Clear It with Sidney | Hillman Foundation

Clear It With Sidney

Notes on journalism for the common good, by Lindsay Beyerstein

Clear It with Sidney

Taibbi: SEC Illegally Shredded Bankster Dossiers

“Is the SEC Covering Up Wall Street Crimes?” asks Matt Taibbi in Rolling Stone. Taibbi reports that the Securities and Exchange Commission has illegally destroyed thousands of preliminary investigation files, including early investigations of Ponzi schemer Bernie Madoff and probes of suspected fraudsters at Lehman Brothers on the eve of the institution’s collapse.

Felix Salmon of Reuters wrote, “Matt Taibbi’s 5,000-word exposé of the SEC’s document-shredding is a magnificent piece of journalism, and is the first and last place that you should look to understand what’s going on here.” 

Here’s Taibbi’s remarkable scoop in a nutshell: From 1993 to 2010, the SEC destroyed the records of preliminary investigations as soon as they were closed, even though the agency had a deal with the National Archives and Records Administration to keep those materials for at least 25 years. These files, known as “Matters Under Inquiry” or “MUIs,” are the first step towards a full-fledged investigation. An MUI may contain newspaper clippings, brokerage reports, and interview notes. Darcy Flynn, an 13-year SEC veteran who is now suing as a whistleblower, alleges that SEC officials lied about unauthorized document destruction and tried to cover it up. 

Taibbi argues that these files could have been crucial in identifying criminals before their misdeeds cost investors and taxpayers untold trillions of dollars.

Last week, NARA stated that the SEC has no authority to destroy MUIs and that NARA has been working with the SEC for a year to put a stop it.

The SEC maintains that it wasn’t required to keep MUIs in the first place. Even if federal law allowed the SEC to dispose of these records, the larger question would by why the agency would want to do something so reckless and shortsighted. Other law enforcement agencies don’t routinely trash their closed cases. These weren’t decades-old files, either. The SEC’s policy was to destroy MUIs as soon as they were closed.

The SEC’s defenders are claiming that these records were unimportant, but as Taibbi points out in an interview with Amy Goodman of Democracy Now!, SEC investigators like Darcy Flynn complained at the time that all the shredding was getting in the way of ongoing investigations.

The fact that the SEC was so determined to destroy evidence raises suspicions that the agency was more interested in coddling the financial sector than regulating it.

[Photo credit: dorena-wm, Creative Commons.]

Unlicensed "pumpers" prey on transwomen in New York

Back-alley cosmetologists prey on transwomen in New York City, peddling black market silicone injections, which temporarily enhance feminine curves at great risk to the clients’ health, Laura Rena Murray reports in the New York Times. In February, a young woman died shortly after receiving black market silicone injections in Philadelphia. In July a young transwoman* named Gabrielle Aguilar died in a Queens hospital shortly after visiting a unlicensed “pumper,” as these practitioners are known.

Why would anyone seek out an unlicensed operator to pump industrial grade silicone into her buttocks and plug the holes with Krazy Glue, as one of Murray’s subjects did? With great compassion, Murray captures the yearning that these women have for something that most of us take for granted, a body that fits with our sense of ourselves:

Zaira Quispe, 42, said she knew as a child that she was a girl, though she had been born male. She picked up a photo that she kept on the windowsill above her bed and held it out as proof. It’s a picture of herself as a smiling baby, naked and with legs crossed, concealing genitals. “Look,” she said, “even then I was trying to hide it.”

Ms. Quispe, an Ecuadorean immigrant who came to New York at age 9, was determined to get the curves that would make her look more feminine. But she lacked health insurance or the money to pay for surgical procedures that would provide them; they can cost as much as $70,000. So she tried something else: she went to a so-called pumper, a person who illegally injects silicone to modify the body.

Ms. Quispe was initially delighted with the results, but over time the liquid calcified and spread, causing infection, disfigurement, and constant pain. In 2002, a doctor told her that the liquid she thought was silicone was actually industrial oil. He said the oil had insinuated itself so deeply into her flesh that there was no way to surgically remove it without cutting out huge chunks of her hip and buttocks muscles. Fearing the treatment would be more debilitating than the disease, he told her to go home and take painkillers instead.

So, Ms. Quispe returned to her tiny apartment in Brooklyn’s Farragut Houses to live as a virtual shut-in. She’s bedridden for most of the day. Besides, she says, she’d rather stay indoors than endure the stares of her neighbors. But she may not be able to avoid surgery forever. The oil has riled her body into a constant state of inflammation. This summer she was hospitalized for bloodthinner injections to dissolve potentially lethal blood clots before they could travel to her heart.

Murray contrasts Ms. Quispe’s hardships with the opulant lifestyle of S, a New York City pumper who says she brings in $10,000 a week injecting clients with medical grade silicone she acquires on the black market:

The evidence of her success crowds the spacious two-bedroom apartment she rents in Brooklyn. The exterior of her building fits in with the dilapidated neighborhood. The front door is missing a doorknob, and the windows are boarded up and painted a mud brown, concealing the opulent interior. Inside her apartment, gold candleholders, ceramic vases, crystal and gleaming white cherubic angels sparkle under elaborate chandeliers. Thirteen Tiffany-style lamps clutter her shelves, and dozens of porcelain plates hang in rows on her walls.

One corner of her dining room contains 10 bird cages stacked in two columns from floor to ceiling, the sides of the cages covered in tin foil and each cage holding three to six canaries, finches and other small birds.

The living room is crammed with stacks of boxes containing items that she plans to move to a house she said she recently bought in Puerto Rico.

S, a transwoman whose face bears pumping, says that she’s helping her clients, unlike some of the 50 or so illegal pumpers she estimates to be operating in the city. Not everyone is willing to make fine-grained distinctions based on craftsmanship:

Pumpers are preying on desperate people who are poor,” said Pauline Park, president of Queens Pride House, an organization that provides services to lesbian, gay and transgender people. “They’re basically killing people and profiting from it.”

Murray notes that many pumping clients are underage. For some transgenderd youth, pumping is a quick and relatively cheap way to look more feminine. Many see it as stopgap measure on the road to a more expensive sex reassignment surgery. Ms. Quispe ruefully estimates that if she’d saved the money she spent on silicone injections, she could have afforded her surgery by now.

A lesser reporter might have focused exclusively on the sensational details of pumping, whereas Murray is careful to explain the connection between this disturbing phenomenon and the widespread discrimination and social dislocation that transgender people face:

Transgender youth cannot be treated by a doctor without parental consent, and many of them are estranged from their families because of their gender identities. According to a 2011 discrimination report released by the National Center for Transgender Equality and the National Gay and Lesbian Task Force, 19 percent of transgender people experienced homelessness because of their gender identity, 57 percent were rejected by their families, and 41 percent had attempted suicide.

Murray resists the temptation to demonize the pumpers or scold their clients. She consults experts who explain that the black market is a symptom of a larger problem, namely, transwomen being shut out of the medical system because of poverty, bad insurance, family breakdown, and other systemic factors. Hers is an excellent story that deserves to be widely read.

*Terminological note: “Transgender“ describes a person whose gender identity differs from the sex they were assigned at birth. A transwoman, short for “transgender woman,” is someone who was labelled as male at birth but who identifies as female. “Transgender” is a synonym for the outdated term “transsexual.”

[Photo credit: Photo of a generic syringe, for illustration, by ZaldyImg, Creative Commons.]

Corporations Seeking "Job Creation" Tax Breaks Hide Outsourcing Stats with Government Help

Multi-national corporations are begging for U.S. tax breaks in the name of job creation, but refusing to reveal how many of those jobs are created overseas, Jia Lynn Yang reports for the Washington Post:

Some of the country’s best-known multinationals closely guard a number they don’t want anyone to know: the breakdown between their jobs here and abroad.

So secretive are these companies that they hand the figure over to government statisticians on the condition that officials will release only an aggregate number. The latest data show that multinationals cut 2.9 million jobs in the United States and added 2.4 million overseas between 2000 and 2009.

Some of the same companies that do not report their jobs breakdown, including Apple and Pfizer, are pushing lawmakers to cut their tax bills in the name of job creation in the United States.

But experts say that without details on which companies are contributing to job growth and which are not, policymakers risk flying blind as they try to jump-start the hiring of American workers.

All U.S. multinationals are required to report their overseas hiring data to the Commerce Department, but the government promises not to disclose these figures to the general public.

Asked by the Post why the government agrees to keep this information secret, a researcher at the U.S. Bureau of Economic Analysis gave the official equivalent of a shoulder shrug: “I don’t think it’s a question of companies feeling like they’re hiding dirty laundry by not giving this information out,” Ray Mataloni said. “I don’t think they really have anything to hide, but I don’t really know the logic of why that’s something they don’t just put in their annual report.”

Others see the government as complicit in concealing politically volatile facts about job creation, or lack thereof.

Outsourcing has become a lightning rod, and the media coverage they’re likely to get is unfavorable,” Scott N. Paul, the executive director of the Alliance for American Manufacturing, told the Post.

The federal government is spending taxpayer dollars to keep track of outsourcing statistics from major multinational corporations and promising to keep that information secret, even though it bears on critical public policy decisions.

For example, Apple and Pfizer, two companies that stopped disclosing their overseas job numbers, are part of a corporate lobbying coalition clamoring for a massive temporary tax cut on profits earned overseas but repatriated to the United States. These gains would ordinarily be taxed at 35%, but if the lobbyists get their way, there would be a 1-year window to bring home the money at a tax rate of 5.25%.

Not to be outdone, Republican presidential hopeful Gov. Rick Perry suggested at a campaign event in New Hampshire last week that corporations should be allowed to bring home the fruits of offshoring at an even lower rate:

And here’s another issue from my perspective. Corporate profits that are offshore, that we tax at 35 percent. We know for a fact that money’s not coming back. They’re going to leave that offshore. So why not look at, and talk about, how you repatriate those dollars and have those dollars focused on job creation, but allow them to come back in at a substantially lower rate than 35 percent. Say, something like, if it’s clearly going for job creation, like zero, to get this economy working again.

The corporate lobbying coalition claims that what looks like a blatant giveaway to multinationals actually serves the greater good because the companies will use the money to create jobs. Of course, there’s no guarantee that companies will spend their tax windfall on hiring. In all likelihood, they won’t. Multinationals got a similar tax holiday in 2004, but subsequent analysis showed that very little of the money went to job creation, most of it went to pay higher returns to shareholders. Many firms that cashed in in 2004 went on to lay off thousands of workers. Pfizer, for example, repatriated $37 billion in 2004 and laid off 10,000 employees in 2005-2006.

If we can’t trust corporations to be honest about outsourcing statistics, we shouldn’t trust them with a massive tax giveaway predicated on their unverifiable promise to create jobs at home.

 [Photo credit: Dan Brady, Creative Commons.]

Jon Stewart on "World of Class Warfare"

Some links on jobs and the economy:

-Daily Show host Jon Stewart mocked conservative pundits for accusing investor Warren Buffet of engaging in “class warfare” with an op/ed suggesting that the rich should pay their fair share of taxes.

-The Department of Labor announced Friday that the unemployment rate for July rose in 28 states, fell in 9, and remained unchanged in 13.

-Thousands of unemployed African Americans braved sweltering temperatures to attend a job fair sponsored by the Congressional Black Caucus (CBC) in Atlanta on Thursday. Several people were treated for heat exhaustion. As Andy Kroll reported in Tom Dispatch last month, unemployment is high for everyone, but especially for black men. The overall unemployment rate is 9.1% but the jobless rate for blacks is 15.9%.

-In a wide-ranging interview on job creation, race, and the economy, Time Magazine asked former CBC chair Rep. Maxine Waters (D-MI) how the how the machinations of the new 12-member “Super Committee” are likely to affect poor and minority citizens. The veteran legislator didn’t mince words, “I hate the idea of the ‘super committee.’ It undermines the ability of elected officials in this country to be truly representative of the people who sent them there. The way this is forged, we lose any way we go. They have the mandate to cut $1.5 trillion. And if they don’t get it done, you get $1.2 trillion across the board. It’s the worst kind of legislating that could be dreamed of. These cuts are going to dig deeply into these cities. We’re in for some hard times.”

-The unemployment rate in Texas is at a 24-year high, according to the latest statistics from the Texas Employment Commission. So much for Gov. Rick Perry’s “economic miracle.”

 

Defending the Social Safety Net: Not the Democrats' Best Option, Their Only Option

Historian Rick Perlstein debunks a central myth of American politics; namely, that a vigorous defense of our social safety net is too “divisive” to be politically palatable.

Perlstein argues that U.S. presidential elections are usually decided on one of two basic sets of issues: culture war anxiety or middle class economic insecurity. Historically, Republicans are more likely to win culture war slugfests and Democrats are more likely to win elections where economic issues are front-and-center, provided they define themselves as protectors of the middle class against the vaguaries of the market and the apathy of Republicans.

President Obama is reportedly reading Perlstein’s book “Nixonland.” Perlstein offers the president a cautionary fable. George McGovern lost in 49 states because he assumed that the middle class was prosperous enough to take care of itself and that labor unions were no longer relevant. 

Here’s what LBJ knew that ­McGovern didn’t: There are few or no historical instances in which saying clearly what you are for and what you are against makes Americans less divided. But there is plenty of evidence that attacking the wealthy has not made them more divided. After all, the man who said of his own day’s plutocrats, “I welcome their hatred,” also assembled the most enduring political coalition in U.S. history.

The Republicans will call it “class warfare.” Let them. Done right, economic populism cools the political climate. Just knowing that the people in power are willing to lie down on the tracks for them can make the middle much less frantic. Which makes America a better place. And incidentally makes Democrats win. [TIME]

This is Perlstein’s first contribution to TIME and I hope it will be the first of many.

[Photo credit: “ILGWU workers meet Lyndon B. Johnson,” Kheel Center, Cornell University, Creative Commons.]

Tuna Trouble: Greenpeace Sets its Sights on Bycatch

This week, the Hillman Foundation gave the August Sidney Award to Tom Gogola for his story “Bycatch 22,” which reveals how dysfunctional fishing regulations force fishermen to throw tons of perfectly good “bycatch” fish overboard. Bycatch is anything a fisher catches while fishing for something else. Gogola explains how misguided regulations force fishermen to waste fish in the name of conservation. He also describes innovative new government-funded research to reduce bycatch of fish, turtles, and seabirds.

In other bycatch news, Greenpeace launched a major new campaign against bycatch in the tuna industry this week. The centerpiece of the campaign is a satirical video entitled, “The Tuna Industry’s Dirty Little Secret,” featuring artwork by Pulitzer Prize-winning cartoonist Mark Fiore. The campaign takes aim at Starkist, Chicken of the Sea, and Bumble Bee–major suppliers of supermarket tuna.

In a post about the campaign at Lawyers Guns and Money, Eric Loomis chides pescetarians (vegetarians who make exceptions for fish), arguing that eating large marine fish in this day and age is the equivalent of chowing down on passenger pigeons in 1850. That’s hyperbole. Not all marine fisheries are mismanaged.

However, as Greenpeace reveals, the fishers who supply canned tuna to supermarkets have a lot to answer for. One of the main offenders is a simple technology known as a fish aggregating device, or FAD. To you and me, an FAD is a buoy; but to sea creatures, an FAD is an irresistable marine block party. Fish are instinctively attracted to floating debris. Unfortunately, it’s not just tuna that are drawn to these floats, according to the Greenpeace website:

FADs increase bycatch in the skipjack tuna industry by between 500% and 1000% when compared to nets set on free-swimming schools (FAD-free seining.) To make matters worse, between 15 percent and 20 percent of the total catch of a FAD-associated skipjack seine is actually juvenile yellowfin and bigeye – two species of tuna that are in serious trouble and cannot afford to have their young purloined before they ever have a chance to breed. The total content of bigeye and yellowfin in FAD-free skipjack seines is less than 1 percent.

 

Sashimi-lovers take note. The canned tuna industry is strangling yellowfins and bigeyes in their infancy.

[Photo credit: John Kratz, Creative Commons.]

Mistakes in Scientific Studies Surge

Last week, the Wall Street Journal reported a shocking statistic about scientific research. The number of published studies is up 44% since 2001, but the rate of retractions increased fifteen-fold during the same period.

Reporter Gautam Naik writes:

Just 22 retraction notices appeared in 2001, but 139 in 2006 and 339 last year. Through seven months of this year, there have been 210, according to Thomson Reuters Web of Science, an index of 11,600 peer-reviewed journals world-wide.

In a sign of the times, a blog called “Retraction Watch” has popped up to monitor the flow.

Science is based on trust, and most researchers accept findings published in peer-reviewed journals. The studies spur others to embark on related avenues of research, so if one paper is later found to be tainted, an entire edifice of work comes into doubt. Millions of dollars’ worth of private and government funding may go to waste, and, in the case of medical science, patients can be put at risk.

A seemingly impressive study can influence how doctors treat their patients, where investors put their money, and what scientists decide to study next. Naik shows how a shoddy or fradulent study can have consequences that reverberate far beyond the ivory tower.

Citizen Journalists Capture Rage of London Riots

By Tom Watson

The violent riots in areas of London and other cities in the UK have rightly shocked observers because they are so widespread and, seemingly, sprang from nowhere. And while some news organizations have noted (and perhaps overplayed) the role of mobile technology and social media by gangs of rioters to call out their numbers and assemble in certain locations, I think the use of networks in reporting on the spread of violence and destruction is actually more interesting.

The riots are the perfect laboratory for semi-pro and citizen reporters. They spring up quickly in widely dispersed areas (including other cities like Liverpool and Manchester), offer strong images of fast-moving violence, and - quite frankly - stretch beyond the abilities of professional news organizations to cover. In some ways, following mobile pics uploaded to yfrog.com or twitpic brings you a much deeper, more accurate view of these roving gangs than, say, the coverage on the BBC.

Consider some of the excellent “riot maps” that sprung up, usually laid over Google maps and providing an up-to-minute view of where violent incidents were taking place around London. James Cridland, who runs MediaUK.com, a free media resource, put together a working riot map that quickly gained international attention.

http://maps.google.co.uk/maps/ms?msid=207192798388318292131.0004aa01af67…

Another map created tags based on tweets that carried both a UK postal code and the #londonriots hashtag.

http://londonriotsmap.appspot.com/

And social media “location” startup Cravify.com quickly created a searchable riot map of London.

At paidContent.org, Cridland wrote a thoughtful post on what he’d learned about the reliability of fast-breaking news sources as a “citizen journalist” chronicling the riots. Some lessons: news media aren’t always reliable … but neither are myriad Twitter reports. Checking sources matters, and doubling back to correct errors remains a news-gathering basic.

http://paidcontent.org/article/419-what-i-learned-mapping-the-london-riots/

To me, the smartest outlets in Britain used the knowledge they’ve gathered over the past few years about social media to take advantage of citizen reporting when the riots broke. The Guardian, for example, regularly reported via Twitter and amplified posts and pictures there. And NPR’s Andy Carvin, who has become a cyber-celebrity in the news biz for his incisive “anchorman” role on Twitter in places of conflict, again provided high-level curation and aggregation on the micro-blogging platform.

Perhaps most heartening was the lightning-quick organizing of Londoners using social media around cleaning up after the riots - using both the #riotcleanup tag, Facebook, and the @RiotCleanup Twitter page.

http://www.facebook.com/londoncleanup

http://www.riotcleanup.co.uk/

As the organizers posted: “This is not about the riots. This is about the clean up - Londoners who care, coming together to engender a sense of community.”

So Close Yet So Far: Wisconsin Democrats Shatter Recall Record But Fail to Retake the State Senate

Democratic hopes of retaking the Wisconsin State Senate were dashed in Tuesday’s recall election. The Democrats, backed by organized labor, successfully recalled two Republican senators but failed to unseat four others. In order to retake the Senate, Democrats would have had to win three recalls yesterday and save two Democratic senators from recall next week.

Historically speaking, two recalls in one day is unprecedented. Only 13 U.S. state legislators have ever been recalled and voters have never recalled more than two representatives in a single year. On Tuesday, Wisconsin voters recalled as many legislators in one day as they’d recalled in last 80 years.

Most recall races are strictly local affairs, but the recall fight in Wisconsin was a counterattack against a state-level agenda, an agenda that other governors and state legislators are trying to replicate across the country.

Scott Walker did not campaign on a promise to eliminate collective bargaining for public sector workers, but that’s what he did. Republicans control both the State Assembly and the State Senate, so, once elected, Walker had broad power to enact his previously unspoken agenda.

Yesterday’s attempt to recall Walker’s allies en masse was the latest in a series of bold and creative assaults on the Walker agenda. In February, the Democratic state senators fled the state to stop Walker from passing his anti-collective bargaining bill by denying a quorum in the Senate.

While the senators were in exile in Illinois, tens of thousands of anti-Walker, pro-union protesters converged on the state capital. One day in early March, 150,000 braved freezing temperatures to hold one of the largest pro-labor demonstrations in American history. Greg Sargent of the Washington Post won a Sidney Award for his coverage of these protests.

After a three-week standoff, Walker and his allies used procedural tricks to pass the bill without the absent senators, but the fight continued in the courts. Walker’s opponents scored some early victories in the lower court and the implementation of the law was delayed. Hoping to tip the balance of power on the State Supreme Court, which would ultimately hear challenges to Walker’s law, progressives backed challenger JoAnn Kloppenburg against incumbent David Prosser. Kloppenburg lost. In June, the deeply divided court reinstated Walker’s law.

Sargent summed up yesterday’s results as follows:

Yesterday unions and Democrats fell just short of victory in Wisconsin, winning two of six races to recall GOP state senators, in a battle that had unexpectedly emerged as ground zero in a national class war, partly over the fate of organized labor. There’s no way to sugar-coat it: Unions and Dems failed in their objective as they defined it, which was to take back the state senate, put the brakes on Scott Walker’s agenda, and let the nation know that elected officials daring to roll back public employee bargaining rights would face dire electoral consequences.

But nonetheless, what they failed to accomplish does not diminish what they did successfully accomplish. The fact that all these recall elections happened at all was itself a genuine achievement.

The struggle in Wisconsin is often portrayed as a clash of well-matched opponents–Democrats vs. Republicans or Big Labor vs. Big Business. In fact, the Democrats and their allies have been waging an irregular war against a much more powerful opponent. The Republicans control every branch of state government.

In each skirmish, the Democrats and their allies have faced long odds and achieved far more than anyone in the political establishment would have predicted. The anti-Walker forces have proven implacable, even in defeat. Their resiliance proves that public sector workers are not the easy targets that Republicans assumed they would be.

Insurgents can’t expect to rout their enemy in any single decisive battle. If they win, they win by wearing down their opponents over time. 

[Photo credit: Sue Peacock, Creative Commons. Madison, WI, March, 2011.]

Kroll Handicaps Tomorrow's Recall Elections in Wisconsin

On Tuesday, Wisconsinites will decide the political fate of six Republican state senators who backed Gov. Scott Walker’s anti-union agenda. In order to regain the majority in the state senate, and check Republican power in Wisconsin, Democrats must recall three out of six GOP legislators tomorrow and successfully defend two Democratic legislators against recall votes next week.

Knock out three, hold two. Sounds manageable, right? However, as Craig Gilbert notes at the Journal Sentinel.com, U.S. voters have never recalled more than two state legislators in the same year in the entire history of recalls. Only 13 state legislators have ever been recalled, period. There are 16 legislators facing recall in Wisconsin right now. Then again, Gilbert notes, the Wisconsin race is unprecedented in many respects. This is the first time a state-level recall battle has become a national referendum. Money and media attention are pouring in from across the country. 

Andy Kroll of Mother Jones has assembled an invaluable election-eve cheat sheet, based on publicly available polling data and interviews with progressive insiders. By Kroll’s count, the Democrats have a clear lead in two races, the Republican is ahead in another, and three more are still too close to call.

This is uncharted territory. Anything could happen.

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