attendance at secretive Koch Industries retreats?, and (2) Does attendance of a closed-door Koch Industries retreat constitute political activity? Common Cause argues, “We believe it is inappropriate for a Supreme Court judge to be ‘featured’ at or attend closed-door strategy meetings with political donors, corporate CEOs, candidates and political officials, and thereby lend the prestige of their position to the political goals of that event” and “A reasonable person would question the impartiality of Justices Thomas and Scalia in the Citizens United case based on their attendance at political strategy meetings sponsored by a corporation that raises and spends millions to defeat Democrats and elect Republicans”.

And there's another fly in the ointment that may add credence to Common Cause's request: As you can probably imagine (simply because you undoubtedly consider yourself a "reasonable person"), federal judges -- and justices -- are required by law to disclose their spouse's income. This prohibits unsavory organizations and individuals from influencing the judiciary by channeling money (i.e., "influence") through their wife or husband. Yet, Justice Thomas has not complied with this requirement for years. Between 2003 and 2007, Virginia Thomas, Justice Thomas' wife, earned $686,589 from the Heritage Foundation, according to a Common Cause review of the foundation’s IRS records. Thomas failed to note the income in his Supreme Court financial disclosure forms for those years, instead checking a box labeled “none” where “spousal noninvestment income” would be disclosed. It's also known that Virginia Thomas has been active in the political group, Liberty Central, an organization of her founding, that's predominately guided by the Tea Party's vague philosophies of limited government, free enterprise, national security, and personal responsibility, and is also funded charitably by Koch Industries, the second largest private corporation in America.  

Thus, the Common Cause petition to the Department of Justice also asked a third very critical question: Did Justice Thomas have a conflict of interest based on his wife’s interest in the subject matter of the Citizens United case? If so, and this is an equally important question to ask (again, assuming you're a "reasonable person"): Does Koch Industries' ties to Virginia Thomas' organization, Liberty Central, create an additional appearance of bias for Justice Thomas? 

Knowing what we know now -- that Koch Industries, a major beneficiary of the Citizens United decision, and benefiting from the ruling to expand its multi-million dollar investment in political campaigns and causes -- should the Citizens United ruling be vacated? If there were a such thing as justice, and rule of law, it would be. But given the American mainstream media, and its refusal to report this, the vast majority of Americans will never even be aware of this blatant and obvious conflict of interest. And not being aware creates no pressure by We the People to force and elicit change through the Obama Administration. If the Common Cause petition ever sees the light of day, I'll be surprised. In just about all areas, this administration has shown it's more concerned with the welfare of corporate America than with the rights of We the People. I'm sure this will be no exception.

Why We, the People, Are Losing

Many who know me realize I'm an ardent supporter of the anti-corporate personhood crowd. I've been adamantly against the legal fiction that corporate entities have been increasingly given those most sacred of human rights that our founders recognized over two centuries ago. With this blog I hope to explore, with your help, the concept of corporate personhood and all its insidious ramifications. Most people haven't a clue what the words "corporate personhood" mean, what it refers to, where it came from, or even how it affects them in their daily lives. With this blog I hope to explore these questions, and hopefully answer them with meaningful discourse and discussion. The following post, initially published on my friend Tom Degan's blog on September 9, 2008 -- literally days before the near-collapse of the investment banking sector -- is even more meaningful today.

"Tom, like you, I used to be firmly in the Democratic camp each and every election cycle, just knowing that if only the Democrats could retain power, all our social and political problems would be worked on, and would finally get solved. But, decade-after-decade, the same problems continued to persist. They actually got worse, not better. Aside from a Republican revolution that oversaw a dismantling of much of the New Deal era's strides to put society on a more equal footing, even when Democratic control was firmly in place the slide continued towards further degradation of human rights, and citizen needs, in favor of corporate and moneyed interests.

I, too, sincerely hope I'm wrong in my opinion about Senator Obama. I truly do. But the evidence is irrefutable. Thankfully, in 2002, which is the year Thom Hartmann's remarkable Unequal Protection came out, I picked it off the bookstore shelf and only intended to take a quick glance, but then couldn't put it down. I immediately bought it, and read it - more like absorbed it. Since, I've done extensive reading and research concerning corporate personhood through other areas, such as POCLAD.

That day things really started to crystallize for me. I understood that our problems weren't unsolvable through democratic action; they were only resisted by corporate entities that held far more power and influence than I did as a voter, and an agenda that was antithetical to mine, and most Americans. I learned that although I had the protections and rights granted to me through the Constitution and the Bill of Rights, so did, underhandedly, multinational corporate and banking interests. Just as important, it became apparent that our elected officials, from both parties, were in the corner of their corporate benefactors; not mine, or yours, or any of the other millions of middle or working class people in this country. When I made that connection, I mean when it finally hit me like a ton of bricks, I understood that a slow-motion coup d’état had taken place right under our noses. It didn't take troops and tanks rolling through the streets; all it took was time and incremental steps. It worked, and sadly, most of America is oblivious to the fact that it happened. They know 'something's wrong' but they haven't figured it out. It was the most covert takeover of a people in history.

I'll probably never return to the Democratic Party, but it could happen. If, through some miracle, they adopted the same stance in their official party platform that the Green Party has regarding the elimination of corporate personhood, then I'll come back. The 'Greens' unabashedly call for 'legislation or constitutional amendment to end the legal fiction of corporate personhood.' This, Tom, would be the real panacea to true reform, and the return of our country to We the People. Without this, we're just pissin' in the wind."

Of course, since this post, the advancement of corporate personhood has made great strides in solidifying its position while concurrently overshadowing our democratic rights. As this short video makes clear, corporate rule is firmly in-place. Although it didn't begin with last January's Supreme Court ruling, in Citizens United v. Federal Election Commission, a 5-4 majority invalidated many restrictions on corporate spending to influence elections.