Truthout Stories Fri, 26 Dec 2014 01:35:00 -0500 en-gb Non-Violence and the Lost Message of Jesus

Belfast - I recently visited Assisi, the home of St. Francis and St. Clare, two great spirits whose lives have inspired us and millions of people around the world.

St. Francis, a man of peace, and St. Clare, a woman of prayer, whose message of love, compassion, care for humans, animals and the environment comes down through history to speak to us in a very relevant and inspirational way.

Today, in the 2lst century, as we the human family face increasing violence, we are challenged to admit that we are on the wrong path, and that we need to find new ways of thinking and doing things from a global perspective.

Peace is a beautiful gift to have in life, and it is particularly treasured by those who have known violent conflict, war, famine, disease and poverty. I believe that Peace is a basic human right for every individual and all people.

Love for others and respect for their rights and their human dignity, irrespective of who or what they are, no matter what religion – or none – that they choose to follow, will bring about real change and set in motion proper relationships. With such relationships built on equality and trust, we can work together on so many of the threats to our common humanity.

Poverty is one such threat and Pope Francis challenges us to take care of the poor, and has declared his desire that the Catholic Church be a church of the poor and for the poor. To meet this challenge, we can each ask ourselves 'how will what I do today help the poor'?.

Pope Francis also has spoken about the need to build fraternity amongst the nations. This is important because building trust amongst people and countries will help bring peace to our interdependent, inter-connected world.

Violence begets violence as we witness every day on our television screens, so the choice between violence and non-violence, is up to each one of us. However, if we do not teach non-violence in our education systems and in our religious institutions, how can we make that choice?

I believe that all faith traditions and secular societies need to work together and teach the way of non-violence as a way of living, also as a political science and means for bringing about social and political change wherever we live.

A grave responsibility lies with the different religious traditions to give spiritual guidance and a clear message, particularly on the questions of economic injustice, 'armed resistance', arms, militarism and war.

As a Christian living in a violent ethnic political conflict in Northern Ireland, and caught between the violence of the British army and the Irish Republican Army, I was forced to confront myself with the questions, 'do you ever kill?' and 'is there such a thing as a just war?'.

During my spiritual journey I reached the absolute conviction that killing is wrong and that the just war theory is, in the words of the late Fr. John L. McKenzie, "a phony piece of morality".

I became a pacifist because I believe every human life is sacred and we have no right to kill each other. When we deepen our love and compassion for all our brothers and sisters, it is not possible to torture or kill anyone, no matter who they are or what they do.

I also believe that Jesus was a pacifist and I agree with McKenzie when he writes: "if we cannot know from the New Testament that Jesus rejected violence absolutely, then we can know nothing of Jesus' person or message. It is the clearest of themes."

For the first three hundred years after Christ, the early Christian communities lived in total commitment to Jesus's non-violence. Sadly, for the next 1700 years, Christian mainline churches have not believed, taught or lived Jesus's simple message: love your enemies, do not kill.

During the last 1700 years, Christians have moved so far away from the Christic life of non-violence that we find ourselves in the terrible dilemma of condemning one kind of homicide and violence while paying for, actively participating in or supporting homicidal violence and war on a magnitude far greater than that which we condemn in others.

There is indeed a longstanding defeat in our theology. To help us out of this dilemma, we need to hear the full gospel message from our Christian leaders.

We need to reject the 'just war' theology and develop a theology in keeping with Jesus' non-violence.

Some Christians believe that the 'just war' theory can be applied and that they can use violence – that is, 'armed struggle/armed resistance' – or can be adopted by governments to justify ongoing war.

It is precisely because of this 'bad' theology that we need, from our spiritual or religious leaders, a clear message and an unambiguous proclamation that violence is not the way of Jesus, violence is not the way of Christianity, and that armaments, nuclear weapons, militarism and war must be abolished and replaced with a more human and moral way of solving our problems without killing each other.

Opinion Thu, 25 Dec 2014 12:54:33 -0500
From the ER to the Courtroom: How Nonprofit Hospitals Are Seizing Patients' Wages

On the eastern edge of St. Joseph, Missouri, lies the small city's only hospital, a landmark of brick and glass. Music from a player piano greets visitors at the main entrance, and inside, the bright hallways seem endless. Long known as Heartland Regional Medical Center, the nonprofit hospital and its system of clinics recently rebranded. Now they're called Mosaic Life Care, because, their promotional materials say: "We offer much more than health care. We offer life care."

Two miles away, at the rear of a low-slung building is a key piece of Mosaic—Heartland's very own for-profit debt collection agency.

When patients receive care at Heartland and don't or can't pay, their bills often end up here at Northwest Financial Services. And if those patients don't meet Northwest's demands, their debts can make another, final stop: the Buchanan County Courthouse.

From 2009 through 2013, Northwest filed more than 11,000 lawsuits. When it secured a judgment, as it typically did, Northwest was entitled to seize a hefty portion of a debtor's paycheck. During those years, the company garnished the pay of about 6,000 people and seized at least $12 million—an average of about $2,000 each, according to a ProPublica analysis of state court data.

Many were uninsured Heartland patients who were eligible for financial aid that would have eliminated or drastically cut their bills. Instead, they were charged full price for their care, without the deep discounts negotiated by insurers, according to court records, interviews and data provided by Heartland. No other Missouri hospital sued more of its patients.

Blue collar workers, Walmart cashiers, nursing home aides, clerical staffers—these types of patients have long been the most vulnerable to unexpected debt. They can't afford insurance, yet they're not poor enough for Medicaid. Even after the 2010 Affordable Care Act, about 30 million Americans remain uninsured, in part because some states, like Missouri, have not expanded Medicaid to cover more of the poor.

Earlier this year, ProPublica and NPR reported that the wages of millions of U.S. workers are diverted to pay off a variety of consumer debts. Most states, like Missouri, allow creditors to take a quarter of after-tax wages—an amount that government surveys show is unaffordable for lower-income families.

Consumer advocates say the laws governing wage garnishment are outdated and overly punitive, regardless of the debt's source. But the consequences are especially dire when garnishment is used to collect unavoidable health care bills—with interest and legal fees piled on.

No one tracks how many hospitals sue their patients and how frequently, but ProPublica and NPR found hospitals that routinely did so in Kansas, Oklahoma, Nebraska, and Alabama, as well as Missouri. The number of suits is clearly in the tens of thousands annually. In Missouri alone, hospitals and debt collection firms working for them filed more than 15,000 suits in 2013.

Court records also revealed stark differences in how hospitals within each state pursued patients who couldn't pay their bills. In Missouri, a handful of hospitals, Heartland foremost among them, accounted for an outsized portion of suits. But many others, including the state's largest hospital, rarely, if ever, sued.

Heartland's aggressive tactics aren't because the hospital is strapped for cash. Despite being based in an economically struggling county of just 90,000, Heartland reported a $45 million profit last year and paid its chief executive $1.2 million, according to its annual report. The hospital declined to discuss Northwest's finances.

As a nonprofit, Heartland pays no income taxes and no property taxes on the acres of land it owns. In exchange for these tax breaks, it is expected to provide a benefit to the community—most crucially by providing care to lower income patients who can't afford to pay.

Tama Wagner, the hospital's chief brand officer, said the hospital does everything it can to fulfill that mission. Patients are offered multiple opportunities to qualify for financial assistance and avoid the possibility of legal action, she said, adding that it's better for everyone "if we attempt to work on things before it gets to this level."

But if patients don't utilize those resources, she said, the hospital must take action. "No one goes into this with the goal or the desire to ruin someone's life," she said. "But at the same time, the services were rendered, and we have to figure out how to get them paid for."

Asked why the hospital sues more patients than any other in the state, Wagner said, "I don't know."

Chi Chi Wu, an attorney with the National Consumer Law Center, said Heartland's tactics ran counter to its mission. Nonprofit hospitals are given tax-exempt status "because they are supposed to be serving the public and especially the poor," she said.

But if hospitals are charging low-income, uninsured patients "even more and then garnishing their wages on the basis of these inflated amounts," there ought to be consequences, she said. "They should lose their tax-exempt status."

The center has recommended that federal regulators prohibit debt collectors from garnishing wages based on the high prices hospitals charge uninsured patients.

In interviews, former patients said they'd run up debts to Heartland mostly because, in an emergency, it's their only option. They never expected the hospital to seize their wages if they couldn't pay.

Northwest first sued Keith and Katie Herie when they couldn't afford the $14,000 bill for Katie's emergency appendectomy. While Northwest was seizing Keith Heries' pay for that suit, it sued him again over another hospital visit. Since 2006, the Heries have paid almost $20,000 and still owe at least $26,000, with interest mounting.

ProPublica and NPR shared Herie's case and other findings with Heartland's board of trustees, which is now reviewing the hospital's debt collection practices.

"Make it so people can make a dent in it," said Herie, 51, a drill operator. "There's a lot of people who want to be able to pay their medical bills...But they're not going to jeopardize their household for it."

Docket filled with patients

On a morning last month inside Buchanan County's historic courthouse, the docket was stocked with more than two dozen Northwest cases.

"You have quite a few today," the judge noted with easy familiarity to Northwest's attorney, who last year filed more than 1,000 such suits.

In 2013, Northwest won judgments in 77 percent of its cases, usually because the defendants didn't show up, court records show. Only 3 percent of those sued had an attorney. And all of the judgments tacked on a 9 percent interest rate to the debt, the most allowed under Missouri law.

Most of the defendants who made it to court that day waited glumly, not entirely sure how the proceedings were supposed to go. Some had been served with lawsuits at work: Denny's, Walmart, a pig slaughterhouse, a local charity. A woman and her daughter had both been sued.

Whether debtors show up or not, the outcome seldom varies.

Some former patients agree to payment plans to avoid garnishment. But since Northwest requires these arrangements to be renegotiated or paid "in full" after six months, the plans are not a guaranteed reprieve from court action. A Heartland spokeswoman would only say the periodic reviews were company policy.

When her case was called, Tammy Berry, who earns $8.20 an hour working at the fast food chain Taco John's, told the judge incredulously, "They're already garnishing my paycheck." The judge acknowledged that might be true. But not, he said, for the case on the docket that day.

Berry, 48, and her husband Keith, 47, were first sued by Northwest in 2009. Since then, Northwest has garnished $4,500 from Tammy Berry's pay, almost all of it going to pay off interest (Keith Berry said he does not work and is applying for disability payments). The couple still owes $7,000 on that debt. The couple has had a number of ailments including issues with Keith's heart, but they are unclear on which led to the suits.

Then, while still being garnished for those bills, Berry said she fell ill with pneumonia and went to Heartland for treatment again. Northwest sued them for $4,600 more.

Federal law only protects the poorest of the poor from garnishment, and Tammy Berry is not poor enough. If she takes home more than $870 a month, her wages can be garnished. On the weeks she works full-time, the garnishments bring her take-home pay below the minimum wage.

The Berrys had qualified for charity care at Heartland for bills at other times, so the hospital has known that their finances were precarious, yet they were charged full price for Tammy Berry's treatment for pneumonia. Heartland spokeswoman Tracey Clark declined to explain this, but said "information has to be a two-way street."

At the judge's urging, the Berrys said they met with Northwest's attorney and offered to pay $20 every two weeks. The attorney told them he was not authorized to accept such a low offer and they would have to ask Northwest directly, the Berrys said. In the end, they agreed that they owed the debt and Northwest received a judgment against them.

Outside the courtroom, the couple slumped on a bench dejectedly and said they were uncertain how they would absorb this latest blow.

"We're living paycheck to paycheck," said Tammy Berry.

Low-income patients often sued

Nonprofits, which make up nearly 60 percent of U.S. hospitals, have a history of aggressive debt collection.

In the early 2000s, several faced lawsuits challenging their tax-exempt status based on their use of such tactics. In 2003 the Wall Street Journal ran a series of articles detailing the frequent use of garnishments by hospitals, including the prestigious Yale-New Haven Hospital.

"When the public saw that, they were shocked," said Rick Wade, then the spokesman for the American Hospital Association.

The AHA asked its members to review their debt collection policies. Many hospital executives were surprised by what they found and decided to revamp their practices, Wade said.

A handful of states subsequently passed laws either restricting how nonprofit hospitals can collect on debts or dictating how much financial assistance they must provide.

But in most states, there are no clear guidelines, and over time, public scrutiny has faded, said Nancy Kane, a professor with Harvard's School of Public Health. "Hospitals are not looking for opportunities to give away charity care."

Under federal law, nonprofit hospitals must offer care at a reduced cost to lower income patients, a service often called charity care. But crucial details—how poor patients need to be, how much bills are reduced, and how policies are publicized—are left to the hospital. The Affordable Care Act empowered the IRS to set new requirements for publicizing this information, but those have yet to be finalized.

At Heartland, uninsured patients with household incomes up to double the poverty line ($23,340 for a single person without dependents) qualify for free care. Those with incomes between 200 percent and 300 percent of the line (up to $35,010) are billed at a rate similar to what an insurer pays, then have their bills cut in half.

Last year, about 8,700 Heartland patients had their bills cut or zeroed out, according to data provided by Heartland. About half were uninsured, while the rest were spared full payment of deductibles or other obligations not covered by their insurance.

But uninsured patients like the Berrys who don't receive charity care—either because they were turned down or never applied—are billed at Heartland's standard rates, the sticker price that insurers never pay. In 2013, more than two-thirds of the accounts Northwest handled involved uninsured patients, according to data provided by Heartland.

If a patient can't pay and Northwest obtains a judgment, it's too late. Hospital policy says once the collection agency has "incurred legal fees" on a case, the patient is ineligible for charity care, regardless of earnings.

Charity care, Clark said, is reserved for patients who "seek it and legitimately work with us."

Court data shows that in 2013 Northwest garnished the wages of hundreds of lower income patients—including more than 50 employees of fast food restaurants such as McDonald's and more than 100 Walmart employees. Heartland's Clark said that Walmart employees constituted "only 3.6 percent" of the thousands of patients currently being garnished by Northwest.

The employees of a local pig slaughterhouse were Heartland's most frequent target. One of the largest employers in St. Joseph, Triumph Foods processes 6 million hogs a year and has 2,800 employees, according to its website.

In 2013, at least 255 Triumph employees had their wages garnished by Northwest—about one of every 11 employees.

Eight years of garnishments, no end in sight

Just after Christmas in 2004, Katie Herie got sick and then sicker with sharp pains in her stomach, nausea and vomiting. "I was running a fever," she said. "It was bad."

But Herie was uninsured, so for four days she held off going to the hospital. Finally, she said, "enough was enough."

Her appendix had ruptured. Surgeons operated at 2 a.m., Herie recalled. After four nights at Heartland, she was discharged. The pain was gone. But in its place was a bill for more than $14,000—including a charge of nearly $3,000 for the room alone, according to court records.

It was a staggering debt for the Heries. At the time, Keith Herie worked as a truck driver, earning around $30,000 annually, and his job didn't come with insurance. The couple had two young children.

When the surgery took place, Heartland's financial assistance policy restricted aid to those with household incomes below the federal poverty level. For a family of four, that was $18,850, so the Heries didn't qualify.

Monthly payment plans were also out of reach, they said. Heartland's guidelines state, for instance, that balances up to $5,000 should be repaid within 18 months. For a $5,000 balance, that would be a minimum of $278 per month, a sizeable burden for lower and middle income families. There's nothing in the guidelines about still larger balances. Patients who can't pay the minimum may be eligible for a "special contract agreement," but that could add on 9 percent interest.

In a statement, Heartland's Clark said the interest is added because "more operating costs are incurred the longer an account is active." Patients have a host of options to pay, she said, including credit cards or loans "from family/friends."

"They will tell you to borrow the money from somebody to pay the bill. They don't care," said Katie Herie.

Clark said records show that Northwest spoke twice with Keith Herie about a payment plan in 2005, but that he "would not commit to an arrangement." Herie said he doesn't recall those conversations, only feeling overwhelmed at the prospect of repaying the debt.

So, in March 2006, Northwest sued the Heries, but not just for the appendectomy. The suit included a host of other outstanding bills, from a 2001 chiropractor bill for Keith Herie to a $10 pediatrician's bill for their son. It turned out that Northwest handled accounts for local medical practices as well as Heartland. ProPublica reviewed hundreds of Northwest cases and almost all of them involved at least one Heartland debt.

The Heries' total debt stood just shy of $17,000. But then came the interest. To start, there was $1,654 of "prejudgment interest," and, for as long as the balance remained outstanding, the Heries would incur interest on it at a rate of 9 percent a year.

Shortly after winning a judgment, Northwest moved to garnish Keith Herie's pay. It did the same to Katie Herie, who had begun work at Sam's Club. Missouri law allows Northwest to sue both spouses, regardless of who received the medical care. An operations memo for Northwest states that both spouses should be named in a suit if the balance exceeds $1,500.

Over the years, the garnishments have tracked the couple, following Keith to a better paying job, where he operates a drill for a firm that inventories coal stockpiles. Most of the time, Northwest has taken 10 percent of his after-tax pay, a break Missouri gives debtors with children.

Unfortunately for the Heries, other visits to the hospital followed—for chest pains, for the flu. For these Heartland visits, the Heries would have qualified for charity care if they had applied because Heartland had changed its policy to include patients making up to three times the poverty line. But the couple says no one told them.

In 2010, when the Heries were still being garnished as a result of the first suit, Northwest sued the couple again for $17,630, including a nearly $1,600 attorney fee and about $2,900 in interest.

Over the past several years, the Heries' wages have been garnished almost continuously, with the money sometimes going to pay down one debt, and sometimes the other. They have chipped away, paying nearly $20,000, but still owe more than $26,000.

Northwest also has a lien on the Heries' home, meaning that they are unable to sell it or refinance their mortgage without resolving the debt. According to the company operations memo, this is done in all cases in which the company has won a judgment exceeding $1,000.

"It's like a never never plan – you're never going to get rid of it and you're never going to get ahead of it," said Keith Herie.

Some hospitals rarely sue over debts

Other hospitals in Missouri have found ways to avoid suing low-income patients.

BJC HealthCare, a nonprofit, operates a chain of 12 hospitals, including Barnes-Jewish Hospital in St. Louis, the largest in the state. In 2013, Northwest filed about 2,300 lawsuits in Missouri courts. BJC filed 26.

Unlike Heartland, BJC automatically slices 25 percent off its standard rates for uninsured patients and never includes interest on payment plans, said June Fowler, BJC's spokeswoman.

As recently as only a few years ago, one BJC hospital often pursued patients in court. But BJC's CEO Steven Lipstein said the chain's new policies are both more efficient and more in line with its charitable mission. Patients who can pay a portion of their bills are more likely to, he said, if they learn about financial assistance and payment options early in the process.

Mark Rukavina, a Boston-area consultant who advises hospitals on billing issues, said many nonprofits actively seek to identify low-income patients who might qualify for help because they don't want to try to collect from those who can't pay.

At BJC, patients are often classified as eligible for financial assistance based on factors like their workplace, job title, or whether they live in a zip code with a low average income, Fowler said. While these patients might never complete the application process and be officially granted financial assistance, the hospital does not attempt collections on the accounts, she said.

At the end of each year, BJC writes off tens of millions of dollars in bad debt it believes comes from low-income patients who should have received charity care. By contrast, in its 2013 tax filings, Heartland says that none of its nearly $17 million in bad debt came from patients who were eligible for financial assistance.

For Natalie Elardo, 44, who has also been sued twice by Northwest over debts incurred at Heartland, policies like BJC's would have helped. Elardo had back surgery in 2000 and later received follow-up care for continued pain. She and her husband have paid more than $19,000 in garnished wages since being sued by Northwest in 2001. Their debts now exceed $80,000.

"I assume we will be paying them off until we die," she said.

Weighed down by similar medical debts, Keith Herie has considered declaring bankruptcy, but said he has focused mostly on working his way out, piling up as much overtime as he can.

"I've been putting it on hold, because I keep believing that somewheres I can make a difference, I can get ahead of this," he said.

The lawsuits and garnishments have had collateral effects. Herie's current job provides insurance for him, and he has added his children, but there is not room in the budget to add Katie. He has nothing saved for retirement.

Recently, Herie asked Northwest for a printout of all his debts. It ran to four pages filled with rows of charges in tiny type. It made him think bankruptcy may be the only answer.

"I'm catching up to 52 years old come spring, and I don't think I got another 10 years of this," he said. "I'm tired. I'm just mentally tired."

This story was co-published with NPR.

Jonathan Stray contributed to this story.

News Thu, 25 Dec 2014 12:39:11 -0500
Immigration Enforcement: A Tool to Silence Workers?

Last April, Ramon Mendez, a Mexican-born roofer in Los Angeles, complained to the Department of Labor that the contractor he worked for had stiffed him out of $12,000 he'd earned.

"Within a few days, immigration officers showed up at his house and put in a deportation order," says Cliff Smith, business manager of Roofers and Waterproofers Local 36 in Los Angeles. But Mendez was on the street nearby and saw them coming. He escaped, and with union, community, and political support, was able to make a deal. He turned himself in to the Bureau of Immigration and Customs Enforcement, and as he had no criminal background and the agency has a policy of staying neutral in labor disputes, he was given an "order of supervision" and later a work permit. However, says Smith, "vindictive ICE officials are requiring him to wear an ankle bracelet, making it difficult to hold steady employment to provide for his wife and four children."

Local 36 has no proof that the accused contractor reported Mendez to ICE, but the timing was definitely suspicious, Smith adds. The union has filed a Freedom of Information Act request for details on his case.

How employers use immigration laws against workers who speak out on the job is a complex, murky world. It's not as black-and-white as it was under George W. Bush, when massive ICE raids often coincided with union campaigns—such as the 2008 raid at Agriprocessors, a meatpacking plant in Postville, Iowa that the United Food and Commercial Workers was trying to organize, where 389 people were arrested and 270 jailed for using Social Security numbers that weren't their own.

The Obama administration doesn't do that kind of raid. Instead, it has preferred what some call "silent raids" or "desktop raids." It has quadrupled the number of audits of workplaces' I-9 "employment eligibility verification" forms, to about 2,000 a year, according to a 2013 report by the National Employment Law Project.

"It's not guys in black fatigues now," says Mike Henneberry of UFCW Local 5 in California. "It's bureaucrats on computers getting people fired."

"The buildup of immigration enforcement provides unscrupulous employers with additional tools to retaliate against immigrant workers who seek to exercise their rights," the NELP report said. More than 2 million undocumented immigrants were deported in Barack Obama's first five years in office—more than in the Bush administration's full eight—and employers are still finding ways to use immigration laws against workers complaining about conditions or trying to organize unions.

One common tactic is ordering workers to "reverify" their I-9 forms, as businesses are required to fire employees who can't prove they're legally allowed to work. "It's very convenient for employers," says an immigration specialist at one national union, who asked for anonymity because he is not authorized to speak on the record. "An I-9 audit gets rid of the complainers. It's really damaging when you have organizing going on."

When workers at Mi Pueblo Food Center, a Northern California supermarket chain, began picketing and leafleting in 2012, the stores "all of a sudden" volunteered to use ICE's E-Verify database to check workers' Social Security numbers, even though it had never enrolled before, says Henneberry. That was "pretty bizarre" given that the chain caters mainly to Mexican and other Latino immigrants, he adds.

I-9 forms are supposed to be checked only for new hires, "not for people who've been here five-six-seven-eight years," says Pete Maturino, president of United Latinos of UFCW and head of Local 5's agricultural division. The result at Mi Pueblo, where the owner "would only hire people who are undocumented because they won't speak up," was that about 750 workers, 70 percent of the stores' staff, were terminated.

This does not directly lead to deportation, but "ICE goes to people's homes," says Nelson Motto, an organizer with the National Guestworker Alliance in New Orleans. "The biggest challenge is that it's extremely difficult to get ICE to admit that they were tipped off by the employer." In one case, when construction workers in Washington, DC, were trying to form a union, the house where some of them were staying was raided. "We haven't been able to prove that the employer tipped ICE, but if you ask the workers, they're 100 percent sure," he says.

Employers also ask to reverify I-9s when they want to avoid responsibility for an accident, Motto adds.

Workers have some protection, says Henneberry, from a 1998 memorandum of understanding between the Department of Homeland Security and the Department of Labor that ICE will hold off on raids if there's a union-organizing campaign underway. Last year, says Motto, Jamaican guest workers cleaning hotels in Panama City and Dustin, Florida were able to use this to wage a strike when their employer threatened to deport them after they complained about not getting enough hours and receiving paychecks for $0. The key tactic, he explains, was immediately notifying ICE that there was a labor dispute going on and getting the agency to issue a written neutrality agreement. "That provided the workers a bit of relief," he says.

Paradoxically, says the immigration specialist, ICE is more likely to initiate audits of better-paying employers, as they are more likely to "have their papers in order" and are thus easier to investigate than low-end employers. Employers who pay cash, who classify workers as independent contractors to escape wage and safety regulations, or are franchises technically not connected to the brand-name corporation, are harder to track. These employers are more likely to initiate audits on their own, and their workers have fewer protections when they try to organize or make complaints.

"If we have any kind of smoking gun that the employer did that, we can go after them," he says, but if not, they can't prove anything—although in one case, an employer left a voicemail message telling the union, "I'm going to have to call ICE if you don't back down."

Immigrant construction workers are particularly vulnerable, says Cliff Smith of the Roofers, because their work is intermittent, temporary or day labor. He calls Los Angeles "the wage-theft capital of the country."

In 2012, according to the NELP report, two Brazilian construction workers from Massachusetts were deported after they tried to collect $6,500 a subcontractor owed them for a summer's work installing plaster and sheetrock in Boston. When they went to the subcontractor's home in the New Hampshire suburbs, he called police, who stopped them and turned them over to ICE.


Simply exploiting fear can discourage workers from speaking out. "You only have to call ICE a couple times, and then everyone knows it's a possibility," says Nicky Coolberth of the UFCW.

In agriculture and related industries, where about 70 percent of workers are undocumented, the anti-union consultants employers hire can be "pretty subtle," says Pete Maturino. In formal unionization campaigns, he explains, organizers are allowed to visit workers at home, so employers give their names and addresses to the National Labor Relations Board, which passes them on to the union. The consultants will apologize to the worker for that, saying, "I had to give your name and address to the federal government, and I know your situation."

At an onion-processing plant in Firebaugh, California, he says, consultants told workers in one-on-one meetings "you have to be documented to be a member of the union." At the Apio salad-processing plant in Guadalupe on the Central Coast, the consultants told workers that "union membership requires you to be documented, so a lot of you are going to lose your jobs." ("In fact, the union is required to represent members no matter what their status," responds Coolberth.)

Results of the vote held at Apio Dec. 5 are still undecided, according to the NLRB's Los Angeles office. Preliminary results showed more workers voting against joining the UFCW, but there were enough challenged ballots—135 out of more than 750 cast—to possibly swing the election in the union's favor.

The language barrier is another issue, says Motto. When workers have to sign papers they don't understand, documents that might lead to their deportation, it's "a very intimidating space to be in."

These tactics don't always work, however. Last February, after 19 workers at Alameda County Industries, a garbage-recycling company in San Leandro, California, signed a letter announcing that they were going to sue for being paid almost $6 an hour less than the city's $14.17 "living wage," 18 of them were fired on the grounds that an ICE audit a year before had revealed they were undocumented. The news of the audit provoked a strike, and in October, workers at the facility voted overwhelmingly to join Local 6 of the International Longshore Workers Union.

"A lot of times, undocumented workers are our strongest supporters, because they've been through so much and they won't take any crap," says Henneberry.

Legal issues

In the courts, undocumented workers have two main problems, says Rebecca Smith, deputy director of the National Employment Law Project: actually enforcing their rights, and having their status exposed.

The key legal precedent is the Supreme Court's 2002 decision in Hoffman Plastic Compounds v. NLRB, in which a 5-4 majority held that a Mexican immigrant illegally fired for being a union supporter had no right to get back pay or his job back, because he was "never lawfully entitled to be present or employed in the United States."

That decision, says Smith, "unleashed this whole wave" of employers claiming that undocumented immigrants were not entitled to back pay, workers' compensation, or freedom from racial or gender discrimination. Lower-court rulings have moderated that somewhat since then, she adds, as "there is no credible argument that unauthorized workers aren't entitled to their basic wage for work—a contrary view would condemn them to slavery."

In 2011, when a Colorado restaurant worker sued his former employer for wage theft, a federal court ruled that the employer's attempts to find out his immigration status were "an improper attempt to harass and intimidate Plaintiff." In 2010, the Washington Supreme Court held that admitting evidence that a construction worker injured on the job was undocumented was more likely to prejudice the court than prove anything relevant.

Workers have won most such cases, Smith says, but employers still use "very aggressive discovery tactics" to reveal their undocumented status in court, and there have been "a couple of outlandish decisions." In 2011, a federal judge in Washington state ordered apple-orchard workers suing their employer for sexual harassment to reveal their immigration status, saying that the women's emotional distress might have been caused by being undocumented and not from having had a foreman stick his hand down their pants. In a class-action suit about wage theft in California last year, the judge said undocumented workers could not be among the named plaintiffs representing the class of unpaid workers.

ICE recognizes the potential for employers to take advantage of immigration laws, says the immigration specialist, but its general policy of not interfering with labor disputes varies from place to place. Some local offices, he says, have close relations with the employers they police.

The 1998 memorandum of understanding with the Department of Labor suspends ICE enforcement at a workplace only while there is a federal investigation of workers' wage and hour or health and safety complaints, the NELP report notes. It does not suspend it during state investigations of wage theft or safety violations, or protect workers who make claims about discrimination or for workers' compensation—and it "explicitly allows ICE to resume or begin an audit after the Department of Labor investigation concludes."

Hope for Change from Obama?

Will President Barack Obama's executive orders intended to enable an estimated 4 million undocumented immigrants to stay in the country make a difference?

Rebecca Smith calls them "a huge step forward that will give immigrant workers protection." She hopes they will allow more workers to come forward.

The UFCW's Mike Henneberry says he's "glad for the incremental changes," but cautions that they will cover less than half the nation's 11 million undocumented immigrants.

Giving workers some kind of assurance that they won't be deported doesn't mean retaliation will stop, says Nelson Motto of the Guestworkers Alliance. The Obama plan might even make things worse for those who don't qualify, by pushing them deeper into the underground economy. He believes there needs to be comprehensive immigration-reform and worker-rights laws.

The AFL-CIO has proposed 10 actions the President could take through executive order. Among them are creating a process in which workers would be safe from retaliation based on their immigration status for joining a union or making a health or safety complaint; "deprioritizing I-9 audits of companies that already pay more than industry averages and/or have an established collective bargaining relationship with their employees"; revising procedures to ensure that employers can't "embroil the federal immigration enforcement mechanisms into labor disputes"; and making victims of workplace crimes equally eligible for the "U visas" given immigrants who are victims of other crimes and cooperate with police.

"Providing protection to undocumented individuals who assert their workplace and civil rights protects all workers," it says, and "allowing them to be detained or deported for such activity has a dangerous chilling effect on activity to enforce workplace standards."

"There needs to be some kind of legalization," says Motto. "If not, there's nothing that will force these employers to reinstate these workers. At the end of the day, they're still undocumented."

Opinion Thu, 25 Dec 2014 12:27:23 -0500
Even With Ban, New York Can't Escape Effects of Fracking

Last week Governor Andrew Cuomo banned fracking in New York, citing public health risks. Fracktivists rejoiced, relieved that their state won't go the way of neighboring Pennsylvania. Pocked with fracking wells, the mountainous counties of northeast Pennsylvania have suffered from contaminated water supplies, earthquakes, spoiled countryside and thunderous truck traffic. As long as the fracking ban is in place, New Yorkers won't be threatened by methane emissions and toxic fumes from fracking wells, wastewater pools or the risk of a well blowing up or leaking uncontrollably.

Unfortunately, just because New York banned fracking, and even though more than 150 New York municipalities have banned fracking using local zoning laws, the state won't escape its effects. In fact, New York is already burdened with the fracking industry's health and safety problems and threats to the environment because of gas infrastructure.

Gas companies are building pipelines to service increasing demand in New York City. In spite of opposition from groups like OccupythePipeline concerned about radon exposure and the risk of explosion, Spectra Energy's pipeline, which runs under Greenwich Village, went into service in November 2013.

On December 1, gas began to flow through the Northeast Connector Project, which will deliver 647,000 dekatherms daily from York County, PA to 1.8 million natural gas customers in Brooklyn, Queens, Staten Island and Long Island. The new delivery point will shift from Long Island to the Rockaway Peninsula via the Rockaway Lateral Project, a disputed 26-inch diameter pipeline currently being constructed under popular beaches, a golf course, and a federally protected wildlife refuge.

Two years after Superstorm Sandy hit the Rockaways hard, this high-pressure pipeline may pose some super hazards in the event of another big storm. (Sandy is estimated to have caused 1,600 natural gas pipeline leaks overall.) Pipeline company Williams' record on pipeline incidents and explosions in recent years is troubled, and the company dismissed safety recommendations for Rockaway Lateral from the US Corps of Engineers.

LNG Terminals

Construction started this fall to convert a liquefied natural gas facility in southern Maryland to enable it to export fracked gas. So far, it's the only export terminal geographically situated to cash in on all the gas from the Marcellus. But it may have a competitor.

Liberty Natural Gas has proposed the Port Ambrose LNG Project, a deepwater import facility 22 miles off of Rockaway peninsula. Its former incarnation, called Port Liberty, was defeated by activists in 2011. Port Ambrose also faces steep opposition.

Getting Port Ambrose approved as an import terminal could be a ploy on Liberty's part. Once it's built and operational, a proposal to convert it to an export facility could bypass stringent federal review. Liberty could then take advantage of the Rockaway Lateral, supplying fracked gas from the Marcellus. The pieces all fit into place.

Compressor Stations

Natural gas has to be pressurized to keep it moving through pipelines. Compressor stations are situated about every forty miles along pipelines for that purpose. When a pipeline's capacity is increased, new stations are built or more powerful compressors are added to existing ones. They emit pollutants like nitrogen oxide, volatile organic compounds, fine particulates, and even radon, since there is radioactive material in the Marcellus Shale. As compressor stations invade more populated areas, their incessant rumble can stress people out.

Compressor stations are multiplying in New York. In June 2013, Millennium's compressor station started up in the town of Minisink. Some residents are getting sick, experiencing chronic nosebleeds, rashes, migraines, and dizzy spells. Venting from the compressor station sometimes leaves a stench like rotten eggs in the air.

Storage Facilities

Opposition to a storage facility for liquid propane gas (LPG) in a salt cavern at one of the Finger Lakes has been fierce. Activists from We Are Seneca Lake, led by biologist and fracktivist Dr. Sandra Steingraber, have lined up to be arrested and re-arrested in civil disobedience actions blocking Crestwood's expansion.

They fear that a cavern collapse or leak could lead to catastrophe, potentially contaminating the water source for 100,000 people.

Thrilled by Cuomo's decision to ban fracking, Seneca Lake protestors won't let up. Over a hundred people have been arrested in the last week alone. So many protestors have opted to go to jail over paying fines that the local judge is now imposing a mandatory $375 fine and refusing jail time.

Oil by Rail

Fracking fields beyond the Marcellus also impact New York. Oil from the Bakken Shale in North Dakota is transported by rail to the Port of Albany, posing the risk of a spill in the Hudson River.

After the Lac-Mégantic disaster in July 2013, people have been concerned about whether trains carrying the volatile crude oil from the Bakken Shale are traveling through their cities and towns. Environmental groups have asked New York officials to share information on Bakken Shale oil shipments.

In spite of the oil's volatility due to fracking chemicals, train companies have persisted in using outdated DOT-111 tankers, a practice which Senator Charles Schumer called "a ticking time bomb." Recently, a state inspection team found 100 defects on just 95 miles of rail line and 704 tank cars.

Ban Fracking Everywhere

The gas industry has been ramping up capacity to get gas out of the Marcellus region. The lack of future gas production in New York may have put a dent in their plans, but they still need to build pipelines and accompanying infrastructure to deliver gas to homes, power plants and, most of all, to new export terminals. With the fracking ban in place, New York's formidable fracktivists will undoubtedly turn their attention to thwarting gas infrastructure.

Of course, the heart of the problem is the practice of fracking itself. Fracking is devastating people's lives, health and environment. And the fact is, we all live downstream. If fracking of the Marcellus and Utica Shale formations isn't reined in, activists and citizens trying to defend their communities against gas infrastructure have to wage a separate battle against every project. The real success of the New York anti-fracking campaign, however, is proof that a sustained and unrelenting grassroots campaign can get results. As more people are emboldened to confront big energy, the tide will turn in other states as well.

News Thu, 25 Dec 2014 12:07:41 -0500
Bankers Brought Rating Agencies "to Their Knees" on Tobacco Bonds

When the economy nosedived in 2008, it didn't take long to find the crucial trigger. Wall Street banks had peddled billions of dollars in toxic securities after packing them with subprime mortgages that were sure to default.

Behind the bankers' actions, however, stood a less-visible part of the finance industry that also came under fire. The big credit-rating firms – S&P, Moody's and Fitch – routinely blessed the securities as safe investments. Two U.S. investigations found that raters compromised their independence under pressure from banks and the lure of profits, becoming, as the government's official inquiry panel put it, "essential cogs in the wheel of financial destruction."

Now there is evidence the raters also may have succumbed to pressure from the bankers in another area: The sale of billions of dollars in bonds by states and municipalities looking to quickly cash in on the massive 1998 legal settlement with Big Tobacco.

A review by ProPublica of documents from 22 tobacco bond offerings sold by 15 state and local governments shows that bankers routinely bragged about having their way with the agencies that rated their products. The claims were brazen, the documents show, with bankers saying they routinely played one firm against its competitors to win changes to rating methods, jack up a rating or agree to rate longer-term, riskier bonds.

"Bear Stearns is the ONLY firm in two years to have negotiated new rating criteria pertaining to stress tests and tobacco sector fundamentals," the now-defunct investment bank stated in a typical 2005 pitch for a deal led by Kym S. Arnone, who today chairs the Municipal Securities Rulemaking Board, the industry's self-regulator.

"Fitch reached out to UBS for input so that they would fall in line with the other ratings agencies," UBS said after it and other financial services firms dropped Fitch from deals because of its "constraining" stress tests. Following the conversation, "Fitch amended their stress criteria," UBS told officials in Michigan as it readied a 2006 deal.

In 2007, JPMorgan promised to negotiate Fitch "to their knees" if Ohio hired the bank for a $5.5 billion deal that was the largest sale, or "securitization" of tobacco settlement payments.

The 140 documents, unearthed through public records requests, show that bankers from six Wall Street firms – UBS, Bear Stearns, Citigroup, Merrill Lynch, JPMorgan and Goldman Sachs – claimed they could persuade the rating agencies to make favorable changes to their criteria.

Garnering better grades for the tobacco bonds meant the bankers could sell more of them, get a leg up on their competition and win millions of dollars in fees from the governments issuing the debt. The state and local governments were trading their annual tobacco payments for up-front cash by making the bond deals. As ProPublica has reported in a series of stories, the bonds have proved much riskier than advertised, leading to fiscal headaches for the issuers and losses for investors.

While there are no indications that the bankers did anything illegal, their claims further undermine the argument by the raters that their opinions are only the result of independent analysis – something the firms will soon be required to attest to in writing under reforms enacted in the wake of the financial crisis.

Since the economy tumbled in 2008, the estimated $36 billion of bonds issued in the tobacco sector – like so many other corners of Wall Street – have proven to be founded on shaky assumptions. In this case, the unraveling was caused by weaker-than-expected cigarette sales, which drive the size of the settlement payments. The outlook is now so bleak that in September Moody's estimated that 80 percent of the money owed on tobacco bonds it rates won't repay on time.

The future may be even bleaker for a $3 billion sliver of the debt. Those securities, known as capital appreciation bonds, promised balloon payoffs so large – $64 billion, all told – that they are almost certain to default. The documents show bankers pressed rating agencies to ease criteria for evaluating those bonds as well.

ProPublica shared the tobacco bond documents with S&P, Moody's and Fitch. All denied changing their methodologies, also known as rating criteria, in response to demands from bankers.

In an interview, Nicolas Weill, who oversees Moody's rating methodologies for tobacco bonds and similar securities, said, "We don't negotiate criteria." Those criteria – such as stress tests that gauge how much cash is available to repay the bonds under various scenarios – are "never, ever'' open to deal-by-deal changes. He said the firm may evaluate different deal structures but only if they meet those criteria.

In a statement, Fitch said: "With respect to every one of the examples provided to us by ProPublica, we can affirm that no banker or other outside party unduly influenced any of these ratings decisions ... We determine our ratings – they are not open to negotiation with issuers and bankers."

S&P said in a statement: "On the whole, the assertion that S&P's cash-flow stress assumptions for tobacco settlement bonds were relaxed is false ... credit ratings change because factors that affect credit risk change."

ProPublica shared the documents with each of the banks. All declined to comment except UBS, which said the bankers involved no longer work for the firm, which exited the municipal bond business amid the 2008 market turmoil.

ProPublica also shared the materials with the Securities and Exchange Commission, which regulates rating agencies and has been working to reform the rating process since the abuses in mortgage-backed securities. In August, the agency adopted hundreds of pages of new rules it said will help prevent "conduct and practices that were central to the financial crisis."

The SEC also has been investigating whether S&P bent its criteria to win ratings of commercial mortgage bonds. The regulator is now seeking to suspend S&P from that part of the business in what would be its toughest action yet against one of the big three raters, Bloomberg News reported this month.

The SEC declined to comment on the documents provided by ProPublica.

The documents give the bankers' version of what happened, and some degree of exaggeration can be expected in any sales pitch. Nevertheless, former rating analysts, lawyers and regulatory experts who reviewed the documents said the consistency of the bankers' claims across multiple years, deals and states, compared with known criteria changes and ratings, suggests the banks' influence was real.

"Banks have a right to advocate for their clients – that's normal," said Mayra Rodriguez-Valladares, a financial regulatory consultant who reviewed the documents at ProPublica's request. "What's going on here is very different ... this is the banks trying to convince rating analysts to make changes to their methodology, and that's really crossing the line."

Crafting the Recipe

Credit rating agencies' letter grades signal their judgment as to which debts are safe to buy and which ones carry a higher risk of nonpayment, or default – akin to credit scores banks look at before they decide to make home loans.

Depending on the size of the issue, a local government issuing bonds with an "AAA" rating, the highest in the scale run by S&P and Fitch, could wind up paying millions of dollars less in annual interest to bond buyers than an entity selling an issue with a rating below "BBB-", the lowest grade for safe, investment-grade bonds.

Thus, issuers and their bankers have a natural incentive to push the credit-rating agencies to assign favorable ratings. Their leverage is that the raters' compensation comes from money raised from the debt they rate. S&P, for example, earned $266,000 for rating a March tobacco deal in New Jersey.

Executives of S&P, Fitch and Moody's, the three biggest firms in the business, have long maintained that their ratings are independent judgments of the creditworthiness of a bond. They have said there is no incentive to succumb to pressure because that would taint the reputation as honest brokers that their business model demands.

But as the SEC acknowledged in its recent rules, the potential conflict of interest faced by rating agencies is "more acute" in the area of structured finance. That term refers to the practice of turning streams of money – like mortgage or credit-card payments – into debt backed by those payments.

That is exactly what happened to money from the 1998 settlement.

For bankers and politicians, it was an irresistible opportunity for structured finance deals. The accord with cigarette manufacturers promised to send more than $200 billion over its first 25 years to state governments to reimburse smoking-related health care costs – and more money beyond. Even before the first payments began flowing in 1999, bankers were asking rating agencies to develop criteria for how they would grade the creditworthiness of the debt, the documents show.

From the beginning, that was going to be part art, part science.

The tobacco settlement payments are linked to inflation as well as cigarette sales, with room for adjustments based on legal disputes. That left a whole host of uncertainties, from the rate of the likely decline in cigarette sales to the potential bankruptcy of tobacco firms.

Starting in 1999, the rating agencies published their basic expectations, along with various so-called stress scenarios, for attaining various letter grades on their credit scales. They made clear that these criteria were subject to change at their discretion.

To protect investors, these criteria are supposed to be a non-negotiable element of the rating process: They are the independent recipe rating agencies use to fairly measure deals brought to them by bankers.

"Rating criteria should not be changed simply to enable securities to achieve the rating level the banker desires," said Thomas McGuire, former executive vice president of Moody's, who worked at the rating agency from 1977 to 1995.

Going shopping

Beginning in 2002, documents show, the bankers took aim at that recipe. They sought to pack more debt into tobacco deals while preserving the highest possible grades.

"UBS's tobacco securitization team turned the sector on its head in mid–2002 when the rest of the industry was passively accepting ratings criteria, and blindly structuring securitizations to meet the most constrictive criteria of the three rating agencies (the lowest common denominator approach)," UBS bankers boasted to Michigan officials when they were wooing the state's business in 2006.

"UBS analyzed, challenged and fundamentally changed the underpinning criteria for mainstream ratings," they added in bold italic text.

A 2002 pitch to New York State recounted how the UBS bankers said they did it. After being hired by Rhode Island on a tobacco deal, the bankers said they spent an "intensive 10 days redefining the statistical ranges employed in Moody's tobacco stress tests" using cash-flow projections they'd developed for the deal.

UBS said Moody's agreed to alter its stress tests, allowing Rhode Island to get more proceeds out of the deal, which Moody's rated "A1"– the highest rating it assigned in the sector.

"This was the first time that any issuer had been successful in achieving a favorable change in a rating agency's tobacco rating criteria," UBS said in a 2005 deal resume submitted to California. "As a result, Moody's decided to permanently ease its stress tests," UBS claimed in a later California document.

The Rhode Island transaction was only the beginning. UBS said that over the following years, it "pioneered" the concept of "shopping" ratings to max out the amount of cash it could raise for its clients by pitting rating agencies against each other. Competitors followed its lead, UBS said.

It was all viewed as business as usual: "In the structured finance arena, each rating agency is accustomed to and comfortable with the 'shopping' dynamic," UBS told Virginia in a 2007 pitch.

By 2005, rivals Bear Stearns and Citigroup were making similar claims about their persuasive prowess. Citigroup took credit for negotiating new stress tests with Moody's, and in one pitch, it provided a "timeline of events" outlining its negotiations – and favorable results – with all three rating agencies.

Not to be outdone, UBS said it helped Moody's spruce up its criteria in late 2005 after the firm didn't get hired on a spate of deals: "Though others viewed Moody's as obsolete, UBS brought them back to the sector and worked with them to modernize their criteria."

Weill, the Moody's executive, declined to discuss any specific remarks by bankers.

However, an internal Moody's document, disclosed in one of several lawsuits brought against the firm in the wake of the financial crisis, indicates that something happened in late 2005 that allowed the rater to recapture market share in rating tobacco bonds.

"Moody's position is this market was regained in late 2005 but could be lost again," an executive wrote to senior management in a November 2006 discussion of "competitive issues."


As the market for tobacco debt continued to heat up in 2005, bankers added one particularly toxic security into their sales pitch: a capital appreciation bond, or CAB.

Unlike traditional bonds, CABs do not pay interest to bondholders every year, instead letting it add up into huge amounts at maturity. The CABs were often dated to mature in 40 years or later, so that regular interest-paying tobacco bonds would be paid first. CAB investors were last in line.

Some issuers, such as Puerto Rico, had already maxed out on the amount of interest-paying tobacco bonds they could sell. So the CABs helped keep the tobacco market humming. But CABs were a riskier proposition to investors, since their longer maturities meant forecasts of cigarette sales would have to hold up over many decades for the debt to repay.

To attract buyers, and get better prices, bankers needed the rating agencies to weigh in. But Moody's didn't rate CABs. Neither had S&P.

Fitch stepped in to fill the void.

Starting with its first CAB sale in 2005, the rating agency got hired again and again to assess CABs.

With Fitch in the game, bankers pushed for more favorable treatment of CABs in areas like the stress tests used to rate the bonds. Changing the tests could allow bankers to squeeze out more money from CAB deals Fitch rated. In pitches they submitted to Michigan on Feb. 17, 2006, Citigroup and Bear Stearns each took credit for lobbying Fitch to ease up on CABs.

Just a few days later, Fitch announced that "with the advent of new bond structures," it would update its criteria with a stress test that would make it easier for bonds 40 years or longer – the typical maturity for CABs – to get rated.

UBS bankers immediately ran the numbers and decided the change wasn't favorable enough.

"UBS shared its findings with Fitch within 24 hours of their press release. Fitch confirmed our analysis and worked with our tobacco securitization bankers to devise a new stress test methodology," UBS told California in bold letters in a 2006 deal document.

Fitch did not respond to written questions from ProPublica about UBS' claims.

Days later, in a Feb. 28, 2006, presentation to Michigan, UBS bankers bragged about getting Fitch to agree to what they called a "revision to revision" on its CAB criteria. Thanks to the rater's more "lenient" rules for CABs, they also recommended that Michigan use Fitch on its deal, which UBS ultimately didn't win.

By then, one of Fitch's competitors, S&P, had decided to jump into rating CABs, too.

During the months that followed, bankers continued to press agencies to relax their criteria, pouncing on any advantage they could find. Bear Stearns claimed to have the most success negotiating favorable changes. Led by Arnone, the top banker in the sector, the firm handled enough deals to have leverage in challenging rating agencies' criteria and picking the ones that agreed to the best terms.

"Cherry-picking" is how Arnone and her team described the ratings process in a January 2007 document submitted to Virginia. Often, the team would get "negotiations" with the agencies started before pitching a deal so they could brief governments on various criteria changes they could expect if they hired Bear Stearns. These were noted on a running list of "major inroads" with the rating agencies.

In one case, Arnone's team told California officials in November 2006 they were seeking an adjustment to the estimated market share of cigarette manufacturers participating in the settlement. Even a tiny increase in the assumed market share, from the current 94 percent to 94.3 percent, would mean $26 million more in upfront cash to the state – if a committee of S&P rating analysts agreed to the change.

"We are highly confident that this criteria change will be approved by the rating committee," Arnone's team said in its pitch. Six months later, S&P did publish new criteria for tobacco bonds, establishing the market share for participating firms at 94.3 percent.

Arnone, now a managing director at Barclays Capital, declined to comment or to answer written questions about the documents through a spokesman for her current bank.

S&P said in a statement that its May 2007 criteria changes were actually more conservative, since they included "more severe" stress tests for cigarette consumption declines underpinning the bonds.

At the time, however, bankers disagreed. In a June 2007 document dissecting the new criteria, Bear Stearns said that, overall, S&P's new criteria were more favorable since they allowed them to raise more cash.

Sometimes the bankers took advantage of the apparent absence of a constraint to spark negotiations.

Citigroup noticed that S&P's new 2007 criteria chose to "remain silent" on the maximum length of the CABs it would rate. With Fitch rating CABs longer than 40 years, Citigroup had been pushing S&P to do the same. And so, "immediately after the release of the criteria," Citigroup's bankers made a case for rating CABs with a 45-year term instead of 40. Goldman Sachs also sought the change.

A few weeks later, Citigroup closed an all-CAB deal in Rhode Island in which S&P for the first time rated CABs with a 45-year maturity. In general, the longer the term of an investment, the more risky it becomes because predictions are less dependable.

Just a few years into their 45-year terms, those risks been realized: The highest-rated CABs in the deal have been downgraded from a relatively safe "BBB" rating to well below investment grade. Earlier this year, Rhode Island sought to bail out the debt.

Citigroup declined to comment.

Biggest Deal of All

In the summer of 2007, Ohio officials decided to come to market with a $5.5 billion bond sale linked to their share of the tobacco settlement. It was to be the biggest such offering yet, and the stage was set for a historic showdown among bankers eager for a piece.

JPMorgan beefed up its tobacco team by hiring two key bankers from UBS. The firm said it now had a "leading tobacco bond resume."

However, by now the landscape was changing, the bank warned. Storm clouds of the financial crisis were gathering as Congress began to scrutinize the rating agencies for their faulty grades on subprime-mortgage securities.

"What was formerly a very negotiated, fluid ratings process at Moody's is now poised to become clinical and public. Moody's criteria will be published and rigidly adhered to for the first time," JPMorgan's bankers lamented to Ohio in their August 2007 pitch.

The rating firms continued to insist that their work wasn't subject to meddling from bankers. "We offer reasoned independent forward looking opinions about relative credit risk," Michael Kanef, an executive in Moody's structured finance division, testified to a Congressional committee just a few weeks after JPMorgan pitched Ohio.

JPMorgan declined to comment.

Bear Stearns, meanwhile, had been readying the ground by negotiating a list of favorable rating criteria changes that would help Ohio get more cash. Among them, Bear said, were a more optimistic assumption Moody's had agreed to about what would happen in case a cigarette manufacturer went bankrupt, and more favorable cigarette consumption declines agreed to by Fitch.

Fitch was also reviewing its ratings of the tobacco companies themselves. Bear told Ohio that an upgrade for the industry might help boost the ratings available for the bonds, including CABs, since Fitch links its ratings on the bonds to its assessment of cigarette manufacturers.

A few weeks later, on Aug. 29, 2007, Fitch made the upgrade. By then, Ohio's bond issue was under way, with Arnone's Bear Stearns team at the helm alongside Citigroup. Bear Stearns immediately helped Ohio cash in, selling two tranches of CABs that netted the state $319 million but promised to repay $6.6 billion by 2052. Fitch rated the CABs "BBB+" and "BBB," ratings that comfortably landed them within the investment-grade categories sought by the state.

The upgrade might well have been the result of Fitch's independent analysis of the tobacco sector. But bankers at Bear Stearns also took credit.

When pitching another deal in Michigan a few months later, Bear Stearns bragged about "facilitating" Fitch's upgrade and getting a rating agency "for the first time in the history of the tobacco market" to give CABs a "BBB+" rating. More negotiations were "ongoing," Bear said.

Fitch disputed such claims in its statement to ProPublica: "Even if the bankers actually believed they had some sort of undue influence over us, that doesn't make it so – they had no such influence."

By 2008, the broader markets already were beginning to crumble under the weight of subprime mortgage debt. Bear's competitors wondered why tobacco bond criteria were being loosened.

"We view the current rating criteria relaxation for tobacco bonds as particularly interesting and unusual given current market conditions, where the rating agencies are 'under fire' for rating criteria for structured financings," bankers for DEPFA First Albany Securities wrote in a competing March 10, 2008, pitch to Michigan.

Four days later, on March 14, 2008, Bear Stearns collapsed and was sold off to rival JPMorgan in a fire sale brokered by the Federal Reserve Bank of New York. The financial crisis precipitated by the banks, with rating agencies' help, had arrived.

'Sold out'

After 2008, the market for tobacco bonds collapsed with the broader economy. Prices nosedived, too, especially for the long-dated CABs.

Downgrades ensued as cigarette sales slid more than expected. A big federal tax increase on cigarettes, announced in 2009, had dashed those expectations, and soon prompted the rating agencies to retool their criteria, too.

Fitch has downgraded Ohio's CABs five times since they were issued. They are now considered highly speculative. S&P has also lowered ratings on its CABs to junk territory. Moody's flirted with rating CABs, according to a Goldman Sachs pitch, but in the end didn't.

S&P told ProPublica that its ratings on tobacco bonds reflected its own views of cigarette consumption and, as those views changed in 2009, CABs got downgraded to speculative levels. Fitch said its downgrades were prompted by lower-than-expected cigarette sales after 2006, though about half of its portfolio of rated tobacco bonds remains within investment-grade ratings.

The implosion of mortgage-backed securities graded favorably by rating agencies prior to the financial crisis triggered lawsuits, including one in 2009 by Ohio's then-Attorney General Richard Cordray. As Ohio treasurer in 2007, he had overseen the state's tobacco bond sale. While the state had been issuing tobacco bonds with questionable ratings, its pension funds had been investing in mortgage debt securities whose ratings also turned out to be inflated. He sued the three big rating firms in November 2009 over $457 million of losses caused by what he called "false and misleading" ratings.

"The credit rating agencies sold out, and they sold us out," Cordray was quoted in news reports at the time. "They traded in their objectivity, and in exchange received massive profits." The lawsuit was tossed out in 2011 by a federal judge.

Congress addressed rating agencies in its 2010 Dodd-Frank financial system reform law. The Permanent Senate Subcommittee on Investigations and the Financial Crisis Inquiry Commission each concluded that the raters contributed to the 2008 disaster. In August, the SEC adopted rules requiring the firms to set up better internal controls so that business managers do not interfere with the analytical work.

More stringent policing of conflicts of interest is also required, as well as the opportunity to give everyone a chance to comment when the firms propose changes to rating criteria.

An SEC official said the rules would help avoid a repeat of the behavior that led to the financial crisis. But others who reviewed the rules and the documents collected by ProPublica demurred.

"One of the things that the documents illustrate is that it's not just the rating agencies alone making bad decisions,'' said Frank Partnoy, professor of law and finance at the University of San Diego and a former Wall Street trader. "It's the banks manipulating the rating agencies into making bad decisions."

This story was co-published with Marketplace.

News Thu, 25 Dec 2014 11:25:47 -0500
What Would You Have Eaten for Christmas in Medieval Times?

(Photo: Mike)(Photo: Mike)

With Christmas almost upon us, there will be plenty of frenzied present shopping and meal planning. Haven't made that Christmas cake yet? Fear not. If you were preparing the festive meal 600 years ago you'd have far more on your plate.

The picture below is a calendar page from a Book of Hours, a type of prayer book popular among pious rich people in the Middle Ages. Apart from the costumes they are wearing, the people at the bottom of the page seem much like us – keeping warm and enjoying their food and drink.

It may surprise you to learn that this particular calendar month is January. The feast day celebrated by the couple is Epiphany on January 6, picked out in red (Epyphania). Our Christmases, hectic though they may be, are actually a doddle compared to the traditions of old. Medieval people celebrated all 12 days of Christmas, from December 25 through to Epiphany – the day the three kings turned up with gifts for the newborn Jesus – although they did not usually feast every day. Some households had their big feast on Christmas Day. For others it was the first of January or the 6th, depending on local custom.

Wealthy or poor

There's not much detail as to what the couple ate at their winter feast. The artist was more interested in depicting the strawberries and flowers in the margins than in putting food on the table. This is typical of medieval manuscript art. Even elaborate descriptions of royal feasts say little about food. We know even less about what the poor ate, although lords probably feasted their tenants at least once over Christmas.

We do know that preparations for winter would have begun in the late autumn. Humans and animals both ate the same basic foodstuff: grain. Poorer people did not have enough grain for animals over winter so most pigs and cattle were fattened up on acorns and slaughtered. Calendars commemorate this strategic act for the months of November and December as in the images below, paired with the relevant signs of the zodiac (Sagittarius and Capricorn).

Of course, the wealthy could continue to keep their animals alive, so they had fresh meat all winter. It's not true that they used spices to liven up rotten meat: cloves, nutmeg, cinnamon and pepper were imported from India or Indonesia, so if you could afford them you could afford good meat. The rich could also afford sugar – candied fruit, sugared almonds and sweets have always been popular Christmas treats.

The poor would have eaten sausage and bacon instead, salted fish if they could get it, stored or dried apples, peas and beans, perhaps a bit of honey, and would only have had the added flavours of onion, leeks and garlic. Even salt was expensive. The hungriest time was actually not the months that we associate with winter cold, but the months of April and May. It was then that stores had run out and there would be little growing yet in the garden. Nor was there much dairy as hens naturally lay less in winter and cows don't produce milk until after they have their spring calves.

Yuletide feasting

The best way to find out what the wealthy ate is to turn to their financial accounts and cookery books. Cookery books such as the Forme of Cury, written for the household of King Richard II (1377-1399), provide some tasty recipes. For a recent project we made recipes from this text and others for the public to try at festivals and markets around Yorkshire. In Castleford Market in December 2012 we prepared seasonal tastes such as gingerbread, mutton stew (mounchelet) and apple pudding (pommesmoile).

But it was nigh on impossible to prepare the main dishes that the rich had at their feasts. Turkey originally came from the Americas so was not found on English tables until the late 16th century. It probably replaced a showier but much less tasty bird: the peacock. The price of these birds meant that most people had to be content with another large expensive bird, the goose, which was a traditional Christmas main course until relatively recently. Also closely associated with Christmas was the wild boar – a boar's head was often brought into the hall to accompanying carols. But it wasn't always intended for eating.

And then elaborate displays of prepared meat, sugar or wax in the form of fantasy animals, angels and castles were often part of the entertainment, sometimes even moving mechanically or exploding.

So count yourself lucky as somebody who won't go hungry this winter. You may have left the pudding quite late but you can leave the peacock and pommesmoile for next year.

News Thu, 25 Dec 2014 10:26:51 -0500
Merry Iconoclastic Christmas

(Photo: Jeff Weese)(Photo: Jeff Weese)

It never ceases to amaze me how the loudest practitioners of Christianity in the United States are so consistently able to sidestep and ignore the core teachings of their religion with apparently no shame whatsoever.

(Photo: Jeff Weese)(Photo: Jeff Weese)

The Houston Chronicle reported late Tuesday night that former president George H.W. Bush was rushed via ambulance to a local hospital after suffering shortness of breath. Despite the fact that the man is in the habit of throwing himself out of perfectly good airplanes to celebrate his birthdays, the truth is that he has passed 90 of them, so the medical precautions being taken to safeguard his health are wise.

This probably makes me a terrible person, but my first thought was to take sharp note, in the context of the times, of what happens when a wealthy white man says, "I can't breathe." Not to put too fine a point on it, but really, there it is.

I'm just sayin'. I sincerely hope the man recovers in time to celebrate Christmas at home in the mansion with the rest of his wrecking ball of a family. Everyone deserves a holiday. Hell, even God took a day off.

My grandmother would have scolded me for such talk. "That's not very Christian of you," she would have said.

And therein lies the funny part.

If you pay heed to the talking points boiling out of evangelical Christian churches all across the land, as well as media outlets like Fox News, you would be led to believe the United States is a "Christian nation." There is no passage in the founding documents to confirm this claim - and a mountain of established facts, in fact, to refute it right down the alley and into the dumpster - but this has not ceased the increasing fictionalization of the nation's creation. If the trend continues, the next generation of benightened evangelical home-schooled children will be raised to believe the Constitution was written by Jesus Christ as he rode a saddled Tyrannosaurus Rex over the graves of Muhammad and Martin Luther King, Jr.

It never ceases to amaze me how the loudest practitioners of Christianity in the United States are so consistently able to sidestep and ignore the core teachings of their religion with apparently no shame whatsoever. For example:

"When you pray, you are not to be like the hypocrites; for they love to stand and pray in the synagogues and on the street corners so that they may be seen by men. Truly I say to you, they have their reward in full. But you, when you pray, go into your inner room, close your door and pray to your Father who is in secret, and your Father who sees what is done in secret will reward you."

That's the New American Standard Bible version of Matthew 6:5-6, and is arguably the bedrock argument for how and why American "Christianity" has gone viciously sideways. Pray alone? Don't be seen doing it? But how else will everyone know how falsely pious you are?

Meanwhile, these same so-called Christians overwhelmingly approve of Dick Cheney's torture program, even in all its grisly details, and according to the polls, likewise don't seem to have a problem with unarmed Black people being gunned down or choked to death by police all across the country.

Here's another one to chew on: According to Revelation 1:14-15, Jesus Christ had "hair like wool," and his feet were "like polished bronze."

A number of recent bad movies, and a museum hall's worth of paintings that have poured down over the centuries, depict Jesus as a blue-eyed straight-haired pale-skinned White man come to save us all. I don't know if he existed, and I have wild doubts about anyone who is declared "divine," but one thing is certain true fact: Whoever got nailed to those crossties on Golgotha bled from brown skin.

The police are stacking unarmed Black bodies like cordwood, and many in this "Christian" nation cheer them on. Innocent prisoners in Iraq were shredded and tortured; children were reportedly raped in Abu Ghraib by US soldiers in front of their mothers, who then asked to be killed because they could not live with what they had been forced to witness...and the polls say most of this "Christian" nation approves.

Conclusion: The majority of "Christians" in these United States of "Christian" America don't give a single solitary damn about the lives of people who resemble their "savior" a whole hell of a lot more than they do. The mental and emotional disconnect, fully encompassed, is a Doctoral thesis on how deftly the powerful have played with history to their capital advantage, and on how so many others bought it.

In point of fact: It's Christmas, upon which we celebrate the birth of Jesus, which is entirely wrong, because the Roman emperor Constantine gave Christianity its first taste of state sponsorship in the year 312, and later Christianized all the standing pagan holidays to consolidate his power. Jesus was not, in fact, born today. At the Council of Nicaea, the emperor and his crew made sure the "Good Book," and its interpretations, would read the way they wanted it to down through the centuries, and that flex has lasted for close to two thousand years.

Beyond these historical anomalies are the pressing modern realities, chief among which is this madhouse push to acquire personal belongings as a means of celebrating a man who cherished and preached the benefits of poverty and self-denial. Our annual carnival of consumption stands in stark contrast against the legacy of someone who took a whip in hand and beat the holy hell out of the bankers in the temple.

It's probably considered not "Christian" to say these things, either. But it's honest, at least.

There is what we believe, and there is what actually happened. There may very well have been a guy born in Bethlehem who spent three years preaching against the order of his day until he was executed for it. That may have happened, but the gross manipulation of that alleged event definitely happened, century after century, at the hands of people not seeking piety but power. So much of our culture has been shaped by the aftermath of the arrogance of the righteous, and we are all the poorer for it.

Jesus was not born today. Constantine told me so. Regardless, have a very Merry Christmas. The best present you can give yourself is an understanding of history. Misleading mythology withers on the vine of knowledge, and that is always a good thing.

Opinion Thu, 25 Dec 2014 10:17:38 -0500
Video Games Gave Cultural Cachet – so Recognize Their Place in Society and History

The UK's video games industry body Tiga has called for the products to be treated like other creative industries such as television or film, rather than mere "software". There is a good argument for this. Games have been part of human civilisation for thousands of years.

(Photo: włodi)(Photo: włodi) 

The UK's video games industry body Tiga has called for the products to be treated like other creative industries such as television or film, rather than mere "software".

There is a good argument for this. Games have been part of human civilisation for thousands of years. Egyptians played the board game senet 3,000 years ago, around the same time that Persians played the Royal Game of Ur with dice. Around 700AD the ancient Indian game of chatarunga developed into the modern game of chess, and India is also the origin of snakes and ladders and ludo.

These games, as much as more recent creations such as Monopoly and Scrabble, have cultural cachet, a place in our society and history. Video games have fans all over the world – for example, when two Indian brothers launched Scrabulous, a web-based Scrabble clone for Facebook, they had 600,000 daily players until Scrabble's owners shut them down. Video games of more contemporary tastes, for example online 3D shooters such as Call of Duty, have more than 100m players.

Games reflect society

In his classic utopian novel The Glass Bead Game, Nobel Prize-winning author Herman Hesse writes of the eponymous game:

The way to learn the rules of this game of games is to take the usual prescribed course, which requires many years; and none of the initiates could ever possibly have any interest in making these rules easier to learn.

The game, like games in general, draws upon many aspects of human culture, arts, mathematics, and music, and is capable of expressing and establishing relationships between them. A game is a means of playing with the entire range of culture in the same way that a painter might play with a palette of colours.

This gives some indication of the place games have in human societies, and why they are such an important part of our cultural heritage. The characters of James Bond or Batman are cultural heritage, and then there are 007 and Batman video games. These games are played by people of all ages, with a 48% peak between the ages of 18-49 with rest pretty evenly divided between the under 18s and over 50s, and over 40% of gamers in the US are women.

Often families and groups of friends play games together – for instance Wii Sports, which is considered a kind of social activity, shaping the way that we interact with other people. We've reached the moment in which we are all gamers. Games are part of our life and a common form of cultural expression.

Games are diversifying

Games have become far more sophisticated than simplistic shoot-em-up, beat-em-up tests of skill and reaction, providing imaginative and sophisticated references and comment on culture.

Narratives in games are increasingly important, drawing the player into a fantasy world, or a simulacra of the real world, offering avenues for learning, for fun, and understanding a given environment.

Such games include Eufloria, which mixes strategy with relaxing music based on the idea of creating life on a planet. Proteus, is a minimalist game of pure exploration and discovery in a musical wilderness environment. It contains no challenges, tests or goals other than those the player chooses. The music engine reacts to activity in the game prompting the player to explore the environment as music.

This is story development as an imaginative art form and as mesmerising and immersive as the best novels. In fact sometimes reality and fantasy meet in the gaming world, such as Kevin Spacey playing the part of Jonathan Irons in Call of Duty – a role at least partially based on his portrayal of a ruthless senator in House of Cards.

Games can also be useful: in 2011-12, the city of San Jose, which was facing a large budget deficit, created a budget challenge game for its citizens to engage them in helping tackle the problem. Games are even changing the face of scientific research, through Fold-it, which sees members of the public asked to solve problems for science, putting many minds to work to help with breakthroughs in the lab.

Part of the creative industry

In the UK, the video games industry is a strong part of the British creative economy, contributing more than £1.7 billion annually. The growth of the industry is closely related to the opening of new development hubs and companies, with the focus on mobile games. Globally, the British market ranks 5th in terms of consumer revenues.

The centres of the UK video games industry are strongly co-located with other creative industries, especially film, TV, advertising, music and design. This shows how all the creative needs – audio, narrative writing, visual effects – can be and are integrated to great effect.

Games are cultural products – they've been exhibited in the Barbican in London, at MoMA in New York City, and in in many other leading museums. The curator for the MoMA show, Paola Antonelli, said: "I really do believe that design is the highest form of creative expression". We need to take that leap of imagination and approach games and the development of them as an extension of our creative industries.

Opinion Thu, 25 Dec 2014 09:18:49 -0500
How Mindfulness Could Give You the Gift of a Calmer Christmas

In the run-up to Christmas we find our to-do lists bloated with added chores: present shopping, card writing, preparing to travel or receive guests. We are bombarded with adverts telling us what to buy and where. We tackle the shopping crowds searching for the perfect gift and the juiciest turkey. Our energy and purses are pulled in all directions while we limp on at work waiting for the holiday to arrive.

As the day approaches we may dream of happy families singing around the fire or worry whether everyone will like their gifts or if there will be arguments. Media images distort our expectations of the perfect Christmas with celebrities advising us on the recipes and crafts to add extra joy to the holidays.

And then there’s the ghost of Christmas past. Maybe we are feeling that Christmases are not as good as they used to be or maybe we are dreading a repeat of an earlier disastrous year. It can be a lot to contend with and perhaps not everyone feels as festive as the songs and adverts would have us believe.

Some of us may be seeking a way to avoid being bogged down by the stress. We could try a single ticket to that Caribbean Island or perhaps embrace the spirit of Scrooge and say “bah humbug” as we lock ourselves out from the world. If these options seem a little extreme, an alternative is to take inspiration from the teachings of mindfulness.

Enter mindfulness

A modern interpretation of ancient Eastern philosophies, mindfulness incorporates guided meditation that helps us learn about the inner workings of our mind. This helps break habitual patterns of thinking and behaving that can increase distress and unhappiness.

Meditation practises that focus on monitoring the activity of the mind or cultivating compassion are familiar in both historical Eastern traditions and modern mindfulness interventions. The way in which mindfulness meditation is different is the way in which it has been packaged. Often it is taught to beginners as an eight-week course that includes a selection of meditation practises and teachings that have been brought together and adapted to address specific issues such as emotional stress or chronic pain.

A growing body of research shows mindfulness can reduce stress, depression and anxiety – and can improve attention and self-regulation (our ability to control our thoughts, actions and emotions).

It is thought that some of the effects of practising mindfulness are a result of making our reflections on our experiences more positive, reducing rumination, and lessening the extent to which we react emotionally to our environment.

How does it work?

So what is mindfulness? A common practice is to sit quietly for several minutes placing the attention of the mind on the flow of your breath, perhaps focusing on the movement of breath in your nose, throat, chest or belly, or counting the breaths, starting from one each time you lose count. The practice may sound simple but the stillness of the exercise reveals the restless nature of the mind. As we aim to focus on our breath we see the activity of mind, as it distracts us from our purpose.

Like sitting on the side of a busy road we see our thoughts, feelings and memories pass us by. It doesn’t take long before one or more of the passing cars pulls us out of our seat and away from the breath entirely and we find ourselves trying to control the traffic, stopping the thoughts we don’t like or clinging on to the ones we do. This is the natural way for our minds to behave and they do this most of the time. The result is that we are often not fully present in what we are doing right now in this moment.

Our minds can wander as we carry out our daily activities. As we approach Christmas we may be thinking about all the shopping we need to do while we are drinking a cup of tea. We may also be thinking about sitting drinking a cup of tea, while we are doing the Christmas shopping.

And regardless of whether these fantasies are pleasant or unpleasant, research has found that all mind wandering has a negative effect on our mood. This may be because our wonderful daydreams make our real lives seem like a disappointment and our unpleasant thoughts prevent us from taking pleasure in the small delights of life.

Christmas presence

During the festive season you may notice thoughts, feelings or memories interrupting you. These thoughts may be subtle and fleeting but sufficient to take the edge off your Christmas cheer. When you notice what is happening in your mind, acknowledge it, don’t criticise – be kind and return your attention to writing your Christmas cards, wrapping your gifts or standing in a queue of shoppers. Pay more attention to where you are and what you are doing, even if your mind tries to offer distractions and alternative realities that appear to be more pleasant than your real experience.

So from the time you wake up on this Christmas morning, take time to fully notice the little things, the smells, textures and tastes of Christmas. Each chocolate, cuddle and gift. Take time to savour it. How do the sweets look in your hand? How do they smell? How does it feel in your mouth? Notice the effort others have made to give you gifts. Look at the way they are wrapped. How it feels to pull off the paper. Consider that many other people you do not know have made effort to grow, make or transport parts of your present too.

Be kind and compassionate to everyone you have contact with – including yourself. And if things don’t quite go as planned or you are feeling overwhelmed by the celebrations, just take your seat by the side of the road and spend a few moments focusing your attention on your breath.

Opinion Wed, 24 Dec 2014 11:33:56 -0500
Remembering the Greediest Americans This Holiday Season

Peace on Earth, good will toward men. We honor these noble values every holiday season — and some people actually work to advance them all year long.

Other folks, by contrast, mock these values. They spend their days chasing after ever grander stashes of personal treasure.

These greedy souls love the shadows. So a few years back, the inequality weekly I edit for the Institute for Policy Studies began publishing an annual list of America’s top ten greediest. I’ve just introduced this year’s list, bringing tales of plutocrats young and old.

The oldest character on it: the 79-year-old Wall Street mover and shaker Ken Langone.

Langone began making headlines right at the start of 2014 with his advice for Pope Francis. The pontiff, he told New York’s archbishop, should cool it on the inequality front. Papal broadsides against “the powerful feeding upon the powerless,” Langone complained, could leave America’s wealthy “incapable of feeling compassion for the poor.”

Langone himself has always been a generous sort — at least for his friends. As a New York Stock Exchange director, he greased the skids for a $190-million exit package for his buddy, NYSE president Richard Grasso, in 2003.

Langone has been a bit less generous to the powerless. As a director at Yum! Brands, the home of Taco Bell and KFC, he cheered on company efforts to oppose hikes in the minimum wage. As he likes to tell regulators: “Leave us alone and let us hire people.”

Home Depot, the retail giant Langone’s financing helped propel to big-box dominance, shows what happens when you leave corporations alone. Big-box giants, notes the research group Good Jobs First, don’t create jobs. They “grow mostly at the expense of existing competitors,” many of them local businesses.

Big-box giants, on the other hand, do create massive concentrations of personal wealth. Forbes now estimates Langone’s net worth at $2.6 billion.

Among the youngest of America’s 2014 top ten greediest: the 38-year-old Travis Kalanick, the CEO and cofounder of Uber, a taxi-like service that lets travelers hail cars through a mobile phone app.

Last January, Uber was running cars in just 60 cities. Now it’s spread to 250 cities — in 50 countries. That growth has propelled Uber’s worth to $40 billion — more than long-established transportation heavyweights like Hertz and United Continental.

Not bad for a company, the AP notes, “that didn’t exist five years ago.” And Kalanick himself, Forbes estimates, is ending the year worth a cool $3 billion.

How has Uber soared so quickly? The company is pumping up profits, critics charge, by taking short cuts like not running adequate background checks on drivers. Officials in Los Angeles and San Francisco have just filed suit against Uber on driver safety checks, and governments from Spain to India have also taken legal action against the company.

Other critics include customers like Leah Kappen of Indianapolis. She took an Uber ride downtown to the December 6 Big Ten football championship game. That ride cost her $30. The 18-minute trip home after the game cost her $450. This past Halloween, an 18-mile ride home ran New Yorker Elliott Asbury $539.

Uber’s “surge pricing” — a policy that ties rates to the supposed market demands of the moment — generated these outsized fees. But anyone upset by $500 cab fare, says Kalanick, needs to start “getting used to dynamic pricing in transportation.”

Uber drivers are complaining, too. One of Uber’s competitors, Lyft, gives all the extra profit from “surge pricing” to its drivers. Uber takes a 20 percent cut. Why not, the Wall Street Journal asked Kalanick, follow suit?

“We are a business,” he replied.

So much for good will.

Opinion Wed, 24 Dec 2014 11:27:18 -0500