corruption

For the Children

by Ryan Young on October 25, 2011

in Labor

The people of Illinois don’t expect their government to be corrupt; they insist on it. That’s why nary an eyebrow was raised when it recently came out that two lobbyists for the Illinois Federation of Teachers were able to qualify for generous teachers’ pensions by working as substitute teachers for one day.

One man could receive up to $3.8 million if he lives to age 84. This is in addition to the 401(k) the union gives him as an employee. The Chicago Tribune reports:

Preckwinkle’s one day of subbing qualified him to become a participant in the state teachers pension fund, allowing him to pick up 16 years of previous union work and nearly five more years since he joined. He’s 59, and at age 60 he’ll be eligible for a state pension based on the four-highest consecutive years of his last 10 years of work.

His paycheck fluctuates as a union lobbyist, but pension records show his earnings in the last school year were at least $245,000. Based on his salary history so far, he could earn a pension of about $108,000 a year, more than double what the average teacher receives.

Nationwide spending on K-12 education is around $13,000 per child per year. Not all of that spending is actually for the children, contrary to popular rhetoric. Fortunately, it appears only two people took advantage of this scheme. But the real kicker is that one of the two actually helped write the legislation that made it possible.

Charles Rangel: Swamp Still Full

by Brian McGraw on November 18, 2010

in Politics as Usual, Sanctimony

Today the House Ethics Committee, which was in charge of investigating the accusations against Rep. Charlie Rangel (D-NY), recommended that he be censured. A signal to future politicians: if you (knowingly?) break numerous laws over an extended period of time including not declaring investment income and improper use of rent-controlled apartments, you will receive a slap on the wrist. I’m sure they will be terrified. Maybe Congress will write him a very angry letter.

And rather than going quietly, as Obama himself suggested, Rangel will likely continue with business as usual.

His arrogance is astounding:

“I truly believe public officials have a higher responsibility than most Americans to obey the rules because we write them,” Rangel said in a statement released Thursday morning. “There can be no excuse for my acts of omission. I’ve failed in carrying out my responsibilities. I made numerous mistakes.”

But, Rangel argued, “corruption and personal enrichment are certainly not part of my mistakes and the (ethics committee’s) chief counsel made that abundantly clear. And that was the point I was always trying to make.”

He doesn’t seem to feel that he should be held to much of a serious standard, as he will continue to serve in office. Furthermore, the idea that he didn’t benefit financially from from any of the laws he broke is laughably false. Are we to believe that he paid tax on his undisclosed investments despite not declaring them?

Not that I can think of a better solution, but this is bound to happen when you have colleagues investigate colleagues. Rangel will return to office, largely still a hero to his constituents — he received over 80 percent of the votes in his re-election.

Image credit: pamhule’s flickr photostream.

Increase in American Corruption May Have Been Understated

by Hans Bader on October 27, 2010

in Bailout Watch, Economy, International, Legal, Politics as Usual, Property Rights, Sanctimony, Zeitgeist

Earlier, I wrote about how America had slipped to a historic low on the Global Corruption Index, becoming more corrupt.  In retrospect, I think the decline in America’s ratings may even be understated. For example, Obama’s firing of an inspector general who uncovered fraud by an Obama crony wasn’t mentioned in coverage of the corruption rankings, which were just released by Transparency International. The politicized bailouts over the last couple years were barely mentioned.

In the Index, America ranked well below countries like Denmark and New Zealand, which came in first place; Canada, which came in 6th; and Barbados, which came in 17th.  All of those countries were rated less corrupt than the U.S.  Somalia came in last, rated as the most corrupt nation on Earth.

U.S. Slips to Historic Low in Global Corruption Index

by Hans Bader on October 26, 2010

in Bailout Watch, Economy, Legal, Politics as Usual, Property Rights

America has slipped to a historic low in the global corruption index, Reuters reports, and it is no longer one of the 20 least corrupt countries.  The Bernard Madoff scandal, in which the SEC failed to do anything about the world’s largest Ponzi scheme despite multiple warnings, was cited as one of several factors by Transparency International.

The SEC was recently rewarded for its failure with a big budget increase and provisions in the 2010 Dodd-Frank financial “reform” law allowing it to withhold information previously available to the public under the Freedom of Information Act. Meanwhile, the Treasury Department recently paid a Democratic donor to advertise a position for a new bureaucrat with expertise in using technicalities “to withhold information from release to the public.” In the face of public outrage and ridicule from conservative lawmakers, Congress eventually repealed the information-withholding provision in Dodd-Frank, in open-government legislation sponsored by Rep. Darrell Issa (R-Calif.).

Earlier, the World Economic Forum noted that property rights are deteriorating in the United States, to the point where America now ranks behind third-world countries like Gambia and Jordan.  The U.S. ranks 40th in the world; last year, it ranked 30th.  Property rights have suffered under Obama.  The Obama administration ripped off bondholders in the government takeovers and bailouts of General Motors and Chrysler, harming pension funds, and non-union retirees.

Fraudulent Claims in Louisiana – I’m Shocked, Shocked!

by Fred Smith on October 5, 2010 · 1 comment

in Culture, Odds & Ends, Politics as Usual, Zeitgeist

Kenneth Feinberg, the individual dolling out the $20 billion BP Oil Spill “Settlement” (a No Pressure Voluntary thing), has been criticized for distributing funds too slowly.   Fighting back, Feinberg has noted that the delay has resulted from the flood of dubious claims pouring into his office (some 50,000 at last count).  Over 5,000 of these, he noted, have no documentation at all — another 25,000 claims have various deficiencies.  He is forwarding to the Department of Justice examples where he thinks fraud is an issue.

That Feinberg is surprised that such problems might arise in Louisiana — a state whose history demonstrates that they do not tolerate corruption — but rather insist upon it — is shocking, shocking!

The Nation’s Worst State Attorneys General

by Hans Bader on July 22, 2010

in Deregulate to Stimulate, Economy, Energy, Environment, Insurance, Legal, Nanny State, Personal Liberty, Politics as Usual, Regulation, Sanctimony, Zeitgeist

The nation’s worst state attorneys general abuse the power of their office for political ends, undermining the rule of law.  In recent years, many state attorneys general have “increasingly usurped the roles of state legislatures and Congress by using lawsuits to impose interstate and national regulations and extract money from out-of-state defendants who have little voice in a state’s political processes,” as I explain in a recent study, The Nation’s Worst State Attorneys General.

Six state attorneys general comprise the worst-in-the-nation list:

  1. Jerry Brown, California
  2. Richard Blumenthal, Connecticut
  3. Drew Edmondson, Oklahoma
  4. Patrick Lynch, Rhode Island
  5. Darrell McGraw, West Virginia
  6. William Sorrell, Vermont

California’s Jerry Brown tops the list, for repeatedly refusing to defend state laws he disliked.  One example was Proposition 8, a state constitutional amendment prohibiting gay marriage (but not civil unions).  This constitutional provision was upheld by the state Supreme Court, which rejected Brown’s argument that it violated the state constitution.  I personally opposed Prop. 8, but it’s clear, by definition, that a provision of the state constitution cannot violate the very constitution of which it is a part; and it’s the most basic duty of an attorney general to defend state laws, whether or not he likes them.  Another example was Prop. 209, a state constitutional amendment banning racial set-asides and racial preferences.  This constitutional provision was upheld by a federal appeals court in 1997, but a dozen years later, Brown refused to defend it, claiming its ban on discrimination violated the Constitution’s equal protection clause.

Connecticut’s Richard Blumenthal scored 2nd worst on the list.  In CEI’s previous ratings, released in 2007, Blumenthal occupied the #1 worst spot.  Blumenthal hasn’t gotten any better since then,  but competition for worst AG has gotten fiercer.

Blumenthal, who has used the power of his office to spread largesse to cronies, continues to earn low grades for his ringleader role in the Tobacco Settlement racket of 1998, which he used to steer millions of dollars to his cronies, as well as for his support of racial quotas and speech restrictions, his attack on private property rights, and various other egregious acts.

The study uses several criteria for determining who made the list of shame: ethical breaches and selective applications of the law; fabricating law, usurping legislative powers; and predatory practices (such as seeking to regulate out-of-state businesses that broke no state law).

Kyrgyz Daze

by William Yeatman on April 9, 2010

in Odds & Ends

The Kyrgyz Republic is again in turmoil. President Kurmanbek Bakiyev fled on Wednesday after violence claimed scores of lives. Like the “Tulip” revolution that toppled President Askar Akeyev in 2005, this one started in Talas, the northwestern most state, and then spread to Bishkek, the country capitol. In 2005, Akeyev avoided the mob by a hair. It seems as if a similar thing happened to Bakiyev.

For an American, I share a rare intimacy with the Kyrgyz Republic. From September 2004 to November 2006, I was one 7 of foreigners (and three Americans) living in Talas City, the capitol of Talas, where I worked as a PeaceCorps volunteer. I socialized with all the politically active young people–they helped forge my love for cheap vodka in 50 gram increments–so there’s a high probability I know many of the primary participants. According to news reports, many members of the “opposition” in Talas City were detained. I pray for my friends. People get boiled in that part of the world.

I use quotation marks around “opposition” because a singular grouping is misleading. Talas, where these revolutions started, and Bishkek, where they finished, are like apples and oranges. The people of Talas are stereotyped as prideful. We say, “don’t mess with Texas”; the Kyrgyz say, “never fight a guy from Talas.” They are also stereotyped as backwards, because Talas is largely rural and isolated by steep mountains on all sides. Bishkek , on the other hand, is just like every other capitol mega-city in the developing world: bloated with immigration from the countryside, and riddled with crime.

The distinction is important because these revolutions easily change for the worse as they cross the mountains from Talas to the capitol. Shortly after the February 2005 parliamentary elections, the men of Talas started gathering in front of the local executive office building, and they waited. I could see them from my bedroom window. They were non violent. Many of them were my friends. It was an altogether different vibe in Bishkek. There, the proceedings were organized by regional crime bosses. They bussed in thousands.  A lot of alcohol was consumed, and looting was widespread, although there were few casualties. I hope the impetus wasn’t similarly corrupted this time around, but I suspect it was.

In any case, the prognosis is bleak. In the Kyrgyz Republic, the state is just one more player in the black market, so it doesn’t matter who’s in charge. Everyone knows it: There is even a saying, to the effect of “corruption is a way of life.” One of my most enduring memories, unfortunately, is the languid flip of the wrist with which cops beckoned motorists to the side of the road for a bribe. What struck me was the sense of routine. You slipped your money into your passport, handed it over, received the passport, and drove on. Rinse, wash, repeat.

When it isn’t outright extortion, it’s the soft corruption of nepotism and prejudice. Generally speaking, the magnitude of the abuse increases in lockstep with the legal power accorded to the perpetrator by the state.

If only the Brits had won the Great Game! In India, the British Empire left democracy. In the Kyrgyz Republic, the Soviet Union left a corruptocracy.

Dog Bites Man

by Ryan Young on September 4, 2009

in Economy, Stimulus to Nowhere

I am shocked — shocked — that $6 million of stimulus money went to a company accused of “overbilling, bribery of union officials and other alleged improprieties on several large New York projects.” Such lapses in oversight never happen with government spending projects!

Video Evidence Suggests Chevron Lawsuit Riddled With Corruption, Santacruz Comments on the Case

by Christine Hall on September 1, 2009 · 1 comment

in Environment, Features, International, Natural Resources

A major scandal has arisen in the biggest environmental lawsuit in history – the $27 billion lawsuit against Chevron oil company brought by a lawyer representing citizens of Ecuador.

As reported in Tuesday’s New York Times, Chevron has released video implicating Ecuador government officials close to the president in a massive bribery scheme.  Chevron claims its covertly recorded videos “reveal a $3 million bribery scheme implicating the judge presiding over the environmental lawsuit currently pending against Chevron and individuals who identify themselves as representatives of the Ecuadorian government and its ruling party.”  The president responded, in part, by threatening to shut down a television station that aired the videos.

In a Forbes commentary this summer (“Toxic Revenge“), CEI journalism fellow Silvia Santacruz explained why the lawsuit was unjust in the first place (exempting the state-owned oil company, for example).  She noted that Ecuador lawsuits targeting international companies face a court system rated corrupt by the United Nations, the International Bar Association and the U.S. State Department.

Santacruz also explains why such lawsuits, along with a 50% “windfall profits” tax, have directly harmed the people of Ecuador, scaring away foreign investment.  Lago Agrio, where the lawsuit against Chevron was brought, is poor in literacy levels and in basic needs, like running water.  In fact, Santacruz produced a YouTube video, UnderMining Prosperity, to call attention to the plight of Ecuadorian people.

Russia introduces strict new antitrust law

by Tatiana Kryzhanovskaya on July 29, 2009

in International, Legal, Odds & Ends, Regulation

Russian President Dmitriy Medvedev has signed into law amendments that will bring increased penalties for price collusion and unfair competition. The new amendments will allow the authorities to bring unscrupulous businessmen and bureaucrats to justice. Government officials will be subject to disqualification and sufficiently large fines if they will restrict the movement of goods across the country. Section 178 contains a very harsh sanction – up to six years imprisonment for committing a crime in the area of restriction of competition. This is unprecedented measure for Russia but it is unlikely to work because of corruption among bureaucrats at all levels of government.

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