Hastert & Emanuel: Who Made Hay While The Sun Shined?

 “Lobbyists make more money than Congressmen because lobbyists write more laws than we do.â€� – Congressman Ron Paul (TX)

Government work can inspire a certain image, particularly if you are still swayed by idealistic grade-school texts that extolled the work of ‘public servants.’  These are people working not for themselves, primarily, but for a greater good.  Government workers accept a discount from what they could earn in the private sector, because they care about the public.  We owe them our gratitude.

Well, some of them, to be sure. 

In economics, there is a fundamental principle called ‘rationality.’  A lot of students tend to rebel against this notion, and it has some critics from the behavioral finance profession as well.  But I still remember the day one of my favorite professors in economics, facing heat from students on this score, stepped back and defined rationality simply as ‘self-interested, purposive behavior.’  People don’t intentionally try to harm themselves, even if they don’t always make consistent or good decisions.  People try to pursue their own self-interest, to try to make themselves better off.  In a world without significant government intervention, this tendency usually promotes cooperation among buyers and sellers, and the common good as well.

Does public service make for a vow of poverty?  Our public servants are people, like the rest of us.  As a general tendency, we all tend to pursue our self-interest.   And in the public service world, some of the most ambitious, loudest champions about what is good for the rest of us are also intensely self-interested.  When self-interest combines with the pursuit of profit through government intervention, public servants can make themselves better off while leaving the rest of us worse off.

Assuming that policymakers pursue their own self interest is a central tenet of the public choice school of economics.   The “Chicago School� of regulation (the University of Chicago economics department, not the City of Chicago) similarly calls for us to suspend any enduring belief that public servants are always unselfish.  And when public servants serve themselves, well-organized special interest groups can more easily capture regulatory policy and drive it to their own benefit.  In turn, the revolving door, with our servants moving seamlessly between government and the regulated, and back again, can be a very lucrative business.   

Lobbying can also lead government policy to generate results the opposite of what is being advertised.  For example, anti-trust policy can actually make consumers worse off, particularly if well-organized producers run the show.  Government financial regulation can actually destabilize the financial system, if public guarantees spawn moral hazard and gambling with the public purse.  And the resulting crises can become a lever for taking more money from the many, in order to stabilize and cement the positions of the favored few. Read more È

Mainstream Media – Actually On a Case?

In the previous article in this series, we provided a brief review of the long train of corruption cases in Chicago and Illinois, and how they provide valuable perspective for some compelling national and international issues. 
Earlier this week, we had two indications that some elements of the City that Works may actually be working in a good way, and on matters related to international terrorism, drug trafficking, corruption in the city, state, and federal governments, and even the events of September 11, 2001.

On November 1, the Chicago Tribune reported how the City of Chicago’s “Corporation Counsel,� Stephen Patton, responded to a question about a dispute over the authority of the City Inspector General, Joseph Ferguson.  Ferguson has faced noncompliance with subpoenas he has issued to the city.  New mayor Rahm Emanuel’s Corporation Counsel has argued to the State Supreme Court that the city has the authority to enforce these subpoenas, not the inspector general alone, and the city also holds sole authority to hire outside counsel in matters at issue. 

This article did not identify any of the specific cases for which subpoena demands had been rebuffed.  But the fact that the City Inspector General has been issuing them is alone room for optimism. Read more È

The Ultra Secret FBI Criminal Files in the Chicago Field Office

In the first edition of their series of reports on corruption in Chicago, University of Illinois professors Thomas Gradel, Dick Simpson and Andris Zimelis included a good discussion of the evolution of machine politics over time.  They looked at the period with Mayor Richard J. Daley (1955-1976), as well as an equally-lengthy interval with his son, Richard M. Daley, serving as mayor (1989-2011).  The earlier regime drew its authority primarily from entrenched ties with ethnic communities, while the latter evolved a more sophisticated set of relationships with a variety of supporters including unions, corporations, and other special interest groups.  The report from the University of Illinois professors was written in early 2009, on the heels of the indictment of former Illinois governor Rod Blagojevich.  And after listing a long train of successful convictions, they concluded simply that “corruption continues unabated in city, county, suburbs and state today.� 

The authors have gone on to write four more updates to this report, which are all available here.  The fourth edition was released in early 2011, following the last Daley term and the passing of the torch to new Mayor Rahm Emanuel.  This fourth report listed over 340 city officials convicted in public corruption cases in the past few decades, with little sign of any slowing in recent years.  The authors listed cases of “bribery, patronage, contract rigging, conflict of interest, nepotism/family ties, clout, and theft,� noting that they were pervasive across a range of agencies.

Chicagoans can be thankful for some prosecutors, but the “City that Works� and the state and federal government functions dealing with it haven’t earned a presumption of innocence.  A careful, cautious and even cynical perspective is warranted when considering the prospects for reform under new Mayor Rahm Emanuel, especially in light of the strong ties that helped lay the basis for his political career in recent decades.

And while thinking about the Chicago political environment and its relevance for the case of Sibel Edmonds, it is useful to be careful about distinctions between the two main parties in our political system.  We have Democrats and Republicans, on the one hand, and the rest of us, on the other hand.  The long train of scandals and convictions such as those laid out by the University of Illinois professors have entrenched bi-partisan roots, with Democrats as well as Republicans breeding disenchantment and suspicion.  The Edmonds case reaches across party lines, as well. Read more È

Burrowing Into Some Rabbit Holes

Chicago has a lot of strengths, along with a deserved, well, reputation. The City of Big Shoulders?  Perhaps.  But legal and illegal corruption have long greased the wheels in the City That Works.  Chicago is joined at the hip with the State of Illinois, with no shortage of its own symptoms.  Paul Powell, an Illinois Secretary of State who passed away while in office in 1970, just before $800,000 in cash (nearly $5 million in today’s dollars, given the inflation since then) was found stuffed in a shoebox and other places in his hotel room, along with 49 cases of whiskey.  George Ryan, a former governor still in jail on corruption convictions.  And they don’t seem to learn.  Rod Blagojevich was elected to the governor’s seat after Ryan, and Blagojevich now stands to be sentenced following his conviction on corruption charges earlier this year.

The longer-term financial consequences arising when public institutions are used to fleece the public can be seen in the fiscal status of the City of Chicago, as well as the Land of Lincoln.  Last year, interest rates and credit default swap costs for Illinois state debt climbed above California, suggesting the market considered Illinois the worst credit quality among the 50 United States.

The latest nasty recession hasn’t helped, but long-festering inefficiency and corruption have been a major factor in financial deterioration.  A recent study led by Dick Simpson of the University of Illinois/Chicago estimated costs of $350 million a year in Chicago arising simply from waste, theft, patronage, nepotism and contract rigging.  And speaking of waste, an illuminating symbol comes from the cost of garbage disposal in Chicago.  A recent Wall Street Journal article reviewed the city’s finances, and found Chicagoans paying far higher costs per ton of garbage disposed than any other city in the country, nearly twice as much as the second highest.

 

In light of the environment, and the seeming inability of public institutions to reform after scandal after scandal, the prospects for ethical and cultural renewal in Chicago in the new administration led by Mayor Rahm Emanuel might best be viewed cautiously. 

Here’s another reason for caution on that score.

A 2009 article/interview published in The American Conservative summarized some of Sibel Edmonds’ testimony in a court case in Ohio.  This venue allowed her to speak about topics where this former FBI translator had been silenced by a dubious legal constraint called the ‘state secrets privilege.’  The 2009 article included shocking material about corruption and influence peddling.  And the city of Chicago was surprisingly prominent, given the scope of her material. 

Edmonds closed her 2009 article / interview with the following observations:

As soon as Obama became president, he showed us that the State Secrets Privilege was going to continue to be a tool of choice. It’s an arcane executive privilege to cover up wrongdoing—in many cases, criminal activities. And the Obama administration has not only defended using the State Secrets Privilege, it has been trying to take it even further than the previous terrible administration by maintaining that the U.S. government has sovereign immunity. This is Obama’s change: his administration seems to think it doesn’t even have to invoke state secrets as our leaders are emperors who possess this sovereign immunity. This is not the kind of language that anybody in a democracy would use.

The other thing I noticed is how Chicago, with its culture of political corruption, is central to the new administration. When I saw that Obama’s choice of chief of staff was Rahm Emanuel, knowing his relationship with Mayor Richard Daley and with the Hastert crowd, I knew we were not going to see positive changes. Changes possibly, but changes for the worse. It was no coincidence that the Turkish criminal entity’s operation centered on Chicago.

In our coming series, we are going crawl into a few of these rabbit holes.

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The Roots of Lee Hamilton’s Six Figure Earnings

We all know the relevance and importance of a solid and sound background check when it comes to our elected and appointed officials and commissioners. Of course we all want to know about that big ‘conflict of interest’ factor. Okay, not all of us, especially not our MSM stenographers, but a few independent researchers and journalists here and there, and the rest of us among the ‘active and inquiring’ crowd. So let’s call this ‘chasing the chicken’ for now.’ Are you with me so far? Just hang in there and you’ll find out what I’m talking about, or at least I hope you will

Equally or even more significant is the need to follow up into post facto profiteering and connections of those assigned or elected for particular official posts. As in business, there is more than one method of payment and reimbursement for public figures serving interests other than the public, and in some cases interests totally in conflict with those of the public. Think of Former Speaker of the House, Dennis Hastert, and his post official position as a registered foreign agent for Turkey and his $35,000 a month payment. Or think about Former Defense Secretary, William Cohen, who went from heavily in debt and with negative net worth to multi millionaire in less than two years after leaving his public post. Unfortunately even fewer people, reporters and researchers, bother to cover and report on these important cases. Now, let’s call this ‘chasing the egg’ for the sake of what’s coming next.

Fortunately one independent reporter researched and reported on one such case, call it ‘chased the egg,’ on one of the 9/11 Commissioners, a Former Representative, Mr. Lee Hamilton, which I happened to come across yesterday. It was truly interesting to see how many ‘honorary’ positions Mr. Hamilton has been given, handed, by our government alone, just check out a few here:

-Co-chair of the Department of Energy Blue Ribbon Commission on America’s Nuclear Future with Brent Scowcroft

-Serves on the President’s Intelligence Advisory Board & the FBI Director’s Advisory Board,

-Serves on the US Department of Homeland Security Task Force

- Serves on the CIA External Advisory Board

The White House, the CIA, and the FBI must have been extremely well-served by Hamilton’s performance as the commissioner to grant him this many prestigious quasi positions. No? For me, the most interesting aspect which was covered by CounterCurrents.Org had to do with Hamilton’s position with and current salary from the Woodrow Wilson Center, and his questionable corporate ties, particularly with BAE Systems, the main sponsor of his forthcoming gala dinner. Here are a few excerpts:

Back in May, I was unaware that WWC President Lee Hamilton is a board member of one of the Center’s top corporate donors, BAE Systems Inc. That’s the American division of the largest weapons and defense firm in the world, BAE Systems plc, based in the U.K., with annual sales exceeding $36 billion.

Lee Hamilton’s 34 years as Congressman (D-IN) and his service on the CIA External Advisory Board, FBI Director’s Advisory Board, 9/11 Commission, and elsewhere are cited in his biography on the WWC website.

Nowhere, however, does the WWC mention his simultaneous service to corporate America. Hamilton — whose WWC salary exceeds $410,000 and who qualifies for a hefty Congressional pension — is a member of the boards of not only BAE Systems Inc. (since 2004), but also Carbon Motors (since 2008), and the Albright Stonebridge Group (since 2006).

…

Hold on, it’s getting much worse, and I’m adding my own emphasis to the excerpts:

The latter is a DC-based “global strategy firmâ€� headed by former Secretary of State Madeleine Albright (co-chaired the so-called “ Genocide Prevention Task Force” with former Defense Secretary William Cohen, whose firm represents Turkish businesses; they both refuse to acknowledge the Armenian genocide) and National Security Advisor Sandy Berger (pled guilty to stealing classified documents needed by the 9/11 Commission).

…

Even aside from Hamilton’s corporate connections, can the WWC serve as a “neutral forumâ€� for, and objectively analyze, the issues facing the American people when companies with mercenary agendas – overseas business interests, deals with sordid foreign governments, genocide denial, Federal contracts, and more – are helping to foot WWC’s budget?

BAE, for example, has lobbied against an Armenian genocide resolution in the U.S. Congress and, like several WWC donors, is a member of the American Turkish Council. The ATC is a business group that has shamelessly labored to defeat the Armenian resolution and that FBI whistle-blower Sibel Edmonds has accused of serious wrongdoing.

…

Here is more on BAE as a major criminal entity: Read more È

The Star Power of Chicago: A President, a Chief of Staff, a Governor, a Mayor, a Criminal Convict Creamer, a Dumb or Charlatan Congresswoman, a Political Fundraiser, a Political System Termite…What a Play this would make!

Chicago’s governing style and practices have been consistently characterized as criminal and corrupt since the days of the prohibition-era gangster, Al Capone. Last year Daniel Elgber wrote an interesting piece on this same topic titled ‘Why is Chicago so Corrupt?’

Former Illinois Gov. George Ryan received a sentence of six and a half years in prison on Wednesday, after being convicted on charges of racketeering, mail fraud, filing false tax returns, and lying to investigators. The Chicago Sun-Times reports that in the last three decades, at least 79 local elected officials have been convicted of a crime, including three governors, one mayor, and a whopping 27 aldermen from the Windy City. What makes Chicago so corrupt?

Elgber then goes on to provide some context, historical background, and past parallels with other cities. He points to a few possible factors behind this windy city’s continuous struggle with chronic political corruption:

In Chicago, corruption persisted, to some degree because the city never had the benefit of a reformist mayor like New York City’s Fiorello LaGuardia, who had political ties to FDR. Instead, Chicago moved towards a one-party system that made it even more vulnerable to corruption: The city’s last Republican mayor left office in 1931. Today, not even the Democratic primaries are competitive—for the most part, once you’re in office, you stay there. The weak campaign finance laws in Illinois probably helped to stave off competition in recent years.

The star power of Chicago politicians may also contribute to the city’s continuing problems with corruption. Incumbents tend to be big personalities who get celebrity coverage in the local papers—which sometimes translates into ethical leeway from voters. (In cities like Los Angeles and New York, local politicians take a back seat to the media celebs.)

Lastly, Elgber talks about corruption measurement and relevant points. This is a very interesting and obviously still relevant and applicable piece, so I suggest you read it in its entirety here and check out the links provided.

The media has long been reporting on Chicago’s corruption related scandals, and the intensity and frequency of these stories have increased tremendously in the last few years. So why am I so interested in this windy city of Bears?

Those of you who know me and/or are familiar with my case know the answer: Could it be the Political System Termite Dennis Hastert? Could it be the case of still under question marks Jan Schakowsky and the clear-cut record of her convicted husband? Could it be the Turkish criminal operatives with their HQ in Chicago since the early 90s? Could it be that Chicago was one of the two centers of the FBI’s nearly decade-long espionage and criminal investigations?

Well, the answer to all those ‘could it be’s is a firm yes, with more answers still buried somewhere in Chicago…For now let’s look at a small gallery of a much bigger gallery on recent key political personalities who happen to be connected to each other in more than one way and with more than a tie or two. Treat it as you might an exhibition room in a museum showcasing a series of relevant portraits all set against the same windy city background. Or if you wish, which I hope you do, go even further and add your points and possible interpretations for each portrait.

White House Chief of Staff Rahm Emanuel

I am starting with Rahm Emanuel since he prompted this piece on Chicago Politics’ Figureheads in Corruption. I know what you’re thinking, and no I am not going to walk down the same path and talk about the creepy odd personalities making even a creepier and odder couple. Catch my drift? While the outcome of that marriage may end up interestingly, the marriage is not as advertised. It is not far left with far right, but purely and simply a good example of in-breeding: when the byproducts of the same establishment couple with each other…In ordinary life the off-spring sum up the result. In the murky, smoke and mirrors, basically plain swampy and dirty world of partisan politics the outcome is what you watch on Fox TV, or the like.

Okay, so while the latest with Rahmie prompted this piece, the reasoning and the points herein have nothing to do with that. After all, Rahm Emanuel’s past record has always been out there for anyone who wanted to look, to see, to know about: his father’s Ziono-Terrorist background, his own active duty with Israel’s military, his dual citizenship, his highly questionable loyalties, his even more questionable financial gains from swampy financial institutions’ practices, his connections to the corrupt and criminals, his dirty mouth, his dirtier deeds in the campaign finance area…That’s right. All this has been known for quite a while. Somehow, the far left, while advertising for and promoting Obama, chose not to see their man’s choice of White House Chief of Staff, and worked very hard to hush anyone who did. Now that their con man of choice is secured in place, combined with only God knows what agenda, they choose to mumble about him. Read more È

The Erosion & Rotting of a Nation’s Foundation

While dictionaries and encyclopedias, including Wikipedia, provide a thorough definition and description of insect termites, none offers any information on the semi-human termites imbedded within the political system of our nation, where they feed on the lobby and special interest Political Eco System while they cause serious foundational and structural damage to the welfare of the public majority, and to future generations’ prosperity and liberties. These Political System Termites (PST) and their colonies exist and thrive within various branches and layers of the political governing system, and they go by different names or titles, including Representative, Senator, Secretary, and Advisor. Regardless of title differences and purely cosmetic differentiations and technicalities, they belong to the same political eco system and all are considered members of the PST family. This article will focus mainly on Congressional Termites.

Let’s start by comparing some general overlapping characteristics between the widely acknowledged and recognized insect termites and the still-waiting-to-be recognized and defined Political System Termites (PST):

Insect termites divide labor among gender lines, produce overlapping generations and take care of their young collectively. Political System Termites divide their activities based on a corruption hierarchy, create networks of laws and legislations to protect themselves and the establishment, and protect one another collectively, including their retired then turned lobbyist seniors – regardless of cosmetic brand differentiations, such as ‘D’ or ‘R.’

Insect termites are economically significant as pests that can cause serious structural damage to buildings, crops or plantation forests. Political System Termites are also economically and politically significant as pests that can create a seriously damaging web of laws and regulations particularly harmful to society at large, while sucking up taxpayers’ resources and trust, and betraying the people’s interests in exchange for establishment and external interest connected personal gain.

Insect termites live in colonies that, at maturity, number from several hundred to several million individuals. The potency of Political System Termites has a bit less to do with their actual numbers, and much more with the power and freedom granted to them by the very same victims they feed and extract upon. After all, PSTs are in charge of making the laws and rules governing their own existence and survival.

A typical insect termite colony contains nymph workers, soldiers, and reproductive individuals of both genders, sometimes containing several egg-laying queens. A typical Political System Termite colony may include a Speaker of the PST Colony, Chairmen and Chairwomen of sub-colonies, congressional larva (aka aides), and extended networking PSTs in media and PR colonies.

The most significant difference between insect termites and Political System Termites has to do with their ecology. While the former are important in nutrient recycling, habitat creation, soil formation and quality, the later is not known for any positive contribution to the human eco system, at least not in the last few decades. The only known habitats for Political System Termites are those marked by social deceases such as bribery, greed, prostitution, treason …

This should be enough for a preliminary albeit simplified scientific definition and general description of Political System Termites. I will leave further and more expanded descriptions and literature to sociologists and political scientists in academia, where time always seem to be abundant to formulate definitions and answers into long winded gobbledygook no one ever seems to understand, let alone critique.

Instead, I will provide you with a short portrait of a known Political System Termite which acted as the Speaker of the PST Colony of Capitol Hill for nearly a decade. This example should sufficiently illustrate how these termites go about eroding and rotting the nation’s foundation, while putting in place laws meant to ensure further and easier erosion by their larva, the future PSTs.

PST Dennis Hastert: A Portrait

Dennis Hastert, a Republican member of the US House of Representatives from 1987 until 2007, represented Illinois’ 14th Congressional District, and served as the Speaker of the House from 1999 to 2007.

Prior to his two-decade long career as a congressman, Hastert was a high school teacher in Chicago with a modest family income. Yet, somehow, he managed to become a multi-millionaire while in Congress: his financial net worth went from less than $270,000 in 1986 to an estimated $4 million to $17 million. No, this was not due to a rich wife or a sudden inheritance, nor was it due to winning a lottery. This fortune came about solely as a result of his activities as a Political System Termite. We will have more on this further down the article.

This PST, while hard at work with his comrade termites eroding and rotting the legislative foundation, while filling up his personal pockets with hard-earned taxpayers money and building a fortune, was involved in almost every major scandal involving the Capitol Hill PST Colony during the last decade: From the Jack Abramoff Scandal to the Mark Foley Disaster, from being pocketed by foreign government(s) to making millions in congressionally earmarked land deals.

Well, this PST may have had retired in 2007, but he is still sucking up taxpayers money, and not a meager amount. Let’s look at the latest on this PST and on our rotten system with real rotten laws drafted by even more rotten lawmakers to benefit the most rotten ones. Read more È