Crony Capitalism

Wall Street Cronies

This is where the high-level action is. I'm just starting to round up stories, but here's one on Treasury Sect. Paulson (under Bush) going to talk with top investment bankers, and giving them insider information on government policy.


K-Street Cronies

About $3,500 million per year is spent buying government favors — mostly on K Street, Washington DC, mainly for business. That's the definition of crony capitalism. Want to know how that works? You've got to see this amazing interview with Jack Arbamoff ("I only owned 100 Congressman") — he's now out of prison.

Koch-David-Charles.jpgThe Koch Brothers

What if one (or two) of America's super-rich decided just buy itself a political party? That's how truly serious crony capitalism works, like under Putin in Russia. But what would that cost? The last presidential race cost only about a billion—for both parties. So, about 3% of the Koch brother's wealth. But their doing it far cheaper than that. To follow the election you need to know how.



Elections Inc. — The Supreme Court vs. Democracy

On January 21, 2010, the Supreme Court overturned the Bipartisan Election Reform (McCain-Feingold) Act, and allowed corporations and unions to make unlimited contributions to influence elections. In June 2011, Charles Koch, quoting Saddam Hussein, declared the 2012 presidential election would be the "mother of all wars." What's the connection?


Why Fox = Wall Street

Fox News cites the Wall Street Journal far more than all other papers put together. Their politics is identical. What don't you know about the Wall-Street Media?


Occupy Wall Street

Facing hard times and an out-of-touch, tea-party Congress, the country was ripe for an anti-greed movement, and who better to target than the fat cats that caused the mess, got bailed out and thumbed their noses at us. Occupy Wall Street got the country talking about the real problem instead of the tea-party's manufactured debt crisis. But OWS needs to focus—it needs a "cause," if it wants to make a significant change. Luckily, the pieces of this puzzle fit together.



Wall Street

How Bush's Treasury Sect. Paulson, gave hugely valuable insider-trading information to top Wall-Street players.


K Street, DC


  See this amazing 60-Minutes interview with Jack I-only-owned-100-Congressman Arbamofxlnk.gif. Abramoff explains in fascinating detail, exactly how crony capitalism works — and just how easy it is for business to buy our government. Crony capitalism is much of what wrecks our government and make people hate Uncle Sam. You can't get much more un-American.

In 1985, Abramoff joined Citizens for America, a pro-Reagan group that helped Oliver North build support for the Nicaraguan Contras. In 1986 he received a minor appointment from Reagan. In 1989 he wrote and produced with this brother a propaganda film for the apartheid government of South Africa. In 2001 he was part of the Bush transition team. In short, he has impeccable conservative credentials. That's why what he says now is so completely credible.

Abramoff grew the biggest and most successful K-Street lobbying firm, and as he explains, most of what he did was perfectly legal because the laws are designed for crony capitalists and their lobbyists. But defrauding Indian tribes and "corrupting" (bribing) public officials is not legal, and Abramoff landed in (minimum security) prison on Nov. 15, 2006. He was released from a halfway house, and his job at Tov Pizza earning $10 an hour, on Dec. 3, 2010. As you will see in the film, working at the kosher Pizza parlor seems to have produced a remarkable transformation.

Oh, and by the way, Abramoff was no loner. The following accomplices were either forced to resign, convicted or pled guilty.

  • Tom DeLay (R-TX) The House Majority Leader.
  • Susan B. Ralston (R) Special Assistant to the President and Senior Advisor to Karl Rove.
  • Bob Ney, U. S. Representative, (R-Ohio), 2½ years in prison for taking bribes.
  • Steven Griles, (R) former Deputy Interior Secretary, under George W. Bush.
  • Italia Federici, (R) co-founder of the Council of Republicans for Environmental Advocacy.
  • Roger Stillwell (R) Staff in the Department of the Interior under George W. Bush.
  • David Safavian, (R) former White House top procurement official.
  • Neil Volz, (R) a former chief of staff to Ney.
  • William Heaton, (R) former chief of staff for Ney.
  • Thomas Hart, (R) former chief of staff for Ney.
  • Mark Zachares, former aide to U. S. Representative Don Young, (R-Alaska).
  • Kevin A. Ring former staff to John Doolittle (R-CA).
  • James Hirni, former staff to Tim Hutchinson (R-AR).
  • Michael Scanlon (R) former staff to Tom DeLay.
  • Tony Rudy (R) former staff to Tom DeLay.
  • James W. Ellis (R) executive director of Tom DeLay's political action committee.
  • John Colyandro executive director of Tom DeLay's political action committee.
  • John Albaugh former chief of staff to Ernest Istook (R-OK).
  • Jared Carpenter (R) VP of the Council of Republicans for Environmental Advocacy.
  • Robert E. Coughlin (R) Deputy Chief of Staff, Criminal Division of the Justice Department.
  • For details on crimes and times served.

Koch Brothers

David & Charles Kock. $50,000 million.

 What if two of America's super-rich decided just buy itself a political party? What would that cost? The last presidential race cost only about a billion—2% of the Koch brother's wealth—for both parties. But why spend so much? If you're clever and secretive, just fund a fake grass-roots foundation, train some organizers, start party chapters, run some candidates, and let them raise the money. $100 million should should do the trick. That's pocket change.

If it worked, that would be the ultimate crony capitalism. Just buy a whole political party and uses it gain government favors.

So what influence would they want to have? If they owned a big oil company, they'd want to stop any climate-change laws. If they emitted a lot of air pollution, they'd want to go after the EPA. If they didn't want to pay taxes they'd want to cut any government spending and cut taxes on the rich. And if they owned a lot of different industries, they'd want their party to be anti-regulation down the line.

And to further such a project, it would be nice to end restrictions on corporate political contributions. But, then you'd need the help of the supreme court. Why not invite a couple of supreme court justices to your secret political meeting and have a chat with them? Sound far fetched?

It if worked it would be a fabulous investment. And most of those in your Tea Party would never need to know.

When the conservative financier Charles Koch sent out invitations for a political retreat in Palm Springs later this month, he highlighted past appearances at the gathering of “notable leaders” like Justices Antonin Scalia and Clarence Thomas of the Supreme Court. (NYT)

The Koch brother's combined fortune of $50 billion xlnk.gif is exceeded only by those of Bill Gates and Warren Buffett.

Charles Lewis, the founder of the Center for Public Integrity, a nonpartisan watchdog group, said,

“The Kochs are on a whole different level. There’s no one else who has spent this much money. The sheer dimension of it is what sets them apart. They have a pattern of lawbreaking, political manipulation, and obfuscation. I’ve been in Washington since Watergate, and I’ve never seen anything like it. They are the Standard Oil of our times.”

"The brothers have funded opposition campaigns against so many Obama Administration policies—from health-care reform to the economic-stimulus program—that, in political circles, their ideological network is known as the Kochtopus." —The New Yorker

"In my mind, without a doubt nobody has had more influence on the anti-Obama campaign than the Koch-funded groups."  —Taki Oldham, an Australian documentary film maker who spent months following Tea Party activists

From the extremely conservative The WashingtonExaminer:

Americans for Prosperity is led by billionaire Republican donor David Koch, whose endorsement Romney seeks. An Oct. 4 internal Romney campaign memo obtained by The Washington Examiner describes Koch as the "financial engine of the Tea Party".

The quoted phrase in from a secret internal Romney campaign memo.

"Five years ago, my brothers Charles and I provided the funds to start Americans for Prosperity,"  —David Koch, 2009, at annual AfP gathering

It is the Kochs' links to a welter of mass mobilisation campaigns opposing Barack Obama that is making the biggest impact. Political monitoring organisations say the Koch-connected Claude R Lambe Charitable Foundation has given $3.1m to Americans for Prosperity.

"[T]his is the mother of all wars over the next 16 months for the life or death of this country."  —Charles Koch, June 2011, election planning meeting


Iran, Spills, etc.

From Bloomberg (the leader in global business and financial information)

By Asjylyn Loder and David Evans - Oct 3, 2011 10:28 AM PT, Bloomberg Markets Magazine

... David Koch ran for vice president on the Libertarian ticket, pledging to abolish Social Security, the Federal Reserve System, welfare, minimum wage laws and federal agencies -- including the Department of Energy, the Federal Bureau of Investigation and the Central Intelligence Agency. ...

A Bloomberg Markets investigation has found that Koch Industries -- in addition to being involved in improper payments to win business in Africa, India and the Middle East -- has sold millions of dollars of petrochemical equipment to Iran, a country the U.S. identifies as a sponsor of global terrorism. ...

From 1999 through 2003, Koch Industries was assessed more than $400 million in fines, penalties and judgments. In December 1999, a civil jury found that Koch Industries had taken oil it didn’t pay for from federal land by mismeasuring the amount of crude it was extracting. Koch paid a $25 million settlement to the U.S. ...

In 1999, a Texas jury imposed a $296 million verdict on a Koch pipeline unit -- the largest compensatory damages judgment in a wrongful death case against a corporation in U.S. history. ...

Sally Barnes-Soliz, who’s now an investigator for the State Department of Labor and Industries in Washington, says that when she worked for Koch, her bosses and a company lawyer at the Koch refinery in Corpus Christi, Texas, asked her to falsify data for a report to the state on uncontrolled emissions of benzene, a known cause of cancer. Barnes-Soliz, who testified to a federal grand jury, says she refused to alter the numbers.

“They didn’t know what to do with me,” she says. “They were really kind of baffled that I had ethics.”

... Koch Industries has spent more than $50 million to lobby in Washington since 2006. ...

The brothers have backed a foundation that has trained thousands of Tea Party activists. ...

The EPA had sued Koch Industries a year earlier for a series of pipeline leaks in several states, including one that left a 12-mile-long oil slick on Nueces and Corpus Christi bays in October 1994. ...

Two days before Christmas 1999, the jury delivered the verdict: Koch Industries had made 24,587 false claims in buying oil, underpaying the U.S. government for royalties on Native American land from 1985 to 1989. ...

Three months after the Smalley verdict, Koch settled the five-year-old EPA case for pipeline leaks, along with a second EPA case brought in 1997. The company paid $35 million to resolve those cases, which covered more than 300 oil spills in six states.

For six decades around the world, Koch Industries has blazed a path to riches -- in part, by making illicit payments to win contracts, trading with a terrorist state, fixing prices, neglecting safety and ignoring environmental regulations. At the same time, Charles and David Koch have promoted a form of government that interferes less with company actions.

‘Overall Concept’

“My overall concept is to minimize the role of government and to maximize the role of the private economy and maximize personal freedoms,” David Koch told the National Journal in May 1992.

In his 2007 book, Charles Koch says his company had difficulty keeping up with changing government regulations and that it did eventually build an effective compliance program for 20 areas ranging from environmental to antitrust to safety regulations. 

“We were caught unprepared by the rapid increase in regulation,” he wrote. “While business was becoming increasingly regulated, we kept thinking and acting as if we lived in a pure market economy.”


Koch and Cato

Ed Crane

Charles Koch founded the Cato Institute (Originally called the Charles Koch Foundation, Inc.) with Ed Crane in 1974 in Wichita Kansas. Koch had the money and Crane was broke. Each of the Koch Brothers has retained a 25% share of the institute, although Charles left the board of directors in 1992 and reduced his contributions. His brother David remained on the board and a major funder of the institute.

Now they are suing for control, and the institute is resisting. But just what is going on remains a mystery.

Source: The New Yorker

Elections Inc.

Conservative favor interpreting the Constitution exactly as the founding fathers did. This requires a bit of mind reading, but it is hard to see how anyone could have thought they were talking about corporations when they guaranteed free speech. Corporate law at the time was focused on protection of the public interest, and not on the interests of corporate shareholders. Corporate charters were closely regulated by the states.

So how did it come to pass in that on Jan. 21, 2010, the conservative majority on the Supreme Court gave corporations the same right to spend in elections as ordinary citizens, in a case deceptively called "Citizens United."?  (slate)

Why Fox = Wall St.

Fox-Murcoch-WSJ.pngRupert Murdoch, the owner of the Wall St. Journal and Fox News, is the epitome of crony capitalism, having top-to-bottom links to the British government. (Tony Blair is godfather to one of Murdoch's children and his paper used to bribe the police.) So it is hardly surprising the Wall St. Journal and Fox agree on all things crony, and much more.

To illustrate the connection consider the web links from FoxNews to the the Wall Street Journal (Google:, Dec. 31, 2011) and other papers:

Links from FoxNews to Number of Links
Wall Street Journal 64,900
New York Times 8,460
Washington Post 1,340
Chicago Tribune 94
Los Angeles Times 86
Atlanta Journal Constitution 39
Dallas Morning News 30
Houston Chronicle 17

Clearly the Fox News is almost totally aligned with Wall Street.

Occupy Wall Street

Stop Corpocracy !
view full

 Facing hard times and an out-of-touch, tea-party Congress, the country was ripe for an anti-greed movement, and who better to target than the fat cats that caused the mess, got bailed out and thumbed their noses at us. Occupy Wall Street got the country talking about the real problem instead of the tea-party's manufactured debt crisis.

But OWS needs to focus—it needs a "cause." To get people talking is one thing. Camping en masse in NY City will do that. But scoring a victory against the 1% is a whole 'nother kettle of fish. In fact we'll be lucky if we can even elect Elizabeth Warren, who's strong on her own and is fighting in Massachusetts—OWS territory.

What's to be done? Listening to OWS and to what the country is asking for, some points are obvious. But these points get lost in confrontations with police.

  • "99%" is brilliant, because it's true, on point, and inclusive.
  • [#The 1% problem] is the crony-capitalism problem.
    • Cronies use politics to gain wealth and wealth to control politics.
  • The Supreme Court decision:  Corporations are people too. Wrong!
  • The 1% problem  =  crony capitalism  =  "Corporations are people"


OWS should adopt The End of Corpocracy as their cause.

Corpocracy is the root of the problem, and most of the country agrees, including many in the tea party. The tea party has taken up crony capitalism as a cause, but it has long been a cause of Democrats. And the Supreme Court decision flies in the face, not just of democracy, but also the right wing view that the Court follow the thoughts of the founding fathers. There is no way James Madison was thinking of corporations when he introduced the Bill of Rights. So even extreme-right tea partiers will have a hard time arguing that corporations are people.

Focus on corpocracy and OWS could go down in history as more than a flash in the pan.

The original OWS blog post (July 13, 2011) says "The most exciting candidate [for a single demand] that we've heard so far is ...

that Barack Obama ordain a Presidential Commission tasked with ending the influence money has over our representatives in Washington. It's time for DEMOCRACY NOT CORPORATOCRACY, we're doomed without it."

But I suggest it not be a "demand," which implies that we are handing power to someone who will grant the demand, and that OWS is not taking responsibility for the hard work needed to achieve this goal. The end of corpocracy is a "cause;" it is cause that will make all other progress possible. It is what [#America] wants now, and it is much bigger than any demand that can be granted.


Some links:

The original OWS Blog Post.
How it started:   SF Chronicle,  New Yorker
Top GOP strategist is scheming.
Bank Lobbyists plan to undermine Occupy.

  Luntz figures how to defeat Occupy xlnk.gif

  Lakeoff explains to Dems that Luntz is smart xlnk.gif




[=The 1% problem] Many of the 1% are not the problem. This is not about personal attacks. But there is a huge problem located within, and represented by, the 1%.
[=America] Except for corporations, almost no one favors out-of-control lobbying or secret super PACs and their attack ads.
[=PopNotes] Just hover over green-underline links above to see the "pop" notes.

Other Twitter Protests

May 20, Madrid. (click)

  First there was Tunisia (14 Jan 2011), then Egypt, Lybia, Bahrain, Syria, and more Arab-Spring Countries. But even more similar are Spain's M-15 movement (15 May, 201), and the Israeli Summer protest beginning in July 2011. And new, perhaps the Moscow vote-fraud protests are the next step.

1000's protest, hundreds arrested.
Moscow and St. Petersburg

  Occupy is part of something much bigger, and the web is definitely part of it. Senator John McCain just offered Putin a warningxlnk.gif on Twitter: "Dear Vlad, The Arab Spring is coming to a neighborhood near you." McCain should know, Occupy just showed up in his neighborhood. We heard less about the Israeli Summer, but it is the most similar to Occupy — with tents and similar goals.

Alexei Navalnyxlnk.gif. At 2:15 p.m. on Monday, he called his huge internet following to a 7 p.m. demonstration at the Chistye Prudy park to protest “the rotten total fabrication of Moscow election results.”  He wondered why some Moscow districts reported 20 percent while identical districts next door reported 70 percent votes for United Russia. Thousands ...