Archive for the ‘corruption’ Category
Represent Us and ‘US democracy’, part 2
Wall Street owns the country. It is no longer a government of the people, by the people, and for the people, but a government of Wall Street, by Wall Street, and for Wall Street.
― Mary Ellen Lease
So the next issue the Represent Us video raises is partisan gerrymandering, an issue here in Australia too. It’s extraordinary to think that gerrymandering has been a problem in the USA since 1788 (the term refers to a salamander-shaped redistricting map created by a governor Gerry of Massachusetts in 1812), with still no solid solution found. So, although this isn’t a new problem, the clearly political, anti-democratic motives involved should make it obvious that it needs to be dealt with apolitically, such as through the justice system or a thoroughly independent, regulated authority. The idea should be that boundaries, which may need to be redrawn from time to time, considering, for example, the general human movement from rural to urban neighbourhoods, should be drawn so as to best assure that all individual votes are of equal value in deciding representation. This would clearly mean taking redistricting out of the hands of partisan politicians and making it a function of independent bodies armed, nowadays, with computer-based maps and up-to-date statistics on human movement. Or am I missing something? Apparently. Here’s what Wikipedia says about the US problem:
Through the 20th century and since then, the US Court system has deemed extreme cases of gerrymandering to be unconstitutional, but has struggled with how to define the types of gerrymandering and standards to be used to determine when redistricting maps are unconstitutional.
… the Supreme Court has struggled as to when partisan gerrymandering occurs (Vieth v. Jubelirer (2004) and Gill v. Whitford (2018)), and in a landmark decision in 2019 in Rucho v. Common Cause, ultimately decided that questions of partisan gerrymandering represents a nonjusticiable political question that cannot be dealt with by the federal court system.
I’m not sure if this 2019 decision is due to the conservative stacking of the Supreme Court (Republicans have more financial clout but less popular support than Democrats), but it seems reasonable to my naive self that legislation can be created to ban incumbent governors etc from redrawing the boundaries of their own districts. They should be the last people allowed to do so.
So the video goes on to claim that, due to gerrymandering, ‘only 14% of House campaigns are actually competitive’. As a non-American, I’m not sure if that means just House of Reps campaigns or Congressional campaigns. In any case a USA Today article from late 2016, with the telling title ‘Fewer and fewer US House seats have any competition’. However, the author argues that it’s not just about gerrymandering. He quotes a political scientist who talks of ‘self-sorting of the population’, where citizens move around to be with the ideologically like-minded. The Washington Post has an article from mid 2017 on the trend, which, I have to say, favours my fantasy of having the USA split into two nations, on red and blue lines, and seeing how each one fares. But nothing is so simple. Interestingly, on the gerrymandering question the WaPo has this:
Some states have moved to take the redistricting process out of the hands of the legislature, turning the duty over to special commissions that in many cases are told to ignore political outcomes. Results have been mixed.
A bit vague, unfortunately. Are they talking about the results of the attempt to form special commissions, or the results of redistricting by the commissions? The point should be that redistricting by partisan actors should be banned as intrinsically a bad thing.
So let’s look at other claims in the video – 1) trillions of dollars spent annually ‘on fraud and abuse in government’ (does this mean on fighting it, or just by the fraudsters and abusers?) – 2) one in five children live in poverty – 3) the most expensive healthcare in the world – 4) more people in prison per capita than any other country. Other claims are perhaps less quantifiable – the US is losing jobs to the rest of the world, and isn’t doing enough re air and water pollution. I’ll look more closely at those first four.
On point one, the evidence is plentiful. This Medical Economics article cites a study showing nearly a trillion dollars annually in healthcare waste, most of it due to administrative complexity and over-pricing. Forbes reports here on massive waste and fraud by federal agencies, and – most egregious but least surprising – the Pentagon’s accounts are in such a mess that multiple firms of auditors have given up on auditing them. There’s no doubt that waste, fraud and abuse in this massively over-indulged sector dwarfs all others.
As to point two, poverty is of course defined differently in different parts of the world. The US website Debt.org has a section titled How is poverty defined in America?, but what follows fails signally to answer the question. Nevertheless, according to their vague criteria 22% of Americans under 18 live in poverty. With its limited government-based safety net and its massively-paid business and banking sectors, there is surely no other ‘open society’ nation that has such a rich v poor disparity.
On the third point, according to Investopedia, the USA does indeed spend more per capita on healthcare than any other nation, but without the best outcomes. Also, unlike most European nations which also spend heavily on healthcare, the USA spends vastly more on expensive private health insurance rather than subsidised government healthcare.
Point four – Wikipedia doesn’t seem to have reliable figures on incarceration rates beyond 2013, but it does state that ‘in the last forty years, incarceration has increased with rates upwards of 500% despite crime rates decreasing nationally’. It’s an outrageous and shameful statistic, but they might argue that it’s the price they’re willing to pay for their libertarianism (!). The rate of incarceration of women in recent decades has been double that of men. The price to pay for women’s liberation?
So there you go – the greatest country in the world, according to that country.
So the Represent Us argument is that this mess can be cleared up, or begin to be cleared up, if the nation is given back to the people, who are currently unrepresented, mostly. Fix the system, and you can fix everything else. According to Silver and Lawrence, and the constitutional scholars (again, that worshipped constitution) and other experts they consulted, a law (but presumably more than one) that would wrest power from the established economic elites and so move, via the people, to end gerrymandering (using independent redistricting commissions), to create ranked-choice voting (we have this in Australia, where it’s called preferential voting), which will give more scope for new parties and independents, and to automate voter registration.
As to the issue of bribery and financial corruption in the political system, here’s what’s hoped to happen once they, the people are in control. They’ll overhaul lobbying and ethics laws, so that politicians can’t be bribed, say, by promises of cushy sinecures after leaving office; they’ll mandate transparency of political spending, for obvious reasons; ‘give every voter a tax voucher so politicians spend time fundraising from their constituents rather than the [economic elites]’ (this is a strange one I’ll have to look into).
All of these reforms can be wrapped up in an American Anti-Corruption Act, which 87% of Americans already support, enthuses Josh Silver.
So the model American Anti-Corruption Act (AACA), co-authored by Silver and other luminaries, was first unveiled in 2012. I gather from the Wikipedia article on it that it does have a lot of electoral support, though 87% might be a bit exaggerated. I just don’t have that much faith in they, the people.
In any case, Silver himself has little faith in a Congress captured by the economic elites. Congress, he feels, will never turn such an act into law. So what’s the solution? I’ll look at that in my next post. Keep well!
USA – suffering for its own failure
The commentariat is divided, though perhaps not entirely on partisan lines, on the treatment of the American President.
It’s becoming clear that, in the USA and elsewhere, people are inhabiting their own social media bubbles. There’s no doubt this is a massive change. Twenty years ago, the term ‘social media’ didn’t exist. Today, when you walk down the street, or catch public transport, you will see people clutching their social media connection machine in their hands as if their life depended on it, and much of the time they’re fully engaged with it. I’m not sure that this social media world can be divided clearly on left/right political lines, but it’s fairly clearly affecting the political understanding of vast numbers of people.
The commentariat, however, more or less represent the intelligentsia, and we expect them to be less in thrall to social media. Yet the division is striking, even if, it seems, uneven. I may be biased, I’m not sure, but it seems to me that those disparaging and mocking, or claiming to be bored by the career diplomats testifying to their frustration and alarm regarding the covert operation to extort the Ukraine government, are in a minority, though a loud one. At the same time, the US President was smearing, via Twitter, the former US ambassador to Ukraine, Marie Yovanovitch, as she was about to testify. As all the evidence shows, Yovanovitch was removed from her post by Trump, and threatened by him in a phone call to the Ukrainian President, saying ‘she’s going to go through some things’. The President described this phone call as ‘perfect’.
All of this is well known, as is the reason for Yovanovitch’s removal. She was a hindrance to the extortion plot.
So why isn’t the President in prison, as should and would occur in every reasonably regulated democratic country? The case is easy to prove, it is admitted by the culprit, and involves a number of first-hand witnesses. This morning I heard a member of the commentariat lay this all out in some detail, then lament that it’s ‘very unfortunate and appalling’, and so forth. And of course many others agreed. Their helplessness is sad, indeed tormenting, to behold.
The President should be held without bail, because of his known compulsion for witness tampering and intimidation, until the date of his trial, but of course this isn’t happening, not because the President is immune from prosecution while in office, but because – despite the massive opportunity for any holder of presidential office to pervert the course of justice – there is no clear law regarding how to treat a criminal President. That this is so, is damning. Waiting for that President to leave office is not a solution, as should be abundantly clear, even to a ten-year-old.
What continually astonishes outsiders like myself is that the commentariat within the USA seems perversely unaware of this failure in the US politico-legal system. With great power – and the power of the US president is, IMHO, far too great – must come great legal responsibility. It’s one of the many failings of the American presidential system that this is not made abundantly clear though black letter law, and plenty of it. Depending on the Constitution, brilliant and wondrous though it might be, is insufficient.
Will the USA be able to reform its system after all this?
It’s astonishing to most of the democratic world that a person so plainly unfit for office, in any office, should have been allowed to stand for office as President of the most militarily powerful country in the world. If any position requires vetting – and all responsible positions surely do – then it is this one. Yet in the USA anyone, even someone who more or less defines dishonesty, corruption and extreme self-interest, can become President, and this seems to be accepted as an article of faith. As one US commentator has pointed out, the current President would not last two weeks as CEO of any US company. But it is worse than this. He would not be considered for such a position by any responsible vetting panel, and he would not last for two weeks in any job whatever, from office boy to toilet cleaner. He has never worked for anyone else in his life, and would be incapable of doing so. Yet he has been given the responsibility of working for the entire American population.
This is not news. It is something known by every member of congress, every business leader and every observer of US politics. That, of course, is why the current US political situation is so bizarre. Now that he has been given that position – with the help of Russian operatives working for a dictator whose principal aim in life appears to be to undermine the most prominent democratic nations – the party that he pretends to belong to, the Republican Party, has for the most part assembled behind him, prepared to follow wherever he leads.
So, where, precisely, is the ‘leader’ going? His life, as is well known, has never involved service to others. It has generally been a convoluted and impulse-driven floundering after self-aggrandisement. Those Republicans gifted with some intellect are well aware of this, and I’m sure many of them scratch their heads at his popularity, such as it is. However, it seems that such is their hunger for power, they’re prepared to cling to someone who wields that power, in spite of never having been supported by a majority of the American public, even on election day. They will support him, again somewhat astonishingly, even if he betrays their values and their political agenda.
Where will this end, and how? Most experts argue that the House will vote to impeach, but the Senate will vote against removing him from office. Of course I have no idea if this will happen, or if Trump will be re-elected in 2020. It appears, though, that, given current poll numbers which have been consistent over a long period, he will need foreign assistance in the next election, of the sort he utilised in 2016. Trump has many powerful ‘advocates’ overseas, and of course he will be extremely willing to employ them, for he has many reasons for wishing to stay in power, beyond self-aggrandisement.
The utter helplessness of the American intelligentsia, and the free press (and I say this while admiring their indefatigable work in exposing all of the corruption, neglect and fecklessness) is painful to watch in this period. But there must be a silver lining. When all this is over, there must be root and branch reform of a Presidential system that has proved itself such easy prey to this extreme vandalism.
getting roolly rich in the USA 1: Jeffrey Epstein
The Jeffrey Epstein case, in terms of women, girls and exploitation, is something I’m far too squeamish to explore, and of course it’s very very sad and disgusting, but my interest was also piqued by the news that he was/is a hedge fund manager (but maybe not), with mansions and an island and oodles of moolah to invest in all sorts of science projects. This raised many questions. Was he obnoxiously rich to begin with, like little Donny Trump? And what is a hedge fund, and can you legitimately make millions from one?
I’ve never been rich and I’ve never invested in anything, unless you call giving money to Oxfam or UNHCR an investment, so I’m really starting from scratch here. The first definition I’ve found is that a hedge fund is ‘an offshore investment fund, typically formed as a private limited partnership, that engages in speculation using credit or borrowed capital’. So, if this is true, why invest ‘offshore’, and how are you able to do this with money you don’t really have or haven’t earned? I suspect I won’t find easy answers to these questions. The website Investopedia (which sounds immediately suss!) starts with another definition: ‘Hedge funds are alternative investments (?!) using pooled funds that employ different strategies to earn active return, or alpha, for their investors’. Alpha! What a lovely musical note that hits for investors (especially combined with ‘male’). But the mention of pooled funds (e.g. mutual funds and pension funds, as well as hedge funds) might explain how you can make money even if you have little personally to invest. Investopedia also tells us that hedge funds ‘are generally only accessible to accredited investors’, because they’re less regulated than other funds. And we all know that the wealthy are very very keen to have less regulation and oversight than what the Yanks call ‘regular folks’
However, it does seem that, to be an ‘accredited investor’, it helps to be already rich. The term applies to financial institutions such as ‘investment banks’ and corporations as well as individuals. Needless to say, this is a world of which I know absolutely nothing. All I’ve really heard about it is negative – high rollers, corruption, anti-government arrogance and the like – which says much about where I get my information from. Even so, the most objective analysis raises questions – for example, the Australian Corporations Act of 2001 ‘defines “sophisticated investor” [basically synonymous with ‘accredited investor’] so as to exclude them from certain disclosure requirements.’ That rings alarm bells for me – you’d think that these heavy investors would be the last people to be excluded from disclosure. The Act also says that such investors require an accountant’s certificate to the effect that they have a minimum of $2.5 million in net assets or a gross income of $250,000 over each of the previous two years. Presumably they’re not asked about how they acquired such income/assets. And the financial bar is considerably lower in the USA.
Hedge funds have grown in popularity, and as a proportion of the asset management field, over the years. After the GFC of 2007-8 there was an attempt (probably feeble) to rein in the sector. The essential hedge fund strategy (think ‘hedging your bets’) is to receive a positive return regardless of bear or bull markets, by spreading the risk in some clever non-risky way. If you get to be a hedge fund manager (which some reports have claimed Epstein to be, though Wikipedia doesn’t mention this in a fairly comprehensive bio) you get to keep a certain percentage of invested funds for yourself – generally a management fee (maybe 2% of assets) and a performance fee (a substantial percentage of any annual increase in net asset value). You can see how disclosure is essential in payment of such fees, and why the temptation to cook the books would be high.
Epstein seems to have ‘risen’ from humble beginnings. His mother was a ‘homemaker’ and one-time school aide, and his father was a groundsman and gardener, yet Epstein is described, at various periods in his career from the early eighties, as an options trader, a financial consultant, a limited partner (at the dodgy investment bank Bear Stearns), a finance manager and other such vagueries – all despite a patchy scholastic record (but as an autodidact and dilettante I certainly don’t hold that against him). However, one very interesting item stands out….
Back in the eighties, Epstein became an associate of one Steven Hoffenberg, who hired him as a consultant for his company, Tower Financial Corporation (TFC). Epstein was paid $25,000 a month, which to me is an absurdly huge amount for anyone to be paid, though in this world it’s probably peanuts. Even before joining TFC (a collection agency that bought up other people’s debts – and if you think that’s dodgy, read on), Epstein had been bruiting it about among the crooked rich that he was a ‘high-level bounty hunter’, sometimes working for governments or the super-rich to recover embezzled funds, sometimes working for clients to secure embezzled funds. He and Hoffenberg became very close, flying around the world to do their dodgy deals, done not so dirt cheap, but in 1993 TFC collapsed and was exposed as one of the biggest Ponzi schemes in US history, with some $475 million of investor funds vanishing. Epstein, though, had already left the company and managed to escape without charge. Hoffenberg was sentenced to 20 years’ jail, and has always claimed that Epstein was intimately involved in the scheme. In fact, Wikipedia’s brief entry on Hoffenberg ends with this fascinating line:
In July 2019, he claimed that the American financier Jeffrey Epstein was his co-conspirator in the Ponzi scheme.
That’s right now, folks. Presumably he has the evidence for that – so why wasn’t Epstein prosecuted way back then?
Anyway, it appears, surprise surprise, that Epstein’s criminality isn’t restricted to his treatment of the opposite sex, which makes you wonder how many super-rich types who don’t draw attention to themselves vis-a-vis sexual exploitation can be shown to be criminals. And how is it possible to buy what is presumably an American island to use as a tax haven?
Tax havens are always described as ‘offshore’. That’s to say, not a part of the country in which you want to avoid paying taxes. The US site Investopedia underlines its dodginess by providing plenty of info on tax havens (hey man, we’re just tellin’ stuff, not selling’ stuff, I mean, peace off man), as well as providing a list which includes the British (but not the US) Virgin Islands. Epstein owns two of the US Virgin Islands, Great Saint James and Little Saint James, where he has one of his mansions. Great Saint James cost him $18 million in 2016, pretty cheap for an island I would’ve thought, and I can’t find the price he paid for Little Saint James back in 1998. This tiny island was his principal centre of sexploitation, aka Orgy Island by the cognoscenti.
The USA has an international reputation as a bad actor in respect of tax disclosure. With monumental hypocrisy, it implemented the Foreign Account Tax Compliance Act in 2010, requiring or ‘forcing’ (dog knows how) financial firms everywhere in the world to report accounts held by US citizens to their IRS, while at the same time refusing to comply with the OECD’s Common Reporting Standard – the only major nation to do so. To be clear about this the USA demands that other countries share information about US citizens’ offshore dealings, but refuses to share the same information with those countries about foreign investment in the USA. As a result, the USA is arguably now the world’s biggest tax haven. How this works exactly for US citizens like Epstein I’m not sure at this point, but the USA has become, especially over the last decade, one of the easiest places in the world for successful tax evasion, especially through the use of LLCs or shell companies. We’re finding this out through examination of Trump’s criminal activities, but of course I’m far from understanding the detailed nature of LLCs, offshore trusts and the like. I need to lern more.
I’ll end this piece – almost – with a quote from an organisation and site that’s the polar opposite of Investopedia, the Tax Justice Network:
The United States, which has for decades hosted vast stocks of financial and other wealth under conditions of considerable secrecy, has moved up from sixth to third place in our index. It is more of a cause for concern than any other individual country – because of both the size of its offshore sector, and also its rather recalcitrant attitude to international co-operation and reform. Though the U.S. has been a pioneer in defending itself from foreign secrecy jurisdictions, aggressively taking on the Swiss banking establishment and setting up its technically quite strong Foreign Account Tax Compliance Act (FATCA) – it provides little information in return to other countries, making it a formidable, harmful and irresponsible secrecy jurisdiction at both the Federal and state levels.
Of course, none of this clearly explains how Epstein ill-got the wealth to be tax-liable in the first place. Certainly the Ponzi scheme he seems to have gotten away with was one, possibly the main, source, but he seems even before this to have ingratiated himself into the world of dodgy financial entities and personae, presumably through schmoozing and force of personality. Certainly his relationship with Ghislaine Maxwell, daughter of that supremo of repugnant dodginess, Robert Maxwell, is an indication of the world Epstein had become familiar with, a world in which everyone is advising everyone else on how to make money out of nothing and how to retain as much of that money as possible, regardless of anything so inconvenient as the law.
References
https://en.wikipedia.org/wiki/Jeffrey_Epstein
https://en.wikipedia.org/wiki/Hedge_fund
https://www.investopedia.com/terms/h/hedgefund.asp
https://www.investopedia.com/terms/p/ponzischeme.asp
https://en.wikipedia.org/wiki/United_States_as_a_tax_haven
https://www.investopedia.com/terms/t/taxhaven.asp
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Trump – still watching the slo-mo train wreck
Jacinta: Well haha, you made a prediction to me last December that Trump would be out on his highly intelligent arse by the end of this year – how’s that going?
Canto: Well after making that prediction I’ve embarked on a bit of a journey re US politics and the presidential system in particular, and as you know, what I’ve discovered has shocked me to the core. So, yes, he probably won’t be out by year’s end, but he obviously should have been, well before this. Basically, as I see it, the sensible folks of the US, the adults, are paralysed in the face of a crooked, incompetent, solipsistic pre-teen brat being elected, with less than half the votes, to the most powerful position in the most economically and militarily powerful nation on Earth. They just haven’t got the political system, the checks and balances, to deal with him, in spite of their constant braying about being ‘the world’s greatest democracy’. Still, as a number of US pundits have pointed out, he’ll be much closer to his end when this month comes to an end. And I find it all very engaging, in a morbid kind of way.
Jacinta: Well, yes, we’ve referred to it for some time as a slo-mo train wreck, and it looks like some of the more visible damage might be witnessed in the next few weeks.
Canto: Follow the money. Which takes us to Russia. We’ve long known that Trump was saved from his bankruptcies and financial incompetence by Deutsche Bank, the Russian money-laundering bank, that he’s very secretive about those finances, and his tax returns haven’t been prised from him…
Jacinta: But the Mueller team have subpoenaed Deutsche Bank, haven’t they? Specifically for Trump’s business finances? I mean, why else?
Canto: I’ve long said that the Mueller team have such a feast of incriminating info on Trump and Russia that even the world’s greatest glutton couldn’t consume it. And there’s plenty of murky stuff available to the public, as reported in The Moscow Project, for example, and in presentations by MSNBC journalist Rachel Maddow, among others.
Jacinta: The word ‘kompromat’ comes up a lot – compromising information or indebtedness, used to exert leverage over powerful individuals or business entities. Though I’m sure Russia-Putin never dreamed they would one day have such leverage over a US President.
Canto: Well that’s the thing. They did dream about it, and what’s more worked to make it happen. Remember that Trump didn’t win the popular vote, he won the electoral college. And remember that the Russians interfered with that election. I haven’t looked into this in detail, but the claim made, for example, by the historian and commentator Niall Ferguson, that Russian interference in the 2016 election was negligible as to results, that claim is bullshit, I suspect. They targeted ‘purple states’, theirs was a value-for-money operation, very sophisticated. I recall reading the speaking indictment on the hacking, and noting the mention of ‘known and unknown individuals’ on the American side of that hacking. So Mueller knew then about some American conspirators, and probably knows more now. Trump goes on about ‘no collusion’, but there clearly was a conspiracy, to win the election with Russian assistance in return for removal of sanctions and god knows what else.
Jacinta: Kompromat indeed. Certainly seems to explain Trump’s behaviour re Russia-Putin from before the election to now. What’s amusing is that he’s not only parroted ‘no conclusion’ endlessly, he’s also repeated the ‘no deals with Russia’ mantra ad nauseam. Pretty dumb, because it soon becomes clear that when he repeats things like that, he’s lying.
Canto: Dumb but hey, he’s never been jailed or had to pay much of a price for his misdeeds. But let’s focus on Russia itself – or Russia-Putin as you call it (I like that combo). As you know the country is run, or rather fleeced, by a bunch of billionaire oligarchs who are Putin’s puppets, and if they don’t do his bidding they’re fleeced in turn by Putin and either jailed or forced into exile, or worse. Trump enters this network of fiends as the archetypal bumbling braggadocio. These guys love to sneer at Americans, no doubt seeing them as amateur scammers and thugs compared to themselves. And Trump is the ultimate incompetent amateur, as if created for their cynical purposes. Now, as is well known, Trump has filed for bankruptcy six times, from 1991 to 2009. It’s called Chapter 11 bankruptcy and it’s designed to enable restructuring, so Trump says he uses the system to his benefit, but of course little of what he says is true or even makes sense…
Jacinta: But surely it’s true that he hasn’t suffered much from his bankruptcies.
Canto: That’s true, and there are obviously major flaws in US corporate law that allow him to get out from under while others apparently foot the bill. But what’s interesting is that, as American banks saw him more and more as an unstable businessman, they turned off the tap. One bank that didn’t, however, was Deutsche Bank – the Russian money-laundering bank. Not only that, Trump was increasingly interested in business relations with Russians, probably due to their lax standards. Trump Tower Toronto was largely funded through VEB, a Russian state-owned bank once chaired by Putin himself, and Russian investments into Trump real estate in the US are too numerous to list. And that takes us to more recent events. Trump and his enablers were trying to build a tower in Moscow in the run-up to the campaign. Clearly this was of interest to Russia-Putin, so again the VEB was heavily involved. Imagine if candidate Trump, who already shared many of Russia-Putin’s anti-democratic proclivities, could be installed as President, in return for financial assistance, which would be tied to the lifting of US sanctions on Russia, and other sweetheart deals. What a coup that would be.
Jacinta: Yes, and all that is pretty well established, I mean in the public realm. But what about the law? Which laws have been broken? We both agree that impeachment stinks, so how exactly is the law going to deal with Trump and co?
Canto: Well, let’s leave aside the probable case that the Mueller team won’t have Trump arrested, due to the vast powers they’ve given their President. Let’s imagine it’s a more sensible system in which the head of state is as immediately accountable for his crimes as any other citizen. I’m not an expert on US law of course, but as often mentioned, Cohen has pled guilty to two felony offences, campaign finance violations, and has stated – obviously correctly – that they were directed by Trump. The FBI, or whoever, already knew that as they have all of Cohen’s paperwork, emails, texts, mountains of the stuff. So that’s two dead certain offences.
Jacinta: Cohen is trying for what we know Flynn will likely get – no prison time. How does that affect Trump?
Canto: Badly. I love it that Trump is lambasting Cohen for doing the right thing, and praising Manafort and Stone for doing the wrong thing. Now all Manafort can hope for is a pardon, from a surely doomed President.
Jacinta: So if Trump pardons Manafort and then he goes down on multiple charges – financial misdealings, conspiracy and obstruction of justice – what then?
Canto: The pardon shouldn’t be allowed to stand, and that’s another test for the US judicial system.
Jacinta: So should we try to find out the precise laws that have likely been broken?
Canto: That may be a difficult, or at least a painstaking task. There are lawsuits pending against him however. For example there are a couple of suits against him for violating the emoluments clause of the US constitution, one by Citizens for Responsibility and Ethics in Washington (CREW), and one filed jointly by the Attorneys-General of the District of Columbia and the State of Maryland. This will be the first time the emoluments clause has been tested in court. The D C and Maryland suit was filed back in June 2017 but there has been action on it recently, with subpoenas issued just a few days ago for Trump’s financial records relating to his D C hotel. So that’s one to watch on the sidelines. But generally there will be laws relating to money laundering, conspiring with foreign entities to interfere in an election, and obstruction of justice, that will likely apply to Trump. The obstruction of justice matter, which no doubt includes lying to the FBI (but perhaps not lying about the FBI!) is unfortunately a bit vague. In any case, we just need to stop hyperventilating – or I do – and watch it all play out. I’d love to see Trump in jail, but the other side of me knows he can’t help himself, he is what he is. The real problem, as I’ve always said, isn’t really Trump but the American political system, most particularly the Presidential system. I want to see if they try to fix it, post-Trump.
the USA’s presidential crisis – what will they learn from it?
The USA has a tragic problem on its hands, of its own making. It now has, as its President, a career criminal, a narcissistic demagogue, a flim flam man who’ll stop at nothing to remain in power. Within a few days, though, his power will be curtailed and, I strongly suspect, and certainly hope, US law enforcement authorities will be rounding up some of his accomplices and generally turning up the heat. Everything about Trump tells me he would be prepared to destroy as much of the country’s political edifice as he possibly can, rather than go quietly.
But it’s the political edifice itself that’s allowed Trump, who isn’t a Republican, or a Democrat, or a politician or a businessman, to take over the ship of state and steer it on a bumpy ride to nowhere. This could never have happened under the Westminster system, which pertains in Britain and Australia, two countries of which I happen to be a citizen.
The flaws in the US Presidential system have been unwittingly exposed by Trump, and this may be the one true gift he will have bestowed on his people, just as the horrors of the great European wars of last century left the one bright legacy of over seventy years of peace in Western Europe.
So what are these problems? Well there’s one general problem of democracy, which is shared by all democratic countries, and that’s the fact that not everyone eligible to vote is sufficiently informed or detached to use their vote to the best advantage of themselves or the nation as a whole. Many are massively influenced by what is called ‘identity politics’, because they identify with a particular sub-culture, be it ethnic, religious, job-related, or special-interest-related in a host of ways. Many simply don’t understand much about politics and are easily swayed by political promises or the promises made by those around them on behalf of politicians. The intellectual elites, the cognoscenti, have no more weight to their vote than the more or less completely clueless.
This problem is exacerbated in the USA by the fact that, every four years, they’re asked to cast a vote essentially for one person over another. In the run-up to that vote there’s massive fund-raising and lobbying, hype (short for hyperbole), overblown promising, and circus-like razzmatazz and bells and whistles.
The one-against-one competition is, it seems, typically American, where the ‘great man’ who saves the world by single-handedly defeating all enemies is a staple of Hollywood blockbusters. In contrast, elections in the Westminster system are more like a blend of the American mid-term and presidential elections, but with much more of the mid-term than the presidential. People essentially vote for parties – a major party of the left and of the right, together with smaller independent parties and independent members. The two major parties and the smaller parties all have leaders, of course, and they’re elected by the rest of the elected MPs of their parties. They’re the ‘captains of the team’, and they work with them in parliament. The Prime Minister, the leader of the party elected to power in general elections, is thus in a very different position from the US President, who resides in and works from the White House, surrounded by staff and officials who are appointed by himself (though more or less vetted by others) without necessarily having been elected by the public to any office of any kind in the past. These include some very influential positions indeed – the 15 members of the Presidential Cabinet including Secretary of State, Secretary of Defense, Attorney-General and Chief of Staff. The President thus heads the ‘executive branch’ of government, which is entirely separate from parliament, or congress.
Under the Westminster system there’s no such separation. The Prime Minister does get to select his cabinet, but they’re all appointed from within parliament, and all of them work within the House, or the Senate. So the PM is literally ‘primus inter pares’, first among equals, and often has to defend his or her ministers and policies in the teeth of opposition sitting across the aisle. This creates much more of a team spirit, and if the PM ‘goes rogue’, as Trump clearly has, his party can organise a no-confidence motion to oust him. Such an event obviously has major repurcussions for the nation, but they are clearly nowhere near as disastrous as the ousting of an American President. Though, arguably, the difficulties involved in ousting the President are even more disastrous.
In watching and learning about the US political system over the past year or so, I’ve been totally astonished at the power granted to the President, and with that power comes a sense of Presidential immunity, due to his ‘indispensability’. This is virtually a recipe for demagoguery and dictatorship. The current President has clearly utilised powers that previous Presidents quite probably didn’t know they had, because they grew up within the usual ethical guidelines of the vast majority of people, regardless of background. Trump has no such guidelines, and so has sacked appointed officials without replacing them, has used pardoning powers – and will continue to do so unless ousted – without restraint, and has issued executive orders in a manipulative and detrimental fashion. He has monetised the Presidency, obstructed justice by declaring war on the FBI and justice department officials, viciously and relentlessly attacked the fourth estate, and spread myriad falsehoods with impunity.
All of this has created a kind of internal paralysis in the US, while making the country and its President both a laughing stock and a cause for grave concern worldwide. Meanwhile the success of demagoguery and ‘power’ over ethics has had its echoes in elections in Austria, Sweden and Brazil. But the USA’s political problems are unique. The two principal problems are – How do you rid yourself of a rogue president? and, How do you present this from ever happening again?
Many concerned Americans are looking to the process of impeachment as the solution. I’m writing this on the day (in Australia) of the mid-term elections, November 6, though the USA is some 11-12 hours behind us in central Australia. It seems likely that the Democrats will take control of the House and possibly the Senate, though I wouldn’t bet on it – I usually get these things wrong. But impeachment is a political process and therefore highly partisan in a nation that has become partisan perhaps to the point of extreme violence. Impeachment doesn’t exist in the Westminster system, because there is clearly no need for it.
For a Prime Minister, under the Westminster system, to ‘successfully’ go rogue, as the US President has, he would have to carry the whole of his party with him, or a substantial majority, as the party system and party loyalty are deeply entrenched in the polity. A no-confidence motion in the Prime Minister can be put up at any time during parliamentary sessions, either from within the PM’s party or from the opposition benches. It’s easier for the President to become a ‘one-man band’ because he’s entirely cut off from congress. I don’t know if Trump has ever entered congress. There seems no reason for him to do so. This complete disconnection from what is is supposedly his own party and government is, I think, disastrous.
The massive power of the President – veto powers, pardoning powers, executive orders, and apparent, if limited, immunity from prosecution – is no small problem for a country that is the most economically and militarily powerful in the world. Rachel Maddow of NBC has highlighted the problem of prosecuting the President. If he is charged and placed in custody or let out on bail, does he still have presidential authority? If not, who does? This would not be a problem under the Westminster system – the Deputy PM would step up, as s/he does when the PM is overseas. And if the matter were serious enough, that deputy, or another senior cabinet minister, would take over the PM’s role permanently. And there would be no hesitancy, under that system, to arrest and detain. Why should there be? The law should treat all offenders in precisely the same way.
In the US there seems to be a lot of confusion on these matters. Many consider the President ‘too important’ to be charged with a crime while in office. This is truly ridiculous. If you have allowed one person to be so important within your political system as to be above the law, for even a second, then your political system sucks, to put it mildly.
Another bizarre anomaly of the US system is this ‘hanging back’ by the federal authorities, in terms of subpoenas and indictments, during pre-election periods. This, it seems to me, is an interference, by a kind of stealth, of the judiciary by the political sphere. Where did this ridiculous idea come from? It seems abundantly clear to me that when investigating potential felonies of any kind, the political background should play no part whatsoever. Once investigators have ‘all their ducks in a row’, as Americans like to say, that’s when prosecutions should begin. I’ve no idea right now what will happen to Trump after these elections, but he has already been clearly implicated in campaign finance violations via his criminal fixer, so prosecutions should have occurred already. To not institute criminal proceedings when everything is set to do so, because of some election or other – that constitutes political interference. Am I missing something here?
Assuming that Trump is indicted after these elections (though what I’ve heard is that the Mueller will only issue a report to congress, even if it includes indictable offences, which makes my head spin with its unutterable stupidity and dereliction of duty), is it likely that Trump will give himself up to authorities? Trump is a career criminal who has never spent any time in jail, though his tax crimes and various scams should have seen him incarcerated for much of his adult life. It’s hard to know what he’ll do when cornered, but I can’t imagine him giving himself up to authorities. The real crisis is about to hit the fan, so to speak. It will get very very bumpy over the next few months, no matter what the election result.
The other major question is – what will Americans learn from the Trump disaster? Will they reform their political system? With their jingoistic pride, I don’t hold out too much hope. My guess is that there will be some reform around the edges – the emoluments clause might be ‘promoted’ to something more than a mere clause, for example – but their beloved but outdated Constitution will remain largely untouched, and they’ll still keep their POTUS in splendid isolation, a law unto himself and a potential threat to their nation and the outside world. But then, as some dipshit has often said, we’ll have to wait and see.
waiting for Mueller – the many and varied problems for Trump
There are undoubtedly billions of worthier subjects to focus on than Trump, but I do find it hard to look away for long from the slow-moving train wreck – and I’m still nursing my prediction that he’ll be out by year’s end. Of course I keep stumbling at obstacles, and anything that gets in the way of justice being the same for everyone seems to me an unnecessary and illegitimate obstacle. Now it’s this ridiculous notion that you shouldn’t charge a President around election time. It’s bullshit. It should be absolutely clear that you should charge any felon precisely when all is in order to charge him, no matter what time of year it is.
But that apparently isn’t how it goes in the USA, and so we have to wait for two whole months to bring charges, assuming this ‘etiquette’ is followed. And then what happens after the mid-term fall-out? Too close to Christmas?
Needless to say, I’m completely opposed to the truly criminal notion that you can’t charge a head of state while in office. Only in America is such a notion even thinkable – a testament to one of the worst political systems in the western world.
Anyway, no sense bemoaning a system that the US Congress, fourth estate and intelligentsia are too jingoistic to even be capable of examining let alone reforming. So instead I’ll focus here on the legal jeopardy Trump finds himself in from various directions, as we wait for the Mueller team to hopefully finish him off.
Firstly the Michael Cohen case. Cohen is currently out on bail awaiting sentencing on eight criminal counts he has pleaded guilty to. According to this article in The Hill, from August 21, Cohen won’t be sentenced until December 12, which seems an eternity to me. It’s expected that he’ll do a fair amount of jail time.
What has this to do with Trump? Cohen was his fixer and I’m not sure how many of the felonies he’ll be sentenced on relate to Trump or his organisation. Some reports claim that more than one felony relates to the 2016 campaign. What is clear is that Cohen seems bent on revenge for the way Trump, who never treated him particularly well in spite of his loyalty, dropped him like a hot potato shortly after Cohen’s offices and home were raided by the FBI. In pleading guilty to one charge of campaign violations relating to the Stormy Daniels payment, Cohen implicated Trump as the person who directed his activities. This should have led directly to Trump’s arrest, but for some reason this hasn’t happened. In any case it stands to reason that whatever Cohen’s sentence on this particular count, Trump’s should be greater, as the ‘Mr Big’ in this case.
Of course Trump’s legal jeopardy from the Cohen direction is probably, or hopefully, more considerable than just the Stormy matter. Cohen struck a plea deal with the SDNY, clearly in the hope of getting a lighter sentence in return for dirt on Trump, but the plea deal seems to have been minimal, most likely because the Mueller team, who are surely in close contact with SDNY, have enough dirt on Trump already (particularly from the raid on Cohen’s offices and home, conducted by the SDNY, but nothing prevents the FBI from sharing information – in fact such sharing is essential), and they don’t like working with criminals if they can help it. Still, they may call on Cohen if they need to, which all spells trouble for Trump. Meanwhile, Emily Jane Fox writes In Vanity Fair (September 11) that Cohen’s attorney is set to meet New York State tax officials who are looking into the Trump Organisation’s finances. Hopefully Cohen will have more damning stuff on that topic. I should also add that it’s this SDNY probe into Cohen that has granted immunity to the CFO of the Trump Organisation, as well as to David Pecker, chief of the National Enquirer, a gutter mag dedicated to spruiking Trump’s ‘qualities’ and to ‘catching and killing’ negative stories about him. So, more legal jeopardy there.
Secondly, on those New York State tax officials. A Washington Post article from July 20 revealed that the state’s tax agency is investigating Trump’s personal charity (sic), the Trump Foundation. New York’s embattled governor, Andrew Cuomo, who appears to have launched the investigation under pressure from constituents, has said that the probe could lead to criminal charges. Trump’s children would be involved as well as himself.
Thirdly, the tax probe comes on the heels of a civil suit, filed in June by the New York Attorney-General, claiming that Trump and three of his children ran a charity ‘engaged in persistently illegal conduct.’ The Attorney-General’s department has been considering pursuing criminal charges, but apparently there’s a race to become the next Attorney-General there, and the Democratic candidates are all promising to go after Trump if elected. They’re hoping to focus on the Emoluments Clause in the Constitution, which is altogether a good thing. Not being well up on how the US electoral system works, I’m not sure how long it will take for this all to be sorted, but it definitely looks like there will be an annihilation of Republicans in the mid-terms, and this Attorney-General race will be caught up in that. So, more trouble for Trump.
Fourthly, the next Manafort trial starts soon, and it involves Russia. Manafort is apparently trying to negotiate a plea deal as I write, one that won’t involve dumping on Trump, and won’t involve actually going through the trial process. It’s hard to imagine that happening. An article in Fortune, out yesterday (September 13) claims that a deal has more or less been struck, but it’s hard to imagine such a deal not involving Trump. This deal may be announced as early as today. Considering that the Mueller team holds all the cards – a slam-dunk set of convictions on the second trial, and the possibility of retrying the ten counts that were left undecided in the first trial, it’s hard to imagine that Mueller wouldn’t have extracted some damning evidence about Trump, the campaign, and Russian money in exchange for any deal. Maybe Trump won’t be touting Manafort as a ‘great guy’ for much longer – but on the other hand, Manafort may just be lookingfor a way to avoid the expense of a court case he can’t win, and he’s hanging out for a pardon from Trump.
And fifthly, the Mueller probe itself. I see it dividing into three parts – conspiracy, obstruction of justice, and financial crimes.
Conspiracy charges will depend on whether Trump and/or his campaign knew about the Russian interference in the 2016 elections, an interference amply documented in the two speaking indictments, in February and July of this year, which together charged 25 Russian individuals and three Russian companies with hacking of servers and hijacking of social media sites to influence the election outcome, entirely in Trump’s favour. No American citizens were charged, but other persons ‘known and unknown’ to the investigators were repeatedly mentioned. The second indictment also raised profound suspicions that the Trump campaign had knowledge of the hacking, because of certain dates matching comments at the time by Trump himself. Apart from this there is the meeting at Trump Tower on June 9 2016, which I personally think is less significant, but about which there have clearly been cover-ups and lies by the Trump campaign and administration, including by Trump himself. It has always appeared to me highly likely that Mueller has an abundance of material on this conspiracy.
On obstruction, although much of the focus here has been on the firing of James Comey for the illicit reason of trying to stop the Russia investigation, it seems clear to me that the relentless public attacks on the Mueller enquiry, the FBI and the DoJ, and the hounding of specific officers within those departments, are all very serious cases of obstruction of justice, so flagrant and criminal in intent in fact that they should have warranted dismissal from office long ago. These are questions, of course, about the limits to free speech, but one would think that such limits would indeed apply to the Head of State when speaking of cases in which he himself is implicated. The more power you have to influence, the more responsibility you should bear in speaking of such institutions as investigating services, the judiciary and the free press, a matter which should be inscribed in law. In any case it’ll be interesting to see what the enquiry’s findings are on this topic. They should be fulsome.
On financial misdealings and any other bits and pieces of criminality that might be uncovered during the enquiry, There’s potentially a lifetime of stuff there. It’s pretty certain that Mueller has all the tax returns, and knows a thing or two about Deutsche Bank’s dodgy dealings with Trump. This is the most murky of areas, obviously, but there are outstanding financial experts on Mueller’s team who’ll be having a wonderful time joining all the dots.
So who knows when the fireworks will start, but I’ll be happy to be viewing them from a safe distance. Meanwhile I’ll try, really try, to focus on other things for a couple of months.
zero sum game nationalism, Chinese style
Jacinta: So we’ve been hearing about Russia’s, or Putin’s, obsession with wrecking democratic processes in the USA, Europe and elsewhere – not to mention in Russia itself – but what about Russia’s much more economically smart neighbour, China? We know it’s bent on interference, but for what reason, and to what degree?
Canto: Well this conversation’s based on something we heard this morning, about China having interfered, or tried to, in the last few federal elections, and the consequent problem of foreign donations and investments, and ‘pay for play’ generally.
Jacinta: Yes there’s been a top secret report into foreign interference generally, which is unfortunately ‘classified’, but some of it’s being leaked apparently, and there’s an article about it here. The report names China as the most concerning nation.
Canto: Quelle surprise. And it gets murky fairly quickly, with former NSW Premier and federal Foreign Minister Bob Carr, clearly a Chinese government apologist, trying to undermine John Garnaut, the principal author of the secret report. He recently described Garnaut as one of ”the leaders of the recent anti-China panic in the Australian media”.
Jacinta: Right – why should we panic about the most populous and economically dynamic nation on the planet, a massive human rights abusing dictatorship, interfering with all of our election processes down to the council level, with increasing frequency and sophistication? Surely they’re just doing it for our benefit?
Canto: Garnaut’s ASIO enquiry examined China’s infiltration of Australian political parties, media and academia, and it probed the activities of Huang Xiangmo, a billionaire Chinese businessman who created a ‘think tank’ (always a term to raise the skeptical antennae) called the Australian China Relations Institute (ACRI), headed by Carr. Huang also runs a lobbying organisation for the Chinese Communist Party. Garnaut provided testimony to the US Congress a couple of months ago about China’s considerable activities in interfering with Australian elections. Meanwhile Carr is talking up how friendly to us the Chinese dictatorship is, and questioning Garnaut’s right to advise the government on these matters. He doesn’t seem to have much interest in the facts about interference – which admittedly, we’re all in the dark about, in terms of details. Anyway, ACRI appears to be little more than a lobbying group.
Jacinta: I worry about academic interference, as I work in a field that’s become ever more dependent on full-fee Chinese students. What’s most clear about Chinese students – pace those from Hong Kong – is their general ignorance of and indifference to a political system that allows them no voice and provides them with minimal and distorted info. So I try to open their minds a little, but I get nervous – I’ve heard of spies in the ranks, reporting back to the Beijing bully-boys. And fear of ‘insulting’ the dictatorship, biting the hand that feeds us, will surely be hampering university administrators as well. The worry is that the universities profiting from all this Chinese money will become advocates of a softly softly approach and turning a blind eye to political influence.
Canto: But so far we haven’t addressed the question of what China hopes to gain through interference. Clive Hamilton – no doubt one of Carr’s ‘panic merchants’ – had much trouble publishing his book Silent Invasion, simply for fear of a Beijing backlash. Two major publishers backed out – were they leaned on? The book raises questions about Carr and Andrew Robb and their dealings with billionaire businessmen..
Jacinta: But look, I do wonder about Silent Invasion‘s subtitle, ‘how China is turning Australia into a puppet state’. Doesn’t that sound a teensy bit panicky?
Canto: Granted, but there are disturbing things happening on Australian soil – which we shouldn’t panic about, but we should act upon. And we should be aware that China is not our friend, as is generally the case with small countries when big countries come sniffing around them. Look at the Philippines way back in the day, when they got some US assistance in their fight for independence from Spain. Once the natives had gained their independence the poor buggers then had to fight off the US, which was only interested in gaining control. Rule of thumb for small countries – don’t trust the overtures of the friendly giants in your neighbourhood, because for the time being, until we grow out of this infantile stage of humanity, nationalism is largely a zero sum game.
Jacinta: There was a small demonstration by a group of Tibetans in Canberra some years ago, at the time of the Beijing Olympics torch relay. They were set upon by Chinese thugs, apparently in what appears to have been an organised attack. Wonder what organisation was behind it. On that occasion, thousands of Chinese students were apparently bussed into Canberra, to celebrate their Chinese-ness. Rumour has it that they were bribed with job offers in China. That probably happens in China itself – fealty to the dictatorship is doubtless a pre-requisite for getting on in business there.
Canto: And the Chinese government recently issued a warning to students due to attacks on them by Australians, though it looks to have been an over-reaction, and probably politically motivated.
Jacinta: I’m sure there have been such racist attacks, we’re just as racist as other countries of course, but the Chinese government would love to have something to criticise us for. Our government’s announcement of tougher espionage laws was met by the usual claims from China of bias and a cold war mentality.
Canto: Those laws were announced precisely as a result of evidence of Chinese interference, and the reasons for the interference are the usual nationalistic ones – to get Australia to allow more Chinese investment, to have a more sympathetic attitude to China’s expansionism in the region, to support China’s domestic assimilation policies and the like. So there are the usual self-interested big nation issues, but there’s also the drive to get Australia, and other nations, to wholly accept its oligarchic and dictatorial closed society with its associated human rights abuses as legitimate, or at least of no concern to other nations.
Jacinta: The Sydney Morning Herald has a maddeningly undated 3-part online article, ‘China’s Operation Australia’, written by a team of top journalists, which highlights ASIO’s concerns about influence peddling and the monitoring of Chinese dissidents inside Australia. Chinese media have been particularly targeted, with some once-independent Chinese news outlets succumbing to the pressure of the Chinese oligarchy. ASIO believes it to be the largest foreign interference campaign ever carried out in Australia.
Canto: Yes and two of the biggest operatives in this campaign are the aforementioned Huang Xiangmo, and Chau Chak Wing. They’re both billionaires, and Chau is an Australian citizen, so changes to the law about political donations from foreigners wouldn’t affect him, though he appears to be in cahoots with the oligarchy. However it appears to be Huang who’s most suspect, though it’s not entirely clear why. He’s a dynamic business type from humble origins who appears to be genuinely philanthropic as well being a hustler for influence. His keenness to become an Australian citizen suggests he’s not entirely wedded to the Chinese political system, while other activities suggest otherwise. And here’s where I start to question, or put into perspective, the ASIO concern. If there’s influence peddling here, it’s not like the rabid Russian, Putin-directed attempts to subvert democracy in the USA and Europe. It’s definitely an attempt to influence policy toward China, and we need to be aware of that. Rules against foreign donations will help, monitoring is always required, and illegal activities should be exposed, but we need to be realistic about the zero sum game that every nation, including Australia, plays, while trying to whittle away at that ultimately self-defeating game in the name of global concerns, including human rights, which are, and always should be, a global issue.
Jacinta: All the same we need to hold our nerve against big bullying countries, and call them out on the international stage if need be.