Special counsel on prisoner abuse

Lee Drutman: Special counsel on prisoner abuse

01:00 AM EDT on Friday, April 8, 2005
Providence Journal

In recent months, Bush-administration critics have lodged disturbing accusations against U.S. Atty. Gen. Alberto Gonzales for his alleged role in authorizing torture in the war on terror.

For example: On Jan. 25, 2002, Mr. Gonzales (then White House counsel) dismissed parts of the Geneva Conventions as "quaint" in advising President Bush that the document did not apply to detainees held at Guantanamo Bay. And on Aug. 1, 2002, Mr. Gonzales requested a Justice Department memo to approve such practices as "water boarding" (simulated drowning) and "open-handed slapping of suspects" as acceptable prisoner treatment.

A long list of similar memos skirting the spirit of both domestic and international law -- documented by the American Civil Liberties Union and other groups -- has led such critics as the president of the Alliance for Justice, Nan Aron, to conclude that "Alberto Gonzales was the chief engineer behind the Bush administration's policy justifying the abusive treatment of prisoners of war."

The attorney general may prefer to dismiss such statements as outlandish, while asserting his qualifications with a series of platitudes about the importance of upholding the law and a promise that torture "will not be tolerated by this administration" (as he told the Senate during his recent confirmation hearing). Yet concerns about Mr. Gonzales's role are hard to avoid when he answers tough specific questions with such lawyerspeak as "I don't recall specifically" (again, as he said at his confirmation hearing).

Given the situation, and politics being what it is, Mr. Gonzales's coyness is to be expected. Yet it does not help us get to the bottom of a black mark on the American war on terror: the extensive evidence that the United States, while casting itself as the defender of human rights, has engaged in disturbing treatment of detainees. (One wonders how, exactly, soaking a prisoner's hand in alcohol and setting it afire, putting lit cigarettes in a prisoner's ear, or force-feeding a prisoner with a baseball makes the world safer for democracy.)

Figuring out who did what and who bears responsibility in the torture scandal is crucial, for a simple reason: We cannot be a credible international force for human rights and democracy if we cannot hold ourselves accountable for potential human-rights violations.

We can't say for sure whether Alberto Gonzales bears responsibility for the torture scandal. What we can say is that to find out requires appointing an outside special counsel to investigate. Asking the Gonzales-headed Justice Department to investigate would not provide a satisfactory answer; if the attorney general and other administration figures were absolved of responsibility, few critics would believe it. Mr. Gonzales and his associates are too close to approach the scandal objectively -- or even to appear objective.

-- Lee Drutman

http://www.projo.com/opinion/contributors/content/projo_20050408_08lee.1ba6381.html

Shelters from the storm

Lee Drutman: Shelters from the storm

01:00 AM EST on Saturday, April 2, 2005

Only the little people pay taxes.

-- Leona Helmsley

News item: Americans' unpaid taxes are now topping $300 billion a year, with people who underreport their income the biggest culprits. -- Associated Press

At a time of rising (and well-justified) concern in Washington about the metastasizing federal-budget deficit, most of the solutions proposed these days seem to involve some form or other of cutting spending. Raising taxes remains political heresy, but a lot of us wonder why nobody has seized on doing a better job of collecting taxes, as at least a partial solution.

A recent General Accountability Office report highlighted the opportunity in going after tax shelters. On the definition of tax shelters, the GAO says:

"The Internal Revenue Code has defined tax shelters in various detailed and complicated ways for purposes of having them registered, for applying certain penalties, or for certain tax accounting rules. Although the IRS has no single, authoritative definition of abusive shelters, it has generally characterized them as complex techniques promoted by sophisticated tax professionals that companies and rich individuals use to exploit tax loopholes and reap unintended tax benefits. Tax services include services involving tax compliance, tax planning, and tax advice as described by the Securities and Exchange Commission (SEC)."

According to the report, more than 10,300 individuals and 207 Fortune 500 companies have used tax shelters, accounting for a total tax revenue loss of nearly $129 billion for 1998-2003. That's an awfully large pot of money to go after at a time when revenue is in short supply. Yet, according to the GAO report, the IRS staffing levels in "key occupations" related to compliance were lower in 2002 than in 2000, and "based on past experience and uncertainty regarding some expected internal savings, fiscal year 2004 anticipated staff increases might not fully materialize."

The report further warns that "if IRS carries through with its intentions to increase resources devoted to abusive shelters, it may not have the desired level of resources in other areas of compliance."

Much of the blame can be heaped on the accounting industry, which has grown increasingly aggressive in the art and sale of tax shelters. According to the GAO report, 114 of the Fortune 500 companies and 4,400 individuals using tax shelters obtained the services from an accounting firm.

Meanwhile, a recent report by the Senate Permanent Subcommittee on Investigations found that accounting firm KPMG's revenue from its Tax Services Practice rose from $829 million in 1998 to $1.2 billion in 2001. The report also documented how accounting firms such as Ernst & Young and PricewaterhouseCoopers, banks such as Deustche Bank and Wachovia Bank, and law firms such as Sidley Austin Brown & Wood "developed, implemented, and mass-marketed cookie-cutter tax shelters used to rip off the Treasury of billions of dollars in taxes," as Sen. Norm Coleman (R.-Minn.), the committee's chairman, put it.

Both the Senate Permanent Subcommittee on Investigations and the Senate Finance Committee have been holding periodic hearings on tax shelters for years now, documenting a wide range of abusive practices ripe for regulation. With the budget deficit becoming ever more precarious, a serious congressional crackdown on abusive tax shelters is long overdue.

-- Lee Drutman

http://www.projo.com/opinion/editorials/content/projo_20050402_02tax.1ae8f3a.html

Small win against spam

Lee Drutman: Small win against spam

01:00 AM EST on Friday, March 25, 2005

Recently, a former AOL software engineer named Jason Smathers pleaded guilty to stealing 92 e-mail screen names and selling them to spammers for $100,000. These spammers, in turn, used those e-mail screen names to flood the in-boxes of AOL customers with as many as seven billion e-mails for herbal penile-enlargement pills and Internet casinos.

(To get a sense of how many e-mails that is, assuming you could delete one e-mail per second, it would take you 222 years to delete seven billion e-mails from your inbox.)

The Smathers case is significant in that it is one of the very first cases brought under the less than two-year-old Can-Spam Act, a largely toothless federal statute that makes it illegal to send e-mails with false header information but has done virtually nothing to stem the tidal wave of spam flooding e-mail in-boxes.

The statute is so weak that U.S. District Judge Alvin K. Hellerstein had originally rejected Smathers's guilty plea last December because at first, he wasn't convinced that Smathers' despicable activities were actually illegal under the act.

Also disturbing is that Smathers, who was low on the totem pole at AOL, was able to hand the company's entire subscriber list to spammers with what appears to have been relative ease.

If something like this could happen at a major Internet service provider like AOL, one has to wonder: What about other companies?

Although the Smathers prosecution is noteworthy, it is a mere drop in the vast and seemingly bottomless bucket of spam. Experts estimate that in-boxes are now bombarded with 15 billion spam messages a day (more than twice the 7 billion spam e-mails involved in the Smathers case), which accounts about 75 percent of all e-mails -- a time waste that costs U.S. businesses as much as $87 billion a year in lost productivity (not to mention to general levels of frustration it adds to an already exasperated society).

While it is encouraging to see a small legal victory against spam now and then, the numbers just presented tell us quite clearly that we are losing the war. Federal prosecutors need stronger laws, more resources, and tougher penalties to go after spammers. One step would be to broaden the definition of spam to include e-mail that is not just fraudulent, but also unwanted, annoying and harassing.

-- Lee Drutman

http://www.projo.com/opinion/editorials/content/projo_20050325_25smath.1a643ad.html

The apocalyse approaches online

The apocalyse approaches online

http://www.projo.com/opinion/contributors/content/projo_20050322_ctraptu.2073e05.html

01:00 AM EST on Tuesday, March 22, 2005

BERKELEY, Calif.

GO TO RaptureReady.com and there you will find something called the Rapture Index, which tracks the news in 45 categories related to the biblical prophecy of the Second Coming of Christ.

The higher the index goes, the closer we get to the "fasten your seatbelts" zone, which means that the Rapture could be coming any day now.

For the true believers, of course, the Second Coming is the day to end all days -- the day when Christ finally returns as promised, and the devout are eternally rewarded, while the heretics are eternally damned to the fires of Hell. Therefore, it is with certain eager anticipation, it seems, that the folks at RaptureReady posted stories about the recent tsunami disaster in Asia (after all, they "look for more earthquake activity as the return of Christ draws near").

RaptureReady is keeping its eyes on such trends as "Oil Supply and Price" ("The final battle of Armageddon may . . . involve a dispute over oil"), the "movement to join all religions into one" ("This has been a goal of the Devil for some time. By having all religion unified, he could more easily control their leadership"), and global famine ("During the time of the tribulation, a day's wage will be equal to a loaf of bread"), among many other categories.

While the tendency of well-educated secular progressives is to scoff at this as just a bunch of fringe lunatics holding up "The End Is Nigh" signs, it is starting to seem as if the well-educated secular progressives are the ones who are on the fringe. According to a 2002 Time/CNN poll, 59 percent of Americans believe that the Book of Revelation prophecies are actually going to come true, and one in four Americans believes that 9/11 was actually predicted in the Bible. And Timothy LaHaye's Left Behind series -- 12 volumes of tales of the imminent biblical apocalypse -- are among the best-selling books in America.

For a number of progressive-minded folks, this is frightening and dangerous stuff. For example, in a recent speech accepting the Harvard Medical School Center for Health and the Global Environment's Global Environment Citizen Award, journalist Bill Moyers raised the worrisome prospect that this biblical millennialism might be behind the right wing's refusal to do anything about global warming. Quoting Grist Magazine, Moyers suggested, "Why care about the earth when the droughts, floods, famine, and pestilence brought by ecological collapse are signs of the apocalypse foretold in the Bible?"

But where Moyers and others see alarm bells, I see opportunity. Instead of wondering how these people could be so deluded, progressives should be figuring out how to use these delusions as an organizing strategy. With a little work, such progressive-agenda items as gay marriage, abortion rights, and legalizing drugs could all be transformed from betes noires of Christian conservatives into signs of the Second Coming of Jesus.

The folks at ReadyRapture.com already seem to be on the boat here. For example, one of the 45 categories they are following in their Rapture Index is "Moral Standards." They note, "The scourge of gay marriage upgrades this category." Therefore, if these true believers are really serious about the Second Coming, they ought to welcome "the scourge of gay marriage," instead of passing state constitutional amendments to ban it.

Similarly, instead of protesting outside abortion clinics, these hard-core Christians should welcome a woman's right to choose, since, according to RaptureReady, "the Scripture says, 'In the secret place doth he murder the innocent' (Psalms 10:8). The 'secret place' is the womb of a mother." Come on, folks: Do you want the Rapture or not?

RaptureReady is also following "Drug Abuse":

"The Bible . . . may make mention of drugs. In the Book of Revelation the word 'sorcery' has the Greek word pharmakeia as its root. This is where we get the word 'pharmacy.' When it says 'they repented not of their sorceries,' it could mean they repented not of their drug use."

Here, it would appear, is an untapped constituency for helping to expose the "War on Drugs" as a waste of time and resources, as well as for fighting for the long-overdue decriminalization of marijuana. After all, more drug use means an earlier Rapture.

More broadly, RaptureReady even has a category entitled, simply, "Liberalism." (You can't make this stuff up.) However, at last check, the "Liberalism" index was down to just "1" (the lowest level), with RaptureReady noting, "Liberals in the U.S. take huge beating." If only John Kerry had reminded evangelical voters that without liberalism on the rise the Rapture Index would be that much further from the Second Coming, he might have won the election.

The Web site also notes that "liberalism is . . . the 'true conspiracy.' The liberal media is 100 percent control [sic] by the forces that bow to this humanistic ideology." Perhaps these folks could even be enlisted in a crusade to shut down Fox News.

Sure, the Rapture Index also roots for "Inflation," "Unemployment," "Volcanoes," and "the Antichrist." Not to mention "Global Turmoil," "Drought," and "The Mark of the Beast." But in these troubled times, you have to pick your battles.

Lee Drutman is a frequent contributor.

Grinchier is healthier this year (Providence Journal)

Providence Journal Commentary - Grinchier is healthier this year
December 30, 2004
Lee Drutman



BERKELEY, Calif.

TWAS THE WEEK before Christmas, and all through the stores, consumers were spending, but should have spent more.

At least that was the view of Wall Street analysts and retail-store owners, who worried that holiday shoppers were not getting into the holiday spirit and spending with their usual reckless abandon this year.

For example, in a report issued just a few days before Christmas, Bank of America senior retail analyst Dana Cohen offered a grim prediction: "With only a few days left, we suspect that Christmas '04 is turning into a much more lackluster season than even we anticipated (and we were not too optimistic). We recognize that there are some very big days left both pre- and post-Christmas; however, we are running out of days to make it up."

Michael Niemira, chief economist at the International Council of Shopping Centers, meanwhile, complained that the holiday season had been "soft, sluggish and uneven" for retailers.

The numbers were indeed bleak for these analysts. The ICSC was reporting that Christmas retail sales were up a measly 3 percent over last year's mere $219.9 billion (which, by comparison, is a little less than Sweden's annual gross domestic product: $230 billion). And to think that the National Retail Federation had projected a 4.5-percent increase over last year, which would have brought spending up to more than $700 per shopper (up from $672 in 2003).

Meanwhile, on the crucial Saturday before Christmas (typically the biggest single shopping day), consumers spent a miserly $6.7 billion, or the equivalent of almost the annual GDP of Malawi ($6.8 billion): a full 7 percent less than they had on the Saturday before Christmas in 2003.

What was going on? Could it have been that perhaps, after years of participating in the Christmastime tradition of spiraling credit-card debt, some folks had decided to pull back a little? And could this -- contrary to the narrow views of Wall Street -- maybe be a good thing for the long-term health of the economy?

After all, the average U.S. household now owes $9,205 in debt on an average of 13.4 credit cards, and 13 percent of after-tax household income is going to pay debts -- the highest percentage in about two decades. By comparison, household saving rates in 2004 averaged just 0.9 percent of after-tax income -- the lowest ever. In October, the rate fell to just 0.2 percent. American families are declaring bankruptcy at the rate of about 1 every 15 seconds. And those retail analysts wanted families to spend more money on Christmastime shopping? What were they trying to do?

Yet because more than two-thirds of the U.S. economy depends on consumer spending -- and because some stores depend on Christmas shopping for as much as 40 percent of their annual sales -- Yuletide is always crucial for the economy. If consumer spending doesn't keep growing, goes the logic, the economy can't keep growing. And then we all suffer.

Problem is, consumers can't keep spending and going into debt forever to keep the economy rolling. At some point, something's gotta give. And it appears that we may be getting quite close to that season of "giving."

According to the International Council of Shopping Centers, 39 percent of Christmas shoppers surveyed said that they had spent less because their finances were deteriorating. And Howard Davidowitz, chairman of the retail-consulting firm Davidowitz & Associates, has said that Americans "are really starting to worry about credit-card interest. Consumers have the highest debt and lowest savings in history."

Then, of course, there is the great existential question regarding all this Christmas shopping: Does it really make us happy? Does it really bring us closer to our loved ones? Or has it merely turned all our relationships into a series of Well-what-did-you-get-for-me-this-year contests? Could the downturn in Christmas shopping be a sign that maybe -- just maybe -- some people have had it with the maddening crowds, the long lines, and the relentless materialism, which can't really be what the spirit of Christmas is all about?

According to a recent poll done for the Center for a New American Dream (a nonprofit that pithily promotes "More fun, less stuff"), 88 percent of Americans say that society is too materialistic, 87 percent say that "our current consumer culture makes it harder to instill positive values in our children," and 80 percent say that society is "too focused on shopping and spending."

Additionally, the poll found that since Sept. 11, 2001, 40 percent of Americans had "made conscious decisions to buy less," and 58 percent said that excessive materialism causes people to work too much. (Americans on average work more hours per year than people in any other industrialized country -- about 350 more hours per year than our counterparts in Western Europe.)

Finally, 52 percent of Americans say that they have too much debt. Does this mean that we have finally gone as far as we can with this whole Christmas-shopping thing?

Still, even after Christmas, the retailers continue to do what they know how to do best: push irresistible bargains on what should otherwise be perfectly resistible junk. But an economy that relies on consumers' spending themselves into ever-increasing levels of debt and doubt does not seem to be a particularly sustainable one. If big retailers and Wall Street analysts want to give the country a real Christmas present, perhaps they should start thinking about this sooner, rather than later.

Lee Drutman, a frequent contributor, is the co-author, with Charlie Cray, of The People's Business: Controlling Corporations and Restoring Democracy (Berrett-Koehler Publishers).

Spam spreads

Providence Journal Editorial

Spam spreads

01:00 AM EST on Wednesday, March 9, 2005

By all accounts, the tidal wave of spam -- the colorful name for unsolicited e-mail -- increasingly overwhelms the Internet. Experts estimate that three out of every four e-mail messages are spam -- or about 15 billion messages a day -- and that the cost to U.S. businesses ranges from $10 billion to $87 billion a year in lost productivity (plus another $140 million to pay for spam filters).

Yet despite recently enacted federal anti-spam legislation, as well as anti-spam laws in about half the states, spamming shows no sign of letting up. Recent court cases highlight the limitations of the current methods of law enforcement in the world of spam.

Consider a case decided on Dec. 20, involving a $1 billion judgment in favor of a tiny Internet service provider (ISP) in Iowa. In 2000, Robert Kramer, owner of the five-employee ISP with about 5,000 e-mail customers, filed a suit against 300 alleged spammers -- after his customers had received up to 10 million spam e-mails a day.

Four years later, U.S. District Judge Charles R. Wolle found three of the 300 defendants guilty, under both the federal Racketeer Influenced and Corrupt Organizations (RICO) Act and the Iowa Ongoing Criminal Conduct Act. The judge ordered AMP Dollar Savings, of Mesa, Ariz., to pay $720 million; Cash Link Systems, of Miami, to pay $360 million; and Florida-based TEI Marketing Group to pay $140,000. So the judgments are soaring, although how much money will be collected is another matter. (Lawyers for the defendants didn't even show up at the trial.)

According to The Spamhaus Project, an organization that works against spam, Florida has 54 of the 180 biggest spamming operations. And for good reason: The state's favorable personal-bankruptcy laws let spammers who are sued hold on to most of their possessions.

The Iowa case also highlights that while justice moves slowly (in this case, four years), spammers move at light speed. Experts estimate that spammers now change domain names every two days -- compared with once a week just three months ago. Soon it could be every few seconds.

While the authorities struggle with limited tools, spam, by flooding Internet in-boxes, threatens the very viability of e-mail. Without some new methods of spam-law enforcement, the situation will only worsen.

http://www.projo.com/opinion/editorials/content/projo_20050309_09spam.1bf1609.html

A generous excerpt from my book in In These Times

The People’s Business

Controlling corporations and restoring democracy

By Lee Drutman and Charlie Cray

One does not have to look far in Washington these days to find evidence that government policy is being crafted with America’s biggest corporations in mind.

For example, the Bush administration’s 2006 budget cuts the enforcement budgets of almost all the major regulatory agencies. If the gutting of the ergonomics rule, power plant emissions standards and drug safety programs was not already enough evidence that OSHA, EPA and FDA are deeply compromised, the slashing of their enforcement budgets presents the possibility—indeed, probability—that these public agencies will become captives of the private corporations they are supposed to regulate.

This should come as no surprise to anybody familiar with the streams of corporate money that flowed into Bush campaign coffers (as well as the Kerry campaign and all races for the House and Senate) in the 2004 election. The old “follow the money” adage leads us to a democracy in thrall to giant corporations—a democracy that is a far cry from the government “of the people, by the people, and for the people” that Lincoln hailed at Gettysburg.

At a time when our democracy appears to be so thoroughly under the sway of large corporations, it is tempting to give up on politics. We must resist this temptation. Democracy offers the best solution to challenging corporate power. We must engage as citizens, not just as consumers or investors angling for a share of President Bush’s “ownership society.”

To read the full article:

http://www.inthesetimes.com/site/main/article/1971/

Dick Grasso and executive pay

From the Providence Journal
http://www.projo.com/opinion/contributors/content/projo_20050215_ctlee.200fa8d.html

Lee Drutman: Corporate boards take care of pals

10:15 AM EST on Tuesday, February 15, 2005

BY NOW, we are all familiar with the fractured fairy tale of former New York Stock Exchange Chairman and CEO Richard Grasso. Hard-working kid from Queens begins his career as an NYSE clerk in 1968, charms his way up the ladder, makes lots of friends, puts some of them on the board of directors at the not-for-profit NYSE, and somehow winds up with a $188 million pay package.

The public finds out, Grasso is forced to leave, and his name becomes a symbol of the current era of executive excess, in which top executives are, on average, paid 300 to 400 times what average workers earn.

So -- how did he do it? And how can we prevent this kind of avarice from happening again?

The latest insight into this question comes from a recently disclosed 130-page report by NYSE lawyer and former federal prosecutor Dan K. Webb. The Webb report details how Grasso's hand-picked board of directors was largely kept in the dark about Grasso's metastasizing remuneration -- which added up to $192.9 million in compensation and paid pension benefits over eight years of service -- while Grasso quietly (though ultimately not quietly enough) started pulling out his retirement benefits.

According to the report, Grasso's compensation was $113.6 million to $124.5 million too high, on the basis of salaries for comparable positions. Although Grasso comes across as a smooth, scheming operator in the report, the question remains: Could he have won such a pay package for himself without having a board willing to either pay him his millions or at least conveniently look the other way?

The board that granted Grasso his millions was a Who's Who of Wall Street CEOs, including James Cayne, of Bear Sterns, Henry Paulson, of Goldman Sachs, and David Komansky, of Merrill Lynch. Another big-league board member was H. Carl McCall, the former New York State comptroller and state Democratic Party bigwig who, as a member of the exchange's compensation committee, first asserted that he didn't know how Grasso had gotten paid so much, but then defended the salary.

These directors didn't get to their present positions of power by being stupid or easily duped. Which makes it hard to believe that they were tricked outright by Grasso. What is easier to believe is that they willfully turned the other way, following the advice of legendary U.S. House Speaker Sam Rayburn: "If you want to get along, go along."

Then there is the special case of Kenneth G. Langone, chairman of the compensation committee at the time of Grasso's top pay. According to the Webb report, Langone argued in 2002 for a new Grasso contract (which ultimately led to the outsized payout), in response to rumors that Grasso might leave the NYSE to become Treasury secretary. According to New York Atty. Gen. Eliot Spitzer, Langone was a full-on conspirator in the plot to take the NYSE's money and put it in Grasso's pockets.

Spitzer is suing Grasso and Langone for having violated the New York State Not-for-Profit Corporation Law, which mandates that executive compensation must be "reasonable" and "commensurate with services provided."

Unfortunately, the Grasso pay debacle is only a more extreme version of what is happening at corporate boardrooms across America -- where CEOs place their friends on the board of directors and then help them come up with confusing, misleading, and ever more outrageous pay packages.

As a result, executive pay continues to surge. For example, according to a recent Reuters study of the Standard & Poor's 500 companies, CEO median cash pay -- base salary and bonuses -- rose from $1.75 million in 2002 to $2 million in 2003 (the latest year for which such numbers are available). Bonuses were up 20 percent, from $884,000 to $1.06 million.

A dose of board independence -- today's bromide solution for all that ails corporate America -- is obviously needed. Certainly, those responsible for deciding executive compensation should not be in a position in which they are also trying to curry favor with management to keep their $160,000-a-year gig as director.

Meanwhile, the CEO of a company should not also serve as the chairman of the board that sets his or her salary -- as 75 percent of CEOs currently do (and as Grasso did at the New York Stock Exchange).

Another promising development comes from the Securities and Exchange Commission, where Chairman William Donaldson has proposed bringing more transparency to the disclosure of executive compensation, which is often presented to shareholders (and even sometimes directors) in hopelessly confusing and misleading terms.

But perhaps the easiest and most straightforward way to put a clear check on excessive executive compensation is for shareholders to have the right to vote on the compensation -- after all, it is their money.

The lesson of Dick Grasso and his $188 million should have sent corporate boards scurrying to remove potential conflicts of interest and to clarify pay packages in order to ensure fairness. It hasn't. But the resistance of executives and insiders to the growing chorus of both shareholder and citizen complaints can last so only long.

Give us a few more Dick Grassos, a few more Webb reports, and a few more William Donaldsons, and somewhere, somehow, something has got to give.

Lee Drutman, an occasional contributor, is the communications director for Citizen Works, a public-policy research and lobbying group, and the author of The People's Business: Controlling Corporations and Restoring Democracy.