Saturday, October 1, 2011

Transit Authority: $1 Million Deficit, Highest Paid Executives

By Tom Gantert | Sept. 30, 2011

Editor's Note: AATA CEO Michael Ford has responded to this story. To see the response, click here.

The Ann Arbor Transportation Authority has a nearly $1 million deficit projected for fiscal 2011-12 at a time when its top executives are among the highest paid transit bosses in the state.

The AATA has eight employees making $90,000 or more, according to a Freedom of Information Act request. The AATA has 171 employees and a $21.4 million operating budget.

Grand Rapids, which has 308 employees and a $31.9 million operating budget, had four employees making $90,000 or more. Flint, which has a $21 million operating budget, has two employees making $90,000 or more.

Jackson Transit Agency’s highest paid employee is the general manager, who makes $75,524.

The Kalamazoo Metro Transit has one employee making $90,000 or more. The executive director made $102,861 in 2010.

“If these were private-sector businesses operating on their own, employee pay would be none of our business,” said Jack McHugh, senior legislative analyst for the Mackinac Center for Public Policy. “Transit agencies would dry up and blow away without massive taxpayer subsidies and that makes it the people’s business.”

Michael Ford, the CEO of the AATA, was the highest paid administrator at $183,895.

Ford didn’t respond to an email seeking comment.

The other AATA administrators making $90,000 or more included: Dawn Gabay, deputy CEO, $116,289; Ed Robertson, human resources director, $104,394; Christopher White, service development manager, $98,274; Philip Webb, controller, $93,514; Ronnie Copeland, transportation manager, $93,344; Terry Black, maintenance manager, $93,063; Janet Hallber, IT manager, $92,529.

White House sends Hill Fast & Furious docs, but withholds some

September 30, 2011

The White House sent another installment of documents to Congress on Friday detailing White House staffers' knowledge about the controversial "Operation Fast & Furious" gunrunning probe run by the Bureau of Alcohol, Tobacco, Firearms & Explosives.

However, the chief counsel to President Barack Obama, Kathryn Ruemmler, indicated that the White House was withholding an unspecified number of internal e-mails exchanged among three National Security Staff aides.

"These internal NSS emails are not included in the enclosed documents because the [Executive Office of the President] has significant confidentiality interests in its internal communications," Ruemmler wrote in a letter to House Oversight & Government Reform Committee Chairman Darrell Issa (R-Calif.) and Sen. Chuck Grassley (R-Iowa). The letter, posted here, was obtained Friday by POLITICO.

The latest batch of 102 pages of records partially duplicated information previously sent to Congress and didn't appear to include any smoking guns showing that White House officials were aware that the operation involved allowing hundreds or thousands of guns to flow essentially unimpeded from the U.S. to Mexican drug cartels.

"As today's production makes clear, none of the communications between ATF and the White House revealed the investigative law enforcement tactics at issue in your inquiry, let alone any decision to let guns 'walk,'" Ruemmler wrote in response to a letter Issa and Grassley sent to National Security Adviser Tom Donilon earlier this month.
Posted by Josh Gerstein 06:07 PM

Fed Plan to Consolidate Power Over Nation's Power Highway Has States Nervous

By Judson Berger
Published October 01, 2011

The Obama administration is looking to consolidate control over the nation's power highway, pushing a proposal that would put one federal agency in the driver's seat when it comes to reviewing and approving power-line projects across the country.

The proposal has triggered a rush of complaints, pitting power companies and the federal government against concerned citizens and local lawmakers.

As the Energy Department reviews the immense feedback in the weeks ahead, the ordeal could help determine how and where the nation's power supply is routed.

At the heart of Washington's proposal is a desire to guide and speed up a process that can be slowed by local bureaucratic hurdles. The need for more transmission lines is apparent -- in the vast states where wind and other forms of renewable energy are produced, the energy is often hundreds of miles from where it would be consumed.

But new power lines are not exactly welcome guests.

"Siting transmission is extremely difficult, because no one wants it on their land," said Gene Fadness, with the Idaho Public Utilities Commission.

Still, he said, "We don't think (the process) takes so long that it's not workable."

The states, which along with local governments have long had authority over whether and where power lines get built, derided the plan as a move that would make it harder for local residents to weigh in.

"It turns the whole process on its head," said Robert Thormeyer, spokesman with the National Association of Regulatory Utility Commissioners. He said the federal government would be "more inclined to build" than the states, if for no other reason than they probably wouldn't have as much interaction with citizens. A bureaucrat in Washington might not hear the not-in-my-backyard pleas as frequently as a bureaucrat in, say, Boise.

The proposed change has drawn the skepticism of at least one senator. Sen. Jeff Bingaman, D-N.M., who helped write a 2005 law that initially expanded federal power over power lines, complained about the plan in a letter to Energy Secretary Steven Chu.

The chairman of the Senate Energy and Natural Resources Committee said it appears the commission is trying to "rewrite" the language in the law. He said that's a decision for Congress, not the commission, to make.

The move, he wrote, "would pave the way for the commission to use the newly consolidated powers in ways never intended by Congress."

On paper, the federal government has had expanded authority over transmission lines since 2005, when the Energy Policy Act set up a process that split federal oversight between two agencies -- the Department of Energy and the Federal Energy Regulatory Commission.

Under the law, the Department of Energy was tasked with studying where transmission lines were needed most. Then the FERC was given the power to grant construction permits in those areas under certain circumstances, including if a state withheld approval for more than a year.

Successful court challenges, though, have since blocked the federal government from exercising that authority.

In the latest proposal, the FERC suggested shifting things around -- so that the Department of Energy would let the FERC effectively do all the work. The FERC would have the authority to figure out where power lines are needed most, and then have authority over permits for specific projects.

"This may lead to a 'build, build' mentality," the National Association of Regulatory Utility Commissioners warned in a Sept. 8 letter to Chu. The group said giving FERC all that power could lead to "the construction of unnecessary and expensive transmission projects."

They warned that the federal role makes local participation "less accessible, more expensive and therefore less likely."

In one of the earlier court cases challenging Washington's power-line power, a New York community group complained that the federal commission would not require power companies to review the effect a project could have on property values.

Idaho Commissioner Marsha Smith agreed that state and local governments have a better sense of how a project would affect residents -- like whether a transmission tower would "impair" farmland.

"Federal agencies don't have the historical, social, cultural and physical information that deals with the local areas," she said.

The FERC said it's not proposing to expand federal power. The proposal, the agency said, "will simplify and consolidate in a single forum federal actions mandated by Congress."

They also said the plan would allow for an "expedited" process and, in the long run, "help satisfy the need for a modern and efficient transmission grid in the United States, with increased access to the most cost-effective renewable resources."

FERC spokesman Craig Cano said the proposal is not final; the Department of Energy still has to review comments.

"They're looking at options for how to move forward given the court decision on the last try," he said. "It's one idea."

The idea has support from the industry and some environmentalists. The Natural Resources Defense Council wrote in a memo last month that the plan would spur "needed new clean, renewable energy generation while ensuring that land and wildlife values are protected."

US Selects Contractor to Support African Healthcare Project


The Obama Administration's billion-dollar global healthcare endeavor continued to unfold this week with the awarding of a $20 million support-services contract (Award #AID-OAA-C-11-00161). The U.S. Agency for International Development (USAID) gave the contract to Cambridge, Mass.-based Management Science for Health, or MSH, which will be tasked with identifying "policy and implementation constraints” as well as potential hurdles to related investments across Africa. The African Strategies for Health initiative (Solicitation #M-OAA-GRO-EGAS-11-0001), as it is known, is a separate but corollary segment of the Administration's international healthcare program, which USAID is dividing into three primary projects.

As U.S. Trade & Aid Monitor previously reported, the largest of the three packages is the $500 million plan for Africa. The Asia/Middle East plan will receive $300 million, while $100 million is slated for programs in Latin America and The Caribbean (Monitor; May 6, 2011). Likewise, there is an estimated $60 million component of the global strategy strictly for communications and IT, which includes the crafting and dissemination of media messages on behalf of local governments to promote "healthy behaviors."




Rep. Don Young to Repeal Every Regulation Enacted Since 1991

Written by Brian Koenig
Friday, 30 September 2011 11:38

Rep. Don Young (R-Alaska, left) plans to introduce a controversial bill that would abolish every federal regulation enacted in the past two decades, including restrictions on banking, oil drilling, healthcare, and food and drug safety. "My bill is very simple, I just null and void any regulations passed in the last 20 years," Young announced to a crowd at the Anchorage Downtown Rotary Club. "I picked 20 years ago because it crossed party lines and also we were prosperous at that time. And no new regulations until they can justify them."

Rep. Young’s legislation is still in development, but the premise of the bill is to dissolve burdensome regulations that hamper American businesses from growing and prospering in the sluggish U.S. economy. "The main thing is if an agency can’t justify a regulation, it shouldn’t be on the board," he contended. "The overall idea behind the legislation is to make sure an agency justifies these regulations." The Alaskan congressman did however cede to the likely fate that his proposal would be barricaded by the Democratic-led Senate or stamped with a veto by President Obama.

Regardless of the bill’s details, the binding reality is regulatory agencies have boomed over the past decade, and at a more progressive rate during the Obama administration. According to a study by the Heritage Foundation, 75 new major regulations have been enacted — costing $38 billion annually — since President Obama took office. The New American reported last month:

According to the Government Accountability Office, between October 2010 and March of this year, 1,827 rulemaking proceedings were completed, 37 of which were classified as "significant" or "major," meaning their expected economic impact surpassed $100 million per year. According to estimates by regulatory agencies, 15 of these new major regulations have combined annual costs of a whopping $5.8 billion.

The number of pages in the Federal Register, which chronicles all new and proposed rules and regulations, jumped 18 percent in 2010. Further, the Federal Register documents more than 4,200 regulations in waiting, not including new EPA clean air rules, ObamaCare mandates, new fuel economy standards, or Dodd-Frank regulations.

Young later admitted that some regulations are necessary, but that he’s interested in repealing "regulations that do not have any founding." Responding to a question about Wall Street regulation, he said, "When we deregulated the financial institutions, which we did I believe probably 10 years ago, we created some problems. There’s no doubt about that."

Luke Miller, Young’s spokesman, wrote in an email that the congressman believes it’s blasphemous that the "thousands of rules that Congress never intended and has not approved" are burdening American taxpayers with over $1.75 trillion per year. "While there are certainly regulations that are essential for public health and safety, the amount of regulations coming from the federal government and the extent to how they affect everyday life in America is outrageous," Miller said.

As Young’s legislation further develops, opponents of the proposal will be emerging from the woodworks, as they exploit the weighty "importance" of consumer safety and environmental protection. An attendant at the Rotary Club luncheon, Deborah Williams, former director of the Alaska Democratic Party, inferred that Young’s legislation would be calamitous to America’s well-being, as it would repeal rules on deep sea oil wells and subject consumers to dangerous health costs, due to lacking food and drug regulations.

But Young argues that in the past 20 years, a wide array of regulations have been fused into the U.S. economy, infecting nearly every sector of society, from industry, banking, aviation, energy extraction, and food production. He contends that American politics, and a corrupt Congress and executive that continually oppresses the private sector, must be reformed. "We’ve got to make the public less comfortable and more interested in the benefits that they should be providing because of economic well-being for future generations," he said.

Whether Mr. Young’s full intent is to extinguish every regulation on the books since 1991 is unclear, because the legislation is still being developed and he has somewhat backpedaled due to recent criticism. But nevertheless, his message is clear: "The idea behind the legislation is simple; if an agency cannot justify the benefit of a regulation, then it has no business being on the books."

Teachers reprimanded after political survey

Posted: Sep 29, 2011 6:28 PM by Rob Krieger

PRAIRIEVILLE- Seventh grade students at Galvez Middle School got a lesson in extreme politics they and their parents may not have expected.

Their social studies teacher prefaced a lesson on political parties with a survey that asked: Are you a Republican or Democrat.

"In my opinion the answers were highly skewed in order to promote one party over another," said Terry Stehlik, who's child was given the survey.

Ascension Parish Schools quickly sent a letter to parents to let them know the teacher made a mistake by using the "teaching tool," and assured them it wouldn't happen again.

"We don't want teachers to teach partisan views to students, we want teachers to approach political views in a balanced way, so that we make sure that we're not being critical of any political party or any political group," said Steve Westbrook, Assistant Superintendent of Ascension Parish Schools.

You can see the full survey here.

Solar Power to the People

Bill O'Reilly

Nobody likes buying oil from OPEC. Nobody likes coal dust dropping from the sky. We all know that pollution is bad, and greedy oil sheiks are not looking out for us. The problem is, we don't have a realistic alternative fuel option. So we have to live with a bad situation.

President Obama has fast-tracked green energy projects, and the results, thus far, have been awful. The Solyndra scandal is the best example. The feds provided this solar panel company $528 million in loans. Shortly after that, the company declared bankruptcy. See you later, a half-billion taxpayer dollars.

Many Americans were upset by this colossal waste of money, but not The New York Times editorial page. It headlined: "One company's failure should not deter robust public investments in clean energy." Now we know why the nation is more than $14 trillion in debt.

The Times editorial goes on to urge the government to pour more money into "green" industry in conjunction with raising fuel taxes, because that's what's good for America. "The surest way to guarantee that America gets its fair share of (green) business ... would be to enact a comprehensive energy strategy that raised the price of older, dirtier fuels."

Swell. Americans are already taxed to the max, and the Times wants the feds to impose even more taxes to discourage "dirty" fuel use. So, folks who have to drive would pay more as the government artificially drives up the price of energy. That would help the bad economy, wouldn't it? Consumers saddled with higher utility and gasoline costs. Yeah, that's the ticket to an economic rebound for sure.

But The New York Times doesn't care. The paper wants global warming to stop right now! And it blames fossil fuels for the heat wave. So, whatever it takes to get green energy on everybody's plate is going to be supported by the paper and some others on the liberal side even if it means wrecking the economy and running up massive debt.

A few months ago, I had an interesting conversation with T. Boone Pickens, the billionaire investor. He put up his own money to develop a massive wind power project in the heartland. T. Boone thought he'd found the answer: Wind would drive the clean energy movement. But the windmills couldn't deliver enough energy to make a profit. So Pickens folded and put the wind deal up for sale.

If the United States could develop green energy, I'd be first in line to buy some. I recognize the need for clean, efficient fuel. But you don't punish hardworking Americans by wasting their tax dollars and raising their taxes to fund the green dreamscape. That is irresponsible and brutally unfair. With literally trillions of dollars to be made, the private marketplace is where alternative energy should be developed.

If there's real green in it, things will happen.

Liberal Myths

John C. Goodman

Did you know that Paul Krugman is more compassionate than you are? Or so he says.

In fact, just about everybody who is left of center is more compassionate than everybody who is right of center, Krugman explained in a recent New York Times editorial.

“American politics is fundamentally about different moral visions,” he wrote. If you identify with Milton Friedman’s “Free to Choose” vision you are today part of the “free to die” crowd.

That last bit is a reference to Republican presidential candidates foolishly stumbling over a Wolf Blitzer question about what should be done with a man who willfully chooses to be uninsured and then discovers needs lifesaving medical care. No, in case you are wondering, none of them said “let him die.” But Krugman would like you to believe that is the position of the entire Republican Party.

[Democrats, by the way, would also have trouble with that question. In fact there is nothing in Obama Care that guarantees health care for someone who ignores the government mandate and remains uninsured.]

Krugman is not alone. Writing at Health Affairs the other day, Princeton University economist Uwe E. Reinhardt described the current budget impasse in Washington by declaring that this country has been in:

…a long ideological war fought over the distribution of economic privilege in this country, a war that has been raging unabated for over three decades now.

One side in this war believes that the current distribution of income and wealth in this country is fair, as it rewards generously those who contribute commensurately to the economy and properly gives short shrift for those who do not — e.g., unskilled workers…

The opposing faction believes that the current distribution of income and wealth no longer is the product of a genuine meritocracy, and even if it were, that health care, education and legal care are so-called social goods to which rich and poor should have access on roughly equal terms, regardless of their own ability to pay.

Although Reinhardt doesn’t engage in the kind of ad hominem personal character attacks that are Krugman’s stock in trade, the message is still the same: one side cares about the unfortunate and the other side doesn’t.

Before going further, there is something you should know. There is no evidence whatsoever – zero evidence – that liberals are more compassionate than conservatives. In fact all the evidence points in the other direction. More about that in a moment.

Since Krugman is a Nobel Prize winning economist, I would like to turn first to the science of economics, just as Adam Smith did more than 200 years ago. What Smith realized was that it’s not compassion, or any other feeling that is going to eliminate most deprivation and suffering around the world. It’s sound economic policies, produced by rational thought.

Several years ago, I was at a conference at the Vatican and I heard another Nobel laureate, University of Chicago economist Gary Becker, make a remarkable statement. Becker said, “I believe in capitalism. The reason: capitalism confers its greatest benefits on those at the bottom of the income ladder. If I didn’t believe that, I wouldn’t be a capitalist. And Milton Friedman thinks the same way.”

Non-economists are generally unaware of how much evidence there isin support of the Becker/Friedman position. If you look around the world, you will find that the bottom 10% of the income distribution gets about the same percent of national income in countries with the least economic freedom (2.5%) as they do in the countries with the most economic freedom (2.6%). Whether a country is capitalist or socialist doesn’t seem to matter. But there is a huge difference in the absolute level of income. In fact, the bottom 10% gets almost ten times more income ($8,474 per persons per year vs. $910) in capitalist countries than in non-capitalist countries.

Given that disparity, what is the most compassionate economic system? It is the system advocated by the University of Chicago economists and other classical liberals: a system that leaves people free to use their intelligence, their creativity and their innovative ability to pursue their own interests. In other words, it is a system in which people are “free to choose.”

That freedom and free enterprise are good for poor people is a fact of economic science. It has nothing in particular to do with compassion. But since the issue has been raised, who are the most compassionate people? It turns out, they are not liberals. In an exhaustive study of this issue American Enterprise institute president Arthur Brooks discovered that:

In 2000, households headed by a conservative gave, on average, 30 percent more money to charity than households headed by a liberal ($1,600 to $1,227). This discrepancy is not simply an artifact of income differences; on the contrary, liberal families earned an average of 6 percent more per year than conservative families, and conservative families gave more than liberal families within every income class, from poor to middle class to rich…

The differences go beyond money and time. Take blood donations, for example. In 2002, conservative Americans were more likely to donate blood each year, and did so more often, than liberals. If liberals and moderates gave blood at the same rate as conservative, the blood supply in the United States would jump by about 45 percent.

What about Krugman, personally? I don’t know him. But the next time he is on television, mute the sound and focus on the image on the screen. Is there anything about Paul Krugman that seems to be the least bit compassionate? Not to me.

Obama's Double Down on Stupid

Bob Beauprez

Solyndra, the California energy company gone bust, was so cash strapped in December, 2010 that they defaulted on a loan payment to the government. That didn't bother the Obama Administration, though. In fact, DOE officials amended the loan agreement, allowing Solyndra to draw another $67 million, and subordinated the taxpayer's credit position to that of private investors.

There was an abundance of information and reasons why the Solyndra loan should never have been approved in 2009. But, the Obama White House rejected all the obvious warning signs preferring to pass out half a trillion dollars like party favors and to create campaign photo-ops.

The White House says this wasn't stupid. "That's just the way business works," according to the President's spokesman, Jay Carney.

The next time Obama shows he understands how ANYTHING in business works, it will be the first time.

The White House still defends the $535 billion loan guarantee to Solyndra as an investment in "cutting edge technology." A less varnished assessment would conclude that it was a government investment in opulence designed to failed from the beginning.

The glitzy made-for-Hollywood 300,000 square foot plant, characterized by workers as the "Taj Mahal," had vastly greater manufacturing capacity than Solyndra ever commanded in market share and came with "robots that whistled Disney tunes, spa-like showers with liquid-crystal displays of the water temperature, and glass-walled conference rooms."

The Administration doubled down on stupid by not recognizing that failure was imminent by the end of 2010. In addition, the Energy Act of 2005 specifically prohibits subordination of the taxpayer's credit position – an apparently violation of federal law.

The DOE says it renegotiated the loan agreement and allowed Solyndra to draw down the additional $67 million because the government officials "thought it gave Solyndra a fighting chance to survive and the taxpayers their best chance to recover their loan."

What the DOE doesn't say is that the subordination of the taxpayer's position and the additional $67 million created an illusion of better financial condition than was reality. In other words, the DOE helped put a better-than-actual appearance on Solyndra, who then went to the private markets to raise additional investment capital. That prompted allegations that government officials may be guilty of fraud according to Andrew McCarthy, a former Assistant U.S. Attorney.

The Solyndra scandal has already prompted five high level investigations. What Obama thought would be government funded campaign props is likely to turn into a re-election season nightmare.

Calif. Dems seek waivers after embezzlement scheme

Sep 30 07:15 PM US/Eastern
Associated Press

SACRAMENTO, Calif. (AP) - Attorneys for Democratic candidates and committees trying to recover from an alleged embezzlement scheme appealed Friday to California's political watchdog agency to relax financial reporting rules temporarily and waive some contribution limits.

The attorneys appeared before a meeting of the Fair Political Practices Commission in Sacramento as it considered options for candidates whose campaign accounts evaporated in the scandal involving longtime Democratic treasurer Kinde Durkee.

Durkee is charged with mail fraud and accused by federal prosecutors of siphoning $700,000 from the account of state Assemblyman Jose Solorio and targeting others, including U.S. Sen. Dianne Feinstein, who estimates she may be missing as much as $5 million.

Investigators are trying to sort out who lost how much after entrusting their funds to Durkee & Associates.

Solorio's attorney, Karen Getman, said the bank Durkee used, First California Bank, will not provide statements so candidates can determine whether they have any money left. She said it could be months before candidates even know where there money went, and it would be unfair to penalize them for an extraordinary situation.

"Contributions weren't contributions, expenditures weren't expenditures. It was all just bank transactions conducted by Kinde Durkee," said Getman, a former chairwoman of the FPPC.

She said candidates are also being victimized by the bank, which has refused to help the alleged victims obtain any documents.

The bank's chief marketing officer, Diane Dickerson, did not immediately respond to phone messages left Friday.

Durkee controlled as many as 400 accounts, including some for nonprofits. A criminal complaint says she acknowledged misappropriating her clients' money for years, using the funds to pay her credit cards, a mortgage, business bills and her mother's care at an assisted-living facility.

She then shifted money from other candidates' accounts to cover up the wrongdoing, federal prosecutors allege.

Durkee has not yet entered a plea and is due to appear in court Oct. 19. Her attorney, Daniel Nixon, did not return calls seeking comment.

The embezzlement case came as many candidates head into difficult, potentially expensive campaigns in an unpredictable election year.

Candidates for state and congressional offices face newly redrawn political maps that could lead to tougher contests for many incumbents and possibly more competitive seats.

Stephen Kaufman, an attorney representing the Los Angeles County Democratic Party and several other Durkee clients, urged the FPPC to devise a clear process for candidates and committees who may not be able to recreate missing financial statements as the case winds through court—which could take years. He said contribution limits should also be waived if candidates can show they didn't ever receive the funds.

"There are obvious examples where money was received and a deposit was never put into their bank accounts," Kaufman said. "Where it went, I frankly don't know."

Commission Chairwoman Ann Ravel said the agency would not take enforcement action, or issue penalties, for any legitimate victims who are unable to file complete reports due to the case. The next statewide filing deadline is Jan. 31, although federal candidates whose campaigns are regulated by the Federal Election Commission must file quarterly reports in about two weeks.

In California, Ravel said the FPPC is researching myriad legal issues, including guidance for candidates on opening duplicate bank accounts, whether they can use legal defense funds to pay expenses in the case and whether contribution limits can be raised temporarily to make up for missing funds.

She said the commission has discretion to interpret state law on many of those issues, but could also determine that legislative action is necessary. The state Legislature is not scheduled to reconvene until January.

The commission will hold another meeting in Los Angeles next month and could offer guidance after that, Ravel said.

Feinstein is one of several members of Congress whose campaign accounts are in limbo. Reps. Susan Davis and Loretta Sanchez also said they believe hundreds of thousands of dollars are missing.

In an audit released this week, the FEC found repeated problems with deposits Durkee's Burbank firm, Durkee & Associates, made on behalf of the Democratic Party of Orange County's federal political action committee from 2007 through 2008.

It found that the group failed to deposit 58 percent of the contributions received in the 2008 election cycle within 10 days of receipt, as required by law. The money was deposited, on average, 41 days late, the audit said.

Durkee's firm blamed the delays on bank errors and a new check-scanning system that led to "many discrepancies and processing malfunctions which we were not prepared to handle," according to the audit. The FEC did not issue a fine or penalty.

Many candidates and committees do not even know how much money they have remaining and cannot spend any of it, since all of their accounts have been frozen.

The state commission spotted the alleged fraud during a 2009 audit and notified the FBI, said Gary Winuk, chief of the FPPC's enforcement division.
Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Capitalism Gives Back

Jeff Carter

This is one of the best articles I have read in a long time. Andy Kessler eloquently dismantles the arguments from the left.

As you may or may not know, I live in one of the most left wing areas of the country. The recent statements by Massachusetts far left Democratic Senate candidate Elizabeth Warren were being repeated and put on Facebook pages everywhere.

“You built a factory out there? Good for you,” she says. “But I want to be clear: you moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did.”

She continues: “Now look, you built a factory and it turned into something terrific, or a great idea? God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”

Kessler takes the socialist/communists to the woodshed.

Give something back? Greatbatch did well specifically because he provided something that society needed. His and Medtronic’s profits are what you and I are willing to pay above costs for these life-enhancing devices. This is true of Apple iPhones and Genentech Herceptin and Google Maps and Facebook Likes.

Ever since the mid-19th-century era of so-called Robber Barons, this country has had a philosophical divide over the role of business in a democracy. It’s time to set the record straight.

History has proven that the road to increased standards of living and wealth was built on productivity—doing more with less. It was the Industrial Revolution that got us out of the growing fields and into factories, which allowed us to pay for roads and teachers and civil servants. And now the move out of factories into air-conditioned offices is creating anxiety. It shouldn’t. Labor replacement is productivity. James Spangler’s vacuum cleaner. The Walker brothers’ dishwasher. Clarence Birdseye’s flash freezing. DuPont’s Kevlar. And John Simpson’s guidewire catheter for angioplasty and heart stents—the list goes on. Each invention generated wealth because it improved our lives, not because someone “gave back.”

Click over and read the whole thing. It’s really brilliant and echoes what I have been writing about here regarding entrepreneurship, and “social justice“.

People on the right often quote the Chinese proverb, “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.”

However, the sentiment is correct but the real point is missed. Someone has to invent and manufacture the fishing pole, the reel, the line, the sinker, the hook, the bait, the knife, the charcoal, the cooker, the silverware, and the plate before he can eat that fish. They all raise our standards of living.

Society pays them for their service-but society gets back far more in consumer surplus than it pays. That’s the grand bargain of capitalism.

Judge rules Constitutionally guaranteed right to bear arms merely a privilege

Kurt Hofmann, St. Louis Gun Rights Examiner
September 30, 2011

A federal lawsuit filed in Texas last year seeks to repeal the prohibition, as part of the Gun Control Act of 1968, on handgun purchases by 18 to 20-year-olds from licensed dealers. That lawsuit has hit a snag, with U.S. District Judge Samuel Cummings dismissing it yesterday. From the Statesman:

In a 17-page order, U.S. District Judge Samuel Cummings dismissed a challenge to a 32-year-old [actually 42] federal law barring handgun sales by licensed gun dealers to people under the age of 21.

Judge Cummings' rationale is especially . . . interesting:

"The Court is of the opinion that the ban does not run afoul of the Second Amendment to the Constitution,” the ruling states. “The right to bear arms is enjoyed only by those not disqualified from the exercise of the Second Amendment rights.

But wait a second--"by those not disqualified from the exercise" of a Constitutional right? If the government can arbitrarily deem some citizens "unworthy" of a right, and "disqualify" them from it's exercise, how can it even be a right? What distinguishes it from a mere privilege, to be granted or denied at whim? If 18-year-olds are unworthy of the right (or privilege) of self-defense, who else might be so deemed some time in the future? He continues:

It is within the purview of Congress, not the courts, to weigh the relative policy considerations and to make decisions as to the age of the customer to whom those licensed by the federal government may sell handguns and handgun ammunition.

No, your honor--it is most definitely within the purview of the courts to rein in the legislature's unconstitutional excesses through judicial review. If you are unable or unwilling to do that, what good are you?

Of course it's possible that Judge Cummings agrees with Senator Charles Schumer (D-NY), that the three branches of government do not include a judiciary branch (see sidebar video):

So I would urge my Republican colleagues, no matter how strongly they feel -- you know, we have three branches of government. We have a House. We have a Senate. We have a president.

If the court's role in government is merely as a rubber stamp for the legislative and executive branches, Cummings is probably just fine for the job. The flip side of that, of course, is that if we the people cannot count on the courts to rein in an overzealous legislature and executive, we will have to take that on ourselves. That could get messy.

The Government's Interest Rate Extortion

Bill Tatro

When you take action, there is usually an intended or unintended reaction. In order to support his banker friends, the jury is still out on whether Ben Bernanke intentionally drove retirees to risk their life savings.

Millions of seniors have subsisted on Social Security, pensions, and bank savings for many years. Their risk tolerance was low and a 3% CD rate was sufficient to meet their daily needs.

Mailbox money that consistently arrived on a monthly basis allowed these folks to plan their entire lives.

Yes, retirees understood inflation, not the type we experienced in the 1970’s, but rather the controlled, acceptable 2% or 3%.

Even though this normal rate of inflation caused prices to increase, it also allowed for higher rates on savings accounts.

Periodically, with a little extra cash, they would buy a popular mutual fund, or a stock with good fundamentals.

Of course, those investments were for the long-term, and more than likely were intended for their children or grandchildren.

With ample Social Security and pension income, there was no need for seniors to rely on stocks or mutual funds for a living.

Then along came Chairman Ben and his echoes of Alan Greenspan with interest rates lower than imaginable: CDs at 0.59%, money market accounts at 0.25%, 2-year treasury notes at 0.26%, and savings account at 0.28%.

Savers were completely stunned when they experienced essentially no return on their money.

It was no longer a red-hot statistic; it was a cold-hard fact that retirees could no longer make ends meet.

Less money, more expenses.

What was a person on fixed income to do?

Ask Bernanke and his Wall Street cronies, and they will say its simple: Take more risk. Just withdraw your life savings, and reposition it into junk bonds, or maybe a good international stock fund.

Or, how about some Netflix stock?

Regardless of one’s choice, the markets that receive this money will supposedly move higher and higher, until one day when the bull runs out of energy.

The criminal activity of Ben Bernanke has put several generations at risk for not only their savings, but their lives in general.

When the financial markets collapse and the saver turned investor loses it all, the response from Ben and his cohorts will probably be “Well, that’s the market.”

Saver turned investor is not a pretty sight, but its occurring every single day.

This could be the most significant intended or unintended consequence of this whole financial farce.

Poll of Swing States

First PurplePoll Shows Challenges for Obama, Leading GOP Contenders

Voters surveyed in 12 Purple Swing States will decide the 2012 race

ALEXANDRIA, Va., Sept. 30, 2011 /PRNewswire-USNewswire/ -- Today Purple Strategies released the results of their first PurplePoll of the 2012 election cycle revealing challenges for President Obama, but problems for Mitt Romney and Rick Perry as well.

Click here to read full PurplePoll results.

Unlike other polls, the PurplePoll focuses exclusively on the 12 states that have decided presidential elections for the past dozen years, and will do so again in 2012: Colorado, Florida, Iowa, Minnesota, Nevada, New Hampshire, New Mexico, North Carolina, Ohio, Pennsylvania, Virginia and Wisconsin. Eight of these states won by President Obama in 2008 have swung between Republican and Democratic candidates since 1996. The four others (NH, MN, PA, and WI) have been decided by three points or less at least once since 2000.

The survey finds President Obama with a 41 percent job approval rating in the 12 states, all of which he carried in 2008. The poll also shows that in these 12 states, 24% of those surveyed have a favorable view of Texas Governor Rick Perry; among independents, 19% view Perry favorably. Head-to-head matchups show a statistical dead heat: Romney, who is viewed favorably by 32% of respondents, holds a 46%-43% lead over Obama, while the President leads Perry by a margin of 46% to 44% in a general election matchup. On issues, nearly half - 49% - rate "jobs and economic growth" as the most important issue facing America; 23% say "government spending and tax cuts" are the nation's top priority.

Members of Purple Strategies leadership team made the following statements in response to the survey findings:

Steve McMahon, Founding Partner - "Campaign 2012 is just getting started. President Obama's approval ratings may be lower than Democrats would like, but his GOP challengers are not well liked. President Obama should continue his focus on jobs, while painting his potential opponent as a captive of the Tea Party, who will put narrow ideological interests ahead of the country's. With the primaries months away, this much is certain: Republicans will continue to attack each other, and will damage their eventual nominee among the Purple State independent voters who will determine this election."

Bruce Haynes, Managing Partner - "These 12 States won by President Obama in the last election are the key to the GOP recapturing the White House in 2012. If Republicans want a candidate who can win back these key swing states, then our first survey clearly shows that Rick Perry has a lot of work to do in Purple America."

Updated regularly throughout the 2012 election cycle, the PurplePoll will follow leading political indicators and track new issues as they emerge. It will offer a unique lens to gather original insight into this critical election.

The PurplePoll is fielded and analyzed by Purple Insights, the research division of Purple Strategies, a bipartisan public-affairs firm located in Alexandria, VA.

SOURCE Purple Strategies

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Obama speechwriter departing White House

By Peter Nicholas
Washington Bureau

September 30, 2011, 1:28 p.m.
One of the young wordsmiths behind President Obama’s oratory is leaving the administration, a crack in a close-knit speechwriting team that helped propel Obama to the White House and has played a major role in shaping his words ever since.

Adam Frankel is leaving to become executive director of Digital Promise, a new nonprofit group that will explore ways technology can be used to strengthen education.

“I worked with the president on a lot of his education speeches,’’ Frankel said in an interview Friday. “So I was thinking about what I want to do and I realized that I wanted to see if I could have some kind of impact in education.’’

Frankel, 30, was part of the original core of campaign wunderkinds led by Jon Favreau and Ben Rhodes who toiled on speeches as Obama slogged his way past Hillary Clinton in the 2008 Democratic primaries. Today is his last day.

At the White House, Frankel’s forte was speeches that involved issues of morality and history. When Obama would be called on to give a eulogy, the assignment often fell to Frankel.

He penned a memorable speech Obama delivered in West Virginia last year, marking the deaths of 29 coal miners killed in an explosion.

“Most days they would emerge from the dark mine, squinting at the light,’’ Obama said. “Most days, they would emerge, sweaty, dirty, dusted with coal. Most days, they would come home. Most days, but not that day."

Down the road, Frankel said, he wants to write a book about his family. His grandparents on one side were Holocaust survivors, while his grandfather on the other side fought in World War II.

Obama rose to national prominence because of a speech at the Democratic convention in 2004. He rescued his presidential bid with a speech on race relations in 2008.

And he has repeatedly sought to gain traction for his agenda with high-stakes speeches throughout his term. So speechwriters have a special status in the White House. Frankel had a fair amount of face time with Obama, working over speech drafts on Air Force One and in the Oval Office, making final edits.

“His edits are very precise,’’ Frankel said. “He has respect for the writing process, and so his edits are very helpful. If he sees a problem with something, he’ll tell you exactly what needs to be done to fix it rather than just say, ‘There’s something wrong with this.’ ’’

In their conversations, Obama would call him “Frankel,’’ not “Adam.’’

No matter.

“He can call me whatever he wants,’’ Frankel said.
One of the young wordsmiths behind President Obama’s oratory is leaving the administration, a crack in a close-knit speechwriting team that helped propel Obama to the White House and has played a major role in shaping his words ever since.

Adam Frankel is leaving to become executive director of Digital Promise, a new nonprofit group that will explore ways technology can be used to strengthen education.

“I worked with the president on a lot of his education speeches,’’ Frankel said in an interview Friday. “So I was thinking about what I want to do and I realized that I wanted to see if I could have some kind of impact in education.’’

Frankel, 30, was part of the original core of campaign wunderkinds led by Jon Favreau and Ben Rhodes who toiled on speeches as Obama slogged his way past Hillary Clinton in the 2008 Democratic primaries. Today is his last day.

At the White House, Frankel’s forte was speeches that involved issues of morality and history. When Obama would be called on to give a eulogy, the assignment often fell to Frankel.

He penned a memorable speech Obama delivered in West Virginia last year, marking the deaths of 29 coal miners killed in an explosion.

“Most days they would emerge from the dark mine, squinting at the light,’’ Obama said. “Most days, they would emerge, sweaty, dirty, dusted with coal. Most days, they would come home. Most days, but not that day."

Down the road, Frankel said, he wants to write a book about his family. His grandparents on one side were Holocaust survivors, while his grandfather on the other side fought in World War II.

Obama rose to national prominence because of a speech at the Democratic convention in 2004. He rescued his presidential bid with a speech on race relations in 2008.

And he has repeatedly sought to gain traction for his agenda with high-stakes speeches throughout his term. So speechwriters have a special status in the White House. Frankel had a fair amount of face time with Obama, working over speech drafts on Air Force One and in the Oval Office, making final edits.

“His edits are very precise,’’ Frankel said. “He has respect for the writing process, and so his edits are very helpful. If he sees a problem with something, he’ll tell you exactly what needs to be done to fix it rather than just say, ‘There’s something wrong with this.’ ’’

In their conversations, Obama would call him “Frankel,’’ not “Adam.’’

No matter.

“He can call me whatever he wants,’’ Frankel said.

Copyright © 2011, Los Angeles Times

The Wall Street Protesters’ Website of Tears

September 30th, 2011
Penny Thawtz

The Wall Street protesters have a web site called, “We Are The 99 Percent.” This site permits the supporters and participants of the Wall Street protests (the 99 percent) to submit and publish to the site handwritten notes of their own personal hardship stories, apparently all caused by rich corporations. The idea seems to have been created to generate support for the protesters and to offer insight to the effects of the supposedly injurious behavior by successful corporations and the rich

It appears to me that the transgressions attributed to Wall Street by some of these people are rather endless and include poor health, bad loans, bankruptcy, credit card debt, huge student loans, no clothing, hunger, depression, anxiety, single parenthood, forced adoption, unemployment, foreclosure, taxes, and loss of hope, etc. Every problem a person could have is blamed on “the rich” and Wall Street. Do any of these people take any personal responsibility for their own bad decisions which may have contributed to their situation?

So I will probably get some heat from this, but I am going to post it anyway because maybe it will help some of them to get a different perspective. I think many of these people don’t seem to understand that the choices we make today, can affect us for many years to come. Many Americans are hurting and struggling to make ends meet, and some of these stories are truly sad, but some of them just seem like a logical outcome for some really bad decisions. What do you expect when you take out a school loan for $100,000.00 to earn a degree that will get you $29,000 a year? Payback is always a bitch, but more so when you only make $29,000 a year.

I do not believe these people should be protesting successful American people and businesses; they should do some serious self-examination and figure out if their own behavior and poor decisions may have contributed to their current predicament. For the most part, the stories read like a collective whine-fest with the writers complaining about how they have to work for what they want, how they must pay back money they have borrowed, how they have too much anxiety to find a job or keep one. Come on, now, really? Grow up.

Now, obviously most people do not have control over their health problems and I am sorry for anyone dealing with any sickness. We need to remember that life is hard and bad things do happen, but most bad things are not the result of someone else’s success.

My suggestion to these folks is that instead of writing online anger letters and blocking city streets, they do something constructive like get to know financial guru Dave Ramsey and learn about his philosophy on his website or radio show. Mr. Ramsey’s specialty is getting people back up and running after tough times such as these. One could also look for a helping hand at a church, synagogue or community organization, too. Americans are a good and generous people and will help.

Oh, yeah, maybe they should consider voting Republican in 2012.

Read on:

Duh! Here's a clue: If you can't afford to attend a certain school, then how do you plan on paying for it? Or are "we" supposed to pay for it?

Uh.... this might not be the best time to start a business, seeing as you have no money or collateral.

Yeah, I hate when people have to sell drugs to someone else's kids, so that they can feed their own kids. So unfair.

Well, now that don't seem right. Why don't you change your major?

Your Dad's not too bright then, huh?

What about counting your Section 8 Housing, Food Stamps and free insurance in your income tally. Maybe you'll feel better about yourself.

Try paying the loans off or helping kids in your own country first. You need the practice. Otherwise, how will you enable others in your helpless state of mind.

Did you write that all by yourself?

Liberals Call for Death of Herman Cain; "I Applauded" When He Almost Died of Cancer

Saturday, October 1, 2011

I have been writing for Pundit Press for over a year now and I have been a close follower of the news my entire life. And yet, I have never, ever experienced such vitriolic hatred that the Left is spewing today. Since the beginning of the year, we have covered liberals calling for the death of Sarah Palin. We covered a video game, created by a liberal, about killing Tea Partiers. We even covered liberals blaming Republicans for Hurricane Irene.

But the hatred that has been aimed at Herman Cain is like none other that I have ever witnessed. Why exactly the Left hates Mr. Cain can only be guessed at. Whatever the reason, it is not based in reality but on hatred.

And now there's this: there are liberals calling for his assassination or, at the 'very least,' his death. It is so disgusting and disturbing on so many different levels that it boggles my mind. Here are just a few examples that I found:

This comment came from a News One article which called on Herman Cain to be quiet (expletives obscured):

This one comes under a YouTube Video entitled, "White Republicans are RACIST BIGOTS" (expletives obscured):

This comment comes from another YouTube video, this one called "Bank Robber Just Wants Healthhcare." The person's insane suggestion? "Shoot Herman Cain:"

On top of these, there are many more calling for the death of Herman Cain, regardless of how. For example, this comment from the Huffington Post that refers to when Mr. Cain was speaking about almost dying from cancer:

Note: 4,693 fans

This one comes from Twitter, where a user tells Mr. Cain that he should 'just kill himself:'

And this comment comes from Mediaite, under an article about Herman Cain's thoughts on the Ground Zero Mosque, also known as the Park 51 Project:

Notice: Six "Likes"

I do not know what to say any more. The fact is, there isn't really that much to say other than these comments are some of the most vile things I have ever seen. "Civility?" What a joke.

Friday, September 30, 2011

New DoE loans favor even more Democratic donors

posted at 12:45 pm on September 29, 2011 by Ed Morrissey

Earlier today, I noted that one of the new loans approved by the Department of Energy for green-tech stimulus just happened to favor a company with connections to Nancy Pelosi’s family. That’s not the only connection in the batch of new loan approvals from the DoE, as the Daily Caller discovered. Digging into investment records and public statements, it appears that a number of key donors will benefit from the Obama administration’s largesse — including a central figure in the collapse of Solyndra and the destruction of a half-billion dollars in taxpayer money:

The Hill newspaper reported Wednesday that the Santa Monica, Calif.-based SolarReserve has secured a $737 million loan guarantee from the Department of Energy for a Nevada solar project.

That company has ties to George Kaiser, the Oklahoma billionaire who raised $53,500 for President Obama’s campaign in 2008. Through his Argonaut Private Equity firm, Kaiser holds a majority stake in Solyndra.

Argonaut has a voting stake on SolarReserve’s board of directors in the person of Steve Mitchell, who also serves on Solyndra’s board of directors.

John Rossomondo also notes the connection to Ron Pelosi at SolarReserve, but there are more connections to big Democratic donors:

Additionally, Federal Election Commission records made available by the Center for Responsive Politics show that SolarReserve board member James McDermott has contributed $61,500 to various Democratic campaigns since 2008, including $30,800 to Obama’s presidential election campaign.

McDermott’s U.S. Renewable Energy Group has a significant financial stake in SolarReserve, and has drawn scrutiny for its ties with Senate Majority Leader Harry Reid — and for reportedly driving green jobs to China.

And Lee Bailey, a fellow SolarReserve board member and U.S. Renewables Group investor, has donated $21,850 since 2008 to Democratic candidates including President Obama, Senate Majority Leader Harry Reid, California Sen. Barbara Boxer and then-presidential candidate Hillary Clinton.

And not just at SolarReserve, either. First Solar got $2.1 billion in loan guarantees, despite it looking like a very bad investment. After its share price peaked at $170 in February, it has tumbled to $65.77 this week, which means that investors don’t see a lot of optimism for the company. In fact, that looks an awful lot like the pattern at Solyndra, where share prices dropped dramatically, alerting DoE auditors whose concerns got ignored.

Who are the investors? One is Michael Ahearn, who pulled out a $69 million stake in the company last month, obviously not as interested in betting on First Solar as the Obama administration. However, he did invest $123,000 in the Democratic Party over the last three cycles.

Then there’s SunPower, whose stock has dropped from $21 in April to $8.30 today, but who got a $1.3 billion loan guarantee from the White House. How did they qualify for this largesse?

SunPower has paid lobbyist Patrick Murphy, a close confidant of Senate Majority Leader Harry Reid, at least $290,000 in lobbying fees since 2009.

SunPower’s political action committee gave $15,650 to Democratic congressional candidates in 2010 and only $500 to a single Republican candidate. Reid received the largest slice of that pie, a $4,000 campaign contribution.

So we’ve paid off donors to Obama, Pelosi, and now Harry Reid. At least they’re spreading it around. Will we get our money back out of SunPower’s loan? Not according to analyst firm Morningstar, which predicts losses this year and next. Why? Like Solyndra, their internal costs are too high to compete in the market.

The DoE isn’t operating a stimulus program. It’s running a slush fund for Democratic donors.

Liberals Try to Remove Anti-Obama Signs in New Orleans

Stephen Gutowski
Thursday, September 29, 2011 - 12:40pm

It's a story as old as time. Liberal comes across speech they don't like. Liberal does everything it can to silence said speech. (h/t Fox Nation)

criticizing President Obama. Some liberals wandered by and didn't like the fact the signs made fun of President Obama. These liberals freaked out so much that the media, police, and even some liberal politicians got involved.

In fact, city councilwoman Susan Guidry questions this guy's expression of his opinion so much that she openly admits that she will try to use ANY technicality she can find to squash it. She literally goes through a list of things she might use against the homeowner while being interviewed by WWL-TV saying "Whatever we can use, we will". Of course she is reportedly just "concerned about public safety".

Now, I'm not positive what country, or planet for that matter, these liberals live on but I've always been under the impression that here in America freedom of speech was a protected right given to us by God and protected from infringement by the Constitution. Heck, I'm not even the kind of person who would put up big provocative political signs on my property (and I don't agree with everything on those signs) but I am certainly the kind of person who will push back against those who try to drum up bogus technicalities in order to infringe on speech they don't like.

If this attack on free speech goes unabated and succeeds it will be yet another dark day for our country.

FBI Said to Be Probing Solyndra for Possible Account Fraud

By Seth Stern and Jim Snyder - Sep 29, 2011 6:17 PM GMT-0400

The FBI is investigating Solyndra LLC for possible accounting fraud and the accuracy of financial representations made to the government, according to an agency official.

The FBI is examining possible misrepresentations in financial statements, according to the FBI official, who requested anonymity because the investigation is continuing.

Solyndra, which made cylindrical-shaped solar panels, filed for bankruptcy protection on Sept. 6 and fired about 1,100 workers with little notice, about two years after winning a $535 million U.S. loan guarantee from the Energy Department.

The company’s offices in Fremont, California, were raided by Federal Bureau of Investigation agents on Sept. 8. The Justice Department hasn’t said why Solyndra is being probed.

“The company is not aware of any wrongdoing by Solyndra officers, directors or employees” related to the Energy Department loan guarantees or other actions and “is cooperating fully” with the U.S. Attorney in San Francisco, according to a Sept. 20 statement from Solyndra. David Miller, a company spokesman, didn’t immediately return a phone call and an e-mail seeking comment today.

Solyndra’s collapse has prompted congressional scrutiny of President Barack Obama’s administration, which issued final approval of the loan that also won support from officials in the administration of George W. Bush.
White House Pressure

Republicans on the House Energy and Commerce Committee, which has investigated the loan since February, have said the administration pressured federal loan officers to expedite the review of Solyndra’s application so it could be promoted as a stimulus success story.

The company was the first to receive a guarantee under the stimulus act and was the largest award given to a solar manufacturer under the program.

Democrats, who dispute claims politics played a role, joined Republicans in criticizing Solyndra Chief Executive Officer Brian Harrison for what they said were misrepresentations of the company’s finances in meetings with lawmakers.

“When Mr. Harrison was in my office in July, he said that Solyndra’s future was bright, with sales and production booming,” Representative Henry Waxman of California, top Democrat on the Energy committee, said at a Sept. 23 hearing on where Harrison was a witness. “I’d like to know why he told me that in July, and then filed for bankruptcy one month later.”
Harrison, Stover

Harrison and Chief Financial Officer Bill Stover invoked their Fifth Amendment rights against self-incrimination and refused to answer questions at the hearing.

Harrison joined Solyndra in July 2010, after Solyndra had received its loan guarantee and its auditor had warned its financial difficulties were deep enough to raise questions about how long it could survive.

Companies seeking guarantees were required to estimate project costs, list private investors and provide a model detailing cash flows for the life of the project, according to the 2006 Energy Department solicitation for loan guarantees.

Solyndra submitted an application in 2006 and added details in October 2007 after the company was identified by the Bush administration as a potential candidate for a guarantee.

It is unlawful for applicants for federal loan guarantees to make untrue, misleading or incomplete statements, according to James F. Bowe Jr., an energy regulatory lawyer with Dewey & LeBoeuf in Washington, who isn’t involved in the Solyndra case.
IPO Withdrawn

The company withdrew a planned initial public offering in June 2010, citing adverse market conditions. A month earlier, Obama toured the new manufacturing factory that U.S. aid helped to build and said Solyndra was a testament to “American ingenuity and dynamism.”

By December, the company was almost out of cash and sought to restructure the loan agreement with the Energy Department. The department at the time knew the company had failed to set aside $5 million in the first of six payments into a reserve fund, Damien LaVera, an agency spokesman, said in an e-mail. The new deal eliminated the payments, he said.

The agreement made the government’s debt subordinate to $75 million in private investment in a last-ditch effort to save the company, Energy Department officials have said.

Harrison replaced Solyndra founder Chris Gronet as chief executive. Gronet remained chairman until Aug. 19, when the company announced his departure, 12 days before it halted operations on Aug. 31.

Gronet, a former executive at Applied Materials Inc. (AMAT), expressed anger when action on the loan guarantee was postponed in January 2009, Energy Department e-mails show.

“I was appalled to learn on Friday that our application is being delayed yet again,” Gronet wrote in an e-mail to Steve Isakowitz, the Energy Department’s chief financial officer, in the early morning hours on Jan. 12, 2009.

He later spurned an apology from David Frantz, director of the loan program under Bush, according to an e-mail sent later that day.

“I find the response completely unacceptable,” Gronet wrote. “An apology from David is not enough.”

ADMIT: Energy Secy continued taxpayer money to SOLYNDRA after company defaulted

Chu takes responsibility for a loan deal that put more taxpayer money at risk in Solyndra

By Carol D. Leonnig and and Joe Stephens, Published: September 29

Energy Secretary Steven Chu acknowledged Thursday making the final decision to allow a struggling solar company to continue receiving taxpayer money after it had technically defaulted on a $535 million federal loan guaranteed by his agency.

Chu spokesman Damien LaVera said in a statement that the secretary approved the restructuring agreement for Solyndra because it gave the company “the best possible chance to succeed in a very competitive marketplace and put the company in a better position to repay the loan.”

Also Thursday, a law enforcement official confirmed that the criminal probe of Solyndra is focused on whether the company and its officers misrepresented the firm’s finances to the government in seeking the loan or engaged in accounting fraud. The official spoke on the condition of anonymity because of the sensitivity of the probe.

On the political front, Chu’s admission came as some members of Congress were asking whether Chu went too far in trying to help the company before it went into bankruptcy, leaving taxpayers on the hook for the loan.

Chu, a Nobel laureate and physicist who came to the administration from academia, arrived in Washington with a mandate to push billions of dollars in stimulus funds into clean-energy companies and projects. With keen White House interest, Chu rode herd over an $80 billion showcase initiative that was supposed to spur a new “green” industry and economic growth.

Solyndra was the first company approved for a loan guarantee under the Obama administration; its application originated several years earlier during George W. Bush’s presidency. Early on, there were concerns about Solyndra’s finances, but the company was still endorsed by President Obama and received high-profile support from Chu. Both visited the firm at different press events. Chu flew to California to announce the loan approval at the groundbreaking for a $750 million factory that was built mostly with funds from the loan.

In announcing the Solyndra deal in March 2009, Chu boasted of the “speed at which the department can operate,” according to an agency news release.

“Secretary Chu initially set a target to have the first conditional commitments out by May . . . but today’s announcement significantly outpaces that aggressive timeline,” the release said.

In April 2010, the company’s auditors raised doubts about whether the company could continue as a “going concern” because of cash-flow problems. The following month, Obama visited the company to praise it as an “engine of growth.”

In late autumn of 2010, company executives confided to the Energy Department that they were running out of cash and could not make a required payment to a cash-reserve account. The company was supposed to begin making the first of $5 million payments to create a $30 million cash reserve on Dec. 1.

Solyndra officially defaulted on its loan that day. Chu approved a softening of the loan requirements so that the company could continue receiving loan installments.

“Ultimately, the choice was between imminent liquidation or giving the company and its workers a fighting chance to succeed,” LaVera said in the statement, first reported by Politico.

The agency authorized the Federal Financing Bank to give two additional cash installments to Solyndra — one in December 2010 and another in January 2011. Both payments came before Energy Department officials finalized a deal to restructure the loan and forestall the company’s collapse in late February.

On Capitol Hill, Republicans continued to complain Thursday that the Obama administration and Chu had not protected taxpayers.

“Why was the leadership at DOE so stubborn, ignoring every warning sign that Solyndra was a bad bet, continuing to throw good money after bad right up until Solyndra’s fate was sealed and taxpayers were left holding the bag on DOE’s $535 million bust?” said Rep. Cliff Stearns (R-Fla.), chairman of the House Energy and Commerce oversight and investigations subcommittee.

Chu is tentatively scheduled to appear before the subcommittee next month. The House probe seeks to determine whether the White House sought to help Solyndra for political reasons. The nature of the separate criminal probe was first reported in an online story by Bloomberg News on Thursday evening. The leading private investors in Solyndra were investment funds tied to Oklahoma billionaire George Kaiser, a prominent fundraiser for Barack Obama’s 2008 presidential campaign.

Some Democrats also have questioned Chu’s decision, including Rep. Henry A. Waxman (Calif.), the ranking Democrat on the Energy and Commerce Committee.

Rep. Gene Green (D-Tex.) said Thursday that he wants to know why Chu restructured Solyndra’s loan to put taxpayers behind a group of private investors to be repaid if the company went bankrupt. Two investors, including an equity fund tied to Kaiser, provided an additional $75 million to keep the company afloat.

“I guess I’m surprised that Secretary Chu made the decision earlier this year to give the private sector priority over the federal commitment, because your fiduciary duty is to the taxpayer, and not to an applicant. . . . Your responsibility is to the American people,” Green said.

Staff writer David A. Fahrenthold contributed to this report.

AP: DNC's 2012 convention co-chair probed in land deal

GARY D. ROBERTSON, Associated Press, MICHAEL BIESECKER, Associated Press
Updated 02:13 a.m., Friday, September 30, 2011

Plant deal may enrich donors

RALEIGH, N.C. (AP) — A state lawmaker and a group of Democratic political donors with ties to Gov. Beverly Perdue are poised to sell land at a handsome profit for a tire plant that's being lured with $100 million in state and local incentives, according to public records reviewed by The Associated Press.

As North Carolina's chief executive, the governor is a key decision maker in large incentives deals involving state money. She also helps appoint the board members of a foundation that's been asked to provide part of the tire plant's package. Perdue's campaign has received more than $52,000 from five men with an ownership stake in the Brunswick County industrial park proposed for the new facility.

The governor's son, Garrett Perdue, is also a lawyer and site-selection consultant for an influential law firm that a county official said was advising the tire company. The firm, Womble Carlyle Sandridge & Rice, does not disclose which projects the younger Perdue works on, citing attorney-client privilege.

Perdue's spokesman stressed Thursday that the company seeking the incentives, not the governor's aides, chose the site. The North Carolina site is competing with sites in two other states.

"Gov. Perdue is focused on bringing 1,300 jobs to North Carolina," said Mark Johnson, Perdue's spokesman. "She doesn't care where in the state the plant goes, who owns the land or who the company hires as its lawyer. She just wants the jobs."

The proposed location, the Mid-Atlantic Logistics Center, is owned by a group of investors that includes state Sen. Michael P. Walters, a Democrat from Proctorville.

A development company owned by David T. Stephenson III, a Lumberton tobacco farmer, is also listed as having a stake in the center. Stephenson is a major Democratic contributor appointed to the board of Golden LEAF, a foundation created by the state legislature to dole out hundreds of millions of dollars paid by cigarette manufacturers through a legal settlement.

Brunswick County officials have asked Golden LEAF for a grant to help fund an incentives package for the plant, said the county's top economic development official.

The deal is expected to include tax breaks, infrastructure improvements, cash grants and a forgivable loan. It's not clear how much money the foundation might put in. The new facility, code named by economic development officials as "Project Soccer," has been billed as creating up to 1,500 new jobs.

A confidential document outlining the terms of the proposed deal reviewed by The Associated Press indicated that money from the incentives package would be used to buy a large portion of the 1,129 acre site for the tire plant at a price of $6,000 an acre.

Records show the investors bought the site in 2007 for $4.3 million, or about $3,800 an acre.

Stephenson, a tobacco farmer and investor, did not return a message seeking comment Thursday.

Golden LEAF president Dan Gerlach wouldn't say whether the foundation is involved in Project Soccer. But Gerlach said Stephenson came to him at a board meeting months ago and said he may have a conflict of interest if the foundation were to provide a grant for the project.

Gerlach said Stephenson asked that he not be provided any materials provided to the foundation related to Project Soccer because of his potential financial interest in the deal.

Gerlach said Stephenson has gone beyond the foundation's conflict of interest policy by alerting the foundation to potential problems well before they could have reached the board. A board member isn't required to put the potential conflict in writing, but Gerlach said he made a note affirming Stephenson's request.

State lawmakers, who would have to approve the incentives package, have been briefed on the possibility of a special legislative session to be held in the coming weeks to vote on it.

Walters filed a letter with the Senate clerk on Aug. 25 recusing himself from any deliberations on the deal "to avoid any potential conflict of interests or the appearance of impropriety."

He declined to comment further Thursday.

"I've recused myself from that project and that's all I have to say," Walters said.

Democratic Rep. Dewey Hill, who said he's spoken to Commerce Secretary Keith Crisco about Project Soccer, described the company seeking the incentives deal as a "tire manufacturer and distribution company from Germany." Hill's district includes part of Brunswick County.

The German company Continental Tire is in the process of selecting a site for a new plant in the Southeast, spokeswoman Kathryn Blackwell said Thursday, but she wouldn't say whether the company was looking at North Carolina.

"We have not made a decision, though one is coming in the near future," Blackwell said.

In addition to Crisco, Womble Carlyle lobbyist Laura DeVivo has been talking with key lawmakers. A legislator described a meeting in which DeVivo and other Womble lobbyists worked with state officials to gain support for the proposed incentives package. The legislator asked not to be identified because of the sensitive nature of the negotiations.

DeVivo works on Womble's government affairs team, which also includes Perdue's son. In an interview last year, Garrett Perdue described his role with the firm as identifying companies seeking to relocate to the state and helping them find sites to meet their needs.

Two attorneys who lead the firm's government affairs team, former Democratic Gov. Jim Hunt and former state Supreme Court Chief Justice Burley Mitchell, did not return messages seeking comment.

Gov. Perdue has said she doesn't talk to her son about which companies he works for, though she has recused herself from making decisions in at least two economic incentives projects in recent years after her aides became concerned he was working on behalf of the companies involved.

Johnson, the governor's spokesman, said he didn't know whether Womble Carlyle played any role in advising the tire company in considering the proposed Project Soccer site.

Jim Bradshaw, director of Brunswick County Economic Development Commission, said he was the one who first recommended the Mid-Atlantic site for Project Soccer last winter. He said the land was one of 53 sites originally under consideration. That list has now been whittled down to three: the Mid-Atlantic land and sites in South Carolina and Louisiana.

Bradshaw said some pieces of North Carolina's proposed package are already in place. The state Department of Transportation has pledged $150,000 to extend a rail spur to the site and the state-supported N.C. Rural Center has awarded the county about $1.5 million toward water and sewer installation.

He said Gov. Perdue did not personally become involved in the negotiations until after the Mid-Atlantic site was in the running. He said August was the first contact he had with anyone from Womble Carlyle about the county's proposed contributions to the incentives package. He declined to identify the person he spoke to.

Bradshaw also said he had no idea the owners of the proposed Project Soccer site have been frequent contributors to the Democratic Party or Gov. Perdue.

Campaign finance records show Stephenson and members of his family have donated more than $85,000 to Democratic candidates over the last 20 years, including $14,000 to Perdue since 2004. Records show $8,000 in contributions to former Senate President Pro Tempore Marc Basnight, the Manteo Democrat who appointed Stephenson to the Golden LEAF board.

Walters and his wife have donated more than $34,000 to elected Democrats other than himself, including $14,000 to Perdue.

William E. Musselwhite, a Lumberton lawyer who owns a share of the land, has given more than $22,000 to state Democrats, including $14,500 to Perdue.

Dennis T. Worley, a Tabor City attorney and another of the owners, has given more than $28,000 to Democrats, including $7,700 to Perdue.

Kyle A. Cox, another Tabor City lawyer and part property owner, gave more than $11,000 to Democrats, including $2,000 to Perdue.

Bradshaw, the economic developer, said he doesn't care who owns the land.

"I don't know who these people are," Bradshaw said. "I don't know who contributes to who. I just want to bring these jobs to Brunswick County."


Michael Biesecker reported from Atlanta and can be reached at mbiesecker(at) or

Tainted African ruler may get UN prize in his name

Sep 29, 2:25 PM EDT
Associated Press

DAKAR, Senegal (AP) -- The African heads of state who converged on the capital of Equatorial Guinea this summer are used to life's finer things - yet even they were impressed.

The minuscule nation located on the coast of Central Africa spent several times its yearly education budget to build a new $800 million resort in which to house the presidents attending this summer's African Union summit.

Besides an 18-hole golf course, a five-star hotel and a spa, the country built a villa for each of the continent's 52 presidents. Each one came with a gourmet chef and a private elevator leading to a suite overlooking the mile-long artificial beach that had been sculpted out of the country's coast especially for them.

Western diplomats say that the charm offensive worked, and on Friday the United Nations' cultural arm may be forced to create a prize named after Equatorial Guinea's notoriously corrupt president, due to a resolution passed in June by the presidents staying at the lavish resort.

If that happens President Teodoro Obiang Nguema, a man whose regime is accused of gross human rights violations, will be associated with an organization whose stated mission is the promotion of peace and human rights through cultural dialogue.

During the AU summit this summer, Obiang succeeded in getting the body to pass a motion calling on UNESCO to approve a prize named in his honor.

Armed with this resolution, the 13 African delegates on UNESCO's executive board are threatening to force a vote on the UNESCO-Obiang Nguema Mbasogo Prize for Research in the Life Sciences as early as Friday when the board meets in Paris, said five officials taking part in the discussion.

The $3 million prize was first proposed in 2008 and UNESCO initially agreed to create it, only to suspend it as outrage erupted over the provenance of the money and accusations of abuses by Obiang against the people of his Maryland-sized nation.

A senior Western diplomat in France who is close to the negotiation, said that Obiang, as the rotating chairman of the African Union, forced through a resolution during the AU summit that unified the African position.

"In the past our ability to keep the prize in the deep freezer depended on divisions within the African group," said the diplomat, who asked not to be named because of the sensitivity of the matter. "At UNESCO on the executive board, the African group makes up a large percentage of the board - and when they are completely unified they can always count on complete support from the Arab group."

Together, the Arab and African delegations account for 20 out of 58 votes. Thirty is needed for the measure to pass; fewer if some governments abstain. The diplomat said the Equatoguinean delegation has been hanging out in the halls outside of the board's meeting room in Paris, trying to influence the vote of undecided delegates when they step outside. Among the ambassadors from Africa, there are misgivings about the prize and several have privately said they feel embarrassed voting for it, but believe their hands are tied due to the African Union resolution.

"What Obiang has been able to set up here is a dynamic by which the ambassadors are constrained - their backs are against the wall because their position has been mandated by their heads of state," said the official.

The diplomat's account of the situation was confirmed by a senior European diplomat who is also on the UNESCO executive board, as well as by leading rights groups including New York-based Human Rights Watch and London-based Global Witness which have been at the forefront of trying to stop the creation of the prize.

The Western nations opposing the measure are hoping to avoid a vote on Friday, the diplomats say, on the argument that forcing one is against UNESCO's tradition. They fear that if it goes to a vote, the measure will pass, forcing the body to implement the prize.

Obiang seized power in a coup 32 years ago after toppling the former leader, who was executed. The United Nations Rapporteur on Torture toured the country's prisons in 2008 and determined that torture is systematic, including using electroshocks through starter cables attached to the detainees' body with alligator clips.

In February, the government imposed a blackout on news regarding the Arab Spring uprising. A disc jockey who dared refer to Libya during his music program had his microphone cut off minutes into his show and the program was pulled off the air for two months.

Another concern is the provenance of the $3 million that Obiang has said he will donate to endow the prize. The Obiang family has become fabulously wealthy during the president's reign and is accused of pilfering the nation's oil wealth.

The United States Senate's Permanent Subcommittee on Investigations held hearings to discuss how Obiang's son used lawyers, realtors and bankers to help him transfer $110 million of suspect funds to the U.S. The money was used to purchase a $30 million mansion in Malibu and a $38 million plane, according to a separate Justice Department inquiry.

On Thursday, French officials in Paris seized 16 luxury cars, including a Bugatti Veyron worth more than $1.3 million allegedly belonging to Obiang's son, in a probe into claims that the Equatoguinean leader had misspent public funds in France. And earlier this month, a lawyer close to former French President Jacques Chirac claimed in a memoir that Obiang had tried to give the French government suitcases of cash in order to secure favor.

Equatorial Guinea's Minister of Information Jeronimo Osa Osa Ecoro told The Associated Press by telephone from his nation's capital that the claims of theft, corruption and abuse by Obiang and his entourage are unfounded.

"They want to dirty the image of our country. This is a nation that wants to share $3 million of its money for a UNESCO prize that will save human lives - this is a gift to humanity!" he said, adding: "There is no poverty in Equatorial Guinea, and as for the respect of human rights, which country can say that it respects human rights 100 percent of the time?"

In an Op Ed piece published Thursday online in Think Africa Press, Nobel Peace laureate Desmond Tutu said that the people of Equatorial Guinea need justice, not a $3 million science prize funded by their president.

"In numerous speeches to international audiences, including many in his role as the rotating African Union chair, President Obiang has stated his commitment to democracy, human rights, and good governance. His words, however, ring hollow since they are often not applied inside his own country," Tutu wrote. "It is unfortunate that the time and resources expended by President Obiang to establish the prize are not directed at implementing the reforms that he regularly mentions."

In Equatorial Guinea, the new town of Sipopo was built for nearly $800 million. It's an investment that the country's opposition leader Placido Mico said is an insult to the nation's population. He points to the country's 2011 budget, where only $40 million is allocated in the line for education. He said it appears that the sole purpose of the resort was to impress the heads of state of AU nations, and possibly to lure tourists.

Equatoguineans who have tried to go there after the end of the summit were turned away and told that they needed a special authorization.


West Africa Bureau Chief Rukmini Callimachi is based in Dakar. She was in Malabo, Equatorial Guinea in July to cover the African Union summit. Associated Press writer Pierre-Antoine Souchard in Paris contributed to this report.

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