By Peter C Gøtzsche, Allan H Young, John Crace | British Medical Journal | May 15, 2015
We could stop almost all psychotropic drug use without deleterious effect, says Peter C Gøtzsche, questioning trial designs that underplay harms and overplay benefits. Allan H Young and John Crace disagree, arguing that evidence supports long term use.
Psychiatric drugs are responsible for the deaths of more than half a million people aged 65 and older each year in the Western world, as I show below.1 Their benefits would need to be colossal to justify this, but they are minimal.1 23 4 5 6
Summary of Article
Overstated benefits and understated deaths
The randomised trials that have been conducted do not properly evaluate the drugs’ effects. Almost all of them are biased because they included patients already taking another psychiatric drug.1 7 8 9 10 Patients, who after a short wash-out period are randomised to placebo, go “cold turkey” and often experience withdrawal symptoms. This design exaggerates the benefits of treatment and increases the harms in the placebo group, and it has driven patients taking placebo to suicide in trials in schizophrenia.8
Under-reporting of deaths in industry funded trials is another major flaw. Based on some of the randomised trials that were included in a meta-analysis of 100 000 patients by the US Food and Drug Administration, I have estimated that there are likely to have been 15 times more suicides among people taking antidepressants than reported by the FDA—for example, there were 14 suicides in 9956 patients in trials with fluoxetine and paroxetine, whereas the FDA had only five suicides in 52 960 patients, partly because the FDA only included events up to 24 hours after patients stopped taking the drug.1
For antipsychotics, I used a meta-analysis of placebo controlled trials in patients with dementia because they would be less likely to have been receiving psychiatric drugs before randomisation. The absolute death … Full article
Peter C Gøtzsche, professor, Nordic Cochrane Centre, Rigshospitalet, DK-2100 Copenhagen, Denmark, Allan H Young, professor of mood disorders, Institute of Psychiatry, Psychology and Neurosciences, King’s College London, UK, John Crace, psychiatric patient and parliamentary sketch writer, Guardian, London, UK
Lawmakers in Germany have been told that an EU agreement for a $25 billion state subsidy by the UK to build a nuclear power station is illegal and should be annulled, in another twist in Europe’s nuclear energy farce.
The German Bundestag’s Economic and Energy Committee took evidence on the European Commission’s approval of $25 billion worth of state aid for the construction of a new nuclear plant at Hinkley Point, in Somerset, southwest England. The hearing followed recent claims by German energy cooperative Greenpeace Energy that the EU state aid approval contravenes competition rules. In October 2014, the European Commission approved the state aid for the construction of Hinkley Point C, which allows the UK government to assure the future operator a fixed electricity price over a period of 35 years and to guarantee inflation surcharges and credit guarantees.
The German Government had informed the European Commission that “political expectations” made it clear that the promotion of renewable energy should not lead to the encouragement of nuclear power plants, according to, the Parliamentary State Secretary at the Federal Ministry of Economic Affairs, Brigitte Zypries.
A political coalition of Alliance 90 and the Greens called for a stop to “subsidies for British nuclear power plant Hinkley Point C and legal action.”
In January, the Austrian government confirmed it is to take the European Commission to the European Court of Justice over the subsidy deal.
New Nuclear in Meltdown Fears
The Hinkley Point C proposal has already been beset by many years of delay — mostly because the reactor it is considering using has been plagued with problems. EDF has chosen the European Pressurised Reactor (EPR), a third generation pressurised water reactor (PWR) design. It has been designed and developed mainly by Framatome (now Areva), EDF in France and Siemens in Germany.
However, the first ever EPR nuclear power station under construction in Flamanville, in northwest France, is already massively over budget and seriously delayed. Since construction began in April 2008, the French nuclear safety agency has found that a quarter of the welds inspected in the secondary containment steel liner were abnormal, cracks were found in the concrete base and it also ordered a suspension of concrete pouring on the site.
In November 2014, EDF announced that completion of construction was delayed to 2017 due to delays in component delivery by Areva. In the same month, Areva issued a profit warning and said it would suspend future profit predictions because of problems on a similar EPR power station project at Olkiluoto in Finland.
And in June 2015, the French nuclear safety watchdog says it has found “multiple failure modes” that carry “grave consequences” on crucial safety relief valves on the Flamanville nuclear plant in northern France, which could lead to meltdown.
Areva and EDF have been hit by the global backlash against nuclear plants since the Fukushima accident in 2011. Following the incident, Germany accelerated plans to close its nuclear power reactors, Italy voted in a referendum against the government’s plan to build new nuclear power plants and French President Francois Hollande announced the intention of his government to reduce nuclear usage by one third.
US cites fictional Russian threat
Washington is mulling the delivery of stealthy F-22 Raptor fighter jets to Europe in the face of a “resurgent Russia”, according to US Air Force Secretary Deborah Lee James.
The US Air Force plans to further increase the number of its rotational forces in Europe amid tensions with Russia and could deploy the F-22 fighter to Europe, US Air Force Secretary Deborah Lee James was quoted by the Wall Street Journal as saying.
She made the statement during the Paris Airshow at Le Bourget earlier this week.
“That’s the beginning, there will be more. You’ll continue to see more and more rotational forces. The biggest threat on my mind is what’s happening with Russia and the activities of Russia. That’s a big part of why I’m here in Europe,” James said.
She added that she saw “no reason” why the fifth-generation F-22 fighter jets could not be stationed in Europe, but refused to elaborate.
The statement came shortly after the US military awarded defense contractor Lockheed Martin nearly 70 million dollars to add flying hours to the F-22 Raptor fighter jets.
Earlier, the US Air Force stepped up its number of air patrols in the Baltics as Britain received B-2 stealth bombers and B-52 bombers from the US.
On Monday, it was reported that the Pentagon is poised to send heavy military equipment to Eastern Europe and the Baltic nations, as part of its effort to strengthen US forces there. The move was harshly condemned by Russia, which said that this possible decision would undermine the 1997 Russia-NATO Founding Act.
These are the top salaries at the Save the Children fund.
CEO Justin Forsyth £139,950
COO Anabel Hoult £139,950
COO / CFO & Strategic Initiatives Rachel Parr £131,970
Global Programmes Director Fergus Drake £113,300
Fundraising Director Tanya Steele £112,200
Marketing & Comms Director Sue Allchurch £111,920
Policy & Advocacy Director Brendan Cox £106,029
CFO Peter Banks £102,000
HR Director Paul Cutler £100,980
The UK average salary is 26,500.
StC has just given Tony Blair its “Global Legacy” award. What kind of people like Tony Blair? People who earn over 100,000. I am not sure that if you put money in a tin, or bought from their charity shop, you thought you were paying that many fat salaries. There are also gold plated pensions and other benefits. Justin Forsyth, the CEO, of course worked in Tony Blair’s neo-con policy unit.
As I have written before, very few charities are in any sense independent any more. Save the Children Fund gets 176 million pounds – over half its income – in grants from various governments, including over 80 million from the British government. That compares to 106 million in donations from the public. In 2012 over 70 million pounds was spent by Save the Children UK on its own staff costs. This was reduced on paper to 44 million in 2014 by the expedient of transferring some Headquarters staff from Save the Children UK to Save the Children International. I have an uneasy feeling about some of Save the Children’s accounting presentation. Justin Forsyth’s and Annabel Hoult’s salary of 139,950 sounds a lot better than 140,000 doesn’t it? Rachel Parr’s 131,970 sounds less than 132 grand.
Save the Children’s highly paid and very numerous HQ staff work in a swanky office for which they pay a staggering 6.5 million pounds a year lease. Do they really need their HQ in ultra expensive Central London? I suppose all those high earners have to get home to Islington. Their HQ costs more than all their other premises put together, including all their shops.
I wonder how much all of this is known to the 13,000 good-hearted volunteers who work many hours for nothing to support these people.
I give regularly to charity, by standing order. I am sure so do many who read this blog. If you are giving to Save the Children, I do urge you to re-target your charitable giving.
Making lots of money was very important to Jeb Bush. In 1983, he was famously quoted by a Miami News reporter saying, ”I’d like to be very wealthy, and I’ll be glad to let you know when I think I’ve reached my goal.” But the manner in which he has acquired his wealth, currently estimated between $8 million and $10 million, has raised many red flags and even allegations of wrongdoing.
Trading on his family name, Jeb Bush wove a spider’s web of business partners and deals based on family connections and (sometimes shadowy) business transactions. His associates ranged from Miami organized crime figures to Washington and Wall Street insiders. He experimented in various areas from real estate to international sales to investing in an NFL team.
By all accounts, Jeb Bush is a hard worker putting in long hours. But he is also a privileged individual whose success has its foundations in his family name. And his tangle of business affairs since 1974 is nothing if not entitled and convoluted.
Following graduation from the University of Texas at Austin in Latin American Studies in 1973, Jeb Bush went to work with the international division of the Texas Commerce Bank. As the St. Petersburg Times reported, an executive at the bank, James A. Baker III, was a close friend of Jeb’s father and would later run George H.W. Bush’s presidential campaign before becoming the Secretary of the Treasury under Ronald Reagan and Secretary of State under Bush Sr.
Three years later the 24-year old Jeb was sent to oil-rich Caracas, Venezuela, to open a new operation of the bank, managing hundreds of millions of dollars. While there, he rubbed elbows with executives such as Lady Bird Johnson, the widow of President Lyndon Johnson, a director of the bank.
In 1979, Jeb Bush quit his banking job and moved his family back to the United States to help on his father’s presidential campaign. Though he worked as an unpaid volunteer on the campaign, he received some compensation for his time: he forged a robust network of political and business connections which would serve him well over the next decades in his self-proclaimed quest to make money.
After the 1980 election – which made his father Vice President – Jeb Bush moved to Miami, Florida, where he became involved in the business and political world of the city, dominated at the time by wealthy Cuban émigrés. Bush became associated with Armando Codina, a Cuban real-estate investor and Republican supporter of George H. W. Bush. Because of Codina’s personal affinity towards the Bushes, Codina offered Jeb a business partnership in his real-estate company.
With no prior real-estate experience and for no initial investment, Bush received 40 percent of the profits and had his name on the company, Codina Bush Group. In return, Codina got the prestige carried by the Bush family name. Their alliance would set Bush on track to build his wealth and business reputation.
By 1983, Bush had earned enough to start making small investments in the acquisition of properties with Codina. One of their first ventures was Museum Tower, located at 1390 Brickell Ave., on Miami’s “Banker’s Row.” Bush invested $1,000. By 1990 he sold out for about $346,000.
But the building proved to be a headache for Bush and Codina, as a third-party investor, who had borrowed over $4 million from a local savings and loan company, defaulted on the loan. A 1990 New York Times article describes how the savings institution became insolvent and eventually had to be bailed out by the federal government. Bush and Codina are quoted as being unaware that the funds for the $4 million repayment of the loan came from taxpayer money.
The Cuban Connection
Jeb Bush’s connections with other prominent Cuban-American businessmen and politicians in Miami before and during his Florida governorship are extensive. Some of these alliances have raised eyebrows and occasionally got him into trouble.
As the Guardian recounted from the 2002 book, Cuba Confidential: Love and Vengeance in Miami and Havana by Ann Louise Bardach, Jeb Bush, in 1984, “began a close association with Camilo Padreda, a former intelligence agent under the Batista dictatorship, overthrown by Fidel Castro. Jeb Bush was then the chairman of the Dade county Republican party and Padreda its finance chairman.” Later, Padreda would be convicted of “defrauding the housing and urban development department of millions of dollars during the 1980’s.”
In 1984, Bush was approached by Miguel Recarey Jr., the owner of International Medical Centers (IMC), a large health maintenance organization. The Tampa Bay Times described Recarey as a charming yet volatile personality who openly bragged about his connection to the crime boss Santo Trafficante Jr. Recarey allegedly approached Bush to help him acquire an office building, but received an additional bonus — numerous calls by Bush to Washington to request a waiver of Medicare rules that were threatening IMC’s profits.
Bush was paid $75,000 compensation for helping obtain a property. But sources told the St. Petersburg Times that it was repayment for Bush’s political help, as IMC never purchased a building shown by Codina-Bush – and Recarey received his sought-after federal waiver. In addition, two months before Bush placed calls to Washington, “in September of 1984, the Dade County GOP received a $2000 contribution from IMC,” reported the Miami News.
Two years later, IMC was shut down because it was insolvent and Recarey was accused of stealing millions of government dollars, along with multiple charges of bribery and fraud against the government. The Miami News reported in 1991, “By the time the organization collapsed in mid-1987, IMC and Miguel Recarey were receiving a $30 million check from the federal government each month. In fact, IMC was the biggest Medicare fraud scheme in American history.”
Recarey fled the country and remains an international fugitive. According to a Tampa Bay Times article last March, Recarey has been working as a technology executive in Madrid, Spain.
There was another facet to the Bush-Recarey relationship, described by the Guardian via Bardach’s 2002 book on the Cuba-Miami link. “In 1985, Jeb Bush acted as a conduit on behalf of supporters of the Nicaraguan contras with his father, then the vice-president, and helped arrange for IMC to provide free medical treatment for the contras.”
The Miami News continued, “When the Iran-contra scandal began to break in October 1986, the CBS Evening News and the Herald quoted unnamed officials as saying that Jeb had served as his father’s chief point of contact with the contra rebels. Jeb’s denials were narrow. He did not deny being his father’s liaison to the contras, only that he had not participated ‘directly’ in the illegal contra resupply effort directed from the White House.”
Robert Parry, who in the mid-1980s was an Associated Press reporter investigating the Reagan-Bush administration’s secret support for the Contras, confirms Jeb Bush’s association with Contra supporters operating out of Miami. Parry recalls that one Nicaraguan businessman with close ties to both Jeb Bush and the Contras told Parry that Jeb Bush was getting involved with a pro-Contra mercenary named Tom Posey, who was organizing groups of military advisers and weapons shipments.
In 1988, Posey was indicted along with several other individuals on charges of violating the Neutrality Act and firearms laws, charges that were dismissed in 1989 when a federal judge ruled that the United States was not at peace with Nicaragua.
Jeb Bush was also instrumental in helping Cuban-American politician Ileana Ros-Lehtinen get elected to Congress in 1989 when he became her campaign manager. Besides managing and handling strategy, Jeb helped raise funds, including imploring then-President George H.W. Bush to appear at a Miami fundraiser for the congressional hopeful.
President Bush was quoted as saying, “I am certain in my heart I will be the first American president to step foot on the soil of a free and independent Cuba.” Returning the favor now, Ros-Lehtinen has publicly endorsed Jeb Bush for the 2016 presidential election.
There is also the troubling history of the Bush family connection to the Cuban drug kingpin, Leonel Martinez, as reported by the Miami News. Martinez left Cuba following the communist overthrow to continue his capitalist ventures and eventually became one of the most successful cocaine and marijuana importers in Miami during the 1980s. He was also a generous benefactor of the Republican Party.
“Between 1984 and 1987, Martinez and his wife Margarita donated at least $14,200 to political organizations controlled by the Bush family,” including the Dade County GOP, of which Jeb became chairman in 1984, and the vice presidential campaign fund of George H.W. Bush. A photograph of Martinez and Bush Sr. shaking hands shows the value placed on Martinez’s contributions.
When Martinez was finally arrested in 1989 for possession of 300 kilos of cocaine he entered a plea deal. The Washington Post reported another layer of connection to the Bushes:
“Formal approval of the plea bargain had to be provided by Dexter Lehtinen, the top federal prosecutor in Miami — who owed his job to Jeb and George Bush. Lehtinen, a former Republican state legislator with little prosecutorial experience, is married to Ileana Ros-Lehtinen, the congresswoman from Miami. In July 1990, while Leonel Martinez’s case was still under consideration by Lehtinen’s office, his wife’s campaign received a $500 campaign contribution from Margarita Martinez, Leonel’s wife.”
The Post continued that, while it is not assumed the Bushes were aware of the source of Martinez’s money during the 1980s, the connection was troubling at a time when Vice President George H.W. Bush was head of the federal anti-drug task force. The Bushes also did not attempt to return any of the money contributed by Martinez after they learned of its source.
Jeb Bush was integral, too, in securing a number of “pardons” of Cubans involved in terrorist acts. One example was his intervention to help release Cuban terrorist Orlando Bosch from prison and grant him U.S. residency. A notorious right-wing Cuban terrorist, Bosch was convicted of firing a rocket at a Polish ship en route to Cuba and was implicated in many other acts of terrorism, including the 1976 mid-air bombing of a Cubana Airlines plane, killing 73 civilians.
The Cubana Airlines bombing and several other major acts of right-wing Cuban terrorism occurred while George H.W. Bush was CIA director and was working closely with anti-communist Cuban exiles employed by the CIA, including Felix Rodriguez, a close associate of Bosch’s alleged co-conspirator in the Cubana bombing Luis Posada Carriles.
In its 2002 review of Bardach’s book, The Guardian wrote, “Bosch’s release, often referred to in the US media as a pardon, was the result of pressure brought by hardline Cubans in Miami, with Jeb Bush serving as their point man.” And, in July 2002, while Jeb Bush was Florida’s governor, he “nominated Raoul Cantero, the grandson of Batista, as a Florida supreme court judge despite his lack of experience. Mr Cantero had previously represented Bosch and acted as his spokesman, once describing Bosch on Miami radio as a ‘great Cuban patriot’.”
During George W. Bush’s presidency, “[o]ther Cuban exiles involved in terrorist acts, Jose Dionisio Suarez and Virgilio Paz Romero, who carried out the 1976 assassination of the Chilean diplomat Orlando Letelier in Washington, [were also] released.”
In addition to the release of convicted Cuban terrorists, according to the Guardian, Bardach’s book suggests, “[t]he Bush family has also accommodated the demands of Cuban exile hardliners in exchange for electoral and financial support.” George W. Bush’s presidential adviser Karl Rove “‘has urged him to fully accommodate hardliners in return for electoral victories for both his brother and himself’, Bardach’s book says. For their help, many hardline Cuban-Americans have received plum jobs in the current administration.”
The Saint Petersburg Times reported that from 1986 to 1987 Bush sat on the board of the Private Bank and Trust, a secretive, Swiss-owned institution that managed wealthy foreigner customers’ investments for a fee. In 1991, the bank was shut down by federal regulators for “making investments contrary to client instructions and putting funds in companies affiliated with or managed by the bank.”
Bush denied any knowledge of nefarious financial activity while he was there. Yet rumors of the bank’s clientele included Latin American drug cartel leaders, presidents, generals and manufacturing oligarchs, which deepen suspicions of Bush’s connection to illicit dealings in Latin America, highlighted by his support of the Nicaraguan Contras in the 1980s.
In 1987, Bush became Florida’s secretary of commerce through an appointment by Gov. Bob Martinez (no relation to Leonel). Martinez was helped in his election bid by the Dade County Republican Party of which Bush was chairman from 1984 to 1994. Bush left the state position after a year to help with his father’s presidential campaign, but during his short-lived tenure as commerce secretary, he furthered his network of business and political connections.
One such connection was businessman David Eller, a Republican fundraiser and owner of MWI Corp., a water pump company. In 1988, Bush and Eller formed Bush-El. Corp. to market and sell water pumps internationally through MWI, most notably in Nigeria. According to the St. Petersburg Times, over the next few years Bush invested no money in the company yet made nearly $650,000. Eller later donated large sums to the Florida GOP and Bush’s gubernatorial campaign.
Again, a legal controversy marred Jeb Bush’s mix of politics and business. The federal government brought a lawsuit against MWI alleging fraud and bribery. The lawsuit involved the sale of water pumps to Nigeria, with a $74 million loan from the Export-Import Bank of the United States.
Originally, Bush had been enlisted to secure loans from Nigerian banks but, when the loans fell through, MWI turned to the federal government’s Ex-Im Bank. Bush asserts he stopped working on the transaction at this point, because it conflicted with his own rule not to work with U.S. government agencies. But the New York Times revealed Bush continued to be involved in the deal.
According to the Tampa Bay Times, “The government contends that in applying for Ex-Im loans, MWI fraudulently concealed that the deal would include a ‘highly irregular’ $28 million in commissions for the company’s Nigerian sales agent. The Justice Department argues Ex-Im never would have approved the deal had Ex-Im known of that payment.”
The government alleged that Mohammed Indimi, the recipient of the sales commission, had used the money to pay bribes. According to Forbes, by 2014 Indimi was the 37th richest man in Africa as the founder of a privately held oil exploration and production company.
Bush, Eller and MWI denied any wrongdoing by Bush or special benefits bestowed by his connections. Bush called it “patently absurd” to suggest he played a part in securing Ex-Im loans. But the deal prompted lingering questions about Bush’s use of familial influence and was referenced disparagingly by opponents in his gubernatorial bids. It may cause further allegations of cronyism and unlawful dealing in his 2016 presidential campaign.
The Lawless Link
In 1989, Bush began a series of real-estate ventures with another acquaintance, Richard Lawless, a former CIA officer who supposedly helped secure the release of American hostages in Lebanon in 1988 under Vice President George Bush. As reported by the St. Petersburg Times, during Jeb Bush’s term as state commerce secretary, “Lawless’s consulting firm — U.S. Asia Commercial Development Corp. — won a state contract worth $160,000 to promote Florida exports in Asia.”
Later, Bush and Lawless sought to sell property to wealthy foreign investors. Bush was paid by Lawless to find properties. Bush formed, among a number of other private companies, Uno and Uno Dos as “investment vehicles for different deals.” Lawless formed U.S. Asia Florida and a number of similarly named companies.
The Bush-Lawless connection raised more troubling questions about Jeb Bush’s merger of his business dealings with his father’s connections from the intelligence world. In 1988, the New York Times reported that in the aftermath of the Iran-Contra scandal, which involved secret sales of weapons to Iran with some profits diverted to support the Contra war in Nicaragua, more secret contacts with Iran may have continued involving an intermediary representing Vice President Bush in efforts to gain the release of American hostages in Lebanon. According to former Iranian President Abolhassan Bani-Sadr, that intermediary was Richard Lawless.
White House spokesman Marlin Fitzwater said: ”There is a fellow named Lawless. He is over there. What he’s up to, nobody knows. But he doesn’t represent the United States. . . . He does not represent the Vice President or the President or anybody else.”
But the Times reported that Lawless “had worked in the operations directorate of the Central Intelligence Agency until several years ago [and] that Mr. Lawless had served in the United States Embassy in South Korea in the years when Donald P. Gregg had been the C.I.A. station chief there. Mr. Gregg is now the national security adviser to Mr. Bush.” Lawless denied contacting Iran as part of a hostage deal on behalf of Vice President George Bush.
The Petway Tie
From 1989 to 1994, Bush was involved in other business dealings that were called into question. One deal, described by the St. Petersburg Times, was a 1993 investment in the soon-to-be NFL team, the Jacksonville Jaguars, through an acquaintance from his secretary of commerce days, Thomas Petway III. Petway, a Republican fundraiser, had worked on Jeb Bush’s gubernatorial campaign finance committee and would later become the co-chairman of President George W. Bush’s 2004 reelection campaign in Florida.
The Jaguar transaction produced another lawsuit, asserting Petway had pushed aside investors in favor of Bush, whom he offered special monetary rewards. The St. Petersburg Times reported, Bush “sold his Jaguars stake back to the ownership group in June 1997. ‘I just told them to pay me back for what I put in,’ Bush said. The transaction netted Bush a taxable gain of about $58,000.”
The Jacksonville Jaguars deal wasn’t Bush’s only profit from the association with Petway. In 1995, Petway facilitated a meeting between Bush and Paul Kahn, owner of Ideon Corp., a company that sold credit card protection services. Bush was offered $50,000 a year to become a board member, plus stock options. It was not their first meeting, as Kahn had held a fundraiser for Bush’s unsuccessful 1994 gubernatorial campaign.
But it became apparent that Ideon was in trouble; Kahn proved to be an inept owner and the company suffered huge losses. He left the company in 1996. According to the St. Petersburg Times, “Bush and the seven other directors agreed to sell Ideon to CUC International. Lawsuits filed against the Ideon board for stock manipulation and weak oversight were settled early [in 1998] for $15-million, all paid by CUC.”
In 1990, Bush and partner Armando Codina tried their hand in a new area of business when they purchased a shoe-importing business called Oriental Trading Corp. The intention was to sell the shoes to small stores using credit, but the venture broke down when lenders would no longer issue credit to the company. The investor group cashed out in 1993 and Bush, after investing $100,000, walked away with a net profit of $244,000.
One of Bush’s biggest real estate deals was the sale of IBM’s Boca Raton office park in 1996. The St. Petersburg Times reported the massive complex consisted of 2-million square feet of space sprawling on 565 acres of land with an assessed value of $100 million. In 1997, it was sold at $46.1 million, less than half the assessed value, to Blue Lake Ltd., a Florida company that included Republican fundraiser Mark Guzzetta. Jeb Bush had been best man at Guzzetta’s wedding and Guzzetta became finance co-chairman of Bush’s 1998 gubernatorial campaign.
The Lehman Link
Bush was elected Governor of Florida in 1998 and served two consecutive terms. When he left the Governor’s office in 2007, his wealth had diminished from $2 million to $1.3 million. He began working to restore his finances and started by creating two consulting firms, Jeb Bush and Associates, with his son Jeb Bush Jr., and Britton Hill Partners LLC.
Jeb Bush became a paid consultant for banking giant Lehman Brothers (later Barclay’s) and joined the board of a number of companies, receiving sizable salaries with each appointment. Bush’s post-governorship business relations included a larger network of partners yet were no less convoluted and problematic than his earlier dealings.
The New York Times noted last year that in board fees and stock grants from publicly traded companies, Jeb Bush earned $3.2 million. At one time, he sat on the board of six different companies. His work as a consultant with Lehman Brothers and Barclay’s generated millions of dollars. And additionally Bush received handsome compensation from his numerous speeches and public appearances. According to the Times, he received an average of $50,000 per speech, delivering more than 100 speeches since 2007.
In 2007, Bush joined Lehman Brothers, the global financial services company, as a paid consultant to its private equity business. A year later, Lehman Brothers filed for bankruptcy, touching off the 2008 financial crash that led to massive bank bailouts from the federal government and cost the jobs of millions of Americans. But Bush was not among them.
Barclay’s, the British multinational bank and financial services company, purchased Lehman Brothers’ North America Division and Bush shifted to Barclay’s payroll for an excess of $1 million a year until he left the company at the end of 2014.
Jeb Bush also joined the board of directors of Tenet Healthcare Corp. in April 2007. Though himself a strong critic of the Affordable Care Act, Bush’s relationship with Tenet, which enthusiastically supported the legislation and is estimated to receive up to $100 million in new revenue from the Act, has proved rewarding.
A Securities and Exchange Commission filing from 2014, published by ThinkProgress, notes Jeb Bush’s total income from Tenet for the year as $298,500, with $128,500 in fees and $170,000 in stock awards. The New York Times notes that Bush has earned more than $2 million from his tenure as a board member at Tenet.
But Tenet has had its share of problems, too. A ThinkProgress link to the Journal Enquirer of Connecticut estimated in 2013 that Tenet “has paid more than $1 billion over the last decade to settle a series of fraud, overbilling, kickback, and other allegations by its biggest customer: the federal government. Tenet Healthcare Corp. also agreed to pay more than half as much — $641 million — to settle hundreds of civil lawsuits as well as an additional $80 million to pay back taxes after an IRS audit.”
The article also notes that in September 2003, U.S. Sen. Charles Grassley observed, “Tenet appears to be a corporation that is ethically and morally bankrupt.” Grassley wrote in a letter that “in the annals of corporate fraud, Tenet (formerly National Medical Enterprises) … more than holds its own among the worst corporate wrongdoers.” Bush resigned from Tenet on Dec. 31, 2014, to focus on the 2016 presidential elections.
An Investor Scheme
In November 2007, Bush began work with InnoVida Holdings, a manufacturer of building materials, which was owned by Claudio Osorio, a Miami businessman whose previous company, CHS Electronics, ended in bankruptcy in 2001, according to the South Florida Business Journal. The 2007 contract between Jeb Bush and Associates and InnoVida agreed to pay Bush $15,000 a month plus reasonable expenses as a member of the board of directors. From 2007 to 2010 Jeb Bush and Associates were paid a total of $468,901.
Bush left the company in 2010 and the following year InnoVida filed for bankruptcy protection. In 2012, the Securities and Exchange Commission charged InnoVida and Osorio with “defrauding investors in an offering fraud scheme” and Osorio ultimately pleaded guilty to two counts of conspiracy to commit fraud and one count of conspiracy to commit money-laundering. Court records published by Thinkprogress show that in 2013, Jeb repaid $270,000 to InnoVida creditors “in order to avoid the expense and uncertainty of litigation … and to enhance the funds payable to creditors.”
Bush joined the board of Swisher Hygiene in 2010, at a time when company executives acknowledged their “financial statements were unreliable and their accounting practices were inadequate” reported the New York Times. This caused stock prices to drop dramatically and shareholders to file lawsuits against Bush and his colleagues.
The documents of one lawsuit, which named Bush, accused the defendants of “sustained and systematic failure to exercise their oversight responsibilities,” and was combined with other lawsuits, prompting Swisher Hygiene to agree “to a class-action settlement …, with no admission of fault,” according to ThinkProgress.
Britton Hill Partners was formed in 2008, but information didn’t emerge regarding the company until 2013, when a filing was made to the Securities and Exchange Commission under a law requiring a company to file a notice after managing more than $100 million.
As reported by Bloomberg News, the company was known as Britton Hill Holdings by 2013 and its board consisted of Bush and three other associates: two former employees of Swiss-based international bank Credit Suisse, David Savett and Ross Rodrigues, who worked in natural gas trading and leveraged finance, respectively, and one former banker from Lehman Brothers, Amar Bajpai.
A jumble of private equity funds and investors emerged after Britton Hill Holdings made their 2013 SEC filing. Bloomberg News reported that in addition to the original Florida based company were at least three other private equity funds: BH Logistics, BH Global Aviation Holdings based in Delaware, and BH Global Aviation in the United Kingdom, whose location essentially served as a tax-haven since the U.K. eliminated taxes on income earned outside the country. There are also at least eight limited partners involved in the Britton Hill funds, including former cronies from Bush’s days as governor and private equity funds based in China.
The funds generally invest in energy production and exploration and aviation technology. Two instances of corporate nepotism emerged by which Britton Hill partners were subsequently named to the board of the companies they had invested in. As outlined by Bloomberg News, these companies are Inflection Energy and Dorian LPG. After BH Global Aviation Holdings invested in Inflection Energy, a company exploring for natural gas in the Appalachian mountain range, Inflection named Bajpai to its board of directors. Later, David Savett was named to the board of Dorian LPG, a liquid petroleum gas shipping company, after BH Logistics bought 1.4 million shares of the company.
Over the past two years Jeb Bush’s business activity through the Britton Hill companies ramped up significantly, with the companies securing large investments from numerous financers. This whirlwind of activity has provoked questions regarding Bush’s presidential campaign strategy, as one would normally be pulling out of such business ventures before running for office, rather than getting more deeply involved. Holding a leadership role in such a variety of investments could raise issues of conflicts of interest.
White House Beckons
Jeb Bush’s litany of troubling business ventures and roster of dubious partners have prompted a number of unanswered questions. One puzzle is how he manages to repeatedly get involved with corrupt and/or soon-to-be defunct companies and then pulls out just before a lawsuit is brought against the company. Or how he has largely avoided legal liability over allegations of corporate malfeasance.
Also, how involved was he in the Iran-Contra affair through his various associations in Miami, including right-wing Cuban exiles such as Bosch associate Luis Posada, who worked closely on the Contra war with former CIA officer Felix Rodriguez, who, in turn, was in frequent contact with Donald Gregg, Vice President George H.W. Bush’s national security adviser?
Other Bush business crossovers to that scandal include Miguel Recarey Jr. and Richard Lawless. And if Bush was willing to bend the rules and call in political favors for his (sometimes less-than-esteemed) business associates in the past, what’s to stop him from doing the same if he reaches the White House?
The Washington Post reported, “Bush has spoken openly about his business experience while visiting early primary states, telling potential supporters that despite his years in politics, he’s also ‘signed the front side of a paycheck.’ He uses the line to suggest that his business experience makes him a rarity among the field of potential presidential candidates.”
But his business dealings might also have a downside for his 2016 presidential bid as he tries to maintain the shroud of secrecy that has surrounded them so far. Bush may face problems as Mitt Romney did during the 2012 campaign regarding his private equity funds, as Bloomberg News suggested last year. Bush’s business connections and investors, including his recent multi-million dollar deals with Chinese companies, may be dissected.
But one thing is certain: old alliances and family connections will continue to serve Bush in the future as he taps into the network of donors and political operatives who served his father and brother in their presidential elections. He also is turning to his own network of supporters.
The Wall Street Journal reported Bush is enlisting the help of past associates to lead his finance and fundraising teams for a presidential bid, including Thomas Petway, Mark Guzzetta and Armando Codina. And the Washington Post showed that, despite repeated assertions of being his “own man,” 19 of the 21 campaign foreign policy advisers to Jeb Bush worked in his father’s and/or brother’s administration.
Among NATO’s psychological warfare outlets the UK Guardian occupies a special place as the fake-progressive mouthpiece of neocolonial English language news media. In recent years, Guardian writers and editors have been persistent propaganda shills for Nazi militias and death squads in Ukraine and for Al Qaeda and related terror groups in both Libya and Syria. No surprise then that it should also have an almost endless record of propaganda attacks against the main member countries of ALBA – Bolivia, Cuba, Ecuador, Nicaragua and Venezuela.
The latest disinformation offering has been an article by Nina Lakhani in the Guardian’s development pages targeting Nicaragua’s education system. The article’s title “Poverty in Nicaragua drives children out of school and into the workplace” could be applied to almost any country in the majority world as well as to countries in North America and Europe. It’s also worth noting that the Guardian’s development pages are funded by the Bill and Melinda Gates Foundation.
A recent survey of projects funded by the Microsoft tycoons’ NGO between 2003 and 2013 in Africa found out that only 12% of the USD 3 billion granted went directly to the target populations. The rest was invested in research centers for the expansion of European and US-American agribusiness corporations. Self-evidently, the Guardian has a vested interest in promoting a neocolonial perspective skewed in favour of corporate funded non-governmental views and against sovereign governments, especially anti-imperialist governments like those of the ALBA countries.
This particular Guardian article offers a helpful concrete example of how certain kinds of anti-ALBA country propaganda can work while still staying within the bounds of apparently progressive ideas and argument. Nicaragua’s Sandinista government education has transformed education in Nicaragua in many positive ways despite very significant difficulties. But the Guardian article tries to make the absolutely false case that Nicaragua has practically abandoned a large number of it’s school age population and lacks a serious commitment to improving the country’s education system. The article uses various propaganda tricks that depend entirely on readers’ likely ignorance of Nicaragua and the region.
Nina Lakhani starts her false argument with quotes from childen in Bluefields, a city on Nicaragua’s impoverished Caribbean Coast. One quote goes “My family can’t afford the books”. But nowhere in her article does Nina Lakhani report that in January 2007, the very first decision of the incoming Sandinista government under Daniel Ortega was to make health and education services free. No child in Nicaragua’s public school system needs to pay for their schoolbooks. School directors breaching the principle of free education face dismissal. Does Lakhani offer a quote from a local school director? Of course not.
Similarly, Nina Lakhani’s disinformation exercise completely omits reporting mass national programmes by Nicaragua’s Sandinista government to guarantee at least one meal a day for children in school, to ensure the poorest children have shoes and a backpack for their books, to rehabilitate classrooms and classroom furniture, to consolidate literacy skills and to improve dental health. Apart from those important omissions, perhaps the most reprehensible feature of the Guardian article is that it cites figures that are mostly five years or more out of date.
This use of obsolete statistics effectively ignores the Nicaraguan government’s massive efforts to improve school attendance, diminish desertion, improve academic performance and promote better academic standards. Readily available World Bank data for some indicators is slightly more up to date and allows a fair comparison with Nicaragua’s neighbours. While it is certainly true that available recent statistics are patchy and make it hard to compare like with like, that does not mean a more current view is out of reach. In any case, data isolated from any comparative context are grossly misleading and are a long-standing disinformation specialty of corporate media writers on foreign affairs.
So Nina Lakhani’s false use of out-of-date data looks even more dishonest when Nicaragua’s indicators according to the World Bank for the period 2006 to 2013 are compared with its regional neighbours’. For example, in the area of primary education, Nicaragua’s indicators are generally better than those in Guatemala, somewhat behind Honduras and El Salvador and all four countries lag behind Costa Rica. However, in terms of indicators relating to secondary education, Nicaragua has generally similar or better indicators than Guatemala, Honduras and El Salvador and again all four lag behind Costa Rica.
Nina Lakhani’s insistence on the importance of reducing child labour so as to ensure good education for all children is certainly correct. But that is true throughout Central America, whose countries share many social characteristics derived from their history of colonial and neocolonial domination and economic under-development. In particular in Nicaragua, the school year has historically been scheduled around the coffee harvest from mid-December to late February when thousands of rural families migrate en bloc as families to pick coffee. As in most of Central America, Nicaraguan law allows children to start work at 14.
Since 2011, the Nicaragua government has implemented a series of measures aimed at preventing under-age children from working. In 2012 the government began an annual campaign coordinated by local municipal authorities, the Education Ministry, the Health Ministry and relevant labour unions to ensure children under 14 years old, accompanying their families picking coffee in Nicaragua’s main coffee growing areas, attend classes and educational activities. The national confederation of workers in the informal sector also works with the government in urban centres to keep school age children from working selling with their parents on the streets.
Child labour is a serious problem throughout Central America. But Lakhani’s article suggests the Nicaraguan government’s policy on child labour represents a unique failure. To make her false case, she cites old figures from the 2005 census that she compares with unreliable current estimates from Nicaragua’s business sector. Lakhani writes “Nicaragua has ratified multiple international treaties and has strong national policies, but government claims that it is reducing child labour are not supported by any published evidence.” But Lakhani applies a different standard to a business sector estimate “that there are between 250,000 and 320,000 child workers, with one in three under 14.”
The link her report offers is to a video with off the cuff remarks at a press conference by business organization President José Adán Aguerri. His claim too is unsupported by any recent published evidence, but still Lakhani gives it more weight than government claims. By contrast, the Chair of the National Assembly’s Commision for Women Youth, Children and the Family, Carlos Emilio López, announced in 2013 a 10% drop in child labour in Nicaragua since 2005. Nina Lakhani mentions no reliable evidence to falsify that assertion.
She mentions an anecdotal case study by La Isla Foundation of 26 children in the sugar cane plantations aged between 12 and 17 which is virtually meaningless in the national context, but may perhaps reflect to some degree the reality in the sugar industry throughout the region, not just in Nicaragua. In that regional context, Nicaragua has a better record at protecting vulnerable children than its neighbours. In fact, the International Labour Organization representative in Nicaragua said in June 2014, “In the 2005 census, 53% of children working did not go to school, now that percentage is less than 15%.”
That statement by the ILO should be taken together with recent government data for education indicating substantial increases in matriculation numbers, lower figures for academic desertion, and better academic results generally. Likewise, Nicaragua’s Ministry of the Family’s mass campaign to help families ensure their children go to preschool is helping hundreds of thousands of children to get better early schooling. Bearing all that in mind, it is fair to say that the recent statements from the relevant responsible officials about the government’s committed implementation of education and family policies categorically contradict the Guardian’s misleading report. Nina Lakhani seems deliberately to omit highly relevant context supporting the government’s education policies in relation to child labour.
When she cites the most recent US government report saying, “The [Nicaraguan] government’s enforcement of labour laws is inadequate, and plans to combat child labour and protect children have not been fully implemented”, one has to assume she is making an extremely bad joke. The United States government, has overseen the fall of much of its child population into deep poverty for many years now and has zero authority to lecture another country about its record on child welfare. All the Central American governments are working to reduce child labour, Nicaragua’s Sandinista government especially.
Nina Lakhani’s baseless claim that the Nicaraguan government is failing to reduce child labour is not just grossly unfair given available evidence that she has chosen to ignore. A look at the budgetary history of Nicaragua’s spending on education since January 2007 also serves to confirm the falsity of the Guardian’s report. This calculation of education spending in Nicaragua includes both spending assigned to universities and the budget of Ministry of Education. It does not include :
spending by the Ministry of the Family to support pre-school education;
spending by the Ministry of Health to support children with special needs or dental health
spending in schools by the government’s sports and culture institutions;
in some years it may not include all spending on vocational and technical education;
spending to guarantee school meals or shoes and backpacks for school
Last year of the Presidency of Ing. Enrique Bolaños Geyer
|Year||Education spending in C$ (millions)||% national budget||% GDP|
Comandante Daniel Ortega Saavedra became President in January 2007
|Year||Education spending in C$ millions||% national budget||Inflation adjusted increase||% GDP|
(Budget data from Ministerio de Hacienda y Crédito Público. Inflation data calculated from various IMF reports. GDP data calculated from World Bank data.)
This represents an increase of education spending of 36% in real terms since 2006, well outstripping the development of the school age population which, like Costa Rica’s, has in fact been declining slightly year by year in contrast to Honduras, El Salvador and Guatemala where the school age population is slightly increasing year by year. Here are World Bank data on Nicaragua’s population of children and adolescents under 18 years of age :
(Data from World Bank: http://databank.worldbank.org/data/download/EdStats_excel.zip)
As regards the above table of budget allocations, note the period 2008 to 2011. Major events in this period were the massive inflationary pressures leading to dramatically higher oil and food prices. Also in 2009 the US government and the European Union cut a total of over US$100m in development cooperation funding to the Nicaraguan government in response to the opposition campaign led by right-wing leader Eduardo Montealegre and his social democrat allies falsely alleging fraud in the November 2008 municipal elections. That mendacious campaign was supported by political opinion across the political spectrum in North America and Europe, including neo-colonial progressives and leftists.
It was only through 2011 that the government was able to make good the budgetary difficulties of the three years 2008-2010. Government spending figures tend to conceal the huge deficiencies of Nicaragua’s education system as of January 2007. The new Sandinista government had to overcome the enormous deficit in capital spending accumulated over 16 years of systematic denial of resources and corruption, preceded by a decade of war. In January 2007, that 26 year period had left Nicaragua’s schools unable even to deliver the complete primary school curriculum to large areas of the country, never mind comprehensive provision for secondary or technical and vocational education.
In January 2007, preschool care was almost entirely private. Secondary education was in the early stages of effective privatization. Public vocational and technical training was grossly under-resourced. Nationally, school infrastructure needed a programme of complete overhaul and renewal. Teacher salaries were desperately inadequate, as were resources for teacher training. That same year, 2007, saw the start of the global economic crisis with oil reaching US$147 a barrel in early 2008 and the worst economic collapse in North America and Europe since the 1930s.
None of that essential context figures anywhere in the Guardian’s report by Nina Lakhani on Nicaragua’s education system and its link to child labour. Her report glibly evades all that essential history. Instead, she shifts from disinforming her readers about Nicaragua’s education system to remarks reflecting an ideological disagreement between international education bureaucrats. But her earlier faithless, heavily prejudiced depiction of Nicaragua’s education dilemmas offers no legitimate insight into that debate. Her Guardian report quotes Manos Antoninis, “a senior analyst at Education for All global monitoring report“.
Manos Antoninis argues, “While raising the compulsory age of schooling is unlikely to immediately impact on completion rates in Nicaragua, it would send a powerful message that the state believes in the importance of education, which in turn would impact the way families perceive their own responsibility in keeping children in school.” His remarks are quoted in such a way as to reinforce Nina Lakhani’s false argument that the Nicaraguan government neither really believes in the importance of education nor devotes the resources necessary to improving Nicaragua’s education system.
The Guardian cites an opposing theoretical view, without explaining that this view, offered by Philippe Barragne-Bigot, Unicef representative in Nicaragua, in fact reflects the current policy of the Nicaraguan government. Philippe Barragne-Bigot argues “Quality, flexible education and jobs will keep children in school, not a change in the law.” But Nina Lakhani categorically fails to report the significance of these remarks by UNICEF’s representative in Nicaragua. Nicaragua’s Sandinista government is very deliberately prioritizing improving the quality of education in Nicaragua, broadening the range of study and training opportunities available to adolescents and young adults and prioritizing employment creation.
All these policy measures are integral components of Nicaragua’s national development strategy whose overwhelming priority is to reduce poverty. But the Guardian never even mentions the wide-ranging, complex national development policy the government is trying to implement. Instead, the Guardian report gives Manos Antoninis the last word:
“Countries that don’t educate their children to second school level don’t stand a chance. But the sudden expansion of secondary education could serve the elite, so policies must target the neediest,” said Antoninis. He added: “The inter-generational effect is chilling. A lack of education not only scuppers a child’s chances, but also the chances of their children. Failing to make an effort in this generation, also fails the next.”
And that’s it. Nina Lakhani’s article ends there, leaving the reader with the impression that Nicaragua’s Sandinista government is a clear example of a government “failing to make an effort” for the education of the country’s children and youth. The falsity of Nina Lakhani’s report in the Guardian is beyond travesty. More than any other country in the region, with the possible exception of El Salvador, Nicaragua is very much targeting the neediest among its population as it works to strengthen the whole of its historically devastated public education system.
On May 19th this year, the government’s policy coordinator, Rosario Murillo, announced that enrollment in the public education system came to “a grand total 2,143,721 students between Pre-school, Primary level, Secondary level, Special Education, Teacher training, Workshop-Classrooms for Young people and Adults, Literacy tutoring, Technical education and training”, apart from university level education. Earlier in the year, Rosario Murillo also confirmed the distribution of almost 90,000 text books in indigenous peoples languages, free, for school students on Nicaragua’s Caribbean Coast.
The reality of educational policy in Nicaragua overwhelmingly contradicts Nina Lakhani’s disingenuous fake-progressive argument that the Sandinista government has failed Nicaragua’s children. Perhaps the most egregious outright falsehood in the Guardian’s account is its report as a current fact that “The UN children’s agency, Unicef, estimates that 500,000 Nicaraguan children aged three to 17 are not in the educational system.” That is grotesquely unfair both to UNICEF and the Nicaraguan government because the link leads to a 2012 report using figures from 2010 that were probably out of date even then, despite the crisis between 2008 and 2010, and much more so now, five years after that crisis, in 2015.
For us at Tortilla con Sal we feel particularly bitter at the Guardian’s mendacious report on education and child labor in Nicaragua because much of the community work of our collective’s members is with families on extremely low incomes. Since 1998, we have worked with a programme serving 40 young women from very impoverished rural families each year training to be primary school teachers. Since 1999, we have worked on a programme that each year has helped over a hundred low income women, mostly single mothers, return to school to finish their secondary education. Over the last four years we have worked on a program to address domestic violence among families in low income rural and urban areas.
This close grass roots engagement has permitted us to witness the great sacrifices people in Nicaragua on very low incomes will make to ensure their children get an education that will improve their economic opportunities. We have also witnessed how year by year the government’s education and child protection policies improve systematically and incrementally, often making a dramatic difference to different sectors of the country’s impoverished majority. That process throws up many complex dilemmas over trade-offs, the most obvious being that of young family members opting to start work so as to increase their family’s income and go back to education later.
By quoting UNICEF’s country representative in Nicaragua, the Guardian’s Nina Lakhani opened the door a fraction towards a view of the flexible, quality education system Nicaragua’s Sandinista government led by Comandante Daniel Ortega is trying, despite innumerable difficulties, to promote. But she and her editors then immediately slammed it shut. They had to.
Nina Lakhani had to close down that view because it contradicts her own self-evident prejudices against Nicaragua’s government. Her Guardian editors’ had to deny it because their sinister psy-warfare imperative is to erase any reality contradicting their neocolonial propaganda line. In sum, Nina Lakhani’s article in the Guardian is grossly unfair and disingenuous. Contrary to her phony conclusion, Nicaragua’s education system is a very successful example of how a government committed to ALBA’s emancipatory socialist vision can overcome, in favour of the impoverished majority, the intractable problems inherited from decades of neocolonial subjugation and war.
By Claire Bernish | ANTIMEDIA | June 11, 2015
After Iceland suffered a heavy hit in the 2008-2009 financial crisis, which famously resulted in convictions and jail terms for a number of top banking executives, the IMF now says the country has managed to achieve economic recovery—“without compromising its welfare model,” which includes universal healthcare and education. In fact, Iceland is on track to become the first European country that suffered in the financial meltdown to “surpass its pre-crisis peak of economic output”—essentially proving to the U.S. that bailing out “too big to fail” banks wasn’t the way to go.
Iceland is beautifully, yet unfortunately, unique in how it chose to handle the disaster. It simply let the banks fail, which resulted in defaults totaling $85 billion—lending ample justification for the prosecution and conviction of bank executives for various fraud-related charges. The decision seemed shocking at the time, but the gamble has obviously paid off. Choosing a different route, the U.S. bailed out the banks and let executives off the hook by levying fines that ultimately ended up being paid by the corporations—meaning the executives ostensibly responsible for the mess got off scot-free.
“Why should we have a part of our society that is not being policed or without responsibility?” special prosecutor Olafur Hauksson said after Iceland’s Supreme Court upheld the convictions for three bankers—and sentenced them to between four and five and a half years each. “It is dangerous that someone is too big to investigate—it gives a sense there is a safe haven.”
Hauksson, a police officer from a small fishing village, ended up taking the role of special prosecutor after being urged to do so when the first announcement to fill the position drew no applicants. The Icelandic Parliament even aided the prosecution’s effort by loosening secrecy laws to allow investigation without the hindrance of requiring court orders.
Six of the seven convictions that ended up in Iceland’s Supreme Court have been upheld, and five cases were scheduled for the top court as of February. An additional fourteen cases appear likely to be prosecuted. By contrast, the animosity Americans felt toward their largest financial institutions after the bailout has grown bitter. After the banks pled guilty in May for manipulating global currency and interest rates, the court imposed a paltry fine of $5.7 billion—which won’t even go to the people most affected by the fraud. Iceland’s successful prosecutions and economic recovery remain the subject of envy for Americans.
Shortly, however, Iceland’s economic health will be put to the test.
Strict capital controls that were applied when banks were circling the drain six years ago will now be loosened, allowing foreign investors—whose assets have essentially been frozen since then—to take their business elsewhere. To prevent a possible repeat crisis, the finance minister announced a 39% tax for anyone choosing to do so. “The danger is capital flight and a consequent fall in the value of the krona,” explained University of Iceland economics professor, Thorolfur Matthiasson. “That would be tantamount to October 2008, bringing back bad memories for ordinary people and possibly making most businesses unsustainable due to balance-sheet problems.”
Though many are nervous, there is still cautionary optimism since Iceland has certainly weathered the storm before.
After voicing concerns about an obscure US immigration program for foreign investors, a Department of Homeland Security agent says she was barred from owning a personal firearm and almost lost custody of her one-year-old adopted daughter.
Taylor Johnson, a senior special agent with a division of the Immigration and Customs Enforcement (ICE), testified before the Senate Committee on Homeland Security and Governmental Affairs on Thursday. She was at a hearing alongside several other whistleblowers who claim that they have also faced harassment for speaking out against their agencies wrongdoings.
Johnson told the committee her problems started after investigating the so-called EB-5 program, which offers visas to foreign investors. When she questioned whether visas were being approved with enough scrutiny, her managers began to receive complaints about her queries. She was removed from the investigation and the case was closed.
“Some of the violations investigated surrounding the project included bank and wire fraud, and I discovered ties to organized crime and high-ranking politicians and they received promotions that appeared to facilitate the program,” Johnson testified.
The whistleblower discovered that “EB-5 applicants from China, Russia, Pakistan, Malaysia had been approved in as little as 16 days” and that case files didn’t have “the basic and necessary law enforcement queries.”
Johnson told the committee her gun was confiscated. She mentioned her access to her workplace and government databases were revoked and the government vehicle she used was also taken away. “I was told I couldn’t even carry or own a personal weapon, which is a constitutional rights violation,” she added.
“When an adoption social worker tried to contact and verify employment, she was told that I had been terminated for a criminal offense,” Johnson said, choking up. “I almost lost my one-year-old-child.”
Johnson’s testimony comes as the EB-5 program is already under intense criticism due to a report released in March by the DHS’ inspector general John Roth. Roth’s report concluded that Homeland Security deputy secretary Alejandro Mayorkas violated ethics rules by intervening as the head of USCIS on several occasions in EB-5 visa cases involving prominent Democrats, such as Senator Harry Reid and Governor Terry McAuliffe.
Mayorkas has since said, “I regret the perception my own involvement created.” It is unclear however if Johnson’s investigation concerned Mayorkas or any of his associates.
About 75% of US employees work 40 hours or longer, the second longest among all OECD countries, exceeded only by Poland and tied with South Korea. In contrast, only 10% of Danish workers, 15% of Norwegian, 30% of French, 43% of UK and 50% of German workers work 40 or more hours.
With the longest work day, US workers score lower on the ‘living well’ scale than most western European workers. Moreover, despite those long workdays US employees receive the shortest paid holidays or vacation time (one to two weeks compared to the average of five weeks in Western Europe). US employees pay for the costliest health plans and their children face the highest university fees among the 34 countries in the Organization for Economic Cooperation and Development (OECD).
In class terms, US employees face the greatest jump in income inequalities over the past decade, the longest period of wage and salary decline or stagnation (1970 to 2014) and the greatest collapse of private sector union membership, from 30% in 1950 down to 8% in 2014.
On the other hand, profits, as a percentage of national income, have increased significantly. The share of income and profits going to the financial sector, especially the banks and investment houses, has increased at a faster rate than any other sector of the US economy.
There are two polar opposite trends: Employees working longer hours, with costlier services and declining living standards while finance capitalists enjoy rapidly rising profits and incomes.
Paradoxically, these trends are not directly based on greater ‘workplace exploitation’ in the US.
The historic employee-finance capitalist polarization is the direct result of the grand success of the trillion dollar financial swindles, the tax payer-funded trillion dollar Federal bailouts of the crooked bankers, and the illegal bank manipulation of interest rates. These uncorrected and unpunished crimes have driven up the costs of living and producing for employees and their employers.
Financial ‘rents’ (the bankers and brokers are ‘rentiers’ in this economy) drive up the costs of production for non-financial capital (manufacturing). Non-financial capitalists resort to reducing wages, cutting benefits and extending working hours for their employees, in order to maintain their own profits.
In other words, pervasive, enduring and systematic large-scale financial criminality is a major reason why US employees are working longer and receiving less– the ‘trickle down’ effect of mega-swindles committed by finance capital.
Mega-Swindles, Leading Banks and Complicit State Regulators
Mega-swindles, involving trillions of dollars, are routine practices involving the top fifty banks, trading houses, currency speculators, management fund firms and foreign exchange traders.
These ‘white collar’ crimes have hurt hundreds of millions of investors and credit-card holders, millions of mortgage debtors, thousands of pension funds and most industrial and service firms that depend on bank credit to meet payrolls, to finance capital expansion and technological upgrades and raw materials.
Big banks, which have been ‘convicted and fined’ for mega-swindles, include Citi Bank, Bank of America, HSBC, UBS, JP Morgan, Barclay, Goldman Sachs, Royal Bank of Scotland, Deutsch Bank and forty other ‘leading’ financial institutions.
The mega-swindlers have repeatedly engaged in a great variety of misdeeds, including accounting fraud, insider trading, fraudulent issue of mortgage based securities and the laundering of hundreds of billions of illegal dollars for Colombian, Mexican, African and Asian drug and human traffickers.
They have rigged the London Interbank Official Rate (LIBOR), which serves as the global interest benchmark to which hundreds of trillions of dollars of financial contracts are tied. By raising LIBOR, the financial swindlers have defrauded hundreds of millions of mortgage and credit-card holders, student loan recipients and pensions.
Bloomberg News (5/20/2015) reported on an ongoing swindle involving the manipulation of the multi-trillion-dollar International Swaps and Derivatives Association (ISDA) fix, a global interest rate benchmark used by banks, corporate treasurers and money managers to determine borrowing costs and to value much of the $381 trillion of outstanding interest rate swaps.
The Financial Times (5/23/15, p. 10) reported how the top seven banks engaged in manipulating fraudulent information to their clients, practiced illegal insider trading to profit in the foreign exchange market (forex), whose daily average turnover volume for 2013 exceeded $5 trillion dollars.
These seven convicted banks ended up paying less than $10 billion in fines, which is less than 0.05% of their daily turnover. No banker or high executive ever went to jail, despite undermining the security of millions of retail investors, pensioners and thousands of companies.
The Direct Impact of Financial Swindles on Declining Living Standards
Each and every major financial swindle has had a perverse ripple effect throughout the entire economy. This is especially the case where the negative consequences have spread downward through local banks, local manufacturing and service industries to employees, students and the self-employed.
The most obvious example of the downward ripple effect was the so-called ‘sub-prime mortgage’ swindle. Big banks deliberately sold worthless, fraudulent mortgage-backed securities (MBS) and collateralized debt obligation (CDO) to smaller banks, pension funds and local investors, which eventually foreclosed on overpriced houses causing low income mortgage holders to lose their down payments (amounting to most of their savings).
While the effects of the swindle spread outward and downward, the US Treasury propped up the mega-swindlers with a trillion-dollar bailout in working people’s tax money. They anointed their mega-give-away as the bail out for ‘banks that are just too big to fail”! They transferred funds from the public treasury for social services to the swindlers.
In effect, the banks profited from their widely exposed crimes while US employees lost their jobs, homes, savings and social services. As the US Treasury pumped trillions of dollars into the coffers of the criminal banks (especially on Wall Street), the builders, major construction companies and manufacturers faced an unprecedented credit squeeze and laid off millions of workers, and reduced wages and increased the hours of un-paid work.
Service employees in consumer industries were hit hard as wages and salaries declined or remained frozen. The costs of the FOREX, LIBOR and ISDA fix swindles’ fell heavily on big business, which passed the pain onto labor: cutting pension and health coverage, hiring millions of ‘contingent or temp’ workers at minimum wages with no benefits.
The bank bailouts forced the Treasury to shift funds from ‘job-creating’ social programs and national infrastructure investment to the FIRE (finance, insurance and real estate) sector with its highly concentrated income structure.
As a result of the increasing concentration of wealth among the financial swindlers, inequalities in income grew; wages and salaries were frozen or reduced and manufacturers outsourced production, resulting in declines in production.
Employees, suffering from the loss of income brought on by the mega-swindles, found that they were working longer hours for less pay and fewer benefits. Productivity suffered. With the total breakdown of the ‘capitalist rules of the game’, investors lost confidence and trust in the system. Mega-swindles eroded ‘confidence’ between investors and traders, and made a mockery of any link between performance at work and rewards. This severed the nexus between highly motivated workers, engaged in ‘hard work, long hours’ and rising living standards, and between investment and productivity.
As a result, profits in the finance sector grew while the domestic economy floundered and living standards stagnated.
Financial Impunity: Regulatees Controlling the Regulators
Despite the proliferation of mega-swindles and their pervasive ripple effects throughout the economy and society, none of the dozens of federal or state regulatory agencies intervened to stop the swindle before it undermined the domestic economy. No CEO or banker was ever arrested for their part in the swindle of trillions. The regulators only reacted after trillions had ‘disappeared’ and swindles were ‘a done deal’. The impunity of the swindlers in planning and executing the pillage of hundreds of millions of employees, taxpayers and mortgage holders was because the federal and state regulatory agencies are populated by ‘regulatory administrators’ who came from or aspired to join the financial sector they were tasked with ‘regulating’.
Most of the high officials appointed to lead the regulatory agencies had been selected by the ‘Lords of Wall Street, Frankfurt, the City of London or Zurich.’ Appointees are chosen on the basis of their willingness to enable financial swindles. It therefore came as no surprise on May 28 2015 when US President Obama approved the appointment of Andrew Donahue, Managing Director and Associate General Council for the repeatedly felonious, mega-swindling banking house of Goldman Sachs to be the ‘Chief of Staff’ of the Security and Exchange Commission. His career has been typical of the Washington-Wall Street ‘Revolving Door’.
Only after fraud and swindles evoked the nationwide public fury of mortgage holders, investors and finance companies did the regulators ‘investigate’ the crimes and even then not a single major banker was jailed, not a single major bank was closed down.
There were a few low-level bond traders and bank employees who were fired or jailed as scapegoats. The banks paid puny (for them) fines, which they passed on to their customers. Despite pledges to ‘mend their ways’ the bankers concocted new schemes with their windfalls of billions of Federal ‘bailout’ money while the regulators looked on or polished their CV’s for the next pass through the ‘revolving door’.
Every top official in Treasury, Commerce and Trade, and every regulator in the Security Exchange Commission (SEC) who ‘retired to the private sector’ has ended up working for the same mega-criminal banks and finance houses they had investigated, regulated and ‘slapped on the wrist’.
As one banker, who insists on anonymity, told me: ‘The most successful swindlers are those who investigated financial transgressions’.
Mega-swindles define the nature of contemporary capitalism. The profits and power of financial capital is not the outcome of ‘market forces’. They are the result of a system of criminal behavior that pillages the Treasury, exploits the producers and consumers, evicts homeowners and robs taxpayers.
The mega swindlers represent much less than 1% of the class structure. Yet they hold over 40% of personal wealth in this country and control over 80% of capital liquidity.
They grow inexorably rich and richer, even as the rest of the economy wallows in crisis and stagnation. Their swindles send powerful ripples across the national economy, which ultimately freeze or reduce the income of the skilled (middle class) employees and undermine the living conditions for poor working-class whites, and especially under and unemployed Afro-American and Latino-American young workers.
Efforts to ‘moralize’ capital have failed repeatedly since the regulators are controlled by those they claim to ‘regulate’.
The rare arrest and prosecution of any among the current tribe of mega-swindlers would only result in their being replaced by new swindlers. The problem is systemic and requires deep structural changes.
The only answer is to build a political movement independent of the two party system, willing to nationalize the banks and to pass legislation outlawing derivatives, forex trading and other unnatural parasitic speculative activities.
Ukraine’s Prime Minister Arseny Yatsenyuk hopes to sell the country’s state-owned companies to the US. American investors will get the assets “on the most transparent conditions” if they decide to invest, he said.
The statement comes ahead of a Ukrainian-American investment conference in Washington on July 13.
“We want to start the privatization process… We want to see American owners on the territory of Ukraine, they will bring not only investment, but also new standards, new ways of managing the companies, and a new investment culture,” Yatsenyuk was cited as saying during his meeting with the representatives of Ukraine’s diaspora in Washington, UNIAN reported on Tuesday. Yatsenyuk and Ukraine’s Finance Minister Natalia Jaresko are in the US capital on a working visit which will last until June 10.
The massive privatization process of Ukraine’s state-run assets is planned for the second quarter of 2015. In April, the Ukrainian government decided to hold a number of investment conferences in Berlin, Paris and Washington to attract investors and to spread the privatization idea. The Prime Minister then said they expect to see American and European entrepreneurs in agriculture, energy, especially in the modernization of the Ukrainian gas transportation system and the mining industry, as well as in other vital sectors of the economy.
Ukraine is facing a deep economic crisis with the country on the verge of a default. Earlier this month, the IMF’s mission in Ukraine said the country’s GDP is expected to shrink 9 percent in 2015, with annual inflation to hit 46 percent. Ukraine’s total debt is estimated around $50 billion, $30 billion of which is external debt and $17 billion internal debt. Public sector debt rose to 71 percent of Ukraine’s gross domestic product, and is due to rise to 94 percent of GDP in 2015, according to the National Bank of Ukraine.
Last year, Ukraine’s President Petro Poroshenko invited foreign citizens to become key ministers in the new government of Ukraine, claiming that he views the foreigners as some kind of “anti-crisis management needed due to the difficult situation in economy”. The natives of the US, Georgia and Lithuania – Natalie Jaresko, Aleksandr Kvitashvili, and Aivaras Abromavicius were approved by the parliament to head up the Ministry of Finance, Ministry of Health and Ministry of Economic Development, respectively. All of them have been granted Ukraine citizenship after a decree amending the law to allow foreigners into the government.