Thursday, December 22, 2011

Throw Them All Out

You know there's something wrong when people go to Washington, earn a salary of $174,000 a year for a dozen years or so and are suddenly worth millions. How does that happen? Peter Schweizer explains it with a calm lucidity that is an impressive display of self-control, given the injustice he documents in his book Throw Them All Out: How Politicians and Their Friends Get rich Off Insider Tips, Land Deals, and Cronyism That Would Send the Rest of Us to Prison.

The stories Schweizer recounts are infuriating and the worst of it is that, for the most part, what these people are doing is perfectly legal. It's corrupt, it's unfair, it's a betrayal of the trust of the American people, but it's legal because the people who make the laws and oversee the Congress are the same people who are profiting from he corruption.

Schweizer focuses in particular on three kinds of political venality: Insider trading, earmarks, and paybacks of taxpayer money to donors (cronyism). He never mentions the political party to which the thieves belong, but there are representatives of both parties discussed in the book. His prime examples on the Republican side are former Speaker of the House Dennis Hastert, and former Senator Judd Gregg. The Democrat rogues gallery includes Senator John Kerry, former House Speaker Nancy Pelosi, Senate Majority Leader Harry Reid, and President Barack Obama.

There are, in addition, many others from both parties whose shenanigans he mentions, or could have mentioned, to illustrate the rampant corruption of what he calls the Permanent Political Class.

Some examples: During the debate over Medicare Part D in 2003, Senator Kerry made purchases of $5 million worth of stocks in pharmaceutical and health plan companies that he knew, by virtue of his position on his Senate committee, would profit from the legislation. He and his wife made millions from their advanced knowledge of the winners and losers. Kerry and others essentially bet on which companies would do well, knew in advance which companies these would be, and were in position to help those companies succeed.

It's not unlike a baseball player betting on games. It can get a baseball player thrown out of baseball - Pete Rose was banned from the Hall of Fame for it - but it's all legal when members of Congress do it.

Another example: In 2002 House Speaker Dennis Hastert inserted a $207 million dollar earmark into a federal highway bill that would facilitate construction of a road that just happened to run past his own property, raising the value of Hastert's acreage by 140%.

Nor is the President above it all. His graft is especially revolting since it involves direct giveaways of taxpayers' money to his donors and supporters. On pages 100 and 101 of the book Schweizer lists almost fifty of President Obama's bundlers, donors, and supporters who raised vast amounts of money for his campaign and who were rewarded for their efforts with millions, in some cases billions, of dollars of stimulus money.

Leucadia Energy had one employee and $120,000 in annual revenue, but it received billions of dollars in stimulus money because the CEO of its parent company, Leucadia National, was Ian Cumming who was a member of the president's 2008 National Finance Committee. The billions in stimulus created a net increase of three jobs for Leucadia.

A 35% stake in Solyndra, another green energy company, was held by an Oklahoma billionaire by the name of George Kaiser who raised at least $100,000 for the Obama campaign. As soon as the stimulus was passed Solyndra was awarded a government-backed loan of $573 million, despite widespread warnings that Solyndra was a poor financial risk. The company went bankrupt, as expected, and the taxpayers are left to pick up the tab. Kaiser didn't lose anything.

Schweizer closes his chapter on presidential cronyism with this:
Imagine for a minute that you are a corporate executive and you start using your companies assets to "invest" in projects that in turn benefit you directly. What would happen? You would be risking possible criminal charges for the misuse of those assets. But if it's taxpayer money? Suddenly it becomes legal. Even acceptable.

And for the billionaire who is looking to get a big return on his investment, there are few returns that can be higher than those resulting from campaign contributions. After all, how else can you turn half a million dollars from yourself and your friends into hundreds of millions of dollars after a single election?

Not surprisingly, many of those named here are raising money again for President Obama's 2012campaign. As a jobs program - the stated purpose - these billions in grants and loans were a failure. But as a method of transferring billions in taxpayer funds to friends, cronies, and supporters, they worked perfectly.
It makes you wonder why the Occupy Wall Street crowd is on Wall Street and not on the Capitol steps and the White House lawn.

This brief review is scarcely the tip of the iceberg that Schweizer uncovers for us. Every citizen, certainly every voter, should read this book. It'll make your blood boil and probably cause you to demand term limits for our elected kleptocrats. The problem, of course, is that the kleptocracy is the very group that has to legislate the limitations on how much time they have to make themselves rich. Fat chance that the fat cats will do that.