Jun 052013

Almost four decades after the percentage of American women holding a job crested 40 percent, what many are calling an archaic debate is breaking out among some influential men about the role of women in the workplace. 

Arguments over the place women hold in the societal and economic structure of the US may seem quaint and misplaced in an era when the favorite to be the next president is female and scores of top corporate executives are women, but rancor over the growing independence of women has seized the consciousness of many in the political and business communities.

Nothing demonstrated the influence of women and their powerful modern role than the most recent election campaign. Hamstrung by a slew of candidates and personalities that drew headlines with derogatory comments or controversial policies that targeted women, conservatives lost the female vote in a landslide to President Obama and other Democrats in numerous state and federal races. The storyline of a right-wing “war on women” has become a prominent focus in national and regional politics as many lawmakers seek to relitigate issues like birth control and reproductive rights,

While some may consider the politics of abortion and religion to be a “hot button” that is cloaked in controversy, even more basic developments in the decades-long struggle for gender equality and the protection of women’s rights has been revived by influential men in politics and on Wall Street.

Those dual narratives of a woman’s place in politics and the economy came to a head in particular comments by the Republican governor of Mississippi this week that cemented the conservative position of “traditional” family values over economic and societal equality for women.

Gov. Phil Bryant told a Washington Post panel that the nation’s educational system has started to fail because “the mom is in the workplace.” Bryant proceeded to distance himself from that particular comment, but such opposition to women being able to work outside the home is a common theme among Republicans.

Mississippi Gov. Phil Bryant (R) said Tuesday that America’s educational troubles began when women began working outside the home in large numbers.

Bryant was participating in a Washington Post Live event focused on the importance of ensuring that children read well by the end of third grade. In response to a question about how America became “so mediocre” in regard to educational outcomes, he said:

I think both parents started working. And the mom is in the work place.

Bryant immediately recognized how controversial his remark would be and said he knew  he would start to get e-mails. He then expanded on his answer, saying that “both parents are so pressured” in families today. He also noted that America seemed to be losing ground internationally in regards to educational outcomes because other nations began to invest more in their own school systems and make progress.

Bryant’s are only one of a string of recent remarks that have sought to disparage or discourage the idea of women and mothers holding down important or full-time jobs, a situation they argue is unsuccessful for the woman and harms a “traditional” family structure.

Perhaps unsurprisingly, as women gain a greater foothold in the national and global economy and begin rivaling men for prominent political and corporate positions, a backlash is developing under the guise of “values” and protecting families.

Despite a number of recent examples of high-profile women balancing young families and top corporate jobs (like Yahoo CEO Marissa Mayer), the theory that women with children somehow cannot be as successful as men in the same position has been developed by at least one important Wall Street titan.

Hedge fund magnate Paul Tudor Jones has come under fire for his comments in April that being a mother was a “focus killer” and that moms had no ability to compete with men in Wall Street trading jobs.

“You will never see as many great women investors or traders as men, period, end of story,” the well-respected billionaire remarked. He was forced to issue an apology once video of his opinion was leaked to the media.

From CNBC…

It is difficult for mothers to become traders because connecting with a child is a “focus killer,” hedge-fund chief Paul Tudor Jones told an audience at a Q and A session at the University of Virginia last month. Responding to a question from the audience about why the panel of hedge-fund heavy hitters didn’t include any women, Jones said, “You will never see as many great women investors or traders as men, period, end of story.”

(He also released a statement Friday, after a video of his remarks hit the web. Apologizing that “my remarks offended,” he added: “I believe that great success is possible in any field … as long as a woman or man has the skill, passion, and repetitions to work through the inevitable life events that arise along the way.”)

Appropriateness of such a statement aside, the opposite of the “women-can’t-be-traders” sentiment is actually true. Rather than eroding their “focus,” women and mothers in the trading sector have been found to perform as good or notably better than their male counterparts.

One major study discovered that returns for women were much higher than that of men, largely due to “hyperactive trading” that eroded any gains among male traders.

From Business Insider…

And he points to the seminal piece of research on the topic by the distinguished behavioural economists Terrence Odean and Brad Barber. ’ Boys Will Be Boys: Gender, Overconfidence and Commons Stock Investment .’

In their 2001 study, they analysed account data for more 35,000 households at a large discount brokerage between February 1991 to January 1997. They discovered that on average, men traded 45pc more frequently than women and that this hyperactive trading reduced their net returns by 2.65pc a year, compared to 1.72pc for women. Their explanation for the high levels of counterproductive trading in financial markets was overconfidence. Men trade more than women – and thereby reduce their returns.

While it may be understandable for tradition-bound Wall Street veterans to feel threatened as women increasingly assimilate in what is stereotypically thought of a s a male-dominated profession, the very notion that any woman can or should be the economic powerhouse of a family is coming under attack from some commentators.

Reacting to a Pew study that showed women as the sole or primary breadwinners in the largest percentage of American  households on record, two (male) political commentators on fox News described this shift in financial roles as “tearing us apart” and proof that “something is terribly wrong” in modern society.

Conservative blogger Erick Erickson insisted that “biology” dictates that females must be submissive and play a “complementary role” to the “dominant” male.

From Huffington Post…

Juan Williams said it was “something going terribly wrong in American society, and it’s hurting our children, and it’s going to have impact for generations to come.”

Fellow guest Erick Erickson said it was a downright repudiation of nature itself.

“When you look at biology, look at the natural world, the roles of a male and a female in society, and other animals, the male typically is the dominant role. The female, it’s not antithesis, or it’s not competing, it’s a complementary role. We as people in a smart society have lost the ability to have complementary relationships in nuclear families, and it’s tearing us apart.”

“The politicians won’t say it,” Williams said. “They won’t admit this!”

That groundbreaking Pew poll is the most startling evidence yet of the rapidly evolving economic role that women now have in the modern US economy. It is the strongest indication yet that the trend of a female electorate shifting away from “values” issues and placing greater emphasis on more basic and fundamental questions about economic policies and programs when considering their vote.

Pew finds that women make up the sole or primary source of income in at least 40 percent of US households, a significant increase from decades past and even a sizable jump from just ten years ago. Only 11 percent of households had women as “breadwinners” in 1960.

The demographics of households economically dominated by women are also changing. While the traditional picture of a single mother providing for her children is still most prevalent, a greater percentage of married women are their family’s main income source than ever before.

A record 40% of all households with children under the age of 18 include mothers who are either the sole or primary source of income for the family, according to a new Pew Research Center analysis of data from the U.S. Census Bureau. The share was just 11% in 1960.

These “breadwinner moms” are made up of two very different groups: 5.1 million (37%) are married mothers who have a higher income than their husbands, and 8.6 million (63%) are single mothers.


The growth of both groups of mothers is tied to women’s increasing presence in the workplace. Women make up almost of half (47%) of the U.S. labor force today, and the employment rate of married mothers with children has increased from 37% in 1968 to 65% in 2011.

Regardless of their new place of prominence in the American economy and as the leading provider for millions of families,  women have yet to gain widespread recognition as a legitimate member of the national job market. Women still face widespread discrimination and unique challenges that their male colleagues or even men in less advanced jobs do not.

Basic treatment of female colleagues or employees at the hands of largely male supervisors and executives has yet to catch up with decades of broader progress for working women. Most women say there is prominent “bias” in the workplace, including lopsided pay benefiting men and inappropriate behavior from coworkers or supervisors.

From The Wall Street Journal…

 Women in large numbers believe they face disadvantages in the workplace, including lower pay than men and other forms of discrimination—opinions that haven’t budged during a period when public opinion has shifted markedly on many other social issues, a new Wall Street Journal/NBC News survey shows.

Decades after women began flooding into the workforce, 84% of women say men are paid more for similar work, a view borne out by government data but which draws agreement from only two-thirds of men. More than four in 10 women say they have faced gender discrimination personally, most often in the workplace. Both findings are little changed from a 1997 survey.


Many women offered a different perspective, with 46% saying they’ve experienced discrimination because they’re women, a number that has increased slightly from a 2000 survey.

“When I was working, I could go to a meeting and offer an opinion, and it was like I didn’t even say a word,” said Christine Dale, 42, who lives in Illinois and participated in the poll. “A guy can offer the same opinion and it’s like, ‘Oh, that’s brilliant.’ “

Bureau of Labor Statistics data show that women who work full-time earn 79% of the weekly pay that men bring home. The Institute for Women’s Policy Research, which tracks the gender wage gap, finds that women’s median earnings lag men’s in almost every occupation. While the gap narrowed during the 1980s and 1990s, there has been little movement since 2000, said Ariane Hegewisch, the institute’s study director.

The most public example of the bias displayed against women by private business is the continued existence of a significant gender pay gap. Even in 2013, after numerous attempts by states and the federal government to legislate fairness, women earn more than 30 cents less than men for every dollar earned on the job.
Further efforts to confront the disparity in pay for women has been stymied by conservative opposition. One Republican congresswoman, ostensibly speaking for all of her gender, claimed that women “don’t want” to be paid as much as men for the same job, and that Washington should stand clear of corporate interests.

Republican congresswoman Marsha Blackburn said on Sunday that women “don’t want” equal pay laws.

During a roundtable discussion on NBC’s Meet The Press, former White House advisor David Axelrod asked if the Tennessee lawmaker would support a law promoting workplace gender equality. Blackburn responded:

“I think that more important than that is making certain that women are recognized by those companies. You know, I’ve always said that I didn’t want to be given a job because I was a female, I wanted it because I was the most well-qualified person for the job. And making certain that companies are going to move forward in that vein, that is what women want. They don’t want the decisions made in Washington. They want to be able to have the power and the control and the ability to make those decisions for themselves.”

Blackburn voted against the 2009 Lily Ledbetter Fair Pay Act, a landmark bill for women’s rights in the workplace. The law makes it easier for women to file wage discrimination suits against employers. She also voted against the Paycheck Fairness Act of 2009.

May 292013

(New York Times photo)

A far more complex and confusing picture emerges on closer inspection of the festering controversy surrounding the treatment of grassroots conservative political groups by the IRS, with the agency admitting that at least one regional office singled out applicants for special tax exempt status that included conservative themes in their organization’s titles.

The incident has quickly become the “scandal” du jour for most Republicans and has led many to pin direct blame for the incident on President Obama, arguing that it is a sacred “right” for these groups to seek and attain a particular government benefit that allows them to raise secret and unlimited amounts of money for political campaigns and highly partisan causes.

Now there are new questions swirl over whether the targeted groups were innocent victims or blatantly operating in bad faith.

New evidence shows that many of the “Tea Party” groups demanding special tax breaks for their “social welfare” campaigns were in fact breaking federal statutes against engaging in overtly political activities by funneling cash they raised to candidates and partisan causes. And while the IRS may have been victimized by this grassroots game of subterfuge, the agency did have one major failure not that it was overzealous in grilling conservative groups, but that it ignored the far more serious breaches of tax-exempt law committed by larger organizations that collectively raised nearly one billion dollars.

A report published by the New York Times this week catalogs the stories behind the dozens of Tea Party or conservative activist groups that applied for tax exempt status but were stonewalled by delays from the IRS that lasted up to two years in some cases.

These groups and hundreds of others were in search of the coveted designation as a “501(c)(4),” a convoluted taxation subcategory popularized by the Supreme Court’s ruling in the Citizens United case that opened the door for unlimited and undisclosed political fundraising — but only by “outside” organizations officially unaffiliated with specific candidates and campaigns.

Bound by federal tax and election regulations to commit most of the money they raised through their tax exemption to “social welfare” endeavors, most of the conservative groups admittedly targeted by the IRS and investigated by the Times were found to have flouted the law and spent most or all of their funds on overtly political activities.

One local “Tea Party” outfit seeking an IRS exemption divulged to officials that there express purpose for raising unlimited money was to “defeat…President Barack Obama.”

When CVFC, a conservative veterans’ group in California, applied for tax-exempt status with the Internal Revenue Service, its biggest expenditure that year was several thousand dollars in radio ads backing a Republican candidate for Congress.

The Wetumpka Tea Party, from Alabama, sponsored training for a get-out-the-vote initiative dedicated to the “defeat of President Barack Obama” while the I.R.S. was weighing its application.

And the head of the Ohio Liberty Coalition, whose application languished with the I.R.S. for more than two years, sent out e-mails to members about Mitt Romney campaign events and organized members to distribute Mr. Romney’s presidential campaign literature.

Representatives of these organizations have cried foul in recent weeks about their treatment by the I.R.S., saying they were among dozens of conservative groups unfairly targeted by the agency, harassed with inappropriate questionnaires and put off for months or years as the agency delayed decisions on their applications.

But a close examination of these groups and others reveals an array of election activities that tax experts and former I.R.S. officials said would provide a legitimate basis for flagging them for closer review.

Even admitting their blatantly partisan status, leaders of some conservative groups singled out by IRS officials complained about the extent of the agency’s prying into their donor lists, future plans and even print-outs of their websites.

But election law experts and former IRS agents say these steps are necessary given the rise in political tax-exempt applicants and the broad nature of the regulations the tax agency is being pressed to carry out in the wake of “Citizens United.” Many groups outside of the targeting case have already been deemed to have broken tax-exempt guidelines in the last two election cycles.

Faced with hundreds of independent organizations seeking a specialized government benefit once the realm of ordinary charities, the government likely had little choice but to use whatever means necessary to uncover the relevant information needed to decipher the intent of  these groups.

The I.R.S. is already separately reviewing roughly 300 tax-exempt groups that may have engaged in improper campaign activity in past years, according to agency planning documents. Some election lawyers said they believed a wave of lawsuits against the I.R.S. and intensifying Congressional criticism of its handling of applications were intended in part to derail those audits, giving political nonprofit organizations a freer hand during the 2014 campaign.

After the tax agency was denounced in recent weeks by President Obama, lawmakers and critics for what they described as improper scrutiny of at least 100 groups seeking I.R.S. recognition, The New York Times examined more than a dozen of the organizations, most of them organized as 501(c)(4) “social welfare” groups under the tax code, or in some cases as 501(c)(3) charities. None ran major election advertising campaigns, according to the Campaign Media Analysis Group, the main activity of a small number of big-spending tax-exempt groups that emerged as major players in the 2010 and 2012 elections.

But some organized volunteers, distributed pamphlets and held rallies leading up to the 2010 elections or the 2012 presidential election, as conservatives fought to turn out Mr. Obama.


I.R.S. agents are obligated to determine whether a 501(c)(4) group is primarily promoting “social welfare.” While such groups are permitted some election involvement, it cannot be an organization’s primary activity. That judgment does not hinge strictly on the proportion of funds a group spends on campaign ads, but on an amorphous mix of facts and circumstances.

“If you have a thousand volunteer hours and only spend a dollar, but those volunteers are to help a particular candidate, that’s a problem,” Mr. Tobin said.

Agents may examine when and for how long a group advocates policy positions, in part to see whether those positions are associated with a specific candidate, which can be relevant to the group’s tax status, tax lawyers and former I.R.S. officials said.

Agents may look at what a group publishes in print or on a Web site, whether it provides funds to other organizations involved in elections or whether a group’s officers are also employed by political parties. They may also consider other public information, former officials and tax experts said, though they are required to ask the organization to provide those materials or comment on them before the information can be included in an application review.

Whether or not the IRS or the Obama administration engaged in a specific and targeted campaign of intimidation against right-wing political organizations may be endlessly debatable. What cannot be disputed is the near-crisis that the IRS found itself in after the “Citizens United” case opened the “floodgates” of political spending.

Ordained by the Supreme Court to raise as much campaign cash as they could collect, hundreds and eventually thousands of “independent” political groups sprang up virtually overnight, seeking to take advantage of the loopholes and exemptions that are at the disposal of those with a so-called “501(c)(4) designation. The IRS division devoted to investigating the propriety of applications for non-exempt status, once a relatively sleepy assignment, became the focus of a political cash bonanza starting in 2010, leaving it badly undermanned and without adequate funding.

The IRS was overwhelmed with a wave of new applications — most from conservative-leaning groups and backed by wealthy Republicans — seeking that special status to raise unlimited and undisclosed money for political means.

Making the situation worse was that this was not the typical job of the agency; they were given an “impossible task.” Instead of collecting taxes or weeding out charities, the IRS had been placed on the front lines of a frenzied — and very expensive — partisan battleground, one that ended up playing a major role in two important national elections.

This was the obvious consequence of an ad-hoc campaign finance system created in the aftermath of “Citizens United,” with little thought put into how a massive fundraising system that popped up almost instantaneously would be regulated.

The IRS didn’t make this mess because its employees are stupid or because they have a political vendetta. It’s because they’ve been given an impossible task: figure out which organizations have missions that are “primarily political” — and come up with definitions for “primarily” and “political” that are neither vague nor politically charged.

Note, when we talk about these groups as “tax-exempt” all that means is they don’t pay tax on their own income. A 501(c)4 group can’t accept tax-deductible donations because it’s not a charity (those are 501(c)3 groups). Instead, a 501(c)4 is a “social welfare” organization: That is, it is supposed to produce benefits that are broadly enjoyed, rather than producing private profits for its funders. By law, (c)4 groups are free to lobby without limitation and also may engage in electoral activities so long as that is not their primary purpose. The main reason political donors want to channel their funds through (c)4s rather than other independent expenditure vehicles isn’t a tax advantage; it’s that (c)4 organizations are not required to disclose their donors.

Since 2010, when the Supreme Court’s Citizens United decision led to an explosion in applications to form such groups, the IRS has tried to thread (this) needle and failed completely. Their first idea was to look for key words like “Tea Party” in organization names. Realizing this would show unfair political bias, they switched to focusing on statements about orientation (“political action type organizations involved in limiting/expanding government”).

Accusations of politically-motivated targeting and widespread policy of intimidation and bias against conservatives and “Tea Party” supporters also fall`away when more closely considered, largely because if such a presidential vendetta did exist during the 2010 and 2012 elections, it was a disastrous disappointment

Most importantly, the supposed political activists within the IRS or any part of the Obama administration failed miserably if the goal of a few targeted delays of right-wing tax exempt applications was to shut off conservative election spending during the 2012 midterm campaign and leading up to 2012.

$1 billion was spent in total by outside groups on the 2012 election, with a quarter of that coming directly from the loophole-ridden “social welfare non-profits” given the federal government’s blessing to raise and unlimited amount of cash from undisclosed donors for the sole purpose of political advertising, not the “welfare” of greater society.

“Social welfare” organizations like Karl Rove’s Crossroads “non-profit charity” drove much of the spending on ads during last year’s election, all aided and abetted by the IRS. Supposed to eschew “overtly political” language in how it spent the secret and unlimited cash it raised, Rove and other groups were hardly shy in pronouncing their preference for Republican presidential nominee Mitt Romney.

More specifically, tens of millions of dollars were raised and spent by conservative non-profit groups given tax-exempt status after 2010, supposedly when the scandalous anti-Tea Party operation commenced. The money collected by these groups far outstripped cash raised by the handful of liberal-leaning activists that received 501c(4) status.

Conservative nonprofits that received tax-exempt status since the beginning of 2010 and also filed election spending reports with the Federal Election Commission overwhelmed liberal groups in terms of money spent on politics, an analysis of Internal Revenue Service and FEC records shows.

Of the 21 organizations that received rulings from the IRS after January 1, 2010, and filed FEC reports in 2010 or 2012, 13 were conservative. They outspent the liberal groups in that category by a factor of nearly 34-to-1, the Center for Responsive Politics analysis shows.

By far the largest driver of the disparity was American Action Network, whose $30.6 million in spending reported to the FEC in 2010 and 2012 made up 94 percent of the conservative total. However, even without American Action Network, spending by conservative groups approved after 2010 was nearly quadruple that of liberal groups receiving exempt status in the same period.

Outdated language allows those on all sides of the political aisle to take advantage of the system and funnel millions of dollars into American politics with virtually no oversight and with the unprecedented benefit of concealing its funding sources. By its very  nature the existing hodgepodge of campaign finance regulations and tax exemptions, balancing the jurisdictions of the FEC and the IRS in a confused nowhere-land, foments myriad opportunitis for mistakes or malfeasance.

Not that the groups at the center of this debate weren’t taking advantage of such a muddled regulatory scenario. Crossroads and Priorities USA, the two largest conservative and liberal 501(c)(4) “non-profits,” were specifically “created for the purpose of hiding donors.”

These two groups, along with several other large conservative-leaning organizations that played significant roles in the billion-dollar election spending spree in 2012, were largely given a pass by IRS officials for their “overtly” political operations.

Government regulators actually ignored repeated complaints lodged by prominent liberal activists in the middle of the presidential campaign against big conservative “non-profits” spending millions on behalf of Republican candidates like GOP  nominee Mitt Romney.

Rather than being hyper-sensitive to all right-wing political activity under their jurisdiction, federal tax officials were likely guilty of selective justice, ignoring the largest and most effective groups while focusing on the dozens of smaller organizations with “Tea Party” sensibilities.

Over the last two years, government watchdog groups filed more than a dozen complaints with the Internal Revenue Service seeking inquiries into whether large nonprofit organizations like those founded by the Republican political operative Karl Rove and former Obama administration aides had violated their tax-exempt status by spending tens of millions of dollars on political advertising.

The I.R.S. never responded.


The I.R.S. has done little to regulate a flood of political spending by larger groups — like Crossroads Grassroots Policy Strategies, co-founded by Mr. Rove, and Priorities USA, with close ties to President Obama — as well as Republican leaders in Congress and other elected officials. And an agency that is supposed to stay as far away from partisan politics as possible has been left in charge — almost by accident — of regulating a huge amount of election spending.

“We’ve complained about a few big fish and we’ve heard nothing from the I.R.S.,” said Paul S. Ryan, senior counsel at the Campaign Legal Center, which filed many of the complaints with the agency. “We would far rather see scrutiny of these big fish — the groups that spent hundreds of millions of dollars to influence elections — than to see the resources spent on hundreds of small groups that appeared to spend very little on elections.”

The only conclusion to draw from the current “scandal” is that rather than being overzealous in applying the laws colored with partisan motivation, federal regulators at the IRS and FEC have done virtually nothing to enforce the existing rules that are meant to apply to outside political groups. These outfits, almost all conservative, have been incredibly successful in beating the system meant to prevent them from raising unfettered and unlimited amounts of money and using it solely for political operations.

May 282013

With roadway deaths on the rise for the first time in several years, federal safety officials are calling for a substantial drop in the blood-alcohol level used to determine drunk drivers. 

But despite the national epidemic of drunk driving deaths and widespread public awareness of the issue, some interest groups and lawmakers are vigorously fighting the proposed changes, which have no legal weight until acted on by Congress or individual states. Some in the beverage industry say the recommended federal reforms are “ludicrous” because stricter blood-alcohol limits could cut down on their business.

Meeting earlier this month, the National Transportation Safety Board issued a call to lower the current national blood-alcohol standard of .08 to a stricter limit of .05. The NTSB noted that the United States lags behind most other developed countries in combating drunk driving.

States should lower the definition of drunken driving to a blood-alcohol reading of no more than .05 percent, the National Transportation Safety Board recommended Tuesdayy, saying the U.S. is too tolerant of impairment behind the wheel.

The safety board at a hearing in Washington said the U.S. is behind other countries, including most of Europe, in having a threshold for drunken driving of .08 in all 50 U.S. states.

The risk of a crash at a .05 reading is half what it is at .08, the board said.

“It’s frustrating that with the education and advocacy, with laws and enforcement and with the many processes set up to deal with the problem of drinking and driving, that we are still seeing so many lives lost,” NTSB Chairman Deborah Hersman said at the hearing.

About one-third of U.S. traffic deaths are related to alcohol, according to National Highway Traffic Safety Administration data.

Though any federal agency’s recommendations on tightening drunk-driving standards are not binding and don’t represent any official policy, groups with an interest in preserving the current national blood-alcohol law have launched an aggressive campaign to oppose any sweeping changes.

May 242013

(KOMO News)

Renewed attention is being given to the state of the nation’s roads and bridges following a terrifying incident outside of Seattle on Thursday, with critics arguing the event proves the danger in putting off crucial fixes to America’s crumbling public infrastructure.

A highway bridge carrying lanes of Interstate 5 over the Skagit River in Washington state crumbled late Thursday night, sending cars and their trapped occupants into the water below. Initial blame is being leveled at an oversize truck that may have struck a portion of the structure’s girders and destabilized the bridge section that subsequently fell apart.

Miraculously, the accident left no fatalities and only minor injuries to the three motorists that happened to be driving on the bridge when it collapsed. Emergency officials say they have accounted for everyone believed to be in the area at the time of the disaster, and that everyone is safe.

The safety of all victims assured, focus has shifted to the transportation nightmare that the bridge failure is already causing. I-5 is a major roadway in the greater Seattle metropolitan area and carries vital commercial and commuter traffic. Thursday’s event has “totally disrupted” the highway corridor and will likely do so for weeks or months as plans for replacing the bridge are finalized.

An Interstate 5 bridge over a river collapsed north of Seattle Thursday evening, dumping two vehicles into the water and sparking a rescue effort by boats and divers as three injured people were pulled from the chilly waterway.

Authorities said it appeared nobody was killed in the bridge failure that raised the question about the safety of aging spans and cut off the main route between Seattle and Canada.

“We don’t think anyone else went into the water,” said Marcus Deyerin, a spokesman for the Northwest Washington Incident Management Team. “At this point we’re optimistic.”

A man and a woman were reported in stable condition with non-life-threatening injuries in the emergency room at Skagit Valley Hospital, hospital spokeswoman Kari Ranten said. Another man was reported in stable condition at United General Hospital in Sedro-Woolley, hospital CEO Greg Reed said. He said he didn’t know whether the man would be admitted.

Survivor Dan Sligh and his wife were driving their pickup truck when he said the bridge disappeared before them in a “big puff of dust.”


Traffic along the heavily-travelled route could be impacted for some time.

“The I-5 corridor is totally disrupted,” said Gov. Jay Inslee, who went to the scene Thursday night.

He said work has already started to design detour, but state Transportation Secretary Lynn Peterson asked people to avoid I-5 in the area for the next several days.

Being that bridges crumbling under travelers on major highways is an unsettling prospect, authorities have quickly moved to determine the exact reason the Skagit span came down.

Most signs pointed to a single “oversize” truck that clipped a section of the girders holding the bridge together, sending a considerable chunk of it immediately crashing into the river. So far, nothing points directly to an independent structural failure due to disrepair or neglect. However, several factors shed light on how delays and reduced funding for infrastructure projects such as bridge repairs did play a significant role in Thursday’s near-tragedy.

The Skagit span was built in 1955. This means that, in addition to operational age, the span lacked modern safety features and construction techniques that would have likely prevented such a catastrophic mass failure when struck by a vehicle.

The Skagit River Bridge wasn’t particularly worrisome to state engineers. Structural inspections showed its condition to be average. But bridges of its generation, circa 1955, often were designed in a manner described today as fracture-critical — meaning a failure in a key location can ruin an entire span.

Which is apparently what happened Thursday night.

Officials believe an oversized truck traveling south on Interstate 5 hit the bridge and triggered the collapse, said Bart Treece, state Department of Transportation (DOT) spokesman. One of the bridge’s four spans fell into the water.

Though officials insist there was nothing “bad” about this particular bridge, its age and archaic construction make it possible that “complete collapse” would occur with the failure of any single component.

“It doesn’t imply anything bad about the bridge. It just means that if a certain component fails, it can lead to the complete collapse of the bridge,” said Jugesh Kapur, former head of bridges and structures for the DOT.

Kapur said a truck hitting a vertical or diagonal part of the truss certainly is capable of causing a failure. Guardrails or similar barriers are supposed to prevent strikes.

But besides its basic age and how it was put together, there were actually a considerable number of safety warnings about this specific bridge and detailed reports of its considerable “deficiencies.”

The Skagit River I-5 bridge was labeled “functionally obsolete” and “structurally deficient” in various federal and state reports — one of them more than twenty years ago. While having little meaning to the general public, these terms are important distinctions for architects and public officials charged with overseeing roads and bridges.

As early as 1992, the bridge that fell apart on Thursday was deemed “structurally deficient” and in immediate need of at least $8.2 million in repairs. Two years later, it was deemed “functionally obsolete” because of its age and not “adequate for modern traffic.

The Skagit bridge was rated “structurally deficient” in 1992, needing $8.3 million in fixes, according to a report by uglybridges.com, which cites the National Bridge Inventory data for that year. There was erosion on the stream banks below, and serious road-deck damage or wear. By 1994, the federal database listed the bridge as “functionally obsolete,” an improved rating but an indication it still wasn’t adequate for modern traffic.

The “sufficiency rating” of the Skagit bridge was also quite poor; a 57 rating out of a possible 100. Most alarmingly, that score actually bested nearly 800 of Washington’s other highway bridge structures, which were given a “C-” grade just days before Thursday’s incident by the American Society of Civil Engineers.”

In other words, the bridge that fell down was actually in better shape than most of Washington State’s bridges or even other bridges along the same I-5 corridor.

The bridge was built in 1955 and has a sufficiency rating of 57.4 out of 100, according to federal records. That is well below the statewide average rating of 80, according to an Associated Press analysis of federal data, but 759 bridges in the state have a lower sufficiency score.

According to a 2012 Skagit County Public Works Department, 42 of the county’s 108 bridges that are 50 years or older. The document says eight of the bridges are more than 70 years old and two are over 80.

Washington state was given a C in the American Society of Civil Engineers’ 2013 infrastructure report card and a C- when it came to the state’s bridges. The group said more than a quarter of Washington’s 7,840 bridges are considered structurally deficient of functionally obsolete.

Images of the Skagit accident outside of Seattle may have proven familiar to anyone that remembers a similar, though considerably more tragic, bridge collapse just six years ago. That was in 2007, when an interstate bridge span in downtown Minneapolis gave way and sent dozens of cars into a river, killing 13 and injuring hundreds.

The Minnesota disaster eventually was deemed preventable after information was subsequently revealed showing that span was likewise “structurally deficient” and decades behind in necessary repairs.

Inadequate and potentially dangerous bridges can be found all across the country, meaning tens of millions of Americans likely travel over them every day. The most recent National Bridge Inventory is a sobering document that shows nearly 90,000 bridges in the United States are officially listed as “obsolete,” and more than 70,000 are “structurally deficient” and in need of immediate repair.

An almost unimaginable backlog of bridge repairs and vital fixes has piled up in every corner of the nation. The same civil engineer group that gave a poor rating to Washington state’s bridge infrastructure gave an only slightly better “C+” grade to the entire US network of bridges. They estimate that it would require spending $21 billion every year just to fix the backlog of dangerous bridges in the country.

It doesn’t take a policy expert to understand that not only has such funding not been directed to bridges or any manner of national infrastructure in recent years, but that any future substantive action to combat the documented crisis is almost guaranteed not to happen.

Calculations have determined that it will take nearly three trillion dollars in federal spending by 2020 — many times what the government invests now — just to prevent the worst and most disastrous consequences from an aging and fragile national infrastructure. Without such a “critically important” investment, severe and long-lasting economic impacts will begin to be felt by Americans,.

Ignoring a crumbling infrastructure system means jobs will be lost, prices for almost every consumer item will go up, and the daily commute of millions of Americans in major population centers will become even moe unbearable than it curently is.

“Infrastructure is the most important thing you never think about,” said Jim Hoecker, former chairman of the Federal Energy Regulatory Commission. “Infrastructure is a collection of critically important strategic assets, and we generally take them for granted.”

If the problem is not addressed, power outages will become more frequent, prices at the supermarket and department store will inch up, traffic will detour around bad bridges, household incomes will drop and millions of people will lose their jobs.

The challenge of rebuilding a post-World War II infrastructure at the end of its natural life — roads, bridges, the electrical grid, water and sewer systems, ports — has been well documented by myriad experts. One of the most meticulous accounts has come in a series of reports by the American Society of Civil Engineers (ASCE), which delved into each failing system to calculate not just the cost of restoration but the economic and personal price of doing too little or nothing at all.

The exclamation point on the “Failure to Act” reports came Tuesday in an ASCE paper: An investment of $2.7 trillion is needed by 2020; likely funding available, $1.6 trillion. The Congressional Budget Office says combined federal, state and local spending for roads and bridges now amounts to about $160 billion.

The federal government and Congress appropriate nothing close to the amount experts declare is necessary to repair and sustain America’s vast and economically vital infrastructure network. Even worse has been the prevalence of deep cuts by states to funds and programs meant to keep roads and bridges functioning and safe.

This is a combination that has led to a cratering of spending on public construction projects, with a reduction of more than $50 billion since President Obama’s stimulus plan in 2009. And not since at least 1993 has  spending on infrastructure a smaller percentage of overall economic output.

In raw dollars, the decline is obvious. From a peak of about $325 billion in March 2009, the monthly amount has plummeted to $258 billion — a big number to upgrade your house, but less so for the entire country.

 But when you compare spending to the entire economic output of the country — how much of what we make that’s spent on public construction — the picture becomes more stark. We haven’t spent this little of our economic output on public construction since before 1993.

Many of the cuts can be attributed to the overall economic stagnation and tighter budgets wrought by the recession. But other factors are at play, including an inability by President Obama to get results on his repeated efforts to boost investment in infrastructure by posturing it as a job-creation program meant to employ millions of out-of-work Americans.

But the president’s lobbying efforts produced few results and largely focused on “shovel-ready” proposals selected for the number of jobs they would create, not based on safety factors.

But nothing has hastened the decline of public investment than the rise of the Tea Party, Republican control of the House, and an overall growing aversion of federal authority. Since the president took office, Congress has allocated even less money than usual for infrastructure projects even as the need for such funds grew exponentially.

Just as in 2007 after the deadly Minneapolis disaster, no one expects the fallout from this week’s Washington State bridge collapse to move the political needle on infrastructure repairs. 

It’s almost as if Washington has seen this movie before: a bridge collapses, groups decry the nation’s crumbling infrastructure and Congress does nothing.

Like the tragic Minneapolis, Minn. bridge collapse in 2007 that came before it, today’s Mount Vernon, Washington collapse is unlikely to spur Congress to pour hundreds of billions of dollars into fixing roads and bridges.

The political inertia in Washington around transportation funding and projects hasn’t eased despite President Obama’s nearly constant push for additional funding.

In February, Obama renewed his nearly annual call for $50 billion in additional transportation and infrastructure spending as part of his 2014 budget request. But Republicans said the proposal amounted to an unfunded wish list.

To be sure, Congress did pass a highway transportation funding bill last year, but infrastructure spending advocates say it’s simply not enough. The bill allocated just enough money to keep transportation spending at status quo levels and it only funded projects for two years, as opposed to the usual five or six.

So how much is enough?

For roads and bridges alone, the Federal Highway Administration estimates that every year $190 billion would need to be infused into the system compared to the $103 billion currently being spent.

When you take into consideration all of the country’s infrastructure, the American Society of Civil Engineers says that about $3.6 trillion is needed by 2020 to fix the country’s mounting problems.


May 242013

Three years after Congress passed what supporters claimed were unprecedented federal regulations meant to prevent a repeat of the 2008 financial collapse, lobbyists for banks and Wall Street firms have more sway than ever on Capitol Hill.

House Financial Services Committee chairman Rep. Jeb Hensarling

Republicans and some Democrats have targeted the package passed in 2010, known as Dodd-Frank, for intense criticism. Conservatives decry the string of comprehensive new regulations as onerous and guilty of stunting economic growth.

Financial industry interests have also complained, flooding lawmakers who want to rewrite Dodd-Frank with cash in the last two election cycles and gaining new influence when Republicans seized control of the House.

This political alliance has begun paying handsome dividends for financial companies as legislators hostile to the new regulations are willing to go to considerable lengths to make sure the industries covered by the oversight are given a chance to craft reforms more to their liking.

The New York Times reports on Friday that House Republicans working on bills to repeal Dodd-Frank and loosen myriad other financial regulations have allowed banking lobbyists to draft much of the legislation themselves. Three-quarters of the language in one bill that easily passed the House Financial Services Committee had been written by lobbyists for Citigroup. Industry officioals defend such a practice as “common” in Washington.

Wall Street and big banks, once reviled as the driving forces of the 2008 market crash and subsequent recession, have seen their reputations significantly polished in the nation’s capital. Banks and their lobbyists now enjoy a “resurgent influence” with business-friendly Republicans and election-wary Democrats in Congress.

Bank lobbyists are not leaving it to lawmakers to draft legislation that softens financial regulations. Instead, the lobbyists are helping to write it themselves.

One bill that sailed through the House Financial Services Committee this month — over the objections of the Treasury Department — was essentially Citigroup’s, according to e-mails reviewed by The New York Times. The bill would exempt broad swathes of trades from new regulation.

In a sign of Wall Street’s resurgent influence in Washington, Citigroup’s recommendations were reflected in more than 70 lines of the House committee’s 85-line bill. Two crucial paragraphs, prepared by Citigroup in conjunction with other Wall Street banks, were copied nearly word for word. (Lawmakers changed two words to make them plural.)

The lobbying campaign shows how, three years after Congress passed the most comprehensive overhaul of regulation since the Depression, Wall Street is finding Washington a friendlier place.

The cordial relations now include a growing number of Democrats in both the House and the Senate, whose support the banks need if they want to roll back parts of the 2010 financial overhaul, known as Dodd-Frank.

This legislative push is a second front, with Wall Street’s other battle being waged against regulators who are drafting detailed rules allowing them to enforce the law.

The payoff for both sides in the equation is incredibly attractive. Financial companies have been able to ingratiate themselves with lawmakers already receptive to their calls for fewer regulations by spending huge sums on lavish lobbying events and bankrolling scores of congressional candidates.

And as its lobbying campaign steps up, the financial industry has doubled its already considerable giving to political causes. The lawmakers who this month supported the bills championed by Wall Street received twice as much in contributions from financial institutions compared with those who opposed them, according to an analysis of campaign finance records performed by MapLight, a nonprofit group.

In recent weeks, Wall Street groups also held fund-raisers for lawmakers who co-sponsored the bills. At one dinner Wednesday night, corporate executives and lobbyists paid up to $2,500 to dine in a private room of a Greek restaurant just blocks from the Capitol with Representative Sean Patrick Maloney, Democrat of New York, a co-sponsor of the bill championed by Citigroup.

Industry officials acknowledged that they played a role in drafting the legislation, but argued that the practice was common in Washington. Some of the changes, they say, have gained wide support, including from Ben S. Bernanke, the Federal Reserve chairman. The changes, they added, were in an effort to reach a compromise over the bills, not to undermine Dodd-Frank.

It’s unlikely to be a coincidence that the chairman of the House committee in charge of financial industry oversight and at the center of granting direct access by lobbyists to the drafting of important regulatory bills has been wined and dined by some of the nation’s leading banks.

According to Pro Publica, Texas Rep. Jeb Hensarling met with several banking executives at an exclusive Utah ski resort — complete with a celebrity chef to cater the event — only weeks after attaining chairmanship of the House Financial Services Committee. That is the same committee now discovered to be letting lobbyists for Citigroup and other banks draft legislation intended to gut federal financial regulations.

The posh party for Hensarling’s campaign PAC may not have breached any election laws, but it presented an “invaluable opportunity” for financial companies and their lobbyists.

In January, Rep. Jeb Hensarling, R-Texas, ascended to the powerful chairmanship of the House Financial Services Committee. Six weeks later, campaign finance filings and interviews show, Hensarling was joined by representatives of the banking industry for a ski vacation fundraiser at a posh Park City, Utah, resort.

The congressman’s political action committee held the fundraiser at the St. Regis Deer Valley, the “Ritz-Carlton of ski resorts”known for its “white-glove service” and for its restaurant by superstar chef Jean-Georges Vongerichten.

There’s no evidence the fundraiser broke any campaign finance rules. But a ski getaway with Hensarling, whose committee oversees both Wall Street and its regulators, is an invaluable opportunity for industry lobbyists.

May 222013

Pain at the pump may be a universal emotion shared by drivers on either side of the Atlantic, but only one side of the “pond” is conducting an unprecedented regulatory operation to uncover potentially illegal activity that has kept gas prices so high.

European regulators have launched an aggressive investigation into ”serious” allegations of price rigging by some of the globe’s biggest oil companies and the top oil market trading agency. Motorists in continental Europe and Britain have long voiced complaints over disparities in retail gasoline prices from the wholesale values set by traders and oil companies.

The inquest took a dramatic turn earlier this month when corporate offices of Shell, BP, Statoil and the world’s top oil pricing firm were raided by investigators with the European Commission under suspicion that the companies involved “colluded” to artificially inflate prices for crude oil and other products. Regulators now suspect the price-fixing may have been carried out for as many as 11 years before government officials were finally tipped off.

Some have called the idea of a decade-long oil rigging scheme as big as the “LIBOR” scandal that rocked financial markets last year, when banks and traders spent years tinkering with the benchmark rate for charging rates of interest.

The London offices of BP and Shell have been raided by European regulators investigating allegations they have “colluded” to rig oil prices for more than a decade.

The European commission said its officers carried out “unannounced inspections” at several oil companies in London, the Netherlands and Norway to investigate claims they may have “colluded in reporting distorted prices to a price reporting agency [PRA] to manipulate the published prices for a number of oil and biofuel products”.

The commission said the alleged price collusion, which may have been going on since 2002, could have had a “huge impact” on the price of petrol at the pumps “potentially harming final consumers”.

Lord Oakeshott, former Liberal Democrat Treasury spokesman, said the alleged rigging of oil prices was “as serious as rigging Libor” – which led to banks being fined hundreds of millions of pounds.


The European authorities declined to name any of the companies raided but BP, Shell, Norway’s Statoil and Platts, the world’s leading oil price reporting agency, all confirmed they are being investigated.

In a statement Shell said: “We can confirm that Shell companies are currently assisting the European commission in an inquiry into trading activities.”

BP said: “BP is one of the companies that is subject to an investigation that was announced by the European commission. We are co-operating fully with the investigation and unable to comment further at this time.”

Statoil, which is 67%-owned by the Norwegian government, said: “The authorities suspect participation by several companies, including Statoil, in anti-competitive agreements and/or concerted practices contrary to Article 53 of the European Economic Area (EEA) [market manipulation].

“The suspected violations are related to the Platts’ Market-On-Close (MOC) price assessment process, used to report prices in particular for crude oil, refined oil products and biofuels, and may have been ongoing since 2002.”

What is unclear for now is how much of an impact the alleged European rigging has had or will have on global oil markets and prices paid by American consumers. With world markets increasingly interconnected and fluctuations of any kind in one part of the globe instantly analyzed by traders and industries all over the planet, the ramifications of the probe could be far-reaching.

The fact that the globe’s leading oil market price assessment firm has been directly targeted in the investigation and the similarity of the potential oil fixing scheme to recently uncovered operations in the United States and elsewhere leads Matt Taibbi to argue that the story rates as “hugely significant” for Americans, too.

One analyst I spoke to for that piece talked specifically about Platts (and another, similar price assessment company), noting that they “do benchmarks for the entire oil market, the entire refined products market” and “you name it” – any of these benchmarks that rely on voluntary reporting could be manipulated.

It’s not clear yet exactly what is alleged to have occurred, but Europeans have long complained that retail gas prices have not seemed to match wholesale prices. In fact, complaints that wholesale prices at gas stations were noticeably slow to fall when wholesale prices fell prompted the U.K.-based Office of Fair Trading last year to conduct a cursory inquiry into possible anti-competitive behavior in the fuel markets. Early this year, they announced that they hadn’t found enough evidence to warrant a full-blown investigation. But complaints persisted.

The story is obviously hugely significant in its own right, just as the LIBOR story was. But both are even more unpleasant in conjunction with each other, and the other price-fixing scandals that have cropped up in the financial markets in the last year or two. We’ve had other price-fixing scandals involving gas in the U.K. and here in the U.S., just a few weeks ago, it came out that the Federal Energy Regulatory Commission (FERC) concluded that JPMorgan Chase used “manipulative schemes” to tinker with energy prices in Michigan and California.

While the fixing scandal is relegated to Europe for now, there is little question that similar motivations exist in the United States for oil companies to manipulate and artificially enhance market prices to improve their bottom line.

Gas prices are already beginning to soar for the summer in the US, jumping from what were seasonal highs to begin with and now approach or break price records in many locations. Oil insiders warn of higher prices after Memorial Day despite the record-setting boom in American oil production and the expansion of global supplies due to the flow of US crude.

While analysts and consumer advocates repeatedly question the causes behind the unwavering upward trend in prices at the pump, government regulators in the United States have done virtually nothing to uncover any truth to allegations of rigged markets or unfair pricing practices.

Incentive for oil companies to keep crude and pump prices consistently elevated is obvious to many experts, with one congressional report detailing how high gas prices reap a “windfall” of profits for oil giants like Exxon, Shell and BP.

At least one lawmaker has taken notice of the European investigation and is calling for a US-based inquiry into the oil markets and attempts by the industry to universally rig prices.

Vermont Sen. Bernie Sanders has proposed legislation to force federal regulators to mirror the price-fixing operations in Europe and begin a similar investigation in the United States, as well as use the government to crack down on oil speculation that is also fingered as a leading cause of high gas prices.

Sanders said a full accounting of oil markets is necessary to root out “fraud, manipulation, abuse and excessive speculation.”

With gasoline prices rising rapidly, Sen. Bernie Sanders (I-Vt.) today proposed an amendment to make U.S. federal regulators follow the lead of Europeans and investigate oil and fuel price manipulation.

Sanders also proposed a 30-day deadline for the Commodity Futures Trading Commission to use its emergency powers to curb excessive speculation in crude oil markets.

“We must do everything that we can to make sure that oil and gasoline prices are transparent and free from fraud, manipulation, abuse and excessive speculation,” said Sanders, a member of the Senate energy committee.

Over the past five months, the national average price for a gallon of gasoline has gone up by more than 41 cents. The price hikes come at a time when U.S. oil inventories reached a three-decade high while demand for gasoline is lower than four years ago when prices averaged less than $2.30 a gallon.

“The skyrocketing cost of gasoline and oil is causing tremendous hardship to the American consumer, small businesses, truckers, airlines and fuel dealers. In fact, as we struggle to claw our way out of this terrible recession, high oil and gas prices are enormously detrimental to the entire economic recovery process,” Sanders said.

May 222013

President Obama’s nominee for Commerce Secretary is facing a surge of opposition from grassroots labor groups as moderate lawmakers on Capitol Hill line up behind Penny Pritzker, foreshadowing what could be a surprisingly easy official confirmation process.

Republican Sen. Mark Kirk of Illinois has thrown his support behind the president’s selection, part of the charm offensive billionaire philanthropist and Obama campaign bundler Pritzker has been conducting behind the scenes with key lawmakers leading up to Senate hearings.

But moderate Republicans may be the easiest to placate regarding Pritzker.  A close friend of the president and a wealthy heiress known for bankrolling charitable causes and political campaigns, Pritzker also remains deeply involved with the business practices of her family’s source of wealth, the Hyatt Hotels chain.

Criticisms over contract negotiations and unfair treatment of employees at the hotel company has several grassroots labor organizations launching protests and calling on President Obama to rescind Pritzker’s nomination. 

UNITE HERE, a major service employee union, has accused Hyatt of worker mistreatment and openly violating safety protocols. Pritzker and the chain’s current executive leadership have refused to sign new union contracts for more than three years.

Organized labor will break its silence and oppose President Obama’s nominee for Commerce Secretary, Chicago’s Penny Pritzker, the Daily News has learned.

The decision stems from long-standing grievances with labor practices at the Hyatt Hotels chain, a source of her family’s fortune, and despite earlier reports that unions would not raise objections to the nomination.

Donald “D” Taylor, president of the 270,000-member union of hotel and restaurant workers known as UNITE HERE, confirmed the move to The News on Monday. His opposition was spurred by his just learning that the Senate Commerce Committee was moving up its confirmation hearing for Pritzker.

The union had been led to understand that hearing would take place perhaps well after the Memorial Day weekend. But the surprise decision to move up the hearing forced the union’s hand.

“We are opposed to the nomination of Penny Pritzker based on what has taken place at Hyatt,” Taylor said in a phone interview.


UNITE HERE’s disputes with the hotel chain date to 2009 and the expiration of contracts at those Hyatt hotels that are unionized. There have been many demonstrations nationally related to its outsourcing previously unionized housekeeper positions at hotels in Boston and Baltimore and hiring what the union alleged were often temporary workers paid minimum wages.

The union has also alleged worker safety issues and argues the Hyatt track record run contrary to Obama’s call for more vigilant enforcement of safety regulation by the Occupational Safety and Health Administration. UNITE HERE alleges that housekeepers have been obligated to clean bathroom floors on their hands and knees rather than have access to a mop.

Labor groups call Hyatt the “worst hotel employer in America” and have tried to get hourly employees named to the Hyatt corporate board that Pritzker chairs as a means of making sure employee complaints are addressed.

 But Pritzker’s nomination will also roil the Democratic base, particularly organized labor. That’s because Pritzker sits on the board of directors for Hyatt Hotels, the national hotel chain co-founded by her father, which is currently engaged in a protracted struggle with the hospitality workers union UNITE HERE.

“Hyatt has singled itself out as the worst hotel employer in America,” according to a UNITE HERE-maintained website called Hyatt Hurts. The allegations which UNITE HERE has brought against the company include wage theft, unreasonable workloads, unjust firings, and conditions which lead to high injury rates.

Pritzker has been a repeated target of UNITE HERE demonstrations, but with her nomination the campaign has moved into a new phase. Now the union is requesting that Hyatt appoint a worker to fill her seat on the board of directors.

“If they put someone like me on the Hyatt board of directors, that would certainly send a signal that corporate American is listening extensively to what workers on the ground have to say,” said Cathy Youngblood, a Hyatt housekeeper in West Hollywood and the architect of the union’s “Someone Like Me” campaign to place a worker on the Hyatt board of directors. In December 2012, she kicked off the campaign by submitting a resolution to Hyatt corporate headquarters.

May 212013

Victims of Monday’s deadly tornado that ripped through an Oklahoma City suburb may face delays in receiving relief aid and assistance from the federal government. At least one Senate Republican is vowing to enforce a demand that any disaster aid funds be offset with substantial spending cuts from another sector of the federal government.

The lawmaker speaking out about the need for austerity at a time of disaster is none other than Oklahoma Sen. Tom Coburn. His constituents faced a terrifying ordeal on Monday when a massive twister leveled much of Moore, Oklahoma, including schools, businesses and many neighborhoods. At least 51 people are confirmed dead, including many children.

But Coburn quickly put out a statement that promised to line up spending cutds before any taxpayer funds were appropriated for tornado cleanup. As much as $200 million was needed following the deadly Joplin tornado in 2011, and Coburn confirmed that he would “absolutely” seek funding offsets if a similar figure was called for following the Oklahoma disaster.

The tornado damage near Oklahoma City is still being assessed and the death toll is expected to rise, but already Sen. Tom Coburn, R-Okla., says he will insist that any federal disaster aid be paid for with cuts elsewhere.

CQ Roll Call reporter Jennifer Scholtes wrote for CQ.com Monday evening that Coburn said he would “absolutely” demand offsets for any federal aid that Congress provides.

Coburn added, Scholtes wrote, that it is too early to guess at a damage toll but that he knows for certain he will fight to make sure disaster funding that the federal government contributes is paid for. It’s a position he has taken repeatedly during his career when Congress debates emergency funding for disaster aid.

Both Oklahoma US senators — Coburn and fellow Republican James Inhofe — have a controversial history concerning federal disaster relief. They have argued against money for FEMA and  joined with other Republicans in Congress to successfully stall federal aid for victims of Hurricane Sandy last year, sparking outrage from the regions affected by that storm and even fellow Republican New Jersey Gov. Chris Christie.

But both Sooner State lawmakers have also called for immediate federal money when natural disasters have scarred their own home state. A Coburn staffer claims things will be different in the aftermath of the Moore twister.

Sens. Jim Inhofe and Tom Coburn, both Republicans, are fiscal hawks who have repeatedly voted against funding disaster aid for other parts of the country. They also have opposed increased funding for the Federal Emergency Management Agency (FEMA), which administers federal disaster relief. 

Late last year, Inhofe and Coburn both backed a plan to slash disaster relief to victims of Hurricane Sandy. In a December press release, Coburn complained that the Sandy Relief bill contained “wasteful spending,” and identified a series of items he objected to, including “$12.9 billion for future disaster mitigation activities and studies.”

Coburn spokesman John Hart on Monday evening confirmed that the senator will seek to ensure that any additional funding for tornado disaster relief in Oklahoma be offset by cuts to federal spending elsewhere in the budget. “That’s always been his position [to offset disaster aid],” Hart said. “He supported offsets to the bill funding the OKC bombing recovery effort.” Those offsets were achieved in 1995 by tapping federal funds that had not yet been appropriated.

In 2011, both senators opposed legislation that would have granted necessary funding for FEMA when the agency was set to run out of money. Sending the funds to FEMA would have been “unconscionable,” Coburn said at the time.


And despite their voting record on disaster aid for other states, both Coburn and Inhofe appear to sing a different tune when it comes to such funding for Oklahoma.

In January of 2007, Coburn urged federal officials to speed disaster relief aid after the state faced a major ice storm.

A year later, in 2008, Inhofe lauded the fact that emergency relief from the Department of Housing and Urban Development would be given to 24 Oklahoma counties. “The impact of severe weather has been truly devastating to many Oklahoma communities across the state. I am pleased that the people whose lives have been affected by disastrous weather are getting much-needed federal assistance,” he said at the time.

Inhofe has on Tuesday distanced himself somewhat from both his colleague Tom Coburn’s stand on offsetting disaster spending and his own recent history in voting against federal aid for other parts of the country.

Confronted with his current request for federal assistance for Monday’s deadly Oklahoma storm juxtaposed with his vocal opposition to aid money for Sandy victims, Inhofe said that the two situations are “totally different” and that the Sandy bill included “pork” spending.

In the wake of the devastating tornado in an Oklahoma City suburb, Sen. James Inhofe (R-Okla.) rejected comparisons between federal aid for this disaster and the Hurricane Sandy relief package he voted against.

That was a “totally different” situation, Inhofe told MSNBC, arguing that the Sandy aid was filled with pork. There were “things in the Virgin Islands. They were fixing roads there and putting roofs on houses in Washington, D.C.”

“Everyone was getting in and exploiting the tragedy that took place,” he said. “That won’t happen in Oklahoma.”

May 212013

Apple, of the world’s most valuable companies and the driving force behind some of the world’s most popular consumer technology, is facing serious new charges of “gimmicky” tax avoidance even as its executives prepare to lobby for a sweeping overhaul of US tax codes meant to further reduce their shrinking tax burden.

Apple CEO Tim Cook

Suspected for years of employing unusually skilled and complicated maneuvers to skirt tax laws in the United States and other countries, a new congressional investigation finds that Apple’s efforts at dodging the IRS are far more extensive than previously indicated. Apple has shifted billions of dollars to overseas tax havens in a strategy shared by many other familiar American brands and which is most prevalent among tech companies that have particularly mobile assets and operations.

But the New York Times reports that the US Senate, as part of its broader look at simplifying the federal corporate tax system, has discovered a massive “scheme” put together by Apple executives to insulate a significant chunk of the company’s profits and cash assets from government regulators. Lawmakers say the company behind the iPhone and iPad has achieved the “holy grail of tax avoidance” with “gimmicks” that leave much of the company’s profits held in offshore accounts that are technically “stateless” — thus out of the reach of the US or other governments.

Even as Apple became the nation’s most profitable technology company, it avoided billions in taxes in the United States and around the world through a web of subsidiaries so complex it spanned continents and went beyond anything most experts had ever seen, Congressional investigators disclosed on Monday.

The investigation is expected to set up a potentially explosive confrontation between a bipartisan group of lawmakers and Timothy D. Cook, Apple’s chief executive, at a public hearing on Tuesday.

Congressional investigators found that some of Apple’s subsidiaries had no employees and were largely run by top officials from the company’s headquarters in Cupertino, Calif. But by officially locating them in places like Ireland, Apple was able to, in effect, make them stateless — exempt from taxes, record-keeping laws and the need for the subsidiaries to even file tax returns anywhere in the world.

“Apple wasn’t satisfied with shifting its profits to a low-tax offshore tax haven,” said Senator Carl Levin, a Michigan Democrat who is chairman of the Senate Permanent Subcommittee on Investigations that is holding the public hearing Tuesday into Apple’s use of tax havens. “Apple successfully sought the holy grail of tax avoidance. It has created offshore entities holding tens of billions of dollars while claiming to be tax resident nowhere.”

Thanks to what lawmakers called “gimmicks” and “schemes,” Apple was able to largely sidestep taxes on tens of billions of dollars it earned outside the United States in recent years. Last year, international operations accounted for 61 percent of Apple’s total revenue.

While much of the hidden money is technically under the purview of foreign governments, Apple has also managed to avoid American taxes on tens of billions of dollars in profits. From 2009 to 2012 alone, the tech giant sent $74 billion to offshore tax havens that would have been subject to taxation in the United States. It’s effective tax rate on the profits it did make available to the IRS was also significantly less than the company has public reported, a 20 percent corporate rate that saved it $8 billion over three years.

Apple allegedly ran a scheme that Republican Sen. John McCain claims makes the company “one of America’s largest tax avoiders.”

Over all, Apple’s tax avoidance efforts shifted at least $74 billion from the reach of the Internal Revenue Service between 2009 and 2012, the investigators said. That cash remains offshore, but Apple, which paid more than $6 billion in taxes in the United States last year on its American operations, could still have to pay federal taxes on it if the company were to return the money to its coffers in the United States.

John McCain of Arizona, who is the panel’s senior Republican, said: “Apple claims to be the largest U.S. corporate taxpayer, but by sheer size and scale, it is also among America’s largest tax avoiders.”


The Senate investigators also found evidence that the company turned over substantially less money to the government than its public filings indicated.

While the company cited an effective rate of 24 to 32 percent in its disclosures, its effective tax rate was 20.1 percent, based on the committee’s findings. And for a company of Apple’s size, the resulting difference was substantial — more than $8 billion in 2009, 2010 and 2011.

The extent of Corporate America’s distasteful and publicly embarrassing — though not illegal — tax avoidance gamesmanship has not stopped the same executives and business interests from lobbying Congress for even lower rates on the few taxes they do pay the federal government. Already enjoying effectively zero-percent taxation thanks to aggressive accounting and offshore havens, many of the nations largest companies are simultaneously demanding that lawmakers cut their tax burdens even more.

Apple, Google and other big multinational corporations are partners in a powerhouse lobbying organization that has been pressing Washington for big changes to the federal tax code. The centerpiece of their plan is a  corporate tax “holiday” that would allow companies to repatriate at least $1 trillion held overseas back to the United States.

The idea behind the tax holiday is to foster investment in the US and shift profit-generating projects that had been based offshore back onto American soil. Such a deal is awfully sweet for corporations and has critics complaining of preferential treatment. After previously avoiding all taxes on profits shipped offshore to countries with a low or non-existent tax rate, corporations would be able to move their profits back to the US tax-free, a veritable double-dip of tax avoidance.

Apple CEO Tim Cook will actually present his own proposals for a“dramatic simplification” of the corporate tax code at the same Senate hearing where details of his company’s tax strategies will be questioned.

While lawmakers grill Cook over Apple’s apparent success in dodging tax bills around the globe, the executive will continue to lobby for a “reasonable” — and significantly lower — corporate tax rate designed to save potentially trillions in corporate profits.

Apple chief executive Tim Cook plans to propose a “dramatic simplification” of corporate tax laws when he testifies for the first time before Congress next week, just as lawmakers are considering an overhaul of the tax code.

In an interview with The Washington Post, Cook said he will present specific proposals aimed at encouraging companies to bring back foreign earnings to the United States and invest that money injob creation, as well as research and development. He will speak at a Senate hearing Tuesday that is taking aim at companies that shift profits overseas to lower their tax bills.

More than 1,000 U.S. companies hold an estimated $1.7 trillion in earnings overseas, according to a JPMorgan report. And Apple, which has built up one of the biggest cash piles in corporate history, holds massive amounts in foreign countries.

Some companies, especially large multinationals, have argued that U.S. rates are too high and out of step with other developed economies.

“If you look at it today, to repatriate cash to the U.S., you need to pay 35 percent of that cash. And that is a very high number,” Cook said in an interview Thursday. “We are not proposing that it be zero. I know many of our peers believe that. But I don’t view that. But I think it has to be reasonable.”

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