Tag Archives: regulatory affairs

Cliven Bundy Exposes the Cravenness of the Modern Right

by w0ujpysd Posted on April 15, 2014

Mother Jones

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Like a lot of people, Ed Kilgore is distressed at the outpouring of support on the right for Nevada rancher Cliven Bundy:

Call it “individualism” or “libertarianism” or whatever you want, but those who declare themselves a Republic of One and raise their own flags are in a very literal sense being unpatriotic.

That’s why I’m alarmed by the support in many conservative precincts for the Nevada scofflaws who have been exploiting public lands for private purposes and refuse to pay for the privilege because they choose not to “recognize” the authority of the United States. Totally aside from the double standards involved in expecting kid-glove treatment of one set of lawbreakers as opposed to poorer and perhaps darker criminal suspects, fans of the Bundys are encouraging those who claim a right to wage armed revolutionary war towards their obligations as Americans. It makes me really crazy when such people are described as “superpatriots.” Nothing could be more contrary to the truth.

The details of the Bundy case have gotten a lot of attention at conservative sites, but the details really don’t matter. Bundy has a baroque claim that the United States has no legal right to grazing land in Nevada; for over a decade, every court has summarily disagreed. It’s federal land whether Bundy likes it or not, and Bundy has refused for years to pay standard grazing fees—so a couple of weeks ago the feds finally decided to enforce the latest court order allowing them to confiscate Bundy’s cattle if he didn’t leave. The rest is just fluff, a bunch of paranoid conspiracy theorizing that led to last week’s armed standoff between federal agents and the vigilante army created by movement conservatives.

The fact that so many on the right are valorizing Bundy—or, at minimum, tiptoeing around his obvious nutbaggery—is a testament to the enduring power of Waco and Ruby Ridge among conservatives. The rest of us may barely remember them, but they’re totemic events on the right, fueling Glenn-Beckian fantasies of black helicopters and jackbooted federal thugs for more than two decades now. Mainstream conservatives have pandered to this stuff for years because it was convenient, and that’s brought them to where they are today: too scared to stand up to the vigilantes they created and speak the simple truth. They complain endlessly about President Obama’s “lawlessness,” but this is lawlessness. It’s appalling that so many of them aren’t merely afraid to plainly say so, but actively seem to be egging it on.

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Cliven Bundy Exposes the Cravenness of the Modern Right

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New Ad Hammers Gov. Andrew Cuomo For Abandoning His Pledge to Fight Corruption

by YoungLubfmlrnd Posted on April 11, 2014

Mother Jones

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When Gov. Andrew Cuomo (D-N.Y.) signed his new $140 billion budget into law last week, he hailed it as a “grand slam.” For New York State’s ethics reformers and good government groups, however, the budget was an epic flop. And now one national pro-reform group is planning to hammer Cuomo on the airwaves for failing to make good on his pledge to overhaul the state’s cash-fueled, noxious brand of politics.

The new ad—paid for by the Public Campaign Action Fund, a non-profit funded by individuals, labor unions, and foundations—blasts Cuomo for signing a budget that doesn’t include a so-called fair elections system for all statewide races. (The budget instead features a pilot program that half-heartedly applies the fair elections model to only this year’s state comptroller race.) The ad also hits Cuomo for eliminating a commission—created by the governor just last year—devoted to rooting out corruption in state government. Public Campaign Action Fund has bought nearly $300,000 worth of airtime to run the ad, starting Saturday, for nine days in the Syracuse and Buffalo media markets.

The ad’s narrator says:

When Governor Cuomo introduced his ethics and reform plan, it was going to clean up Albany. But he let the rule limiting campaign contributions get cut. Then the commission that was supposed to investigate corruption in state government got cut. And the promise to reduce the influence of big money in all state races? All cut, except for one office. And now the governor says he’s proud of what’s been achieved? Gov. Cuomo, get back to work and deliver the reform you promised.

Reform groups had pressed especially hard this year for Cuomo and the New York State legislature to overhaul how state elections are funded by implementing so-called fair elections, a campaign funding system that rewards candidates who accept lots of small donations by matching those donations with public money. This type of system is already used in New York City, where it helped progressive Bill de Blasio become mayor.

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New Ad Hammers Gov. Andrew Cuomo For Abandoning His Pledge to Fight Corruption

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You’re Probably Paying Less in Overdraft Fees Than You Used To

by GuadaluMcclanah Posted on April 2, 2014

Mother Jones

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The Wall Street Journal has an interesting short piece about overdraft fees today, including some facts and figures I haven’t seen before. Here are the trends between 2009 and 2013:

Average number of overdrafts per year: down from 9.8 to 7.1
Total overdraft revenue: down from $37.1 billion to $31.9 billion
Average overdraft charge: up from $27.50 to $30 (in 2013 dollars)

That’s a decrease of nearly a third in the annual number of overdrafts per checking account. This is likely because of new regulations, and banks have responded by raising the average fee in order to recoup some of their lost revenue.

Overall, this is a net benefit. The reduction in the number of overdrafts per year can probably be attributed to legal and regulatory actions that have reined in or flatly banned some of the worst abuses: clearing large payments first, refusing to let customers opt out of overdraft protection, slowing down payment credits, and so forth. These were the most outrageous fees, and eliminating them has helped consumers even if banks have partially made up for it with higher fees. In inflation-adjusted terms, the average person is now paying $213 in overdraft fees each year, compared to $269 in 2009. It’s a start.

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You’re Probably Paying Less in Overdraft Fees Than You Used To

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Critics Say Chevron Flouted Pay-to-Play Law. FEC Says It’s All Good.

by FeliciaFoutch Posted on March 24, 2014

Mother Jones

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A recent decision from the Federal Elections Commission could overturn 70 years of precedent and defang a long-standing law that bars companies from buying favorable election results to gain federal contracts. Goodbye anti-pay-to-play laws, hello corporate America profiting off lucrative government deals based on campaign donations.

The trouble all stems from a single contribution made during the 2012 election. On October 7, 2012, oil giant Chevron donated $2.5 million to the Congressional Leadership Fund (CLF), a super PAC tied to John Boehner and House Republicans that spent almost $10 million in 2012, largely on ads attacking Democratic House candidates.

That raised the ire of Public Citizen, a liberal consumer advocate group. In a complaint sent to the FEC last year, Public Citizen and a handful of other groups claimed that Chevron and CLF violated a federal law (referred to as pay-to-play) that bans any corporation that holds a contract with the federal government from contributing to a political campaign. The complaint was sent after Public Citizen checked a public database of federal contractors and noticed that Chevron was listed as working with the government. Last week the FEC dismissed those complaints with an argument that could create a loophole a million dollars wide for other companies to exploit.

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Critics Say Chevron Flouted Pay-to-Play Law. FEC Says It’s All Good.

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Follow-up: Why Are We Adopting the Stupidest Possible Payment System in the US?

by 0xde2zx Posted on February 19, 2014

Mother Jones

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Yesterday I wondered aloud why it was taking so long for chip-and-PIN credit cards to come to America, and why, now that they’re finally here, we’re getting lame chip-and-signature cards instead.

First things first. There’s actually not a lot of mystery about why it’s taken so long, something I’ve written about before. Roughly speaking, the answer is that fraud detection in the US improved dramatically in the 90s, and that reduced the motivation to make the switch. Conversely, fraud detection in Europe was more primitive, so it made a lot of financial sense to transition to chip-and-PIN. Most of the transition costs were paid for by reduced fraud.

So that explains that. But now that we’re finally making the switch, why are we moving toward chip-and-signature? The whole point of smart cards is that the chip makes them hard to counterfeit and the PIN makes them hard for thieves to use. Chip-and-signature cards are still hard to counterfeit, but they can be used by thieves just as easily as current mag stripe cards. Plus they aren’t universally compatible in the rest of the world.

The answer, apparently, is that banks don’t want to do it:

The changeover in this country will be costly—as much as $35 billion, by some estimates…. According to the National Retail Federation, merchants are willing to spend that money if the banks issue the right kind of smart cards. Retailers want what are called chip-and-PIN cards, which require that a PIN be entered for each transaction.

….At a news conference Tuesday, Mallory Duncan, the federation’s senior vice president and general counsel, called chip-and-signature cards a bad idea. “It’s like locking the front door and leaving the back door open,” he said. “It would be a shame to spend all that money for a half-baked solution.”

The American Bankers Association said the marketplace should be able to accommodate both chip-and-signature and chip-and-PIN smart cards. “It’s the only way for this complex payments system to continue to deliver convenience and meet the needs of consumers,” said Jeff Sigmund, the association’s senior director of public relations.

Well, sure, the marketplace can accommodate both, but banks are apparently planning to issue signature-only cards, not cards that can be used both ways. Why?

“Merchants see the PIN as a more secure option, but it doesn’t make a lot of sense to the banks because it really doesn’t do anything,” said Alphonse Pascual, a senior analyst for security, risk and fraud at Javelin Strategy & Research. “It would be like putting a new deadbolt on your front door and then putting gum in the lock. It’s the lock that’s protecting you, not the gum.”

This makes no sense. A PIN foils thieves. What’s really going on here is that it’s merchants who mostly pay the costs of fraud these days, so banks don’t care much about it. Apparently, this means they just don’t want to deal with the hassle of PIN cards:

There’s also the concern that Americans, who tend to have a variety of credit cards, would have a tough time managing multiple PINS.

“If the consumer doesn’t want to memorize all those numbers, they might choose the same PIN for each card,” said Randy Vanderhoof, executive director of the nonprofit Smart Card Alliance. “Using one PIN to protect 10 different cards in your wallet now exposes you to the potential for increased fraud.”

PIN technology could pose a challenge to credit card issuers, which must deal with users who can’t remember their PIN or need to change it. That was a problem when Canada switched to chip-and-PIN credit cards, but people eventually got accustomed to it.

This is a combination of insulting and crazy. Americans are already accustomed to using PINs, and would have no more trouble managing multiple PINs than Danes and Italians do. And while using one PIN for ten cards might not exactly be best practice, it’s certainly better than no PIN at all. How could it possibly increase fraud? Signature cards can be used with nothing more than a scrawl.

And then we get to the last paragraph. If cards have PINs, banks and card issuers will have to spend a bit of money helping people change their PINs.

And that seems to be what we’re left with. Merchants are willing to make the switch. Consumers would get used to the switch pretty quickly. But card issuers don’t want to bother because it might increase their customer support costs a bit during the transition.

Once again, the American financial industry is proving that there’s nothing they can’t screw up. For the last two decades they’ve been just about the least consumer-enhancing industry in the country, and they’re continuing their value-destroying ways in the transition to smart cards. I guess we shouldn’t really be surprised.

Bottom line: This really begs for regulation from the Fed or Congress. With all the public outrage over recent data breaches, you’d think this would be a relatively bipartisan kind of issue. I understand that it involves regulation, and Republicans have a knee-jerk opposition to regulation of any kind, but honestly, this is precisely the kind of regulation Congress is made for. Do your jobs, folks.

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Follow-up: Why Are We Adopting the Stupidest Possible Payment System in the US?

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Comcast-Time Warner Merger Really Has Nothing to do With You and Me

by hoseawilder7387 Posted on February 14, 2014

Mother Jones

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Via Matt Yglesias, I see that Matthew Klein has finally written a short post that explains what’s really behind the Comcast-Time Warner merger:

To understand what the deal is really about, remember that pay-TV distributors are at the mercy of the networks that sell programming. According to Bloomberg Industries analyst Paul Sweeney, about half your cable bill goes to companies such as Viacom Inc. and Walt Disney Co. The networks consistently raise prices about 10 percent a year on average, irrespective of the state of the economy. By contrast, the typical cable bill only goes up by about 5 percent a year. Cable companies have eaten the difference by lowering their margins and cutting costs elsewhere, but there are limits to both processes.

This margin squeeze is why Time Warner Inc. spun off its cable business, why Comcast acquired NBC Universal, and why Internet-based subscription services offered by Netflix Inc. and Amazon.com Inc. have invested in original programming as a defense against the rising cost of licensing content. It also explains why Time Warner Cable had to cave to demands for higher fees from CBS Corp. a few months ago. Merging the two biggest cable operators might give them more bargaining power with the networks, especially if it encourages DIRECTV and Dish Network Corp. to consolidate the satellite business.

In the same way that the health care business can largely be understood as a competition between suppliers (hospitals, pharma, etc.) and consumers (insurance companies), the video entertainment business should largely be understood as a competition between content producers (Disney, Viacom, etc.) and content distributors (Comcast, Verizon, etc.). Ideally, you want competition everywhere. That is, you want enough producers that they compete with each other; enough distributors that they compete with each other; and enough balance between the two that neither producers nor distributors have the whip hand against the other.

So the question we should be asking about the Comcast-Time Warner merger is simple: Do content distributors need more clout? Klein suggests they do: they’re at the mercy of rapacious networks who keep raising carriage fees and they don’t have the market power to fight back. The merger will help that.

That may be, but I’d like to hear more about this. Networks and cable companies fight constantly, as you know if you’ve ever seen dueling ads about why your favorite shows will soon be off the air in your area. The networks run ads telling people that if they don’t want to miss the next episode of CSI, they better call their cable company and tell them to knock off the gamesmanship. The cable companies run ads insisting that the network is jacking up rates unconscionably and everyone should besiege them with demands that they be more reasonable. Usually this continues until about one minute before the current contract runs out, at which point both sides make a deal. Occasionally it goes longer, and certain shows really are blacked out for a while.

If you’ve ever had trouble figuring out which side is really at fault in one of these battles of the titans, well, that’s the problem. Two mega-corporations are duking it out, and the rest of us are just caught in the middle. From a consumer point of view, part of the problem is that we’ve all been trained to hate the cable companies who send us outrageous bills every month and love the content producers who make all the shows we love. But don’t fall for that: it’s just an artifact of which business happens to be customer facing. The truth is that both sides are big, soulless corporations who have no claim on your emotions. That said, I’d normally take Klein’s side of this except for one thing: would a bigger Comcast really have more negotiating clout than they do now? I guess that’s possible, but they have a helluva lot of clout already. No network can afford to be shut out of Comcast’s market for long. So it’s not clear to me that a bigger Comcast would really do much for the rest of us.

In any case, that’s how to think of this stuff. Practically every big battle you see in the media arena is, one way or another, a battle between gigantic producers on the one hand and gigantic distributors on the other. That’s what net neutrality is all about. That’s what copyright battles are all about. That’s what broadband fights are all about. And that’s what this merger is all about. We are all just pawns watching the fireworks.

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Comcast-Time Warner Merger Really Has Nothing to do With You and Me

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North Carolina Protected Duke Energy from Pollution Complaints Before the Company’s Coal Ash Disaster

by Aale Thomas Posted on February 10, 2014

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Last year, North Carolina’s top environmental regulators thwarted three separate Clean Water Act lawsuits aimed at forcing Duke Energy, the largest electricity company in the country, to clean up its toxic coal ash pits in the state. That June, the state went even further, saying it would handle environmental enforcement at every one of Duke’s 31 coal ash storage ponds in the state—an act that protected the company from further federal lawsuits. Last week, one of those coal ash storage ponds ruptured, belching more than 80,000 tons of coal ash into the Dan River.

Now environmental groups and former regulators are charging that North Carolina Republican Gov. Pat McCrory, who worked for Duke for 30 years, has created an atmosphere where the penalties for polluting the environment are low.

The Associated Press reports that McCrory’s Department of Environment and Natural Resources blocked three federal Clean Water Act suits in 2013 by stepping in with its own enforcement authority “at the last minute.” This protected Duke from the kinds of stiff fines and penalties that can result from federal lawsuits. Instead, state regulators arranged settlements that carried miniscule financial penalties and did not require Duke to change how it stores the toxic byproducts of its coal-fired power plants. After blocking the first three suits, which were brought by the Southern Environmental Law Center, the state filed notices saying that it would handle environmental enforcement at every one of Duke’s remaining North Carolina coal ash storage sites—protecting the company from Clean Water Act lawsuits linked to its coal waste once and for all.

The Dan River disaster became public on February 3—one day after Duke officials had been alerted that a pipe beneath a coal ash storage pit of nearly 30 acres had ruptured. “The company reports that up to 82,000 tons of coal ash mixed with 27 million gallons of contaminated water drained out, turning the river gray and cloudy for miles,” the AP reports. “The accident ranks as the third largest such coal ash spill in the nation’s history.”

The AP story suggests that McCrory’s settlements with Duke are part of a pattern of regulatory slackness. A former North Carolina regulator who recently left to work for an environmental advocacy group after nine years working for the state told the AP that under McCrory, who took office in early 2013, she was often instructed not to fine or cite polluters, but instead to help them reach compliance standards. The article continues:

Since his unsuccessful first campaign for governor in 2008, campaign finance reports show Duke Energy, its political action committee, executives and their immediate families have donated at least $1.1 million to McCrory’s campaign and affiliated groups that spent on TV ads, mailings and events to support him.

After winning in 2012, McCrory has appointed former Duke employees like himself to key posts, including state Commerce Secretary Sharon Decker.

His appointee to oversee the state environmental department, Raleigh businessman John Skvarla, describes his agency’s role as being a “partner” to those it regulates, whom he refers to as “customers.”

“That is why we have been able to turn DENR from North Carolina’s No. 1 obstacle of resistance into a customer-friendly juggernaut in such a short time,” Skvarla wrote in a letter to the editor of the News & Observer of Raleigh, published in December. “People in the private sector pour their hearts and souls into their work; instead of crushing their dreams, they now have a state government that treats them as partners.”

McCrory hit back, telling the AP that his administration is “the first in North Carolina history to take legal action against the utility regarding coal ash ponds.” Duke Energy has also made large donations to Democrats, giving $10 million for the Democratic National Convention in 2012.

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North Carolina Protected Duke Energy from Pollution Complaints Before the Company’s Coal Ash Disaster

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JPMorgan Paid $20 Billion in Fines Last Year—So Its Board Is Giving Jamie Dimon a Raise

by TerryQnhtwe Posted on January 24, 2014

Mother Jones

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The New York Times reported Friday that Jamie Dimon, the silver-haired CEO of JPMorgan Chase, the nation’s largest bank by assets, is getting a raise. Dimon is poised to add a few million to the $11.5 million compensation package he took home in 2013.

If you so much as glanced at the news last year, this bit of news may puzzle you. JPMorgan, in many ways, had a miserable 2013. JPMorgan paid $1 billion in fines in the wake of the “London Whale” scandal, in which the bank lost $6 billion on a market-rattling blunder by a trader named Bruno Iksil. The bank also paid $13 billion to settle charges that it’d peddled risky mortgage-backed securities. And it forked over another $2 billion to settle charges for failing to spot Bernie Madoff’s ponzi scheme, which Madoff perpetrated largely using JPMorgan accounts. All told, the bank paid out roughly $20 billion in penalties to federal regulators over a slew of screw-ups and failures.

2013 was a rough year for JPMorgan. So why is Dimon getting a raise? The answer, in part, will make your blood boil. Here’s the money quote in the Times:

Mr. Dimon’s defenders point to his active role in negotiating a string of government settlements that helped JPMorgan move beyond some of its biggest legal problems. He has also solidified his support among board members, according to the people briefed on the matter, by acting as a chief negotiator as JPMorgan worked out a string of banner government settlements this year.

…

Mr. Dimon’s star has risen more recently as he took on a critical role in negotiating both the bank’s $13 billion settlement with government authorities over its sale of mortgage-backed securities in the years before the financial crisis and the $2 billion settlement over accusations that the bank turned a blind eye to signs of fraud surrounding Bernard L. Madoff.

Just hours before the Justice Department was planning to announce civil charges against JPMorgan over its sales of shaky mortgage investments in September, Mr. Dimon personally reached out to Attorney General Eric H. Holder Jr.—a move that averted a lawsuit and ultimately resulted in the brokered deal. Just a few months later, Mr. Dimon acted as an emissary again, this time, meeting with Preet Bharara, the United States attorney in Manhattan leading the investigation into the Madoff Ponzi scheme.

In other words, as big as those multibillion-dollar settlements were, JPMorgan board members believe the bank’s legal problems could’ve been worse. Blast-a-hole-in-our-balance-sheet worse. And so Dimon’s pay bump is a reward for locking horns with bank regulators and federal authorities and hashing out settlement deals that were favorable to the bank. He’s getting a raise because he beat the regulators, played them so well, JPMorgan board members seem to be saying, that he deserves to be rewarded for the deals he helped engineer.

There are other factors, too. Despite its legal headaches, JPMorgan’s stock price climbed 22 percent over the past year, and the bank recorded profits of $17.9 billion in 2013. But to read that Dimon’s savvy negotiating has won him a raise—and don’t forget that no top bank executives have gone to jail for actions related to the 2008 financial meltdown—brings to mind the old Dick Durbin quote about banks and Washington: “They frankly own the place.”

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JPMorgan Paid $20 Billion in Fines Last Year—So Its Board Is Giving Jamie Dimon a Raise

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West Virginia Spill Exposes Disturbing Lack of Data About Hazardous Chemicals

by GlennaNVYhnbrcm Posted on January 15, 2014

Mother Jones

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This story originally appeared on the Huffington Post and is republished here as part of the Climate Desk collaboration.

The 300,000 residents of nine West Virginia counties affected by last Thursday’s chemical spill are slowly starting to get notice that they can turn on their taps again. But many are still wondering why they didn’t have more information about the potential dangers in their own backyard.

As much as 7,500 gallons of 4-methylcyclohexane methanol (also known as crude MCHM) spilled into the Elk River about a mile and a half upstream from where the West Virginia American Water utility draws its supply. The coal-cleaning chemical came from a storage facility owned by Freedom Industries and located in Charleston, the state capital.

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West Virginia Spill Exposes Disturbing Lack of Data About Hazardous Chemicals

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How the West Virginia Spill Exposes Our Lax Chemical Laws

by ElouiseR69 Posted on January 13, 2014

Mother Jones

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The West Virginia chemical spill that left some 300,000 people without access to water has exposed a gaping hole in the country’s chemical regulatory system, according to environmental experts.

Much the state remains under a drinking-water advisory after the spill last week into the Elk River near a water treatment facility. As much as 7,500 gallons of the chemical 4-methylcyclohexane methanol, which is used in the washing of coal, leaked from a tank owned by a company called Freedom Industries.

A rush on bottled water ensued, leading to empty store shelves and emergency water delivery operations. According to news reports, 10 people were hospitalized following the leak, but none in serious condition.

The spill and ensuing drinking water shortage have drawn attention to a very lax system governing the use of chemicals, according to Richard Denison, a senior scientist at the Environmental Defense Fund who specializes in chemical regulation. “Here we have a situation where we suddenly have a spill of a chemical, and little or no information is available on that chemical,” says Denison.

An empty West Virginia store shelf Foo Conner/Flickr

The problem is not necessarily that 4-methylcyclohexane methanol, or MCHM, is highly toxic. Rather, Denison says, the problem is that not a great deal about its toxicity is known. Denison has managed to track down a description of one 1990 study, conducted by manufacturer Eastman Chemical, which identified a highly lethal dose, in rats, of 825 milligrams per kilogram of body weight. But how that applies to humans at much lower doses in water isn’t necessarily clear.

In response to the crisis, the Centers for Disease Control and Prevention and the Environmental Protection Agency have determined that a level of 1 part per million in water is safe. The drinking water advisory is now slowly being lifted on an area-by-area basis.

So why do we know so little? All of this traces back to the 1976 Toxic Substances Control Act, or TSCA, the law under which the Environmental Protection Agency regulates the production of chemicals. According to EPA spokeswoman Alisha Johnson, MCHM is one of a large group of chemicals that were already in use when the law was passed, and so were “grandfathered” under it. This situation “provided EPA with very limited ability to require testing on those existing chemicals to determine if they are safe,” she says.

There are more than 60,000 such grandfathered chemicals, according to Johnson. A leak involving any of them into water could trigger to a similar situation of uncertainty—meaning that this spill has served to underscore a major gap in how we regulate chemicals.

“What we have now is a situation where because our system, our policies, and regulations don’t require this information be developed, we’re left scrambling when something like this happens,” says Denison.

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How the West Virginia Spill Exposes Our Lax Chemical Laws

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