Saturday, November 19, 2011
The Defense Death Spiral: from Chuck Spinney's Blog (by Chuck Spinney)
http://chuckspinney.blogspot.com/p/links-to-my-reports.html
Why the Pentagon is Always Underfunded
The courtiers in the Hall of Mirrors that is Versailles on the Potomac are lining up to give Leon Panetta advice on how to manage the Pentagon in the coming era of budget “constraints.” Most of this wisdom takes the form of platitudes of how important it is to have a strategy and to make the hard choices needed to budget for that strategy. Duh!
My current favorite is Dr. Daniel Goure’s recent blog on the web page of the Lexington Institute, a pro-defense “think tank.” Goure starts his advisory by saying:
Let’s be honest. The current U.S. defense program is underfunded, even at over $500 billion a year in the base budget and another $100 billion plus in contingency expenses.
Goure then goes on to discuss the need for vision, particularly concerning controlling personnel and health costs and avoiding duplication by transferring work done in government facilities, and by the military, to contractors. In other words, when times are tough, return to the old game of protecting industry at the expense of the soldier and the taxpayer.
Thanks for your honesty, Daniel, but more of the same won’t cut it this time.
Goure is correct about one thing, however. The defense program is underfunded. But before dispensing advice on how to shovel money to his friends in industry, Goure ought to explain how and why the highest budget since the end of World War II could possibly end up underfunding the current program. After all, the United States is engaged in a tough but relatively small war on terror, with far smaller forces and minuscule operational tempos compared to those deployed to either Korea and Vietnam.
Moreover, the United States no longer needs to spend a large part of the defense budget to maintain a large forward deployed conventional and nuclear forces to counter the threat posed by the Soviet Union. With a few minor exceptions, the United States is also fielding the smallest combat-coded force structures since 1950. Nevertheless, despite a defense budget that has almost doubled in inflation adjusted dollars since 1998, Mr. Panetta is inheriting a defense program approaching the programmatic equivalent of a meltdown.
Why?
If Mr. Panetta wants to nurse the Pentagon into to health he must come to grips with the real causes of the Defense Death Spiral — a problem I have been studying and writing about since the late 1970s.
The central management problem plaguing the Department of Defense -- i.e., the meltdown of the entire defense program -- can be characterized in a general sense as being produced by the mutually reinforcing effects of A modernization program that cannot buy enough new weapons to modernize the force structures of the Army, Navy/MC, and Air Force, because the unit costs of new weapons always grow faster than budgets, even when budgets increase sharply, as they did in the 1980s and after 1998;
Continual budgetary pressure to reduce readiness and shrink force size to contain the growth of operating costs (from operating aging, more complex hardware, but also from the growing personnel costs of the all volunteer force) to free up funds to finance the bankrupt modernization program; and Corrupt and unauditable accounting, financial management, and program planning systems that lubricate the degenerative process by making impossible to assemble the information needed to sort out and correct the first two problems.
As long as these three relations remain in place, the defense budget will always be underfunded. In fact, as I explained to Senator John Tower during testimony to Congress in 1983, "spending more money the same way actually makes matters worse." A near doubling of the defense budget since 1998 has shown again that statement to be correct.
This is the fundamental management dilemma facing Mr. Panetta. Resolving it won’t be easy, because this trifecta of structural problems is only the outward manifestation of a bureaucratic engine powered by deeper behavioral pathologies that insensibly built up over during the 40 years of Cold War and are now seamlessly embedded in the culture of the Pentagon, the defense industry, and their wholly owned subsidiaries in Congress -- these habitual modes of conduct are known as the defense power games (front loading and political engineering).
The defense power games, together with their trifecta of external manifestations, effectively turn the decision making process and program planning processes inward and disconnect the entire decision/policy making effort from external reality, including the threats it purports to cope with, the strategy alleged to meet those threats, and the shaping of force structures needed to execute the strategies. The resulting self-referential decision making engine — referred to by some wags in the Pentagon as a self-licking ice cream cone — creates the inwardly-focused death spiral portrayed by the following figure.
Simply repeating the same old empty platitudes about having a strategy and fitting forces and budgets to that strategy leads nowhere, because the Pentagon decision process that consumes millions of man hours each year to create this mess year after year — the Planning, Programming, and Budgeting System — already is designed precisely to link threats to strategy to programs and then to budgets! The real problem is why it fails to do so year after year — which brings us back to a diagnosis of the pathologies.
The repetitive pattern of these pathologies and their effects have been well understood and have been well documented since the early 1980s. Moreover, the programmatic meltdown the Defense Department is experiencing today was foreseen by the late 1980s and early 1990s. Nevertheless, with a few lonely exceptions, notably Senator Charles Grassley (R-Iowa), no one in leadership positions in the Pentagon, Congress, or the White House has taken any interest in correcting the Pentagon's self destructive patterns of behavior.
For this reason, at the end of the 1980s, I decided the only thing I could do was to begin documenting these problems for posterity. My intent was to provide a track record showing how these problems were indeed foreseeable and how they could have been avoided, if the leaders in the Pentagon chose to make that effort. They did not -- and today, the American public is reaping the Pentagon's bitter harvest of shame -- an underfunded defense program in chaos even though is being funded by largest budgets since the end of World War II (after removing the effects of inflation). Those who blame this mess on the war on terror and out of control personnel and medical costs are selling snake oil to grease a continuation of this destructive pattern of business as usual.
This link, for example, will take you some of my more important unclassified reports and papers describing these problems: They explain why and how the Defense program has been in a continuous state of unraveling. They predicted what would happen if these behavioral pathologies were left on unaddressed. My June 2002 statement to Congress outlined a comprehensive plan for fixing these general decision-making problems. I don’t know if that plan will work, but at least it was designed to address the real causes of the underfunding problem.
TACAIR Case Study
No mission area reveals the Pentagon’s behavioral pathologies more clearly than tactical fighter aviation or TACAIR. As the Cold War was ending in the early 1990s, the Air Force, Navy, and Marine Corps wanted to embark on a new generation of high-cost, high-complexity fighter/attack aircraft (these became the F-22, F/A-18E/F, and the F-35 Joint Strike Fighter).
To summarize a somewhat complex story: In 1991, just as the Cold War was ending, the AF front loaded the F-22 by pushing it prematurely though decision-making milestone II into concurrent engineering and manufacturing development (EMD, aka Milestone II). This decision allowed the contractor (Lockheed Martin) to begin the construction of a social safety net by spreading dollars, jobs, and profits to many congressional districts, a power game known as political engineering. Front loading and political engineering are explained in Defense Power Games. Less than a year later, the Navy pulled off the same stunt by prematurely rushing the F-18E/F into EMD for the same reason. Both airplanes were high cost legacies of Cold War thinking. The objective of the decision making game in each case was to turn on the money spigot and lock it open; in effect, the goal was to let the Cold-War cows out the Cold-War barn before its door closed.
It is important understand that the senior military and civilian decision makers in the Pentagon responsible for rushing these two decisions knowingly created a long term force structure crisis. They knew beforehand that the Pentagon's contractors could not possibly produce enough new F-22s and F-18E/Fs quickly enough (even in the unlikely event where there were no delays due to cost overruns and technical problems) to replace the 3,000-plus fighter/attack aircraft in the inventories on a timely basis. Consequently, decision makers knew before the fact that the average age of the older airplanes remaining in that inventory would rapidly grow to unprecedented levels and that the increased aging would lead to unpredictable increases in future operating budgets. They also knew before the fact that only way to slow down the increased rate of aging would be to approve a drastic reduction in the size of those inventories by retiring the oldest airplanes without replacement.
The senior decision makers responsible for these decisions also knew beforehand that the force-structure crisis created by the F-22/F-18E/F decisions would became the source of enormous extortionary pressure to approve the development two years later of yet a third high cost fighter/attack program -- what was to become the problem-plagued F-35 Joint Strike Fighter -- yet another Cold-War-inspired concoction of highly complex and costly technologies that is now the most expensive single weapons program in history.
Put bluntly, the disastrous ramifications of these reckless decisions were known before they were approved. If you don’t believe me, you can download and read my reports. They describe how this was being done while it was being done — they can be found here in the subsection entitled “Specific Reports on Tactical Fighters.” Together, with my March 1996 essay, Defense Budget Time Bomb, the case of tactical aviation provides the clearest evidence of how the Pentagon bureaucracy, with malice of forethought, deliberately created the modernization crisis that metastasized after 2000 and is now staring Mr. Panetta in face. But if you think I am cherry picking my data by focusing on TACAIR, a more general, albeit more complex picture of the same general pattern of decision making can be found in my unclassified 1998 briefing, Defense Death Spiral.
That, in a nutshell, is the dirty story of why the defense budget is underfunded, but you won’t hear this story from courtiers trying to ingratiate themselves with the new Secretary of Defense. Given that political pressure is mounting to cut back non-defense programs including Social Security, Medicare, education, infrastructure, etc., to reduce deficit, I submit the time has come to rein in the Pentagon’s out of control budget, to discipline its reckless behavior, and to force it to clean up its act.
Job 1 is to provide more reliable programmatic information to the Secretary of Defense, so he and his staff can figure out how to pull the Pentagon out of its death spiral. The only incentive to force this is to put the entire core budget at "risk," say by placing the core (non-war related) budget on a downward sloping glide path of 2 to 4% per year (in current as opposed to inflation-adjusted dollars) until the Pentagon can produce auditable books. That would simply bring it into compliance with Chief Financial Officers Act of 1990 and the Accountability and Appropriations Clauses of the Constitution. Given that every member of the Defense Department has taken a sacred oath to protect the Constitution, making the Pentagon conform to the requirements of the Constitution is hardly an onerous requirement.
Only with cleaner books can serious policy-making and strategic planning begin. Readers interested in a short primer written by defense insiders, with over 400 years of collective experience, on how to think about defense and what kinds of changes can and should be made once we have reliable information are referred to the The Pentagon Labyrinth: 10 Short Essays to Help You Through It.
Who knows, if we can force the Pentagon to think before it spends, the United States might be able to field a military that meets the threats it faces at a cost the nation can afford.
Thursday, November 17, 2011
Being jerked out of that comfort zone - and the damned papers don't quite figure out why they lose so much readership!
PENNING: Newspaper changes can feel personal
It is like the casualties of war.
First, you hear general reports of American soldiers killed in a far-off country. Then you read a profile of a soldier from a town nearby who made the ultimate sacrifice.
Finally, you know someone who lost a family member, or that family member was your own. That’s when it becomes what we call “personal.”
While certainly not as serious as death and war, watching the slow decline of the newspaper industry has parallels.
First, there are stories about the news media outlets in general struggling to retain audience in this Internet era. Then there are reports of lost advertising revenue. This is followed by noticeable differences in the size and number of pages in some national newspapers. Then some staff at a nearby newspaper are let go. Then home delivery is reduced or eliminated. Finally, the “paper” exists online only — if at all.
Such was the case with the shocking — yet what seems inevitable announcement — that a nearby newspaper, the Grand Rapids Press, will only deliver an actual paper three days a week, beginning early next year. I teach and study media, and I have watched and commented on the changes in media for several years now.
But this? The paper that I wrote for briefly as a young college graduate with a journalism degree? Going from a “daily” to delivery only three days a week?
This is personal.
I grew up in Grand Rapids. A newspaper landing on our front stoop is one of my early memories. My parents didn’t allow us to watch much television — and there were no video games, Internet, texting or other distractions young people have today. So, after doing my homework and playing while there was available daylight, I often would hang out in the living room and read the paper.
I started the habit watching my dad, a plumber, come home from work and retire to a La-Z-Boy chair, his thick gray socks sticking out over the pull-out foot rest, a copy of the paper held in the air. It would be about 20 minutes before he put it down and dozed.
I picked up the newspaper the first time out of boredom and curiosity. But soon it was a habit. I had a natural interest in what was going on in the community and the world.
As someone who loved to read, I was fascinated that you could have a job doing that for a newspaper. Journalism became my first career calling. Plumbing was never a consideration.
Since then, I’ve moved into public relations and education. But I never lost my love of a newspaper.
I’m happy to say, some of my students share that love. Not enough of them, according to conversations I have with classes, as well as national survey data about newspaper readership.
However, some of them not only read online, but love an actual paper newspaper. They love the tactile pleasure of newsprint in hand. Several even said they love the smell of a newspaper. I smiled to hear one say that a cup of coffee and a newspaper remain one of life’s simple pleasures.
But all that’s changing. The paper you are reading now still is delivered six days a week. But it is also available on computer and mobile device, in various formats. In one sense, this sounds like progress. But I also worry.
What about people who can’t afford computers or aren’t technically adept enough to read online media? What about the online environment in which we are overwhelmed with content, but nevertheless can feel less informed? Will newspapers be able to survive economically, or will they move to the Internet and then one day just cease to exist altogether as a cacophony of bloggers take over?
Perhaps I worry too much. There is much to gain from technological advances. I enjoy accessing the Tribune wherever I am around the world when I travel. The multimedia content, such as video clips and links to related content, enhance the original reporting.
The ability for readers to comment on articles, and each others’ comments, adds a whole new community feeling to a community newspaper. It actually could improve what media scholars call the “public sphere,” in which journalists report and society discusses politics and other relevant information of the day.
I don’t really think newspapers are going to die. But they are changing.
Maybe “casualties of war” is too strong a metaphor. It’s more like the feeling I imagine my friends have when their children leave the home for college or a job.
There is excitement and pride about inevitable progress and change. But there is also a nagging, nostalgic twinge in the heart about losing something special.
It is like the casualties of war.
First, you hear general reports of American soldiers killed in a far-off country. Then you read a profile of a soldier from a town nearby who made the ultimate sacrifice.
Finally, you know someone who lost a family member, or that family member was your own. That’s when it becomes what we call “personal.”
While certainly not as serious as death and war, watching the slow decline of the newspaper industry has parallels.
First, there are stories about the news media outlets in general struggling to retain audience in this Internet era. Then there are reports of lost advertising revenue. This is followed by noticeable differences in the size and number of pages in some national newspapers. Then some staff at a nearby newspaper are let go. Then home delivery is reduced or eliminated. Finally, the “paper” exists online only — if at all.
Such was the case with the shocking — yet what seems inevitable announcement — that a nearby newspaper, the Grand Rapids Press, will only deliver an actual paper three days a week, beginning early next year. I teach and study media, and I have watched and commented on the changes in media for several years now.
But this? The paper that I wrote for briefly as a young college graduate with a journalism degree? Going from a “daily” to delivery only three days a week?
This is personal.
I grew up in Grand Rapids. A newspaper landing on our front stoop is one of my early memories. My parents didn’t allow us to watch much television — and there were no video games, Internet, texting or other distractions young people have today. So, after doing my homework and playing while there was available daylight, I often would hang out in the living room and read the paper.
I started the habit watching my dad, a plumber, come home from work and retire to a La-Z-Boy chair, his thick gray socks sticking out over the pull-out foot rest, a copy of the paper held in the air. It would be about 20 minutes before he put it down and dozed.
I picked up the newspaper the first time out of boredom and curiosity. But soon it was a habit. I had a natural interest in what was going on in the community and the world.
As someone who loved to read, I was fascinated that you could have a job doing that for a newspaper. Journalism became my first career calling. Plumbing was never a consideration.
Since then, I’ve moved into public relations and education. But I never lost my love of a newspaper.
I’m happy to say, some of my students share that love. Not enough of them, according to conversations I have with classes, as well as national survey data about newspaper readership.
However, some of them not only read online, but love an actual paper newspaper. They love the tactile pleasure of newsprint in hand. Several even said they love the smell of a newspaper. I smiled to hear one say that a cup of coffee and a newspaper remain one of life’s simple pleasures.
But all that’s changing. The paper you are reading now still is delivered six days a week. But it is also available on computer and mobile device, in various formats. In one sense, this sounds like progress. But I also worry.
What about people who can’t afford computers or aren’t technically adept enough to read online media? What about the online environment in which we are overwhelmed with content, but nevertheless can feel less informed? Will newspapers be able to survive economically, or will they move to the Internet and then one day just cease to exist altogether as a cacophony of bloggers take over?
Perhaps I worry too much. There is much to gain from technological advances. I enjoy accessing the Tribune wherever I am around the world when I travel. The multimedia content, such as video clips and links to related content, enhance the original reporting.
The ability for readers to comment on articles, and each others’ comments, adds a whole new community feeling to a community newspaper. It actually could improve what media scholars call the “public sphere,” in which journalists report and society discusses politics and other relevant information of the day.
I don’t really think newspapers are going to die. But they are changing.
Maybe “casualties of war” is too strong a metaphor. It’s more like the feeling I imagine my friends have when their children leave the home for college or a job.
There is excitement and pride about inevitable progress and change. But there is also a nagging, nostalgic twinge in the heart about losing something special.
— By Tim Penning. His columns and other thoughts can be read on his PierPoints blog: http://pierpoints.blogspot.com [1].
2 frickin' 39 point 6
Checked my weight on the digital scale up here in the 'puter room today and it read: 239.6!
Hot fricken damn! First time under 240 since, what? 2009? or earlier?
That might help get the ole' BP down (can't find my damn meds; crappolies - had an entire box filled with pills, none of which am I taking; my pharmacy, and now, can't even find it, sigh.
Hot fricken damn! First time under 240 since, what? 2009? or earlier?
That might help get the ole' BP down (can't find my damn meds; crappolies - had an entire box filled with pills, none of which am I taking; my pharmacy, and now, can't even find it, sigh.
It ain't just white Christians that get religiously discriminated against here in 'Muricaw
Complaints of religious discrimination in workplace are increasing
Published: Thursday, November 17, 2011, 6:00 AM Updated: Thursday, November 17, 2011, 7:00 AM
By Marcia Pledger, The Plain Dealer
Joshua Gunter, The Plain Dealer
Suhad Hasan, a former Old Navy employee, sued the store's parent company Gap Inc. last month, saying she was treated unfairly because she wears a head scarf. The Parma resident, who now works as a home health aide, is among a growing number of people nationwide who filed religious-based complaints with the Equal Employment Opportunity Commission.
CLEVELAND, Ohio -- Northeast Ohio native Suhad Hasan, a hijab-wearing Muslim, says neither her head scarf nor her religion should be an issue where she works.
But she said they were while she was a sales associate at the Old Navy clothing store in Santa Clara, Calif., three years ago. Hasan said she was assigned to work in the fitting room and was never offered training for other positions that was given to non-Muslims, despite her repeated requests to be trained.
After several months and still working in the fitting room, Hasan moved back to Ohio, only to be denied what she said was supposed to be an automatic transfer to a job in another Old Navy store. She found herself without a job, all because of what she describes as discrimination because of who she is and what she looks like.
"I was born and raised in the United States and I pay taxes like everybody else," said Hasan, 39, now a Parma resident who last month sued Gap Inc., the parent company of Old Navy. "What I wear on my head and the god that I believe in should not be an issue in the workplace."
The number of complaints like Hasan's is steadily rising. Equal Employment Opportunity Commission statistics show that religious discrimination complaints in workplace settings have more than doubled from a little over a decade ago, resulting in roughly $10 million in settlements. Last year, nearly 3,800 were filed -- 136 of them with the Cleveland EEOC office.
"Religion has increasingly moved into the private sphere, so when it does pop up in the workplace, we're less equipped to deal with it in a rational and even-handed manner," said John Gordon, chairman of the religion department at Baldwin-Wallace College, who believes the increase is a result of being a more multi-cultural, more multi-faith country.
The Gap did not respond to emails or phone calls this week.
Many of the complaints from employees involve wearing head garb or those who say they work for companies that refuse to accommodate their requests for religious days off.
Cynthia Stankiewicz, enforcement manager for the EEOC Cleveland field office, said not allowing time off for religious observances is a common issue. She said many cases come about when employers aren't aware of employees' rights or when employers don't attempt to accommodate requests that do not pose a hardship on the business.
She cited a case where an assistant manager at a local fast-food restaurant fired an employee after only a day on the job after claims that the worker's headscarf was a fire hazard.
"In most cases, employers don't have a good valid job-related reason for religious discrimination," she said. "It's often based on fears, myths and stereotypes."
The law requires employers to make reasonable accommodations to "sincerely held" religious beliefs of employees as long as doing so poses no undue hardship on the employer, EEOC says. When that doesn't happen, EEOC said it steps in but only after first attempting to reach a pre-litigation settlement with the employer.
A few months ago, the commission stepped in and sued a Rent-A-Center in Washington, D.C., on behalf of an employee, saying the company violated federal law when it failed to accommodate the store manager's religious beliefs, and then fired him because of his religion. EEOC charged that the manager, a Seventh-Day Adventist, had asked to be excused from working on Saturdays before sundown, but his request was denied.
Last summer, a Toledo-based nursing home settled a religious discrimination lawsuit, paying the employee $30,000 and offering training to all employees, including managers in the region, on recognizing and preventing religious discrimination, EEOC said.
"An employee should not be forced to choose between his faith and his job," Lynette Barnes, a regional attorney for EEOC, said in a press release involving the Rent-A-Center case.
Still, an employer can turn down a request if that means training someone else, at a substantial cost, to cover for the worker who doesn't want to work on Saturdays for religious reasons, Stankiewicz said.
Also, employers are not required to pay premium or overtime costs in order to accommodate religious needs. Or undue hardships could become an issue if a collective bargaining agreement includes rules regarding seniority and assignments.
"It's a complex thing. Almost every case is unique," said Gordon at Baldwin Wallace. "A particular employer may really have a bias or an employee might be unreasonable."
While employers tend to be familiar with sexual harassment, family leave, age discrimination, and the Americans with Disabilities Act, employers may not even be aware of the law regarding religion in the workplace until they face a religious challenge, said Julia Shearson, executive director of the Council on American Islamic Relations-Ohio in Cleveland.
Civil rights attorney and law professor Avery Friedman, who has represented employees for the last four decades, said he's not surprised about the increase in EEOC complaints about religious workplace issues.
"The rise relates to how certain groups are perceived, coupled with people who carry their faith-based precepts and act as missionaries in the workplace," he said.
Since returning to Ohio, Hasan has landed a job as a home health aide. She said she is still shaken by her experience with Old Navy.
"I was raised to respect all religions. But when you attack my hijab, you're demeaning my beliefs and my religion," she said.
© 2011 cleveland.com. All rights reserved.
Published: Thursday, November 17, 2011, 6:00 AM Updated: Thursday, November 17, 2011, 7:00 AM
By Marcia Pledger, The Plain Dealer
Joshua Gunter, The Plain Dealer
Suhad Hasan, a former Old Navy employee, sued the store's parent company Gap Inc. last month, saying she was treated unfairly because she wears a head scarf. The Parma resident, who now works as a home health aide, is among a growing number of people nationwide who filed religious-based complaints with the Equal Employment Opportunity Commission.
CLEVELAND, Ohio -- Northeast Ohio native Suhad Hasan, a hijab-wearing Muslim, says neither her head scarf nor her religion should be an issue where she works.
But she said they were while she was a sales associate at the Old Navy clothing store in Santa Clara, Calif., three years ago. Hasan said she was assigned to work in the fitting room and was never offered training for other positions that was given to non-Muslims, despite her repeated requests to be trained.
After several months and still working in the fitting room, Hasan moved back to Ohio, only to be denied what she said was supposed to be an automatic transfer to a job in another Old Navy store. She found herself without a job, all because of what she describes as discrimination because of who she is and what she looks like.
"I was born and raised in the United States and I pay taxes like everybody else," said Hasan, 39, now a Parma resident who last month sued Gap Inc., the parent company of Old Navy. "What I wear on my head and the god that I believe in should not be an issue in the workplace."
The number of complaints like Hasan's is steadily rising. Equal Employment Opportunity Commission statistics show that religious discrimination complaints in workplace settings have more than doubled from a little over a decade ago, resulting in roughly $10 million in settlements. Last year, nearly 3,800 were filed -- 136 of them with the Cleveland EEOC office.
"Religion has increasingly moved into the private sphere, so when it does pop up in the workplace, we're less equipped to deal with it in a rational and even-handed manner," said John Gordon, chairman of the religion department at Baldwin-Wallace College, who believes the increase is a result of being a more multi-cultural, more multi-faith country.
The Gap did not respond to emails or phone calls this week.
Many of the complaints from employees involve wearing head garb or those who say they work for companies that refuse to accommodate their requests for religious days off.
Cynthia Stankiewicz, enforcement manager for the EEOC Cleveland field office, said not allowing time off for religious observances is a common issue. She said many cases come about when employers aren't aware of employees' rights or when employers don't attempt to accommodate requests that do not pose a hardship on the business.
She cited a case where an assistant manager at a local fast-food restaurant fired an employee after only a day on the job after claims that the worker's headscarf was a fire hazard.
"In most cases, employers don't have a good valid job-related reason for religious discrimination," she said. "It's often based on fears, myths and stereotypes."
The law requires employers to make reasonable accommodations to "sincerely held" religious beliefs of employees as long as doing so poses no undue hardship on the employer, EEOC says. When that doesn't happen, EEOC said it steps in but only after first attempting to reach a pre-litigation settlement with the employer.
A few months ago, the commission stepped in and sued a Rent-A-Center in Washington, D.C., on behalf of an employee, saying the company violated federal law when it failed to accommodate the store manager's religious beliefs, and then fired him because of his religion. EEOC charged that the manager, a Seventh-Day Adventist, had asked to be excused from working on Saturdays before sundown, but his request was denied.
Last summer, a Toledo-based nursing home settled a religious discrimination lawsuit, paying the employee $30,000 and offering training to all employees, including managers in the region, on recognizing and preventing religious discrimination, EEOC said.
"An employee should not be forced to choose between his faith and his job," Lynette Barnes, a regional attorney for EEOC, said in a press release involving the Rent-A-Center case.
Still, an employer can turn down a request if that means training someone else, at a substantial cost, to cover for the worker who doesn't want to work on Saturdays for religious reasons, Stankiewicz said.
Also, employers are not required to pay premium or overtime costs in order to accommodate religious needs. Or undue hardships could become an issue if a collective bargaining agreement includes rules regarding seniority and assignments.
"It's a complex thing. Almost every case is unique," said Gordon at Baldwin Wallace. "A particular employer may really have a bias or an employee might be unreasonable."
While employers tend to be familiar with sexual harassment, family leave, age discrimination, and the Americans with Disabilities Act, employers may not even be aware of the law regarding religion in the workplace until they face a religious challenge, said Julia Shearson, executive director of the Council on American Islamic Relations-Ohio in Cleveland.
Civil rights attorney and law professor Avery Friedman, who has represented employees for the last four decades, said he's not surprised about the increase in EEOC complaints about religious workplace issues.
"The rise relates to how certain groups are perceived, coupled with people who carry their faith-based precepts and act as missionaries in the workplace," he said.
Since returning to Ohio, Hasan has landed a job as a home health aide. She said she is still shaken by her experience with Old Navy.
"I was raised to respect all religions. But when you attack my hijab, you're demeaning my beliefs and my religion," she said.
© 2011 cleveland.com. All rights reserved.
Enquiring Cosmologists Want to Know: How big is the universe, how old is it?
WHAT'S UP: Cosmology is big science
Anonymous
07:00 PM
Dec 31
1969
What is the universe — matter, energy, the fabric of space and time?
How big is the universe, how old is it?
How did the universe come into existence, or has it always been here?
What is its ultimate fate, or will the universe always be here?
These are grand questions. How shall we seek answers to these questions?
Shall we turn our thoughts inward as philosophers and theologians because questions of cosmology are questions of perception, and because the universe can only be exactly as we perceive it to be? Or shall we scrutinize the bits of matter in the space at our fingertips as engineers and physicists with microscopes and particle accelerators, poking and prodding what we can close to home?
Or do we look outward to the stars, with telescopes and other instruments that extend our senses, forming and testing theories, seeking objective truths as mathematicians and scientists — as astronomers?
I believe we must do all three — because questions of cosmology are so grand, so profound, that a clear path to their answers is not even apparent.
Human cultures as far back as history has kept records have contemplated questions of cosmology. But why?
Of all philosophical, scientific and religious endeavors that are far removed from the demands of everyday life, cosmology must be among the most distant. Cosmology peaks the interest of just about anyone who has ever had some small amount of time to contemplate a look to the heavens.
Carl Sagan — the famous astronomer and author who passed away in 1996 — is more eloquent: “The Cosmos is all that is or ever was or ever will be. Our feeblest contemplations of the Cosmos stir us — there is a tingling in the spine, a catch in the voice, a faint sensation of a distant memory, as if we were falling from a great height.”
Nov. 9 would have been Sagan’s 77th birthday, and annually the day is recognized by many organizations as “Carl Sagan Day.” Sagan was a champion of scientifically skeptical inquiry; and he told the story of our cosmology, our creation myth, in an entertaining and compelling way.
Do you remember seeing the PBS production of his book, “Cosmos: A Personal Voyage,” back in the 1980s? At the time, according to online sources, “Cosmos” was the most watched PBS series in the world. “Cosmos” brought cosmology to you and I.
Our cosmology is big science.
The 2011 Nobel Prize in physics was awarded to three observational cosmologists: Saul Perlmutter of the Lawrence Berkeley National Laboratory and the University of California, Berkeley; Brian Schmidt of the Australian National University; and Adam Riess of Johns Hopkins University. The prize was awarded “for the discovery of the accelerating expansion of the universe through observations of distant supernovae.”
The 2006 Nobel Prize in physics was also awarded to a team of observational cosmologists: John Mather of the NASA Goddard Spaceflight Center; and George Smoot of the University of California, Berkeley, for “for their discovery of the blackbody form and anisotropy of the cosmic microwave background radiation.”
It is true that our cosmology — the “big bang theory” and the so-called lambda-CDM model — is not accessible to many of us because it is rooted in difficult mathematics, and that our cosmology is not as colorful as ancient creation myths.
Yet, as for all that have come before us, our cosmology is our attempt to understand the universe and our place within it.
Anonymous
07:00 PM
Dec 31
1969
What is the universe — matter, energy, the fabric of space and time?
How big is the universe, how old is it?
How did the universe come into existence, or has it always been here?
What is its ultimate fate, or will the universe always be here?
These are grand questions. How shall we seek answers to these questions?
Shall we turn our thoughts inward as philosophers and theologians because questions of cosmology are questions of perception, and because the universe can only be exactly as we perceive it to be? Or shall we scrutinize the bits of matter in the space at our fingertips as engineers and physicists with microscopes and particle accelerators, poking and prodding what we can close to home?
Or do we look outward to the stars, with telescopes and other instruments that extend our senses, forming and testing theories, seeking objective truths as mathematicians and scientists — as astronomers?
I believe we must do all three — because questions of cosmology are so grand, so profound, that a clear path to their answers is not even apparent.
Human cultures as far back as history has kept records have contemplated questions of cosmology. But why?
Of all philosophical, scientific and religious endeavors that are far removed from the demands of everyday life, cosmology must be among the most distant. Cosmology peaks the interest of just about anyone who has ever had some small amount of time to contemplate a look to the heavens.
Carl Sagan — the famous astronomer and author who passed away in 1996 — is more eloquent: “The Cosmos is all that is or ever was or ever will be. Our feeblest contemplations of the Cosmos stir us — there is a tingling in the spine, a catch in the voice, a faint sensation of a distant memory, as if we were falling from a great height.”
Nov. 9 would have been Sagan’s 77th birthday, and annually the day is recognized by many organizations as “Carl Sagan Day.” Sagan was a champion of scientifically skeptical inquiry; and he told the story of our cosmology, our creation myth, in an entertaining and compelling way.
Do you remember seeing the PBS production of his book, “Cosmos: A Personal Voyage,” back in the 1980s? At the time, according to online sources, “Cosmos” was the most watched PBS series in the world. “Cosmos” brought cosmology to you and I.
Our cosmology is big science.
The 2011 Nobel Prize in physics was awarded to three observational cosmologists: Saul Perlmutter of the Lawrence Berkeley National Laboratory and the University of California, Berkeley; Brian Schmidt of the Australian National University; and Adam Riess of Johns Hopkins University. The prize was awarded “for the discovery of the accelerating expansion of the universe through observations of distant supernovae.”
The 2006 Nobel Prize in physics was also awarded to a team of observational cosmologists: John Mather of the NASA Goddard Spaceflight Center; and George Smoot of the University of California, Berkeley, for “for their discovery of the blackbody form and anisotropy of the cosmic microwave background radiation.”
It is true that our cosmology — the “big bang theory” and the so-called lambda-CDM model — is not accessible to many of us because it is rooted in difficult mathematics, and that our cosmology is not as colorful as ancient creation myths.
Yet, as for all that have come before us, our cosmology is our attempt to understand the universe and our place within it.
— By Doug Furton, a member of the physics faculty at GVSU. Send questions and suggestions to dgf@inbox.com.
Charming Story: Ottawa County tot takes dad’s car for spin, winds up CEO of GM
STRANGE GH: Ottawa County tot takes dad’s car for spin, winds up CEO of GM
Kevin Collier [1]
07:00 PM
Dec 31
1969
Ottawa County native Edward Nicholas Cole began his career with a crash — and sadly, his career ended with one, too.
But thanks to Cole, we can all breathe a little easier.
Cole was born in Berlin (Marne, Mich.) on Sept. 17, 1909, to Franklin and Lucy Cole. At the age of 5, the boy’s fascination with cars got him into trouble.
The year was 1914 when little Ed climbed into the driver’s seat of his father’s parked 1908 Buick, released the handbrake and went for short ride. The car struck a tree and came to a stop. Edward was unhurt and damage to the vehicle was minor.
His dad scolded him good, but that didn’t dampen Ed’s enthusiasm for the “horseless carriage.”
At age 16, Edward was one of the rare “two-car owners” in Marne when he rebuilt a pair of old vehicles. He also converted old Model A jalopies into homemade tractors, which he sold to area farmers, on his father’s property.
Cole began his automotive career in 1929 with General Motors in their Cadillac division. Soon after that, Cole married his hometown sweetheart, Esther “Dolly” Engman. He advanced his work in engineering to co-head a team that developed the 1949 Cadillac V-8.
His associates once said, “Ed just has one speed — full-throttle.”
He became chief engineer of the Chevrolet division in 1952. As general manager of Chevrolet, he directed the development of the Corvair, intended to pursue the compact car market. Cole was featured on the cover of Time magazine — Oct. 5, 1959, issue.
Cole was promoted to head the GM car and truck group in 1961, eventually becoming company president in 1967. He retired in 1974, then became chairman and CEO of Checker Motors Corp.
Cole deserves credit for weaning American cars off leaded gasoline by introducing catalytic converters to the market in 1975.
On May 2, 1977, Cole’s inspirational career ended as it had started it — with “a crash.” He died at age 67 during a storm while piloting his private twin-engine Beagle Series 2 airplane near Kalamazoo. The plane crashed 50 miles south of where he was born — Marne.
Literally, we can all breathe a little easier thanks to Cole’s innovative work, and it all began here in Ottawa County 97 years ago when a curious tot took his father’s car for a spin.
Kevin Collier [1]
07:00 PM
Dec 31
1969
Ottawa County native Edward Nicholas Cole began his career with a crash — and sadly, his career ended with one, too.
But thanks to Cole, we can all breathe a little easier.
Cole was born in Berlin (Marne, Mich.) on Sept. 17, 1909, to Franklin and Lucy Cole. At the age of 5, the boy’s fascination with cars got him into trouble.
The year was 1914 when little Ed climbed into the driver’s seat of his father’s parked 1908 Buick, released the handbrake and went for short ride. The car struck a tree and came to a stop. Edward was unhurt and damage to the vehicle was minor.
His dad scolded him good, but that didn’t dampen Ed’s enthusiasm for the “horseless carriage.”
At age 16, Edward was one of the rare “two-car owners” in Marne when he rebuilt a pair of old vehicles. He also converted old Model A jalopies into homemade tractors, which he sold to area farmers, on his father’s property.
Cole began his automotive career in 1929 with General Motors in their Cadillac division. Soon after that, Cole married his hometown sweetheart, Esther “Dolly” Engman. He advanced his work in engineering to co-head a team that developed the 1949 Cadillac V-8.
His associates once said, “Ed just has one speed — full-throttle.”
He became chief engineer of the Chevrolet division in 1952. As general manager of Chevrolet, he directed the development of the Corvair, intended to pursue the compact car market. Cole was featured on the cover of Time magazine — Oct. 5, 1959, issue.
Cole was promoted to head the GM car and truck group in 1961, eventually becoming company president in 1967. He retired in 1974, then became chairman and CEO of Checker Motors Corp.
Cole deserves credit for weaning American cars off leaded gasoline by introducing catalytic converters to the market in 1975.
On May 2, 1977, Cole’s inspirational career ended as it had started it — with “a crash.” He died at age 67 during a storm while piloting his private twin-engine Beagle Series 2 airplane near Kalamazoo. The plane crashed 50 miles south of where he was born — Marne.
Literally, we can all breathe a little easier thanks to Cole’s innovative work, and it all began here in Ottawa County 97 years ago when a curious tot took his father’s car for a spin.
Wear helmets when biking — it could save your life
PAINTER: Wear helmets when biking — it could save your life
Len Painter [1]
07:00 PM
Dec 31
1969
OK kids, listen up. Adults should pay attention, too.
Wear a helmet when riding a bicycle.
I can provide testimony as to how important it is to wear a helmet. On Oct .23, I was involved in a bicycle accident — yes, again.
This time, I went flying through the air and hit my head, as well as my face and knees on the concrete. I ended up with a fractured bone in the lower part of my neck, cuts and abrasions throughout my body, and a concussion.
Fortunately, the concussion wasn’t severe. I have my bicycle helmet to thank for that. I’ll keep that helmet as a keepsake because it has five cracks in the lining from my fall. That helmet saved me from more severe injuries.
My doctor told me I was lucky that I wasn’t more seriously injured. He said that I should write a story about the virtues of wearing a helmet. I’ve taken him up on his suggestion.
Unfortunately, bicycle accidents are common. It’s quite easy to lose control of a bike when you hit loose gravel or slide on wet pavement. The Centers for Disease Control and Prevention said that each year 500,000 people are treated in emergency rooms for bicycle-related injuries.
A few years ago, I broke my shoulder blade from a fall on a bike.
But this accident involving hitting my head was much more serious. According to helmets.org, 60 percent of all bicycle accidents involve head injuries. Wearing a bike helmet can go a long way in minimizing head injuries from a bicycle accident. The same website said a well-fitted helmet can reduce head injuries by 74 to 85 percent. Those are astonishing numbers.
Yet, I see quite a few bikers — especially children — riding without helmets. It doesn’t matter how fast you are traveling —you can still suffer a head injury from a bicycle fall.
The stigma that wearing a bicycle helmet “isn’t cool” should be thrown out the window. Bicycle helmets now come in all colors and shapes. Check out the Tour de France bicycle race to get a glimpse of how “cool” helmets look.
I would urge parents to require that their kids wear bike helmets. Adults should wear them as well.
Local bicycle shops can give you some pointers on how bicycle helmets should fit and be worn.
I know that there are many other bikers who can testify about the virtues of wearing a helmet. Please wear a helmet. It could save your life.
Len Painter [1]
07:00 PM
Dec 31
1969
OK kids, listen up. Adults should pay attention, too.
Wear a helmet when riding a bicycle.
I can provide testimony as to how important it is to wear a helmet. On Oct .23, I was involved in a bicycle accident — yes, again.
This time, I went flying through the air and hit my head, as well as my face and knees on the concrete. I ended up with a fractured bone in the lower part of my neck, cuts and abrasions throughout my body, and a concussion.
Fortunately, the concussion wasn’t severe. I have my bicycle helmet to thank for that. I’ll keep that helmet as a keepsake because it has five cracks in the lining from my fall. That helmet saved me from more severe injuries.
My doctor told me I was lucky that I wasn’t more seriously injured. He said that I should write a story about the virtues of wearing a helmet. I’ve taken him up on his suggestion.
Unfortunately, bicycle accidents are common. It’s quite easy to lose control of a bike when you hit loose gravel or slide on wet pavement. The Centers for Disease Control and Prevention said that each year 500,000 people are treated in emergency rooms for bicycle-related injuries.
A few years ago, I broke my shoulder blade from a fall on a bike.
But this accident involving hitting my head was much more serious. According to helmets.org, 60 percent of all bicycle accidents involve head injuries. Wearing a bike helmet can go a long way in minimizing head injuries from a bicycle accident. The same website said a well-fitted helmet can reduce head injuries by 74 to 85 percent. Those are astonishing numbers.
Yet, I see quite a few bikers — especially children — riding without helmets. It doesn’t matter how fast you are traveling —you can still suffer a head injury from a bicycle fall.
The stigma that wearing a bicycle helmet “isn’t cool” should be thrown out the window. Bicycle helmets now come in all colors and shapes. Check out the Tour de France bicycle race to get a glimpse of how “cool” helmets look.
I would urge parents to require that their kids wear bike helmets. Adults should wear them as well.
Local bicycle shops can give you some pointers on how bicycle helmets should fit and be worn.
I know that there are many other bikers who can testify about the virtues of wearing a helmet. Please wear a helmet. It could save your life.
‘Code Talker’ to tell his WWII story
‘Code Talker’ to tell his WWII story at GVSU
AP WIRE
03:00 PM
NOV 07
2011
GRAND RAPIDS
An 88-year-old Marine Corps veteran who was among the famed Navajo Code Talkers during World War II is bringing his story to West Michigan on Thursday for a Veterans Day week event.
Samuel Sandoval of Shiprock, N.M., and his fellow Navajo speakers used the Native American language to communicate and keep Japanese interpreters from understanding U.S. forces’ communications. Since few outsiders understood the language, their work offered a considerable tactical advantage for the U.S.
“The Japanese didn’t have a chance,” said Sandoval, who served in the Pacific. “I am pretty proud of what we did.”
Using the language during the war was the idea of Phillip Johnston, the son of a Protestant missionary who grew up on a Navajo reservation. After convincing top commanders, Johnston launched a test program and the unit was formed in early 1942, as Johnston recruited the first 29 Code Talkers.
Native words were assigned to military terms, often linked to weapons they resembled. For example, tank was “chay-da-dahi,” the Navajo word for turtle, and a dive bomber was “chini,” which translates to chicken hawk.
The code was expanded by assigning Navajo terms to individual letters, allowing Code Talkers to spell out words. The Navajo term for ant, “wo-la-chee,” became the letter A. The term for badger, “na-hash-chid,” was the letter B.
Sadoval will tell his story at Grand Valley State University’s Eberhard Center at 1 p.m. Tuesday. The Marine Corps League of Grand Rapids is hosting the event to highlight Veterans Day, which is Friday.
AP WIRE
03:00 PM
NOV 07
2011
GRAND RAPIDS
An 88-year-old Marine Corps veteran who was among the famed Navajo Code Talkers during World War II is bringing his story to West Michigan on Thursday for a Veterans Day week event.
Samuel Sandoval of Shiprock, N.M., and his fellow Navajo speakers used the Native American language to communicate and keep Japanese interpreters from understanding U.S. forces’ communications. Since few outsiders understood the language, their work offered a considerable tactical advantage for the U.S.
“The Japanese didn’t have a chance,” said Sandoval, who served in the Pacific. “I am pretty proud of what we did.”
Using the language during the war was the idea of Phillip Johnston, the son of a Protestant missionary who grew up on a Navajo reservation. After convincing top commanders, Johnston launched a test program and the unit was formed in early 1942, as Johnston recruited the first 29 Code Talkers.
Native words were assigned to military terms, often linked to weapons they resembled. For example, tank was “chay-da-dahi,” the Navajo word for turtle, and a dive bomber was “chini,” which translates to chicken hawk.
The code was expanded by assigning Navajo terms to individual letters, allowing Code Talkers to spell out words. The Navajo term for ant, “wo-la-chee,” became the letter A. The term for badger, “na-hash-chid,” was the letter B.
Sadoval will tell his story at Grand Valley State University’s Eberhard Center at 1 p.m. Tuesday. The Marine Corps League of Grand Rapids is hosting the event to highlight Veterans Day, which is Friday.
“Stick Together” Obama Tells Black Misleadership Class At White House Conference (in other words: "VOTE FOR ME!"
“Stick Together” Obama Tells Black Misleadership Class At White House Conference
By Bruce A. Dixon
Created 11/16/2011 - 13:00
Submitted by Bruce A. Dixon on Wed, 11/16/2011 - 13:00
Black Misleaderhsip Class [1] Obama Delusional Affect [2]
The US president is the most powerful man in the world. Black unemployment was already at an all time high the day Barack Obama was sworn in. Three years into his term, there are few signs that record black unemployment, growing poverty, the wave of foreclosures centered in minority neighborhoods are concerns for this administration.
“Stick Together” Obama Tells Black Misleadership Class At White House Conference
by BAR managing editor Bruce A. Dixon
Last week, with exactly a year to go before the 2012 election, President Obama summoned a few hundred carefully selected African Americans to the White House. They were preachers and entertainers, politicians and promoters and business people – the kinds of folks we call “leaders: in the black community, whether or not they have or ever will lead us anyplace we really need to go. This was, after all, what the White House called its African American Leadership Conference. It was clearly a campaign event, and just as clearly an attempt on the president's part to back down a little from the utter contempt he displayed last month toward the suffering of the black unemployed and dispossessed at a Congressional Black Caucus meeting, telling them to “stop whinin'... stop cryin' and complainin'..”
They has a “working lunch” with Attorney General Eric Holder. Presumably none of the well-fed preachers or politicians present asked the attorney general why the Justice Department had, 3 full years after the biggest Wall Street crash since 1929, had not begun a criminal investigations of bank and mortgage fraud, or why the Obama Justice Department was pushing a “settlement” of mortgage banking fraud claims that would protect all the banksters involved from future prosecution.
Why were there no probing questions? Because a section of the black misleadership class were themselves implicated in pushing widespread predatory loans on black customers. Black political leaders had long ceased to advocate the construction of affordable housing. Instead, many of them lent their names, offices and churches to “mortgage fairs” and seminars peddling predatory loans to black families in their own communities, touting these as “wealth-building” exercises. As these predatory loans pushed on black and poor consumers have been a disproportionate share of foreclosures, the wealth gap between white and black families has grown, under Obama's watch from eleven to one to more than twenty to one.
It's a fact too, that if Barack Obama ever intended to create the millions of “green jobs” his campaign talked about, his all-time historic opportunity was when the federal government acquired General Motors, one of the planet's largest collection of manufacturing and engineering capital and expertise. The president could have appointed new GM managers and directed them to do electric cars, buses and trucks, or green energy saving building materials and battery technologies, or high speed rail. Congress couldn't have stopped him, but this class of “black leaders” won't call him to account either.
The working lunch followed morning panel sessions economic security, jobs training, corporate education reform which really means school privatization, and on “the President's domestic policy agenda and the African American community.” We are not aware that the black leaders present asked about the tens of thousands of experienced and superbly qualified public school teachers whose salaries have been lowered, whose benefits compromised or whose jobs have been eliminated by the Obama administration's Race To The Top program [4]. But then, some of the politicians present had accepted campaign contributions from the advocates of educational privatization.
If any of the assembled “leaders” noted the incongruence of talk about the “economic security of the black community coming from a president and congressional leaders who crafted the anti-democratic “supercommittee” budget-cutting process with Medicaid and social security on the table in return for nominal taxes on millionaires, there's no record of that either.
We doubt that anybody took the president or his advisers to task for violating campaign pledges to renegotiate NAFTA, or for pushing even more “free trade” agreements through
The president was nowhere on the schedule, but as per the usual custom he made a carefully staged entrance and briefly addressed the crowd.
“We know tough times,” the president said. “And what we also know, though, is that if we are persistent, if we are unified, and we remain hopeful, then we’ll get through these tough times and better days lie ahead.”
The president exhorted them to go back to their communities and tell people about his American Jobs Act, which is stalled in Congress. Never mind that the jobs in the “jobs bill” are mostly fictions (like the lie that tax cuts create jobs --- a large number of the “jobs” in the bill are supposed to result from its multibillion dollar tax cuts) inside a bigger fiction ---- there were no “jobs bills” introduced at all, during the two years Obama's party held both houses of Congress. During that time, the president told black America repeatedly that it was the private sector's duty to produce jobs, and that we'd have to wait for some of those trillions they gave the banksters to trickle back down so every about a jobs bill.
It was in that same spirit of denial that the president asked the assembled “leaders” for job-producing ideas of their own ---- things, he said “...that we can take right now administratively that would make a difference in the communities that all of you represent.” [5]
Given that black unemployment was already at an all time high the day Barack Obama took office, hearing him ask this questions near the end of his term instead of at the beginning is not a good sign. The president of the United States is still the most powerful man in the world, certainly the one with the most tools at hand to get the things he wants done.
Barack Obama is a student of history and nobody's fool. Obama knows that when Ronald Reagan took office in 1981 he came to the White House with a long list of executive actions to do what he could not get through the Democrat-dominated Congress of the time. Obama knows that Reagan appointed anti-legal aid ideologues to supervise legal aid, anti-environmentalist hacks to head up the Interior Dept, and an obnoxious stooge named Clarence Thomas, who hated civil rights laws to supervise the EEOC, and rushed through a stack of executive orders in the first days of his term. If Barack Obama didn't come to DC with a list of job-creating programs and executive orders, it was because he never intended to do these things.
What the president does intend to do somehow, is get re-elected. He knows that without the absolute and solid support of better than nine out of ten black voters this is impossible. But without much to show after three years in the way of jobs, or housing, or prosecuting banksters, or protecting families from excessive debt or stopping the murderous and expensive wars around the world, what can Obama tell his troops, his followers in the black misleadership class whose careers, fortunes and credibility are hooked to his own? The answer was not much.
Persevere, stay the course, stick together, we'll get through this, the president assured his elite White House audience. No doubt they will. What else can they do? The black misleadership class is riding on a cognitive and delusional bubble [6]. Like bubbles of other kinds, it's a delicate contraption that relies on a mass denial of economic and political reality, conflating black faces in high places with the economic and social empowerment of ordinary black people [7]. As long as the bubble persists, so will this president's career, and the careers of the corporate funded black misleadership class he represents. Our “leaders” will do their jobs, and they will stick together, make no mistake about it.
But what about the rest of us? What else can we do?
By Bruce A. Dixon
Created 11/16/2011 - 13:00
Submitted by Bruce A. Dixon on Wed, 11/16/2011 - 13:00
Black Misleaderhsip Class [1] Obama Delusional Affect [2]
The US president is the most powerful man in the world. Black unemployment was already at an all time high the day Barack Obama was sworn in. Three years into his term, there are few signs that record black unemployment, growing poverty, the wave of foreclosures centered in minority neighborhoods are concerns for this administration.
“Stick Together” Obama Tells Black Misleadership Class At White House Conference
by BAR managing editor Bruce A. Dixon
Last week, with exactly a year to go before the 2012 election, President Obama summoned a few hundred carefully selected African Americans to the White House. They were preachers and entertainers, politicians and promoters and business people – the kinds of folks we call “leaders: in the black community, whether or not they have or ever will lead us anyplace we really need to go. This was, after all, what the White House called its African American Leadership Conference. It was clearly a campaign event, and just as clearly an attempt on the president's part to back down a little from the utter contempt he displayed last month toward the suffering of the black unemployed and dispossessed at a Congressional Black Caucus meeting, telling them to “stop whinin'... stop cryin' and complainin'..”
They has a “working lunch” with Attorney General Eric Holder. Presumably none of the well-fed preachers or politicians present asked the attorney general why the Justice Department had, 3 full years after the biggest Wall Street crash since 1929, had not begun a criminal investigations of bank and mortgage fraud, or why the Obama Justice Department was pushing a “settlement” of mortgage banking fraud claims that would protect all the banksters involved from future prosecution.
Why were there no probing questions? Because a section of the black misleadership class were themselves implicated in pushing widespread predatory loans on black customers. Black political leaders had long ceased to advocate the construction of affordable housing. Instead, many of them lent their names, offices and churches to “mortgage fairs” and seminars peddling predatory loans to black families in their own communities, touting these as “wealth-building” exercises. As these predatory loans pushed on black and poor consumers have been a disproportionate share of foreclosures, the wealth gap between white and black families has grown, under Obama's watch from eleven to one to more than twenty to one.
It's a fact too, that if Barack Obama ever intended to create the millions of “green jobs” his campaign talked about, his all-time historic opportunity was when the federal government acquired General Motors, one of the planet's largest collection of manufacturing and engineering capital and expertise. The president could have appointed new GM managers and directed them to do electric cars, buses and trucks, or green energy saving building materials and battery technologies, or high speed rail. Congress couldn't have stopped him, but this class of “black leaders” won't call him to account either.
The working lunch followed morning panel sessions economic security, jobs training, corporate education reform which really means school privatization, and on “the President's domestic policy agenda and the African American community.” We are not aware that the black leaders present asked about the tens of thousands of experienced and superbly qualified public school teachers whose salaries have been lowered, whose benefits compromised or whose jobs have been eliminated by the Obama administration's Race To The Top program [4]. But then, some of the politicians present had accepted campaign contributions from the advocates of educational privatization.
If any of the assembled “leaders” noted the incongruence of talk about the “economic security of the black community coming from a president and congressional leaders who crafted the anti-democratic “supercommittee” budget-cutting process with Medicaid and social security on the table in return for nominal taxes on millionaires, there's no record of that either.
We doubt that anybody took the president or his advisers to task for violating campaign pledges to renegotiate NAFTA, or for pushing even more “free trade” agreements through
The president was nowhere on the schedule, but as per the usual custom he made a carefully staged entrance and briefly addressed the crowd.
“We know tough times,” the president said. “And what we also know, though, is that if we are persistent, if we are unified, and we remain hopeful, then we’ll get through these tough times and better days lie ahead.”
The president exhorted them to go back to their communities and tell people about his American Jobs Act, which is stalled in Congress. Never mind that the jobs in the “jobs bill” are mostly fictions (like the lie that tax cuts create jobs --- a large number of the “jobs” in the bill are supposed to result from its multibillion dollar tax cuts) inside a bigger fiction ---- there were no “jobs bills” introduced at all, during the two years Obama's party held both houses of Congress. During that time, the president told black America repeatedly that it was the private sector's duty to produce jobs, and that we'd have to wait for some of those trillions they gave the banksters to trickle back down so every about a jobs bill.
It was in that same spirit of denial that the president asked the assembled “leaders” for job-producing ideas of their own ---- things, he said “...that we can take right now administratively that would make a difference in the communities that all of you represent.” [5]
Given that black unemployment was already at an all time high the day Barack Obama took office, hearing him ask this questions near the end of his term instead of at the beginning is not a good sign. The president of the United States is still the most powerful man in the world, certainly the one with the most tools at hand to get the things he wants done.
Barack Obama is a student of history and nobody's fool. Obama knows that when Ronald Reagan took office in 1981 he came to the White House with a long list of executive actions to do what he could not get through the Democrat-dominated Congress of the time. Obama knows that Reagan appointed anti-legal aid ideologues to supervise legal aid, anti-environmentalist hacks to head up the Interior Dept, and an obnoxious stooge named Clarence Thomas, who hated civil rights laws to supervise the EEOC, and rushed through a stack of executive orders in the first days of his term. If Barack Obama didn't come to DC with a list of job-creating programs and executive orders, it was because he never intended to do these things.
What the president does intend to do somehow, is get re-elected. He knows that without the absolute and solid support of better than nine out of ten black voters this is impossible. But without much to show after three years in the way of jobs, or housing, or prosecuting banksters, or protecting families from excessive debt or stopping the murderous and expensive wars around the world, what can Obama tell his troops, his followers in the black misleadership class whose careers, fortunes and credibility are hooked to his own? The answer was not much.
Persevere, stay the course, stick together, we'll get through this, the president assured his elite White House audience. No doubt they will. What else can they do? The black misleadership class is riding on a cognitive and delusional bubble [6]. Like bubbles of other kinds, it's a delicate contraption that relies on a mass denial of economic and political reality, conflating black faces in high places with the economic and social empowerment of ordinary black people [7]. As long as the bubble persists, so will this president's career, and the careers of the corporate funded black misleadership class he represents. Our “leaders” will do their jobs, and they will stick together, make no mistake about it.
But what about the rest of us? What else can we do?
Bruce A. Dixon is managing editor at Black Agenda Report, and a state committee member of the Georgia Green Party. He can be reached at bruce.dixon@blackagendareport.com.
Obama’s Mission Accomplished Moment
Thank heavens for writers and analysts clear-eyed enough to see the most obvious thing in the world: That Barack Obummah is as effective a Republican Presnit as any we've had since Cheney administration.
And yet, I am FOREVER getting the arguement, "well, at least he's better than Bush."
Bull Feathers. He is Bush on steroids, Bush to the 8th power.
Freedom Rider: Obama’s Mission Accomplished Moment
By Margaret Kimberley
Submitted by Margaret Kimberley on Tue, 11/15/2011
Obama is once again out-Bushing Bush on the war-worshipping front. With the president’s blessing, NCAA basketball games will now take place on the decks of warships – the Carrier Classic. There is a message in this muscular madness: “America is powerful, can kill anyone at will, glories in those facts and browbeats everyone into celebrating this horror with a combination of coercion and the façade of making evil acts seem entertaining.”
“Veteran’s Day has morphed from a minor holiday among public celebrations into a festival of celebration for death and destruction.”
The amount of propaganda directed towards the American people is immense and growing at a rapid pace. We face a daily onslaught of grotesque imagery, all of it meant to keep us programmed and compliant in the face of an expanding empire.
Sporting events have become the domain of worship of the military and its actions. It isn’t possible to watch a high school, college or professional sporting event without being subjected to flyovers from fighter jets, drill teams, or marching bands. Anyone who simply wants to watch their favorite football team on a Sunday afternoon cannot do so without the now required greetings from uniformed troops in Camp Liberty, or Camp Freedom, or Camp Patriot in Iraq or Afghanistan.
The apex of public ugliness for the Obama administration came last week on Veteran’s Day, which has morphed from a minor holiday among public celebrations into a festival of celebration for death and destruction. As in all other things, Barack Obama used the occasion to out shine his predecessor George W. Bush.
The aircraft carrier U.S.S. Vinson first gained attention this year as the location from which Osama bin Laden’s body was dumped into the sea. One would think that the administration wouldn’t want to bring renewed attention to this site, but a nation constantly flexing its muscles and contemplating new means of terrorizing the world is not so shy.
“It isn’t possible to watch a high school, college or professional sporting event without being subjected to flyovers from fighter jets, drill teams, or marching bands.”
On this past Veteran’s Day, the Vinson appeared in the headlines again as the venue for what will be known as the Carrier Classic, which will feature NCAA basketball games played on the decks of warships. The president did not disappoint, and just in case anyone missed the significance of the event, he cut right to the chase.
“It was from this aircraft carrier that some of the first assaults on Iraq were launched. This ship supports what’s happening in Afghanistan. I think some of you may know because it’s been reported that the men and women on the Carl Vinson were part of that critical mission to bring Osama bin Laden to justice.”
The imagery was a familiar one, strikingly similar to Bush’s 2003 speech aboard the U.S.S. Abraham Lincoln. Bush piloted a plane onto the deck, emerged in a flight suit, and under an enormous banner proclaiming “Mission Accomplished,” announced that “Major combat operations in Iraq have ended.”
Obama isn’t a pilot and the banner was missing, but the subtext was the same. America is powerful, can kill anyone at will, glories in those facts and browbeats everyone into celebrating this horror with a combination of coercion and the façade of making evil acts seem entertaining. What better way to co-opt the public than to connect warfare to their favorite pastimes. Anyone daring to question any aspect of this awful war worship had better be prepared for vilification.
Obama uses stagecraft better than any other president in recent history and certainly knows how to make the awful seem palatable. The Nobel Peace Prize laureate wasted no time in celebrating the Iraq war which he was supposedly against, and the killing of Osama bin Laden, which was a violation of American and international law.
“As the president spreads war further and further afield, will the super bowl be played on top of Gaddafi’s grave?”
These gruesome displays will not abate as long as the United States makes war on the rest of the world. Every new outrage makes the last one seem tame and easy to forget. Once bin Laden wass assassinated by navy SEALs who were constantly described as “elite,” it then became easy not only to accept that Moammar Gaddafi is dead because of the United States, but to see his murder played out on video in an endless loop.
Now that war is peace, and sports can be played literally atop bombs and munitions, the slope can only become steeper and more slippery. As the president spreads war further and further afield, will the super bowl be played on top of Gaddafi’s grave? Fortunately, that location is a secret and we can be spared watching our leader dance on top of it.
Hopefully, the resistance to Obama will continue just as it did for Bush. The mission wasn’t accomplished because Iraqis didn’t want it to be. The U.S. will be taking its combat troops out of that country because it couldn’t completely subjugate that population.
Obama will have less to celebrate as the Libyan resistance regroups and should he attack a more powerful nation like Iran, will have to eat his words entirely. In the meantime we can all resist. We don’t have to join in the bloodthirsty dance and hopefully this inaugural Carrier Classic will be the last.
Margaret Kimberley's Freedom Rider column appears weekly in BAR, and is widely reprinted elsewhere. She maintains a frequently updated blog as well as at http://freedomrider.blogspot.com. [4] Ms. Kimberley lives in New York City, and can be reached via e-Mail at Margaret.Kimberley(at)BlackAgandaReport.com.
Wednesday, November 16, 2011
Follow the Money Why Republicans Are Acting So Crazy by SAM SMITH
Because, truth be told, they are not ALL cwazies; only the ones who have dunked and drunk the froot paunch.
NOVEMBER 15, 2011
Not every change in national policy and events is announced with a new conference or presidential speech.
A case in point is the rapid rise of apparent mental instability in the Republican Party. You used to just disagree with Republicans; now you have to worry whether your children will be safe in their proximity.
Let me again go on the record as saying that Barack Obummah is the best republican preznit we've every elected, he just DUSTS Wee Willie Clintonians Prick to hell. It takes a DEM to cut social security, otherwise the press and the effete (never)right liberal elites would bitch 'n moan like qwazy! So, the fix is in, and all my predicksuns about Obummah and the one and done thing, dose dey bees meeiss takne!
Historians may peg 2008 – with Sarah Palin chosen to run for vice president – as the beginning of the GOP breakdown. But in the past year things have moved from individually ridiculous to generally irrational.
I still think Palin was a brilliant choice and for a brief while, had the potential to over shadow the excitement that had emerged from the damocratrix convention, when "they" emerged with triumphant shee-it eating grins knowing, KNOWING that "the fix was in" and that the "ANNOINTED ONE" could not lose.
The explanations vary. David Sirota, for example, calls it sadism, but where did it come from and why so suddenly?
Oh, Sam, get real, the party-identified repubes have ALWAY"S been about kinkedinets!
The best rule of thumb is to follow the money.
And that, rather quickly, takes you back to a little over a year ago to January 21, 2010 when the Supreme Court declared that corporations were free to buy our elections at will. As Justice Stevens noted in his dissent:
At bottom, the Court’s opinion is thus a rejection of the common sense of the American people, who have recognized a need to prevent corporations from undermining self government since the founding, and who have fought against the distinctive corrupting potential of corporate electioneering since the days of Theodore Roosevelt. It is a strange time to repudiate that common sense. While American democracy is imperfect, few outside the majority of this Court would have thought its flaws included a dearth of corporate money in politics.”
Of course, as Stevens suggested, the ability of corporados to buy politicians was already well underway. Twelve years earlier, for example, I had given a speech at a rally at the US Capitol in which I said:
My final objection [private campaign financing] is biologic. Elections are for and between human beings. How do you tell when you’re dealing with a person? Well, they bleed, burp, wiggle their toes and have sex. They register for the draft. They register to vote. They watch MTV. They go to prison and they have babies and cancer. Eventually they die and are buried or cremated.
“Now this may seem obvious to you, but there are tens of thousands of lawyers and judges and politicians who simply don’t believe it. They will tell you that a corporation is a person, based on a corrupt Supreme Court interpretation of the 14th Amendment from back in the robber baron era of the late 19th century — a time in many ways not unlike our own.
“Before this ruling, everyone knew what a person was just as everyone knew what a bribe was. States regulated corporations because they were legal fictions lacking not only blood and bones, but conscience, morality, and free . .
“Corporations say they just want to be treated like people, but that’s not true. Test it out. Try to exercise your free speech on the property of a corporation just like they exercise theirs in your election. You’ll find out quickly who is more of a person. We can take care of this biologic problem by applying a simple literary solution: tell the truth. A corporation is not a person and should not be allowed to be called one under the law.”
Further, you don’t always need to buy a politician directly, as Source Watch explained:
In an April 9, 2009 article, Lee Fang reports that the principal organizers of Tea Party events are Americans for Prosperity and Freedom Works, two “lobbyist-run think tanks” that are “well funded” and that provide the logistics and organizing for the Tea Party movement from coast to coast. Media Matters reported that David Koch of Koch Industries was a co-founder of Citizens for a Sound Economy, the predecessor of FreedomWorks. David Koch was chairman of the board of directors of CSE. CSE received substantial funding from David Koch of Koch Industries, which is the largest privately-held energy company in the country, and the conservative Koch Family Foundations, which make substantial annual donations to conservative think tanks, advocacy groups, etc. Media Matters reported that the Koch family has given more than $12 million to CSE (predecessor of FreedomWorks) between 1985 and 2002. .
Media Matters also lists the Sarah Scaife Foundation as having given a total of $2.96 million in funding to FreedomWorks. The Sarah Mellon Scaife Foundation is financed by the Mellon industrial, oil, and banking fortune. The Claude R. Lambe Foundation, also controlled by the Koch family, has donated more than $3 million to Americans for Prosperity.
That said, there is a moment when confusion turns into chaos or assault turns into murder. For the American political system that moment was the Supreme Court decision on corporations a year ago. Historians – if such people are permitted to exist in the future – will probably see this as one of the great tipping points in the collapse of America.
Further, what has happened in the last year – including the Tea Party surge in the 2010 election – is not so much the result of an intrinsic mental breakdown in the GOP as it is the conscious selection of candidates who would once have been considered absurd, but now can be safely used to carry out corporatist goals because the public no longer has the power to defeat the money.
A Scott Walker or Paul LePage can say and do anything that their campaign contributors want because it is assumed by the latter that money now inevitably trumps public will.
Yes, Scott Walker may be a sadist and Paule LePage a dumb bully, but they are merely tools of those who fund them. All they have to do is be pluto pimps for the corporate agenda.
This is scheme wouldn’t work so well if their funders mainly wanted something, but what they really want is the absence of something -namely a government that might stand in their way. So long as Walker and LePage are destroying things, their backers are quite content.
These Republicans are wrecking trucks for the big businesses that want to tear down the neighborhood we call America.
It’s working for them right now. Whether it will continue to do so remains to be seen. For example, for the working class to even think about supporting Republicans is an idea only about three decades old.
A short list of constituencies that Republicans have recently offended include supporters of 9/11 responders, the AARP, Americorps, black men, cchildren with pre-existing health conditions, college students, cops, disabled people, aarthquake warnings, employed women, EPA, ethnically mixed couples, gays, ill people who need medical marijuana, immigrants and their children, jobless people, journalists, latinos, Medicaid recipients, Methodists, minimum wage workers, the National Endowment for the Arts, the National Institutes of Health, the National Science Foundation, NPR & PBS, the Postal Service, public school students, public workers, scientists, supporters of separation of church and state, Social Security recipients, state workers, and women generally.
That’s not a bad base around which to build an electoral rebellion.
Liberals could rediscover the working class and start showing it some respect in their policies. Issues could become more important than icons in our politics. Youth could rediscover their collective power once they turn off Facebook and their Ipods. The drive for a constitutional amendment ending corporate personhood could become a major issue.
And, as I noted at the Capitol back in 1999:
The people who work in the building behind us have learned to count money ahead of votes. It is time to chase the money changers out of the temple. But how? After all, getting Congress to adopt publicly funded campaigns is like trying to get the Mafia to adopt the Ten Commandments as its mission statement. I would suggest that while fighting this difficult battle there is something we can do starting tomorrow. We can pull together every decent organization and individual in communities all over America — the churches, activist organizations, social service groups, moral business people, concerned citizens — and begin drafting a code of conduct for politicians. We do not have to wait for any legislature. If we do this right, if we form true broad-based coalitions of decency, then the politicians will ignore us only at their peril.
At root, dear friends, our problem is that politicians have come to have more fear of their campaign contributors than they have of the voters. We have to teach politicians to be afraid of us again. And nothing will do it better than a coming together of a righteously outraged and unified constituency demanding an end to bribery of politicians, whether it occurs before, during, or after a campaign.
In the meanwhile, it is best to keep in mind that the Republicans destroying our land are doing so not so much because of some new mental problems. They had them before and you just didn’t hear about them.
They are tearing down the nation because their problems are extremely valuable to the corporados who have put them into office and don’t want government to work at all.
Our battle, thus, is not with Walker and LePage but with the big bucks that put them where they are. Follow the money.
Sam Smith edits the Progressive Review. He is the author of The Great American Repair Manual.
Lament for the dearly departed middle class
NOVEMBER 15, 2011
Good-Bye To the “Middle-Class”?
A Lesson for Labor From Occupy Wall Street
by STEVE EARLY
Occupy Wall Street (OWS) has given our timorous, unimaginative, and politically ambivalent unions a much-needed ideological dope slap. Some might describe this, more diplomatically, as a second injection of “outside-the-box” thinking and new organizational blood.
Top AFL-CIO officials first sought an infusion of those scarce commodities in labor when they jetted into Wisconsin last winter. Without their planning or direction, the spontaneous community-labor uprising in Wisconsin was in the process of recasting the debate about public sector bargaining throughout the U.S. So they were eager to join the protest even though it was launched from the bottom up, rather than the top-down, in response to headquarters directives from Washington, D.C.
This fall, OWS has become the new Lourdes for the old, lame, and blind of American labor. Union leaders have been making regular visits to Zuccotti Park and other high-profile encampments around the country. According to NYC retail store union leader Stuart Applebaum, “the Occupy movement has changed unions”—both in the area of membership mobilization and ”messaging.”
It would be a miraculous transformation indeed if organized labor suddenly embraced greater direct action, democratic decision-making, and rank-and-file militancy. Since that’s unlikely to occur in the absence of internal upheavals, unions might want to focus instead on casting aside the crutch of their own flawed messaging. That means adopting the Occupation movement’s brilliant popular “framing” of the class divide and ditching labor’s own muddled conception of class in America.
Them and Us Updated
In his 1974 memoir and union history, United Electrical Workers co-founder Jim Matles reminded readers that labor struggles are about “them and us”—or, as OWS puts it, “the 1 percent” vs. the “99 percent.” Unfortunately, most other unions have long relied on high-priced Democratic Party consultants, their focus groups and opinion polling, to shape labor’s public “messaging” in much less effective fashion. The results of this collaboration have been unhelpful, to say the least. Organizations that are supposed to the voice of the working class majority have instead positioned themselves–narrowly and confusedly–as defenders of America’s “middle class,” an always fuzzy construct now being rendered even less meaningful by the recession-driven downward mobility of millions of people.
As SUNY professor Michael Zweig argued in his book, The Working Class Majority: America’s Best-Kept Secret (Cornell ILR Press, 2000), labor’s never ending mantra about the “middle class” leaves class relations—and the actual class position of most of the population–shrouded in rhetorical fog.
Zweig points out that the working class in America today looks quite different than the blue-collar proletariat of the last century, which leads many to believe that differences in “status, income, or life-styles” define where they stand on the economic and social ladder. But “the real basis of social class lies in the varying amounts of power people have at work and in the larger society….The sooner we realize that classes exist and understand the power relations that are driving the economic and political changes swirling around us, the sooner we will be able to build an openly working class politics.”
As Zweig would agree I’m sure, labor’s “framing” not only lacks the clear resonance of that employed by the new anti-capitalist campaigners of OWS; “one of the great weaknesses” of the standard union view of class “is that it confuses the target of political conflict.” When the working class disappears into an amorphous “middle class,” not only do the “working poor” (a mere 46 million strong) drop out of the picture, but “the capitalist class disappears into ‘the rich.’ And when the capitalist class disappears from view, it cannot be a target.”
Well, thanks to OWS —but not most unions—that target is back in view. As a result of Occupation activity, there is now a far more favorable climate of public opinion for waging key contract fights at Verizon and other Fortune 500 companies.
A Corporate Pig Roast in Albany
During the two-week strike by 45,000 Verizon workers in August, union PR people issued leaflets urging support for the CWA-IBEW “fight to defend middle-class jobs.” This characterization of strike goals enabled Verizon to run newspaper ads claiming that the $75,000 a year or more earned by telephone technicians made them part of the “upper middle class”—and thus, apparently not worthy of sympathy from customers or members of the public whose jobs provide family incomes closer to the national or regional average.
By late October, Verizon technicians, who are part of a reform movement in CWA Local 1101, had marched through lower Manhattan in solidarity with OWS and along with NYC teachers, teamsters, and transit workers. Similar links between occupiers and Verizon contract campaigners developed in Boston.
Meanwhile, in upstate New York, members of CWA Local 1118 held a “corporate pig roast”—right around the corner from “Cuomoville,” the OWS encampment in downtown Albany that has so annoyed the state’s Democratic governor. At this OWS-inspired event, Verizon workers invited occupiers (more used to vegan and vegetarian fare) to join them. They were also brandishing new signs, with a far better, more universalist message: “We are the 99 percent!”
Interaction like this, between OWS and union rank-and-filers, has been mutually beneficial in many other places. On the labor side, Occupation activity has been a much-needed source of new energy and ideas. Lets hope that union members can keep pushing labor’s communications strategy in a more resonant OWS-influenced direction. If they succeed with that objective, more substantive and harder to achieve organizational change could be next on the agenda.
Good-Bye To the “Middle-Class”?
A Lesson for Labor From Occupy Wall Street
by STEVE EARLY
Occupy Wall Street (OWS) has given our timorous, unimaginative, and politically ambivalent unions a much-needed ideological dope slap. Some might describe this, more diplomatically, as a second injection of “outside-the-box” thinking and new organizational blood.
Top AFL-CIO officials first sought an infusion of those scarce commodities in labor when they jetted into Wisconsin last winter. Without their planning or direction, the spontaneous community-labor uprising in Wisconsin was in the process of recasting the debate about public sector bargaining throughout the U.S. So they were eager to join the protest even though it was launched from the bottom up, rather than the top-down, in response to headquarters directives from Washington, D.C.
This fall, OWS has become the new Lourdes for the old, lame, and blind of American labor. Union leaders have been making regular visits to Zuccotti Park and other high-profile encampments around the country. According to NYC retail store union leader Stuart Applebaum, “the Occupy movement has changed unions”—both in the area of membership mobilization and ”messaging.”
It would be a miraculous transformation indeed if organized labor suddenly embraced greater direct action, democratic decision-making, and rank-and-file militancy. Since that’s unlikely to occur in the absence of internal upheavals, unions might want to focus instead on casting aside the crutch of their own flawed messaging. That means adopting the Occupation movement’s brilliant popular “framing” of the class divide and ditching labor’s own muddled conception of class in America.
Them and Us Updated
In his 1974 memoir and union history, United Electrical Workers co-founder Jim Matles reminded readers that labor struggles are about “them and us”—or, as OWS puts it, “the 1 percent” vs. the “99 percent.” Unfortunately, most other unions have long relied on high-priced Democratic Party consultants, their focus groups and opinion polling, to shape labor’s public “messaging” in much less effective fashion. The results of this collaboration have been unhelpful, to say the least. Organizations that are supposed to the voice of the working class majority have instead positioned themselves–narrowly and confusedly–as defenders of America’s “middle class,” an always fuzzy construct now being rendered even less meaningful by the recession-driven downward mobility of millions of people.
As SUNY professor Michael Zweig argued in his book, The Working Class Majority: America’s Best-Kept Secret (Cornell ILR Press, 2000), labor’s never ending mantra about the “middle class” leaves class relations—and the actual class position of most of the population–shrouded in rhetorical fog.
Zweig points out that the working class in America today looks quite different than the blue-collar proletariat of the last century, which leads many to believe that differences in “status, income, or life-styles” define where they stand on the economic and social ladder. But “the real basis of social class lies in the varying amounts of power people have at work and in the larger society….The sooner we realize that classes exist and understand the power relations that are driving the economic and political changes swirling around us, the sooner we will be able to build an openly working class politics.”
As Zweig would agree I’m sure, labor’s “framing” not only lacks the clear resonance of that employed by the new anti-capitalist campaigners of OWS; “one of the great weaknesses” of the standard union view of class “is that it confuses the target of political conflict.” When the working class disappears into an amorphous “middle class,” not only do the “working poor” (a mere 46 million strong) drop out of the picture, but “the capitalist class disappears into ‘the rich.’ And when the capitalist class disappears from view, it cannot be a target.”
Well, thanks to OWS —but not most unions—that target is back in view. As a result of Occupation activity, there is now a far more favorable climate of public opinion for waging key contract fights at Verizon and other Fortune 500 companies.
A Corporate Pig Roast in Albany
During the two-week strike by 45,000 Verizon workers in August, union PR people issued leaflets urging support for the CWA-IBEW “fight to defend middle-class jobs.” This characterization of strike goals enabled Verizon to run newspaper ads claiming that the $75,000 a year or more earned by telephone technicians made them part of the “upper middle class”—and thus, apparently not worthy of sympathy from customers or members of the public whose jobs provide family incomes closer to the national or regional average.
By late October, Verizon technicians, who are part of a reform movement in CWA Local 1101, had marched through lower Manhattan in solidarity with OWS and along with NYC teachers, teamsters, and transit workers. Similar links between occupiers and Verizon contract campaigners developed in Boston.
Meanwhile, in upstate New York, members of CWA Local 1118 held a “corporate pig roast”—right around the corner from “Cuomoville,” the OWS encampment in downtown Albany that has so annoyed the state’s Democratic governor. At this OWS-inspired event, Verizon workers invited occupiers (more used to vegan and vegetarian fare) to join them. They were also brandishing new signs, with a far better, more universalist message: “We are the 99 percent!”
Interaction like this, between OWS and union rank-and-filers, has been mutually beneficial in many other places. On the labor side, Occupation activity has been a much-needed source of new energy and ideas. Lets hope that union members can keep pushing labor’s communications strategy in a more resonant OWS-influenced direction. If they succeed with that objective, more substantive and harder to achieve organizational change could be next on the agenda.
STEVE EARLY is a former national staff member of the Communications Workers of America (CWA) who has been active in labor causes since 1972. He is the author of The Civil Wars in U.S. Labor (Haymarket Books, 2010, a contributor to the forthcoming, Wisconsin Uprising: Labor Fights Back, from Monthly Review Press.
"Re-Occupy, ASAP" Exposing Cultural Myths at Occupy Oakland
NOVEMBER 15, 2011
COUNTERPUNCH
by SUSAN GALLEYMORE
What a welcome relief the Occupy movement’s trend of “leaderless” groups! True, this seemingly contradictory concept is difficult to absorb in a culture the promotes a leadership style that models the strongest, loudest, most persistent, and most vocal monopolizing the microphone – both physical and its cultural equivalent.
But, as Americans know well, repeat something often enough and it becomes part of the cultural vernacular. So, despite the difficulty politicians, media, and many Americans have in grasping this new paradigm, Occupy movements across the country continue as leaderless groups.
After the Oakland camp’s most recent tossing by police word-of-mouth convened about 1,000 people at the main library to strategize. Then they marched the four blocks back to City Hall for the 6 p.m. General Assembly.
There are refreshing and humorous moments at GAs when a random person from the crowd hops the line of speakers, commandeers the mic, and rambles on about the CIA commanding “us all through the fillings in our teeth”, that we’re at the “end times”, or that aliens are watching from outer space and waiting to invade. Then, the mic is retrieved, gently, and GA business continues.
Last night, the group reiterated its commitment to non-violence; anyone unable or unwilling to practice non-violence will be escorted, gently, from the group. It also consensually agreed that Saturday, November 19 is the next major gathering in Oakland for those aching for a different system of governance, society, and relationship to one another.
These peaceful and informal GAs belie the myths perpetuated by local government and the media about epidemics of violence at Occupy sites.
Then again, the movement is exposing other cultural myths and morality tales for what they are, too: formulas for shaming generations of wage-earners into silent compliance.
Presidential hopeful Herman Cain recently reiterated a classic: “If you’re not rich, don’t blame Wall St, blame yourself.”
Variations on the theme include:
The rich have what they have because they “pull themselves up by their own bootstraps”.
“God” shows His approval of the righteously hard-working by endowing them with material wealth.
The unemployed have given up or are too lazy to seek jobs.
“The American Dream” is there for the taking by anyone willing to work for it
Education ensures success.
The planet is a treasure trove of natural resources for bold risk-takers to tap.
Indeed, even the myth that police maintain social order for business is evaporating in the face of reality.
Jesse Smith lives in downtown Oakland and, at first, he was skeptical of the Occupy movement’s manifestation in his neighborhood. After he reconnoitered, talked with Occupiers, and understood that they echoed his grievances about our country’s direction, he joined the camp’s business liaison group.
Yesterday, he stood in the sunshine at the police barricades erected after the police raid early that morning and explained that the business liaison group had surveyed some 100 businesses in a 2 block radius around City Hall.
“We collected data that no one else seems to have: around one third of the business owners report neutral impact on their business by the occupation; another third, owners of convenience stores and pizza joints, report a positive impact – business has gone up; the rest, places negatively impacted, are the attractive retail outlets that tend to be chain stores.”
Most business owners note that the police actions are “the only detriment that they experience to their bottom line.” They say their vendors call and ask them, ‘Is it safe to come to downtown Oakland?’ There’s an impression outside of Oakland that there’s been a need for a constant police line and that raids and violent police actions are imminent. This, if anything, is what is killing commerce here.”
Dorothy King is the owner of the sixty-year-old Oakland-based family business Everett and Jones barbeque.
“People say small business owners in Oakland suffer because people don’t spend money here. No, if the small business owners who live and work in Oakland suffer it is because the big banks take our money out of our community and do not invest in our city.”
In the sunshine, a protester near Jesse Smith patrolled the police barricades behind which municipal workers picked up debris from the for-now demolished encampment. One side of the sign he carried urged, “Mayor Quan, City Council, how about a little imagination?” The other side read, “Re-Occupy asap.”
Judging by how the majority of people conduct themselves in Oakland these days, peacefully and with determination, it is only a matter of time before the latter comes true.
COUNTERPUNCH
by SUSAN GALLEYMORE
What a welcome relief the Occupy movement’s trend of “leaderless” groups! True, this seemingly contradictory concept is difficult to absorb in a culture the promotes a leadership style that models the strongest, loudest, most persistent, and most vocal monopolizing the microphone – both physical and its cultural equivalent.
But, as Americans know well, repeat something often enough and it becomes part of the cultural vernacular. So, despite the difficulty politicians, media, and many Americans have in grasping this new paradigm, Occupy movements across the country continue as leaderless groups.
After the Oakland camp’s most recent tossing by police word-of-mouth convened about 1,000 people at the main library to strategize. Then they marched the four blocks back to City Hall for the 6 p.m. General Assembly.
There are refreshing and humorous moments at GAs when a random person from the crowd hops the line of speakers, commandeers the mic, and rambles on about the CIA commanding “us all through the fillings in our teeth”, that we’re at the “end times”, or that aliens are watching from outer space and waiting to invade. Then, the mic is retrieved, gently, and GA business continues.
Last night, the group reiterated its commitment to non-violence; anyone unable or unwilling to practice non-violence will be escorted, gently, from the group. It also consensually agreed that Saturday, November 19 is the next major gathering in Oakland for those aching for a different system of governance, society, and relationship to one another.
These peaceful and informal GAs belie the myths perpetuated by local government and the media about epidemics of violence at Occupy sites.
Then again, the movement is exposing other cultural myths and morality tales for what they are, too: formulas for shaming generations of wage-earners into silent compliance.
Presidential hopeful Herman Cain recently reiterated a classic: “If you’re not rich, don’t blame Wall St, blame yourself.”
Variations on the theme include:
The rich have what they have because they “pull themselves up by their own bootstraps”.
“God” shows His approval of the righteously hard-working by endowing them with material wealth.
The unemployed have given up or are too lazy to seek jobs.
“The American Dream” is there for the taking by anyone willing to work for it
Education ensures success.
The planet is a treasure trove of natural resources for bold risk-takers to tap.
Indeed, even the myth that police maintain social order for business is evaporating in the face of reality.
Jesse Smith lives in downtown Oakland and, at first, he was skeptical of the Occupy movement’s manifestation in his neighborhood. After he reconnoitered, talked with Occupiers, and understood that they echoed his grievances about our country’s direction, he joined the camp’s business liaison group.
Yesterday, he stood in the sunshine at the police barricades erected after the police raid early that morning and explained that the business liaison group had surveyed some 100 businesses in a 2 block radius around City Hall.
“We collected data that no one else seems to have: around one third of the business owners report neutral impact on their business by the occupation; another third, owners of convenience stores and pizza joints, report a positive impact – business has gone up; the rest, places negatively impacted, are the attractive retail outlets that tend to be chain stores.”
Most business owners note that the police actions are “the only detriment that they experience to their bottom line.” They say their vendors call and ask them, ‘Is it safe to come to downtown Oakland?’ There’s an impression outside of Oakland that there’s been a need for a constant police line and that raids and violent police actions are imminent. This, if anything, is what is killing commerce here.”
Dorothy King is the owner of the sixty-year-old Oakland-based family business Everett and Jones barbeque.
“People say small business owners in Oakland suffer because people don’t spend money here. No, if the small business owners who live and work in Oakland suffer it is because the big banks take our money out of our community and do not invest in our city.”
In the sunshine, a protester near Jesse Smith patrolled the police barricades behind which municipal workers picked up debris from the for-now demolished encampment. One side of the sign he carried urged, “Mayor Quan, City Council, how about a little imagination?” The other side read, “Re-Occupy asap.”
Judging by how the majority of people conduct themselves in Oakland these days, peacefully and with determination, it is only a matter of time before the latter comes true.
Susan Galleymore is a former “military mom” and a radio host, writer, and author of Long Time Passing: Mothers Speak about War and Terror. Contact her at susan@raisingsandradio.org.
Children rapers everywhere - can you believe THIS?
NOVEMBER 15, 2011
7
A Precursor to the Penn State Debacle
The 1994 Christian Children’s Fund Scandal
by THOMAS H. NAYLOR
Former Penn State President Graham Spanier’s connection to the university’s football related sex scandal was not his first brush with scandal involving a major organization under his watch. In 1994, while he was Chancellor of the University of Nebraska, Spanier was also Chairman of the Board of the Christian Children’s Fund, the largest child sponsorship organization in the world, located in Richmond, Virginia. After serving on the CCF board myself for two years, in March, 1994, I was kicked off the board for whistle blowing. Subsequently, I went public with my charges of corruption against the $112 million organization, which claimed to support 400,000 children in 40 countries, whose board Spanier chaired.
Not unlike hundreds of thousands of other Americans, I too had been seduced by emotionally charged television advertisements extolling the virtues of sending a monthly check to a private child sponsorship organization such as Childreach or World Vision. Long before I joined the board of CCF, I had been a sponsor of a child in Bangladesh through Save the Children. The possibility of sponsoring one’s own child in an impoverished third-world country hasenormous appeal. It is neat, clean, tax-deductible, and hassle-free. You do not have to travel anywhere; you need not see or touch any smelly, filthy children; and you avoid the risk of disease and sickness. Even though you are completely detached from your child, writing a check makes you feel good.
During my first year on the CCF board I sat on the audit committee, where I was exposed to a series of quarterly horror stories describing incidents of fraud, theft, and mismanagement in CCF projects in places such as Brazil, Haiti, India, Thailand, Ethiopia, Oklahoma, and North Dakota. After awhile I realized that none of these problems were ever reported to have been resolved. Then one day a new board member, upon hearing the stories of the internal auditor, proclaimed, “This is scary stuff.” And he was right. I decided to dig deeper into the matter.
The bedrock on which child sponsorship organizations based their fund raising appeals was the so-called 80-20 rule. CCF was no exception to the rule. For every dollar received from sponsors, CCF claimed that 80 cents went to support children and that the remaining 20 cents was used for management and fund raising. There was only one catch. It was not true.
One of CCF’s accountants led me by the hand through the organization’s sophisticated accounting system and convinced me that no one really knew how much of each contribution dollar actually reached the children. As a result of creative accounting and an inadequate financial information and control system, the percentage of each sponsorship dollar spent on children could be as low as 50 percent. This got my attention.
I began turning up the heat on the board to look into this egregious matter. The board members were unamused. Their response was a combination of denial and an attempt to discredit me. My fate was sealed at the January, 1994 board meeting when I suggested that the CCF board was little more than a cheerleading team for the organization’s CEO. One board member became so enraged that he threatened to throw me out of the window of a five-story building.
Shortly after being removed form the CCF board I wrote a 10-page report summarizing my grievances with CCF’s management and sent it to Ed Briggs, the religion writer for the Richmond Times-Dispatch. Briggs courageously decided to run with the story even though CCF was perceived to be a virtually untouchable sacred cow protected by a board controlled by well-connected, high-profile Richmonders. Since I was living in Vermont by then, Briggs was in a much better position to dig more deeply into the story than I could, and he did.
On May 23, 1994, the first of 14 front-page articles by Briggs and his colleagues ran in the Times-Dispatch. My original 10-page report was only the tip of the iceberg compared to what they uncovered and reported. They flushed out the details of lavish office furnishings and expensive travel budgets for CCF executives and board members alike. They also interviewed former CCF executives who opted to let it all hang out.
CCF refused to reveal the cost of a frivolous 1993 trip to Warsaw, Poland for a 35-person CCF delegation of which I was a member. We stayed in the most posh hotel in Warsaw. Although little or nothing was accomplished, it was considered chic in the child sponsorship business back in those days to have a presence in Eastern Europe. Spanier made frequent trips on behalf of CCF including at least one to China.
The CCF scandal was picked up nationally by The Washington Post, The Chronicle of Philanthropy, The Chicago Tribune, Christianity Today, and NBC News.
In August 1994 CCF’s CEO Paul F. McCleary announced his plans to retire and Spanier followed suit a month or so later. Both denied that their decision to step down had been influenced by the media attention received by CCF. Both McCleary and Spanier consistently denied any wrongdoing on the part of CCF and tried desperately to ridicule me for my role in exposing the malfeasance at CCF.
In 2009 the Christian Children’s Fund changed its name to Child Fund International. Somehow this seemed appropriate, since CCF had never had any connection whatsoever to Christianity, and it showed.
When all is said and done, in addition to denial and cover-up, what the CCF and Penn State scandals share in common is the fact that both institutions were too big to manage by Graham Spanier or anyone else. And Spanier was not paying attention to what was going on.
7
A Precursor to the Penn State Debacle
The 1994 Christian Children’s Fund Scandal
by THOMAS H. NAYLOR
Former Penn State President Graham Spanier’s connection to the university’s football related sex scandal was not his first brush with scandal involving a major organization under his watch. In 1994, while he was Chancellor of the University of Nebraska, Spanier was also Chairman of the Board of the Christian Children’s Fund, the largest child sponsorship organization in the world, located in Richmond, Virginia. After serving on the CCF board myself for two years, in March, 1994, I was kicked off the board for whistle blowing. Subsequently, I went public with my charges of corruption against the $112 million organization, which claimed to support 400,000 children in 40 countries, whose board Spanier chaired.
Not unlike hundreds of thousands of other Americans, I too had been seduced by emotionally charged television advertisements extolling the virtues of sending a monthly check to a private child sponsorship organization such as Childreach or World Vision. Long before I joined the board of CCF, I had been a sponsor of a child in Bangladesh through Save the Children. The possibility of sponsoring one’s own child in an impoverished third-world country hasenormous appeal. It is neat, clean, tax-deductible, and hassle-free. You do not have to travel anywhere; you need not see or touch any smelly, filthy children; and you avoid the risk of disease and sickness. Even though you are completely detached from your child, writing a check makes you feel good.
During my first year on the CCF board I sat on the audit committee, where I was exposed to a series of quarterly horror stories describing incidents of fraud, theft, and mismanagement in CCF projects in places such as Brazil, Haiti, India, Thailand, Ethiopia, Oklahoma, and North Dakota. After awhile I realized that none of these problems were ever reported to have been resolved. Then one day a new board member, upon hearing the stories of the internal auditor, proclaimed, “This is scary stuff.” And he was right. I decided to dig deeper into the matter.
The bedrock on which child sponsorship organizations based their fund raising appeals was the so-called 80-20 rule. CCF was no exception to the rule. For every dollar received from sponsors, CCF claimed that 80 cents went to support children and that the remaining 20 cents was used for management and fund raising. There was only one catch. It was not true.
One of CCF’s accountants led me by the hand through the organization’s sophisticated accounting system and convinced me that no one really knew how much of each contribution dollar actually reached the children. As a result of creative accounting and an inadequate financial information and control system, the percentage of each sponsorship dollar spent on children could be as low as 50 percent. This got my attention.
I began turning up the heat on the board to look into this egregious matter. The board members were unamused. Their response was a combination of denial and an attempt to discredit me. My fate was sealed at the January, 1994 board meeting when I suggested that the CCF board was little more than a cheerleading team for the organization’s CEO. One board member became so enraged that he threatened to throw me out of the window of a five-story building.
Shortly after being removed form the CCF board I wrote a 10-page report summarizing my grievances with CCF’s management and sent it to Ed Briggs, the religion writer for the Richmond Times-Dispatch. Briggs courageously decided to run with the story even though CCF was perceived to be a virtually untouchable sacred cow protected by a board controlled by well-connected, high-profile Richmonders. Since I was living in Vermont by then, Briggs was in a much better position to dig more deeply into the story than I could, and he did.
On May 23, 1994, the first of 14 front-page articles by Briggs and his colleagues ran in the Times-Dispatch. My original 10-page report was only the tip of the iceberg compared to what they uncovered and reported. They flushed out the details of lavish office furnishings and expensive travel budgets for CCF executives and board members alike. They also interviewed former CCF executives who opted to let it all hang out.
CCF refused to reveal the cost of a frivolous 1993 trip to Warsaw, Poland for a 35-person CCF delegation of which I was a member. We stayed in the most posh hotel in Warsaw. Although little or nothing was accomplished, it was considered chic in the child sponsorship business back in those days to have a presence in Eastern Europe. Spanier made frequent trips on behalf of CCF including at least one to China.
The CCF scandal was picked up nationally by The Washington Post, The Chronicle of Philanthropy, The Chicago Tribune, Christianity Today, and NBC News.
In August 1994 CCF’s CEO Paul F. McCleary announced his plans to retire and Spanier followed suit a month or so later. Both denied that their decision to step down had been influenced by the media attention received by CCF. Both McCleary and Spanier consistently denied any wrongdoing on the part of CCF and tried desperately to ridicule me for my role in exposing the malfeasance at CCF.
In 2009 the Christian Children’s Fund changed its name to Child Fund International. Somehow this seemed appropriate, since CCF had never had any connection whatsoever to Christianity, and it showed.
When all is said and done, in addition to denial and cover-up, what the CCF and Penn State scandals share in common is the fact that both institutions were too big to manage by Graham Spanier or anyone else. And Spanier was not paying attention to what was going on.
Thomas H. Naylor is Founder of the Second Vermont Republic and Professor Emeritus of Economics at Duke University; co-author of Affluenza, Downsizing the U.S.A., and The Search for Meaning.
Waiting for the Second Shoe to Fall Sex Scandals & Cover-Ups
NOVEMBER 15, 2011
COUNTERPUNCH
by DAVID ROSEN
Once again, America is being entertained by a series of sex scandals. One involves the erstwhile corporate showman and Republican presidential candidate, Herman Cain, and the other is engulfing Penn State’s football-team coaching staff and top university administrators.
The Cain scandal is two-fold: (i) the acts apparently committed on at least four women (the reported “evidence” seems convincing) and (ii) Cain’s confusing attempts to deny what took place that seem to only dig him deeper into the proverbial hole.
The Penn State scandal is also two-fold: (i) the pedophile acts attributed to Jerry Sandusky, a retired assistant football coach, to at least eight of boys (the reported “evidence” seems convincing), and (ii) the university’s attempt to contain the scandal by covering up evidence against the perpetrator that seems to only dig those involved deeper into the proverbial hole.
The final outcomes of both cases are still to be determined. Stay tuned.
The two episodes are fundamentally different in terms of the sex issues involved, harassment and rape. Nevertheless, the two episodes share a common attempt to deny, hide or minimize the likely consequences of the alleged actions involved. And neither involved seems to be getting away with their respective cover-ups.
Equally critical, both episodes point to deeper, more systemic issues of male sexism that all-to-often still continue to go under reported if not excused with a wink-and-a-nod acceptance by those with power and money.
We’ve been here before, many, many times. Was it just last spring that we were being entertained by the sexting scandals involving Congressmen Anthony Weiner and ChrisLee? And didn’t Weiner early on play the same fool’s game of denial until he was finally forced to resign?
And who could forget the fun the media had outing John Edwards, Elliot Spitzer and Tiger Woods? After so many scandals, it’s clear that the cover-up can be more consequential than the act(s) itself.
It’s as if our politicians and athletes (or their coaches) jump headlong into the media spotlight at scheduled intervals. Suffering their 15 minutes of fame, they add some seasoning to the hard-to-eat reality of daily life. Stay tuned as further episodes of sex scandal America play themselves out.
* * *
The Cain and the Penn State scandals are still unraveling; their final outcomes yet to be determined. Most assuredly, they are very different offenses. One involves individuals; the other involves individuals and an institution. One involves adults; the other an adult and children. One involves sexual harassment, with passive coercion and (apparently) no overt violence; Cain seems to have known where to stop. The other involves the raping of minors; Sandusky could not stop himself from the nonconsensual sexual violation of young boys.
As the old proverb implies, unless you live in a cave you probably know a lot about the sexual misadventures of Cain and at Penn State. These two stories have become the leitmotif of daily news headlines. Set against the looming bankruptcies of Greece and Italy (and the possible collapse of the euro), the Obama/Democrats-Tea Party/Republican political duet, the growing Occupy movement, the grinding recession and daily shoot-em-ups that clutter most local news coverage, these sex scandals poke holes in the generally shared belief about “normal” sex in America.
So far, four women have come forward who have apparently suffered sexual harassment at the hands of Herman Cain. At this time, two of the apparent victims, Karen Kraushaar and Sharon Bialek, have been publicly identified. Bialek held a formal press conference at which she laid out a highly detailed account of a very uncomfortable evening with this oh-so helpful executive. Kraushaar has acknowledged receiving a payout from Cain’s-then employer, National Restaurant Association, a trade group. To date, Cain’s reply has been an assertion that he couldn’t remember Ms. Bialek and, in any case, he was a married man who could never do such dastardly deeds.
The Penn State debacle is a crisis playing out in slow motion. The very Catholic governor of Pennsylvania, Tom Corbett, linked the PSU scandal to the pedophilia scandal long engulfing the Catholic Church. Whereas the Mother Church retreated into centuries-old refusal to hide its culpability, Gov. Corbett seems to be making all of this sad story public, transparent; time will tell if he doesn’t reconfigure truth to serve private interests.
The heart of the crisis is the link between the alleged perpetrator, Sandusky, with the university’s power elite who, for more than a decade, sought to cover up the crimes. The cornerstone of this elite is PSU’s version of Rin-Tin-Tin, football coach Joe Paterno. He is a cash cow, the corporatist version of “Greatest Generation” morals, the all-American granddad. The Penn State football team, popularly know as the Nittany Lions, generates about $50 million annual in revenue to a relatively impoverished sector of central PA.
Debate within the media about Paterno’s culpability has focused on whether simply reporting to his supervisors information about an incident of locker-room pedophilia was sufficient. This is the legal question, one clearly answered in the affirmative, as Paterno did his job and, unfortunately, nothing more. [See grand jury report.]
However, the more fundamental question is whether Paterno had a deeper, moral, responsibility with regard to the unfolding scandal? He knew, and was intimately associated, with Sandusky, his wife and children for about 40 years! Sandusky served on the PSU coaching staff for 32 years, retiring at the end of the 1999 season.
The first reported pedophile incident involving Sandusky was made in 1998 after a mother of a young boy raised the issue with the university police, the state’s Department of Public Welfare and the local district attorney’s office. The DA, Ray Gricar, dropped the investigation; Gricar disappeared in 2005 and has not been seen or heard from since.
Sandusky had been in line to replace Paterno as PSU’s head coach but, in the wake of the ’98 investigation, Paterno dropped the dime on him and he was forced to retire. One can only wonder if (and, if not, why) Paterno approached Sandusky as a friend, boss, fellow jock and good Christian and asked him what was happening and if he needed help?
This points to the deeper crisis confronting the PSU leadership. The grand jury report notes that Wendell Courtney, the university’s counsel, had a thorough knowledge of the charges and also served as attorney for Sandusky’s Second Mile charity. So, what did this model citizen do in the face of this (and surely other) incidents involving Sandusky? Does his failure to act, if not his apparent role halting a criminal investigation, constitute grounds for disbarment?
* * *
The modern culture industry effectively obliterates meaning and history from the present. Thus, the sex scandal involving Herman Cain serves the same social function as the latest gossip about Lady Gaga. Such coverage is interchangeable, equally distracting and titillating.
But sex scandals have a history that illuminates not only a peculiar past, but also the formation of an equally unique present. Scandals mark out the boundaries of acceptable conduct, and especially sexual conduct.
Sex scandals have a peculiar social function that has changed since America’s founding four centuries ago. Since the nation’s founding, sex scandals have been morality tales intended to punish and/or shame the perpetrator. They are rituals setting the boundaries of acceptable sexual practice.
Public shaming, especially directed toward political and cultural figures, has been a powerful force used to impose and maintain social control. As evident in the unraveling scandals involving Cain and Sandusky, the scandals point to deeper issues that the media only passingly focuses on.
The Cain scandal, however it plays out for the Republican candidate, raises the deeper specter of sexual harassment widespread in the workplace. Most disturbing is the business-as-usual policies practiced by the National Restaurant Association to pay-off at least two women who brought charges against Cain.
Who knows how many other women Cain harassed and from whom he bought their silence through “legal” pay-offs? And if this is but one case in one industry sector, how many more such deals like this one are struck annually or charges simply not reported throughout the country as part of ongoing business-as-usual?
The Sandusky scandal, however it plays out for Penn State and its football team, raises the deeper specter of sexual crimes (e.g., pedophilia, rape) committed within an institutional setting. One of the most revealing episodes in the sordid story involves the PSU assistant coach Mike McQueary who discovered Sandusky raping a 10-year-old boy in 2002 and, instead of directly attempted to halt the rape or calling the police, he left the football building and reported the incident to his father who had him meet with Paterno the following morning.
This is the trouble with institutional thinking: personal moral judgment is subordinated to the “good” of the institution, be it football team or local power relations. Another example of compromised institutional allegiance is evident in the local judge, Leslie Dutchcot, who imposed an unsecured $100,000 bail on Sandusky; Sandusky didn’t have to post any money and walked out of jail. Oh, by the way, the good judge was a volunteer to Sandusky charity, the Next Mile.
COUNTERPUNCH
by DAVID ROSEN
Once again, America is being entertained by a series of sex scandals. One involves the erstwhile corporate showman and Republican presidential candidate, Herman Cain, and the other is engulfing Penn State’s football-team coaching staff and top university administrators.
The Cain scandal is two-fold: (i) the acts apparently committed on at least four women (the reported “evidence” seems convincing) and (ii) Cain’s confusing attempts to deny what took place that seem to only dig him deeper into the proverbial hole.
The Penn State scandal is also two-fold: (i) the pedophile acts attributed to Jerry Sandusky, a retired assistant football coach, to at least eight of boys (the reported “evidence” seems convincing), and (ii) the university’s attempt to contain the scandal by covering up evidence against the perpetrator that seems to only dig those involved deeper into the proverbial hole.
The final outcomes of both cases are still to be determined. Stay tuned.
The two episodes are fundamentally different in terms of the sex issues involved, harassment and rape. Nevertheless, the two episodes share a common attempt to deny, hide or minimize the likely consequences of the alleged actions involved. And neither involved seems to be getting away with their respective cover-ups.
Equally critical, both episodes point to deeper, more systemic issues of male sexism that all-to-often still continue to go under reported if not excused with a wink-and-a-nod acceptance by those with power and money.
We’ve been here before, many, many times. Was it just last spring that we were being entertained by the sexting scandals involving Congressmen Anthony Weiner and ChrisLee? And didn’t Weiner early on play the same fool’s game of denial until he was finally forced to resign?
And who could forget the fun the media had outing John Edwards, Elliot Spitzer and Tiger Woods? After so many scandals, it’s clear that the cover-up can be more consequential than the act(s) itself.
It’s as if our politicians and athletes (or their coaches) jump headlong into the media spotlight at scheduled intervals. Suffering their 15 minutes of fame, they add some seasoning to the hard-to-eat reality of daily life. Stay tuned as further episodes of sex scandal America play themselves out.
* * *
The Cain and the Penn State scandals are still unraveling; their final outcomes yet to be determined. Most assuredly, they are very different offenses. One involves individuals; the other involves individuals and an institution. One involves adults; the other an adult and children. One involves sexual harassment, with passive coercion and (apparently) no overt violence; Cain seems to have known where to stop. The other involves the raping of minors; Sandusky could not stop himself from the nonconsensual sexual violation of young boys.
As the old proverb implies, unless you live in a cave you probably know a lot about the sexual misadventures of Cain and at Penn State. These two stories have become the leitmotif of daily news headlines. Set against the looming bankruptcies of Greece and Italy (and the possible collapse of the euro), the Obama/Democrats-Tea Party/Republican political duet, the growing Occupy movement, the grinding recession and daily shoot-em-ups that clutter most local news coverage, these sex scandals poke holes in the generally shared belief about “normal” sex in America.
So far, four women have come forward who have apparently suffered sexual harassment at the hands of Herman Cain. At this time, two of the apparent victims, Karen Kraushaar and Sharon Bialek, have been publicly identified. Bialek held a formal press conference at which she laid out a highly detailed account of a very uncomfortable evening with this oh-so helpful executive. Kraushaar has acknowledged receiving a payout from Cain’s-then employer, National Restaurant Association, a trade group. To date, Cain’s reply has been an assertion that he couldn’t remember Ms. Bialek and, in any case, he was a married man who could never do such dastardly deeds.
The Penn State debacle is a crisis playing out in slow motion. The very Catholic governor of Pennsylvania, Tom Corbett, linked the PSU scandal to the pedophilia scandal long engulfing the Catholic Church. Whereas the Mother Church retreated into centuries-old refusal to hide its culpability, Gov. Corbett seems to be making all of this sad story public, transparent; time will tell if he doesn’t reconfigure truth to serve private interests.
The heart of the crisis is the link between the alleged perpetrator, Sandusky, with the university’s power elite who, for more than a decade, sought to cover up the crimes. The cornerstone of this elite is PSU’s version of Rin-Tin-Tin, football coach Joe Paterno. He is a cash cow, the corporatist version of “Greatest Generation” morals, the all-American granddad. The Penn State football team, popularly know as the Nittany Lions, generates about $50 million annual in revenue to a relatively impoverished sector of central PA.
Debate within the media about Paterno’s culpability has focused on whether simply reporting to his supervisors information about an incident of locker-room pedophilia was sufficient. This is the legal question, one clearly answered in the affirmative, as Paterno did his job and, unfortunately, nothing more. [See grand jury report.]
However, the more fundamental question is whether Paterno had a deeper, moral, responsibility with regard to the unfolding scandal? He knew, and was intimately associated, with Sandusky, his wife and children for about 40 years! Sandusky served on the PSU coaching staff for 32 years, retiring at the end of the 1999 season.
The first reported pedophile incident involving Sandusky was made in 1998 after a mother of a young boy raised the issue with the university police, the state’s Department of Public Welfare and the local district attorney’s office. The DA, Ray Gricar, dropped the investigation; Gricar disappeared in 2005 and has not been seen or heard from since.
Sandusky had been in line to replace Paterno as PSU’s head coach but, in the wake of the ’98 investigation, Paterno dropped the dime on him and he was forced to retire. One can only wonder if (and, if not, why) Paterno approached Sandusky as a friend, boss, fellow jock and good Christian and asked him what was happening and if he needed help?
This points to the deeper crisis confronting the PSU leadership. The grand jury report notes that Wendell Courtney, the university’s counsel, had a thorough knowledge of the charges and also served as attorney for Sandusky’s Second Mile charity. So, what did this model citizen do in the face of this (and surely other) incidents involving Sandusky? Does his failure to act, if not his apparent role halting a criminal investigation, constitute grounds for disbarment?
* * *
The modern culture industry effectively obliterates meaning and history from the present. Thus, the sex scandal involving Herman Cain serves the same social function as the latest gossip about Lady Gaga. Such coverage is interchangeable, equally distracting and titillating.
But sex scandals have a history that illuminates not only a peculiar past, but also the formation of an equally unique present. Scandals mark out the boundaries of acceptable conduct, and especially sexual conduct.
Sex scandals have a peculiar social function that has changed since America’s founding four centuries ago. Since the nation’s founding, sex scandals have been morality tales intended to punish and/or shame the perpetrator. They are rituals setting the boundaries of acceptable sexual practice.
Public shaming, especially directed toward political and cultural figures, has been a powerful force used to impose and maintain social control. As evident in the unraveling scandals involving Cain and Sandusky, the scandals point to deeper issues that the media only passingly focuses on.
The Cain scandal, however it plays out for the Republican candidate, raises the deeper specter of sexual harassment widespread in the workplace. Most disturbing is the business-as-usual policies practiced by the National Restaurant Association to pay-off at least two women who brought charges against Cain.
Who knows how many other women Cain harassed and from whom he bought their silence through “legal” pay-offs? And if this is but one case in one industry sector, how many more such deals like this one are struck annually or charges simply not reported throughout the country as part of ongoing business-as-usual?
The Sandusky scandal, however it plays out for Penn State and its football team, raises the deeper specter of sexual crimes (e.g., pedophilia, rape) committed within an institutional setting. One of the most revealing episodes in the sordid story involves the PSU assistant coach Mike McQueary who discovered Sandusky raping a 10-year-old boy in 2002 and, instead of directly attempted to halt the rape or calling the police, he left the football building and reported the incident to his father who had him meet with Paterno the following morning.
This is the trouble with institutional thinking: personal moral judgment is subordinated to the “good” of the institution, be it football team or local power relations. Another example of compromised institutional allegiance is evident in the local judge, Leslie Dutchcot, who imposed an unsecured $100,000 bail on Sandusky; Sandusky didn’t have to post any money and walked out of jail. Oh, by the way, the good judge was a volunteer to Sandusky charity, the Next Mile.
David Rosen is author of Sex Scandal America: Politics & the Ritual of Public Shaming; he can be reached at drosennyc@verizon.net.
I have the best State Senator in the WORLD - I am truly blessed!
Crain's investigation: The high price of political payback at McCormick Place
By: James Ylisela Jr. November 14, 2011
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Photo illustration by Sean McCabe.
Photo by: AP/Wide World
Illinois House Speaker Michael Madigan cost taxpayers nearly half-a-billion dollars by blocking repeated efforts to restructure McCormick Place bonds and finance a much-needed second hotel at the convention center, a Crain's investigation finds.
Between 2005 and 2010, Mr. Madigan stopped five refinancing bills, ignoring declining interest rates that would have saved hundreds of millions. At the time, he never explained why, but his reasons seem petty and political: McCormick Place CEO Juan Ochoa, an appointee of then-Gov. Rod Blagojevich, had fired a Madigan ally at the convention center, and lawmakers from both parties say the speaker wanted retribution.
"It was no secret that Madigan had a beef with Ochoa and wanted him gone," says state Rep. Angelo "Skip" Saviano, an Elmwood Park Republican who sponsored refinancing bills in 2005, 2007 and 2009. "As long as Ochoa was there, Madigan wasn't going to give McCormick Place anything."
But politics may not have been Mr. Madigan's only motivation. By holding up refinancing, the speaker also denied McCormick Place the money to build a new hotel. That bought time for clout-heavy developers Gerald Fogelson and Cleveland-based Forest City Enterprises Inc. to push a controversial land swap and hotel deal with McCormick Place on property just north of the convention center. Both were then clients of Mr. Madigan's law firm, Madigan & Getzendanner, but the speaker denies any connection.
As the recession raged in early 2010, the collapse of the real estate market scuttled the deal. That May, after Mr. Ochoa resigned, the General Assembly finally passed legislation that lowered McCormick Place's debt payments, allocated funds to expand the existing Hyatt Regency McCormick Place and imposed wage restrictions and new work rules on union labor. The House sponsor was Speaker Michael Madigan.
The legislation reduced this year's debt service by $96 million, but the damage had already been done at the Metropolitan Pier and Exposition Authority, known as McPier, the agency that runs McCormick Place. Denied refinancing for six years, McPier paid out as much as $300 million more in bond interest than it should have and was forced to tap state sales tax revenue to meet its obligations.
Click above for a closer look at Speaker Madigan's costly feud with then-Gov. Blagojevich.
Mr. Madigan's inaction also set off a chain of events that put Chicago's $8-billion trade show industry — and the estimated 66,000 jobs it supports — at risk. Without revenues from the debt savings and a second hotel, McPier had to mark up its prices in the middle of the recession, driving away two trade shows. With McCormick Place in crisis in late 2009, other shows threatened to leave Chicago unless state lawmakers imposed restrictions on McPier unions.
To find out what went wrong, and what still needs to be fixed, Crain's obtained internal McPier memos and emails under the Freedom of Information Act, examined state and county records, and conducted dozens of interviews with McPier officials, legislators and others. With Illinois on the verge of insolvency, what emerges is an unflattering view of how the state works — or doesn't — when politics trumps the public interest.
'THIS STINKS'
The exchange didn't last long, and it failed to attract much attention, despite the gaggle of press covering the final night of the 2010 state legislative session in May. But state Rep. Jim Sacia, a Pecatonica Republican, was determined to ask Mr. Madigan why numerous prior efforts to refinance McCormick Place bonds had failed to come to a vote in the Illinois House.
A month earlier, in a hearing on the McCormick Place legislation, McPier Chairman John Gates testified that failure to refinance sooner had cost taxpayers hundreds of millions in higher interest payments. Reducing debt payments also would have given the agency a surplus of tax revenue that could have been applied to McPier's struggling operating budget, Mr. Gates testified.
Two of the previous refinancing bills had passed the state Senate only to die in the House. A shocked Mr. Sacia wanted to know why.
At the closing session on May 6, he got his chance to ask Mr. Madigan. "I would be deeply grateful, Speaker, if you could explain to the body how that could happen, if that in fact was the case — did I misunderstand something?" Mr. Sacia asked, according to state transcripts of their testy exchange. "Did a bill pass the Senate that could have saved the taxpayers of this state several hundred million dollars? Would you be kind enough to address that, if you could?"
A brief back-and-forth ended with this terse response from Mr. Madigan: "Mr. Sacia, I'm not sure I understand your question. . . . To repeat what I said, there have been bills that provided for yet another restructuring of the debt payments, but none of those bills dealt with the significant work-rule changes that are in this bill."
"This stinks to high heaven and you, the taxpayers, get half-a-billion dollars worth of rotten meat. I can't wait to hear the explanation for this one."
Rep. Jim Sacia, R–Pecatonica
McPier was "engaged in a scheme, and the Speaker wasn't going to allow that to happen."
Spokesman for Illinois House Speaker Michael Madigan
"As long as (McPier CEO Juan) Ochoa was there, Madigan wasn't going to give McCormick Place anything."
Rep. Angelo "Skip" Saviano, R–Elmwood Park
"We didn't have the political strength to get what we knew was in the best interests of McCormick Place."
Juan Ochoa, former CEO, McPier
Mr. Sacia got a bit more colorful in a letter after the exchange to his constituents: "This stinks to high heaven and you, the taxpayers, get half-a-billion dollars worth of rotten meat. I can't wait to hear the explanation for this one."
He is still fuming today. "I was simply looking for a logical explanation," he says. "How can we have millions in the taxpayers' money just going away to higher interest when we had opportunities to bring that interest down?"
Many still wonder why McCormick Place took six years to refinance its debt, as plenty of government agencies, private companies and homeowners were doing at the time.
"A lot of people were expecting (refinancing) to come earlier," says John Kenward, a bond analyst in Chicago at Standard & Poor's. With interest rates dropping, "I don't know why the state wouldn't have taken advantage of that."
As for Mr. Madigan, he never spoke of his reasons for rejecting bill after bill. But in response to questions from Crain's, a spokesman for Mr. Madigan now says the speaker blocked refinancing to prevent the Blagojevich administration from cashing in on contracts for bond work, such as underwriting and legal services. He provided Crain's an unsigned memorandum of understanding, dated August 2007, in which McPier agreed to allow the state to review and approve all fees and "structuring decisions" related to bond refinancing.
Asked about the financial impact of delayed refinancing, the spokesman says the "consequences were outweighed by (opposition to) becoming part of the Blagojevich fundraising machine."
Mr. Ochoa says he received the memo but never signed it. A McPier spokeswoman confirms that the agreement never took effect. No matter, Mr. Madigan's spokesman says. McPier was "engaged in a scheme, and the speaker wasn't going to allow that to happen."
Mr. Madigan's power is so sweeping that few will state publicly what many acknowledge privately. Mr. Gates, who took on the McPier chairmanship in October 2009 after building one of the nation's largest real estate investment trusts, is now chairman of the Regional Transportation Authority. He says his testimony about the cost of refinancing delays speaks for itself.
State Sen. Kwame Raoul, a Chicago Democrat whose district includes McCormick Place, sponsored two failed efforts to refinance McPier's debt. But he treads gingerly when asked what happened. "I never got a firm answer as to why the bills never advanced in the House," he says. "I imagine there was distrust for the (McPier) leadership at the time."
Mr. Saviano is one of the few to put it more directly. Mr. Ochoa, he says, committed a cardinal sin of patronage politics: He dumped one of Mr. Madigan's "guys."
The guy was Jack Johnson, who had worked as a legislative analyst on Mr. Madigan's staff in the mid-1980s before signing on as McPier's chief of external relations in 1989. In September 2007, Mr. Ochoa, just eight months on the job, fired him.
Mr. Johnson, now senior vice-president at the Chicago Convention and Tourism Bureau, declines to comment, and Mr. Madigan's spokesman rejects the story. Management at McPier was "a national disaster," he says, "looking for other people to blame for their mistakes."
For his part, Mr. Ochoa says he was well aware of the rumors but chose to ignore them. "The speaker never called me to say he was upset with me," he says. "I tried to meet with him several times but was never granted a meeting."
'NO-BRAINER'
Refinancing is a concept familiar to every homeowner. When interest rates go down, you can refinance your mortgage, reduce your monthly payment and maybe even use some of the savings to make a few improvements.
McCormick Place needed to do the same thing, only its mortgage was in the billions and the improvements would have added a new hotel to the convention center campus.
Mr. Ochoa says those were his two top priorities when he took the job as McPier CEO. Unlike the convention centers in Orlando and Las Vegas, McCormick Place receives no state subsidy for its operations and has to live off the revenue it generates.
"When I came to McPier, I looked at our operating budget. It was a no-brainer that another hotel would help us further subsidize our operations," he says. "We also knew that we would soon fall short in the taxes collected to make our debt payments. Rather than wait for that to happen, we tried to address both issues at once."
From 1992 to 2004, McPier sold bonds to finance an ambitious expansion that built the West and South buildings, giving McCormick Place 2.6 million square feet of exhibit space and solidifying its position as the largest convention center in the nation.
The expansion left McPier about $3 billion in debt. To pay back the bondholders, the General Assembly approved four taxes — on hotel rooms, car rentals, restaurants and taxi rides from Midway and O'Hare airports.
At the time, the taxes were thought to be adequate to cover the debt payments, but the business downturn that followed the Sept. 11 terrorist attacks changed all of that. Tax receipts fell short by more than $26 million between 2002 and 2006, depleting the surplus fund set up when the bonds were issued. With interest rates declining, it seemed the perfect time to refinance.
By the mid- to late 2000s, many public entities, including the city of Chicago, the Chicago Board of Education and the Chicago Transit Authority, were replacing older municipal bonds with lower-interest debt.
Mr. Saviano, whose district includes the Rosemont Convention Center, sponsored the 2005 legislation in the Illinois House. He is unabashed about his motivations: "If we keep McCormick Place healthy, the trickle-down helps Rosemont," Mr. Saviano says. He introduced his bill in February 2005, when interest rates had dropped under 4.5% — well below the interest on the existing McPier expansion bonds, which carried rates as high as 7.1%.
But Mr. Saviano's bill died in the House Rules Committee, the legislative way station controlled by Mr. Madigan. Mr. Saviano's 2007 effort met a similar fate, even though interest rates had dropped to near 4%. On April 4, 2008, Mr. Raoul's bill passed the Senate 48 to 6, only to die in the House. In 2009, with rates still under 5%, the lawmakers tried again, but neither measure made it.
State Rep. Barbara Flynn Currie, a Chicago Democrat who is chairman of the rules committee, can't say why none of the bills reached the House floor for a vote. "I don't have a good explanation," she tells Crain's. "It's just one of those items that didn't make it to the top of the agenda."
But Mr. Saviano says, "The bills didn't come out of the rules committee because the speaker didn't want them to. It's unfortunate we had an opportunity to show some fiscal responsibility — and we didn't."
The financial impact of doing nothing was significant. Since 2005, McPier could have saved up to $300 million in interest payments alone, based on a two-percentage-point savings in interest. Restructuring the debt to push larger principal repayments into the future would have provided millions more for McPier operations. A second hotel would have added another $15 million a year, McPier officials estimate.
In October 2010, after finally winning approval to refinance its debt five months earlier, McPier sold $1.12 billion in new bonds, at interest rates between 4.98% and 5.23%, to retire some of the older, higher-interest debt. "By restructuring, we don't have to draw from the state and can save it money," McPier Chief Financial Officer Richard Oldshue said at the time. "It relieves pressure from the state's sales tax revenues."
This year's debt payment, which would have been $177 million without the restructuring, fell to $81 million — a reduction of $96 million. The restructuring also provided $80 million for McPier's operating budget and raised $200 million for the hotel.
LAND SWAP
Just north of McCormick Place and east of the Metra train tracks sits an empty, boot-shaped tract of dirt and weeds that developers dreamed would be worth billions.
While McPier's efforts to restructure its debt and finance a hotel were going nowhere in the General Assembly, a group of well-connected real estate agents, developers and lawyers were pushing hard for a deal that would transform the vacant land into a thriving community called the Gateway Development.
Click above to see the Gateway Development plan's proposed land swap with McCormick Place.
Gateway was the brainchild of Gerald Fogelson and Forest City Enterprises, creators of nearby Central Station, an 80-acre spread of high-end townhouses and condominiums where former Mayor Richard M. Daley once lived. The $4-billion Gateway plan called for condominiums, apartments, senior housing, office space, retail, entertainment venues and, at the south end of the property, a twin-tower hotel for McCormick Place.
The plan was as beautiful as it was ambitious, offering Lake Michigan views and easy access to Soldier Field and the Museum Campus. But there was a catch: To make the deal work, Mr. Fogelson and Forest City wanted McCormick Place to give up five acres of prime vacant land along Lake Shore Drive in exchange for less than two acres they owned toward the back of the property, documents obtained by Crain's show.
An October 2007 meeting on the project featured a who's who of Chicago real estate and political clout: Mr. Fogelson, Forest City's Albert and Ron Ratner, attorney Jack George of law firm Daley & George Ltd., David Haymes of architecture firm Pappageorge Haymes Ltd., and urban planner Stephen Friedman, a city consultant on tax-increment financing. The group also included then-McPier Chairman Ted Tetzlaff, a Chicago litigator, and board member Michael Scott, a real estate developer and president of the Chicago Board of Education.
A memo summarizing the meeting from Timothy Desmond, president of Central Station Development Corp., describes a busy and connected project team. Representing the developers, Mr. George, a law partner of Michael Daley's, the then-mayor's brother, confirmed that the city would approve a planned unit development designation for the land, while Mr. Friedman offered to seek TIF financing to pay for infrastructure improvements.
But Mr. Scott failed to tell the McPier board about his relationship with the developers, Mr. Ochoa says. Mr. Scott had an office and an email address with Fogelson Properties, the correspondence shows. Documents obtained by the Better Government Assn. last year revealed that Fogelson Properties provided the office rent-free and was paying Mr. Scott $10,000 a month as part of the developer's efforts to build the proposed Olympic Village. Mr. Scott was then serving on Mr. Daley's bid committee for the 2016 Olympic Games. The payments stopped in early November 2009, two weeks before Mr. Scott was found dead of what police called a self-inflicted gunshot wound; he reportedly was distraught over financial difficulties and an admissions scandal at Chicago Public Schools.
The developers also have ties to Mr. Madigan. Mr. Madigan's spokesman acknowledges that Forest City and Central Station were clients of the speaker's law firm. He says Mr. Madigan "operates at a code of conduct far beyond state ethics requirements," adding that the law firm had withdrawn its representation of the developers "when it became apparent there was a land swap" with McCormick Place that might create a possible conflict.
Yet Madigan & Getzendanner represented Central Station in cases before the Cook County Board of Review in 2007 and 2008, records show. And the firm represented both developers and Mr. Scott in the Eastgate Village condominium development, at 330 E. 26th St. The firm's appeal before the Cook County assessor successfully lowered the property's 2010 assessment to $468,000 from $1.4 million. The firm currently represents Forest City in a Bolingbrook property, Mr. Madigan's spokesman says.
The internal documents show McPier officials enthusiastically supporting the project, with the notable exception of Messrs. Ochoa and Gates.
"Gateway was a captivating project, but the land swap shortchanged the taxpayers," Mr. Ochoa says. And by agreeing to the land deal, Mr. Ochoa says he would have been largely committed to building the hotel on the Gateway Development. But if McPier's refinancing had come through, he would have had other options, including a proposed location near the West Building.
Mr. Ochoa had high hopes for Mr. Raoul's March 2009 legislation, the senator's second attempt at debt refinancing. The bill passed the Senate easily, but only after Mr. Raoul added a last-minute amendment that reduced the bonding authority by $203 million — the exact amount designated to finance the hotel, Mr. Ochoa says.
"We didn't have the political strength to get what we knew was in the best interests of McCormick Place," says Mr. Ochoa, now CEO of Chicago-based Miramar International Group Inc., which helps organizations connect with Latino customers in the U.S. and Mexico.
Mr. Raoul says he can't remember who asked for the change, and neither can Senate President John Cullerton, a spokeswoman for the Chicago Democrat tells Crain's in an email.
In May 2009, Central Station's Mr. Desmond sent McPier's then-general counsel, Renee Benjamin, a letter of intent from Fogelson Properties to pursue the land deal, and two months later delivered a memorandum of understanding that would serve as the agreement for the land exchange and development. Mr. Ochoa says he never saw the document and would not have signed it.
Mr. Desmond, speaking on behalf of Central Station and Forest City, tells Crain's in an email that he would not comment on the negotiations, saying only that the developers are not currently involved in a hotel project with McCormick Place.
In September 2009, Ms. Benjamin proposed that the deal be part of the agenda at McPier's October board meeting. But Mr. Gates, the incoming chairman, decided against it. "This could be a critical piece of property to (McPier) in the future," Mr. Gates wrote in an email. "I am opposed to limiting our options — even in a non-binding manner."
He confirms his skepticism about the deal. "The market had collapsed, and frankly I didn't think it was in McPier's interest to give up control of the 18th Street exit to Lake Shore Drive," he says.
Without the hotel money, Mr. Raoul's bill passed the Senate easily, but it hardly mattered. Mr. Madigan once again stopped the bill from reaching the House floor.
FATEFUL PRICE HIKES
By 2009, McCormick Place was desperate to refinance. The recession had hit the convention business hard, and McPier had already tapped $57 million in state sales tax revenue to make its debt payments. Without refinancing, it was on track to consume up to $800 million more in sales taxes by 2027. Running short of cash to pay its bills, McPier officials kept raising prices for food and electrical services at McCormick Place.
"We were limited in our sources of revenue," Mr. Ochoa recalls. "The only alternative, unfortunately, was to raise the cost of services to our customers."
Reaction was swift. In November 2009, two trade shows declared they were leaving the convention center, citing high electrical and food costs.
Critics: Law doesn't protect exhibitors from price-gouging
Since last year's McCormick Place legislation, the convention center has reduced its payroll, restructured its debt, lowered food costs and is finally adding more hotel rooms. But critics say the law did nothing to curb the worst trade show abuses: the inflated costs imposed on exhibitors by the general contractors and the trade associations themselves, for freight handling, floor space and hotel rooms, as reported by Crain's in June.
"The exhibitors are still getting (screwed)," one former McPier official says. "But at least now they're getting screwed the same way they're getting screwed everywhere else. We are no longer at a competitive disadvantage."
General contractors Freeman and Global Experience Specialists Inc., both of which control three out of four trade shows at McCormick Place and nationwide, have denied gouging exhibitors. But they also have been reluctant to open their books to prove it, citing proprietary and competitive reasons.
' The exhibitors are still getting (screwed). But at least now they're getting screwed the same way they're getting screwed everywhere else.'
— Former McPier official
An audit of the trade shows, required by law, was supposed to be completed last month but was delayed because the chosen auditors, Chicago-based Crowe Horwath LLP, were monitoring the selection of SMG as the private management company for McCormick Place. SMG, based in West Conshohocken, Pa., took over management of McCormick Place on July 1.
McPier officials say the audit, now expected by the end of the year, will analyze three shows to determine whether last year's labor changes resulted in real savings to exhibitors.
In an August letter to the head of the decorators union, McPier Trustee Jim Reilly promised the auditors would "go beyond the statutory requirements" to examine the true costs of freight handling — the No. 1 cost cited by exhibitors.
State Rep. Angelo "Skip" Saviano, an Elmwood Park Republican who sponsored three McPier refinancing bills, isn't holding his breath. The issues at McCormick Place went way beyond labor, he says. "The issue was giving the contractors more control over every aspect of McCormick Place," he says. "With that kind of control all over the country, then they can start shopping the shows to the cities that will give them the biggest incentives. That's where we're heading."
James Ylisela Jr.
Chicago-based Healthcare Information and Management Systems Society announced its departure on Nov. 11. The show, which rotates among three cities, had come to Chicago only after Hurricane Katrina made it impossible to hold the event in New Orleans.
As late as Oct. 22, HIMSS officials said they were still considering Chicago for their 2012 show, but only if McCormick Place could guarantee lower electrical prices. "If this does not get fixed, everything else is irrelevant," HIMSS Vice-president Karen Malone wrote in an email to McPier.
But Ms. Malone tells Crain's the HIMSS show will return in 2015 and 2019.
"Based on changes at McCormick Place and feedback from industry peers, I believe most, if not all of our concerns about electrical services have been addressed," she says.
Internal memos also reveal that McPier made an unprecedented effort to keep the International Plastics Showcase. McPier offered financial incentives for the triennial plastics show to stay in 2012 and 2015, including discounts on space rental and price freezes for services and labor. (McPier redacted the exact numbers from the documents it provided Crain's.) Mr. Ochoa even laid off 100 electricians to demonstrate his commitment to making some changes.
But he now says that McPier probably didn't stand a chance. The plastics show was declining and it "needed to create a diversion," Mr. Ochoa says, and McCormick Place was the perfect foil. "The (higher costs) were certainly an excuse for them to leave the city, especially since we gave them the most aggressive package of incentives we had given to any show during my tenure."
SPI, the Washington, D.C.-based plastics trade association, reported a 28% drop in show attendance between its 2006 and 2009 events, and a 24% decline in membership revenue in the same period, forcing the group to lay off one-third of its staff.
A spokesman says the association is looking forward to its upcoming Orlando event and will not comment on what happened at McCormick Place or on the state of its finances. But a spokesman for the Chicago riggers union confirmed that up to 75 of its members will travel to Orlando to help secure the heavy machinery on the show floor, working at Chicago labor rates and with all expenses paid.
McPier's showcase events, led by the National Restaurant Assn., seized on the crisis to demand labor concessions, even though McPier's higher prices had gone to pay its bills, not to provide raises for its union workers.
McPier officials weren't about to waste the crisis, either. Both Mr. Gates and Mr. Ochoa acknowledge they used the trade show exodus to stoke public ire about the convention center and to reduce McPier's patronage-bloated payroll. They pushed for union work-rule changes to provide political cover for lawmakers reluctant to expand McPier's bonding authority during a recession.
Mr. Cullerton's spokeswoman says the timing of the McCormick Place legislation "wasn't tied to the rise and fall of interest rates" but rather to the issues driving trade shows out of Chicago. "That 'event' seemed to be the centralizing force that brought the leaders together to get something done."
STILL PAYING
Today, the financial picture at McCormick Place has changed dramatically. Restructured debt payments are now in line with tax revenue, but ballooning payments in the future will have to be refinanced yet again. The workforce, once topping 500, now stands at 25, though many former employees now work at SMG, the private management company that took over day-to-day operations on July 1. After a federal judge threw out the union wage and work-rule changes, trade shows once again threatened to leave, though an agreement brokered by Illinois Gov. Pat Quinn and Chicago Mayor Rahm Emanuel last month appears to have brought labor peace, for now.
Dallas-based Freeman and Las Vegas-based Global Experience Specialists Inc., the nation's two giant trade show contractors, have taken over most of the electrical work on McCormick Place shows. Those services, which in 2009 brought a $22-million profit to McPier's operating budget, will bring the agency only about $4.3 million in fiscal 2012. Profits from food operations, at $9 million two years ago, will total about $1 million.
With all the cuts, McCormick Place officials say they will run a $134-million operating deficit between fiscal 2011 and 2014. Savings from the debt restructuring pumped $20 million into the fiscal 2011 operating budget and will add another $60 million over the next three years while McPier builds the hotel addition, which will add 450 rooms.
The six-year delay in building a new hotel continues to cost Chicago money. When President Barack Obama invited world leaders to come to Chicago next May for a NATO meeting and the G-8 economic summit, many applauded the event as a boost for the city's global reputation — and a windfall for the local economy.
But the news didn't sit as well with the Washington, D.C.-based National Restaurant Assn., whose annual trade show at McCormick Place, from May 19 to 22, would overlap the last four days of the summit. Show organizers complained that Chicago didn't have enough hotel rooms to accommodate both events and said they had no choice but to relocate to Las Vegas or Orlando.
After several reportedly tense meetings with Mr. Emanuel, the association's executive director, Mary Pat Heftman, announced the show would stay in Chicago but would move up to May 5 to 8, aided by a reported $2-million package of concessions and incentives from the city.
"There were enough hotel rooms, but everyone was going to want to stay in the same places," Ms. Heftman says. "I was looking forward to producing a show in another city to see if (Chicago) is the right place, especially if we were forced to move."
At the time, Mr. Emanuel said he was pleased to keep the show and the estimated $100 million it generates in revenue each year. But in the midst of his own budget crisis, it was $2 million the mayor certainly didn't want to spend.
The McCormick Place hotel addition won't be ready until late 2013.
© 2011 by Crain Communications Inc.
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David J. wrote:
How long will we allow Madigan to destroy the State of Illinois. His decades of union pandering and petty politics are criminal and the voters need to remove him from office. The recall drive in the midwest is misplaced in Wisconsin, it should be in Illinois. No real reform or recovery of Illinois national standing can begin while he and his cronies control the state.
11/16/2011 8:11 PM CST
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Dan O. wrote:
Citizens of Chicago get what they allow, and what they vote for every election.....aided and abetted by a MSM unwilling or incapable of reporting the truth...it is no surprise the city, the county and the state are all insolvent.
11/16/2011 11:49 AM CST
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Joe M. wrote:
So where is the our ex Un-touchable Mayor in all this
Commission OKs Olympic Village
Mayor wants project built, Games or not
Comments
January 1, 2007
BY FRAN SPIELMAN City Hall Reporter
With a South Side alderman's blessing, the Chicago Plan Commission on Thursday approved Mayor Daley's plan to build a $1.1 billion Olympic Village -- on air rights over a truck staging area for McCormick Place -- that will be converted into a new south lakefront community when the Games are done.
Ald. Toni Preckwinkle (4th) signed off on the idea after a guarantee of what she called a "more inclusive and transparent process" from Olympic planners she accused last month of running roughshod over local elected officials.
Preckwinkle argued there is "considerable work to be done" to make certain the new "urban neighborhood is connected to the Bronzeville community to the west."
"We're including her and others -- and frankly we feel good about that. She's got some great ideas," said Chicago 2016 chairman Pat Ryan.
5,000 housing units
The Sun-Times reported last month that Daley had quietly introduced a "plan development" that would pave the way for an Olympic Village on 77 acres of land that architects have described as the lakefront's "missing tooth": an ugly truck staging area for McCormick Place.
Mayor Daley is so gung-ho about the idea of building 5,000 units of market-rate and affordable housing and hotels with up to 1,000 rooms that he's determined to build the project, whether or not Chicago hosts the 2016 Games.
Thursday, the Plan Commission OKd it, helping close what Ryan calls the "certainty gap" that Chicago can deliver on its promises to the United States Olympic Committee.
"We have to show the U.S. Olympic Committee that we can deliver -- that we can execute," Ryan said.
Ald. Burton F. Natarus (42nd) voiced concern that Chicago could become a terrorist target.
If anything, Ryan said Chicago's self-contained village would be easier to secure. "One village as opposed to clusters is an advantage in security -- where you just secure one perimeter."
fspielman@suntimes.com
11/16/2011 9:53 AM CST
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Kirk H. wrote:
Kudos, kudos, kudos - so great to once again see real investigative journalism and real facts on a highly relevant topic.
As for booting out Madigan, this liberal will vote for ANY non tea-party candidate who challenges him. It's way past time to push out this petty tyrant who has done much to ruin Illinois, of course with lots of help from past Republican Governors and Blago.
11/15/2011 6:05 PM CST
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Dan H. wrote:
Time for Madigan to resign....immediately....
And if not, he and his daughter need to be voted out....this will not be tolerated!!!!!!!!
Nice "Public Service".....
Crains and Tribune...please keep up the investigative reporting, as we are continually reminded how spineless our politicians are!!!
11/15/2011 11:56 AM CST
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Rick B. wrote:
Good, in-depth reporting. Now, how do we get action? Crain's should send copies of the article and all these comments to our folks in Springfield. Ask them if they want to be like Jo Pa's coaching staff and be out of a job for ignoring such activity.
11/15/2011 10:37 AM CST
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Kevin W. wrote:
What will it take to finally motivate Darth Vadigan's constituents (that would imply he actually serves them) to deny him another term of enrichment?! Is this gem and the overwhelming financial ruin he has presided over enough or do we need the same sort of garish Penn State scandal to surface?
For God's sake, Carpe Diem because if past is prologue, this all blows over and Crain's will be punished for their efforts. No good deed goes unpunished in this State.
11/15/2011 10:14 AM CST
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Joe D. wrote:
Good for Crains for not being like every other lap dog reporting outlet to look the other way in regards to Madigan and his political machine. He makes Daley look like a saint. I'm sick and tired of hearing of all this crap. Somebody needs to put Madigan where he belongs, out of office and in Jail. I wish I lived in his district so I could personally vote for anyone who runs against him.
11/15/2011 10:06 AM CST
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Jerry R. wrote:
Who are these nitwits that keep reelecting this obvious self serving crook. Give this to
Fitzgerald, not Madigan's daughter. Now is the time to clear out that Legislative sewer
in Spingfield!
11/15/2011 9:26 AM CST
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Steven A. wrote:
crain is still blaming the unions for the mess
crain another name for tea party
i been preaching to follow the money for years
that is were all the answers are at the end of the money trail
11/14/2011 6:14 PM CST
By: James Ylisela Jr. November 14, 2011
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Photo illustration by Sean McCabe.
Photo by: AP/Wide World
Illinois House Speaker Michael Madigan cost taxpayers nearly half-a-billion dollars by blocking repeated efforts to restructure McCormick Place bonds and finance a much-needed second hotel at the convention center, a Crain's investigation finds.
Between 2005 and 2010, Mr. Madigan stopped five refinancing bills, ignoring declining interest rates that would have saved hundreds of millions. At the time, he never explained why, but his reasons seem petty and political: McCormick Place CEO Juan Ochoa, an appointee of then-Gov. Rod Blagojevich, had fired a Madigan ally at the convention center, and lawmakers from both parties say the speaker wanted retribution.
"It was no secret that Madigan had a beef with Ochoa and wanted him gone," says state Rep. Angelo "Skip" Saviano, an Elmwood Park Republican who sponsored refinancing bills in 2005, 2007 and 2009. "As long as Ochoa was there, Madigan wasn't going to give McCormick Place anything."
But politics may not have been Mr. Madigan's only motivation. By holding up refinancing, the speaker also denied McCormick Place the money to build a new hotel. That bought time for clout-heavy developers Gerald Fogelson and Cleveland-based Forest City Enterprises Inc. to push a controversial land swap and hotel deal with McCormick Place on property just north of the convention center. Both were then clients of Mr. Madigan's law firm, Madigan & Getzendanner, but the speaker denies any connection.
As the recession raged in early 2010, the collapse of the real estate market scuttled the deal. That May, after Mr. Ochoa resigned, the General Assembly finally passed legislation that lowered McCormick Place's debt payments, allocated funds to expand the existing Hyatt Regency McCormick Place and imposed wage restrictions and new work rules on union labor. The House sponsor was Speaker Michael Madigan.
The legislation reduced this year's debt service by $96 million, but the damage had already been done at the Metropolitan Pier and Exposition Authority, known as McPier, the agency that runs McCormick Place. Denied refinancing for six years, McPier paid out as much as $300 million more in bond interest than it should have and was forced to tap state sales tax revenue to meet its obligations.
Click above for a closer look at Speaker Madigan's costly feud with then-Gov. Blagojevich.
Mr. Madigan's inaction also set off a chain of events that put Chicago's $8-billion trade show industry — and the estimated 66,000 jobs it supports — at risk. Without revenues from the debt savings and a second hotel, McPier had to mark up its prices in the middle of the recession, driving away two trade shows. With McCormick Place in crisis in late 2009, other shows threatened to leave Chicago unless state lawmakers imposed restrictions on McPier unions.
To find out what went wrong, and what still needs to be fixed, Crain's obtained internal McPier memos and emails under the Freedom of Information Act, examined state and county records, and conducted dozens of interviews with McPier officials, legislators and others. With Illinois on the verge of insolvency, what emerges is an unflattering view of how the state works — or doesn't — when politics trumps the public interest.
'THIS STINKS'
The exchange didn't last long, and it failed to attract much attention, despite the gaggle of press covering the final night of the 2010 state legislative session in May. But state Rep. Jim Sacia, a Pecatonica Republican, was determined to ask Mr. Madigan why numerous prior efforts to refinance McCormick Place bonds had failed to come to a vote in the Illinois House.
A month earlier, in a hearing on the McCormick Place legislation, McPier Chairman John Gates testified that failure to refinance sooner had cost taxpayers hundreds of millions in higher interest payments. Reducing debt payments also would have given the agency a surplus of tax revenue that could have been applied to McPier's struggling operating budget, Mr. Gates testified.
Two of the previous refinancing bills had passed the state Senate only to die in the House. A shocked Mr. Sacia wanted to know why.
At the closing session on May 6, he got his chance to ask Mr. Madigan. "I would be deeply grateful, Speaker, if you could explain to the body how that could happen, if that in fact was the case — did I misunderstand something?" Mr. Sacia asked, according to state transcripts of their testy exchange. "Did a bill pass the Senate that could have saved the taxpayers of this state several hundred million dollars? Would you be kind enough to address that, if you could?"
A brief back-and-forth ended with this terse response from Mr. Madigan: "Mr. Sacia, I'm not sure I understand your question. . . . To repeat what I said, there have been bills that provided for yet another restructuring of the debt payments, but none of those bills dealt with the significant work-rule changes that are in this bill."
"This stinks to high heaven and you, the taxpayers, get half-a-billion dollars worth of rotten meat. I can't wait to hear the explanation for this one."
Rep. Jim Sacia, R–Pecatonica
McPier was "engaged in a scheme, and the Speaker wasn't going to allow that to happen."
Spokesman for Illinois House Speaker Michael Madigan
"As long as (McPier CEO Juan) Ochoa was there, Madigan wasn't going to give McCormick Place anything."
Rep. Angelo "Skip" Saviano, R–Elmwood Park
"We didn't have the political strength to get what we knew was in the best interests of McCormick Place."
Juan Ochoa, former CEO, McPier
Mr. Sacia got a bit more colorful in a letter after the exchange to his constituents: "This stinks to high heaven and you, the taxpayers, get half-a-billion dollars worth of rotten meat. I can't wait to hear the explanation for this one."
He is still fuming today. "I was simply looking for a logical explanation," he says. "How can we have millions in the taxpayers' money just going away to higher interest when we had opportunities to bring that interest down?"
Many still wonder why McCormick Place took six years to refinance its debt, as plenty of government agencies, private companies and homeowners were doing at the time.
"A lot of people were expecting (refinancing) to come earlier," says John Kenward, a bond analyst in Chicago at Standard & Poor's. With interest rates dropping, "I don't know why the state wouldn't have taken advantage of that."
As for Mr. Madigan, he never spoke of his reasons for rejecting bill after bill. But in response to questions from Crain's, a spokesman for Mr. Madigan now says the speaker blocked refinancing to prevent the Blagojevich administration from cashing in on contracts for bond work, such as underwriting and legal services. He provided Crain's an unsigned memorandum of understanding, dated August 2007, in which McPier agreed to allow the state to review and approve all fees and "structuring decisions" related to bond refinancing.
Asked about the financial impact of delayed refinancing, the spokesman says the "consequences were outweighed by (opposition to) becoming part of the Blagojevich fundraising machine."
Mr. Ochoa says he received the memo but never signed it. A McPier spokeswoman confirms that the agreement never took effect. No matter, Mr. Madigan's spokesman says. McPier was "engaged in a scheme, and the speaker wasn't going to allow that to happen."
Mr. Madigan's power is so sweeping that few will state publicly what many acknowledge privately. Mr. Gates, who took on the McPier chairmanship in October 2009 after building one of the nation's largest real estate investment trusts, is now chairman of the Regional Transportation Authority. He says his testimony about the cost of refinancing delays speaks for itself.
State Sen. Kwame Raoul, a Chicago Democrat whose district includes McCormick Place, sponsored two failed efforts to refinance McPier's debt. But he treads gingerly when asked what happened. "I never got a firm answer as to why the bills never advanced in the House," he says. "I imagine there was distrust for the (McPier) leadership at the time."
Mr. Saviano is one of the few to put it more directly. Mr. Ochoa, he says, committed a cardinal sin of patronage politics: He dumped one of Mr. Madigan's "guys."
The guy was Jack Johnson, who had worked as a legislative analyst on Mr. Madigan's staff in the mid-1980s before signing on as McPier's chief of external relations in 1989. In September 2007, Mr. Ochoa, just eight months on the job, fired him.
Mr. Johnson, now senior vice-president at the Chicago Convention and Tourism Bureau, declines to comment, and Mr. Madigan's spokesman rejects the story. Management at McPier was "a national disaster," he says, "looking for other people to blame for their mistakes."
For his part, Mr. Ochoa says he was well aware of the rumors but chose to ignore them. "The speaker never called me to say he was upset with me," he says. "I tried to meet with him several times but was never granted a meeting."
'NO-BRAINER'
Refinancing is a concept familiar to every homeowner. When interest rates go down, you can refinance your mortgage, reduce your monthly payment and maybe even use some of the savings to make a few improvements.
McCormick Place needed to do the same thing, only its mortgage was in the billions and the improvements would have added a new hotel to the convention center campus.
Mr. Ochoa says those were his two top priorities when he took the job as McPier CEO. Unlike the convention centers in Orlando and Las Vegas, McCormick Place receives no state subsidy for its operations and has to live off the revenue it generates.
"When I came to McPier, I looked at our operating budget. It was a no-brainer that another hotel would help us further subsidize our operations," he says. "We also knew that we would soon fall short in the taxes collected to make our debt payments. Rather than wait for that to happen, we tried to address both issues at once."
From 1992 to 2004, McPier sold bonds to finance an ambitious expansion that built the West and South buildings, giving McCormick Place 2.6 million square feet of exhibit space and solidifying its position as the largest convention center in the nation.
The expansion left McPier about $3 billion in debt. To pay back the bondholders, the General Assembly approved four taxes — on hotel rooms, car rentals, restaurants and taxi rides from Midway and O'Hare airports.
At the time, the taxes were thought to be adequate to cover the debt payments, but the business downturn that followed the Sept. 11 terrorist attacks changed all of that. Tax receipts fell short by more than $26 million between 2002 and 2006, depleting the surplus fund set up when the bonds were issued. With interest rates declining, it seemed the perfect time to refinance.
By the mid- to late 2000s, many public entities, including the city of Chicago, the Chicago Board of Education and the Chicago Transit Authority, were replacing older municipal bonds with lower-interest debt.
Mr. Saviano, whose district includes the Rosemont Convention Center, sponsored the 2005 legislation in the Illinois House. He is unabashed about his motivations: "If we keep McCormick Place healthy, the trickle-down helps Rosemont," Mr. Saviano says. He introduced his bill in February 2005, when interest rates had dropped under 4.5% — well below the interest on the existing McPier expansion bonds, which carried rates as high as 7.1%.
But Mr. Saviano's bill died in the House Rules Committee, the legislative way station controlled by Mr. Madigan. Mr. Saviano's 2007 effort met a similar fate, even though interest rates had dropped to near 4%. On April 4, 2008, Mr. Raoul's bill passed the Senate 48 to 6, only to die in the House. In 2009, with rates still under 5%, the lawmakers tried again, but neither measure made it.
State Rep. Barbara Flynn Currie, a Chicago Democrat who is chairman of the rules committee, can't say why none of the bills reached the House floor for a vote. "I don't have a good explanation," she tells Crain's. "It's just one of those items that didn't make it to the top of the agenda."
But Mr. Saviano says, "The bills didn't come out of the rules committee because the speaker didn't want them to. It's unfortunate we had an opportunity to show some fiscal responsibility — and we didn't."
The financial impact of doing nothing was significant. Since 2005, McPier could have saved up to $300 million in interest payments alone, based on a two-percentage-point savings in interest. Restructuring the debt to push larger principal repayments into the future would have provided millions more for McPier operations. A second hotel would have added another $15 million a year, McPier officials estimate.
In October 2010, after finally winning approval to refinance its debt five months earlier, McPier sold $1.12 billion in new bonds, at interest rates between 4.98% and 5.23%, to retire some of the older, higher-interest debt. "By restructuring, we don't have to draw from the state and can save it money," McPier Chief Financial Officer Richard Oldshue said at the time. "It relieves pressure from the state's sales tax revenues."
This year's debt payment, which would have been $177 million without the restructuring, fell to $81 million — a reduction of $96 million. The restructuring also provided $80 million for McPier's operating budget and raised $200 million for the hotel.
LAND SWAP
Just north of McCormick Place and east of the Metra train tracks sits an empty, boot-shaped tract of dirt and weeds that developers dreamed would be worth billions.
While McPier's efforts to restructure its debt and finance a hotel were going nowhere in the General Assembly, a group of well-connected real estate agents, developers and lawyers were pushing hard for a deal that would transform the vacant land into a thriving community called the Gateway Development.
Click above to see the Gateway Development plan's proposed land swap with McCormick Place.
Gateway was the brainchild of Gerald Fogelson and Forest City Enterprises, creators of nearby Central Station, an 80-acre spread of high-end townhouses and condominiums where former Mayor Richard M. Daley once lived. The $4-billion Gateway plan called for condominiums, apartments, senior housing, office space, retail, entertainment venues and, at the south end of the property, a twin-tower hotel for McCormick Place.
The plan was as beautiful as it was ambitious, offering Lake Michigan views and easy access to Soldier Field and the Museum Campus. But there was a catch: To make the deal work, Mr. Fogelson and Forest City wanted McCormick Place to give up five acres of prime vacant land along Lake Shore Drive in exchange for less than two acres they owned toward the back of the property, documents obtained by Crain's show.
An October 2007 meeting on the project featured a who's who of Chicago real estate and political clout: Mr. Fogelson, Forest City's Albert and Ron Ratner, attorney Jack George of law firm Daley & George Ltd., David Haymes of architecture firm Pappageorge Haymes Ltd., and urban planner Stephen Friedman, a city consultant on tax-increment financing. The group also included then-McPier Chairman Ted Tetzlaff, a Chicago litigator, and board member Michael Scott, a real estate developer and president of the Chicago Board of Education.
A memo summarizing the meeting from Timothy Desmond, president of Central Station Development Corp., describes a busy and connected project team. Representing the developers, Mr. George, a law partner of Michael Daley's, the then-mayor's brother, confirmed that the city would approve a planned unit development designation for the land, while Mr. Friedman offered to seek TIF financing to pay for infrastructure improvements.
But Mr. Scott failed to tell the McPier board about his relationship with the developers, Mr. Ochoa says. Mr. Scott had an office and an email address with Fogelson Properties, the correspondence shows. Documents obtained by the Better Government Assn. last year revealed that Fogelson Properties provided the office rent-free and was paying Mr. Scott $10,000 a month as part of the developer's efforts to build the proposed Olympic Village. Mr. Scott was then serving on Mr. Daley's bid committee for the 2016 Olympic Games. The payments stopped in early November 2009, two weeks before Mr. Scott was found dead of what police called a self-inflicted gunshot wound; he reportedly was distraught over financial difficulties and an admissions scandal at Chicago Public Schools.
The developers also have ties to Mr. Madigan. Mr. Madigan's spokesman acknowledges that Forest City and Central Station were clients of the speaker's law firm. He says Mr. Madigan "operates at a code of conduct far beyond state ethics requirements," adding that the law firm had withdrawn its representation of the developers "when it became apparent there was a land swap" with McCormick Place that might create a possible conflict.
Yet Madigan & Getzendanner represented Central Station in cases before the Cook County Board of Review in 2007 and 2008, records show. And the firm represented both developers and Mr. Scott in the Eastgate Village condominium development, at 330 E. 26th St. The firm's appeal before the Cook County assessor successfully lowered the property's 2010 assessment to $468,000 from $1.4 million. The firm currently represents Forest City in a Bolingbrook property, Mr. Madigan's spokesman says.
The internal documents show McPier officials enthusiastically supporting the project, with the notable exception of Messrs. Ochoa and Gates.
"Gateway was a captivating project, but the land swap shortchanged the taxpayers," Mr. Ochoa says. And by agreeing to the land deal, Mr. Ochoa says he would have been largely committed to building the hotel on the Gateway Development. But if McPier's refinancing had come through, he would have had other options, including a proposed location near the West Building.
Mr. Ochoa had high hopes for Mr. Raoul's March 2009 legislation, the senator's second attempt at debt refinancing. The bill passed the Senate easily, but only after Mr. Raoul added a last-minute amendment that reduced the bonding authority by $203 million — the exact amount designated to finance the hotel, Mr. Ochoa says.
"We didn't have the political strength to get what we knew was in the best interests of McCormick Place," says Mr. Ochoa, now CEO of Chicago-based Miramar International Group Inc., which helps organizations connect with Latino customers in the U.S. and Mexico.
Mr. Raoul says he can't remember who asked for the change, and neither can Senate President John Cullerton, a spokeswoman for the Chicago Democrat tells Crain's in an email.
In May 2009, Central Station's Mr. Desmond sent McPier's then-general counsel, Renee Benjamin, a letter of intent from Fogelson Properties to pursue the land deal, and two months later delivered a memorandum of understanding that would serve as the agreement for the land exchange and development. Mr. Ochoa says he never saw the document and would not have signed it.
Mr. Desmond, speaking on behalf of Central Station and Forest City, tells Crain's in an email that he would not comment on the negotiations, saying only that the developers are not currently involved in a hotel project with McCormick Place.
In September 2009, Ms. Benjamin proposed that the deal be part of the agenda at McPier's October board meeting. But Mr. Gates, the incoming chairman, decided against it. "This could be a critical piece of property to (McPier) in the future," Mr. Gates wrote in an email. "I am opposed to limiting our options — even in a non-binding manner."
He confirms his skepticism about the deal. "The market had collapsed, and frankly I didn't think it was in McPier's interest to give up control of the 18th Street exit to Lake Shore Drive," he says.
Without the hotel money, Mr. Raoul's bill passed the Senate easily, but it hardly mattered. Mr. Madigan once again stopped the bill from reaching the House floor.
FATEFUL PRICE HIKES
By 2009, McCormick Place was desperate to refinance. The recession had hit the convention business hard, and McPier had already tapped $57 million in state sales tax revenue to make its debt payments. Without refinancing, it was on track to consume up to $800 million more in sales taxes by 2027. Running short of cash to pay its bills, McPier officials kept raising prices for food and electrical services at McCormick Place.
"We were limited in our sources of revenue," Mr. Ochoa recalls. "The only alternative, unfortunately, was to raise the cost of services to our customers."
Reaction was swift. In November 2009, two trade shows declared they were leaving the convention center, citing high electrical and food costs.
Critics: Law doesn't protect exhibitors from price-gouging
Since last year's McCormick Place legislation, the convention center has reduced its payroll, restructured its debt, lowered food costs and is finally adding more hotel rooms. But critics say the law did nothing to curb the worst trade show abuses: the inflated costs imposed on exhibitors by the general contractors and the trade associations themselves, for freight handling, floor space and hotel rooms, as reported by Crain's in June.
"The exhibitors are still getting (screwed)," one former McPier official says. "But at least now they're getting screwed the same way they're getting screwed everywhere else. We are no longer at a competitive disadvantage."
General contractors Freeman and Global Experience Specialists Inc., both of which control three out of four trade shows at McCormick Place and nationwide, have denied gouging exhibitors. But they also have been reluctant to open their books to prove it, citing proprietary and competitive reasons.
' The exhibitors are still getting (screwed). But at least now they're getting screwed the same way they're getting screwed everywhere else.'
— Former McPier official
An audit of the trade shows, required by law, was supposed to be completed last month but was delayed because the chosen auditors, Chicago-based Crowe Horwath LLP, were monitoring the selection of SMG as the private management company for McCormick Place. SMG, based in West Conshohocken, Pa., took over management of McCormick Place on July 1.
McPier officials say the audit, now expected by the end of the year, will analyze three shows to determine whether last year's labor changes resulted in real savings to exhibitors.
In an August letter to the head of the decorators union, McPier Trustee Jim Reilly promised the auditors would "go beyond the statutory requirements" to examine the true costs of freight handling — the No. 1 cost cited by exhibitors.
State Rep. Angelo "Skip" Saviano, an Elmwood Park Republican who sponsored three McPier refinancing bills, isn't holding his breath. The issues at McCormick Place went way beyond labor, he says. "The issue was giving the contractors more control over every aspect of McCormick Place," he says. "With that kind of control all over the country, then they can start shopping the shows to the cities that will give them the biggest incentives. That's where we're heading."
James Ylisela Jr.
Chicago-based Healthcare Information and Management Systems Society announced its departure on Nov. 11. The show, which rotates among three cities, had come to Chicago only after Hurricane Katrina made it impossible to hold the event in New Orleans.
As late as Oct. 22, HIMSS officials said they were still considering Chicago for their 2012 show, but only if McCormick Place could guarantee lower electrical prices. "If this does not get fixed, everything else is irrelevant," HIMSS Vice-president Karen Malone wrote in an email to McPier.
But Ms. Malone tells Crain's the HIMSS show will return in 2015 and 2019.
"Based on changes at McCormick Place and feedback from industry peers, I believe most, if not all of our concerns about electrical services have been addressed," she says.
Internal memos also reveal that McPier made an unprecedented effort to keep the International Plastics Showcase. McPier offered financial incentives for the triennial plastics show to stay in 2012 and 2015, including discounts on space rental and price freezes for services and labor. (McPier redacted the exact numbers from the documents it provided Crain's.) Mr. Ochoa even laid off 100 electricians to demonstrate his commitment to making some changes.
But he now says that McPier probably didn't stand a chance. The plastics show was declining and it "needed to create a diversion," Mr. Ochoa says, and McCormick Place was the perfect foil. "The (higher costs) were certainly an excuse for them to leave the city, especially since we gave them the most aggressive package of incentives we had given to any show during my tenure."
SPI, the Washington, D.C.-based plastics trade association, reported a 28% drop in show attendance between its 2006 and 2009 events, and a 24% decline in membership revenue in the same period, forcing the group to lay off one-third of its staff.
A spokesman says the association is looking forward to its upcoming Orlando event and will not comment on what happened at McCormick Place or on the state of its finances. But a spokesman for the Chicago riggers union confirmed that up to 75 of its members will travel to Orlando to help secure the heavy machinery on the show floor, working at Chicago labor rates and with all expenses paid.
McPier's showcase events, led by the National Restaurant Assn., seized on the crisis to demand labor concessions, even though McPier's higher prices had gone to pay its bills, not to provide raises for its union workers.
McPier officials weren't about to waste the crisis, either. Both Mr. Gates and Mr. Ochoa acknowledge they used the trade show exodus to stoke public ire about the convention center and to reduce McPier's patronage-bloated payroll. They pushed for union work-rule changes to provide political cover for lawmakers reluctant to expand McPier's bonding authority during a recession.
Mr. Cullerton's spokeswoman says the timing of the McCormick Place legislation "wasn't tied to the rise and fall of interest rates" but rather to the issues driving trade shows out of Chicago. "That 'event' seemed to be the centralizing force that brought the leaders together to get something done."
STILL PAYING
Today, the financial picture at McCormick Place has changed dramatically. Restructured debt payments are now in line with tax revenue, but ballooning payments in the future will have to be refinanced yet again. The workforce, once topping 500, now stands at 25, though many former employees now work at SMG, the private management company that took over day-to-day operations on July 1. After a federal judge threw out the union wage and work-rule changes, trade shows once again threatened to leave, though an agreement brokered by Illinois Gov. Pat Quinn and Chicago Mayor Rahm Emanuel last month appears to have brought labor peace, for now.
Dallas-based Freeman and Las Vegas-based Global Experience Specialists Inc., the nation's two giant trade show contractors, have taken over most of the electrical work on McCormick Place shows. Those services, which in 2009 brought a $22-million profit to McPier's operating budget, will bring the agency only about $4.3 million in fiscal 2012. Profits from food operations, at $9 million two years ago, will total about $1 million.
With all the cuts, McCormick Place officials say they will run a $134-million operating deficit between fiscal 2011 and 2014. Savings from the debt restructuring pumped $20 million into the fiscal 2011 operating budget and will add another $60 million over the next three years while McPier builds the hotel addition, which will add 450 rooms.
The six-year delay in building a new hotel continues to cost Chicago money. When President Barack Obama invited world leaders to come to Chicago next May for a NATO meeting and the G-8 economic summit, many applauded the event as a boost for the city's global reputation — and a windfall for the local economy.
But the news didn't sit as well with the Washington, D.C.-based National Restaurant Assn., whose annual trade show at McCormick Place, from May 19 to 22, would overlap the last four days of the summit. Show organizers complained that Chicago didn't have enough hotel rooms to accommodate both events and said they had no choice but to relocate to Las Vegas or Orlando.
After several reportedly tense meetings with Mr. Emanuel, the association's executive director, Mary Pat Heftman, announced the show would stay in Chicago but would move up to May 5 to 8, aided by a reported $2-million package of concessions and incentives from the city.
"There were enough hotel rooms, but everyone was going to want to stay in the same places," Ms. Heftman says. "I was looking forward to producing a show in another city to see if (Chicago) is the right place, especially if we were forced to move."
At the time, Mr. Emanuel said he was pleased to keep the show and the estimated $100 million it generates in revenue each year. But in the midst of his own budget crisis, it was $2 million the mayor certainly didn't want to spend.
The McCormick Place hotel addition won't be ready until late 2013.
© 2011 by Crain Communications Inc.
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David J. wrote:
How long will we allow Madigan to destroy the State of Illinois. His decades of union pandering and petty politics are criminal and the voters need to remove him from office. The recall drive in the midwest is misplaced in Wisconsin, it should be in Illinois. No real reform or recovery of Illinois national standing can begin while he and his cronies control the state.
11/16/2011 8:11 PM CST
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Dan O. wrote:
Citizens of Chicago get what they allow, and what they vote for every election.....aided and abetted by a MSM unwilling or incapable of reporting the truth...it is no surprise the city, the county and the state are all insolvent.
11/16/2011 11:49 AM CST
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Joe M. wrote:
So where is the our ex Un-touchable Mayor in all this
Commission OKs Olympic Village
Mayor wants project built, Games or not
Comments
January 1, 2007
BY FRAN SPIELMAN City Hall Reporter
With a South Side alderman's blessing, the Chicago Plan Commission on Thursday approved Mayor Daley's plan to build a $1.1 billion Olympic Village -- on air rights over a truck staging area for McCormick Place -- that will be converted into a new south lakefront community when the Games are done.
Ald. Toni Preckwinkle (4th) signed off on the idea after a guarantee of what she called a "more inclusive and transparent process" from Olympic planners she accused last month of running roughshod over local elected officials.
Preckwinkle argued there is "considerable work to be done" to make certain the new "urban neighborhood is connected to the Bronzeville community to the west."
"We're including her and others -- and frankly we feel good about that. She's got some great ideas," said Chicago 2016 chairman Pat Ryan.
5,000 housing units
The Sun-Times reported last month that Daley had quietly introduced a "plan development" that would pave the way for an Olympic Village on 77 acres of land that architects have described as the lakefront's "missing tooth": an ugly truck staging area for McCormick Place.
Mayor Daley is so gung-ho about the idea of building 5,000 units of market-rate and affordable housing and hotels with up to 1,000 rooms that he's determined to build the project, whether or not Chicago hosts the 2016 Games.
Thursday, the Plan Commission OKd it, helping close what Ryan calls the "certainty gap" that Chicago can deliver on its promises to the United States Olympic Committee.
"We have to show the U.S. Olympic Committee that we can deliver -- that we can execute," Ryan said.
Ald. Burton F. Natarus (42nd) voiced concern that Chicago could become a terrorist target.
If anything, Ryan said Chicago's self-contained village would be easier to secure. "One village as opposed to clusters is an advantage in security -- where you just secure one perimeter."
fspielman@suntimes.com
11/16/2011 9:53 AM CST
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Kirk H. wrote:
Kudos, kudos, kudos - so great to once again see real investigative journalism and real facts on a highly relevant topic.
As for booting out Madigan, this liberal will vote for ANY non tea-party candidate who challenges him. It's way past time to push out this petty tyrant who has done much to ruin Illinois, of course with lots of help from past Republican Governors and Blago.
11/15/2011 6:05 PM CST
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Dan H. wrote:
Time for Madigan to resign....immediately....
And if not, he and his daughter need to be voted out....this will not be tolerated!!!!!!!!
Nice "Public Service".....
Crains and Tribune...please keep up the investigative reporting, as we are continually reminded how spineless our politicians are!!!
11/15/2011 11:56 AM CST
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Rick B. wrote:
Good, in-depth reporting. Now, how do we get action? Crain's should send copies of the article and all these comments to our folks in Springfield. Ask them if they want to be like Jo Pa's coaching staff and be out of a job for ignoring such activity.
11/15/2011 10:37 AM CST
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Kevin W. wrote:
What will it take to finally motivate Darth Vadigan's constituents (that would imply he actually serves them) to deny him another term of enrichment?! Is this gem and the overwhelming financial ruin he has presided over enough or do we need the same sort of garish Penn State scandal to surface?
For God's sake, Carpe Diem because if past is prologue, this all blows over and Crain's will be punished for their efforts. No good deed goes unpunished in this State.
11/15/2011 10:14 AM CST
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Joe D. wrote:
Good for Crains for not being like every other lap dog reporting outlet to look the other way in regards to Madigan and his political machine. He makes Daley look like a saint. I'm sick and tired of hearing of all this crap. Somebody needs to put Madigan where he belongs, out of office and in Jail. I wish I lived in his district so I could personally vote for anyone who runs against him.
11/15/2011 10:06 AM CST
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Jerry R. wrote:
Who are these nitwits that keep reelecting this obvious self serving crook. Give this to
Fitzgerald, not Madigan's daughter. Now is the time to clear out that Legislative sewer
in Spingfield!
11/15/2011 9:26 AM CST
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Steven A. wrote:
crain is still blaming the unions for the mess
crain another name for tea party
i been preaching to follow the money for years
that is were all the answers are at the end of the money trail
11/14/2011 6:14 PM CST
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