Shouldn’t we have more rent-to-buy in housing?

HUD resources for rent-to-own

Mortgage rates are the lowest they have been in decades, unemployment and underemployment are so high that people are dipping into their savings to live, housing is sitting unsold on a stagnant market, and the over-all economy is suffering. In these conditions, it is often prohibitively difficult for people to save up 20 percent of the cost of a house for a down payment.

Dodd-Frank: Rejected house buyers can find out why

So why isn’t the rent-to-buy approach being pushed more often in real estate, as is often used with automobiles? The general idea is simple: Dependable customers who have the income for payments but not the lump sum for cash down agree to continue paying monthly for an agreed-upon length of time. We call this kind of arrangement a contract. Car dealerships use it. After a specified length of time or number of payments, an agreed-upon percentage of the total price is reached. At that point, the monthly payments become no longer rent, if the buyer elects, but house payments. If the buyer cannot or will not purchase at that point, the seller then has the option of going another way.

Why not? As said, the principle is like car leasing, something the markets are already familiar with.

The benefit to any householder trying to sell one house in order to move into another is obvious; the older house is no longer sitting unsold on the market and uninhabited on the block. The benefit to other owners in the neighborhood follows from the first; this is one house no longer depressing house prices in the area and/or suffering from lack of maintenance. Benefits to the general economy include chipping away at the backlog of unsold houses in the real estate inventory, fewer people competing for substandard apartments at inflated prices, and less instability and relocating/shifting in the hunt for affordable housing. In the long run, there should be some perceivable effect in the number of homeless people or people in jeopardy of becoming homeless in the foreseeable future.

For all the press devoted to the ills of ‘easy credit’ since 2008, some relaxation of credit restrictions still helps an actuarily identifiable percentage of the population, and those people with the income to make monthly rental/mortgage payments look like customers it would be a good idea to help. They in turn would help boost the over-all economy. Homelessness, meanwhile, does not benefit anyone. Having citizens move from one crummy apartment to another does not benefit anyone except a negligent landlord, and that only in the short term.  A move can have its benefits, but even in the best of circumstances it involves cost to what might be called Gross Household Product–packing, selling, unpacking, maintenance, paperwork, etc. In less than the best of circumstances, it is simply hellish.

Obviously there would have to be safeguards, particularly for the prospective buyer. People eager, or desperate, to move into a house of their own are only too easy to take advantage of, as we know from the likes of Countrywide. But assuming the possibility of instituting adequate standards for the leasing—analogous to lending, but with less risk and less fraught with abuses than recent forms of lending—it is hard to see a downside in the arrangement. It’s not for everyone. That is a given. Why argue about it? It surely could work for some people, as demonstrated by the fact that it already does work for some people; the UK has used it for years.

Typical UK approach

The housing market always needs to be sustained and supported. More fundamentally, the need of a huge population for safe and healthful housing always has to be met. Anything less would be disaster. Only ‘failed states’, in the somewhat presumptuous term so embraced by the previous administration, fail to meet needs of such magnitude. It behooves us to adopt multi-valent approaches to meet the need, and boosting and encouraging rent-to-own looks like an approach whose time has come.

Other viable ways to boost householders and, through housing, the economy are also available. More refinancing should be encouraged by the public sector and by the private sector. A better class of crack-down on lender abuses from the past ten years can recoup some of the money needed to underwrite enforcement of better standards from here on. Some of the money recouped could be used to help people in danger of foreclosure, especially people in jeopardy of foreclosure through no fault of their own, like people laid off or having to pay off massive medical bills. Community banks that actually kept an eye on their loans and on their lending could be reinforced. As previously written, states should start collecting transaction fees from the multi-billion-dollar entities that bundled thousands of home loans without paying the state taxes that an individual has to pay in buying or selling a house.

Obviously there will be political opposition and impediments to any proposal that has a chance of actually helping the general U.S. population. The major party bent on protecting the financial sector from having to pay one iota in recompense or restitution or retribution for its abuses—the GOP–will scream bloody murder at any of the above, in any form, in every state. But no Orwellian sloganeering outweighs the need for livable neighborhoods.

Another Texas miracle: The number of Texas jobs lost to China

Gov. Rick Perry toasts hosts in China

One point not popping up in Republican debates so far is that the state of Texas ranks #2 in jobs lost to China over the past ten years. Gov. Rick Perry himself does not seem too unhappy about this, judging from his rapport with China. But the numbers jibe oddly with assertions of job creation touted by the state administration under Perry.

The nonprofit Economic Policy Institute published its findings on U.S. trade deficit with China and U.S. job loss Sept. 20.

“The U.S.-China trade deficit has eliminated or displaced nearly 2.8 million U.S. jobs since 2001, a new Economic Policy Institute (EPI) briefing paper finds. Growing U.S. trade deficit with China cost 2.8 million jobs between 2001 and 2010 by Robert Scott, EPI’s Director of Trade and Manufacturing Policy Research, finds that all 50 states, the District of Columbia and Puerto Rico suffered jobs lost or displaced as a result of the growing U.S.-China trade deficit.”

Texas ranks high up in the top ten, so to speak, states losing jobs to China:

“The trade deficit with China grew from $84 billion in 2001, when China entered the WTO, to $278 billion in 2010. It eliminated or displaced 2,790,100 jobs, or about 2% of total U.S. employment over that period. The biggest net losses, in terms of the total number of jobs displaced, occurred in California, Texas, New York, Illinois, Florida, North Carolina, Pennsylvania, Ohio, Massachusetts and Georgia.”

The only state losing more net jobs than Texas to China’s burgeoning development in technology and the computer industry is California, which also placed on the list of states where the net loss was most destructive:

“In ten states, the jobs lost or displaced exceeded 2.2% of total employment. These states are New Hampshire, California, Massachusetts, Oregon, North Carolina, Minnesota, Idaho, Vermont, Colorado and Rhode Island.”

It will be readily apparent that job loss connected to the U.S. trade deficit hits both ‘red states’ (Idaho) and ‘blue states’ (Vermont), boosted by eager brokers for outsourcing like the entity behind the advertisement shown here.

Hands across the sea, in suits

Still, it is somewhat intriguing that the sheer number of Texas jobs lost to China under Texas Governor Rick Perry has not been mentioned on the campaign trail—232,870 jobs, many of them well-paying positions in the high-tech sector, is nothing to sneeze at. This is also 2.20 percent of total Texas employment in the ten years studied, slightly over one in every fifty jobs.

This under the guy who is always ready to talk tough about adversaries abroad; who seldom has said a discouraging word against jingoism or racial prejudice; who has readily associated himself with a purported ‘Texas miracle’ in the economy; and who has repeatedly billed himself as a jobs creator as Texas governor.

To be sure, other GOP candidates might not be on entirely safe turf in this regard themselves. Mitt Romney keeps being reminded about having been governor of Massachusetts, which also places on the lists above for jobs lost to the U.S.-China trade deficit. Utah’s Jon Huntsman was recently U.S. ambassador to China.

Former U.S. ambassador to China Jon Huntsman

More fundamentally, few GOP candidates for the White House are eager to mention the U.S. trade deficit. For one thing, it is a reminder of the consequences of outsourcing. For another, it disobliges top corporate/industry donors who are not loath to ship U.S. jobs overseas; their inclination toward unfettered privilege to do so is part of why they support the GOP in the first place. It draws attention to the supineness or inertness of tough-talking top honchos, when it comes time to bargain on behalf of the American public or on behalf of U.S. working people. It points up key weaknesses in the newest ‘job-creating’ avatar of trickle-down theory. It might draw attention to the abuses of currency speculating.

Indeed, one side benefit of GOP harping on ‘the debt’—even to disparaging sale of U.S. Savings Bonds—is that it buries key economic and political facts behind our trade deficit. Congressman Michael McCaul’s 10^th district in Texas ranks 6^th on the list nationwide of jobs lost to the trade deficit over the past ten years, but McCaul’s website does not emphasize that. Debt, yes; jobs lost, no. Rep. John Carter’s Texas 31^st district ranks fourth nationwide in jobs lost to the trade deficit with China. No focus on that on Carter’s website, but the website does offer a GOP Job Bank.

As the EPI summarizes,

“Increases in U.S. exports tend to create jobs in the United States, and increases in imports tend to lead to job loss. Thus, a growing trade deficit signifies growing job loss.  The trade deficit with China is exacerbated by the currency manipulation. Because China has pegged its currency to the U.S. dollar instead of allowing it to fluctuate freely, the yuan has remained artificially low, effectively subsidizing Chinese exports and artificially raising the cost of U.S. exports. U.S. goods are less competitive in China and in countries where U.S. exports compete with those from China.”

Warning reminder from tech debris

MSNBC reported the EPI study with a lede focused on the typical labor argument:

“China is taking American jobs, labor unions, politicians and economists, have accused for some time. The logic is simple. While a manufacturing job in the U.S. may pay $50 an hour, when salary and benefits are factored in, Chinese factory laborers make little more than a few hundred dollars a month.”

Fortunately the MSNBC article does go on to discuss currency, up to a point:

“Cheap labor may well be the main reason for China’s manufacturing advantage, but currency manipulation could be another, the EPI states. While the cost of labor affected China’s exports, the currency manipulation, which happened despite China joining the World Trade Organization in 2001, distorted its imports. American policymakers have long assumed that as China’s huge middle class grew, U.S. companies’ sales to these new consumers would also grow. But it did not work out that way, the EPI reports: “as a result of China’s currency manipulation and other trade distorting practices, including extensive subsidies, legal and illegal barriers to imports, dumping and suppression of wages and labor rights, the envisioned flow of U.S. exports to China did not occur.” Added to its labor cost advantage, this currency manipulation has been devastating to many U.S. companies.”

The key point never, ever emphasized in GOP debates and other like-minded venues is the intrinsic relationship between cheap labor and cheap currency. Labor is cheap in China not only because the Chinese government has often held human labor cheap in formulating economic policy, but also because of the basic arithmetic of currency disparity itself.

Is there some rule against mentioning this?

At today’s spot currency rates (Sept. 29, 2011), one U.S. dollar is equal to 6.90 CNY (Chinese yuan). One yuan, conversely, is equal to 16 U.S. cents.

This simple fact should obviate GOP or Blue Dog attacks on health benefits or retirement, especially attacks that use unemployment in the U.S. as the pretext.

Try the hypothetical: Subtract every dollar in compensation paid for health benefits—admittedly costly, since the insurance companies are allowed to gouge ever-rising rates from their corporate/union customers along with their other customers. Subtract every dollar paid for retirement. In fact, just for fun subtract every dollar paid to keep the base wage or salary above the minimum wage, which currently in Maryland is $7.25 per hour and in Georgia is $5.15 per hour (for workplaces where the rate is not set by federal minimum).

First, only arguably can a working person live in Georgia on $5.15 per hour. But setting aside if one could the facts on the ground, translate that $5.15 into yuan-determined pay, call the basic unit of currency a yuan, and the $5.15 becomes 82 cents per hour. Just to lean over backward, let’s round that up to 83 cents per hour.

Let’s put this in simple language: There is no such thing as being ‘competitive,’ or even ‘more competitive,’ against 83 cents per hour. There is no way to ‘compete’ in cheapness of labor, at least no way short of starvation, work camps and epidemic. To claim otherwise is simply to undermine the very concept of economic policy or social policy, at least in a democracy.

The very idea that our current GOP leadership is somehow legitimately allowed to set the tone, or determine the terms, for talking about U.S. labor, jobs, and unemployment is lunacy.

Speaking of historical fact, one sector not suffering from the U.S. trade deficit vis-à-vis China over the past decade is the extended Bush family. Bush human and political capital began quietly accruing portfolio interests early in the new century from human-capital-rich China, where George H. W. Bush was a U.S. ambassador, and Taiwan, atop earlier ties to oil-rich Persian Gulf Saudi Arabia and Kuwait. Another factoid that does not pop up in GOP debates.

After the Tea Party deluge: new GOP African-American reps flying high, financially

Following up on the posts of the past two days on debt, the debt ceiling, and campaign debt

Rep. Allen B. West

Here in alphabetical order is a quick list of the new African-American members of Congress among the Republican majority in the House of Representatives, elected in 2010, with the numbers showing where they currently stand financially. (Dollar amounts from the Center for Responsive Politics; 2010 totals as of Dec. 31, 2010; 2012 totals as of June 30.) This group’s membership hails totally from the Southeastern states.

First, Tim Scott (R-S.C.), elected with heavy Tea Party support:

For 2012:

Scott has raised $553,598, spent $230,060. Cash on hand: $392,382. Debts: zero.

For 2010:

Raised $1,213,574, spent $1,136,730. Cash on hand: $76,844. Debts: zero.

While that looks like quite a bit of money raised and quite a bit of money spent, for a deficit hawk, the net outcome financially is still on the plus side of zero. Scott is one of the tight group of four South Carolinians who voted devotedly against raising the debt ceiling even in final passage.

Second, and last, Allen B. West (R-Fl.):

For 2012, West reports raising $2,076,597, has spent $862,700. Cash on hand: $1,266,356. Debts: zero.

For 2010, West raised $6,542,738, spent $6,519,713. Cash on hand: $52,459. Debts: zero.

As with Scott, the financial picture is a lot of money in, a lot of money out, except even more so. West is, of course, a Tea Party voice of sorts, and one of the most carrying voices, not associated with modulation. It seems to have worked out better for him and for Scott than it has for Latino Tea Partyer Reps Flores and Canseco of Texas. For comparison, or perspective, the case study of Allen West is among other things a reminder not to take short cuts in analysis; not all minorities are equally unequal.

West, be it noted, still has money on hand, after spending most of what he raised for 2010, in spite of having an opponent and in spite of being Allen West. His saga in short form is that he simply seems to get lots of money by virtue of going on television and saying ugly things, a fact seemingly not escaping the notice of Joe Walsh (R-Ill.), though it hasn’t worked for Walsh yet, at least not in the same degree.

Third-quarter tallies are due to be reported mid-October. A few weeks will tell whether West continues to enjoy the financial benefits of seldom being out-uglied.

After the Tea Party deluge: new GOP Latino reps in a bind

Following up yesterday’s post

On debt, the debt ceiling, and debt closer to home, including campaign debt

All of the new Republican Latino members of the House except Raul Labrador of Idaho, whose name was omitted by error earlier, voted finally to raise the debt limit. See the NYTimes tally here and tally with short discussion by Kos here. Shrieks about debt and deficit notwithstanding, almost every new GOPer of Latino heritage, whether elected with Tea Party support or over Tea Party opposition, joined in the mostly-Republican vote that pushed the debt ceiling over the line in the House, and Labrador is not among those most deeply in debt. (As previously written on this site, it was mostly Republicans who raised the debt ceiling.) So the members whose financial condition is sketched below are not among those members of Congress who, wracked with debt themselves, also worked to prevent any enhancement of financial stability for the nation at large.

Tea Party revolting

For some of them, though, that’s the end of the good news.

Here in alphabetical order is a quick list of the Latinos among the Republican majority in the House of Representatives, newly elected in 2010, with the numbers showing where they currently stand financially. (Dollar amounts from the Center for Responsive Politics; 2010 totals as of Dec. 31, 2010; 2012 totals as of June 30.) All of this group except Jaime Herrera Beutler of Washington and Raul Labrador of Idaho are from Texas and Florida.

By far the worst off of the group, financially, is Francisco Canseco (R-Tex.). Canseco enjoyed considerable Tea Party support in his part of Texas, and raised a lot of money.

For 2012, Canseco has raised $578,926, spent $238,919. Cash on hand $480,970. Debts $1,150,947. Net minus: $669,977.

For 2010, Canseco raised a considerable $1,569,081, spent $1,460,461. Cash on hand $140,964. Debts $1,146,250. Net minus: $1,005,286.

Rep. Mario Diaz-Balart

Mario Diaz-Balart (R-Fl.) is by far the best off of the group financially. It probably helped that he ran unopposed in 2010. He is the exception to the straits represented by the others, but then he’s not really new, either, already a Congressman and took over the seat vacated by his brother, fellow Rep. Lincoln Diaz-Balart.

Diaz-Balart raised $739,771 for 2010, spent $541,148. Has $215,085 on hand. Debts zero.

For 2012, he reports raising $173,962, spending $114,242. Cash on hand $274,805. Debts zero.

Zero opponents, zero campaign debt. Does sound simple. It also suggests that the Democrats would benefit by running in all districts, or almost all, at least along the coasts.

Rep. William Flores

Next up, or down, is William Flores (R-Tex.). Flores is second worst off in the group, even after some very successful fund-raising.

For 2012, Flores has raised $524,432, spent $165,502. Cash on hand $402,848. Debts $713,574. Net minus: $310,726.

For 2010:

Raised $3,353,665, spent $3,309,747. Cash on hand $43,918. Debts $730,872. Net minus: $686,954.

Jaime Herrera (R-Wa.), who after the 2010 elections announced that she will go by her husband’s name, Jaime Herrera Beutler, is second best off of the group. She is not a Tea Partyer herself and was challenged in the primary by a Tea Party candidate; enjoys financial support from large companies. A local blog casts a critical eye here.

For 2012:

Reports raising $439,101, spending $127,363. Cash on hand $334,292; debt $53,726. Net surplus, so far.

For 2010:

Reports raising $1,557,221 for 2010, spending $1,534,650. Cash on hand $22,571; exceeded by debt $41,262. Net minus: $18,691.

Raul Labrador (R-Id.), endorsed by the Tea Party:

For 2012:

Reports raising $193,752, spending $116,131. Cash on hand $102,617. Debts zero.

For 2010:

Raised $726,288, spent $686,293. Cash on hand: $39,996. Debts: $25,276. Net surplus: $14,720.

David Rivera  (R-Fl.), significantly younger than the others, seems to have more top contributors among local businesses rather than big multi-state companies. A former PR consultant, Rivera ran against a Tea Party candidate, is now designated vulnerable by the RNCC, as previously written, which is good news for him since he will receive a portion of the proceedings from the most recent RNCC fundraiser.

For 2012, Rivera has raised $110,324, spent $59,274. Cash on hand $62,036. Debts $151,581. Net minus: $89,545.

For 2010, Rivera raised $1,895,640, spent $1,884,654. Cash on hand $10,986. Debts $137,474. Net minus: $126,488.

So far it’s looking as though Tea Party support for these particular members is not translating into great financial advantage, particularly on all three coasts, and Tea Party opposition is not translating into financial disaster.

Maybe it’s too soon to tell.

Note: A reader commented on my previous post that I did not distinguish between campaign debt owed to self, and debt owed to third parties. Correct. In this bookkeeping, I am drawing the line only between pluses (incoming) and minuses (outgoing). I respectfully disagree that the analysis is “fundamentally flawed” for that reason. The disparity is between what self-proclaimed GOP deficit hawks say and what they do for themselves, although political interest also lies in the way some of the candidates have been treated by their own party, apparently. The fundamental problem, of course, is the gangrenous role that money plays in elections in the first place, coupled with the anti-people policy that money buys.

Update: I left Rep. Raul Labrador’s name off the list earlier by mistake.

Debt, more debt, and Tea Party representatives debt

Freshmen members of Congress most in debt include the following, all elected in 2010. Names in alphabetical order; dollar amounts as of now (Sept. 2011), heading toward the end of the third quarter; totals rounded downward to nearest thousand.

Rep. Joe Walsh (R-Ill.)

Filings at the October deadline, after Q3 ends, may show changes in some of the amounts. But for now, here goes, numbers from the Center for Responsive Politics:

• Justin Amash,  MI 3: cash on hand $26K, debt $279K       N

Rep. Justin Amash

• Louis J. Barletta, PA 11: cash $229K, debt $227K

• Daniel J. Benishek, MI 1: cash $138K, debt $103K

• Diane Lynn Black, TN 6: $325K cash, $274 debt

• Francisco Canseco, TX 23: $480K cash, $1.1M debt

• Robert Dold, IL 10: $751K cash, $110K debt

• Blake Farenthold, TX 27: $247K cash, $135K debt

• Michael G. Fitzpatrick, PA 8: $438 cash, $19K debt

• Charles J. Fleischmann, TN 3: $261K cash, $250K debt    N

• William Flores, TX 17: $402K cash, $713K debt

• Paul Gosar, AZ 1: $138K cash, $34K debt

• Frank Guinta, NH 1: $439K cash, $336K debt

• Richard L. Hanna, NY 24: $173K cash, $530K debt

• Vicky Hartzler, MO 4: $134K cash, $1K debt [was $22K cash, $163K debt]       N

• Nan Hayworth, NY 19: $630K cash, $507K debt

• Randy Hultgren, IL 14: $244K cash, $55K debt                       N

• Mike Kelly, PA 3: $112K cash, $353K debt

• Jeffrey M. Landry, LA 3: $190K cash, $20K debt                    N

• David B. McKinley, TN 1: $736K cash, $415K debt

• John Mick Mulvaney, SC 5: $173K cash, $143K debt       N

• Ben Quayle, AZ 3: $370K cash, $7K debt       N

• James B. Renacci, OH 16: $577K cash, $370K debt

• Reid Ribble, WI 8: $347K cash, $146K debt

• Scott Rigell, VA 2: $392K cash, $324K debt

• David Rivera, FL 25: $62K cash, $151K debt

• Jon Runyan, NJ 3:  $204K cash, $283K debt

• David Schweikert, AZ 5: $354K cash, $501K debt              N

• Austin Scott, GA 8: $144K cash, $60K debt                N

• Marlin Stutzman, IN 3: $52K cash [was $523 cash, $8K debt]             N

• Scott Tipton, CO 3: $249K cash, $111K debt          N

• Joe Walsh, IL 14: $472K cash, $102K debt [was $22K cash, $362K debt]           N

A few observations about these 31 debt-ridden, or anyway debt-laden, members of the House of Representatives.

One, all are Republicans. The self-proclaimed rock-ribbed guardians of fiscal responsibility—‘deficit hawks’ is the euphemism–in Congress most deeply mired in campaign debt themselves, after the 2010 wave that swept a bunch of them into office, are all GOPers.

Second, while other GOP freshmen are also in debt, these 31 are the members whose debt is or was most egregious. Some of the indebtedness is outrageous in sheer amount, even by the standards of today’s political races, like the $362,000+ formerly owed by Rep. Joe Walsh of Illinois or the $283,000+ by Rep. Jon Runyan of New Jersey or the $501,000+ by Rep. David Schweikert of Arizona or the $1,000,000+ by Rep. Diane Black of Tennessee. Some of it is outrageous in light of their campaign cash raised and on hand, like the $102,000+ still owed by Rep. Joe Walsh of Illinois and the $146,000+ owed by Rep. Reid Ribble of Wisconsin. Some of it is outrageous in light of their money-raising capabilities for what might be called extraneous (family) reasons, like the $7,000+ owed by Rep. Ben Quayle of Arizona, son of former vice president Dan Quayle, and the $135,000+ owed by Rep. Blake Farenthold of Texas, and the $20,000+ owed by Rep. Jeffrey Landry of Louisiana.

Rep. Jeffrey Landry

Third, in this cohort Latinos are disproportionately represented—Rep. Rivera of Florida with $151,000+ in debt, Rep. Flores of Texas with $713,000+ in debt, Rep. Canseco of Texas with $1,100,000+ in debt. So much for that much-vaunted big tent we used to hear so much about. Looks as though some traditional Repub donors/contributors are treating them more like the nose of the camel.

Speaking of tents.

Fourth, all of the above were placed in office with strong Tea Party support or votes. This includes Amash of Michigan, Farenthold of Texas, Rep. Charles Fleischmann of Tennessee ($250,000+ in debt), and Rep. James Renacci of Ohio ($370,000+ in debt).

Fifth and last, twelve of the above 31 members voted against lifting the ‘debt ceiling’ even in final passage. With liabilities, campaign-wise, typically exceeding assets by WAY more than 10 to one, they voted against legislation that would stabilize the economy and ease the pain of fellow Americans.

A quick round-up of some representative comments, from indebted members who opposed lifting the ‘debt ceiling’ (already set by the congressional budget):

Justin Amash (debt: $280,000+) explained his vote this way:

“The bill does not seriously address the drivers of the federal government’s fiscal crisis. It does not improve entitlement programs. It does not include a balanced budget amendment to the Constitution.”

Charles Fleischmann (debt: $250,000+) has this to say:

“Contact Congress now and urge them to end runaway spending.”

Vicky Hartzler (debt: formerly $163,000+) has this:

“Congresswoman Vicky Hartzler (MO-4) has taken a stand for fiscal discipline and a strong national defense, voting against the latest bill to increase the nation’s debt ceiling.”

Hartzler also calls for an end to the ‘skyrocketing costs’ of doing business, which include health and safety regulations and offering insurance for employees. That last $1,000 may be coming in any moment now.

Randy Hultgren (debt: $55,000+):

“”Tonight, I voted against a flawed bill that doesn’t go far enough,” Hultgren wrote. “I’ve been clear from the very beginning I would not support any effort to increase our nation’s debt ceiling if the proposal does not hold true to the values of Cut, Cap, and Balance, as well as enact serious structural changes.”

Less than six figures in debt and with his own political connections among indictable Illinoisians, Hultgren is a piker as a debtor. He is also overshadowed in his state delegation by the unusually overripe Joe Walsh. Walsh’s financial or other flaws have been noticed elsewhere, most notably in this piece from the Daily Caller and this in Salon. One can infer that Walsh was not drawing improperly from campaign contributions to pay his child support.

The Grand (Old Party) Total

Just one final observation. As stated, the names and amounts above are far from all of the newly elected GOP deficit hawks in Congress whose debts exceed their cash on hand, by a mile. There are more.

But the combined debt of just the twelve members above who voted against final passage of the debt legislation, again, totals $1,529,000+, even rounding down. Debt for the others on the list totals $6,130,000+.

The Federal Election Commission filing deadline for the third quarter of 2011 is October 15. It will be intriguing to see how much of that remaining $7.5M congressional campaign debt, run up by deficit hawks, is paid down.

Update:

Roll Call reports today that several of these members are also on the GOP endangered list, as RC puts it “viewed as potentially vulnerable next year.” Ten reps will receive a split of $1.5M raised by the NRCC last week: “The Members receiving a cut of the cash are Reps. Jeff Denham (Calif.), Judy Biggert (Ill.), Robert Dold (Ill.), Bobby Schilling (Ill.), Jon Runyan (N.J.), Michael Grimm (N.Y.), Bob Gibbs (Ohio), Bill Johnson (Ohio), Jim Renacci (Ohio) and Scott Rigell (Va.).”

Note: I have learned the risk of publishing this kind of information. Tax-for-Growth types may fall all over themselves to retire some of that debt for members of their own, now that I have identified them. Shows me. But I never object to doing well by doing good, those little unremembered acts of kindness and of love . . .

Update:

Frankly, it is also a bit irritating that the NRCC lacks the decency to funnel more bucks to specially-recruited Latino GOP reps.

Re-post:          Rumsfeld and Cheney pressured CIA to mislead Congress in the 1970s

The Iraq war, shades of Vietnam

Cheney and Rumsfeld in power in the seventies

The first time Dick Cheney and Donald Rumsfeld pressured the Central Intelligence Agency to mislead Congress was in 1975 and 1976, when Cheney was chief of staff to President Gerald Ford and Rumsfeld was Ford’s secretary of defense. (Cheney, having held a series of positions alongside Rumsfeld—starting under him in the Nixon administration–also became campaign manager for Ford’s reelection campaign.) George H. W. Bush headed the CIA, appointed by Jerry Ford when Ford switched Rumsfeld from White House Chief of Staff to Secretary of Defense.*

Rumsfeld and Cheney with Ford

The mission of the three men was to protect the Ford presidency and some elements in the CIA from the Church Committee. According to researcher and author Lamar Waldron, they succeeded.

Legacy of Secrecy to film

Waldron is co-author, with Thomas Hartmann, of Legacy of Secrecy: The Long Shadow of the JFK Assassination, an exhaustively documented 800 pages compiling more than three decades of research into the assassinations of John F. Kennedy, Martin Luther King, Jr., and Robert F. Kennedy. In two [2009] interviews of more than an hour each, Waldron discussed how much some things haven’t changed since before Watergate.

Reacting to public outrage over a series of abuses—including domestic surveillance–exposed during Watergate, the Nixon impeachment and the winding down of the Vietnam War, in 1975 Congress authorized a special senate committee chaired by Democrat Frank Church of Idaho to look into abuses of the intelligence agencies, primarily CIA and FBI. The Church Committee was convened, getting off to a slow start and under steady CIA-friendly media fire from the beginning. Ford appointed George H. W. Bush as head of the CIA and Donald Rumsfeld as Secretary of Defense in October 1975.

As Waldron points out, we know from thousands of documents declassified since the 1970s that a massive amount of vital information was withheld by Cheney, Rumsfeld and Bush from the Senate’s Church Committee. The White House and top echelon of the CIA withheld crucial information from the Committee:

• the CIA’s extensive manipulation of U.S. news media;
• domestic spying;
• material about Cuba including JFK’s plan to topple Fidel Castro on December 1, 1963,
• the Mafia’s infiltration of the anti-Castro plan,
• and the CIA’s unauthorized continuation of agency plotting to use the Mafia to assassinate Castro.

Waldron and Hartmann document in Legacy of Secrecy that then-CIA official Richard Helms also withheld the unauthorized extension of the mob-linked anti-Castro plots from JFK himself, from President Lyndon Johnson and from the Warren Commission afterward, and even from JFK’s own CIA Director.

Presidents JFK, Eisenhower

The legacy of secrecy—often for political or career reasons, depending on the individual, or for bureaucratic self-protection–continued throughout the sixties and seventies to the Church investigation. Some particularly flashy and sensational material on the larger issues was shared with the Committee, garnering headlines. Elements of the Castro assassination plots like those ‘exploding cigars’ to be given to Fidel, for example, were divulged by the CIA to Church and were exposed with much fanfare. But the deeper concern of intensive Mafia participation in the anti-Castro plots was never fully investigated, not even by the later House Select Committee on Assassinations, and certainly not by the Church Committee.

The back story is that from 1960 to 1963 Mafia participation in plots to assassinate Castro became, tragically for the United States, a powerful Mafia participation in plots to assassinate President Kennedy. The CIA picked up too lethal a tool in choosing the Mob to carry out its plans to remove Castro. To this day, the general public—which never bought the ‘lone nut’ theory that the manipulated Lee Harvey Oswald, a beginning-level marksman, single-handedly brought off the assassination—still has not been permitted to know the full extent of the powerful arsenal of resources trained against President Kennedy by the wealthiest Mafia clans in the U.S.

Coordinated by Carlos Marcello, head of the oldest Mafia family in the U.S. (dating from the 19^th century) and Gulf Coast kingpin in control of Louisiana and Texas, they had planned since 1962 to take out the Kennedy brothers—either Attorney General Robert Kennedy, aggressively pursuing the Mob, or, more effectively, the brother in the White House who had appointed him AG. When John Kennedy came down South—as they had previously threatened—they took him out, having tried twice before in November 1963 to get JFK, once in Tampa and once in Chicago. The helpless Oswald—seen drinking a Coke in the Texas Book Depository two minutes after Kennedy’s murder—was then taken out himself, by heavily mob-connected ‘nightclub owner’ (actually, mob gnome) Jack Ruby, given basically full run of the Dallas police station. The general public has also not been permitted to know the full extent of Ruby’s Mafia involvement, despite hundreds of pages of information detailing his mob connections.

One continuing consequence was the negative effect on U.S. relations with Cuba for decades, deplored by Waldron and Hartmann. Waldron argues that no national security reason justifies hiding the JFK assassination archives at present. Congress intended them to be revealed years ago; the Cuban official implicated in the anti-Castro plots –Almeida—has long since been outed and forgiven; and both the United States and Cuba would benefit from expanded trade and other relationships.

Releasing a million pages of documents that Congress has already said should be released would illuminate more history of the twentieth century, including one of its defining tragic events. Waldron also expressed a wish to see Cheney testify under oath about the material withheld from the Church Committee. After all, there is no argument, however specious, that releasing it would somehow endanger U.S. troops.

There is also  no argument that those anti-Castro plots ‘worked’.  Waldron: “Nobody thought Castro would be in office this long.” Adding: Nobody thought back during the 1970s that Cheney and Rumsfeld and Bush would be back in government again, either, much less that they would return respectively as Vice President and Secretary of Defense in a bloody war, president and father of a president. If we don’t learn from the past, we are condemned to relive it with a vengeance. (The late Mary McGrory wrote about the return of Nixon retreads in the Reagan administration. Very few other established Washington journalists did so, at least in newspapers or on the networks.)

*Rumsfeld was Ford’s transition chairman in the WH, then chief of staff 1974 to 1975; secdef for Ford 1975-1977 (and secdef for GWBush 2001-2006, youngest and oldest person ever and 2^nd longest holding that ofc, etc). Appointd secdef in Oct 1975 when George HW Bush appointd CIA head.

*Cheney was on Rumsfeld’s staff under Nixon; Cheney and Rumsfeld both were Nixon alums, along with GHWBush, who was previously head of the Republican National Committee and resisted acknowledging the ills of Watergate to the bitter end. Cheney became assistant to pres under Ford; became Ford’s chief of staff when Rumsfeld became secdef, and Ford’s campaign manager. As deputy asst to pres in 1974-75, he memoed Rumsfeld about using the DOJ to get at journalist Seymour Hersh, then of the NYTimes. Waldron says that all the information about CIA manipulation of the news media has “definitely not” come out. Much of it is contained in documents still held by the CIA in spite of the congressional act of 1992 saying that they should be declassified and released.
Congress, CIA, Cheney and Rumsfeld

Following up with Lamar Waldron, author with Thom Hartmann of Legacy of Secrecy: The Long Shadow of the JFK Assassination:

Declassified archives show that Richard Helms, then number-4 man in the CIA, withheld even from his CIA chief and from President John F. Kennedy the CIA’s unauthorized continued plotting to kill Fidel Castro and remove the Cuban government. Helms continued to withhold this crucial information under two more presidents, a task aided by his being appointed Director of Central Intelligence under Johnson and Nixon. According to Waldron, there are many parallels between what happened in the 1970s, including what happened when Democrat Jimmy Carter replaced the GOP in the White House, and what has happened since, including developments under the second Bush administration.

Stansfield Turner, Carter’s CIA chief, came into the agency determined to clean it up following exposure of agency abuses from Watergate through the Church Committee. To some extent, Turner did so—but when he got rid of some of that era’s ‘bad apples,’ he unleashed a mighty backlash from CIA-friendly media outlets and from that era’s version of the rightwing noise machine. When Turner, with Carter’s approval, began firing people in CIA, he and the administration were in short order accused of going too far and of making America less safe. Anonymous charges of undermining American security began turning up in major media outlets. The GOP and the right seized another weapon in Cold War tensions to bring down the first Democratic administration since 1968, and Carter lost his reelection bid to Ronald Reagan.

Neither the rightwing noise machine nor the CIA’s grip on large media outlets is today what it was in previous decades. However, responding to questions in one of two lengthy interviews, Waldron says that the material about CIA manipulation of the news media has “definitely not” all been released. Much information about relations between the CIA and the press was withheld from the Church Committee—this while the CIA and the White House, under Bush senior and White House operatives Dick Cheney and Donald Rumsfeld were stonewalling the Committee on other topics as well. “Church uncovered a lot,” Waldron comments, but Bush-Cheney-Rumsfeld stonewalled on essentials.

To read a detailed history of the Kennedy assassination is to be reminded—forcibly—of what a ‘limited hangout’ (in spy parlance) the Watergate investigation turned into. Most of the personnel who broke into the Watergate were Bay of Pigs alumni, including E. Howard Hunt who coordinated the op. Several perpetrators—represented as semi-illiterates barely able to make sense of a home movie in the Woodstein book All the President’s Men–were also mob-affiliated. This grim coterie included some Cuban expats also closely connected to the inner circle of anti-Castro plotting. By any reasonable reading of history, the Watergate break-in and cover-up should be revisited as a further chapter in the history of the JFK assassination and Mafia piggybacking onto CIA anti-Castro assassination plots. It was Cuba—the Bay of Pigs and the tragic consequences of assassination–that Nixon as president was terrified the public might learn about, not some miscellaneous purported campaign plans purportedly housed in Larry O’Brien’s safe. After all, Kennedy had inherited the Castro assassination plot from Nixon, who headed the anti-Castro plans as Vice President under Eisenhower, and Nixon had been familiar with the early stages of the planning. Exposure of even a fraction of what Nixon knew about plans to kill Castro, and when he knew it, would make for a devastating October surprise in any election. 

The selectivity of the limited hangout became a pattern for succeeding administrations, as Waldron and Hartmann show.

Moving  up to the Bush years, it is reasonable given the history to ask how much of what the CIA did under the Bush-Cheney administration was known even by CIA directors George Tenet, Porter Goss and Michael Hayden. How much were even the heads of the agency aware of? Waldron points out that every agency head has his own institution to protect and that it is part of an agency head’s job to know a lot but not everything about the institution he heads.

(One further point: One thing the successful stonewalling of the Church Committee and other investigative bodies demonstrates is that there is no ‘wall’ between intelligence agencies, when it comes to cover-up. Hardly anything successfully concealed by the CIA was exposed by the FBI, for example. There may be a ‘wall’ between foreign and domestic information gathering, between CIA and FBI—as we are repeatedly told–covering the thousands of employees of both huge agencies, that prevents coordinating efforts to protect our country. But there seems to be no wall that prevents coordinating efforts to protect the bureaucracy or to protect individual careers. )

Back to the Church Committee: Nixon and Ford

When the Church Committee began looking into abuses by the intelligence community—including CIA manipulation of the news media and domestic surveillance of administration critics—back in the 1970s, White House Chief of Staff Donald Rumsfeld and Assistant to the President Dick Cheney, working for Gerald Ford, knew they had to circle the wagons. Predictably if ironically, they did so by intensifying the same efforts that had drawn investigation in the first place, continuing unauthorized operations in secret and manipulating the news media to prevent exposure.

The Committee—formal title, the United States Senate Select Committee to Study Governmental Operations with Respect to Intelligence Activities—was formed in response to public outrage over spy agency abuses during the Vietnam War and before, including covert assassination plots against foreign leaders revealed by Seymour Hersh in the New York Times. Its multiple reports were the fullest revelation of behind-the-scenes malfeasance to that date, even if the Committee was to some extent playing catch-up ball with some reporters and with much of the general public.

Nixon tells press, "I am not a crook."

Nixon was never a very popular politician, in spite of his decisive win over George McGovern in 1972. McGovern, a war hero in World War II and political moderate in the old-school New Deal vein, was painted as the candidate of hippies and drug users if not one himself. During the Cold War, after all, stodgy Democratic congressmen were routinely accused of basically wanting to let Russian tanks invade suburban back yards. But Nixon and his top people were fully aware of their nonexistent hold over American minds and hearts. Even rock-ribbed Republicans, and Southern converts attracted by Nixon’s ‘Southern strategy,’ which slowed down civil rights for a generation, thought Nixon was a crook.

Cheney and Rumsfeld, in the Ford White House, were Nixon alumni—minor figures and not top people, as Waldron pointed out, but in a position to observe and absorb the lessons of Watergate. According to Waldron, one lesson they learned was don’t put anything in writing. It was those secret tape recordings, including the exposure of Nixon’s four-letter words behind the scenes with aides (in light of his public sanctimoniousness), that did Nixon in politically.

Since the Church Committee could not be prevented or even blatantly opposed, the effort, according to Waldron, was to contain its investigation, and the effort succeeded. It was facilitated in several ways: Dick Cheney was promoted to White House Chief of Staff, replacing Don Rumsfeld—who was promoted to Secretary of Defense, without ever having seen combat, the youngest person in U.S. history to have held that office. In being lofted to SecDef, Rumsfeld of course bypassed a generation of war heroes from World War II, a point not much emphasized or criticized in a press that tended to focus more on the who’s-in-who’s-out of WH staffing. Score one for the concealers.

Rumsfeld’s transition to Defense enabled him to help further in blocking the Church Committee. For one thing, he now had freer rein to claim that secrecy and concealment were justified by national security concerns. He could also more fully ensure that no one in the military cooperated too much with investigation into the intelligence agencies, including military intel agencies. He could also—behind scenes—encourage or facilitate attacks on the Committee using unnamed military sources ready to claim that American spies and soldiers were being endangered by revelations of agency abuses. Rumsfeld was thus ideally positioned to shunt off investigation into, for example, military infiltration of the American anti-war movement—which appears to have been copious, although the full records and numbers have yet to be released. Any commander in the later stages of the Vietnam War might understandably prefer to detail young military personnel to infiltrate anti-war protestors at home than send them to Vietnam.

Needless to say, any and all investigation and communication to the public were also opposed by Cheney in the White House, who was always viscerally opposed to transparency anyway. But Rumsfeld in Defense and Cheney in the White House also had a formidable ally in their corner—George H. W. Bush, appointed by Ford as head of the CIA at the same time Rumsfeld was appointed to Defense. Suffice it to say—condensing here for brevity—Bush at CIA had the at least the equivalent means at his disposal, and usefulness to the Ford White House, as Rumsfeld at Defense.

Another lesson that Cheney, Rumsfeld and (former head of the RNC) G. H. W. Bush learned from Watergate was to control the press. Nixon had misguidedly antagonized two of the most powerful dailies in the U.S., the New York Times and the Washington Post, going so far as to pursue them in court, where he lost. Judicial restraint in advance of publication is a non-starter in this country. Bush Sr. was more subtle. Washington Post reporter Bob Woodward was allowed to extend contacts with the CIA and became increasingly helpful to it in his reporting; Post neocon columnist Charles Krauthammer sniped years ago that Woodward was an unofficial spokesman for the CIA. The other half of Woodstein, Carl Bernstein, au contraire, who published an excellent and forceful article on the limitations of the Church investigation, had to go other ways. Judicial restraint of the press does not work. Injudicious restraint by other means does.

Webb

As Waldron points out, attempts to control the press hardly ceased with Nixon, as the tragic case of courageous reporter Gary Webb alone would demonstrate.

[This material was posted in May 2009 and is slightly edited here. Back then the top article was lifted from a re-post on another site and was posted on Huffington Post without the author’s consent or knowledge, and without linking to the author’s site, thus denying the author’s site the hits/traffic. (It received at least 27 Diggs on HuffPost.) Undoubtedly every HuffPost editor and journalist knows this conduct to breach journalistic ethics.] 

Obama address this evening

Still ahead, at 7:00 Eastern—

Every thinking person knows the president is carrying a heavy load, with virtually the entire GOP in office refusing to do anything that would help the nation. There are very few exceptions, partial at that, mainly Sen. Tom Coburn (R-Okla.) and Rep. Ron Paul, and the latter is leaving Congress. They’re both critically outnumbered. The rest of the congressional GOP are a wholesale lot of corporate lobbyists in office, temporarily holding down the fort until they depart for their inevitably better-paying positions overtly representing the companies they now represent ex officio. It’s not supposed to be that way—try to find the word lobbyists in the Constitution—but that’s the way it is.

Rep. Boehner, currently lobbying from within Congress

Incidentally, some lobbyists do not scruple to infiltrate organizations to which their employers and/or clients are antithetical, either, and without declaring their affiliation to fellow unwitting members. But that’s a later story. (Needless to say, Republicans in Congress have resisted, opposed, delayed and watered down every effort to strengthen transparency in the multi-billion-dollar lobbying industry.)

For tonight, President Obama has to propose steps to strengthen the U.S. economy and to ameliorate the situation of working people. Enough on the plate, given as mentioned GOP opposition to anything that would actually help, under Orwellian subterfuges including the ‘debt’ and ‘deficit’ that GOP-instigated wars and tax exemptions for the wealthy and for corporations helped to create—along with the recession following the largely GOP-created mortgage-derivatives debacle.

A few points can be raised before the White House address—

• for example, that one easy fix for Social Security is simply to raise or eliminate the ludicrously small limit on contributions by the wealthy. Why should most of the income of someone bringing in more than six figures be exempt from Social Security withholding? It makes no sense. Yet our would-be Republican candidates for president virtually never mention this obvious common-sense improvement.
• Another example: Facing a string of natural disasters and a consequent strain on FEMA and rising requests for disaster aid, why don’t we keep the multi-trillion-dollar insurance industry from wriggling out from under risk coverage? Why is it a given that insurance companies can avoid covering flood risk just when it is most needed? And above all, why do our purported deficit hawks in the GOP go along with this kind of corporate policy—since they know that it will dump all the  costs of a natural disaster on the taxpayers?
• Related point: The phrase ‘the taxpayers’ refers, of course, to those of us who actually pay our taxes—payroll taxes, property taxes, state and federal income tax. Why is it a given that some of our biggest-earning corporations should be allowed to get away with paying no federal income tax at all?
• Finally, as to infrastructure. Surely, our infrastructure needs help. That includes the physical infrastructure of our schools, too, and a proposal to put the construction industry back to work, by working on schools across the nation, is already on the table. Nothing heard so far, on this good idea, from Republicans in Congress.

One more note, before the speech itself: The White House is being put in an impossible position, being demanded to ‘create jobs’ by the very people who, vindictively, are fighting tooth and nail to break the middle class, and who will refuse to implement anything presented by President Obama. Something to keep in mind.

More later

AFTER

Update 7:40 p.m.

A step in the right direction—

Obama did his usual good job of communicating. Speech concluded, clearly the White House knows what is needed, which is “actually do something to help the economy.” So, some of the provisions, in summary:

• Cut payroll taxes in half for working individuals and for small business.
• Tax credits for small businesses for hiring and for raises.
• Federal investment in transportation infrastructure. Btw Obama mentioned a particular bridge, connecting Ohio and Kentucky, a main truck route. (The camera here on Current TV, 192 on Verizon Fios, cut to a quick shot of newish Kentucky senator Rand Paul, probably trying for  poker-faced but looking like a man who took a handful of Pamprin by mistake.)
• Nationwide investment in school repair, restoration and construction.
• Putting thousands of teachers back to work.
• Jobs for veterans.
• Tax credits for hiring the long-term unemployed.
• Extend unemployment benefits for another year.
• Extend the middle-class tax cut. (It will be interesting to see how GOP self-declared deficit hawks avoid this one.)

On funding, the president nicely needled some of those present with a reminder that the bill recently signed into law requires cutting the federal budget by over a trillion. President Obama said that the same representatives of the people who are obligated by said law—that would be the bill raising the ‘debt ceiling’—to come up with cuts, to come up with further cuts. Further proposals will be presented by the White House next week.

Oil execs before Congress

Funding includes eliminating or reducing “tax breaks and loopholes that no one else gets,” as Obama put it, for the wealthiest individuals and for corporations, including tax loopholes for oil companies and tax breaks for millionaires and billionaires.

In this context it is noteworthy that the wealthy and well-funded GOP candidates for the White House, calling for yet more leniency for the top 2 percent, have not been laughed out of every podium. (Their Orwellianism, of course, is that taxing the wealthiest is “job-killing.” Ridiculous, but their audiences will have to call them on it; too few reporters are allowed to do so. )

As the president pointed out, economically speaking at least there is “nothing controversial” in the proposals.

It was fun watching some of the faces caught by the camera. Speaker of the House John Boehner often looked uneasy, often shifty-eyed. He kept licking his lips when the president said something good about the American people or nation. When he’s cheerful he looks it, but when he is trying to convey reproof of sorts he tends to veer between cigar-store Indian and a drunk guy puzzled by the multiplication tables.

Sen. Mitch McConnell, when caught on tape, also had an odd demeanor or look, somewhat cartoonish but the character doesn’t come to mind at this moment.

There is no such thing as ‘Obamacare’

Just switched on the GOP so-called ‘debate’, on MSNBC, during commercial breaks for The Mentalist. For anyone who really wants to learn something about the state of the nation, the latter is a better call btw.

Admittedly the GOP line-up is a luminous example of the depths to which self-aggrandizement can sink when joined with ignorance, fueled by aggression and bucks, and transmitted by television.

The creepiest element thus far is that they seem to think they have a winner in repeating the term ‘Obamacare’ ad nauseam.

Rep. Bachmann

Candidates like Michele Bachmann or Newt Gingrich or Rick Perry, of course, are  scarcely going to fault insurance companies for welshing on customers.

Horrible that they cannot pretend, do not even bother to pretend, to be more protective of the American people who have given this weird crew everything they have, jointly and severally. But this is what happens to individuals who select themselves for exemption from every principle of right or fairness. It is a form of lunacy.

Texas governor Rick Perry

Halliburton, Cheney and the Bush administration in Iraq: 2003

Vice President Dick Cheney

This history is intended as summary and a reminder for anyone who might wonder why connections between former Vice President Cheney’s Halliburton, Inc., and subsidiaries and the George W. Bush administration matter for Iraq. The key facts were not widely reported to the public, or with adequate focus and emphasis, when they would have been timely during the lead-up to the invasion of Iraq, and during the first two years of the Iraq war.

To begin with, under the second Bush administration the U.S. had a trade deficit with Iraq: In other words, while top administration figures were inveighing against Saddam Hussein, the administration’s oil-industry donors and staunchest supporters were quietly running up record oil imports from Saddam. Until May 2003, the U.S. imported more goods from Iraq in regular commerce, even while preparing war against it, than exported to it. According to the U.S. Census Bureau, Foreign Trade Division, in January through June 2003 the U.S. imported $2,516,700,000 worth of products from Iraq.  During the same period it exported $30 million worth of products to Iraq, for a trade deficit of about $2.4 billion.

UK consulted Big Oil before invading Iraq

That’s a lot of doing business with the devil.

In 2002, the U.S. trade deficit with Iraq was $3.5 billion. For 2001, our trade deficit with Iraq was $5.7 billion: We exported $46 million worth of goods to the Iraqis and imported $5.8 billion worth. Interestingly, our trade deficit with Iraq actually peaked in election year 2000, at $6 billion, a fact not emphasized on the campaign trail by those evil-doer-haters George W. Bush and Dick Cheney.

The previous U.S. trade surplus with Iraq lasted through 1996.

U.S. oil imports from Iraq

Perhaps  this should not be surprising. Major U.S. industries, like the oil industry to pick a random example, have done large-scale commerce with the strife-torn Middle East for decades. Our trade deficit with Iraq was dwarfed by our trade deficit with Saudi Arabia, with whom we last had a trade surplus in 1998. Our monthly trade deficit with ally Kuwait almost doubled from 2002 to 2003. (Needless to say, the U.S. consistently runs huge trade deficits over-all, our #1 trade deficit partner being China.)

Given that the second Bush administration invaded and occupied Iraq, it is a good idea to remember the extensive U.S.  commerce between Big Oil and that pitiful nation.

According to those bruisers at the Census Bureau, by some strange chance Iraqi imports fell into the single category of “mineral fuels, lubricants and related materials,” i.e. oil. From January through April of 2003 we imported hundreds of millions of dollars’ worth of oil from Iraq, with imports nearly doubling in February and March, when the invasion took place. Then in May 2003, at the height of the direct invasion, our Iraq imports dropped to $80 million, still a trade deficit. In June 2003, U.S. imports of Iraqi oil fell so far that, for the first time since 1996, the U.S. had a trade surplus ($8 million) with Iraq.

U.S. oil companies, in fact, were consistently Saddam’s biggest customers. In 2001, the U.S. was “the main market for Iraqi crude,” according to the Middle East Economic Survey. Forbes estimated that U.S. companies purchased 70 percent of Iraq’s oil in 2001. One of the single biggest U.S. customers was Chevron, where Bush’s National Security Adviser and second Secretary of State Condoleezza Rice was an executive. Chevron merged with Texaco less than a month after the attacks of September 11, 2001, and the merged giant ChevronTexaco continued its purchases of Iraqi oil, with no sign that the White House considered this a security breach.

Not that U.S. exports to Iraq were nonexistent. Our two biggest categories of export to Iraq in 2002, by far, were “drilling and oilfield equipment”–$16 million–and “excavating machinery”–$4 million. That would be Halliburton Company, headed from 1995 to 2000 by Richard Cheney, who left Halliburton to join the Bush ticket in the election.

That’s a lot of selling to the devil, especially considering that Halliburton subsidiaries were basically responsible for restoring Saddam’s oil fields after not one but two wars, the Iran-Iraq War and the first Gulf War. One might argue that Vice President Cheney’s former company was doing what it could to reverse our trade deficit with Iraq. On the other hand, it seems obvious that if the Bush administration had really wanted to know more about Iraq’s supposed ‘weapons of mass destruction’, it could have asked Halliburton. The giant conglomerate produces and distributes oilfield equipment and related services worldwide, including in Iraq. “Parts for boring or sinking machinery” were the second-largest category of exports from Texas, where Halliburton is based, for every year immediately preceding and following Cheney’s transition from the company to government.

Indeed, while Cheney was head of Halliburton, Halliburton subsidiaries were forging ahead in their continuing project of rebuilding and maintaining Iraq’s oil industry for Saddam. Dresser-Rand and Ingersoll-Dresser Pump Company, two Halliburton subsidiaries, had contracts worth more than $73 million with Iraq during Cheney’s stint at Halliburton.

Halliburton, originally founded in Great Britain but subsequently incorporated in Delaware, has more than 500 subsidiaries, including some located in those notable oil-producing nations the Cayman Islands, Barbados, and Bermuda. Halliburton acquired Dresser Industries in September of 1998. During the presidential campaign, Cheney said under questioning that he had a firm policy against dealing with Iraq, but senior company executives handling Iraqi business reportedly did not hear of a prohibition against it.

News reports subsequently revealed that Houston-based Kellogg, Brown & Root, another chief Halliburton subsidiary, received a noncompetitive-bid contract from the U.S. Army Corps of Engineers in 2003 to rebuild and repair Iraq’s oil fields. The contract was officially stated as capped at $7 billion but with no official projection of actual costs.

Image problems and imaging

The petrochemicals industry has capabilities beyond well-drilling and extinguishing oil field fires, and Halliburton has other subsidiaries besides Dresser and Brown & Root that could have been relevant to operations in Iraq. In September 1996, Halliburton merged acquired a company named Landmark Graphics Inc, acquiring with it Landmark’s five-year plan and its technological capabilities. The September 9, 2001, prospectus for the Halliburton-Landmark merger reads in part:

“Landmark, together with its subsidiaries, designs, markets and supports sophisticated computer-aided exploration (“CAEX”) and computer-aided reservoir management (“CARM”) software and systems. In more than 70 countries, geologists, geophysicists, petrophysicists and engineers use Landmark products in exploration for and production of oil and gas. Landmark’s applications software transforms vast quantities of seismic, well log and other data into detailed computer models of the subsurface. These models reveal critical information about subsurface formations.”

In simple, non-scientific terms, companies such as these have spent years trying to see underground in places like Iraq, this one in particular.

As we know by now, the myth that Iraq had nuclear weapons had about as much dignity as the one that the late Osama bin Laden was going to fly in on a magic carpet at any moment, white beard flowing in the wind, and sprinkle anthrax dust over some D.C. press briefing. But the WMD myth was particularly brazen in flouting commerce as well as science. With its capabilities, the company would have detected sub-surface testing of nuclear weapons or development of missiles in Iraq, where Halliburton itself operates—literally–on the ground.

The key term is “subsurface imaging.” As its SEC filings describe,

“Landmark is engaged in the business of designing, creating and marketing an extensive line of integrated software applications to the oil and gas exploration, development and production industry for seismic processing, 3D and 2D seismic interpretations, geologic and petrophysical interpretation, including reservoir analysis, mapping and modeling of geophysical information, well log and production analysis, drilling and production engineering and data management.”

So why wouldn’t some subsurface imaging, already used to see underground, even in the desert, have worked in Iraq, to detect WMDs (if any)? The number of reporters in Washington, D.C., who posed this question in 2003 is not legion.

One scientist who prefers not to be named, but who worked for five years with a Landmark director, explains that Landmark’s mega-computing-power software does indeed do subsurface 3-D tomography (imaging). As he explained it, however, the imaging is “based on traditional seismic inputs.” That is, you “shoot a small explosion or use a thumper truck, and capture the echoes with an array of many (can be several hundred) geophones [microphones firmly in contact with the ground]. The echoes are then digitally recorded in massive data files” and processed. The output is then color plotted on wall-size sheets of paper, or on monitors, where geologists can study it. The scientist suggests that this software may not be designed to work with voids–caves, tunnels—or with very shallow formations less than 200 feet down.

What would help would be ground penetrating radar. The U.S. government, he pointed out, has had ground penetrating radar, which can get shallow (less than 50 feet underground) subsurface information, since the sixties and seventies. GPR was used to discover camouflaged missile silos back during the Cold War.  The government disclosed this secret capability “by publishing maps of the underground tributaries of the Nile soon after the first launch,” he added.

Military uses aside, ground penetrating radar is well known in the oil business. Geologists use it to find oil. It has also been applied in other fields. Archaeologists have used it to locate dinosaur bones. Its fairly simple process of penetrating the earth with radio waves and then returning the signals to a computer is also used in detective work (forensic tomography), to discover human remains.  The basic idea parallels sonograms used in pregnancy.

So again, couldn’t this process have worked in Iraq? – Or, for that matter, to scrutinize underground caves in Afghanistan?

One expert on this matter is Dr. H. Roice Nelson, a geoscientist in the global oil business who founded Landmark Graphics.

“Yes,” he said, the technique could work, “if the data were available.” But, he said flatly, “they’re not.” Data are not available for Iraq and Afghanistan, because no one had done the large-scale seismic surveys. “It would be very expensive.” Remote-satellite technology is always expensive. [emphasis added]

Asked whether the financial cost would be greater than having the operations handled by troops on the ground, he demurred.

“If I had two or three days,” he remarked rather casually, “and got together with other people in the field,” he could probably come up with a good cost estimate for the necessary “large-scale remote,” “air-mag surveys.”

“But I can’t afford to do it on spec.” Did anyone in the administration get in touch with him, asking for volunteer expertise on what lies beneath, in Iraq? No. Nor, apparently, is there word out on the geologist street that others are being approached. If any geologists are contracted, or have been used, to employ these capabilities, there is no sign of it. A big question, obviously, is whether the process would work. Nelson does not predict an outcome but comments that it still might not turn up hidden weapons. In a short telephone interview, we did not discuss the human cost of the effort in Iraq.

He declines to speculate on whether this effort has been made, at all, by the government.

“I read the same news reports you do.” “You might ask Dick Cheney,” he signed off.  “He used to head Halliburton.”

Before 2003

For the record, here is some further background on Dresser, Halliburton, and Bush-Cheney:

George W. Bush’s father was George H. W. Bush, 41^st president of the United States. The Bush family was from Connecticut, where the elder George Bush’s father, Prescott Bush, was a U.S. senator. Prescott Bush–and this background was not reported during the 2000 election cycle—also was on the board of directors of Dresser Industries from 1930 to 1952.  A director for twenty-two years, Prescott Bush was Dresser’s longest-serving director, according to David A. Smith.

Dick Cheney, while CEO of Halliburton, agreed to acquire Dresser Industries in 1998. Dresser had just acquired M.W. Kellogg, which subsequently merged with Houston firm Brown & Root, becoming Kellogg Brown & Root and then KBR. As everyone attuned to politics knows, the Bush team was already gearing up for the White House run at the time. This is one of those sequences that makes politics look unsavory:

1)      Liability-ridden, Bush-connected Dresser got quietly conveyed to Cheney’s Halliburton, at HAL shareholder expense, distancing George W. Bush from the asbestos-mesothelioma scandal and litigation by Dresser retirees, at a time when Cheney was not overtly connected to Bush;

2)      Cheney subsequently got the nod to be George W. Bush’s vice-presidential pick; and

3)      Once in office, the Bush-Cheney administration provided Halliburton and its business allies with billions of USD worth of federal contracts, while quietly working to delay or to prevent plaintiffs’ lawsuits in U.S. courts.

Halliburton earnings at start of Bush-Cheney administration

The fact that virtually none of this was reported by the Washington political press does not speak well for the political press corps at the time. Contrast the topic above, or any fraction of it, to Al Gore’s switching to brown suits or the canard that Gore claimed to have invented the internet.

A large part of the problem was that insider political reporting back then was dominated by the Washington Post, and most regrettably, the paper’s parent Washington Post Co. had just recently finished buying Kaplan Learning, the giant standardized-testing conglomerate. At a time when the paper was losing money—it still is, as are newspapers in general–the Bush team made explicit overtures to the Post newspaper on the issue of ‘education reform’, which meant billions of dollars’ worth of standardized testing. Both the Bush-brother governors, Jeb Bush in Florida and George W. Bush in Texas, had already increased standardized testing in their respective states. This policy adjustment should have gotten more press scrutiny, given how it flew in the face of both rightwing libertarianism and their state GOPs’ usual attitude toward education.

Al Gore and earth tones

But scrutiny was not the watchword in the 2000 campaign, as we know by now. Candidate Bush got free passes from the Post and from the ensconced press corps—on his drunk driving, his alcoholism, his wife’s having killed another teenager in an automobile accident, his lack of knowledge of national and international affairs, his lack of experience in high office, the inconsistencies and misrepresentations in his military record, the family favors in his career record, the sketchiness of his academic credentials, etc., etc. Meanwhile, Al Gore got taken apart for every trifling detail of clothes or manner. No minutiae went unexamined in regard to Gore; no issue of gravity got the attention it deserved in regard to Bush. And Bush got commendations—especially from the Washington Post—for bringing up the topic of ‘education reform’ or for that matter for bringing up education at all.

Once in office, the administration did get ‘No Child Left Behind’ passed, and the Post Co.’s SEC filings reveal that the push for standardized testing across the nation, in all schools, at all levels–largely what NCLB boils down to—enriched the Post Co. by billions. The company has now officially re-branded itself to the SEC as an education and media company.

None of this was reported by the Post newspaper, which also has gone for years without detailed reporting on continuing asbestos problems in the U.S.

And needless to say, no major publication clued in the public on the Bush-Cheney wish to invade Iraq, already formed when they entered the White House in 2001.

Bush Treasury Secretary Paul O'Neill

More later

Anti bribery versus anti bribery reporting: Halliburton, KBR, and Bush-Cheney

Follow-up to previous post:

Before and after the interview reviewed in last week’s post, former Halliburton contract employee David A. Smith continued to press for investigation on matters raised by the mis-sent company emails that he received by error. As previously written, the Bush administration ceased publication of the Department of State annual report titled Battling International Bribery after Colin Powell, who supported the report’s findings, was replaced as Secretary of State by Condoleezza Rice. The last issue of the report came out in 2004; the company formerly headed by Vice President Dick Cheney, Halliburton, involved in long-running inquiries into its dealings with the government of Nigeria among others, would seem to have benefited from the halt.

Secretary of State Colin Powell

David Smith’s on-site observations indicate that HAL was equally averse to investigation closer to home. In the interview, along with his partner, Smith corroborated the experience narrated in SEC filings in October 2006. Parent company Halliburton at the time still owned subsidiary KBR, formerly Kellogg Brown & Root, which had its own long-term problems including asbestos liability and retiree litigation associated with the former Dresser Industries, part of KBR after a series of acquisitions. The company spun off KBR in 2006 and 2007, continuing the spin-off during the time Smith was filing his complaints.

KBR, formerly Kellogg Brown & Root

KBR/Halliburton, like other military contractors, was subject to audit by the Defense Contract Audit Agency. Among the audit procedures were unannounced visits, including those at the facility at 1550 Wilson Boulevard in Arlington, Va., where Smith worked. Smith states unequivocally that company compliance officers and other personnel engaged in stalling the auditors. “When the DCAA auditors arrived unannounced,” Smith stated, Halliburton compliance officers “stalled them in the lobby with polite conversation and offers of refreshment.” Meanwhile, Human Resources personnel “raced to spread the word that everyone should get their timekeeping records in order, and shuttled ‘problem’ employees away from their desks.” DCAA auditors were conducted through the offices only when compliance officers got the ‘all clear’ from Human Resources, Smith says.

“I distinctly recall one auditor commenting on how many people were out of the office that day. One of the KBR [compliance] officers responded smoothly, to the effect that some were out sick, but many were at an off-site meeting. I was stunned to hear this blatant lie . . . I can distinctly remember the person whose timekeeping record they used to demonstrate compliance for our group . . . and the [compliance] officer coming by later in the day to joke with him about what a great job he’d done as the auditor-facing facade for our group. It was a Potemkin procession, carefully choreographed for the auditors’ perception.”

Oversight and accountability are ongoing needs. Need for oversight, transparency and accountability at KBR in particular is extensively documented by now. Smith’s narrative gives a worm’s-eye view of the company ethos. Smith sat in on, for example, business development meetings where Halliburton’s bid to rebuild the American Embassy in Kabul, Afghanistan, was discussed:

“When I asked one of the business development guys whether the situation on the ground was secure enough for our employees, he joked that we could handle a few ‘towelheads with slingshots’ . . . “When I persisted, and asked what would happen if–during construction–the Embassy and our employees and equipment were to be hit, he joked that we’d just bill the Federal Government for a do-over.” [emphasis added]

The reasonable inference is that KBR’s internal atmosphere reflected Halliburton’s coziness with the Bush-Cheney administration, and Smith has particulars to corroborate the inference. “In all seriousness . . . it was very common to see the KBR bigwigs getting off the elevator on floors where Halliburton/KBR had no operations, for meetings with the principals of other tenants of the building.” The offices were located at 1550 Wilson and 1560 Wilson at the time. Tenants included private security consulting company AALC, founded by Richard Armitage, former Bush Deputy Secretary of State. Smith goes on, “During business development and proposal development meetings at KBR’s offices at 1550 Wilson, frequent references were made to phone calls, breakfast meetings, and other ‘outreach efforts’ that our business development team would make to sitting members of the Bush Administration, to help secure Federal contracts.”

Even internally, KBR cultivated a positive image, showing “slideshows, videos, and other internal marketing pieces, aimed at cultivating the image that the group’s proposal bids were leading to good works around the globe,” Smith says. “Just before one holiday party, the Proposals group had to sit through a video showing the laundry, galley, and other support services that KBR was purportedly providing to our military personnel stationed overseas. Smiling, happy-looking Halliburton/KBR employees were posed mid-task, while the narrator intoned soothingly about the important work we were doing.” At the time, Smith says, “KBR was desperately recruiting to backfill these positions, offering to train anyone how to be a forklift operator or truck driver, if they’d only sign up to go work overseas. Enticements such as signing bonuses, presentations about the tax-free earnings one could earn while working overseas, and the like were used to try to staff the contract’s shortfall roster.”

Coincidentally, Smith was privy to a different perspective. A Marine cousin of his had returned from Camp Bondsteel, near Kosovo:

“Since Camp Bondsteel was prominently featured in those corporate propaganda presentations as one of KBR’s [crowning achievements] (the company was the prime contractor both for building and operating the base), I was eager to hear my cousin’s firsthand, on-base experiences. Boy, did I ever get an earful about the true living conditions. My cousin’s compassion and enthusiasm for helping the locals was matched only by the ferocity with which he decried the base’s operations. He brought his laptop to the [family] reunion, to show his pictures of the local customs, countryside, and people; it didn’t take a photography critic to see that his off-base pictures were decidedly positive and upbeat, while his on-base pictures were pretty bleak. His pictures looked nothing like the ones the Proposal Group had been shown in KBR’s offices at 1550 Wilson Boulevard.”

Camp Bondsteel and landscape

(Smith notes that the company received the Afghanistan contract:

“As shown on FedBizOpps, the Department of State awarded the contract (valued at $114,989,000) to Brown and Root Services at 1550 Wilson Blvd. To view the award notification, use the search feature of FedBizOpps, and restrict your search as follows: 1. Change “Documents to Search” to “Both” active and archived documents; 2. Uncheck “All” and Check “Award”; and 3. Type “Afghanistan AND embassy” in the “Full Text Search” box. The award notification number is: SALMEC-02-C0042, and the contact information for the Department of State contracting office that oversaw the solicitation effort is included (e.g., for making FOIA requests to see Halliburton’s bid for the work).”)

Coziness, of course, is a two-edged sword. Smith noted “purges/layoffs in KBR’s Northern Virginia offices” in 2006. Smith emphasized in further email correspondence that “Vice President Cheney was not ‘out of the loop’ on the Foreign Corrupt Practices Act bribes paid in Nigeria on his watch as CEO,” and “Those bribes were not paid by ‘rogue elements’ within Halliburton.”

Smith also noted that appropriately the Associated Press story mentioning his allegations was picked up by an offshore publication, the Jamaica Gleaner. Halliburton’s global holdings include numerous island tax-haven offices, located in places like the Caymans that are not noted for oil production, in service to places like Iraq that are.

Company invitation for Islanders

As previously written, the emails received by David A. Smith were intended for Halliburton executive David R. Smith, Vice President of Tax. The tax connection appears to be key. One question Smith raises—which seems not to have been answered in previous correspondence with the company or during investigations—is why a high-level executive whose bailiwick was taxes was looped in on matters such as the Nigeria investigation in the first place. Not that David R. Smith was a newcomer to corporate embarrassments and public-relations challenges; he had come on board with the company in 1998, at the time when the Bush family’s Dresser Industries, with its liability-ridden asbestos contagion, was being acquired by Halliburton. (As David A. Smith points out, the timing of the transaction successfully removed Bush’s embarrassing asbestos associations from the 2000 election.)

As with any other corporate money, one question about money used to pay foreign bribes always is whether it has been taxed properly under U.S. law.

Added:

Regarding bribery, it is noteworthy that under the gun of the 2008 election, the Bush Justice Department did conduct some prosecutions of Halliburton personnel. On Sept. 3, 2008, former CEO and Chairman of KBR Albert Jackson “Jack” Stanley filed a guilty plea in federal court in Houston. One article here, picked up here, re-posted here.  Stanley pled guilty to bribing Nigerian officials.