THIS WEEK IN CIVIL LIBERTIES 10MAI13

HERE it is, This Week in Civil Liberties from the ACLU! 

By Rekha Arulanantham, ACLU at 5:02pm

The Supreme Court of which state granted a stay of execution to Willie Manning, who may be innocent of the crime for which he was convicted?

True or false? Eye-tracking technology could pose a risk to privacy if inappropriately used to discover drug and alcohol use, mental and psychological illnesses, sexuality and other traits and behaviors.

Documents released this week suggest that which federal agencies read private emails without obtaining a warrant first?

Which federal agency has continued to increase its surveillance of Americans in the past year, according to the Department of Justice’s annual report?

A report by which organization shows the racial gap in U.S. wealth creation grew substantially during the Great Recession?

Willie Manning Is Scheduled To Die. Shouldn't Mississippi Find Out If He's Innocent First?

Willie Manning was granted this Tuesday a stay of execution by the State Supreme Court. Mississippi was steamrolling toward execution despite compelling evidence that Willie Manning may be an innocent man.

Manning's case has many of the hallmarks of those of other innocent death row exonerees: false snitch testimony, junk science, and racial bias. The prosecutors in Manning's case, like in all too many cases, stacked the deck by systematically removing African-American jurors from Manning's trial. Manning, an African-American man, was convicted of the murders of two white college students.

The Privacy-Invading Potential of Eye Tracking Technology

Eye-tracking technology received new attention recently due to its inclusion in the Samsung Galaxy IV phone, where it can (with mixed results, according to reviewers) let users scroll the screen with their eyes or dim the screen when they look away. Clearly this is a technology that has the potential for a lot of clever applications. But what are the privacy implications?

FBI Documents Suggest Feds Read Emails Without a Warrant

New documents from the FBI and U.S. Attorneys’ offices paint a troubling picture of the government’s email surveillance practices. Not only does the FBI claim it can read emails and other electronic communications without a warrant—even after a federal appeals court ruled that doing so violates the Fourth Amendment—but the documents strongly suggest that different U.S. Attorneys’ offices around the country are applying conflicting standards to access communications content.

They’re Watching: FBI Business Records Requests Jump 900 Percent Compared to 2009

Last week served as yet another reminder of the threats posed to Americans' privacy by the post-Patriot Act surveillance state. According to the Department of Justice's annual report, FISA applications to the secretive Foreign Intelligence Surveillance Court (FISC) in 2012 revealed a continued increase in the FBI's surveillance of Americans. The report covers the Bureau's requests for electronic and physical surveillance, secret court orders under Section 215 of the Patriot Act, and National Security Letters (NSLs).

The Racial Wealth Accumulation Gap and Why ACLU is Suing Morgan Stanley for Racial Discrimination

This month, the Urban Institute joined an emerging consensus of researchers and social scientists with a new report revealing, in the starkest terms, our nation's vast and widening racial gap in wealth creation. With this report, Less than Equal: Racial Disparities in Wealth Accumulation, the Urban Institute joins a growing body of research showing that in America today, wealth is not colorblind and that during the recession this gap has widened.

Learn more about your civil liberties: Sign up for breaking news alerts, follow us on Twitter, and like us on Facebook.

http://www.aclu.org/blog/organization-news-and-highlights/week-civil-liberties-05102013

05/10/2013

• Print
• Email
• RSS
• Facebook
• Twitter
• Share

This Week in Civil Liberties

Wall Street Is Still Out of Control -- Obama Should Call for Glass-Steagall and a Breakup of Big Banks 26OCT11

WELL written piece advocating bringing back Glass-Steagall and breaking up the big banks before they really destroy our economy and nation.
Next week President Obama travels to Wall Street where he'll demand -- in light of the Street's continuing antics since the bailout, as well as its role in watering-down the Volcker rule -- that the Glass-Steagall Act be resurrected and big banks be broken up.
I'm kidding. But it would be a smart move -- politically and economically.
Politically smart because Mitt Romney is almost sure to be the Republican nominee, and Romney is the poster child for the pump-and-dump mentality that's infected the financial industry and continues to jeopardize the American economy.
Romney was CEO of Bain & Company -- a private-equity fund that bought up companies, fired employees to save money and boost performance, and then resold the firms at a nice markups.
Romney also epitomizes the pump-and-dump culture of America's super rich. To take one example, he recently purchased a $3 million mansion in La Jolla, California (in addition to his other homes) that he's razing in order build a brand new one.
What better way for Obama to distinguish himself from Romney than to condemn Wall Street's antics since the bailout, and call for real reform?
Economically it would be smart for Obama to go after the Street right now because the Street's lobbying muscle has reduced the Dodd-Frank financial reform law to a pale reflection of its former self. Dodd-Frank is rife with so many loopholes and exemptions that the largest Wall Street banks -- larger by far then they were before the bailout -- are back to many of their old tricks.
It's impossible to know, for example, the exposure of the Street to European banks in danger of going under. To stay afloat, Europe's banks will be forced to sell mountains of assets - among them, derivatives originating on the Street -- and may have to renege on or delay some repayments on loans from Wall Street banks.
The Street says it's not worried because these assets are insured. But remember AIG? The fact Morgan Stanley and other big U.S. banks are taking a beating in the market suggests investors don't believe the Street. This itself proves financial reform hasn't gone far enough.
If you want more evidence, consider the fancy footwork by Bank of America in recent days. Hit by a credit downgrade last month, BofA just moved its riskiest derivatives from its Merrill Lynch unit to a retail subsidiary flush with insured deposits. That unit has a higher credit rating because the Federal Deposit Insurance Corporation (that is, you and me and other taxpayers) are backing the deposits. Result: BofA improves its bottom line at the expense of American taxpayers.
Wasn't this supposed to be illegal? Keeping risky assets away from insured deposits had been a key principle of U.S. regulation for decades before the repeal of Glass-Steagall.
The so-called "Volcker rule" was supposed to remedy that. But under pressure of Wall Street's lobbyists, the rule -- as officially proposed last week -- has morphed into almost 300 pages of regulatory mumbo-jumbo, riddled with exemptions and loopholes.
It would have been far simpler simply to ban proprietary trading from the jump. Why should banks ever be permitted to use peoples' bank deposits - insured by the federal government - to place risky bets on the banks' own behalf? Bring back Glass-Steagall.
True, Glass-Steagall wouldn't have prevented the fall of Lehman Brothers or the squeeze on other investment banks in 2007 and 2008. That's why it's also necessary to break up the big banks.
In the wake of the bailout, the biggest banks are bigger than ever. Twenty years ago the ten largest banks on the Street held 10 percent of America's total bank assets. Now they hold over 70 percent. And the biggest four have a larger market share than ever -- so large, in fact, they've almost surely been colluding. How else to explain their apparent coordination on charging debit card fees?
The banks aren't even fulfilling their fiduciary duties to investors. Last summer, after Groupon selected Goldman Sachs, Morgan Stanley, and Credit Suisse to underwrite its initial public offering, the trio valued it at a generous $30 billion. Subsequent accounting and disclosure problems showed this estimate to be absurdly high. Did the banks care? Not a wit. The higher the valuation, the fatter their fees.
Just last week Citigroup settled charges (without admitting or denying guilt) that it defrauded investors by selling them a package of mortgage-backed securities rife with mortgages it knew were likely to default, but didn't disclose the hazard. It then bet against the package for its own benefit -- earning fees of $34 million and net profits of at least $126 million. So what's Citi paying to settle this outrage? A mere $285 million. Its CEO at time (Charles Prince) doesn't pay a dime.
I doubt the president will be condemning the Street's antics, or calling for a resurrection of Glass-Steagall and a breakup of the biggest banks. Democrats are still too dependent on the Street's campaign money.
That's too bad. You don't have to be an occupier of Wall Street to conclude the Street is still out of control. And that's dangerous for all of us.

Which of These Banks Was 2010's Most Shameless Corporate Outlaw? 30DEZ10

IF you have accounts with any of these banks you might want to consider leaving them, check out local alternatives at 
http://moveyourmoney.info/ 
and you should also check out my earlier post about the unwillingness of the Dept of Justice to bring charges against these bankers for crimes that brought our nations economy to it's knees at ARE WE GOING TO LET THE BIGGEST FINANCIAL FRAUDSTERS KEEP THEIR MONEY AND AVOID JAIL TIME? 30DEZ10


Bankers. The red carpet's still being rolled out for them in Washington, but if there's a stain on it they'll pout for days. Jason Linkins documents the latest set of cheap white whines from very wealthy white men. (Discrimination lawsuits are a routine part of their legal troubles, too.) This time they're upset because nobody from the six largest banks in America was invited to the president's CEO Roundtable.
They're offended because they didn't meet with the president? From the looks of things they're lucky not to be meeting with the warden. Their collective rap sheet includes fraud, sex discrimination, collusion to bribe public officials... even laundering drug money for Mexican drug cartels. One of them is accused of ripping off some nuns! None of this criminal behavior has stopped them from sulking over a presidential slight. Let's review the record for these corporate malefactors, and then decide:
Which of these six banks was "America's Most Shameless Corporate Outlaw" in 2010? (I mean, really: Nuns?)
1. Bank of America
Here are some recent headlines for the country's largest bank:

• "Bank of America Ends Year With Flurry of Lawsuits"
• "Arizona Wants Bank of America Held in Contempt"
• "Nevada, Arizona sue Bank of America over failed mortgage aid"
• "Allstate Sues Bank Of America For Selling 'Toxic' MBS"
• "Bank of America Hit With Missouri Class Action Over Loan Modifications"

Here are some of the details:
Associated Press: "Attorneys general in Arizona and Nevada filed civil lawsuits Friday against Bank of America Corp., alleging that the lender is misleading and deceiving homeowners who have tried to modify mortgages in two of the nation's most foreclosure-damaged states."
Courthouse News Service: "Bank of America violated a consent judgment it signed almost 2 years ago to provide loan modifications and help relocate borrowers, the Arizona attorney general claims ... Bank of America has continued to misrepresent 'to Arizona consumers whether they were eligible for modifications of their mortgage loans, when Bank of America would make a decision on their modification requests ... and whether and when Bank of America would foreclose upon their homes.'"
Consumer Affairs: "The bank is also facing at least three suits claiming that it reneged on duties it undertook by accepting $25 billion under the Troubled Asset Relief Program (TARP)."
In total, Bank of America's last annual report lists 29 pending lawsuits against the company. Lawsuits are not proof of guilt, of course. But the bank has already paid a fine for illegally concealing $6 billion in payouts to employees, and another fine for concealing major losses at its Merrill Lynch subsidiary. (Both fines were low - not much more than a slap on the wrist - because Bank of America was on taxpayer-funded life support at the time.) BofA also confessed to committing fraud as part of a settlement this month, which the Justice Department noted was restitution "for its participation in a conspiracy to rig bids in the municipal bond derivatives market." The Bank was also ordered to pay Lehman $590 million for illegally seizing its deposits, in violation of bankruptcy law.
From the Associated Press:

A document obtained last week by the Associated Press showed a Bank of America official acknowledging in a legal proceeding that she signed thousands of foreclosure documents a month and typically didn't read them. The official, Renee Hertzler, said in a February deposition that she signed 7,000 to 8,000 foreclosure documents a month.

How generous has the taxpayer been to Bank of America? There was the TARP money, of course. And BofA, like other banks, has been suckling at the teat of Federal Reserve's discount money window throughout the crisis. And, as Zach Carter noted, the bank was also one of two institutions that were the main beneficiaries of a special Fed program called the Primary Reserve Credit Facility. There were those cushy settlements with the SEC.
BofA stock was trading at $53 at the end of 2006. As of this writing the stock is trading for $13.30. But its executives have been wasting corporate money and resources buying up 419 web URLs with insulting phrases and the names of their senior executives -- most of whom nobody's ever heard of - to protect their personal reputations. No company's ever done that before. Bob Scully "blows" (bobscullyblows.com) and Bill Boardman "sucks" (billboardmansucks.com)? Who knew?
Last year two senior executives received $9.9 million and two others received $6 million in total compensation. The guy who robbed a Bank of America branch in West Palm Beach is going to prison. The bank's senior executives are hurt that they didn't get invited to the Rose Garden for tea.
Rap Sheet: BofA has probably committed more foreclosure offenses than any other single institution. It deceived stockholders, and the public, about the $6 million in bonuses it paid out (during the rescue process), and was equally deceptive about Merrill Lynch's financial status. It has also been punished for rigging municipal bond derivative bids.
Shameless Quotes: CEO Brian Moynihan's response toward demands that his bank comply with HAMP's legal requirements? "Sure," he sneered," we'll go back and check our homework again." And he says he won't accept anything but "constructive criticism." Which sounds more constructive: "suck" or "blow"?
2. JPMorgan Chase
As we learned recently, JPMorgan Chase CEO Jamie Dimon doesn't feel loved or admired enough. Small wonder. It looks like he's running a pretty sleazy operation :

"At JPMorgan Chase & Company, they were derided as 'Burger King kids' -- walk-in hires who were so inexperienced they barely knew what a mortgage was... revelations that mortgage servicers failed to accurately document the seizure and sale of tens of thousands of homes have caused a public uproar ..."

Failure to accurately document home foreclosures is illegal. It's lousy management, too. Dimon oversaw a sloppy operation that's going to cost his shareholders a lot of money: "JPMorgan set aside $2.3 billion of reserves to cover mortgage repurchases or litigation expenses, including some for 'mortgage-related matters,' the lender said."
A whistleblower complaint alleges that the bank "sold to third party debt buyers hundreds of millions of dollars worth of credit card accounts... when in fact Chase Bank executives knew that many of those accounts had incorrect and overstated balances." According to the complaint, "Chase Bank executives routinely destroyed information and communications from consumers rather than incorporate that information into the consumer's credit card file ... and mass-executed thousands of affidavits in support of Chase Banks collection efforts ... (but) did not have personal knowledge of the facts set forth in the affidavits." It also claims that "when senior Chase Bank executives were made aware of these systemic problems, senior Chase Bank executives -- rather than remedy the problems -- immediately fired the whistleblower and attempted to cover up these problems."
There are also multiple lawsuits against Chase for allegedly manipulating the price of silver, and there is at least one report that the bank is being probed by several Federal agencies (including the Justice Department) over its trading activities in precious metals.
JPMorgan Chase "agreed to pay $25 million to settle allegations it sold unregistered securities, many of which defaulted, to the state of Florida," as the Orlando Sentinel reported. That's a crime. Chase was also one of several banks that paid to settle charges that it illegally propped up a failed mortgage lender. (These settlements have typically allowed the banks to "admit no wrongdoing" -- a practice which should be stopped. Crimes are crimes.)
JPMorgan Chase's behavior in Jefferson County, Alabama was pure Huey Long material. The Kingfish would've admired the way the bank spread more than $8 million around the county through local intermediaries so it could secure highly lucrative deals on municipal derivatives. As Bloomberg News put it, " JPMorgan, the second-largest U.S. bank by assets, used fees on the unregulated derivative contracts -- and a trip to a New York spa for one elected official -- to curry political favor, a decade after the SEC adopted rules to drive out pay-to-play from the $2.8 trillion municipal bond market."
The bank conducted this criminal behavior under Dimon's watch. And while it "neither admitted nor denied wrongdoing," as usual, it had to pay a three-quarters-of-a-billion dollar settlement to wrangle its way out of this snakepit of illegality.
Rap Sheet: Corruption in Alabama; widespread violation of foreclosure laws; sale of unregistered securities. Also under investigation for illegal manipulation of the precious metals market; mishandling of Madoff funds; deliberate lawbreaking in credit card processing, concealment of criminality.
Shameless quotes: "Judy Dimon says the crisis took a toll on him. He used to stand up to bullies who threatened his smaller twin; now he felt as if he, and bankers in general, were being bullied." (from a New York Times profile of Dimon)
3. Citigroup

Citi's being sued for gender discrimination by its own employees. Citi settled a class action lawsuit after illegally raising rates for credit card customers. The bank's being sued by an independent trustee for allegedly "aiding and abetting" a Ponzi schemer.
Citi executives were given slap-on-the-wrist fines for lying to investors about $40 billion in subprime exposures, which is a criminal act. It should also be remembered that Citigroup paid $2.65 billion in 2004 to settle class action lawsuits over its alleged illegal actions in propping up WorldCom stocks in return for enormous fees.
As Citi's annual report notes, "Citigroup and Related Parties have been named as defendants in numerous legal actions and other proceedings asserting claims for damages and related relief for losses arising from the global financial credit and subprime-mortgage crisis that began in 2007."
Citi is still being investigated by Italian courts for possible criminal behavior in the Parmalat case, and it's being sued by a Norwegian bank for misrepresenting its financial condition and failing to disclose material information. It's being sued by investors for misrepresenting its underwriting of mortgage backed securities.
Rap Sheet: Violation of SEC law regarding corporate disclosures; illegal rate activity toward credit card customers. Under investigation for aiding and abetting a Ponzi scheme.
Shameless quotes: "Almost all of us... missed the powerful combination of forces at work and the serious possibility of a massive crisis." (Robert Rubin) "On November 3, 2007, I sent an email to Mr. Robert Rubin and three other members of Corporate Management. In this email I outlined the business practices that I had witnessed... I specifically warned about the extreme risks that existed within the Consumer Lending Group." (Former Citi exec Richard Bowen)
4. Wells Fargo
They illegally laundered drug money for the Mexican cartels -- and nobody went to jail.
Here's a suggestion: Read stories like "War Torn Mexico: A Population in Terror," which begins: "Massacres, beheadings, YouTube videos featuring cartel torture sessions and even car bombs are becoming commonplace in Juarez." Study the statistics on the violent murders - which include Federal agents, children, and "penniless immigrants" -- and then remind yourself: These are Wells Fargo's business partners.
Rap Sheet: Mexican drug cartels. It makes the brain reel, doesn't it? There's more, but that's enough.
Shameless quotes:"We're more of a Main Street bank than a Wall Street bank." "Of all the decisions I've had to make, few have been as difficult as cutting the dividend." (Wells Fargo CEO John Stumpf)
5. Goldman Sachs
The SEC charged Goldman with fraud, and they settled the suit by admitting their marketing materials contained lies -- which they called "mistakes." They were fined by Great Britain for illegally concealing US fraud investigations. Goldman has its own gender discrimination lawsuit, too, and theirs comes complete with strippers and racist emails.
Goldman's being sued for deceiving its clients over an offering its own employee privately (and thanks to Sen. Levin, famously) bragged was "a shitty deal." Goldman separately paid $60 million in Massachusetts to settle charges of predatory loan practices.
After mismanagement drove Goldman into impending doom, the firm was saved by TARP funds and Federal Reserve's Emergency Liquidity Programs. Total taxpayer aid to Goldman exceeded three-quarters of a trillion dollars. Goldman also received $13 billion in backdoor payouts through the AIG liquidation (under Tim Geithner's supervision).
Rap Sheet: Fraudulent misrepresentation; predatory loan practices; illegal concealment of an investigation. And God know what else. They're Goldman, man!
Shameless Quotes: ""We're very important... We do God's work." (Goldman CEO Lloyd Blankfein) "If I whet My glittering sword, and Mine hand take hold on judgment; I will render vengeance to Mine enemies." (God)
6. Morgan Stanley
Earlier this year the Wall Street Journal reported that "U.S. prosecutors are investigating whether Morgan Stanley misled investors about mortgage-derivatives deals it helped design and sometimes bet against." The firm's also being sued by US Bank for fraudulently misleading it and other investors over a structured residential investment called "Tourmaline." A group of investors in Singapore is suing the firm for designing CDOs to fail and then selling them as "conservative investments."
The Financial Industry Regulatory Authority fined Morgan Stanley this year for failing to disclose material conflicts of interest to investors. The same agency hit the firm with a $12.5 million fine in 2007 for illegally concealing emails during customer arbitration hearings. In a particularly sleazy move, Morgan Stanley claimed that the emails had been lost on 9/11, when they were all safely stored in backup copies elsewhere.
MS was also sued by the EEOC for gender discrimination.
The firm was able to beat back an investors' lawsuit over bloated executive pay -- it set aside 62% of net revenue for employee compensation -- so its executives get to keep fat bonuses for driving the company into the ground. Greed and stupidity aren't illegal, after all.
On the other hand, their portfolio of lawsuits including one that says they defrauded nuns in Europe.

Rap Sheet: Despite numerous violations and charges, Morgan Stanley is a relatively minor player compared to its bigger colleagues. On the other hand, it illegally concealed evidence from arbitrators by using the World Trade Center attack as an excuse, and six of its own employees died in that attack. That's simply vile. On top of that, they're being sued by nuns.
Shameless Quotes: "When we think back on 2001, we are filled with deep sorrow and outrage over the events of September 11. Who among us will ever forget the shock and horror of that day?" (Morgan Stanley Annual Report, 2001) "When you come that close to really going out of business, call it near death, death experience, the end of the line, whatever you want to call it, your only focus is to make sure your company survives." (former CEO John Mack)

The American people rescued these six banks. (Dimon says his bank didn't need rescuing, but how would it have fared in a collapsed economy? And the government's willingness to go easy in its illegalities was pretty helpful, too.) They've all violated the law, and they're all suspected of even more possible illegalities. And yet they're all pouting because they weren't invited to the White House along with the other CEOs.
Which is our most shameless corporate lawbreaker? In any normal period of history they'd all be considered corrupt institutions, and their leaders would be ashamed to show their faces among respectable people. But these aren't normal times, are they?
Frankly I'm stumped. They all deserve the title as far as I'm concerned. Why don't we put it to a vote?
__________________________________
Richard (RJ) Eskow, a consultant and writer (and former insurance/finance executive), is a Senior Fellow with the Campaign for America's Future. This post was produced as part of the Curbing Wall Street project. Richard also blogs at A Night Light.
He can be reached at "rjeskow@ourfuture.org."
Website: Eskow and Associates

Pay czar: 17 bailed-out banks overpaid executives 23JUL10 JOIN moveyourmoney.info

I HAVE LEFT THOSE 'IN MY WALLET' PEOPLE BECAUSE OF THE HUGE AMOUNT THEY RECEIVED FROM TARP AND NOW I AM REALLY GLAD I DID SINCE THEY ARE ONE OF THE BANKS WHO PULLED THIS STUNT. I JOINED THE MOVE YOUR MONEY MOVEMENT AND HAVE MY MONEY IN A STABLE LOCAL BANK NOW. GO TO www.moveyourmoney.info FOR HELP IN FINDING AN ALTERNATIVE TO THESE GREEDY PIGS. AND CHECK OUT THIS VIDEO





The government's pay czar announced Friday that 17 companies benefiting from federal bailout money handed out $1.6 billion in excess executive pay at the height of the financial crisis. The firms include Citigroup, Goldman Sachs and Bank of America.
Kenneth Feinberg, who was appointed as the Obama administration's special master for compensation, examined executives earning more than $500,000 at the 419 firms that received taxpayer assistance. Of the 17 companies that in Feinberg's judgment were egregious in their compensation, 11 have repaid the assistance received from taxpayers.
Citigroup was the worst offender, handing out $400 million in excess pay, according to a government source familiar with the report.
Other offending firms include JPMorgan Chase, Morgan Stanley, AIG and McLean-based Capital One.
Feinberg emphasized he is not asking the companies to pay the money back.
"This is an eleventh hour, armchair, 'look back' quarterbacking," Feinberg said Friday.
The report indicates the companies did not do anything illegal and that 90 percent of the executive payments were made by firms that have fully repaid taxpayers.
Feinberg, however, recommends that companies adopt an emergency provision that would allow them to break pay contracts if another financial crisis were to occur. If the company's board determined that the firm was in a crisis, the compensation committee would be allowed to revisit pay levels. During the recent banking meltdown, many companies protested that they were legally obligated to mete out their payment contracts with executives.
The special master has the authority to review pay but not to force any reimbursements from the banks. Feinberg did not determine the payments were "contrary to the public interest," because they were allowed at the time, although Treasury Department rules later imposed tougher limits on pay for bailout recipients.
Other companies singled out by the report include Boston Private Financial Holdings, CIT, M&T Bank, SunTrust, Bank of New York Mellon, Regions Financial, PNC Financial and U.S. Bancorp.
The excessive pay was reported at only a small group of the 419 firms examined. The report found that out of the entire pool of firms receiving taxpayer funds, 240 did not give excess pay to any executives. A subset of 116 firms handed out too much money to five or fewer executives.
Many of the country's biggest banks have repaid their bailout funds, including Goldman Sachs, J.P. Morgan, Bank of America and Wells Fargo. Companies that are still on the hook include AIG, SunTrust and CIT.
As his work as pay czar winds down, Feinberg will soon focus all his attention on overseeing the BP oil spill compensation fund.

Offshore Corporate Tax Havens: Why Are They Still Allowed? 1JUN10

The American people have a choice. One can choose to bitch about this situation and do nothing, or choose to contact their Senators and Representative in D.C. and demand something be done. Democracy is not a spectator sport....DO SOMETHING!

The bracing reality that America has two sets of rules -- one for the corporate class and another for the middle class -- has never been more indisputable.
The middle class, by and large, plays by the rules, then watches as its jobs disappear -- and the Senate takes a break instead of extending unemployment benefits. The corporate class games the system -- making sure its license to break the rules is built into the rules themselves.
One of the most glaring examples of this continues to be the ability of corporations to cheat the public out of tens of billions of dollars a year by using offshore tax havens. Indeed, it's estimated that companies and wealthy individuals funneling money through offshore tax havens are evading around $100 billion a year in taxes -- leaving the rest of us to pick up the tab. And with cash-strapped states all across the country cutting vital services to the bone, it's not like we don't need the money.
You want Exhibit A of two sets of rules? According to the White House, in 2004, the last year data on this was compiled, U.S. multinational corporations paid roughly $16 billion in taxes on $700 billion in foreign active earnings -- putting their tax rate at around 2.3 percent. Know many middle class Americans getting off that easy at tax time?
In December 2008, the Government Accounting Office reported that 83 of the 100 largest publicly-traded companies in the country -- including AT&T, Chevron, IBM, American Express, GE, Boeing, Dow, and AIG -- had subsidiaries in tax havens -- or, as the corporate class comically calls them, "financial privacy jurisdictions."
Even more egregiously, of those 83 companies, 74 received government contracts in 2007. GM, for instance, got more than $517 million from the government -- i.e. the taxpayers -- that year, while shielding profits in tax-friendly places like Bermuda and the Cayman Islands. And Boeing, which received over $23 billion in federal contracts that year, had 38 subsidiaries in tax havens, including six in Bermuda.
And while it's as easy as opening up an island P.O. Box, not every big company uses the dodge. For instance, Boeing's competitor Lockheed Martin had no offshore subsidiaries. But far too many do -- another GAO study found that over 18,000 companies are registered at a single address in the Cayman Islands, a country with no corporate or capital gains taxes.
America's big banks -- including those that pocketed billions from the taxpayers in bailout dollars -- seem particularly fond of the Cayman Islands. At the time of the GAO report, Morgan Stanley had 273 subsidiaries in tax havens, 158 of them in the Cayman Islands. Citigroup had 427, with 90 in the Caymans. Bank of America had 115, with 59 in the Caymans. Goldman Sachs had 29 offshore havens, including 15 in the Caymans. JPMorgan had 50, with seven in the Caymans. And Wells Fargo had 18, with nine in the Caymans.
Perhaps no company exemplifies the corporate class/middle class double standard more than KBR/Halliburton. The company got billions from U.S. taxpayers, then turned around and used a Cayman Island tax dodge to pump up its bottom line. As the Boston Globe's Farah Stockman reported, KBR, until 2007 a unit of Halliburton, "has avoided paying hundreds of millions of dollars in federal Medicare and Social Security taxes by hiring workers through shell companies based in this tropical tax haven."
In 2008, the company listed 10,500 Americans as being officially employed by two companies that, as Stockman wrote, "exist in a computer file on the fourth floor of a building on a palm-studded boulevard here in the Caribbean." Aside from the tax advantages, Stockman points out another benefit of this dodge: Americans who officially work for a company whose headquarters is a computer file in the Caymans are not eligible for unemployment insurance or other benefits when they get laid off -- something many of them found out the hard way.
This kind of sun-kissed thievery is nothing new. Indeed, back in 2002, to call attention to the outrage of the sleazy accounting trick, I wrote a column announcing I was thinking of moving my syndicated newspaper column to Bermuda:

I'll still live in America, earn my living here, and enjoy the protection, technology, infrastructure, and all the other myriad benefits of the land of the free and the home of the brave. I'm just changing my business address. Because if I do that, I won't have to pay for those benefits -- I'll get them for free!

Washington has been trying to address the issue for close to 50 years -- JFK gave it a go in 1961. But time and again Corporate America's game fixers -- aka lobbyists -- and water carriers in Congress have managed to keep the loopholes open.
The battle is once again afoot. On Friday, the House passed the American Jobs and Closing Tax Loopholes Act. The bill, in addition to extending unemployment benefits, clamps down on some of they ways corporations hide their income offshore to avoid paying U.S. taxes. Even though practically every House Republican voted against it, the bill passed 215 to 204.
The bill's passage in the Senate, however, remains in doubt, with lobbyists gearing up for a furious fight to make sure America's corporate class can continue to profitably enjoy the largess of government services and contracts without the responsibility of paying its fair share.
The bill is far from perfect -- it leaves open a number of loopholes and would only recoup a very small fraction of the $100 billion corporations and wealthy individuals are siphoning off from the U.S. Treasury. And it wouldn't ban companies using offshore tax havens from receiving government contracts, which is stunning given the hard times we are in and the populist groundswell at the way average Americans are getting the short end of the stick.
But the bill would end one of the more egregious examples of the double standard between the corporate class and the middle class, finally forcing hedge fund managers to pay taxes at the same rate as everybody else. As the law stands now, their income is considered "carried interest," and is accordingly taxed at the capital gains rate of 15 percent.
The issue was famously brought up in 2007 by Warren Buffett when he noted that his receptionist paid 30 percent of her income in taxes, while he paid only 17.7 percent on his taxable income of $46 million dollars.
As Robert Reich points out, the 25 most successful hedge fund managers earned $1 billion each. The top earner clocked in at $4 billion. And all of them paid taxes at about half the rate of Buffett's receptionist.
Closing this outrageous loophole would bring in close to $20 billion dollars in revenue -- money desperately needed at a time when teachers and nurses and firemen are being laid off all around the country.
Hedge fund lobbyists are currently hacking away at the Senate's resolve with, not surprisingly, some success. And it's not just Republicans who are willing to do their bidding, but a number of Democrats as well. Indeed, it was a Democrat -- Chuck Schumer -- who led the fight against closing the loophole in 2007.
"I don't know how members of Congress can return home and look an office manager, a nurse, a court clerk in the eye and say 'I chose hedge fund managers instead of you and your family'," said Lori Lodes of the SEIU.
Nicole Tichon, of the U.S. Public Interest Research Group, framed the debate in similar terms:

It's hard to imagine anyone campaigning on protecting hedge fund managers, Wall Street banks and companies that ship jobs and profits overseas. It's hard to imagine telling constituents that somehow they should continue to subsidize these industries. We're anxious to see whose side the Senate is on and what story they want to tell the American people.

Up until now, the story has been a familiar narrative of Two Americas, with one set of rules for those who can afford to hire a fleet of K Street lobbyists and a different set for everybody else. It's time to give this infuriating tale a different -- and far more just and satisfying -- ending.