IRS: Cheapest Obamacare Plan Will Be $20,000 Per Family

IRS: Cheapest Obamacare Plan Will Be $20,000 Per Family
CNS News ^ | January 31, 2013 | Matt Cover 

Posted on January 31, 2013 4:43:47 PM CST by rhema

In a final regulation issued Wednesday, the Internal Revenue Service (IRS) assumed that under Obamacare the cheapest health insurance plan available in 2016 for a family will cost $20,000 for the year.

Under Obamacare, Americans will be required to buy health insurance or pay a penalty to the IRS.

The IRS’s assumption that the cheapest plan for family of five will cost $20,000 per year is found in examples the IRS gives to help people understand how to calculate the penalty they will need to pay the government if they do not buy a mandated health plan.

“The annual national average bronze plan premium for a family of 5 (2 adults, 3 children) is $20,000,” the regulation says.

Bronze will be the lowest tier health-insurance plan available under Obamacare–after Silver, Gold, and Platinum. Under the law, the penalty for not buying health insurance is supposed to be capped at either the annual average Bronze premium, 2.5 percent of taxable income, or $2,085.00 per family in 2016.

In the new final rules published Wednesday, IRS set in law the rules for implementing the penalty Americans must pay if they fail to obey Obamacare’s mandate to buy insurance.

To help illustrate these rules, the IRS presented examples of different situations families might find themselves in.

In the examples, the IRS assumes that families of five who are uninsured would need to pay an average of $20,000 per year to purchase a Bronze plan in 2016.

Using the conditions laid out in the regulations, the IRS calculates that a family earning $120,000 per year that did not buy insurance would need to pay a “penalty” (a word the IRS still uses despite the Supreme Court ruling that it is in fact a “tax”) of $2,400 in 2016.

For those wondering how clear the IRS’s clarifications of this new “penalty” rule are, here is one of the actual examples the IRS gives:

“Example 3. Family without minimum essential coverage.

“(i) In 2016, Taxpayers H and J are married and file a joint return. H and J have three children: K, age 21, L, age 15, and M, age 10. No member of the family has minimum essential coverage for any month in 2016. H and J’s household income is $120,000. H and J’s applicable filing threshold is $24,000. The annual national average bronze plan premium for a family of 5 (2 adults, 3 children) is $20,000.

“(ii) For each month in 2016, under paragraphs (b)(2)(ii) and (b)(2)(iii) of this section, the applicable dollar amount is $2,780 (($695 x 3 adults) + (($695/2) x 2 children)). Under paragraph (b)(2)(i) of this section, the flat dollar amount is $2,085 (the lesser of $2,780 and $2,085 ($695 x 3)). Under paragraph (b)(3) of this section, the excess income amount is $2,400 (($120,000 – $24,000) x 0.025). Therefore, under paragraph (b)(1) of this section, the monthly penalty amount is $200 (the greater of $173.75 ($2,085/12) or $200 ($2,400/12)).

“(iii) The sum of the monthly penalty amounts is $2,400 ($200 x 12). The sum of the monthly national average bronze plan premiums is $20,000 ($20,000/12 x 12). Therefore, under paragraph (a) of this section, the shared responsibility payment imposed on H and J for 2016 is $2,400 (the lesser of $2,400 or $20,000).”

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50 Examples of Government Waste

By Brian M. Riedl
October 6, 2009

• Soaring government spending and trillion-dollar budget deficits have brought fiscal responsibility — and reducing government waste — back onto the national agenda. President Obama recently identified 0.004 of 1 percent of the federal budget as wasteful and proposed eliminating this $140 million from his $3.6 trillion fiscal year 2010 budget request. Aiming higher, the President recently proposed partially offsetting a costly new government health entitlement by reducing $622 billion in Medicare and Medicaid “waste and inefficiencies” over the next decade. Taxpayers may wonder why reducing such waste is now merely a bargaining chip for new spending rather than an end in itself.

It is possible to reduce spending and balance the budget. In the 1980s and 1990s, Washington consistently spent $21,000 per household (adjusted for inflation). Simply returning to that level would balance the budget by 2012 without any tax hikes. Alternatively, merely returning to the 2008 (pre-recession) spending level of $25,000 per household (adjusted for inflation) would likely balance the budget by 2019 without any tax hikes.

Not Easy, but Necessary

Reducing wasteful spending is not easy. Even the most useless programs are passionately supported by the armies of recipients, administrators, and lobbyists that benefit from their existence. Identifying inefficiencies and abuses is much easier than devising a system to fix them. Many lawmakers focus more on bringing home earmarks than on performing the less exciting task of government oversight. Exasperated taxpayers see the cost of government rise with no end in sight.

Of course, eliminating waste cannot balance the budget. Lawmakers must also rein in spending by reforming Social Security and Medicare and by eliminating government activities that are no longer affordable. Yet government waste is the low-hanging fruit that lawmakers must clean up in order to build credibility with the public for larger reforms.

Congress has allowed government employees to spend tax dollars on iPods, jewelry, gambling, exotic dance clubs, and $13,500 steak dinners. If lawmakers cannot even reduce this kind of waste, fraud, and abuse, taxpayers will be less likely to trust them to reform Social Security and Medicare.

Six Categories of Waste

The six categories of wasteful and unnecessary spending are:

1. Programs that should be devolved to state and local governments;
2. Programs that could be better performed by the private sector;
3. Mistargeted programs whose recipients should not be entitled to government benefits;
4. Outdated and unnecessary programs;
5. Duplicative programs; and
6. Inefficiency, mismanagement, and fraud.

The first four categories are generally subjective, and reasonable people can disagree on whether a given federal program falls under their purview. Yet the final two categories — duplication and inefficiency, mismanagement, and fraud — are comparatively easy to identify and oppose. Thus, they are heavily represented in the examples of government waste below:

1. The federal government made at least $72 billion in improper payments in 2008.[1]
2. Washington spends $92 billion on corporate welfare (excluding TARP) versus $71 billion on homeland security.[2]
3. Washington spends $25 billion annually maintaining unused or vacant federal properties.[3]
4. Government auditors spent the past five years examining all federal programs and found that 22 percent of them — costing taxpayers a total of $123 billion annually — fail to show any positive impact on the populations they serve.[4]
5. The Congressional Budget Office published a “Budget Options” series identifying more than $100 billion in potential spending cuts.[5]
6. Examples from multiple Government Accountability Office (GAO) reports of wasteful duplication include 342 economic development programs; 130 programs serving the disabled; 130 programs serving at-risk youth; 90 early childhood development programs; 75 programs funding international education, cultural, and training exchange activities; and 72 safe water programs.[6]
7. Washington will spend $2.6 million training Chinese prostitutes to drink more responsibly on the job.[7]
8. A GAO audit classified nearly half of all purchases on government credit cards as improper, fraudulent, or embezzled. Examples of taxpayer-funded purchases include gambling, mortgage payments, liquor, lingerie, iPods, Xboxes, jewelry, Internet dating services, and Hawaiian vacations. In one extraordinary example, the Postal Service spent $13,500 on one dinner at a Ruth’s Chris Steakhouse, including “over 200 appetizers and over $3,000 of alcohol, including more than 40 bottles of wine costing more than $50 each and brand-name liquor such as Courvoisier, Belvedere and Johnny Walker Gold.” The 81 guests consumed an average of $167 worth of food and drink apiece.[8]
9. Federal agencies are delinquent on nearly 20 percent of employee travel charge cards, costing taxpayers hundreds of millions of dollars annually.[9]
10. The Securities and Exchange Commission spent $3.9 million rearranging desks and offices at its Washington, D.C., headquarters.[10]
11. The Pentagon recently spent $998,798 shipping two 19-cent washers from South Carolina to Texas and $293,451 sending an 89-cent washer from South Carolina to Florida.[11]
12. Over half of all farm subsidies go to commercial farms, which report average household incomes of $200,000.[12]
13. Health care fraud is estimated to cost taxpayers more than $60 billion annually.[13]
14. A GAO audit found that 95 Pentagon weapons systems suffered from a combined $295 billion in cost overruns.[14]
15. The refusal of many federal employees to fly coach costs taxpayers $146 million annually in flight upgrades.[15]
16. Washington will spend $126 million in 2009 to enhance the Kennedy family legacy in Massachusetts. Additionally, Senator John Kerry (D-MA) diverted $20 million from the 2010 defense budget to subsidize a new Edward M. Kennedy Institute.[16]
17. Federal investigators have launched more than 20 criminal fraud investigations related to the TARP financial bailout.[17]
18. Despite trillion-dollar deficits, last year’s 10,160 earmarks included $200,000 for a tattoo removal program in Mission Hills, California; $190,000 for the Buffalo Bill Historical Center in Cody, Wyoming; and $75,000 for the Totally Teen Zone in Albany, Georgia.[18]
19. The federal government owns more than 50,000 vacant homes.[19]
20. The Federal Communications Commission spent $350,000 to sponsor NASCAR driver David Gilliland.[20]
21. Members of Congress have spent hundreds of thousands of taxpayer dollars supplying their offices with popcorn machines, plasma televisions, DVD equipment, ionic air fresheners, camcorders, and signature machines — plus $24,730 leasing a Lexus, $1,434 on a digital camera, and $84,000 on personalized calendars.[21]
22. More than $13 billion in Iraq aid has been classified as wasted or stolen. Another $7.8 billioncannot be accounted for.[22]
23. Fraud related to Hurricane Katrina spending is estimated to top $2 billion. In addition, debit cards provided to hurricane victims were used to pay for Caribbean vacations, NFL tickets, Dom Perignon champagne, “Girls Gone Wild” videos, and at least one sex change operation.[23]
24. Auditors discovered that 900,000 of the 2.5 million recipients of emergency Katrina assistance provided false names, addresses, or Social Security numbers or submitted multiple applications.[24]
25. Congress recently gave Alaska Airlines $500,000 to paint a Chinook salmon on a Boeing 737.[25]
26. The Transportation Department will subsidize up to $2,000 per flight for direct flights between Washington, D.C., and the small hometown of Congressman Hal Rogers (R-KY) — but only on Monday mornings and Friday evenings, when lawmakers, staff, and lobbyists usually fly. Rogers is a member of the Appropriations Committee, which writes the Transportation Department’s budget.[26]
27. Washington has spent $3 billion re-sanding beaches — even as this new sand washes back into the ocean.[27]
28. A Department of Agriculture report concedes that much of the $2.5 billion in “stimulus” funding for broadband Internet will be wasted.[28]
29. The Defense Department wasted $100 million on unused flight tickets and never bothered to collect refunds even though the tickets were refundable.[29]
30. Washington spends $60,000 per hour shooting Air Force One photo-ops in front of national landmarks.[30]
31. Over one recent 18-month period, Air Force and Navy personnel used government-funded credit cards to charge at least $102,400 on admission to entertainment events, $48,250 on gambling,$69,300 on cruises, and $73,950 on exotic dance clubs and prostitutes.[31]
32. Members of Congress are set to pay themselves $90 million to increase their franked mailings for the 2010 election year.[32]
33. Congress has ignored efficiency recommendations from the Department of Health and Human Services that would save $9 billion annually.[33]
34. Taxpayers are funding paintings of high-ranking government officials at a cost of up to $50,000 apiece.[34]
35. The state of Washington sent $1 food stamp checks to 250,000 households in order to raise state caseload figures and trigger $43 million in additional federal funds.[35]
36. Suburban families are receiving large farm subsidies for the grass in their backyards – subsidies that many of these families never requested and do not want. [36]
37. Congress appropriated $20 million for “commemoration of success” celebrations related to Iraq and Afghanistan.[37]
38. Homeland Security employee purchases include 63-inch plasma TVs, iPods, and $230 for a beer brewing kit.[38]
39. Two drafting errors in the 2005 Deficit Reduction Act resulted in a $2 billion taxpayer cost.[39]
40. North Ridgeville, Ohio, received $800,000 in “stimulus” funds for a project that its mayor described as “a long way from the top priority.”[40]
41. The National Institutes of Health spends $1.3 million per month to rent a lab that it cannot use.[41]
42. Congress recently spent $2.4 billion on 10 new jets that the Pentagon insists it does not need and will not use.[42]
43. Lawmakers diverted $13 million from Hurricane Katrina relief spending to build a museum celebrating the Army Corps of Engineers — the agency partially responsible for the failed levees that flooded New Orleans.[43]
44. Medicare officials recently mailed $50 million in erroneous refunds to 230,000 Medicare recipients.[44]
45. Audits showed $34 billion worth of Department of Homeland Security contracts contained significant waste, fraud, and abuse.[45]
46. Washington recently spent $1.8 million to help build a private golf course in Atlanta, Georgia.[46]
47. The Advanced Technology Program spends $150 million annually subsidizing private businesses; 40 percent of this funding goes to Fortune 500 companies.[47]
48. Congressional investigators were able to receive $55,000 in federal student loan funding for a fictional college they created to test the Department of Education.[48]
49. The Conservation Reserve program pays farmers $2 billion annually not to farm their land.[49]
50. The Commerce Department has lost 1,137 computers since 2001, many containing Americans’ personal data.[50]

Pick the Low-Hanging Fruit

Because many of these examples of waste overlap, it is not possible to determine their exact total cost. Yet it is evident that Washington loses hundreds of billions of dollars annually on spending that most Americans would certainly consider wasteful. Lawmakers seeking to rein in spending and budget deficits should begin by eliminating this least justifiable spending while also addressing long-term entitlement costs.

Brian M. Riedl is Grover M. Hermann Fellow in Federal Budgetary Affairs in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

The Dodd-Frank Act versus the Rule of Law

Brief Analyses

No. 775
Tuesday, October 09, 2012
by Roger Koppl

In response to the 2008 financial collapse, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act. Dodd-Frank increased regulation of banks, stockbrokers, insurers and other financial institutions that are “too big  — or interconnected — to fail” and that could require a government bailout to prevent a banking system collapse.

The Act created a board — the Financial Stability Oversight Council — composed mostly of the heads of various federal financial regulatory agencies, including some newly created agencies [see the table]. The Council has the responsibility to identify institutions whose failure might create systemic distress — and the discretion to impose “prudential” regulations on them different from the regulations imposed on other financial institutions.

Regulation is discretionary when the requirements imposed on privately owned institutions vary from firm to firm in ways that are difficult to explain or anticipate, particularly by the affected firms. In the extreme form, regulations could be imposed on specific firms,  regardless of the type of business they conduct, or whether they are chartered by individual states or the federal government.

Discretionary regulation is contrary to the rule of law, but is consistent with the “rule of men” — in this case, experts in financial regulation. However, by their very nature, discretionary regulation cannot reliably produce the results its advocates desire; furthermore, these regulations will increase financial instability, rather than reduce it.

Discretionary Regulation in Theory.Economists who support Dodd-Frank usually cite network theories that claim the financial system is inherently unstable because all its institutions are interconnected and interdependent. These network theories say that a shock in one region or sector of the economy, such as the collapse of a major bank or insurance company, can spread to the whole — a so-called contagion. Advocates of such theories believe regulators can reduce instability by constraining the investment portfolios of financial institutions in order to reduce the “domino effect” — that if one institution fails they will all fail. Some economists, including the executive director of financial stability for the Bank of England, advocate “shaping the network topology,” which comes close to saying regulators should pick portfolios for the banks.

Following the 2008 financial crisis, economist Janet Yellen recommended supervision of so-called systemic institutions, “defined by key characteristics, such as size, leverage, reliance on short-term funding, importance as sources of credit or liquidity, and interconnectedness in the financial system — not by the kinds of charters they have.”

Such regulations could vary the amount and composition of a firm’s capital (risk-based capital requirements), the ratio of its debts to its capital stock (leverage limits), and how much cash it is required to keep on hand (liquidity requirements). Yellen’s recommendations were to a great extent enacted in Dodd-Frank.

Discretionary Regulation in Practice. Discretionary regulation is not new. For example, the Sherman Antitrust Act of 1890 outlawed the unreasonable restraint of trade, a vague term that has never been satisfactorily defined. Such vagueness invites discretion in interpretation and enforcement.

Although discretionary regulation is not new, the element of discretion created by Dodd-Frank is so great that the regulators themselves seem perplexed. For example, Dodd-Frank added a new section to the Bank Holding Act (BHC) of 1956 requiring a group of regulatory agencies to formulate a Volcker rule — a proposal by former Federal Reserve Board Chairman Paul Volcker to limit proprietary trading and conflicts of interest between financial institutions and their clients. In the rule proposed in November 2011, the agencies note “the delineation of what constitutes a prohibited or permitted activity under section 13 of the BHC Act often involves subtle distinctions that are difficult both to describe comprehensively within regulation and to evaluate in practice.”  Thus, the very regulators empowered to execute the Act report that it is not merely hard to understand, but opaque.

By one count, Dodd-Frank calls for regulators to formulate 533 rules, all of them more or less open ended and unspecified. However, recommendations have been made regarding what such regulations should do, including:

• Levying taxes (“fees”) on institutions in proportion to the risks they pose to the financial system.
• Imposing higher liquidity requirements on the most connected banks in the network.
• Establishing central clearing of financial transactions —simplifying but centralizing the network.
• Limiting bank size or activities, and controlling the composition of bank portfolios.

The discretionary regulations called for in Dodd-Frank make it difficult for people to anticipate the legal consequences of their actions. Thus, it violates one of the principal requirements of the rule of law. As Harvard law scholar Richard H. Fallon, Jr., explains, “People must be able to understand the law and comply with it.”

Rule by Experts. The Financial Stability Oversight Council is a body of experts. Such experts are imagined to exist and operate, somehow, above the system, and uninfluenced by it. However, it is more appropriate to treat experts as ordinary humans. As humans, experts may try (perhaps in vain) to maximize utility — that is, enact their own preferences. Moreover, their cognition is limited and erring; they are not smarter than the rest of us. And, importantly, incentivesdo influence the errors the experts make.

Maximizing Utility. If experts seek to maximize utility, they may not be impartial. They could serve other ends, such as larger budgets for their agencies. Even conscientious regulators could have risk preferences different from those of the public, and as a result they might over- or under-price risk. The motives of policy makers need not be selfish to be dangerous.

Limited and Erring Cognition. Dodd-Frank gives regulators the responsibility to assess the risks to the financial system posed by financial institutions. There is no competitive market for risk assessment. Indeed, the goal is to monopolize risk assessment. But absent market signals of greater and lesser risk, authorities cannot assign reliable risk charges to the capital portfolios of different institutions. The very complexity used as a justification for centralized risk assessment may make it impossible for a central body to reliably assess risk.

Influence of Incentives. Finally, incentives skew the errors experts will tend to make, even honest errors. Indeed, all observations are biased by the expectations and motives of the observers. Regulatory errors will tend to serve the biases of the regulators. It is quite possible that collectivized risk assessment may be beset with systemic biases. Without a market to test those assessments, such biases could go uncorrected, and could grow over time.

Conclusion. By replacing competitive evaluations of risk in the marketplace with centralized risk pricing, Dodd-Frank ensures that financial institutions, investors and depositors will have less information about the risks they face. And by further displacing the rule of law with discretionary regulation, the Act ensures that there will be less certainty about the future. As a result, it increases the instability of financial institutions, rather than reducing it.

Roger Koppl is a professor of economics and finance in the Silberman College of Business and director of the Institute for Forensic Science Administration at Fairleigh Dickinson University, and a senior fellow with the National Center for Policy Analysis.

 

Top Five Worst Obamacare Taxes Coming in 2013

NEWS WWW.ATR.ORG

FOR IMMEDIATE RELEASE CONTACT: John Kartch jkartch@atr.org 28 SEPTEMBER 2012 202-785-0266

Top Five Worst Obamacare Taxes Coming in 2013

WASHINGTON, D.C.— Of the twenty new or higher taxes in Obamacare, below are the five worst that will be foisted upon Americans for the first time on January 1, 2013:

The Obamacare Medical Device Tax – a $20 billion tax increase: Medical device manufacturers employ 409,000 people in 12,000 plants across the country. Obamacare imposes a new 2.3 percent excise tax on gross sales – even if the company does not earn a profit in a given year. In addition to killing small business jobs and impacting research and development budgets, this will increase the cost of your health care – making everything from pacemakers to prosthetics more expensive.

The Obamacare “Special Needs Kids Tax” – a $13 billion tax increase: The 30-35 million Americans who use a Flexible Spending Account (FSA) at work to pay for their family’s basic medical needs will face a new government cap of $2,500 (currently the accounts are unlimited under federal law, though employers are allowed to set a cap).

There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are several million families with special needs children in the United States, and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. This Obamacare tax provision will limit the options available to these families.

The Obamacare Surtax on Investment Income – a $123 billion tax increase: This is a new, 3.8 percentage point surtax on investment income earned in households making at least $250,000 ($200,000 single). This would result in the following top tax rates on investment income:

The table above also incorporates the scheduled hike in the capital gains rate from 15 to 20 percent, and the scheduled hike in dividends rate from 15 to 39.6 percent.

The Obamacare “Haircut” for Medical Itemized Deductions – a $15.2 billion tax increase:

Currently, those Americans facing high medical expenses are allowed a deduction to the extent

Capital Gains

Dividends

Other*

2012

15%

15%

35%

2013+ (current law)

23.8%

43.4%

43.4%• Page2

that those expenses exceed 7.5 percent of adjusted gross income (AGI). This tax increase imposes a threshold of 10 percent of AGI. By limiting this deduction, Obamacare widens the net of taxable income for the sickest Americans. This tax provision will most harm near retirees and those with modest incomes but high medical bills.

The Obamacare Medicare Payroll Tax Hike — an $86.8 billion tax increase: The Medicare payroll tax is currently 2.9 percent on all wages and self-employment profits. Under this tax hike, wages and profits exceeding $200,000 ($250,000 in the case of married couples) will face a 3.8 percent rate instead. This is a direct marginal income tax hike on small business owners, who are liable for self-employment tax in most cases. The table below compares current law vs. the Obamacare Medicare Payroll Tax Hike:

Americans for Tax Reform is a non-partisan coalition of taxpayers and taxpayer groups who oppose all tax increases. For more information or to arrange an interview please contact John Kartch at (202) 785-0266 or by email at jkartch@atr.org.

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Lots of Recoverable Oil, But One Non-Recoverable President

SEPTEMBER 16, 2012

By John Ransom

9/14/2012

There was a time in this country when ordinary people understood the connection between high gas prices and a sluggish economy. The pain they felt wasn’t just at the pump, but also at the office and in the warehouse.

Higher prices for gas meant job insecurity, slashing department budgets and less money at bonus time, if bonus time actually occurred at all.

There was time in this country when even government economists and network journalists knew this fact.

Over the last decade the biggest problems  in our economy has been massive new spending by state, local and the federal government and the lack of stable, low prices for energy.

After adjusting for inflation, oil prices reached a low of $16.80 in today’s dollars in 1998. Since then, with temporary lulls due to a slow economy, the price of oil has marched upward until it now stands at $98 per barrel.

The last time we saw this type of oil price action was back in the Whip Inflation Now days of Ford and Carter, who also presided over expansionist monetary policies.

 

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Could it be that unemployment, high gas prices, massive state spending and the loose monetary policies that go along with government control are all related?

Duh.

As our friends over at Political Calculations have observed, there is a connection between high gas prices and unemployment.

We define “high gasoline prices” as being when the national average price of a gallon of regular unleaded gasoline in the United States rises above $3.50 per gallon, in terms of 2011-12 U.S. dollars. This price level appears to be significant in affecting both the spending of U.S. consumers, who respond by cutting back their spending on other goods and services, and the cost of doing business for U.S. employers, who face higher fuel and transportation costs, both directly and indirectly through their supply chains.

Previously, we’ve observed that whenever the national average price of gasoline crosses this level, the number of seasonally-adjusted initial unemployment insurance claims that are filed each week is affected some two to three weeks later. If it rises above the $3.50 per gallon mark, we observe an upward shift in the number of new jobless claims being filed and if it falls below it, we observe a downward shift in the number of new jobless claims being filed each week.

So in the midst of a worldwide recession, why are oil prices continuing to stay at $98 per barrel?

Well, like all of your other questions, the answer to that one is money.

As Milton Friedman observed inflation is always a monetary phenomenon.

Central banks have worked overtime injecting liquidity into the economy worldwide. The result has been inflation in things like oil prices, houses, gold, stock markets and food while our economy continues to be stuck in neutral in the United States.

Inflation of course can be the natural outcome of an economy that is overheated. But in this case, however, it is as if bankers and policy makers have deliberately given a patient a high-grade fever in order to cure them of pneumonia.

Welcome to QE1, QE2 and now bigger than ever QE3.

And why exactly have we injected so much money into the economy?

Primarily it has been done to support an unprecedented expansion on national government.

National debt over the last decade has soared from about one third of our GDP to 106 percent of our GDP, corresponding with high gas prices and sluggish economic growth.

And this just in: Guess who has the largest amount of oil reserves in history? That’s right: the U-S-A.

“In fact, the U.S. has a mind-boggling 1.4 trillion barrels of oil,” writes Investors Business Daily, “enough to ‘fuel the present needs in the U.S. for around 250 years,’ according to the Institute for Energy Research. The problem is the government has put most of this supply off limits.”

We have lots of recoverable oil it seems, but we don’t have a recoverable president of the United States.

Or a recoverable central bank.

It’s time to change them both.

To do otherwise is just stupid.

John Ransom

John Ransom is the Finance Editor for Townhall Finance. You can follow him on twitter@bamransom and on Facebook: bamransom.

OBAMA SUFFERS AMNESIA BLAMING BUSH FOR ECONOMY

 

WND ANALYSIS

OBAMA SUFFERS AMNESIA BLAMING BUSH FOR ECONOMY

Democrats pumped subprime mortgage market, triggering banking collapse

Published: 1 day ago

by JEROME R. CORSI Email | Archive

Jerome R. Corsi, a Harvard Ph.D., is a WND senior staff reporter. He has authored many books, including No. 1 N.Y. Times best-sellers “The Obama Nation” and “Unfit for Command.” Corsi’s latest book is “Where’s the REAL Birth Certificate?”

 

In the current narrative presented by Democratic Party operatives, the banking industry collapse of September 2008 was caused by tax cuts under George W. Bush and supply-side economics tracing back to the era of Ronald Reagan.

The narrative, however, ignores the personal responsibility Barack Obama and Democratic Party operatives played in creating the subprime mortgage market, beginning with the passage of the Community Reinvestment Act of 1977.

The 2008 banking collapse was triggered by a series of failures in the mortgage-backed securities market resulting from massive defaults in the subprime mortgage market and derivatives supporting the mortgage market that caused Lehman Brothers and Bear Stearns to go bankrupt. Financial giants such as Freddie Mac, Fannie Mae, Merrill Lynch and AIG threatened to follow suit, as detailed by the Guardian of London.

As WND reported in May 2009, Obama himself played a role as an activist lawyer in Chicago, representing ACORN in the 1994 case Buycks-Roberson v. Citibank Federal Savings Bank. In the case, ACORN pressed Citibank to make more loans to marginally qualified African-American applicants “in a race neutral way.”

ACORN Housing, then a nationwide organization with offices in more than 30 cities, used the Citibank litigation to push the group’s radical agenda to get subprime homebuyers mortgages under the most favorable terms available.

Community Reinvestment Act of 1977

The Community Reinvestment Act, or CRA, was signed into law by President Jimmy Carter in 1977 with the goal of forcing banks to provide credit to businesses and homeowners with poor credit.

The CRA’s purpose was to stop banks from “red-lining,” or refusing to lend to people in low-income areas because the risk of the loan not being repaid was too high.

Even though lending to people with poor credit is inherently risky, the Carter administration was intent on forcing banks to accept a social responsibility to provide credit to homeowners and businesses in low-income neighborhoods.

The CRA was super-charged during the Clinton administration with a set of new rules that allowed subprime mortgages to be securitized.

Federal Reserve Chairman Ben Bernanke, in a speech to the Community Affairs Research Conference in Washington, D.C., on March 30, 2007, noted a 1992 law passed during the Clinton administration expanded the CRA market by requiring the government-sponsored enterprises Fannie Mae and Freddie Mac to securitize “affordable housing loans,” a euphemism widely understood to mean low-income housing loans.

Clinton expands subprime mortgage market

Securitization of mortgages into bonds, a process that became a multi-trillion-dollar business in the 1990s, increased dramatically the liquidity, or amount of money available, to make new home loans.

Because mortgage originators could sell their mortgages to investment bankers, creating mortgage-backed securities, mortgage originators did not have to hold the mortgage in their portfolio. As a result, mortgage lenders could more easily engage in riskier lending, including lending to less qualified buyers in the subprime market.

By allowing CRA-generated and other subprime mortgages to be included in mortgage-backed securities, the Clinton administration advanced a social agenda to extend homeownership into inner-city poverty, where prospective homeowners were typically not qualified to obtain a mortgage.

By definition, subprime lenders are not credit-worthy under normal lending standards. They typically cannot meet normal lending requirements to verify income and have a history of credit problems.

Gretchen Morgenson and Joshua Rosner, in their 2011 book “Reckless Endangerment,” detailed how the subprime mortgage crisis resulted in the collapse of financial institutions in September 2008. The authors demonstrated, as noted on page 3 of the book, how Clinton’s “calamitous” homeownership strategy developed and “came to blow up the economy.” The authors calls it a “story of greed, good intentions, corporate corruption and government support.”

In the aftermath of the U.S. government takeover of Fannie and Freddie, attention focused on three prominent Democrats who served as Fannie Mae executives: Franklin D. Raines, former Clinton administration budget director; James Johnson, former aide to Democratic Vice President Walter Mondale; and Jamie Gorelick, former Clinton administration deputy attorney general.

All three prominent Democrats earned millions in questionable compensation while serving as top Fannie Mae executives.

Raines earned $90 million in his five years as Fannie Mae CEO, from 1999 to 2004; Johnson earned $21 million in just his last year serving as Fannie Mae CEO, serving from 1991 to 1998; and Gorelick earned an estimated $26 million serving as vice chair of Fannie Mae from 1998 to 2003.

All three were subsequently involved in mortgage-related financial scandals concerning their stewardship at Fannie Mae.

Franklin Raines

Franklin Raines’ problems began in 2004, when Fannie Mae’s regulator, the Office of Federal Housing Enterprise Oversight, or OFHEO, and the Security and Exchange Commission’s top accountant issued reports charging that under Raines’ stewardship Fannie Mae had misstated earnings for three and a half years.

The $9 billion restatement of earnings required by the OFHEO and SEC ended up wiping out 40 percent of Fannie Mae’s originally stated profits from 2001 to mid-2004.

Raines resigned from Fannie Mae in December 2004, with a $19 million severance package.

Raines continued playing the victim until April 2008, when he and two other Fannie Mae top executives were ordered in a civil lawsuit to pay nearly $31.4 million for their roles in what amounted to an Enron-like accounting scandal.

Raines and the other Fannie Mae executives were accused in the civil suit of manipulating Fannie Mae books to manufacture earnings over a six-year period that stretched from 1998 through 2004 to trigger for themselves millions of dollars in otherwise unearned bonuses.

In the final settlement, Raines was also forced to give up Fannie Mae stock options then valued at $15.6 million.

A controversy broke out when the Washington Post noted in July 2008 Raines had taken calls from Barack Obama’s presidential campaign seeking his advice on mortgage and housing policy matters.

Republican presidential candidate Sen. John McCain ran a television advertisement using the Post article as a source to claim Raines was an Obama adviser. But Raines issued a denial that he was an adviser to Obama or that he had provided the Obama campaign with advice on housing or economic matters.

In September 2008, as the controversy developed, the Washington Post stood behind its original report, noting Raines statement that month that he never provided Obama’s campaign with advice on housing or economic matters contradicted what he told the newspaper in July 2008.

James Johnson

James Johnson was appointed to head Obama’s vice presidential selection committee until a controversy concerning an alleged $7 millions in questionable real estate loans he received on favorable terms from failed sub-prime mortgage lender Countrywide Financial surfaced and forced him to resign.

The controversy over Johnson began when the Wall Street Journal reported June 7, 2008, that Countrywide had extended to Johnson and Raines millions of dollars in favorable home loans because they were “Friends of Angelo,” or “FoA,” as such preferential borrowers were known in the inner circles of Countrywide.

The Wall Street Journal carefully noted there is nothing illegal about a mortgage firm treating some borrowers better than others.

Yet, when two top Fannie Mae executives received the preferential mortgage treatment, it spelled political trouble for the government-sponsored, shareholder-owned company, as well as for the Democratic Party and the Obama presidential campaign with which Raines and Johnson were connected.

A lawyer for Johnson insisted to the Wall Street Journal that Johnson’s Countrywide home mortgage loans were within industry practice; Raines did not respond to the newspaper’s requests to comment.

Jamie Gorelick

In 1998, Fannie Mae Vice Chairman Jamie S. Gorelick received a bonus of $779,625, despite her alleged involvement in a scandal in which Fannie Mae employees falsified signatures on accounting transactions to manipulate books to meet 1998 earning targets. The targets, in turn, triggered multi-million-dollar bonuses for top executives, including Gorelick.

The 1998 bonus reported for then-Fannie Mae Chairman and CEO James Johnson was $1.932 million. Then-Chairman-designate Raines received $1.11 million.

After leaving Fannie Mae, Gorelick encountered controversy a second time, over an alleged conflict of interest when a 1995 memo she authored as deputy attorney general at the Justice Department during the Clinton administration surfaced while she was a member of the 9/11 commission.

The memo, which outlined a policy that became known as the “Gorelick Wall,” appeared to put in place barriers that barred federal anti-terrorist criminal investigators from accessing various federal records and databases that may have assisted them in their criminal investigations.

The Case of CH2M HILL: $2 Billion in Crony Stimulation

- Accuracy In Media - http://www.aim.org -

The Case of CH2M HILL: $2 Billion in Crony Stimulation

Posted By Rusty Weiss On November 30, 2011 @ 12:11 pm In Special Report | 49 Comments

“Not very much.”

This was the answer that the Department of Energy Secretary, Steven Chu, recently provided when asked of the amount the federal government will be able to recover from the Solyndra bankruptcy.

“Not very much.”

The same could be said for the amount of research that the federal government has put into other companies involved in the Solyndra scandal. One such company, CH2M HILL, should be next on the House GOP radar, having used nearly $10 million in stimulus funding to design the elaborate Solyndra facility in Fremont, California. While CH2M HILL is in no danger of suffering the same bankruptcy plight, they also languish in a pool of mismanaged taxpayer funds. The firm has a history of fraud, kickbacks, violations, and cover-ups, not to mention one particular parallel with the Solyndra scandal—layoffs. This, despite receiving almost $2 billion in stimulus funding.

Why, having been awarded more than three times as much funding as Solyndra, has CH2M escaped serious scrutiny? Perhaps it is the significant donations and lobbying efforts they have doled out, targeting key Democrats in charge of the stimulus. Perhaps it is the no-bid contracts, the influence they had in shaping the stimulus, or the revolving door of employees and White House administrative positions that have allowed them to continue their dominance in procuring government funding.

Now, however, is the time to place the company that has become a consistent government favorite, under the microscope.

 

Why Analyze Energy Department Favorites?

Even as the House Oversight and Government Reform Committee investigates the handling ^[1] of over $35 billion in stimulus funding granted to the Department of Energy (DOE) in 2009^[1]—a hearing prompted by the failed loan program that funded the now bankrupt solar panel manufacturing company, Solyndra—some fans ^[2] of the administration are calling for the President to stay the ‘green jobs’ course, citing the potential to add three million more jobs through his latest bill.^[2]

President Obama is currently marketing his American Jobs Act, another $447 billion stimulus bill masquerading as a job creation program. “We can’t wait,” has become the mantra ^[3] of a President and an administration desperate to see the job market reverse course.^[3] In order to better understand how money is being utilized, Republicans are trying to retrace the flow of dollars to companies that the Energy Department knew would fail ^[4], or rewarded without competition.^[4]

And it isn’t, as the President suggests ^[5], that Republicans want “dirtier air” and “dirtier water.” ^[5] It is simply that Republicans are tired of watching this administration turn taxpayer funds into dirty money.

The Department of Energy under Obama has continually thrown money into spurring economic development in the ‘green jobs’ or environmental cleanup industries. More often than not, funds rarely hit their intended target, rarely generate tangible job growth, and rarely succeed by any measure.  Testimony at the recent House Oversight subcommittee hearing ^[6] on the “Green Jobs Debacle,” led by Chairman Jim Jordan (R-OH), bears this out.^[6] Any question as to the stimulus program’s failure to create jobs dissipated when DOE Inspector General, Gregory H. Friedman, said in testimony, “…the political push to quickly create jobs and spur economic development didn’t match up with economic realities on the ground.” A report in The Washington Post indicates that Friedman and his department have uncovered $2.3 million in stimulus fraud and sparked five criminal prosecutions within the Energy Department alone.

Elliot P. Lewis, assistant inspector general for the Labor Department added, “Green jobs have not materialized, and therefore job placements had been much less than expected.”

Companies such as Solyndra and other alternative energy/environmental investments have at best only been able to produce short-term jobs. In addition to Solyndra, two other companies working on alternative energy products—Evergreen Solar and SpectraWatt ^[7]—received stimulus funding only to eventually file for bankruptcy. ^[7]

The problem?

Job creation in environmental or infrastructure projects only lasts as long as the stimulus funds are available.

Solyndra had been heralded ^[8] by the Obama administration as a prime example of how the Recovery Act could create new jobs while simultaneously promoting the President’s vision of renewable energy.^[8] Once a beacon of solar light in the progressive green jobs agenda, the defunct company had received a $535 million federal loan with the help of newly minted energy secretary, Steven Chu, only to find themselves staring down bankruptcy and the release of more than 1,100 workers.

But that massive loan only tells part of the story. Another company has, and continues to benefit, from cronyism, so-called job funding, and your money.

That company is CH2M HILL.

 

What is CH2M HILL?

CH2M HILL ^[9] is a $6.3 billion consulting, engineering, and construction firm with nine business groups in over 80 countries. ^[9] CFO Magazine reports that “the Colorado-based firm is the force behind some of the world’s best-known public-works projects,” including “overseeing the construction of London’s 2012 Olympic venues, the expansion of the Panama Canal, and several of the Environmental Protection Agency’s Superfund cleanup sites.”

In 2008, the Energy Department earmarked $6 billion ^[10] for the cleanup of nuclear waste from Cold War era sites throughout the United States. ^[10] They utilized the services of the CH2M HILL Plateau Remediation Company in one of the world’s largest environmental cleanup projects—the Central Plateau on the Hanford Nuclear Site in eastern Washington.

To aide in the Hanford cleanup efforts, CH2M was a major beneficiary of the stimulus, having been awarded four of the top ten contracts. The company currently boasts of $1.961 billion ^[11] in contracts from the Recovery Act, at least $1.36 billion of which was allocated for the Hanford cleanup project.^[11]

 

History of Problems

The DOE has a long history of funding nuclear clean-up programs, but shelling out $6 billion (more than double the typical allotment) from the stimulus to clean up 18 nuclear sites throughout the country was entering new territory.  Careful measures should have been taken to avoid contractors who had experienced cost overruns, safety violations, delays, or mismanagement of public funds. Yet, in the case of CH2M HILL, the opposite has been true.

An Associated Press ^[12] investigative report highlighted several past violations committed by CH2M —violations that were committed prior to the stimulus reward, including: ^[12]

• In 2004, the Energy Department withheld $300,000 from the firm for poor conduct.
• Between 2005 and 2006, the company was fined nearly $400,000 total for the radiological contamination of workers.
• A “major spill” occurred in 2007 that resulted in over $683,000 in both fines and settlements to local agencies.

There’s more.

Between January of 2002 and October of 2008, timecard fraud ^[13] at the CH2M HILL Hanford Group was “widespread” and “routine.”^[13]  A recent plea deal arranged for one employee states that “it was an accepted practice at CH2M HILL to pay hourly employees for hours claimed but not actually worked.” That employee, Carl Schroeder, claimed a total of 1,765 hours of overtime, at a cost of at least $50,000 which was billed to the federal government.

False claims and paid kickbacks ^[14] at the Hanford nuclear site between 2003 and 2005 led to a recent settlement in which CH2M HILL agreed to pay the federal government $1.5 million.^[14]  In this particular case, two employees made purchases from companies that they or their spouses owned, marked up the costs, and charged the DOE.

In 2006, a medical director for the Hanford site, Dr. Loren Lewis, was warning about CH2M HILL’s lack of concern regarding workers being exposed to beryllium dust. Beryllium is a by-product of the nuclear industry that, when exposed to people who are sensitive to the metal, can cause a debilitating and deadly respiratory disease. E-mails between Lewis and another doctor revealed that a Hanford employee had voiced concerns about CH2M HILL management. The employee was advising that beryllium-sensitized workers were having their protective work restrictions ignored; restrictions that were in place to protect those most prone to developing complications. One e-mail read, “The employee from yesterday came in today and had his work restriction removed. Someone needs to advised [sic] DOE that CH2M is not accommodating the new beryllium work restriction.” CH2M was openly exposing their workers to beryllium despite the obvious risks. In April of 2010, a DOE investigation into these incidents led to the dismissal of a nurse in the beryllium disease monitoring program. When Mary Sams, a head nurse at the site, tried to document the company’s attempts to remove work restrictions on an individual who may have had the disease, she was fired. This story was covered by a ProPublica report ^[15] revealing concerns that a crush of hiring and a lack of training may be exposing stimulus workers to beryllium dust. ^[15]

And in 2007, Washington Closure Hanford ^[16], a company partly owned by CH2M HILL, was fined $1.1 million for “improper compaction testing methods” and for having falsified documents “intended to assure the long-term structural stability of waste disposed in the landfill. ^[16]

With all of these issues occurring prior to receiving stimulus funding, either the DOE was not performing their due diligence, or they were simply turning a blind eye.

 

Donations to Democrats, Lobbying, and Industry Ties

How did a company with a sketchy track record such as CH2M HILL become the lucky recipient of an exorbitant amount of taxpayer money? It turns out that certain large companies were collaborating with the Energy Department on how to spend the money, long before a stimulus had even been passed. The Washington Post ^[17] reported that as far back as December of 2008, “when it became clear that Obama would introduce a huge spending bill to create jobs, Energy Department staff members began meeting with the contractors, including representatives from Bechtel National, CH2M HILL and other large firms” in an effort to begin “shaping their piece of the stimulus.”^[17] The result was a massive $6.4 billion plan that was championed by Senator Patty Murray (D-Wash.). Murray lobbied for the nuclear cleanup program’s inclusion in the stimulus bill because “hundreds of acres would be removed from the nation’s ‘footprint of contamination’ and that the projects were a perfect fit for stimulus spending because they would create jobs.” CH2M dutifully rewarded Murray’s efforts with $16,000 in political contributions ^[18] that same year. ^[18]

This certainly wasn’t the only example of ‘pay to play’ provided by the company. In fact, steering funds to benefit political allies may be another area in which CH2M resembles Solyndra.

Senator Maria Cantwell

A visit to the site in 2009 by Senator Maria Cantwell ^[19], Chairwoman of the Energy and Natural Resources Subcommittee, promoted the nearly $2 billion in stimulus funding and predicted a glut of hiring at the Hanford site.^[19]  Cantwell has received over $40,000 in campaign contributions ^[20] during her career from the lobbying group, Brownstein Hyatt, a law firm that has since received over $250,000 from CH2M HILL specifically for their lobbying services.^[20]

House Energy Committee Chairman Fred Upton (R-Mich.) has been investigating White House dealings ^[21] with the Solyndra loan, citing the administration’s monitoring of the application and loan process, along with the knowledge of a key investor for the company, George Kaiser.^[21]  Kaiser is an Oklahoma billionaire, and was a major fundraiser for Barack Obama’s presidential campaign in 2008. The Kaiser connection even caught the eye of the Los Angeles Times ^[22] when they asked the question point blank—“Is Obama using stimulus funds to reward his political contributors?”^[22]

CH2M HILL doesn’t necessarily have a smoking gun contributor like Kaiser. They do, however, have nearly $2 billion in total contracts generated from stimulus funding, which should generate some interest in the company’s finances. Let’s review…

During the 2009-2010 election cycles ^[18], CH2M contributed 60% of nearly $650,000 in campaign finances to Democrats. The top five total contributions were delivered to Democrats, including notable Obama allies such as the aforementioned Murray ($16,000), Barbara Boxer ($21,250) and Harry Reid ($12,500).^[23]

Years 2007-2008 ^[23] also saw contributions in favor of the Democrats, with Senator Barack Obama himself receiving the most lucrative contributions at over $45,000. ^[24]

But the company isn’t just a force for political contributions. Their monetary efforts show more muscle in the lobbying field than any other, something Obama once denigrated as a presidential nominee. TheCenter for Responsive Politics ^[24] reports that CH2M was lobbying their special interests via $455,000 worth of itemized expenditures in 2010.^[25]  The main recipients were Brownstein, as discussed, and the Podesta Group.

One of the more prominent lobbyists CH2M has employed is Matthew Chiller, Senior Federal Affairs Director. Chiller, according to the National Journal ^[25], worked as Legislative Director on the staff of four different Democrats, while also serving on the recount committee in 2000 for former Vice President Al Gore.^[26] His skills can be seen in a CH2M PowerPoint presentation ^[26] on how to secure state and federal funding, in which viewers are briefed on congressional earmarks, and given pointers on how to “work the earmark politically.”^[27]

Work it, they have.

Meanwhile, despite the President’s proclamation as a candidate ^[27] that he “… will finally end the abuse of no-bid contracts once and for all,”^[28] and despite the specific language in the Recovery Act that demands that stimulus contracts be competitively bid “to the maximum extent possible,” the CH2M Hill Plateau Remediation Company was awarded over $1 billion ^[28] in non-competitive, non-fixed price contracts.^[29] The DOE website ^[29] legitimizes this because the company was already under contract via a competitive process in 2008.^[30]

The Post report ^[17] reiterates that “The final version of the legislation included $6 billion for nuclear cleanup, and the department said it would negotiate with current contractors, rather than conduct a lengthy competitive bidding process, to meet spending deadlines.” ^[31]

In addition to all of this, former employees of CH2M have been rewarded rather handsomely the past few years, having held, or will hold, plum appointments on administrative boards. Former CH2M HILL CTO, Dan Arvizu ^[30], is currently serving a six-year term on the National Science Board for the National Science Foundation.^[32]  In 2009, Lee McIntire ^[31], current Chairman and CEO, was appointed by the Obama Administration to the U.S.-Brazil CEO Forum.^[33]  In March, he joined the President ^[32] on a trip to Latin America.^[34]  And just recently in July, President Obama announced his intent to nominate Jack Baylis ^[33], former Senior Vice President at CH2M, to an administrative post on the National Infrastructure Advisory Council.^[35]

Perhaps most interesting may be the influence of one Robert G. Card ^[34], President of CH2M HILL’s Water and Energy Division.^[36]  Card previously served as the Undersecretary of Energy for the DOE.  He resigned from the position in 2004, returning to CH2M when it came to light that a $74 million program to help workers exposed to toxic chemicals, had paid just one claim of $15,000.

During his tenure at the DOE, Card managed to steer billions of dollars in nuclear waste cleanup projects to his former employer, to the point that critics in Congress were scrutinizing his ties to the industry. The New York Times ^[35] reported that one of those critics, Harry Reid, questioned whether Card’s actions constituted a conflict of interest. ^[37] Reid was quoted as saying, “Until those questions are answered, the integrity of Mr. Card’s decisions will be in doubt.”

Integrity seemingly wasn’t an issue however, when, in 2009, Card’s company, recipients of billions in DOE stimulus funding yet again, was contributing $8,000 toFriends for Harry Reid ^[36]. ^[38]

While White House officials have denied interjecting in deals for companies that have backed the President and his party—such as Solyndra and CH2M—questions remain as to why those most cozy with the administration have been reaping the benefits of the stimulus bill.

 

Rewarding Radicals

Of course, collaborating with, cavorting with, and rewarding radicals in the administration certainly doesn’t hurt when trying to secure stimulus funding either—especially when one of those prominent radicals helped in crafting the bill. Phil Kerpin of Americans for Prosperity had confirmed that former Obama ‘Green Energy Czar,’ Van Jones, was on the board of the Apollo Alliance, a group which helped to write the stimulus bill ^[37], and a group that Glenn Beck has said “aspires to destroy the U.S. economy by having the federal government fund green jobs scams.”^[39]   One particular aspect of the bill was a $60 billion request for green jobs funding, something the Apollo Alliance lobbied for, which was included in the bill the President signed in February.

A mere month later, the Aspen Institute ^[38] held an award ceremony, co-sponsored by CH2M HILL, which saw Jones accept recognition in the category of Individual Thought Leadership.^[40]  Jones, in addition to taking part in the influence of the Apollo Alliance group, also served as a special adviser for green jobs at the White House Council on Environmental Quality, and certainly had a role in deciding how stimulus funds were to be spent, having participated in an Economic Stimulus Summit in 2009 hosted by Vice President Joe Biden. A few months after accepting the award for individual thought, Jones was finally being exposed ^[39]by various conservative media, led by blogger Trevor Loudon, as a one-time self-described communist. ^[41]  He resigned from his White House special adviser position in September of that same year.

Other Van Jones/CH2M connections:

• On July 30, 2008, Jones and Lee McIntire ^[40] attended an event also hosted by the Aspen Institute, called the Arctic Expedition for Climate Action.^[42]
• Jones was a keynote speaker at the Boston College Center’s 2009 International Corporate Citizenship Conference ^[41], co-sponsored by CH2M HILL.^[43]  The BCCCC described Jones as, “one of the most inspirational environmental champions and social entrepreneurs in the United States.”
• Jones and Jill Sideman of CH2M both serve as members of the San Francisco Clean Tech Advisory Council ^[42].^[44]

 

Inflating Job Numbers

What would be the best way to stimulate the economy through the green jobs industry? Creating permanent jobs and lowering the unemployment rate? Not in the Obama administration.

August of 2010 saw the release of a Government Accountability Report ^[43] (GAO) which contained some peculiar language. KTVZ, a central Oregon TV news station, reported that the Department of Energy was using “a more unorthodox methodology to inflate job creation in some of its reports.”^[45] The method, unbelievably, involved counting the number of ‘lives touched,’ and was highly touted by CH2M HILL on their website. The company was boasting of 4,547 lives touched as of March, 2010.

Additionally, the people at CH2M HILL were not shy about explaining why they, and the DOE, were using such terminology. They saw nothing wrong in inflating the numbers. A spokesperson from the CH2M HILL Plateau Remediation Company explained:

“Lives Touched” is a figure that the U.S. Department of Energy (DOE) uses to track the amount of people who have been positively affected by the Recovery Act funds. This total would include people who have been provided full time employment (i.e. saved and created jobs) through the Recovery Act and people who at some point have supported a project funded by the Recovery Act.

Cameron Hardy, DOE spokesman, basically reiterated that point: ^[46]

“Lives touched” represents the cumulative number of full-time, part-time, and temporary workers that have been employed with EM Recovery Act funds at some point since the start of the program in April 2009.

To underscore the effect such smoke and mirrors terminology has on job reports, the Recovery.gov website was reporting 2,466 jobs funded at the time the ‘lives touched’ story was being revealed, a full 2,081 less than CH2M HILL was counting in their own reports. This allowed companies to brag about numbers far and above what they were actually hiring.  A tidy little play on numbers, all for the Administration’s benefit.

 

Temporary Employment

Vice President Joe Biden has blasted Republicans for having the audacity to insinuate that the Obama jobs bill was a temporary fix.

“Let me tell you,” Biden shouted at a Public Safety Roundtable ^[44] in Philadelphia, “it’s not temporary when that 911 call comes in and a woman’s being raped and a cop shows up in time to prevent the rape.”^[47]

But another similarity between companies such as Solyndra and CH2M HILL is exactly that—temporary employment. When word was received that the company’s Hanford nuclear waste branch had been awarded stimulus funding back in 2009 ^[45], the celebration was on.^[48]  Dee Milliken, communications officer at CH2M explained that the company quickly hired nearly 1,300 workers through a ‘job fair’ shortly thereafter.

Geoff Tyree, a DOE spokesman explained that “We were provided with the funding and we were told to create jobs.”

He added, “It was meant to stimulate the economy now.”

A report by SeattlePI.com ^[46] at that time seems to contradict the urgency on display at the Hanford site.^[49]  Gerry Pollet, executive director of Heart of America Northwest explained that, while the DOE was accepting stimulus funding with the intent of expediting the cleanup, they were simultaneously requesting that Washington State delay the completion date. He summarized the contradiction thusly, saying, “While we are spending $2 billion extra on accelerating cleanup, the Energy Department is insisting on relaxing enforceable schedules.”

Pollett also raised concerns about the profit margins on some of the Hanford projects, saying they were too high and were “inappropriate for stimulus money.”
Meanwhile, a Wall Street Journal ^[10] report worried about what stimulating the economy now meant for the long haul, pointing out that shoveling money at nuclear-waste projects was nothing more than a short-term Band-Aid on a long-term wound. ^[50]

“… projects that employ people quickly are often considered ‘low-hanging fruit’ and can fail to set the stage for long-term economic growth.”

Sure enough, when the low-hanging fruit began to go bad, when the stimulus funding ran out for the company at the Hanford site, all of those jobs—and then some—were eliminated. Reports of staff reductions at CH2M began in January when KEPR-TV ^[47] announced that 1,350 layoffs were coming in September due to the end of stimulus funding.^[51] The company had to organize a job fair for those affected by these layoffs, as well as an additional 1,000 laid off men and women at the contractor’s Hanford site. Hanford started the year with 12,000 workers but lost 2,000 positions nine months later.The News Tribune ^[48] interviewed several employees who lost their jobs at the company’s Hanford cleanup site when stimulus funding dissipated, many of whom understood that their situation was indeed temporary. ^[52] Whether or not these employees have found new employment is unknown. As the Fiscal Times ^[45] reports, unlike the ‘lives touched’ metric,’ there is no government organization tracking the progress of workers who have lost their jobs due to the stimulus. ^[53]

 

The Solyndra/CH2M Hill Relationship

Within the $535 million loan to Solyndra were a number of sub-awards ^[49] to other vendors, 40 payments of which were greater than $25,000 each. ^[54] The largest sub-award went to CH2M HILL, to the tune of $9.6 million for their construction engineering services. CH2M used the nearly $10 million sub-award todesign Solyndra’s ^[50] solar manufacturing plant in Fremont, California. ^[55]

John Corsi, the company’s Vice President of Media and Public Relations explains, “CH2M HILL performed some design services and helped with a technical engineering report.”^[56]

When asked about the price tag, Corsi stated that, “Our rates were consistent with market rates for similar work.”

He added, “This work was secured through an open, competitive, and transparent procurement process,” a contradiction to the aforementioned Washington Post report which stated that consulting firms had essentially shaped and awarded themselves pieces of the stimulus.

With millions of dollars having been secured, CH2M clearly outdid themselves on the Solyndra project, building a facility the likes that had never been seen before in the heart of Silicon Valley.  The facility covers 300,000 square feet, ran a price tag of $733 million, and was equated by some to the Taj Mahal. Bloomberg News ^[51]reported on some of the extravagant amenities—amenities which might surprise for a company using taxpayer funds to maintain operations. ^[57]

“It wasn’t just any factory. When it was completed at an estimated cost of $733 million, including proceeds from a $535 million U.S. loan guarantee, it covered 300,000 square feet, the equivalent of five football fields. It had robots that whistled Disney tunes, spa-like showers with liquid-crystal displays of the water temperature, and glass-walled conference rooms.”

All on your dime.

While the company deflected any specific questions about building design, Corsi did state that, “The client (Solyndra) made all decisions regarding the final design specs.”

He added, “Any vetting of the relative merits of the project are the responsibility of the government.”

Another company that assisted CH2M Hill in the design of the Solyndra facility also declined comment. Erik Sueberkrop, of Studios Architecture, was on the design team ^[52] for the manufacturing and office facility in Fremont, California. ^[58] He stated only, “As I am not at liberty to discuss, there is no comment at this time.” The Studios website ^[53] meanwhile, has scrubbed detailed links to the facility’s architecture, interior, and planning links. ^[59]

While the building remained a feat of engineering, neither company saw fit to take credit now that the Solyndra scandal has broken. Each declined comment when asked to provide images or blueprints of the facility, and ignored a request to provide expense reports for the use of their stimulus money on the Solyndra project.

 

Summary

In the wake of several Energy Department scandals it is important to analyze how taxpayer funded projects have developed, and what mistakes were made along the way. It is not a time to rush infrastructure funding in the hopes that temporary jobs will be created in an election year; it is a time to analyze where the funding is going, who is responsible for spending it, and how they will be held accountable for their actions. It is not a time to blindly grant multi-million dollar loans to companies that administration officials know will fail; it is a time to scrutinize the potential use of every dollar so they are not wasted. It is not a time for crony capitalism, but rather a time for competent capitalism.

Perhaps the case of CH2M Hill will serve to remind our government of a commitment to be responsible and restrained with the American people’s money.

 

Sources

¹ Lochhead, Carolyn. “Energy Stimulus Program Plagued by Problems.” San Francisco Chronicle. 3 Nov. 2011. <http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/11/03/MNSR1LPINB.DTL&gt;.

²  Bonfiglio, Olga. “Van Jones Has an Answer – Work toward the Future, Stop Bemoaning the past (viewpoint).” MLive.com. 09 Nov. 2011.

<http://www.mlive.com/opinion/kalamazoo/index.ssf/2011/11/van_jones_has_an_answer_-_work.html&gt;.

³ Thomas, Shawna. “Obama Delivers ‘We Can’t Wait’ Stump on Head Start Changes.” First Read. MSNBC, 08 Nov. 2011.

<http://firstread.msnbc.msn.com/_news/2011/11/08/8702113-obama-delivers-we-cant-wait-stump-on-head-start-changes&gt;.

⁴ Mosk, Matthew, Brian Ross, and Ronnie Greene. “Emails: Obama White House Monitored Huge Loan to ‘Connected’ Firm” ABCNews.com. 13 Sept. 2011.

<http://abcnews.go.com/Blotter/emails-obama-white-house-monitored-huge-loan-connected/story?id=14508865&gt;.

⁵“Obama: GOP Wants “Dirtier Air, Dirtier Water, Less People With Health Insurance” RealClearPolitics. 17 Oct. 2011. <http://www.realclearpolitics.com/video/2011/10/17/obama_gop_wants_dirtier_air_dirtier_water_less_people_with_health_insurance.html&gt;.

⁶ O’Keefe, Ed. “Energy Department Couldn’t Manage Stimulus Money, Watchdog Says” The Washington Post. 02 Nov. 2011.

<http://www.washingtonpost.com/blogs/federal-eye/post/energy-department-couldnt-manage-stimulus-money-watchdog-says/2011/11/01/gIQAhunSeM_blog.html?hpid=z1&gt;.

⁷ “Solyndra Not Sole Firm To Hit Rock Bottom Despite Stimulus Funding” Fox News. 15 Sept. 2011. <http://www.foxnews.com/politics/2011/09/15/despite-stimulus-funding-solyndra-and-4-other-companies-have-hit-rock-bottom/&gt;.

⁸ “Pr. Obama at Solyndra (1) California Solar Plant” YouTube. 26 Mar. 2010. <http://www.youtube.com/watch?v=KYiJ-_K9NCo&gt;.

⁹ Stuart, Alix. “80 Countries and Counting.” CFO.com. 01 June 2011. <http://www.cfo.com/article.cfm/14577066/1/c_14577475?f=magazine_alsoinside&gt;.

¹⁰ Tracy, Tennille. “Stimulus Dollars Benefit Nuclear-Waste Cleanup” The Wall Street Journal. 04 Oct. 2010. <http://online.wsj.com/article/SB10001424052748704631504575532384126648488.html?mod=WSJ_Energy_leftHeadlines&gt;.

¹¹ Tyree, Geoff. “Backgrounder on Recovery Act Jobs Created at Hanford.” Memo. Hanford. Web. 10 Nov. 2011. <http://www.hanford.gov/news.cfm/DOE/091030BGHanfordARRAJobs.pdf&gt;.

¹² Dininny, Shannon. “Feds Ready to Spend $2 Billion on Hanford Cleanup.” Breitbart.com. Associated Press, 28 Mar. 2009.                                                                                       <http://www.breitbart.com/article.php?id=D98F3GQG2&gt;.

¹³ Cary, Annette. “Routine Timecard Fraud Alleged at Former Hanford Contractor.” Tri-City Herald. 04 Nov. 2011. <http://www.tri-cityherald.com/2011/11/04/1704686/routine-timecard-fraud-alleged.html&gt;.

¹⁴ “CH2M Hill Unit Will Pay $1.5M to Settle Case.” The Business Journals. 22 Sept. 2011. <http://www.bizjournals.com/denver/news/2011/09/22/ch2m-hill-unit-will-pay-15m-to.html?page=all&gt;.

¹⁵ Epstein, David. “Stimulus Workers Confront Legacy of Contamination at Nuclear Sites.” ProPublica. 03 May 2010.

<http://www.propublica.org/article/all-beryllium-stimulus-workers-confront-legacy-of-contamination&gt;.

¹⁶ Opalski, David D. “Stipulated Penalties for Violations of CERCLA Requirements at the Environmental Restoration Disposal Facility.” Letter to Keith A. Klein. 27 Mar. 2007. MS. Richland, Washington.

¹⁷ Kindy, Kimberly. “Nuclear Cleanup Contractors Cited for Errors, Overruns Getting Stimulus Money.” Washington Post 18 May 2009. Print.

¹⁸ “Ch2m Hill | Influence Explorer: Campaign Finance, Lobbying, Regulations, Federal Spending, Contractor Misconduct and Advisory Committees.” Influence Explorer. The Sunlight Foundation. Web. 10 Nov. 2011.

<http://staging.influenceexplorer.com/organization/ch2m-hill/ef389f39acc141b7a9b554048ae9d95d?cycle=2010&gt;.

¹⁹ Cary, Annette. “Hanford Spending Could Create 12,400 Jobs.” Tri-City Herald. 20 Feb. 2009. <http://www.tri-cityherald.com/2009/02/20/484633/hanford-spending-could-create.html&gt;.

²⁰ “Campaign Finance/Money – Top Donors – Career” OpenSecrets.org. Web. 10 Nov. 2011. <http://www.opensecrets.org/politicians/contrib.php?cycle=Career&gt;.

²¹ Mosk, Matthew, and Ronnie Greene. “Solyndra Investigation: Probe Into White House Role in Massive Energy Loan” ABC News. 02 Sept. 2011.

<http://abcnews.go.com/Blotter/solyndra-investigation-probe-white-house-role-massive-energy/story?id=14434588&gt;.

²² “Solyndra and the Stimulus.” The Los Angeles Times. 02 Sept. 2011. <http://articles.latimes.com/2011/sep/02/opinion/la-ed-solyndra-20110902&gt;.

²³ “Ch2m Hill | Influence Explorer: Campaign Finance, Lobbying, Regulations, Federal Spending, Contractor Misconduct and Advisory Committees.” Influence Explorer. Web. 10 Nov. 2011.

<http://staging.influenceexplorer.com/organization/ch2m-hill/ef389f39acc141b7a9b554048ae9d95d?cycle=2010&gt;.

²⁴ “Ch2m Hill | Influence Explorer: Campaign Finance, Lobbying, Regulations, Federal Spending, Contractor Misconduct and Advisory Committees.” Influence Explorer. Web. 10 Nov. 2011.

<http://staging.influenceexplorer.com/organization/ch2m-hill/ef389f39acc141b7a9b554048ae9d95d?cycle=2008&gt;.

²⁵ “Lobbying Spending Database – CH2M HILL, 2011″ OpenSecrets.org. Web. 10 Nov. 2011. <http://www.opensecrets.org/lobby/clientsum.php?id=D000000492&gt;.

²⁶ Sangillo, Gregg. “CH2M Hill Hires Democratic Aide – Under The Influence – Under the Influence.” National Journal. 13 Oct. 2009.

<http://undertheinfluence.nationaljournal.com/2009/10/ch2m-hill-hires-democratic-aid.php&gt;.

²⁷ Chiller, Matthew, Roger W. Flint, and Dale Gabel. “State/Federal Funding: How to Get Started, Where to Find It, How to Be Competitive.” Google Docs. CH2M Hill. Web. 10 Nov. 2011.

²⁸ Rosen, James. “Obama Administration Steers Lucrative No-Bid Contract For Afghan Work To Dem Donor | Fox News.” Fox News. 25 Jan. 2010. <http://www.foxnews.com/politics/2010/01/25/obama-administration-steers-lucrative-bid-contract-afghan-work-dem-donor/&gt;.

²⁹ Non-Competitive Non-Fixed-Price Contract Awards. Rep. Federal Procurement Data System, 09 Sept. 2009. <http://www.recovery.gov/Transparency/Documents/NonCompetetitiveNonFixedContractAwards.pdf&gt;.

³⁰ “Recovery FAQ.” Hanford Site. Web. 10 Nov. 2011. <http://www.hanford.gov/page.cfm/FAQ&gt;.

³¹  Kindy, Washington Post.

³² “Dan Arvizu, Former CH2M Hill CTO, to Serve Six-Year Term on National Science Board | GovCon Executive.” GovCon Executive. 08 Aug. 2011. <http://www.govconexecutive.com/2011/08/dan-arvizu-former-ch2m-hill-cto-to-serve-six-year-term-on-national-science-board/&gt;.

³³ Holben, Emily. “Lee McIntire Appointed by Obama Administration to U.S.-Brazil CEO Forum.” CH2M HILL Alumni Connect. 05 Aug. 2009. <http://alumni.ch2mhill.com/news/28964/CH2M-HILL-News-Lee-McIntire-appointed-by-Obama-Administration-to-U.S.-.htm&gt;.

³⁴ “Press Gaggle by Press Secretary Jay Carney and Deputy National Security Advisor for International Economic Affairs Mike Froman Previewing the President’s Trip to Latin America.” The White House. 15 Mar. 2011. Web. 10 Nov. 2011. <http://www.whitehouse.gov/the-press-office/2011/03/15/press-gaggle-press-secretary-jay-carney-and-deputy-national-security-adv&gt;.

³⁵ “President Obama Announces More Key Administration Posts.” The White House. 11 July 2011. Web. 10 Nov. 2011. <http://www.whitehouse.gov/the-press-office/2011/07/11/president-obama-announces-more-key-administration-posts&gt;.

³⁶ “Robert G. Card / CH2M HILL.” CH2M HILL News Room. Web. 10 Nov. 2011. <http://newsroom.ch2mhill.com/pr/ch2m/robert-g-card.aspx&gt;.

³⁷ Firestone, David. “Questions Raised Over Energy Dept. Official’s Industry Ties” The New York Times. 06 June 2002. <http://www.nytimes.com/2002/06/06/us/questions-raised-over-energy-dept-official-s-industry-ties.html&gt;.

³⁸ “Expenditure Detail.” OpenSecrets.org. Web. 10 Nov. 2011. <http://www.opensecrets.org/pacs/expenddetail.php?cycle=2010&gt;.

³⁹ Vadum, Matthew. “Communist Green Jobs Czar Van Jones and His Meddling Ways.” NewsReal Blog. 25 Aug. 2009. <http://www.newsrealblog.com/2009/08/25/communist-green-jobs-czar-van-jones-and-his-meddling-ways/&gt;.

⁴⁰ The Aspen Institute. ASPEN INSTITUTE ANNOUNCES WINNERS OF SECOND ANNUAL ASPEN INSTITUTE ENERGY AND ENVIRONMENT AWARDS. 18 Mar. 2009. <http://www.aspenenvironment.org/media_/images/eeawards031809.pdf&gt;.

⁴¹ Kincaid, Cliff. “Van Jones Scandal Threatens Obama Presidency.” Accuracy in Media, 05 Sept. 2009. <http://www.aim.org/aim-column/van-jones-scandal-threatens-obama-presidency/&gt;.

⁴² “ARCTIC EXPEDITION FOR CLIMATE ACTION 2008.” Aspen Institute. Web. 10 Nov. 2011.

⁴³ “Past Conferences « Boston College Center for Corporate Citizenship.” Boston College Center for Corporate Citizenship. Web. 10 Nov. 2011. <http://www.bcccc.net/index.cfm?pageId=1767#2009&gt;.

⁴⁴ “Sfenvironment.org: Our City’s Policies: Clean Technology.” Sfenvironment.org. Web. 10 Nov. 2011. <http://www.sfenvironment.org/our_policies/overview.html?ssi=12#Members&gt;.

⁴⁵ “Walden: Stimulus Jobs Cost $194,000 Each” KTVZ.COM. 30 July 2010. <http://www.ktvz.com/oregon-northwest/24454594/detail.html&gt;.

⁴⁶ “Interview with Cameron Hardy.” E-mail interview. 25 Aug. 2010.

⁴⁷ Spiering, Charlie. “Biden Loses It in Philadelphia.” Washington Examiner. 18 Oct. 2011. <http://campaign2012.washingtonexaminer.com/blogs/beltway-confidential/biden-loses-it-philidelphia&gt;.

⁴⁸ Povich, Elaine S. “Obama’s Stimulus Jobs: Here Today, Gone Tomorrow.” The Fiscal Times. 03 Oct. 2011. <http://www.thefiscaltimes.com/Articles/2011/10/03/Obamas-Stimulus-Jobs-Here-Today-Gone-Tomorrow.aspx#page1&gt;.

⁴⁹ Nalder, Eric. “Stimulus Good for Washington … Part of It, Anyway.” Seattlepi.com. 15 Oct. 2009.  <http://www.seattlepi.com/local/article/Stimulus-good-for-Washington-part-of-it-886553.php#page-1&gt;.

⁵⁰  Tracy, The Wall Street Journal.

⁵¹ Collett, John. “1,600 Layoffs Coming to Hanford.” KEPR CBS 19. 20 Jan. 2011. <http://www.keprtv.com/news/local/114330444.html&gt;.

⁵² Trumbo, John. “Many Saw Their Hanford Jobs as Temporary.” The News Tribune. 17 Oct. 2011. <http://www.thenewstribune.com/2011/10/17/1868177/many-of-those-who-were-laid-off.html&gt;.

⁵³  Povich, The Fiscal Times.

⁵⁴ “Project Summary | Solyndra, Inc.” Recovery.gov. Web. 10 Nov. 2011. <http://www.recovery.gov/Transparency/RecipientReportedData/Pages/RecipientProjectSummary508.aspx?AwardIDSUR=19015&gt;.

⁵⁵ “Common Agreement, Dated as of September 2, 2009.” U.S. Securities and Exchange Commission (Home Page). 02 Sept. 2009. <http://www.sec.gov/Archives/edgar/data/1443115/000119312510058567/dex1014.htm&gt;.

⁵⁶ “Interview with John Corsi.” E-mail interview. 06 Oct. 2011.

⁵⁷ Vekshin, Alison, and Mark Chediak. “Solyndra Plant Had Whistling Robots, Spa Showers” Bloomberg. 28 Sept. 2011. <http://www.bloomberg.com/news/2011-09-28/solyndra-s-733-million-plant-had-whistling-robots-spa-showers.html&gt;.

⁵⁸ Caterino, Jennifer. “Green Industrial – Industrial Projects, Green Building, Leed” Architect Magazine. 30 Dec. 2010. <http://www.architectmagazine.com/industrial-projects/green-industrial.aspx&gt;.

⁵⁹ “STUDIOSarchitecture : Solyndra Office & Manufacturing Facility.” STUDIOS Architecture. Web. 10 Nov. 2011. <http://www.studiosarchitecture.com/projects/278&gt;.

---

Article printed from Accuracy In Media: http://www.aim.org

URL to article: http://www.aim.org/special-report/the-case-of-ch2m-hill-2-billion-in-crony-stimulation/

URLs in this post:

[1] investigates the handling: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/11/03/MNSR1LPINB.DTL

[2] some fans: http://www.mlive.com/opinion/kalamazoo/index.ssf/2011/11/van_jones_has_an_answer_-_work.html

[3] become the mantra: http://firstread.msnbc.msn.com/_news/2011/11/08/8702113-obama-delivers-we-cant-wait-stump-on-head-start-changes

[4] knew would fail: http://abcnews.go.com/Blotter/emails-obama-white-house-monitored-huge-loan-connected/story?id=14508865

[5] the President suggests: http://www.realclearpolitics.com/video/2011/10/17/obama_gop_wants_dirtier_air_dirtier_water_less_people_with_health_insurance.html

[6] subcommittee hearing: http://www.washingtonpost.com/blogs/federal-eye/post/energy-department-couldnt-manage-stimulus-money-watchdog-says/2011/11/01/gIQAhunSeM_blog.html?hpid=z1

[7] Evergreen Solar and SpectraWatt: http://www.foxnews.com/politics/2011/09/15/despite-stimulus-funding-solyndra-and-4-other-companies-have-hit-rock-bottom/

[8] had been heralded: http://www.youtube.com/watch?v=KYiJ-_K9NCo&feature=player_embedded#%21

[9] Image: http://www.cfo.com/article.cfm/14577066/1/c_14577475?f=magazine_alsoinside

[10] earmarked $6 billion: http://online.wsj.com/article/SB10001424052748704631504575532384126648488.html?mod=WSJ_Energy_leftHeadlines

[11] $1.961 billion: http://www.hanford.gov/news.cfm/DOE/091030BGHanfordARRAJobs.pdf

[12] Associated Press: http://www.breitbart.com/article.php?id=D98F3GQG2&show_article=1

[13] timecard fraud: http://www.tri-cityherald.com/2011/11/04/1704686/routine-timecard-fraud-alleged.html

[14] and paid kickbacks: http://www.bizjournals.com/denver/news/2011/09/22/ch2m-hill-unit-will-pay-15m-to.html?page=all

[15] a ProPublica report: http://www.propublica.org/article/all-beryllium-stimulus-workers-confront-legacy-of-contamination

[16] Washington Closure Hanford: http://blog.seattlepi.com/environment/files/library/Hanford_Penalty_Letter_3-27-07.pdf

[17] The Washington Post: http://www.washingtonpost.com/wp-dyn/content/article/2009/05/17/AR2009051702254.html?hpid=topnews

[18] in political contributions: http://staging.influenceexplorer.com/organization/ch2m-hill/ef389f39acc141b7a9b554048ae9d95d?cycle=2010

[19] Senator Maria Cantwell: http://www.tri-cityherald.com/2009/02/20/484633/hanford-spending-could-create.html

[20] campaign contributions: http://www.opensecrets.org/politicians/contrib.php?cycle=Career&type=I&cid=N00007836&newMem=N&recs=100

[21] White House dealings: http://abcnews.go.com/Blotter/solyndra-investigation-probe-white-house-role-massive-energy/story?id=14434588

[22] Los Angeles Times: http://articles.latimes.com/2011/sep/02/opinion/la-ed-solyndra-20110902

[23] Years 2007-2008: http://staging.influenceexplorer.com/organization/ch2m-hill/ef389f39acc141b7a9b554048ae9d95d?cycle=2008

[24] Center for Responsive Politics: http://www.opensecrets.org/lobby/clientsum.php?id=D000000492&year=2010

[25] the National Journal: http://undertheinfluence.nationaljournal.com/2009/10/ch2m-hill-hires-democratic-aid.php

[26] CH2M PowerPoint presentation: http://docs.google.com/viewer?a=v&q=cache:pKGQepzVRbgJ:www.apwa.net/Documents/Meetings/Handouts/Congress/5945.pdf+%22Matthew+Chiller%22&hl=en&gl=us&pid=bl&srcid=ADGEESgD9UIKFyBm2k0fVHniEtsR2A4thtFkldF9c0L6FNbB4DTN1OwdMusQCSMNWJ4u5OIeoI-7kQ0DxXa965FcM3-B3aFlv9loYR3fY18PPIddOaiCf3V59Habs4WEgfcK_3VviBGY&sig=AHIEtbTNILAIIn-sZHNfG2Zb0Sm7LIj2Fw&pli=1

[27] as a candidate: http://www.foxnews.com/politics/2010/01/25/obama-administration-steers-lucrative-bid-contract-afghan-work-dem-donor/

[28] over $1 billion: http://www.recovery.gov/Transparency/Documents/NonCompetetitiveNonFixedContractAwards.pdf

[29] DOE website: http://www.hanford.gov/page.cfm/FAQ

[30] Dan Arvizu: http://www.govconexecutive.com/2011/08/dan-arvizu-former-ch2m-hill-cto-to-serve-six-year-term-on-national-science-board/

[31] Lee McIntire: http://alumni.ch2mhill.com/news/28964/CH2M-HILL-News-Lee-McIntire-appointed-by-Obama-Administration-to-U.S.-.htm

[32] joined the President: http://www.whitehouse.gov/the-press-office/2011/03/15/press-gaggle-press-secretary-jay-carney-and-deputy-national-security-adv

[33] Jack Baylis: http://www.whitehouse.gov/the-press-office/2011/07/11/president-obama-announces-more-key-administration-posts

[34] Robert G. Card: http://newsroom.ch2mhill.com/pr/ch2m/robert-g-card.aspx

[35] New York Times: http://www.nytimes.com/2002/06/06/us/questions-raised-over-energy-dept-official-s-industry-ties.html

[36] Friends for Harry Reid: http://www.opensecrets.org/pacs/expenddetail.php?cycle=2010&cmte=C00143305&name=Friends+For+Harry+Reid

[37] the stimulus bill: http://www.newsrealblog.com/2009/08/25/communist-green-jobs-czar-van-jones-and-his-meddling-ways/

[38] the Aspen Institute: http://www.aspenenvironment.org/media_/images/eeawards031809.pdf

[39] was finally being exposed: http://www.aim.org../aim-column/van-jones-scandal-threatens-obama-presidency/

[40] Jones and Lee McIntire: http://www.colorado.gov/cs/Satellite?blobcol=urldata&blobheader=application/pdf&blobheadername1=Content-Disposition&blobheadername2=MDT-Type&blobheadervalue1=inline;+filename%3D820/17/PR_july11_Arctic+Expedition+Participant+List.pdf&blobheadervalue2=abinary;+charset%3DUTF-8&blobkey=id&blobtable=MungoBlobs&blobwhere=1224913553516&ssbinary=true

[41] Corporate Citizenship Conference: http://www.bcccc.net/index.cfm?pageId=1767#2009

[42] Clean Tech Advisory Council: http://www.sfenvironment.org/our_policies/overview.html?ssi=12#Members

[43] Government Accountability Report: http://www.ktvz.com/oregon-northwest/24454594/detail.html

[44] Public Safety Roundtable: http://campaign2012.washingtonexaminer.com/blogs/beltway-confidential/biden-loses-it-philidelphia

[45] back in 2009: http://www.thefiscaltimes.com/Articles/2011/10/03/Obamas-Stimulus-Jobs-Here-Today-Gone-Tomorrow.aspx#page1

[46] by SeattlePI.com: http://www.seattlepi.com/local/article/Stimulus-good-for-Washington-part-of-it-886553.php#page-1

[47] when KEPR-TV: http://www.keprtv.com/news/local/114330444.html

[48] The News Tribune: http://www.thenewstribune.com/2011/10/17/1868177/many-of-those-who-were-laid-off.html

[49] number of sub-awards: http://www.recovery.gov/Transparency/RecipientReportedData/Pages/RecipientProjectSummary508.aspx?AwardIDSUR=19015&qtr=2010Q4

[50] design Solyndra’s: http://www.sec.gov/Archives/edgar/data/1443115/000119312510058567/dex1014.htm

[51] Bloomberg News: http://www.bloomberg.com/news/2011-09-28/solyndra-s-733-million-plant-had-whistling-robots-spa-showers.html

[52] on the design team: http://www.architectmagazine.com/industrial-projects/green-industrial.aspx

[53] Studios website: http://www.studiosarchitecture.com/projects/278

 

 

CA Cities Consider Seizing Mortgages

- FrontPage Magazine - http://frontpagemag.com -

Posted By Arnold Ahlert On July 6, 2012 @ 12:35 am In Daily Mailer,FrontPage | 12 Comments

In a move best described as an unholy alliance between over-reaching government and crony capitalism, some local government officials in California are exploring ways to invoke eminent domain in order to restructure mortgages for underwater homeowners. California’s San Bernardino County and two of its largest cities, Ontario and Fontana, would seize mortgages from the private investors who currently own them, cut the loan and principle to the current property value, and resell them to new investors. The deal would be run by a venture capital firm called Mortgage Resolution Partners, that in turn has hired investment banks Evercore Partners and Westwood Capital to raise funds from private investors.  Evercore’s founder and leader is Roger Altman. Altman was Deputy Treasury Secretary under President Clinton, and is a current fundraiser for Barack Obama’s re-election campaign.

Eminent domain allows a government to forcibly seize property and then re-use it, under the auspices that such re-use ostensibly constitutes a public benefit. A typical example might be taking a piece of private property and re-using it to help facilitate a road-building project, or new housing. When such property is seized, the former owners are entitled to compensation, the amount of which is usually determined by a court.

The word “ostensibly” is critical here because the Supreme Court, in what many consider one of the worst rulings of the modern era, vastly expanded the definition of eminent domain in 2005. In 1998, the drug company Pfizer constructed a new facility in the city of New London, Connecticut. New London officials, anticipating the additional business the new plant would bring into the community, attempted to purchase 115 homes nearby so they could sell the land to commercial developers. 15 homeowners resisted. The city cited eminent domain and seized the land.

In the case known as Kelo v. New London, the Supreme Court ruled in favor of the city. The Court’s majority reasoned that a city may claim private property under the Fifth Amendment, so long as it does so as part of a clear economic development plan intended to benefit the community as a whole. Sandra Day O’Connor’s dissent illuminated the implications. “Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random. The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms.”

Enter Evercore Partners and its well-connected founder and co-chairman, Roger Altman. As the Wall Street Journal explains, the “highly unorthodox” use of eminent domain, as it has been characterized, goes something like this:

For a home with an existing $300,000 mortgage that now has a market value of $150,000, Mortgage Resolution Partners might argue the loan is worth only $120,000. If a judge agreed, the program’s private financiers would fund the city’s seizure of the loan, paying the current loan investors that reduced amount. Then, they could offer to help the homeowner refinance into a new $145,000 30-year mortgage backed by the Federal Housing Administration, which has a program allowing borrowers to have as little as 2.25% in equity. That would leave $25,000 in profit, minus the origination costs, to be divided between the city, Mortgage Resolution Partners and its investors.

In other words, a group of new investors, hiding behind the combined power of government and crony capitalists, aim to bludgeon the current owners of the existing loans. Their rationale is the idea that homeowners who owe more than their houses are currently worth constitute a “blight” on their respective communities, thus triggering eminent domain. They further argue that such seizures would help homeowners shed debt loads that depress economic activity in their respective communities, and prevent foreclosures that reduce tax revenues for local governments.

That such homeowners freely entered into a contract to acquire such debt? That many local governments, especially in California, have made over-spending an integral part of their agenda for years? In the age where self-entitlement and moral hazard are now openly encouraged — and often underwritten by government — such considerations are apparently anachronistic.

“A number of cities, mayors, city managers have come to me and said, ‘How soon can we get in?’ ” said Greg Devereaux, San Bernardino County’s chief executive. “We think it would be irresponsible, given the size of the problem in our county, not to at least explore it,” he added. Why California in particular? “California legal precedent and political posture favor the program and constitute an ideal proving ground,” said Mortgage Resolution Partners, in a document presented to investors and reviewed by The Wall Street Journal.  In other words, the most politically progressive state in the nation gives us our best shot to re-write eminent domain statutes. The same document outlines a plan in which a $5 billion initial effort in California can grow as large as revamping three million mortgages in a $500 billion, multi-state effort.

Reuters columnist Daniel Indiviglio explains the downside. “A California county’s new plan to seize underwater mortgages from investors may be the most dangerous housing market intervention yet. If it catches on, bondholders could face billions in losses–and taxpayers, too, if local authorities start targeting loans backed by the federal government. That would whack up mortgage costs and may leave Washington as the only lender…Of course, the threat of this program might light a fire under bondholders and servicers that have been sluggish to modify mortgages up to now. But the costs of this coercion would easily outweigh the benefits.”

The key word here is coercion, and lenders know it. ”The only people who take a loss on this are the holders of the mortgage-backed securities. We’re already formulating strategies for banks interested in fighting this,” said Brian Murray, an attorney who heads the Issues and Appeals practice for the law firm Jones Day. Mr. Murray then got to the meat of the issue. “We believe the U.S. Supreme Court has made it clear that a taking has to be for a public purpose,” he said. “When this whole venture was set up to make money for this investor organization, that doesn’t sound like a public purpose.”

That’s because it isn’t. The scheme is nothing more than crony capitalist thuggery aided and abetted by spendthrift government officials. It will no doubt be applauded by morally suspect homeowners, who will be alleviated of living with the consequences of their own freely-made decisions. And all of it will be coated with a patina of respectability to obscure one simple reality: this is nothing more than an attempt to legalize seizing property from one private entity, and giving it to another one.

On June 19, the San Bernardino county Board of Supervisors approved a joint powers authority (JPA) with the cities of Ontario and Fontana. The first public meeting of the JPA is this month. County CEO Greg Devereaux said no program will be approved without a thorough vetting and public approval. Yet who’s kidding whom? 43.4 percent of homeowners in the county have mortgages that are underwater. The idea that they would somehow refuse to accept a proposal that saddles a third party with their outstanding debt is ludicrous. Furthermore, Mortgage Resolution Partners has hired Cornell University law professor Robert C. Hockett, as a consultant. Mr. Hockett maintains seizing private property from investors in mortgages is “a classic public use. There is no more classic textbook case than urban blight,” Hockett said. Unsurprisingly, he cited Kelo v. New London as his justification.

In New London, Pfizer closed its facility four years after the Supreme Court decision. The land where former housing was bulldozed to pave the way for the anticipated “high end ” development, costing the city and state $78 million in the process, now sits vacant. Since the 2005 decision, several states have enacted stronger eminent domain laws to protect property owners. Castlecoaltion.org published a report card on those states. California received a D-minus, cited as a state where “no meaningful reform was seriously considered,” and “abusive redevelopment statutes continue to leave all property owners at risk.”  That report was published in 2007, before the current housing crisis began.

In other words, before yet another opportunity taken by Democrats and their crony capitalist allies to “never let a crisis go to waste” presented itself.

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URL to article: http://frontpagemag.com/2012/arnold-ahlert/crony-capitalists-and-their-government-abettors/

States Should Flatly Reject ObamaCare Exchanges…Here are the reasons…

• Added by Bill Bissell Moderator on July 5, 2012 at 11:33pm
• View Videos

Here are just a few reasons why states should refuse to create ObamaCare Exchanges.

Jobs. Refusing to create an exchange will block Obamacare from imposing a tax on employers whose health benefits do not meet the federal government’s definition of “essential” coverage. That tax can run as high as $3,000 per employee. A state that refuses to create an exchange will spare its employers from that tax, and will therefore enable them to create more jobs.

Religious freedom. In blocking that employer tax, state officials would likewise block Obamacare’s effort to force religious employers to provide coverage for services they find immoral — like contraception, pharmaceutical abortions, and sterilization.

The federal debt. Refusing to create exchanges would also reduce the federal debt, because it would prevent the Obama administration from doling out billions of dollars in subsidies to private insurance companies.

The U.S. Constitution. The Obama administration has indicated that it might try to tax employers and hand out those subsidies anyway — even in states that don’t create an exchange, and even though neither Obamacare nor any other federal law gives it the power to do so. If that happens, the fact that a state has refused to create an exchange would give every large employer in the state — including the state government itself — the ability to go to court to block the administration’s attempt to usurp Congress’s legislative powers.

A lower state tax burden. States that opt to create an exchange can expect to pay anywhere from $10 million to $100 million per year to run it. But if states refuse, Obamacare says the federal government must pay to create one. Why should states pay for something that the federal government is giving away?

Bye-bye, Obamacare. That is, if the feds can create an exchange at all. The Obama administration has admitted it doesn’t have the money — and good luck getting any such funding through the GOP-controlled House. Moreover, without state-run exchanges, the feds can’t subsidize private insurance companies. That by itself could cause Obamacare to collapse.

Michael F. Cannon is the director of Health Policy Studies at the Cato Institute. Video Produced by Caleb O. Brown and Austin Bragg.

Related video here: http://youtu.be/lAbmzAMZnJw
ObamaCare and the States (Leah Vukmir)

The Wisconsin Recall Stakes

A test of whether taxpayers can control the entitlement state.

• Article

 A single election rarely determines a democracy’s fate, but some matter more than others. Tuesday’s recall election of Wisconsin Governor Scott Walker is one that matters a great deal because it will test whether taxpayers have any hope of controlling the entitlement state and its dominant special interests.

Specifically, we will learn if a politician can dare to cross government unions and survive. Mr. Walker isn’t facing this extraordinary midterm challenge because he and a GOP legislature asked public workers to pay 12.6% of their health insurance premiums and put 5.8% of their paychecks toward their pensions. Those are small sums compared to what private employees typically pay.

 His political offense was daring to challenge the monopoly sway that public unions have come to hold over modern state government through collective bargaining. Public unions aren’t like private unions that negotiate labor terms with a single company or workplace. Public unions have outsize influence because they can often buy the politicians who are supposed to represent taxpayers. The unions effectively sit on both sides of the bargaining table.

Thus over time they have been able to extort excessive wages, benefits and pensions, as well as sweetheart contracts like the monopoly provision of health insurance. Their focused special interest trumps the general interest of taxpayers, who are busy making a living and lack the time to focus on politics other than during elections or amid a fiscal crisis.

Democrats—even liberals—once understood this danger and opposed collective bargaining for public workers. No less a Democratic hero than Franklin Roosevelt once said that collective bargaining “can not be transplanted into the public service.” As recently as the 1970s, Jimmy Carter signed the Civil Service Reform Act, which reduced collective-bargaining rights for federal employees. But as public unions began to dominate the modern labor movement, collective bargaining became a sacrosanct part of the liberal agenda.

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Recall Stirs Passion in Wisconsin

Mr. Walker and his fellow Republicans challenged that status quo, and the unions have reacted with such vitriol because they realize the threat to their long-unchallenged clout. They’re especially incensed that the reforms ended the state’s practice of automatically collecting union dues. Now dues are voluntary—and lo, many government workers are finding they don’t want to join the union after all.

Since Mr. Walker’s reforms went into effect, membership in government unions has dropped. At the American Federation of State, County and Municipal Employees (Afscme), membership fell to 28,745 in February from 62,818 in March 2011, according to a Journal report. If the union can no longer guarantee monopoly wages and benefits, workers are better off keeping dues that can add up to several hundred dollars a year.

Shaking off union control of state finances has also been good for taxpayers and Wisconsin’s business climate. Statewide property taxes fell by 0.4% in 2011 for the first time since 1998. The Governor’s office estimates that the reforms have saved Badger State taxpayers more than $1 billion, as local school districts have been able to renegotiate health-care and labor contracts.

According to a survey released last week by Wisconsin Manufacturers and Commerce, 62% of employers in the state say they plan to add employees over the next six months, an increase from 53% a year ago and 44% in December. Overall, the survey reported, 73% predicted moderate to good growth at their own companies and more than half said they planned to expand in the state in the next two years—the highest rate in a decade.

All of which helps explain why Mr. Walker’s Democratic challenger, Milwaukee Mayor Tom Barrett, has made his campaign chiefly about jobs, women’s rights, the environment, community safety and especially an investigation into the conduct of aides who worked for Mr. Walker when he was Milwaukee County executive. Mr. Barrett is running on everything except the collective-bargaining reforms.

Meanwhile, Afscme chief Gerald McEntee has criticized the national Democratic Party for not throwing more money into the recall: “We think they could and should have done more.” And President Obama, who once promised solidarity with Wisconsin unions, flew over the state on Friday for a fundraiser in Minnesota. Perhaps he doesn’t want to associate himself with what might be an embarrassing union defeat.

Students of democracy from Alexis de Tocqueville to Mancur Olson have pointed out that the greatest threat to self-government comes from the tendency of democracies to become barnacled with special interests that vote themselves more benefits than society can afford. This is the crisis of the modern entitlement state, which is unfolding from California to Illinois, Greece, Italy and even Washington. Wisconsin is a critical test of whether democracies can reform before the crisis becomes debilitating.