June 12, 2016
Reports in the NY Times, the Wall Street Journal and USA Today this week document Donald Trump’s refusal to pay debts owed to the small businesses that supplied him goods and services over the years, in some cases forcing them into bankruptcy.
In today’s NY Times, there’s an article about how Trump deceived investors into buying shares in his Atlantic City hotels at inflated prices and then used much of the capital raised for his personal luxurious tastes. It also points out how one small company nearly went under because Trump refused to pay his bills even as he was siphoning off millions from the gambling casinos that relied on companies such as Triad Building Specialties to keep going:
Beth Rosser of West Chester, Pa., is still bitter over what happened to her father, whose company Triad Building Specialties nearly collapsed when Mr. Trump took the Taj into bankruptcy. It took three years to recover any money owed for his work on the casino, she said, and her father received only 30 cents on the dollar.
“Trump crawled his way to the top on the back of little guys, one of them being my father,” said Ms. Rosser, who runs Triad today. “He had no regard for thousands of men and women who worked on those projects. He says he’ll make America great again, but his past shows the complete opposite of that.”
Titled “Donald Trump’s Business Plan Left a Trail of Unpaid Bills”, the WSJ article describes a scenario in which the capitalist state took the side of rich bastard who was very good at stiffing the same kinds of people as the Rossers.
A review of court filings from jurisdictions in 33 states, along with interviews with business people, real-estate executives and others, shows a pattern over Mr. Trump’s 40-year career of his sometimes refusing to pay what some business owners said Trump companies owed them.
A chandelier shop, a curtain maker, a lawyer and others have said Mr. Trump’s companies agreed to buy goods and services, then reneged when some or all were delivered.
Larry Walters, whose Las Vegas drapery factory supplied Mr. Trump’s hotel there eight years ago, said the developer, Trump Ruffin, wouldn’t pay for additional work it demanded beyond the original contract. When Mr. Walters then refused to turn over some fabric, sheriff’s deputies burst into his factory after Trump Ruffin sued him. Trucks took the fabric away.
Finally, there’s the USA Today article titled “USA TODAY exclusive: Hundreds allege Donald Trump doesn’t pay his bills”
During the Atlantic City casino boom in the 1980s, Philadelphia cabinet-builder Edward Friel Jr. landed a $400,000 contract to build the bases for slot machines, registration desks, bars and other cabinets at Harrah’s at Trump Plaza.
The family cabinetry business, founded in the 1940s by Edward’s father, finished its work in 1984 and submitted its final bill to the general contractor for the Trump Organization, the resort’s builder.
Edward’s son, Paul, who was the firm’s accountant, still remembers the amount of that bill more than 30 years later: $83,600. The reason: the money never came. “That began the demise of the Edward J. Friel Company… which has been around since my grandfather,” he said.
You’ll note that in both the WSJ and USA Today article, there’s a reference to a contract that was apparently not worth the paper it was written on. It evokes the words that some attribute to Balzac in “Le Père Goriot”: “Behind every great fortune there is a crime.” The novel doesn’t actually contain this exact formulation but it seems to have achieved a lofty but apocryphal status as good as if it were written by the French royalist who certainly understood what made people like Trump tick. In fact, in many ways Trump seems to have stepped out of this Balzac novel in which a young man in tutored in the art of pursuing money and women as instruments for social climbing as Wikipedia puts it.
Now you would think that a contract legally binds you to pay what you owe. For example, what would happen after you signed a lease for an apartment in Manhattan that rents for $6000 per month and then after you moved in, you told the landlord that it was only worth $4000 per month and intended not to pay a penny more. Not only would you be evicted, it would be difficult to find a landlord willing to lease you an apartment ever again.
I say this as someone who knows a Turk who has run into the same situation as the small proprietors described in the articles above. This was a guy who went to work for a company in Turkey based on a contract that gave him 10 percent of the ownership. After more than a decade working for the company, he came to the USA to look for a new position here. After settling in to a new apartment, he discovered that the people he used to work for had no intention of living up to the contract. There is one law that favors the Donald Trumps of Turkey and another law that applies to the Turk who will not be able to shrug off what he now owes to the landlord.
The USA article describes how Trump gets away with it:
The actions in total paint a portrait of Trump’s sprawling organization frequently failing to pay small businesses and individuals, then sometimes tying them up in court and other negotiations for years. In some cases, the Trump teams financially overpower and outlast much smaller opponents, draining their resources. Some just give up the fight, or settle for less; some have ended up in bankruptcy or out of business altogether.
This is exactly the asymmetric economic warfare that the Turk is facing now. His former employer is worth hundreds of millions of dollars and would have no problem tying him up in court with legal fees he can ill afford right now. His future is uncertain.
Over the years when I have written about economic inequality and corruption, it is mostly set within a broad social and political fabric such as, for example, how Assad’s cousin Rami Makhlouf uses his sixty percent control of the Syrian economy to screw people left and right. I can easily understand how if you have been fucked over by Makhlouf or Trump, you’d have blood in your eyes—to evoke Trump’s sexist jibe against Megan Kelly. But when you know somebody who has been such a victim, you feel doubly outraged. If I had worked for Columbia University for 21 years as I had and discovered that they decided not to pay me my six month’s severance pay, there would have been hell to pay.
Isn’t it ironic that the man running as the Republican Party candidate for president is a deadbeat who thinks a contract is a piece of paper he can wipe his ass with? The contract is supposed to be a cornerstone of capitalist property relations and here’s someone who believes in the superiority of capitalism to any other economic system now making a mockery of it.
If you Google “contract law” and capitalism, the first item to show up is an online book titled “Law for Entrepreneurs” (it doesn’t indicate who the author is.) Chapter 8 is titled “Introduction to Contract Law” and states:
Contract law did not develop according to a conscious plan, however. It was a response to changing conditions, and the judges who created it frequently resisted, preferring the imagined quieter pastoral life of their forefathers. Not until the nineteenth century, in both the United States and England, did a full-fledged law of contracts arise together with, and help create, modern capitalism.
Modern capitalism, indeed, would not be possible without contract law. So it is that in planned economies, like those of the former Soviet Union and precapitalistic China, the contract did not determine the nature of an economic transaction. That transaction was first set forth by the state’s planning authorities; only thereafter were the predetermined provisions set down in a written contract. Modern capitalism has demanded new contract regimes in Russia and China; the latter adopted its Revised Contract Law in 1999.
Contract law may be viewed economically as well as culturally. In An Economic Analysis of Law, Judge Richard A. Posner (a former University of Chicago law professor) suggests that contract law performs three significant economic functions. First, it helps maintain incentives for individuals to exchange goods and services efficiently. Second, it reduces the costs of economic transactions because its very existence means that the parties need not go to the trouble of negotiating a variety of rules and terms already spelled out. Third, the law of contracts alerts the parties to troubles that have arisen in the past, thus making it easier to plan the transactions more intelligently and avoid potential pitfalls.
Posner is one of the country’s most influential law professors, a liberal Republican ideologically. You can bet that when he teaches a class on contract law, he will stress the sanctity of the contract without which capitalism descends into anarchy.
In fact capitalism has been anarchic from the very beginning (I am using the word in its original sense as “without rules” rather than Bakunin’s political philosophy). Despite what libertarians argue, capitalists always use political power to dominate the classes below them. The less economic power you have, the less political power. In the case of Trump’s victims, they simply lack the power to influence the judge and the cops who took away the fabric of a man who made the mistake of signing a contract with Donald Trump.
In societies where the bourgeoisie has the most power over the subordinate classes and which corruption runs rampant, the pieties of contract law are especially irrelevant. While not exactly a contract, the agreed upon wage when you become an employee is about as binding as Trump’s deal with the fabric company. In Ukraine, back pay is often treated as an inconvenience by the owner of a coal mine or a steel mill and simply ignored.
When ordinary people rise up against oppression in a place like Syria or Ukraine, their fondest hope is simply to live in a “normal society” where the individual is not vulnerable to the predations of oligarchs like Rihat Akmetov who was one of Ukraine’s richest men and a close associate of the deposed pro-Russian president Viktor Yanukovych. Guess who ran Yanukovych’s campaign for president? None other than Donald Trump’s chief campaign adviser Paul Manafort, as the Guardian reported in April 2016:
For almost four decades, Donald Trump’s newly installed senior campaign adviser, Paul Manafort, has managed to juggle two different worlds: well known during US election season as a shrewd and tough political operative, he also boasts a hefty résumé as a consultant to or lobbyist for controversial foreign leaders and oligarchs with unsavory reputations.
The controversial clients Manafort has represented have paid him and his firms millions of dollars and form a who’s who of authoritarian leaders and scandal-plagued businessmen in Ukraine, Russia, the Philippines and more. On some occasions, Manafort has become involved in business deals that have sparked litigation and allegations of impropriety.
In 1985, Manafort and his first lobbying firm, Black Manafort Stone & Kelly, signed a $1m contract with a Philippine business group to promote dictator Ferdinand Marcos just a few months before his regime was overthrown and he fled the country.
In the mid-1990s, Manafort reportedly received almost $90,000 from a Lebanese-born businessman and arms merchant to advise French presidential candidate and then prime minister Edouard Balladur, a controversial payment that surfaced as part of a long running French investigation – dubbed the Karachi affair – into allegations that funds, including those Manafort received, came from an arms sale of French submarines to Pakistan and were illegally funneled into the French presidential campaign.
And in 2010, Manafort helped pro-Russian candidate Viktor Yanukovych remake his tarnished image and win a presidential election in Ukraine. The effort was arguably the high point in a decade of political and business consulting in that country involving figures such as gas tycoon Dmytro Firtash, who was separately charged in 2014 by US officials with being part of a bribery scheme in India. The US has sought to have him extradited from Austria, where he was arrested. Firtash and a billionaire Russian oligarch, Oleg Deripaska, also worked with Manafort on separate byzantine investment deals in New York and Ukraine, respectively, that have led to lawsuits.
January 11, 2016
Although I had plans to eventually write about the 2015 documentary “Cartel Land” at some point, I’ve decided to put it on the front burner now that the recapture of Joaquín “Chapo” Guzmán and Sean Penn’s Rolling Stone interview with the drug baron has become the lead story in the NY Times.
“Cartel Land” is now the fourth documentary I have seen about the Mexican drug wars. The first was the 2013 “Narco Cultura”, a film that was focused on the Narcocorrido—the songs that blend the traditional Norteño style with lyrics that toast the drug lords after the fashion of American gansta rap. I found much of it compelling but regretted that there was “not much in the way of analysis.”
Only two months ago, I reviewed “Kingdom of Shadows”, a personality-driven documentary that profiled a Texas rancher who smuggled marijuana when he wasa young and a Mexican cop who was noteworthy for being an exception to the virtually universal rule of corruption. It too was far more interested in “story-telling” than analysis.
Sandwiched between the two films chronologically was the 2014 “Drug Lord: the Legend of Shorty” that described the futile search by a young and obscure director for an interview with the elusive drug lord (chapo means shorty). Apparently he lacked the clout of Sean Penn. Once again I found the film sorely lacking in analysis:
Although I can recommend “Drug Lord”, I am still looking for a documentary on the Mexican drug trade that focuses on the political and economic aspects (what else would you expect from me?) It would be important to hear what Mexican radicals, especially those trained in sociology and history, have to say about the viral growth of drug syndicates over the past couple of decades.
Following suit, “Cartel Land” once again could not be bothered with anything so dry and dusty as a sociologist explaining why Mexico’s major industry is now the production and sale of illegal drugs. Even more than the three films mentioned above, it is intent on drama and action after the fashion of narrative films such as “Traffic” or “Sicario”.
Its saving grace was having access to the autodefensas in Michoacán, the state on the west coast of Mexico that was as ravaged by drug gangs as Guzman’s Sinaloa. The autodefensas were anti-drug paramilitaries initiated in late 2013 by a physician named José Valverde who allowed the film crew to accompany him on raids against members of the Knights Templar cartel that dominated the region. Your initial impression is that the vigilantes were popular with the community and effective. When the Mexican military began to crack down on them, there were protests that successfully defended their right to bear arms and to use them against the gangs.
Like “Kingdom of Shadows”, “Cartel Land” includes a personality from Texas, this time a 56-year old man named Tim “Nailer” Foley who is obviously seen as a complement to Valverde since he too is the leader of a vigilante group known as the Arizona Border Recon whose members, including Foley, patrol the border with Mexico assault rifles in hand. They claim they are trying to prevent drugs from flowing into the USA but mostly they serve as an auxiliary to the border patrols that are trying to keep desperate jobseekers from crossing over. Indeed, you see Foley and his henchman training their guns on some hapless Mexicans whose only hope is to get a job in construction or gardening. The film makes no effort to interrogate the role of Foley’s goons given the obvious evidence that drug cartels use submarines, planes, trucks, and tunnels to get drugs into the USA, not in the backpacks of poor people swimming across the Rio Grande.
The final third or so of the film chronicles the downfall of the autodefensas as its raids begin to target the innocent just as many DEA raids in the USA have done over the years. There are also allegations that the Knights Templar have penetrated the autodefensas to turn them to their own advantage. Eventually Valverde is arrested and sentenced to a long prison sentence cheek by jowl with those who he was supposedly trying to eliminate.
The obvious lesson is that you should not take the law into your own hands although the American vigilantes have a much easier time of it as the armed occupation in Oregon might indicate.
Mostly the film exploits the visceral experience of being embedded with Mexican vigilantes who are taking the fight to the bad guys. We are treated to a front row seat of men firing assault rifles into Knights Templar hideouts as Valverde or his deputies cry out “Surrender, motherfuckers.”
Perhaps the intent of director Matthew Heineman can best be gleaned from the inclusion of Kathryn Bigelow as Executive Producer. Bigelow was the director of “Zero Dark Thirty”, the atrocious reenactment of the raid on Osama bin-Laden’s hideout that provided vicarious thrills to many film reviewers—except me. Shortly after Bigelow came on board, she told Entertainment Weekly that the film would be “potent, raw and visceral”, the same adjectives that could apply to “Sicario”, a narrative film I found cliché-ridden and obvious.
The appeal of the drug wars for people like Kathryn Bigelow should be obvious. They allow her and those attuned to her aesthetic like Matthew Heineman to make a lurid entertainment with social questions getting short shrift. After all it is not the job of a filmmaker to make judgments unless of course you are some obscure Marxist whose work will be screened at the Film Forum for a week or so and then disappear into oblivion.
This leads us to the Sean Penn/”Chapo” Guzman saga. You can read Penn’s article on the Rolling Stone website. Most of Penn’s article is about himself, written in the vein that this commercially “edgy” magazine has made famous. For example, after he gets off a plane flown by one of Chapo’s henchmen, he takes care of some personal business:
I throw my satchel into the open back of one of the SUVs, and lumber over to the tree line to take a piss. Dick in hand, I do consider it among my body parts vulnerable to the knives of irrational narco types, and take a fond last look, before tucking it back into my pants.
Obviously we are in Hunter Thomson territory. Not that I mind gonzo journalism so much, but I keep looking for some discussion of why Sinaloa is so poor or some other matters that could help put the drug wars into perspective.
After thousands of words of prelude that has the aura of an Oliver Stone movie, Penn finally sits down to interview the world’s leading drug dealer. As might be expected, Guzman is given ample opportunity to express by what now seems self-evident, namely that as long as there is a demand for drugs, Mexico will supply them. He got involved in the drug business in Sinaloa when he was 15 years old because there were no other jobs available and hopes to continue for as long as he can in his chosen trade.
Showing that he has absorbed the best techniques of an Oprah Winfrey, Penn asks the gangster about his relationship to his mom. His reply: “My relationship? Perfect. Very well.”
The interview, which probably took all of 15 minutes, is noteworthy for its deference to its subject.
Years ago I tried to come to terms with the Colombian drug trade since there was a time when the public was fascinated with Pablo Escobar, another Robin Hood figure who rose from poverty. My research convinced me that rather than turning Colombia into a jungle, there was evidence that it was a stabilizing factor:
It is important to understand that the cocaine industry also has the effect of fueling the transformation of the peasantry into a proletariat and petty proprietors at the very same time it is displacing it from subsistence farming. In the early 1980s, according to Johns Hopkins Political Science professor Bruce Begley, over 500 thousand Colombians had jobs in the drug trade. In addition, Begley argues that the drugs have actually served to stabilize the Colombian political system and specifically compares their role in the economy to the introduction of the coffee industry in the mid-1800s:
Due to marijuana and cocaine a new nouveau riche has developed in Colombia much as in the late and early twentieth centuries a coffee oligarchy developed in the country. Parts of the civil wars which were fought in the latter part of the nineteenth century, particularly the War of 1000 Days in Colombia, had something to do with the introduction of coffee and the socioeconomic changes that followed. Today, fairly conservative, often right-wing individuals link themselves frequently with MAS, with the military and with other organizations moving to legitimize themselves within the Colombian system, moving to gain status within that society, buying political power, Into the system if you like, but not to disrupt that system in any fundamental way. Nonetheless, there is this sense that the old families in Colombia which have controlled the politics since the late nineteenth century introduction of coffee are now gradually incorporating and absorbing the nouveau riche, the Carlos Lehders that rise, not necessarily in the first generation but rather in the second and third generations. The children of the drug dealers now join the major social clubs and marry into some of the more prestigious families. Many of these old families are precisely those families who were declining economically, and hence politically. With the introduction of coffee in the nineteenth century the new coffee barons also gradually married into more traditional, land-owning families, joining money and commercial agricultural exports with status within the society.
If you look at American history, you will see the same tendencies. The Robber Barons used illegal means to create the vast wealth that is now enshrined in the names of universities like Stanford and Carnegie-Mellon. Who knows? Maybe years from now there will be a Chapo University.
Even more to the point, just as the prohibition of cocaine, methamphetamine, and marijuana lead to huge but illicit profits in Mexico, alcohol played the same role in American society. And perhaps nobody had more of a meteoric rise to respectability based on racketeering than Joseph Kennedy, the father of the JFK. Some years back I wrote about our country’s Chapo—of course he was a lot taller than Guzman but by no means no more benign:
In keeping with Balzac’s epigraph to “Pere Goriot” that “Behind every great fortune there is a crime,” the Kennedy dynasty owed its place in history to the ongoing criminal activities of Joseph Kennedy.
In “The Outfit,” Gus Russo’s definitive study of the Chicago mob, we learn that Joseph Kennedy made his millions through a combination of white-collar crime and bootlegging. Using the same kinds of illegal insider trading that people like Michael Milken made infamous, Kennedy sold short just before the 1929 crash and walked away richer than ever. As a banker-investor, Kennedy plundered the stock of Pathé Films in the 1920s, giving insiders like himself stock worth $80 per share, while leaving common stockholders $1.50 per share. When Kennedy attempted a hostile takeover of the California-based Pantages Theater chain in 1929, he paid a 17 year old girl $10,000 to falsely claim that she had been raped by the chain’s owner, who then served part of a fifty-year prison sentence that was ultimately reversed. Kennedy got control of Pantages at a bargain basement price.
With respect to bootlegging, Russo reports:
Kennedy was up to his eyes in illegal alcohol. Leading underworld bootleggers from Frank Costello to Doc Stacher to Owney Madden to Joe Bonanno to Meyer Lansky to Lucky Luciano have all recalled for their biographers or for news journalists how they had bought booze that had been shipped into the country by Joseph Kennedy. On the receiving side of the booze business, everyone from Joe’s Hyannis Port chums to the eastern Long Island townsfolk who survived the Depression by uncrating booze off the bootleggers’ boats tells tales of Joe Kennedy’s involvement in the illegal trade.
Connections made in this period would prove useful during JFK’s 1960 Presidential bid. Murray “Curley” Humphreys, the brains behind Al Capone, and his chief executioner Sam Giancana (nicknamed “Moony” because of his psychopathic reputation) had inherited control of the Chicago mob after Capone’s death and built up powerful alliances in the trade union bureaucracy all around the country that helped to tip the balance in Kennedy’s favor in the 1960 primaries race.
Using mob lawyer and ex-state attorney general Robert J. McDonnell as a liaison, the Kennedys met with Giancana in Chicago in 1960. According to Russo, a quid pro quo was worked out at this meeting. In exchange for the mob’s help, a Kennedy Justice Department would go easy on them. According to Humphreys’ widow, the mobster was leery of making a deal: “Murray was against it. He remembered Joe Kennedy from the bootlegging days–called him an untrustworthy ‘four flusher’ and a ‘potato eater.’ Something to do with a booze delivery that Joe had stolen. He said that Joe Kennedy could be trusted as far as he, Murray, could throw a piano.”
July 17, 2015
Years from now, when socialist historians of the future examine the dead carcass of US capitalism, they will pay special attention to the growing barbarism of the penal system. While most attention will obviously be paid to the reintroduction of the death penalty and a racist judicial system that incarcerates minorities disproportionately, there will also have to be a close look at the tendency to treat mentally ill people as common criminals.
For all practical purposes, the insanity defense is a thing of the past. It was first introduced in Great Britain in the 1840s, a time of child labor and other cruelties that figure large in the novels of Charles Dickens. The insanity defense was first used in the case of an 1843 assassination attempt on British Prime Minister Robert Peel by a psychotic individual named Daniel M’Naghten. When a physician testified that M’Naghten was insane, the prosecution agreed to stop the case and the defendant was declared insane despite protests from Queen Victoria and the House of Lords.
The M’Naghten Rule can be simply described as a “right and wrong” test. The jury was required to answer two questions: (1) did the defendant know what he was doing when he committed the crime?; or (2) did the defendant understand that his actions were wrong?
When psychotic individuals were on trial without a prior history of professional treatment, it was somewhat more difficult to find them not guilty by reason of insanity but it could be done. Now it makes no difference if someone has been under treatment for a psychiatric illness. So what happened?
In a word, John Hinckley.
After Hinckley was found not guilty by insanity of his assassination attempt on the beloved reactionary US President Reagan, committees of the House and Senate held hearings regarding use of the insanity defense within a month of the verdict.
Within three years of Hinckley’s acquittal, Congress and half of the states enacted laws limiting use of the defense and one state, Utah, abolished the defense outright. In 1986 Utah was joined by Montana andIdaho, two other “frontier justice” states. Congress passed revisions in the defense embodied in the Insanity Defense Reform Act of 1984, which reads:
It is an affirmative defense to a prosecution under any federal statute that, at the time of the commission of the acts constituting the offense, the defendant as a result of a severe mental disease or defect, was unable to appreciate the nature and quality or the wrongfulness of his acts. Mental disease or defect does not otherwise constitute a defense.
As a rule of thumb, schizophrenics who are in a “severe” condition are too detached from reality to go out and kill somebody, let alone cross the street. People who are this dysfunctional are generally hospitalized. The more typical occurrence is somebody who goes off their medication when they are not hospitalized, but who are sufficiently in touch with reality to use a knife or some other weapon. And even if such an individual is in a “severe” state at the time of the crime, they will pump him full of medications during the trial to effectuate a “sane” condition sufficient to win a conviction. Another factor that militates against a successful defense is that psychiatrists are no longer allowed as expert witnesses in many cases.
After 21 years of confinement in a mental hospital, Hinckley had been allowed to visit his aging parents on weekends under stringent conditions. That had outraged all the rightwing talking heads on AM hate radio and the Fox cable news. Meanwhile, all of the top officials of the Reagan administration who broke all sorts of laws in backing the murderous Nicaraguan contras did token time in country club prisons. I guess the lesson is if you are going out to kill people, you should do it on a wholesale basis and wrap yourself in the American flag.
April 9, 2015
In American popular culture, the mafia gangster is either a tarnished hero like Don Corleone or a likeable lowlife like Tony Soprano. But for Italians, he is a much more malevolent figure especially as seen in a number of art films that are often infused with the leftist and neorealist traditions of the postwar period. More importantly, it is much harder for the average Italian to cheer for Michael Corleone taking revenge on a crooked cop and rival gang leader or Tony Soprano’s malapropisms when the mafia has functioned so often as a rightwing death squad.
In Paul Ginsborg’s Marxist-oriented “A History of Contemporary Italy: Society and Politics 1943-1988”, there’s an account of the mafia’s attack on a peasant protest in Villalba in central Sicily in September 1944. This was a village dominated by a mafia boss named Don Calò Vizzini, who had returned as part of the Allies entourage. Vizzini was among the gangsters who supposedly helped prepare the American invasion alongside Lucky Luciano and others.
The local CP leader, a man named Girolamo Li Causi, had asked for permission to hold a meeting in the village square. Vizzini granted permission but only if there was no talk about land reform or the mafia. Ginsborg quotes fellow Marxist Carlo Levi on what took place there:
Causi began to talk to that little unexpected crowd about the Micciché estate, about the land, about the Mafia. The parish priest, brother of Don Calò, tried to drown Li Causi’s voice by ringing the bells of his church. But the peasants listened and understood: ‘He’s right; they said: ‘blessed be the milk of the mother who suckled him, it’s gospel truth what he is saying.’ By so doing they were breaking a sense of time-honoured servitude, disobeying not just one order but order itself, challenging the laws of the powerful destroying authority, despising and offending prestige. It was then that Don Calò,. from the middle of the piazza, shouted ‘it’s all lies!’ The sound of his cry acted like a signal. The mafiosi began to shoot.
Fourteen people were wounded that day, including Li Causi.
There was peasant resistance in Calabria as well, the “toe” of southern Italy that appears to be kicking the island of Sicily. A 1945 CP report indicated that they had built peasant leagues with 40,000 members in Calabria, the very region that is the locale for “Black Souls”, an Italian film that opens at the Angelika and City Cinemas in New York tomorrow and at the Nuart in Los Angeles on April 24.
The blackness alluded to in the title is not skin color but the evil that dwells in the heart of brothers Luigi and Rocco Carbone. The two gangsters come from the town of Africo in Calabria, where their older brother Luciano raises goats on a picturesque mountaintop. Luciano’s son Leo, who is in his late teens, wants nothing to do with goats and only dreams of becoming an apprentice to Luigi and Rocco who run their drug importing business out of Milan.
When a traditional rival of the Carbone family, a local saloon-keeper in Africo, insults them, Leo arms himself with a shotgun and blows out his windows in the middle of the night. This is hardly the kind of offense that leads to gang wars of the sort that dominate American films but is in fact typical of what has turned much of southern Italy into a blood-soaked battleground.
If you are expecting Godfather type action of the “going to the mattresses” sort, not only won’t you find here but you shouldn’t. The violence in “Black Souls” is like that takes place over turf control by the Crips and the Bloods or the kind that has forced so many young people to flee El Salvador and Honduras. It is Luciano’s hope to dissuade Leo from a life of crime even though he knows it is a losing battle. The boy worships Luigi who is both charismatic in his own slimy fashion as well as filthy rich.
“Black Souls” is based on a novel written by Gioacchino Criaco, who was born in Africo and a lawyer who returned home to write about his region’s troubles. Like Juarez in Mexico, Africo is one of Calabria’s most dangerous spots. The film benefits from the casting of Giuseppe Fumo, a local nonprofessional, as Leo. He must have known from first-hand experience the tragic attraction that the mafia has for youth with an uncertain future.
Criaco is far more interested in the family drama that pits brother against brother for the soul of a young man than in the social and economic forces that have given birth to the mafia. Before long, I will be researching Italian films about the mafia that draw from radical and neorealist traditions but do not hesitate to recommend “Black Souls”, a film that is uncompromisingly bleak but truthful. It is blessed by a good script and fine performances. There’s not much more than one can ask for nowadays.
February 15, 2015
The title of this article stems from Honoré de Balzac’s “Père Goriot”. Often seen erroneously (including by me) as the novel’s epigraph, it is actually words spoken by a scheming, malevolent character named Vautrin: “The secret of a great success for which you are at a loss to account is a crime that has never been discovered, because it was properly executed.”
Whatever the exact words, the Balzacian worldview came to mind after reading the NY Times series of articles on the filthy rich and mostly criminal owners of the city’s most expensive condos. They sank in further after watching an episode on “Sixty Minutes” about HSBC, a Swiss bank that facilitated tax evasion and worse.
I suppose that I should have long been inured to the criminality of the super-rich but for some reason I always stop dead in my tracks when I encounter it anew on such a grand scale. I end up feeling like Joe Buck, the Texas hustler who has come to NY to make it as a professional gigolo in “Midnight Cowboy”, standing over a man sprawled out unconscious on the sidewalk as people pass him by with barely a glance. Unlike the rest of humanity, Buck tells himself that something is wrong.
Karl Marx was a big fan of Balzac and even intended to write a study of “The Human Comedy”, a massive collection of novels, short stories and articles about the greed, corruption and power of the bourgeoisie but hardly a paean to the common man. Keep in mind that Balzac was a royalist and hardly a purveyor of “socialist realism”. Engels, another fan of Balzac, told London radical Margaret Harkness in 1888 that his politics were less important than his ability to tell the truth about bourgeois society:
The more the opinions of the author remain hidden, the better for the work of art. The realism I allude to may crop out even in spite of the author’s opinions. Let me refer to an example. Balzac, whom I consider a far greater master of realism than all the Zolas passés, présents et a venir [past, present and future], in “La Comédie humaine” gives us a most wonderfully realistic history of French ‘Society’, especially of le monde parisien [the Parisian social world], describing, chronicle-fashion, almost year by year from 1816 to 1848 the progressive inroads of the rising bourgeoisie upon the society of nobles, that reconstituted itself after 1815 and that set up again, as far as it could, the standard of la viellie politesse française [French refinement]. He describes how the last remnants of this, to him, model society gradually succumbed before the intrusion of the vulgar monied upstart, or were corrupted by him; how the grand dame whose conjugal infidelities were but a mode of asserting herself in perfect accordance with the way she had been disposed of in marriage, gave way to the bourgeoisie, who horned her husband for cash or cashmere; and around this central picture he groups a complete history of French Society from which, even in economic details (for instance the rearrangement of real and personal property after the Revolution) I have learned more than from all the professed historians, economists, and statisticians of the period together.
Monied upstarts pretty much describes the billionaires who bought Manhattan apartments through shell corporations that concealed their identities. The article that introduces the series describes the affinity between NY’s one percent and the human detritus that is artificially inflating an already out-of-reach real estate market:
The high-end real estate market has become less and less transparent — and more alluring for those abroad with assets they wish to keep anonymous — even as the United States pushes other nations to help stanch the flow of American money leaving the country to avoid taxes. Yet for all the concerns of law enforcement officials that shell companies can hide illicit gains, regulatory efforts to require more openness from these companies have failed.
“We like the money,” said Raymond Baker, the president of Global Financial Integrity, a Washington nonprofit that tracks the illicit flow of money. “It’s that simple. We like the money that comes into our accounts, and we are not nearly as judgmental about it as we should be.”
In some ways, officials are clamoring for the foreign wealthy. In New York, tax breaks for condominium developments benefit owners looking for a second, or third, residence in one of Manhattan’s premier buildings. Mayor Michael R. Bloomberg said on his weekly radio program in 2013, shortly before leaving office: “If we could get every billionaire around the world to move here, it would be a godsend.”
In fact the invasion of oligarchs and crooks has been the opposite of a godsend. These condominiums enjoy tax breaks originally intended to stimulate the construction of middle-class housing but real estate developers obviously find it more profitable to build high-rises like the Time-Warner Center that is profiled in the articles. Built shortly after September 11, 2001, the ultra-luxury building was advertised as a fortress for the super-rich that had more to fear from the workers and peasants they were screwing than Islamic radicals.
Here is an idea of the kind of scum that inhabits the Time-Warner Center:
Units 72B and 51E are owned by the Amantea Corporation, which The Times traced to a mining magnate named Anil Agarwal. His company was fined for polluting a major river near a copper mine in Zambia, which sickened nearby residents. And judicial committees in his native India determined that his company had violated the land rights of an indigenous tribe near a proposed mine.
Perhaps the most eye-opening example of how larceny and power politics commingle is found in part five in the series titled “At the Time Warner Center, an Enclave of Powerful Russians”. If you, like me, place little credence in the notion of the Kremlin and its retinue of connected oligarchs as some kind of anti-imperialist vanguard, this profile of Andrey Vavilov is a must read.
Vavilov was Boris Yeltsin’s deputy finance minister and like many of his top officials cultivated ties with American inside-the-beltway policy wonks and power brokers at places like the Brookings Institution. Vavilov was one of the key architects who advised Yeltsin on turning state-owned industry, particularly in the energy sphere, into get-rich-quick bonanzas for the managers benefiting from privatization including himself. Cashing in on a sale of a oil company being sold back to the state under Putin to the tune of $600 million, he was not put off by the price tag of $37.5 million for an 8,275 square foot penthouse in the Time Warner Center. In addition to this penthouse, Vavilov owns an Airbus jet, apartments in Monaco and Beverly Hills, and recently purchased two diamonds for his wife (55 and 59.5 carats) worth a cool $60 million.
He is also a visiting professor of economics at Penn State, where he must be educating a new generation of economists on how to game the system for Wall Street hedge funds and the like.
Like many on Wall Street, Vavilov has managed to avoid a prison cell despite the serious allegations made against him over the years, including the mishandling of nearly a quarter-billion dollars in proceeds from the sale of MIG’s to India. Just around the time the law was breathing down his neck in 2007, he was elected senator to the Russian parliament, which gave him immunity. The case was dropped a year later because the statue of limitations had expired.
Most interestingly, despite Vavilov’s close association to Yeltsin and Putin’s reputation for cleaning up Yeltsin’s privatization mess, he managed to endear himself to the fearless anti-imperialist leader:
Despite Mr. Vavilov’s close association with the Yeltsin administration, much of his wealth was acquired later, as Mr. Putin’s government was consolidating the nation’s oil industry in one state-affiliated super company, Rosneft.
In 2000, Mr. Vavilov had acquired a small oil company, Severnaya Neft, or Northern Oil, for $25 million. When Rosneft purchased Severnaya Neft in 2003 for $600 million, the deal was widely criticized as having been larded with kickbacks for Kremlin insiders.
In a now-legendary confrontation at the Kremlin, Mikhail B. Khodorkovsky, chairman of the oil giant Yukos, challenged Mr. Putin about the purchase. Many people believed that it was Mr. Putin’s anger over the very public encounter that sparked his campaign against Mr. Khodorkovsky, who would be stripped of his company, prosecuted and imprisoned.
For most of the left, particularly those people who remain impressed by NYU professor emeritus Stephen F. Cohen who has the same relationship to Putin that Anna Louise Strong had to Mao Zedong, there’s very little understanding of how Putin continues Yeltsin’s policies rather than breaks with them. In fact, there is an analogy with how Cohen’s wife’s vanity publication, ie. The Nation Magazine, fails to appreciate how much Obama is a continuation of George W. Bush.
For the best analysis of the Yeltsin-Putin continuity, I recommend a Tony Wood review of three recent books on Putin that is unfortunately behind a paywall (contact me if you’d like a copy) but this is the takeaway:
New Year’s Eve 1999 – when Yeltsin appeared on Russian TV screens to announce his resignation as president in favour of Putin – is often taken to mark a major turning point, from the ‘fevered 1990s’ to the stability of the ‘Zero Years’, as the 2000s are known, the moment when Yeltsin’s erratic improvisation gave way to the cold calculation personified in Putin. Economically, the prolonged post-Soviet collapse was followed by recovery after the 1998 ruble crash and then an oil-fuelled boom, while in the media a boisterous incoherent pluralism was replaced by deadening consensus. But there were deeper continuities in the system both men commanded.
Politically, the ‘managed democracy’ of the 2000s was not a perversion of Yeltsinism but its maturation. Faced with a fractious legislature – the Congress of People’s Deputies elected in 1990 – Yeltsin bombed it into submission in October 1993 and then rewrote the constitution along hyper-presidential lines, getting it approved by a rigged referendum that December. Even before that, he had sidestepped democratic accountability by implementing much of the key legislation that shaped the post-Soviet economy through a series of decrees – some of them, notably on privatisation, drafted by Western advisers. Thanks to the notorious ‘loans for shares’ deals of 1995-96, a handful of oligarchs obtained vast holdings in oil and metals companies in exchange for flooding the media outlets they owned with anti-Communist propaganda – a vital contribution to prolonging Yeltsin’s grip on power, though generous financial assistance from the West and electoral violations also played their part. In Chechnya, Yeltsin moved to crush local aspirations to sovereignty, unleashing total war against the civilian population in 1994, though the Russian army had been fought to a standstill by 1996.
On each of these fronts, Putin continued what Yeltsin began, starting in the North Caucasus in September 1999, when he launched a vicious counterinsurgency – officially labelled an ‘anti-terrorist operation’ – to destroy any idea of Chechen independence, eventually imposing a tyrant of his own choosing. Once installed as president, he made use of the autocratic set-up he inherited to reassert central authority, reining in regional elites by appointing plenipotentiaries to head seven new federal superdistricts, okruga; five of the first levy were former military men, underlining their disciplinary function (his first envoy to the Southern Federal District, Viktor Kazantsev, had commanded Russian forces in the North Caucasus). Fiscal reforms increased the federal centre’s tax take at the expense of the regions, with Moscow’s share rising from 50 per cent in 2001 to 70 per cent in 2008. In 2004 Putin further restricted their autonomy, abolishing elections for governors and mayors (though these were partially reintroduced in 2012). The national legislature had been put in its place by Yeltsin, though it showed signs of rebellion in 1998, in the wake of the ruble crisis; Putin brought it firmly to heel, streamlining the party system so that by 2007 there were only four to manage, two of them, United Russia and A Just Russia, the Kremlin’s own creations, while the Communist Party and LDPR (the Liberal Democratic Party of Russia) hardly constituted an opposition. In December 2003, Boris Gryzlov, the Duma chairman, summed up its negligible role by declaring that ‘parliament is no place for political battles.’
I suppose there is very little expectation that Swiss Banks are up to anything except abetting criminals but the segment on Sixty Minutes last Sunday about HSBC was enough to bring out the Joe Buck in me. You can watch the entire thing here.
Bill Whitaker interviews attorney Jack Blum, who was graduating the year I entered Bard College. Blum is a capable investigator whose best-known efforts on behalf of the public interest was an aide to John Kerry in his investigation of the Nicaraguan contra-cocaine connection back in 1986 when he still had a shred of integrity. I never had any contact with Blum but he was a fairly typical young Democrat type of student who at least had the good sense to stay clear of electoral politics.
Here’s the beginning of the transcript from the “Sixty Minutes” piece:
HIGHLIGHT: The largest and most damaging Swiss bank heist in history doesn`t involve stolen money but stolen computer files with more than one hundred thousand names tied to Swiss bank accounts at HSBC, the second largest commercial bank in the world. A thirty-seven-year-old computer security specialist named Herve Falciani stole the huge cache of data in 2007 and gave it to the French government.
BILL WHITAKER: The largest and most damaging Swiss bank heist in history doesn`t involve stolen money but stolen computer files with more than one hundred thousand names tied to Swiss bank accounts at HSBC, the second largest commercial bank in the world. A thirty-seven-year-old computer security specialist named Herve Falciani stole the huge cache of data in 2007 and gave it to the French government. It`s now being used to go after tax cheats all over the world. 60 MINUTES, working with a group called the International Consortium of Investigative Journalists, obtained the leaked files. They show the bank did business with a collection of international outlaws: Tax dodgers, arms dealers and drug smugglers–offering a rare glimpse into the highly secretive world of Swiss banking.
BILL WHITAKER (voiceover): This is the stolen data that`s shaking the Swiss banking world to its core. It contains names, nationalities, account information, deposit amounts–but most remarkable are these detailed notes revealing the private dealings between HSBC and its clients.
JACK BLUM: Well, the amount of information here that has come public is extraordinary. Absolutely extraordinary.
BILL WHITAKER (voiceover): Few people know more about money laundering and tax evasion by banks than Jack Blum.
JACK BLUM: You have a very serious problem.
BILL WHITAKER (voiceover): He`s a former U.S. Senate staff investigator. We asked him to analyze the files for us.
JACK BLUM: If you read these notes, what you understand is the bank is trying to accommodate the secrecy needs of the client. And that`s the first concern.
BILL WHITAKER (voiceover): Take the case of British citizen Emmanuel Shallop. He was convicted for selling blood diamonds, those illegal gems used to finance conflicts in Africa. The documents show in 2005 HSBC knew Shallop was under investigation, yet helped hide his assets. “We have opened a company account for him based in Dubai…” one entry read, “The client is very cautious currently, because he is under pressure from Belgian tax authorities, who are investigating his activities in the area of diamond tax fraud.”
JACK BLUM: You get into the notes and you find that they offer various products: shell corporations, trusts, various ways of concealing the ownership of the account. They offer products that they`re going to give to the customer that will help with a concealment.
BILL WHITAKER (voiceover): Concealment is what Irish businessman John Cashell got from HSBC. His file contained these notes by a bank employee: Cashell`s “…pre-occupation is with the risk of disclosure to the Irish authorities.” The employee went on, “…I endeavored to reassure him that there is no risk of that happening.” Cashell was later convicted of tax evasion.
The bank files we examined contained more than four thousand names of people with connections to the U.S., holding more than thirteen billion in HSBC accounts. One was a New Jersey realtor. The notes in her file reveal that she and her family wanted assurance that her assets would be well hidden from U.S. tax collectors.
JACK BLUM: And she expresses concerns to the bank, which in turn reassure her that they will find ways to keep her name out of the sights of IRS.
BILL WHITAKER: There seems to be evidence of the bank actively helping clients evade, if not cheat.
JACK BLUM: Of course.
It has been at least 35 years since I read “Père Goriot”. I barely have time nowadays to read the political stuff that is my daily bread but I would like to find the time to read it again before I die since it was a book that gave me deep pleasure. Balzac was a master of rendering character, particularly in the depths of their depravity. His introduction to the novel’s main character will give you an idea of the moral rot that underpins bourgeois society. From the sound of this, Père Goriot would have found the road to riches in Yeltsin and Putin’s Russia or a job with HSBC:
In the days before the Revolution, Jean-Joachim Goriot was simply a workman in the employ of a vermicelli maker. He was a skilful, thrifty workman, sufficiently enterprising to buy his master’s business when the latter fell a chance victim to the disturbances of 1789. Goriot established himself in the Rue de la Jussienne, close to the Corn Exchange. His plain good sense led him to accept the position of President of the Section, so as to secure for his business the protection of those in power at that dangerous epoch. This prudent step had led to success; the foundations of his fortune were laid in the time of the Scarcity (real or artificial), when the price of grain of all kinds rose enormously in Paris. People used to fight for bread at the bakers’ doors; while other persons went to the grocers’ shops and bought Italian paste foods without brawling over it. It was during this year that Goriot made the money, which, at a later time, was to give him all the advantage of the great capitalist over the small buyer; he had, moreover, the usual luck of average ability; his mediocrity was the salvation of him. He excited no one’s envy, it was not even suspected that he was rich till the peril of being rich was over, and all his intelligence was concentrated, not on political, but on commercial speculations. Goriot was an authority second to none on all questions relating to corn, flour, and “middlings”; and the production, storage, and quality of grain. He could estimate the yield of the harvest, and foresee market prices; he bought his cereals in Sicily, and imported Russian wheat. Any one who had heard him hold forth on the regulations that control the importation and exportation of grain, who had seen his grasp of the subject, his clear insight into the principles involved, his appreciation of weak points in the way that the system worked, would have thought that here was the stuff of which a minister is made. Patient, active, and persevering, energetic and prompt in action, he surveyed his business horizon with an eagle eye. Nothing there took him by surprise; he foresaw all things, knew all that was happening, and kept his own counsel; he was a diplomatist in his quick comprehension of a situation; and in the routine of business he was as patient and plodding as a soldier on the march. But beyond this business horizon he could not see. He used to spend his hours of leisure on the threshold of his shop, leaning against the framework of the door. Take him from his dark little counting-house, and he became once more the rough, slow-witted workman, a man who cannot understand a piece of reasoning, who is indifferent to all intellectual pleasures, and falls asleep at the play, a Parisian Dolibom in short, against whose stupidity other minds are powerless.
January 23, 2015
Credit: Sam Hodgson for The New York Times
Today’s NY Times has extensive coverage on the arrest of Sheldon Silver, a powerful Democratic Party politician who like so many of his ilk going back to the days of Tammany Hall exchanged political favors for big cash bribes. Of particular interest to me was his crooked deals with figures at Columbia University and Bard College, my long time employer and alma mater respectively, two places that like to preen themselves as paragons of democracy, freedom and the American way. Of course, the American way has always been about corruption rather than democracy and freedom.
Basically Silver made millions of dollars for making connections between those in the business world and politics. In other words, he was a high-class pimp. The NY Times put it this way:
Sheldon Silver, the speaker of the New York Assembly, exploited his position as one of the most powerful politicians in the state to obtain millions of dollars in bribes and kickbacks, federal authorities said on Thursday as they announced his arrest on a sweeping series of corruption charges.
For years, Mr. Silver has earned a lucrative income outside government, asserting that he was a simple personal injury lawyer who represented ordinary people. But federal prosecutors said his purported law practice was a fiction, one he created to mask about $4 million in payoffs that he carefully and stealthily engineered for over a decade.
Mr. Silver, a Democrat from the Lower East Side of Manhattan, was accused of steering real estate developers to a law firm that paid him kickbacks. He was also accused of funneling state grants to a doctor who referred asbestos claims to a second law firm that employed Mr. Silver and paid him fees for referring clients.
“For many years, New Yorkers have asked the question: How could Speaker Silver, one of the most powerful men in all of New York, earn millions of dollars in outside income without deeply compromising his ability to honestly serve his constituents?” Preet Bharara, the United States attorney for the Southern District of New York, asked at a news conference with F.B.I. officials. “Today, we provide the answer: He didn’t.”
The Times identified Robert N. Taub, the director of the Columbia University Mesothelioma Center, as having a mutually beneficial and certainly illegal relationship with Silver.
It seems that Silver was on the payroll of Weitz & Luxenberg, a law firm that advertises its ability to win claims on behalf of mesothelioma victims so many times per hour on cable TV stations that you are practically driven to stick knitting needles into your eardrum for relief.
With his finely honed knack for making ill-gotten gains, Silver racked up $3.9 million in referral fees for cases he steered to Weitz & Luxenberg on behalf of Taub who got $500,000 in state funds in exchange. The Times reports:
Mr. Silver also got the Legislature to issue a resolution honoring the doctor, the complaint says, and helped the doctor’s son Jonathan find a job at a Brooklyn-based social services group that has received state funding with Mr. Silver’s help.
The group, OHEL Children’s Home and Family Services, issued a statement confirming that it had hired Jonathan Taub in 2012, and saying it had “cooperated fully” with prosecutors and been assured that it was “not under investigation and did nothing wrong.”
In another instance, the complaint says, Mr. Silver directed $25,000 in state funding to a nonprofit on which a relative of Dr. Taub’s served on the board of directors. Dr. Taub’s wife, Susan, serves on the board of Shalom Task Force, which promotes healthy marriages. The group received the funding in 2008, records indicate.
Although the Times does not mention Bard College board of trustee Bruce Ratner, the developer responsible for forcing his white elephant Atlantic Yards megaproject down the throats of Brooklynites, it would not surprise me that he ends up under the same kind of spotlight as Dr. Taub and hopefully in the same jail cell.
Silver worked out a deal with another shady law firm run by Jay Arthur Goldberg. Silver steered real estate developers to Goldberg in exchange for a cut of the fees. The Times names Glenwood Management as one of two real estate firms buying Silver’s favors and I’ll bet that Ratner’s Forest City Enterprises will be revealed as the other.
Last March the NY Times reported on the tangled favoritism that connected Ratner to Silver. It seems that an orthodox Jewish charity, just like Mrs. Taub’s Shalom Task Force, was key to greasing the wheels. Silver had a protégé named William Rapfogel who ran the Metropolitan Council on Jewish Poverty, a publicly financed charity whose insurance broker provided $7 million in kickbacks to Rapfogel over the years. Silver funneled millions of dollars to the Met Council and employed Mrs. Rapfogel.
In a move that reeked of Zionist ethnic cleansing of Palestinians, Silver and Rapfogel worked together to keep Puerto Ricans out of an area on the Lower East Side that had undergone “urban removal” in 1967. More than 1,800 mostly Puerto Rican low-income families had been forced to leave their buildings with the understanding that they would be able to return once new public housing had been erected.
Nearly 50 years after the forced removal, the vacant lots remained. It was Silver and Rapfogel’s intention that any new projects would preserve what they called the areas “Jewish identity”, acting through the United Jewish Council of the East Side.
In 1994, Silver and Rapfogel finally figured out the best use for the land. Housing would not even enter the picture. Instead it would be best to house a “big box” store there, like Costco. And who would be brought it in as developer? Bruce Ratner, that’s who.
Once the three men connected over the site’s future commercial possibilities, their bonds strengthened. As was the case with Taub, family favors were the norm. Rapfogel’s eldest son, Michael, a lawyer, went to work for Ratner. The Times summed up the happy coincidence of interests:
In 2006, the Public Authorities Control Board, over which Mr. Silver has significant control, approved Mr. Ratner’s Atlantic Yards project in Brooklyn. Intervention by Mr. Silver and others enabled the project to retain a lucrative tax break, even as that break was actually being phased out.
In 2008, Forest City Ratner, which compared to other developers makes few political contributions, gave $58,420 to the Democratic Assembly Housekeeping Committee, which is controlled by Mr. Silver.
That same year, Mr. Ratner helped raise $1 million for Met Council and was honored at a luncheon given by Mr. Rapfogel and Mr. Silver. “Bruce is responsible for much of the development and growth that’s gone on in Brooklyn and in Manhattan,” Mr. Silver said at the event. “He is a major force in New York City for the good.”
When I read about these corrupt bastards, I can’t help but be reminded of how criminality is embedded in the capitalist system. They keep saying that a true recovery in the USA hinges on a revitalized real estate sector. But it is exactly that sector that led to the 2008 meltdown, just as it did in Spain.
Back in 2011 I read a book titled “Sins of South Beach” that was a memoir written by a former mayor of Miami Beach who went to prison for the same kinds of charges now being made against Sheldon Silver. It was a fascinating account of how an idealistic young politician gets tempted by the devil, in this case not Mephistopheles but real estate developers looking for favors from City Hall.
I had thoughts about writing a book at the time looking at the history of corruption after the fashion of David Graeber’s book on debt. Corruption, like debt, seems to be a permanent feature of class society based on commodity exchange. When the FSLN lost power in Nicaragua, the first thing the formerly dedicated and selfless leaders did was figure out a way to game the system on their way out—the so called Sandinista piñata.
If you want to eliminate corruption, you have to eliminate money. To eliminate money, you have to produce on the basis of use values rather than exchange values. Of course, all of this seems rather utopian at this point, if not trivial in comparison to the other threats to our existence including climate change.
In any case, speaking from a purely reformist perspective, I am tickled pink at the prospects of Sheldon Silver, Dr. Robert Taub and Bruce Ratner going to prison. I hope they put them in cells next to Bernie Madoff as a reminder that connections made through a Jewish old boy’s network are okay just as long as they don’t victimize people who don’t belong to the club, especially Puerto Ricans on the Lower East Side.
December 20, 2014
No matter how many years I have been monitoring crimes high and low in what co-authors Alexander Cockburn and Ken Silverstein called “Washington Babylon”, there are those times that I can only do a double-take over something I read in the NY Times. Today was one of those days as I read an article titled innocently enough “Panel to Advise Against Penalty for C.I.A.’s Computer Search”. If you tried to guess what the article was about from the heading, you’d wonder why anybody would be penalized for a “computer search”. After all, I use Google 25 times a day and nobody ever had the need to penalize me, even IT management at Columbia University that probably figured out that if I was on Google, it was to find out who starred in Godard’s “Contempt” rather than how to do a recursive grep in Unix.
But the heading should have been “Panel to Advise Against Penalty for C.I.A.’s Computer Hack” since that is what actually happened:
A panel investigating the Central Intelligence Agency’s search of a computer network used by staff members of the Senate Intelligence Committee who were looking into the C.I.A.’s use of torture will recommend against punishing anyone involved in the episode, according to current and former government officials.
The panel will make that recommendation after the five C.I.A. officials who were singled out by the agency’s inspector general this year for improperly ordering and carrying out the computer searches staunchly defended their actions, saying that they were lawful and in some cases done at the behest of John O. Brennan, the C.I.A. director.
If it was done at “the behest” of the CIA director and behind the backs of the Senate investigators, but seen as not worthy of punishment, there must have been mitigating circumstances that would have allowed that panel to act as it did. Like the possibility that Diane Feinstein was a secret al-Qaeda operative and it was necessary to check up on her. I mean, after all Obama is a Marxist, right? That’s what Glenn Beck says and who would gainsay him?
As it turns out, the panel is like one of those police department internal investigations that are conducted after some Black youth gets shot 37 times. Who would expect the cops to find themselves guilty? That’s basically what happened here. As the NY Times reports, the members were “appointed by Mr. Brennan and composed of three C.I.A. officers and two members from outside the agency.”
The CIA broke the law just as cops do when they shoot an unarmed Black youth. The Times article referred to “improperly” hacking the Senate computers. That is not quite the term that describes what took place. “Illegally” is more like it. When Oregon Democratic Sen. Ron Wyden, a member of the Senate Intelligence committee, asked Brennan whether the CIA was subject to the Computer Fraud and Abuse Act – an anti-hacking law, Brennan said that he’d have to get back to him.
Those two members from outside the agency might as well have been career CIA officers for what it’s worth. One of them was panel chairman Evan Bayh and the other was Robert F. Bauer, Obama’s legal counsel during his first term.
Evan Bayh was the Senator from Indiana between 1999 and 2011 and served as the Chairman of the Democratic Leadership Council from 2001 to 2005. The DLC embodies the sort of politics that the Clintons made infamous. Some people voted for Obama in 2008 under the assumption that being opposed by Hillary Clinton meant that he was not cut from the same DLC cloth. As it turned out, Obama was exactly like Bill Clinton, a loyal servant of Wall Street and a firm believer in the right of the US to rule the world. In 2002, Bayh stood at George W. Bush’s side in a ceremony announcing their joint support for an invasion of Iraq.
Since Barack Obama is strictly opposed to punishing John Brennan or any of his flunkies, you can expect his former lawyer to understand what his job is. After Robert F. Bauer stopped functioning as the White House shyster, Obama sent him off with the following encomium: “Bob was a critical member of the White House team, He has exceptional judgment, wisdom and intellect, and he will continue to be one of my close advisers.” With a White House that has clamped down on the press more than any administration in modern history and that has made secrecy its standard operating procedure, who would expect Bauer to do anything else except get the CIA off the hook?
Bauer wrote for the Huffington Post briefly. You can get a flavor of his worldview from a couple of articles. In one he makes “the progressive case” for pardoning Scooter Libby, the Bush aide who went to prison for perjured testimony in the Valerie Plame investigation. And here I am, stupid me, always thinking that progressive meant something like public works programs or single-payer health insurance. Golly, you really learn so much from the Huffington Post.
Bauer’s other article worth noting was a tribute to Richard Rorty on his passing. It demonstrates an understanding of the culture wars that I wouldn’t have expected from a shady lawyer in the corridors of power. He urged that the heirs of the New Left, the professors at places like Columbia University teaching cultural studies and standing up for diversity, would find common cause with the New Deal left that preceded it.
In making his case, Bauer referred to Rorty’s essay “The Last Intellectual In Europe — Orwell on Cruelty”. On the very first page of the essay, Rorty quotes Orwell’s opposition to practices that had become widespread in the 20th century. He referred to them in “1984”, those that “had long been abandoned, in some cases for hundreds of years – imprisonment without trial, the use of war prisoners as slaves, public executions, torture to extract confessions, the use of hostages, and the deportation of whole populations – not only became common again, but were tolerated and even defended by people who considered themselves enlightened and progressive.”
Such is the Orwellian state that we have finally arrived at that Robert F. Bauer can write such an article for Huffington Post honoring a man who opposed “torture to extract confessions” while at the same time covering up for a CIA that was guilty of such crimes.
October 21, 2014
Given its Hollywood provenance, I expected very little from “Kill the Messenger”, a film starring Jeremy Renner as reporter Gary Webb, who after exposing the CIA’s role in facilitating Nicaraguan contra planeloads of cocaine into the USA was martyred by forces more powerful than the modest San Jose newspaper where he worked, particularly the CIA and the Washington Post, a “newspaper of record” that had a long history of covering up for the CIA no matter the reputation it earned through the Woodward-Bernstein reporting on Watergate.
Given Renner’s role as an action hero in Katherine Bigelow’s awful “The Hurt Locker” and more recently as a successor to Matt Damon in “The Bourne Legacy”, I fully expected “Kill the Messenger” to figuratively inject steroids into Gary Webb and turn him into a combination of an investigative reporter and superspy. To the contrary, the film is restrained in its presentation of Webb and the forces aligned against him. The real drama is not of the conventional car chase variety but those that take place in the conference room of the San Jose Mercury News as Webb fights to defend his integrity from hostile forces outside the paper and a management all too willing to bend under the pressure.
The film was of particular interest to me since I had spent three years on the board of Tecnica, a volunteer technical aid project for Sandinista Nicaragua, until it succumbed to the same enemies that conspired against Webb: a reactionary presidency abetted by a Democratic Party that shared its ultimate goal—to crush a revolution—while differing only on the rhetoric put forward to achieve that goal. In the late 1980s the Washington Post was all too willing to stump for the contras despite its liberal reputation as Noam Chomsky reported in “Necessary Illusions”:
In April 1986, as the campaign to provide military aid to the contras was heating up, one of the [La Prensa] owners, Jaime Chamorro, wrote an Op-Ed in the Washington Post calling for aid to “those Nicaraguans who are fighting for democracy” (the standard reference to the U.S. proxy forces). In the weeks preceding the summer congressional votes, “a host of articles by five different La Prensa staff members denounced the Sandinistas in major newspapers throughout the United States,” John Spicer Nichols observes, including a series of Op-Eds signed by La Prensa editors in the Washington Post as they traveled to the United States under the auspices of front organizations of the North contra-funding network.
In fact the reputation of Bob Woodward was inflated to begin with, as I pointed out in a Swans article in 2005:
In 1987, Woodward wrote Veil: the Secret Wars of the CIA 1981-1987, a book that had all the trappings of investigative journalism — especially the title. It was based on the career of William Casey, the CIA director who was a key figure in Reagan’s illegal wars. Although the book was filled with all sorts of lurid revelations (Casey thought Reagan was lazy, the King of Saudi Arabia was a drunk, etc.), it really didn’t get to the heart of why these wars took place and, more importantly, how to stop them.
The book generated some controversy that must have been a painful reminder of the Janet Cooke fiasco. An interview with the dying William Casey, who supposedly “confessed” all his contra-arms dealings to Woodward, was filled with so many inconsistencies and vagueness that the book was widely discredited. In addition, Woodward was accused of withholding important information just as he has done more recently. In Congressional hearings, Lt. Col. Oliver North testified that Casey was in on the diversion of funds from the beginning. If Woodward had Casey’s confession months before North testified, it would have been a major scoop for the Post had he come forward as well as a powerful blow against the illegal conspiracies being hatched during the Reagan presidency. But he held back in order to coincide with the publication date of his book.
Turning to the film itself, it benefited—as all good films do—from a strong screenplay written by Peter Landesman based on Webb’s 1999 “Dark Alliance: The CIA, the Contras, and the Crack Cocaine Explosion”. Landesman was an investigative journalist before he became a screenwriter, including time spent in places like Pakistan and covering matters such the illegal arms trade and sex traffickers. So he knows the territory and brings a verisimilitude to the story that might have been absent if developed by an industry hack straight out of film school. Landesman’s co-writer Nick Schou also has a lot of credibility as the author of “Kill the Messenger: How the CIA’s Crack Cocaine Epidemic Destroyed Journalist Gary Webb”, a Nation Magazine book. Schou is the managing editor of Orange County Weekly, a sister publication of the Village Voice that has somehow retained some of the integrity that was present in this alternative weekly’s roots. So, all in all, the creative team behind “Kill the Messenger” are our kinds of people.
The film begins with Webb reporting on the abuse of drug dealer property seizure by California cops, something I am intimately familiar with since my cousin Joel lost the home in upstate New York that he built with his own hands after a police raid on his property uncovered about a hundred marijuana plants he’d grown for his personal use.
On the strength of his reporting, Webb is approached by the girlfriend of a Nicaraguan émigré drug-dealer who wants his help in exposing courtroom irregularities, including the role of his accuser, a big-time dealer who is a DEA informant notwithstanding the millions of dollars he made and continues to make in the drug trade.
With a grand jury transcript that accidentally came into her hands, Webb begins a search in Los Angeles and then proceeds to Nicaragua to uncover the conspiracy that allowed planeloads of cocaine to be exported to the USA in order to raise funds for the contra killing machine.
His articles on the “Dark Alliance” make him a celebrity overnight, earning him appearances on “Nightline” and profiles in major newspapers everywhere. His reporting also sends shockwaves through the Black community suffering from an epidemic of crack cocaine. Meetings are held in South Central LA and elsewhere demanding a satisfactory explanation from the CIA. Six months after the CIA director John Deutsch speaks to an angry audience at one of these meetings, Bill Clinton fires him.
This is the real drama of “Kill the Messenger”, recreating these events without the slightest degree of exaggeration. It is a film that you can recommend to friends and relatives for Chomskyian type insights while they are being entertained. I use the word entertained in the most conventional sense since this is a brilliantly acted, directed and plotted story. The direction is of some significance since Michael Cuesta most important work prior to the film was the HBO series Showtime that is a nasty piece of Islamophobia from what I have heard.
The third act of the film consists of a counterattack by the CIA and the Washington Post that ultimately destroys Webb’s reputation, his career and his life.
Throughout the entire film, Jeremy Renner turns in a bravura performance as a fairly conventional man put into utterly unconventional circumstances. Right now he is my pick for best actor, to go along with my pick of “Kill the Messenger” for best film of 2014.
In 1999, the same year that Webb’s “Dark Alliance: The CIA, the Contras, and the Crack Cocaine Explosion” came out, Jeff St. Clair and Alexander Cockburn published “Whiteout: The CIA, Drugs and the Press”, a book about Gary Webb’s crusade to tell the truth.
When Webb killed himself in 2004 after finally being worn down by the smears and the loss of income, Jeff and Alex wrote a memorial that read in part:
Trashed by the CIA’s Claque
Gary Webb: a Great Reporter
by ALEXANDER COCKBURN And JEFFREY ST. CLAIR, DECEMBER 13, 2004
News came over the weekend that Gary Webb had died Friday from a gunshot wound to the head in his home in Sacramento, California. It appears to have been self inflicted. The news saddens us, and rekindles our anger at the fouls libels he endured at the hands of his colleagues.
Webb was a great reporter whose best-known work exposed the CIA’S complicity in the import of cocaine into the United States in the 1980s, during the US onslaught on the Sandinista government of Nicaragua. His devastating series Dark Alliance, published in the San Jose Mercury News in 1996, provoked a series of wild attacks in the New York Times, Los Angeles Times and Washington Post, purporting to demolish Webb and exonerate the Agency.
The attacks were without merit, but the San Jose Mercury News buckled under the pressure and undercut its own reporter with a groveling and entirely unmerited retraction by its publisher. It was a very dark day in the history of American journalism. We described the entire saga in detail in our book Whiteout: the CIA, Drugs and the Press which sets the story in the larger context of the Agency’s complicity in drug smuggling since its founding.
Their article also reprises something that Webb wrote for CounterPunch in 2001. If there’s anything that makes me prouder than contributing to the same magazine that Gary Webb wrote for, I can’t think of it.
March 21, 2001 Silencing the Messenger Censoring NarcoNews by Gary Webb CounterPunch
Not long after I wrote a series for the San Jose Mercury News about a drug ring that had flooded South Central Los Angeles with cheap cocaine at the beginning of the crack explosion there, a strange thing happened to me. I was silenced.
This, believe it or not, came as something of a surprise to me. For 17 years I had been writing newspaper stories about grafters, crooked bankers, corrupt politicians and killers — and winning armloads of journalism awards for it. Some of my stories had convened grand juries and sent important people to well-deserved jail cells. Others ended up on 20/20, and later became a best-selling book (not written by me, unfortunately.) I started doing television news shows, speaking to college journalism classes and professional seminars. I had major papers bidding against each other to hire me.
So when I happened across information implicating an arm of the Central Intelligence Agency in the cocaine trade, I had no qualms about jumping onto it with both feet. What did I have to worry about? I was a newspaperman for a big city, take-no-prisoners newspaper. I had the First Amendment, a law firm, and a multi-million dollar corporation watching my back.
Besides, this story was a fucking outrage. Right-wing Latin American drug dealers were helping finance a CIA-run covert war in Nicaragua by selling tons of cocaine to the Crips and Bloods in LA, who were turning it into crack and spreading it through black neighborhoods nationwide. And all the available evidence pointed to the sickening conclusion that elements of the US government had known of it and had either tacitly encouraged it or, at a minimum, done absolutely nothing to stop it.
And that’s when this strange thing happened. The national news media, instead of using its brute strength to force the truth from our government, decided that its time would be better spent investigating me and my reporting. They kicked me around pretty good, I have to admit. (At one point, I was even accused of making movie deals with a crack dealer I’d written about. The DEA raided my film agent’s office looking for any scrap of paper to back up this lie and appeared disappointed when they came up emptyhanded.)
To this day, no one has ever been able to show me a single error of fact in anything I’ve written about this drug ring, which includes a 600-page book about the whole tragic mess. Indeed, most of what has come out since shows that my newspaper stories grossly underestimated the extent of our government’s knowledge, an error to which I readily confess. But, in the end, the facts didn’t really matter. What mattered was making the damned thing go away, shutting people up, and making anyone who demanded the truth appear to be a wacky conspiracy theorist. And it worked.
October 20, 2014
The “Hacker Wars” opened at Village East Cinema last Friday and is playing through Thursday. This review is a bit belated but I do want to urge New Yorkers to check out the film since it puts a spotlight on figures in the Anonymous movement that were of some significance despite being obscure to many of us, including me. The film also hints at why the “Hacker Wars” were lost, an outcome that is in many ways parallel to the demise of the Occupy movement, its second cousin.
Let me start off by saying that it took me a while to warm up to this documentary since director Vivien Lesnik Weisman made the decision to adopt an MTV type aesthetic that made use of exceedingly short fragments of the various principals speaking about their experience as hackers that must have been calculated to appeal to a younger audience that ostensibly lacked the patience to hear someone speak for a lengthy period—like five minutes or so. When you superimpose a hip-hop soundtrack over the interviews, it becomes rather annoying to an old fogey like me.
That being said, there’s some important material in the film that must be considered by a left that has grown accustomed to the Guy Fawkes mask-wearing activists who made up the rank-and-file of both Anonymous and Occupy, many of whom were self-professed anarchists.
The film is basically a profile of three victims of the war on hactivism: Andrew Alan Escher Auernheimer—aka “Weev”, Jeremy Hammond, and Barrett Brown. All have spent time or are spending time in prison for their role in Anonymous and its ancillary cabals. And all of them leave something to be desired as personalities and activists.
Weev was a member of Goatse Security (GoatSec), a small band of hackers that was part of the constellation of groups that were either part of Anonymous or “fellow travelers”. Considering the fact that Anonymous was not a membership organization as such, it is hard to pinpoint the various convergences between people like Weev and the network. His biggest hack was uncovering a flaw in AT&T security that made the e-mail addresses of iPad users easily accessible.
As a kind of black Kryptonite evil version of Abby Hoffman, Weev fancied himself as a joker, assuming the guise of Internet troll. When you come across the term in the film, it is important to note that this is not the same thing as, for example, a libertarian making himself a nuisance on Marxmail until he gets the boot. For Weev, trolling means harassing people mercilessly.
A lot of Weev’s shtick is badmouthing “Kikes”, “fags” and “niggers”, behavior that the film puts the best positive spin on, as a form of ironic social commentary on hypocrisy. But there’s probably an aspect of this that the film neglected, no doubt a function of its general affinity for hactivism.
While the film was obviously made some time ago, I wonder how director Weisman would have responded to Weev’s article this month on the neo-Nazi website “The Daily Stormer” titled “What I learned from my time in prison”.
I’ve been a long-time critic of Judaism, black culture, immigration to Western nations, and the media’s constant stream of anti-white propaganda. Judge Wigenton was as black as they come. The prosecutor, Zach Intrater, was a Brooklyn Jew from an old money New York family. The trial was a sham…The whole time a yarmulke-covered audience of Jewry stared at me from the pews of the courtroom. My prosecutor invited his whole synagogue to spectate.
Maybe there’s a joke there but I don’t get it.
The documentary gives equal time to Barrett Brown, who was not a hacker but rather a kind of journalist/advocate for the movement, with credits in Vanity Fair and other mainstream outlets. Brown is a serious journalist, having written on a wide variety of topics including creationism. (He is the co-author of “Flock of Dodos: Behind Modern Creationism, Intelligent Design and the Easter Bunny”.) But he is also something of a provocateur, although not so nearly as toxic as Weev. He is a long-time junkie and styles himself as a latter-day Hunter Thompson, even though that is my take on him rather than his or the film’s. A press conference he gave while taking a bath, for example, was pure Gonzo.
Brown has had a host of legal problems, largely tied to his complicity—at least as charged by the government—with Anonymous hacks. He also had charges of threatening an FBI agent, mostly stemming from a rant he made against the agent and his family in a drug-induced haze. He is all in all a much more fetching personality than Weev.
Finally, there’s Jeremy Hammond, who worked closely with “Sabu”, the tag used by Hector Xavier Monsegur. Sabu was part of the hacking group Lulz Security, commonly known as LulzSec, another part of the loosely-knit Anonymous network. The group’s biggest assaults were on communications megacorporations such as Sony and Fox News—much of it very high-profile even though LulzSec only consisted of six members.
In 2011 Sabu became an FBI snitch within 24 hours of being arrested. In the raids that followed from his becoming a rat, both Hammond and Brown became victims. The FBI, the judiciary and rightwing TV and radio have all lauded Sabu.
In a fleeting moment in this documentary, you see a cadre of hactivists sitting around bemoaning the arrests and pretty much agreeing that it destroyed Anonymous. I suspect that as long as Anonymous refrains from targeting American corporate behemoths, it will be able to raise hell in foreign countries, particularly those that are not American favorites.
After watching the film, it occurred to me that the lack of transparency and accountability in Anonymous as well as the black block wing of Occupy pretty much guaranteed the demise of dead-end anarchist tactics. The Guy Fawkes masks probably belong in the attic just as tie-dyed t-shirts and Nehru jackets ended up there by the time of the Carter presidency.
One final word on director Vivien Lesnik Weisman. She is a Cuban-American with a somewhat famous dad, Max Lesnik who scandalized the gusano community in Miami by rejecting its terrorism and advocating rapprochement with the Cuban government. His daughter made a documentary about him titled “The Man of Two Havanas” that unfortunately appears not to be available anywhere. This is from a Democracy Now interview with Weisman and her father:
AMY GOODMAN: Vivien, why did you do this film about your dad?
VIVIEN LESNIK WEISMAN: Well, first I wanted to explore my relationship with my father. It’s a personal film, as well as a political film. But my dad is — he has one passion, and that’s Cuba. So in order to understand my father better, I had to understand his passion. So therefore I went to Cuba. I got to know my country, the Cuban people, and was immersed in all the information about the terrorist groups that had targeted him throughout my childhood.
AMY GOODMAN: Had you understood this through your life?
VIVIEN LESNIK WEISMAN: Well, I was aware when I was growing up that we were bombed and that there were drive-by shootings in our house, and I lived in a constant state of siege, like a war zone. And Orlando Bosch —
AMY GOODMAN: And you’re talking about here in the United States, when you lived in Florida.
VIVIEN LESNIK WEISMAN: Yes, that’s in Miami. And we were targeted by these people, the anti-Castro terrorists. And the two names, Orlando Bosch and Luis Posada, I can’t remember a time when I didn’t know those names, because they were constantly being discussed. And one of the groups that targeted my father was under the umbrella terrorist group that Orlando Bosch headed.
AMY GOODMAN: Now, Max Lesnik, as Vivien — in this film, The Man of Two Havanas, you, Little Havana in Miami and Havana, Cuba, as she tells the story, you were one of the revolutionaries with Fidel Castro. Describe your early years in Cuba before you split with Castro.
MAX LESNIK: I was a young leader of Ortodoxo Party.
AMY GOODMAN: Of the Orthodox Party?
MAX LESNIK: Orthodox Party, the same party that Fidel Castro belong at that time. I met Fidel in the University of Havana, year 1949, where I was only 18 years old. Fidel was maybe 20, 21. Both together fought — not the revolution, but in some way I started with the student movement fighting for reforms and going to all — the way the student at that time in Cuba did, fighting the police.
Then happened something incredible. At that time, Cuba was a democracy, but with defects, corruption, but democracy like your organization Democracy Now! But that system was overthrown by Batista. He was a sergeant in the ’33 revolution, and then he took power by arms in 1952. Then happened to Cuba the worst thing that can happen in a democracy: the overthrow of the system by a military group of — commanded by Batista, that was a senator at that time.
Then after that, the only way to change the situation is through the arms, because Batista don’t permit any play in democracy or something like free expression. Then Fidel went to hills in Oriente province, the most — the Oriental section of the island. I was related to the group that went to the center part of the island, the Escambray Mountains, and by that time we fought for two years as guerrillas, combatant. Then, the first of January, Batista left the country, and the revolution took power.
AMY GOODMAN: You were the first person in Havana of the group?
MAX LESNIK: I was one of the first —
AMY GOODMAN: Before Fidel Castro got there?
MAX LESNIK: Before Fidel. Fidel arrived to Havana in January the 8th, but I was in Havana the day that Batista left, because I was going forth from the Sierra to the city to organize the clandestine movement, and then Batista left the night of January the 1st, and then I go openly to the radio station and television station. I suppose I was the one of those who appear on television telling Batista left and we are here. In reality, only were a lot of people like milicianos in the city of Havana, but the rebel army was in Oriente and in Las Villas. I was alone fighting the government, because they was afraid that it’s true that I say that we have an army here, that it’s [inaudible] in a way functioned the joke.