Sources: “European Chemical Clampdown Reaches Across Atlantic,” David Biello, Scientific American, Sept. 30, 2008; “How Europe’s New Chemical Rules Affect U.S.,” Environmental Defense Fund, Sept. 30, 2008; “U.S. Lags Behind Europe in Regulating Toxicity of Everyday Products,” Mark Schapiro, Democracy Now! Feb. 24, 2009
6. As economy shrinks, D.C. lobbying grows In 2008, as the economy tumbled and unemployment soared, Washington lobbyists working for special interests were paid $3.2 billion — more than any other year on record. According to the Center for Responsive Politics, special interests spent $32,523 per legislator, per day, for every day Congress was in session.
One event that triggered the lobbying boom, according to CRP director Sheila Krumholz, was the federal bailout — with the federal government ensuring that the lobbyists got a piece of the pie. Ironically, some of the first in line were the same players who helped precipitate the nation’s sharp economic downturn by engaging in high-risk lending practices.
“Even though some financial, insurance and real estate interests pulled back last year, they still managed to spend more than $450 million as a sector to lobby policymakers,” Krumholz noted. “That can buy a lot of influence, and it’s a fraction of what the financial sector is reaping through the government’s bailout program.”
The list of highest-ranking spenders on Washington lobbying reads like a roster of some of the most powerful interests nationwide. Topping the list was the health sector, which spent $478.5 million lobbying Congress last year. A close runner-up was the finance, insurance and real-estate sector, spending $453.5 million. Pharmaceutical companies plunked down $230 million; electric utilities spent $156.7 million; and oil and gas companies paid lobbyists $133.2 million.
Source: “Washington Lobbying Grew to $3.2 Billion Last Year, Despite Economy,” Center for Responsive Politics, OpenSecrets.org
7. Obama’s controversial defense appointees President Barack Obama’s appointments to the Department of Defense have raised serious questions among critics who’ve studied their track records. Although the news media haven’t paid much attention, the defense appointees bring to the administration controversial histories and conflicts of interest due to close ties to defense contractors.
Obama’s decision to retain Robert Gates, secretary of defense under President George W. Bush, marks the first time in history that a president has opted to keep a defense secretary of an outgoing opposing party in power.
Gates, a former CIA director, has faced criticism for allegedly spinning intelligence reports for political means. In Failure of Intelligence: The Decline and Fall of the CIA, author and former CIA analyst Melvin Goodman described him as “the chief action officer for the Reagan administration’s drive to tailor intelligence reporting to White House political desires.” Gates also came under scrutiny for questions surrounding whether he misled Congress during the Irancontra scandal in the mid-1980s, and was accused of withholding information from intelligence committees when the U.S. provided military aid to Saddam Hussein during the Iran-Iraq war.
Critics are also uneasy about the appointment of Deputy Defense Secretary William Lynn, who formerly served as a senior vice president at defense giant Raytheon Company and was a registered lobbyist for Raytheon until July 2008. Lynn, who previously served as Pentagon comptroller under the Clinton administration, came under fire during his confirmation hearing for “questionable accounting practices.
“The Defense Department failed multiple audits under Lynn’s leadership because it was unable to properly account for $3.4 trillion in financial transactions made over the course of several years.”
Sources: “The Danger of Keeping Robert Gates,” Robert Parry, ConsortiumNews.com, Nov. 13, 2008; “Obama’s Defense Department Appointees: The $3.4 Trillion Question,” Andrew Hughes, Global Research, Feb. 13, 2009; “Obama Nominee Admiral Dennis Blair Aided perpetrators of 1999 Church Killings in East Timor,” Allan Nairn, Democracy Now! Jan. 7, 2009; “Ties to Chevron, Boeing Raise Concern on Possible NSA Pick,” Roxana Tiron, The Hill, Nov. 24, 2008
8. Big business cheats the IRS The Cayman Islands and Bermuda are magnets for Bank of America, Citigroup, American International Group and 11 other financial giants that were the beneficiaries of the federal government’s 2008 Wall Street bailout. It’s not the balmy weather that inspires some of America’s wealthiest companies to open operations in the Caribbean archipelago: the offshore oases provide safe harbors to stash cash out of the reach of Uncle Sam.
According to a 2008 report by the Government Accountability Office, which was largely ignored by the news media, 83 of the top publicly-held U.S. companies, including some receiving substantial portions of federal bailout dollars, have operations in tax havens that allow them to avoid paying their fair share to the Internal Revenue Service. The report also spotlighted the activities of Union Bank of Switzerland (UBS), which has helped wealthy Americans to use tax schemes to cheat the IRS.
In December 2008, banking giant Goldman Sachs reported its first quarterly loss, and promptly followed up with a statement that its tax rate would drop from 34.1 percent to 1 percent, citing “changes in geographic earnings mix” as the reason. The difference: instead of paying $6 billion in total worldwide taxes as it did in 2007, Goldman Sachs would pay a total of $14 million in 2008. In the same year, it received $10 billion and debt guarantees from the U.S. government.
“The problem is larger than Goldman Sachs,” U.S. Rep. Lloyd Doggett, a Texas Democrat who serves on the House Ways and Means Committee, told Bloomberg News. “With the right hand out begging for bailout money, the left is hiding it offshore.”
Sources: “Goldman Sachs’s Tax Rate Drops to 1 percent or $14 Million,” Christine Harper, Bloomberg News, Dec. 16, 2008; “Gimme Shelter: Tax Evasion and the Obama Administration,” Thomas B. Edsall, The Huffington Post, Feb. 23, 2009
9. U.S. connected to white phosphorous strikes in Gaza In mid-January, as part of a military campaign, the Israeli Defense Forces fired several shells that hit the headquarters of a United Nations relief agency in Gaza City, destroying provisions for basic aid like food and medicine. The shells contained white phosphorous (referred to as “Willy Pete” in military slang), a smoke-producing, spontaneously flammable agent designed to obscure battle territory that also can ignite buildings or cause grotesque burns if it touches the skin.
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