Economy

Prank Koch Call Prompts More Legal Questions

Madison -- The heat ratcheted up on Wisconsin Governor Scott Walker as more questions were raised about the 20-minute phone call from a Buffalo-area alternative news reporter posing as David Koch, a billionaire whose corporate PAC directly supported Walker and who has given millions to groups that have run ads to aid Walker's rise to the state's highest office. (Find a transcript of the call here).

The section of the tape that has come under the most scrutiny involved Walker's comments that he considered planting "troublemakers" into the crowd. People on the ground here in Madison were quite aware that the first five days of protests were packed with children. The Madison school district and many surrounding districts were closed. Thousands of elementary school children and their parents marched at the capitol in support of local teachers. On the first day and second days, thousands of high school students walked out on their classes and headed to the capitol. The atmosphere was festive and fun, popcorn stands on the corner and thousands of homemade signs.

Walker's M.O. and Past Privatization Disaster Revealed

Wisconsin Governor Scott Walker did not campaign for office calling for the destruction of public unions, but a closer look at his past actions shows that he acted rashly toward union workers before, with disastrous and costly results.

In early 2010, when Walker was Milwaukee County Executive, he fired 26 union security guards who worked at the Milwaukee County Courthouse. They were public employees and were represented by a union, but he fired them anyway, in favor of hiring private security guards. The county board opposed Walker's security-outsourcing move, but he pressed ahead with it anyway, claiming the action was needed due to a budget crisis, to help ameliorate a potential 2010 year-end deficit of around $7 million. After firing the guards, Walker hired private security contractor Wackenhut G4S to provide security services at the Courthouse, as well as two other venues in the county, under a $1.1 million contract.

Astroturf for Hire

NPR's Planet Money recently reported on astroturf activities in the financial sector. "Forgery: The Latest Tactic To Sway Finance Rules" focuses on the behind the scenes fight over the implementation of the Dodd-Frank Wall Street reform bill. The Dodd-Frank bill is now in the agency rulemaking stage and financial sector lobbyists have descended en masse on the pertinent federal agencies, lobbying in person and via comment letters to the Federal Register. Some firms seem to think their advocacy would be more effective if it came from grassroots groups and not corporations. As NPR reports: "In an effort to influence the new rules, somebody sent several forged letters to the Commodities Futures Trading Commission, a key government agency. The letters were sent as part of the public comment process for an arcane rule that could have big financial implications." The rule involved proposal to limit conflicts of interest at derivatives clearinghouses. The forged letters were supposedly from an exec at Heinz (the food company), a Burger King franchise owner, a local judge, a county sheriff and a dozen other concerned citizens. But in reality they were sent from a PR firm on contract with an unnamed client. The Wall Street Journal has named the PR firm as Dewey Square Group and its subcontractor, Goggans Inc. as culprits in the fiasco, but the firm's client is still unknown. The faux letters contain verbatim language railing against the "cartel-like control" of banks in the derivatives market, certainly a legitimate complaint. The fact that financial services firms -- perhaps those who want the opportunity to be part of the cartel -- had to hire PR companies to develop fake "grassroots" to counter the big banks underscores the continued absence of real, organized grassroots in the financial services debates. One notable exception is Americans for Financial Reform (AFR) a coalition of over 250 of labor, consumer, housing, and other public interest groups, that advocates for consumer protection and a more stable and secure financial system. Find out more at Ourfinancialsecurity.org.

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AIG: Corporate Welfare King Mouths Off

Most Americans know American International Group (AIG) as the global insurance behemoth that was so recklessly managed it had an outsized role in tanking the global economy.

Rather than feeling a bit humble for wreaking havoc on the lives of millions, AIG's new management is feeling rather cocky. Apparently AIG CEO Robert Benmosche has figured out the magic formula for selling insurance. Benmosche told Bloomberg News that he likes to do business in "red states" where the firm signs up more reliable customers than those in "more liberal" areas.

Elizabeth Warren 2.0

In a savvy move, the new Consumer Financial Protection Bureau launched its first website today. The CFPB was created by the passage of the Dodd-Frank Wall Street reform bill in July 2010 and is headed on an interim basis by well-known consumer advocate, Elizabeth Warren.

Financial Crisis Inquiry Commission Report Due

Word is beginning to leak out about the contents of the Financial Crisis Inquiry Commission's (FCIC) final report, a 576-page official analysis of the causes of the crisis. The Commission, which got off to a slow and rocky start, managed to hold 19 days of hearings and interviewed 700 witnesses. According to the New York Times, the report puts blame where blame is due, on reckless Wall Street gambling, but also on the colossal failure of government.

Obama Signals Break with Wall Street - Appoints JPMorgan Exec and Goldman Adviser to Top Jobs

Today, with unemployment in almost the double digits and foreclosure unabated, President Obama decided that America needed more of the same. The President announced the appointment of JPMorgan Executive William M. Daley as White House Chief of Staff, replacing Rahm Emanuel. Tomorrow, news reports indicate that he will announce that Goldman Sachs adviser Gene B. Sperling will be appointed head of the National Economic Council, replacing Larry Summers.

About Daley the Center for Public Integrity reports:

At JPMorgan, Daley’s portfolio has included supervising government lobbying for a bank with $2 trillion in assets that has fought efforts to limit the size of megabanks. Daley co-chaired a U.S. Chamber of Commerce commission that urged the federal government to revise the 2002 Sarbanes-Oxley corporate reform law and protect corporate auditors from lawsuits and investigations.

BankofAmericaSucks.com

Bank of America, Confiscating Homes We Don't OwnAccording to the publication Domain Name Wire, Bank of America (BofA) is buying up hundreds of domain names such as BankofAmericaSucks.com and BrianMoynihanBlows.com. The megabank is prepping for the possible release of damaging information from Wikileaks founder Julian Assange. Assange is promising to unleash a cache of secret documents from the hard drive of a big bank executive. In 2009, he told Computer World that the bank was Bank of America. In 2010, he told Forbes it was significant enough to “take down a bank or two.” The New York Times recently reported that BofA is now moving into high gear on damage and spin control tasking dozens of people to a Wikileaks "war room." BofA is already under the gun, defending itself from multiple lawsuits demanding that the bank buy back billions worth of toxic mortgages it peddled to investors. The firm is also at the heart of the robo-signing scandal, having wrongfully kicked many American families to the curb. Assange may have more information on the controversial merger of BofA and Merrill Lynch, which spawned fraud charges. Or he may have more dirt on BofA subsidiary Countrywide. Countrywide's Angelo Mozilo has been the subject of insider-trading charges. Stay tuned and learn more about these scandals in our Sourcewatch profile of America's largest bank.

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Locals Hire PR Firm in Chicken Plant Flap

ChickenCitizens of Nash County, North Carolina have hired the Raleigh-based public relations firm Campaign Connections to help stop Sanderson Farms from building a chicken processing plant in their community. Citizens call the slaughtering plant an "industry of yesterday" and say locating the plant in Nash County will make it harder to lure higher-tech businesses to the area, like biotech, pharmaceutical and alternative energy companies. Campaign Connections says citizens sought their help to correct misinformation, like the notion that they oppose bringing jobs to the area. Citizens say they aren't opposed to jobs, or to Sanderson Farms, but feel the company is not a "good match" for their community. As part of a strategy to oppose the plant, some Nash County citizens have bought stock in Sanderson Farms so they can be included in the company's Board of Directors meetings.

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