Wells Fargo bank fined for account and credit card fraud

Nick Beams

Wells Fargo, the world’s most valuable retail bank, has agreed to pay $185 million in fines after the exposure of schemes that defrauded customers in line with a business model, organised from the highest levels of the company, to boost its profits and growth.

According to the US Consumer Financial Protection Bureau (CFPB), the bank opened 1.5 million deposit accounts and more than half a million credit card accounts without customers’ authorisation. Bank employees moved funds from customers’ accounts into newly-created accounts without their knowledge or consent.

The CFPB said this practice was “widespread” and resulted in customers being charged for insufficient funds or overdraft fees because required amounts were not in their accounts. The bank also created more than 565,000 credit card accounts, of which some 14,000 incurred more than $400,000 in fees and interest charges.

The bank is attempting to lay the blame on “rogue employees” and revealed that since 2011 it had sacked 5,300 staff. But the fraud operation resulted from a strategy imposed from the top.

Moreover, it beggars belief that a company supposedly operating with tight internal controls and regulations did not know about the creation of more than two million fake accounts.

Under chief executive John Stumpf, the bank’s business model was to sell additional products to customers who held a current account with it. This was a core element of the strategy that helped increase the bank’s market capitalisation to $250 billion. Its biggest shareholder is Berkshire Hathaway, the investment firm run by Warren Buffet.

In a statement on the fraud, the Los Angeles City Attorney’s Office said the unauthorised accounts were funded with money from customers’ existing accounts to “satisfy goals and earn financial rewards under the banks’ incentive-compensation program.”

There was direct pressure on employees to engage in the practice. According to a statement by Kahlid Taha, a former employee: “When I worked at Wells Fargo, I faced the threat of being fired if I didn’t meet their unreasonable sales quota every day.”

Under the $185 million settlement, in which Wells Fargo has neither admitted nor denied the allegations against it, the bank will pay $100 million to the CFPB, $35 million to the Office of the Comptroller of the Currency and $50 million to the Los Angeles City Attorney.

There are two crucial aspects to the agreement and the fine. First, as David Vladeck, a Georgetown University law professor and former director of the Federal Trade Commission’s Bureau of Consumer Protection, told CNN: “It sounds like a big number, but for a bank the size of Wells Fargo, it isn’t really.”

Second, the fine is written off the profit and loss account of the bank. There is no penalty imposed on the senior executives and top management, whose business strategies and demands on employees created the conditions for the fraud to take place.

In a memo to employees issued on Thursday, the bank said: “At Wells Fargo, when we make mistakes, we are open about it, we take responsibility for it.”

However, the exposure of the fraud did not come from Wells Fargo but from actions initiated by the Los Angeles City Attorney over unauthorised accounts in May 2015.

As for being “open,” in recent regulatory filings the bank did not disclose that it was under investigation.

“Each quarter we consider all available relevant and appropriate facts and circumstances in determining whether a litigation matter is material and disclosed in our public filings,” Wells Fargo spokeswoman Mary Eshet said in an email. “Based upon that review, we determined that the matter was not material.”

Upon release of the fraud charges, leading Democrat Senator Elizabeth Warren, who has sought to elevate herself into national prominence with denunciations of the big banks, and had a major hand in creating the CFPB, stepped forward to cover up the implications of the fraud.

Thanks to the CFPB, she said, customers were getting their money and the “bank is paying a record-breaking fine that will cause the next bank to think again before engaging in this kind of misconduct. The consumer agency continues to deliver for working families.”

In fact, the very opposite conclusion must be drawn. The 2011 Senate report into the circumstances of the 2008 meltdown disclosed the criminal activities of major banks. But in view of the fact that no one was tried, let alone jailed, and any fines that were imposed came out of corporate cash flows, such activity has continued.

ECB keeps monetary policy on hold as tensions grow

Nick Beams

The European Central Bank (ECB) has kept its interest rate and quantitative easing policy on hold at the meeting of its governing council held in Frankfurt on Thursday. This was widely interpreted as a sign that it did not see any immediate rise in risks as a result of the Brexit referendum in the United Kingdom to leave the European Union (EU).

This week the level of bond purchases by the ECB passed the €1 trillion mark, under a program announced last year. In the lead-up to the meeting there had been conjecture that the bank would announce an extension of the program beyond the present cut-off date of March 2017 and widen it because the supply of bonds it is able to buy is drying up.

In his press conference, ECB president Mario Draghi instead maintained his standard response that the asset purchasing program “is intended to run until the end of March 2017, or beyond if necessary, and in any case until the governing council sees a sustained adjustment in the path of inflation consistent with its inflation aim.”

Lifting the inflation rate is a central ECB objective because it eases the debt burden on banks and other financial institutions.

Keeping the present base interest rate at its present level of minus 0.4 percent, Draghi said he expected interest rates to remain “at present or lower rates for an extended period of time” and well beyond the ending of the asset purchasing program.

Draghi said the available evidence so far suggested “resilience of the euro area economy” in the face of continued global economic and policy uncertainty, but that the outlook was subject to “downside risks.”

In reality, the data provided by the ECB itself, as well as other information, indicate that the bank’s policies—negative interest rates and asset purchases of government and corporate bonds—are having little or no impact in achieving its stated aims of lifting inflation to around 2 percent and boosting economic growth.

According to the latest estimate from Eurostat, the annual inflation rate for August was just 0.2 percent, unchanged from the level in July. This indicates that the ECB has little chance of meeting its target in the foreseeable future.

Data from other sources show the situation is getting worse. The percentage of goods and services prices rising at less than 1 percent has risen to 58 percent, higher than when the ECB started its asset purchasing program last year. In Italy, which is experiencing virtually no growth, the figure is 67 percent.

Economic growth likewise shows no sign of improvement. While the ECB revised its estimate for growth in 2016 slightly upwards to 1.7 percent for 2016, it revised down its estimates for the following two years.

The ECB’s decision not to change its existing policy sparked concern in sections of the financial press. The economics commentator for the British Daily Telegraph, Ambrose Evans-Pritchard, noted that large areas of the euro zone were slipping “deeper into a deflationary trap,” despite negative rates and €1 trillion worth of quantitative easing “leaving the currency bloc with no safety buffer when the next global recession hits.”

Evans-Pritchard warned: “The ECB is close to exhausting its ammunition and appears increasingly powerless to do more under the legal constraints of its mandate.”

The chief obstacle to extending the quantitative easing measures is opposition from Germany, led by its finance minister, Wolfgang Schäuble, and backed by leaders of the country’s major banks who claim that the low interest rate regime is destroying their business model.

In an editorial comment on the decision, the Financial Times pointed to the tensions within the ECB. It said the meeting of the governing council was notable not so much for what it did not do, but for what it did not say. While the decision to keep the policy on hold was reasonable for now, “Draghi’s inability to expand on what action to take if further stimulus is needed in the coming months is worrying.”

The extension of quantitative easing would involve reducing the current restrictions on what assets the bank can purchase, as it is running out of bonds to buy within the current guidelines. The FT noted that such relaxation would meet with “strong political opposition,” particularly from Germany, because rule changes could expose the ECB to losses or “skew purchase towards the bonds of the most indebted countries.”

The FT wrote that while Draghi “clearly would like to have said more,” he confined himself to saying that there was no question of the “ECB’s will, capacity and ability to act.” It warned: “Such assertions may serve the immediate need, but they will not be tenable for long unless the ECB is also able to spell out what its next step would be.” The editorial declared the “rearguard action” being fought by Germany against Draghi was “deeply misguided.”

Some of the tensions came to the surface during the question-and-answer session of the press conference. In his opening remarks, Draghi said governments had to take action to raise productivity and improve the business environment, in part through launching infrastructure projects to increase investment and boost job creation.

In answer to a question on this issue, he cited the September 5 communique from the G20 summit which pointed to the importance of fiscal strategies to improve growth, emphasising in an answer to a later question that this was a statement not of central bankers but of governments and finance ministers—a thinly-veiled jibe at Germany.

Draghi was more explicit after being was asked if he was referring to Germany when he had said some countries have margins (a reference to budget and balance of trade surpluses) to make investments. “Countries that have that fiscal space should use it,” he said. “Germany has fiscal space.”

In conditions where the ECB’s own figures indicate that no major increase in economic growth is on the horizon and deflationary pressures continue, the tensions within the ECB are set to increase in the coming period.

The Sick Ocean

Robert Hunziker

A major new scientific report, “Explaining Ocean Warming” was released on September 5th. It is grim. According to the International Union for Conservation of Nature (IUCN) World Conservation Congress in Hawaii, the findings are based upon peer-reviewed research compiled by 80 scientists from 12 countries. It is the most comprehensive study ever undertaken on the subject of warming of the ocean.

Significantly, the ocean has absorbed more than 90% of “enhanced heating from climate change since the 1970s.” In other words, the ocean has been “shielding us” from the extensive affects of global warming. And, the consequences for the ocean are “absolutely massive.”

The “seasons in the ocean” are actually changing as a result.

“The scale of ocean warming is truly staggering with the numbers so large that it is difficult for most people to comprehend,” D. Laffoley, et al, ed. Explaining Ocean Warming, IUCN Global Marine and Polar Programme, Sept. 2016.

“A useful analysis undertaken by the Grantham Institute in 2015 concluded that if the same amount of heat that has gone into the top 2000m of the ocean between 1955-2010 had gone into the lower 10km of the atmosphere, then the Earth would have seen a warming of 36°C.”

In other words, humanity would be toast.

Here’s one of many dangerous “hooks” mentioned in the report: “Crucially, as evident in the past two years, the heat and CO2 accumulated in the ocean are not permanently locked away, but can be released back into the atmosphere when the ocean surface is anomalously warm, giving a positive rapid feed-back to global warming,” which would entail a decidedly harsh blow to life on the planet.

The 500-page report is all-inclusive with several subsections dealing with individual oceanic issues. Yet, a general overview of the “chain of impacts” is perhaps most relevant to an understanding of the dire consequences of failure to act by halting CO2 fossil fuel emissions as soon as possible.

The “chain of impacts” clearly demonstrates the linear interrelated behavior of ocean warming, ocean acidification, and sea-level rise. Due to a domino effect of one problem cascading into others, key human sectors are now threatened, e.g. fisheries, aquaculture, coastal risks management, general health, and coast tourism.

In point of fact, scientific studies show rapid deterioration throughout the “change of impacts” statement such that an all-out alarm is necessitated. In short, the ole public clarion bells need to start ringing hard and loud because “the impacts on key marine and coastal organisms, ecosystems and ecosystem services are already detectable from high to low latitudes transcending the traditional North/South divide.”

In other words, the entire world oceanic ecosystem is already showing signs of severe stress or oceanic sickness.

Furthermore, the latency affect of anthropogenic (human-caused) global warming means the impact of today’s carbon emissions shows up years and years down the line such that, assuming carbon emissions drop to zero tomorrow, global warming continues cruising along for many years to come.

All-important, the ocean is a “climate integrator” that regulates the entire planetary biosphere by absorbing 26% of human-caused CO2 and 93% of additional planetary heat. “Without the ocean, present climate change would thus be far more intense and challenging for human life.”

Meanwhile, the regulating function of the ocean comes with heavy costs, for example, ocean acidification and availability of carbonate ions are disrupted, which are building blocks for marine plants and animals to make skeletons, shells, etc.

This acidification impact is already a factor at the base of the food chain, as tiny pea-sized pteropods, which serve as food stock for everything from krill to salmon to whales, show ultra-thinning of their protective shells necessary for both reproduction and maturation, a problem especially found in the Southern Ocean. This early stage risk to disruption of the food chain is caused by excessive carbon dioxide (CO2) absorbed into the ocean emitted by fossil fuels.

Astonishingly, sea level rise, the most noticeable oceanic impact, has already dramatically increased its rate of increase over the 1901-2010 period as the rate of rise from 1993-2010 accelerated by an astounding 88%. This sea level rise is already felt in cities like Miami where streets are being raised and additional pumping systems installed (Miami Beach is Raising Streets by 2 Feet to Combat Rising Seas, miamibeachrealtor displays a photo of newly raised streets).

Assuming business-as-usual anthropogenic climate change, sources of dietary protein and income for tens of millions of people will likely be severely impacted by mass mortalities. Wherefore, the ole clarion bell needs to ring even louder, waking up citizens to the threat of impending serious food shortages. Fisheries and aquaculture, which are both key for survival for millions, are already at high risk.

Meanwhile, and unfortunately, climate change contemporaneously continues to negatively affect land agriculture, which will likely exacerbate food shortages with the ocean simultaneously stressed. In all, ocean warming is synergistic with other human-induced stresses such as over-exploitation, like drift net fishing, and habitat destruction, e.g., bleached coral, and chemical pollution, for example, Ag runoff.

The report has suggested solutions to ocean stress, as for example: (1) mitigating CO2 emissions by getting off fossil fuels is number no. 1 on the hit list, followed by (2) protecting marine and coastal ecosystems by governmental regulation of “protected areas” and (3) repairing damaged ecosystems with, for example, coral farming, and (4) adapting economic diversification zones and activities.

Importantly, the landmark study emphasizes the fact that “unequivocal scientific evidence shows that impacts on key marine and coastal organisms, ecosystems, and services are already detectable and that high to very high risks of impact are to be expected,” Ibid, page 53.

That statement is as straightforward, pulling no punches, as scientific papers ever get. The evidence is crystal clear that climate change is disrupting the ocean, which is the only ocean we’ve got.

There are no backups.

Here’s hoping Mr. Trump reassesses his “global warming is a hoax” statement. After all, he has a big audience.

A Good Beginning: Toward the End of US Empire

Kathy Kelly

It seems that some who have the ears of U.S. elite decision-makers are at least shifting away from wishing to provoke wars with Russia and China.

In recent articles, Zbigniew Brzezinski and Thomas Graham, two architects of the U.S. cold war with Russia, have acknowledged that the era of uncontested U.S. global imperialism is coming to an end. Both analysts urge more cooperation with Russia and China to achieve traditional, still imperial, U.S. aims. Mr. Graham recommends a shifting mix of competition and cooperation, aiming toward a “confident management of ambiguity.” Mr. Brzezinski calls for deputizing other countries, such as Israel, Saudi Arabia, Turkey and Iran to carry out the combined aims of the U.S., Russia and China so that this triumvirate could control other people’s land and resources.

It’s surely worthwhile to wonder what effect opinions such as Brzezinski’s and Graham’s might have upon how U.S. resources are allotted, whether to meet human needs or to further enlarge the U.S. Department of Defense (DOD) and further enrich the corporations that profit from U.S. investments in weapons technology.

If the U.S. might diminish offensive war preparations against Russia, when would DOD budget proposals begin to reflect this? As of April 15, 2016, the U.S. DOD was proposing that the U.S. Fiscal Year 2017 budget significantly increase funding for the “European Reassurance Initiative” (ERI) from $789.3 million the previous year to $3.4 billion. The document reads: “the expanded focus is a reflection of the United States’ strong and balanced approach to Russia in the wake of its aggression in Eastern Europe.” The requested funds will enable the U.S. “defense” establishment to expand purchases of ammunition, fuel, equipment, and combat vehicles. It will also enable the DOD to allocate money to airfields, training centers, and ranges, as well as finance at least “28 joint and multi-national exercises which annually train more than 18,000 U.S. personnel alongside 45,000 NATO Allies.” This is good news for major “defense” contractors.

In the past year, the National Guard of my home state of Illinois has participated in the DOD reserve component. 22 U.S. states matched up with 21 European countries to practice maneuvers designed to build up the ERI. The IL National Guard and the Polish Air Force have acquired “Joint Terminal Attack Controller” systems that enable them to practice coordinating airstrikes with Poland in support of ground forces combatting enemies in the region. Members of the IL National Guard were part of NATO’s July 2016 “Anakonda” exercises on the Russian border. As the state of Illinois spent an entire year without a budget for social services or higher education, millions of dollars were directed toward joint military maneuvers with Poland that ratcheted up tensions between the U.S. and Russia.

Many families in Illinois can relate to the impact of rising food prices in Russia while family income stays the same or decreases. People in both the U.S. and Russia would benefit from diversion of funds away from billion dollar weapons systems toward the creation of jobs and infrastructure that improve the lives of ordinary people.

But people are bombarded with war propaganda. Consider a recent piece of propaganda-lite, just under 5 minutes, which aired on ABC news, showing Martha Raddatz in the back seat of an F-15 U.S. fighter jet, flying over Estonia. “That was awesome,” Raddatz coos, as she witnesses war-games from the F-15’s open cockpit. She calls the American show of force a critical deterrent to Russian forces. The piece neglects to mention ordinary Russians on whose borders, in June 2016, 10 days of U.S. / NATO military exercises involving 31,000 troops took place.

In the high plateaus of Afghanistan, peasant women provide a striking example of risk-taking in order to literally plant new seeds. The New York Times recently reported on women in Afghanistan’s Bamiyan province who have formed unions, risking ridicule and possible physical abuse to form cooperative groups. These women help one another acquire seeds for vegetables other than potatoes and also for new varieties of potatoes. They manage to feed their families and to pool resources so that they can spend less on delivering their crops to the market.

These women are acting with clarity and bravery, creating a new world within the shell of the old. We should be guided by such clarity as we insist that lasting peace can’t be founded on military power.

The end of U.S. empire would be a welcome end. I hope that policy makers will let themselves be guided by sanity and the courage to clarify the U.S.’ vast potential to make a positive difference in our world by asking themselves a simple, indispensable question: how can we learn to live together without killing one another? An indispensable follow-up is: When do we start?

Is Israel Pushing For A Palestinian Civil War?

Ramzy Baroud


Division within Palestinian society has reached unprecedented levels, becoming a major hurdle on the path of any unified strategy to end Israel’s violent occupation or to rally Palestinians behind a single objective.

Newly-appointed Israeli ultra-nationalist, Defense Minister Avigdor Lieberman, understands this too well. His tactic since his ascension to office last May is centered on investing more in these divisions as a way to break down Palestinian society even further.

Lieberman is an ‘extremist’, even if compared with the low standards of the Israeli military. His past legacy was rife with violent and racist declarations. His more recent exploits include taking on the late Mahmoud Darwish, Palestine’s most celebrated poet. He went as far as comparing Darwish’s poetry – which advocates the freedom of his people – to Adolph Hitler’s autobiography, ‘Mein Kampf’.

But, of course, this is not Lieberman’s most outrageous statement.

Lieberman’s past provocations are plenty. Fairly recently, in 2015, he threatened to behead with an axe Palestinian citizens of Israel if they are not fully loyal to the ‘Jewish state’, advocated the ethnic cleansing of Palestinian citizens of Israel, and made a death ultimatum to former Palestinian Prime Minister, Ismail Haniya.

Outrageous statements aside, Lieberman’s latest ploy, however, is the most outlandish yet. Israel’s Defense Minister is planning to color-code Palestinian communities in the Occupied West Bank, dividing them into green and red, where green is ‘good’ and red is ‘bad’; accordingly, the former shall be rewarded for their good behavior, while the latter collectively punished, even if just one member of that community dares to resist the Israeli Occupation Army.

A version of this plan was attempted nearly 40 years ago, but utterly failed. The fact that such appalling thinking is occurring well into the 21st century without being accompanied by international uproar is baffling.

Lieberman’s color-codes will be accompanied by a campaign to resurrect the ‘Village Leagues’, another failed Israeli experiment to impose an ‘alternative’ Palestinian leadership by ‘engaging’ Palestinian ‘notables’, not democratically-elected leaders.

Lieberman’s solution is to manufacture a leadership, which, like the Village Leagues of the 1970s and 80s, will, most certainly, be regarded as collaborators and traitors by the wider Palestinian society.

But what is the ‘Village Leagues’ exactly and will it work this time around?

In October 1978, elected Palestinian mayors, joined by town councilors and various nationalist institutions, began a campaign of mass mobilization under the umbrella of the National Leadership Committee, whose main objective was to challenge the Camp David Treaty – signed between Egypt and Israel – and its political consequences of marginalizing Palestinians. 

At the time, the Movement was the most elaborate and united network of Palestinians ever assembled in the Occupied Territories. Israel immediately cracked down on the mayors, union leaders and nationalists of various professional institutions.

The national response was insisting on the unity of Palestinians in Jerusalem, the West Bank and Gaza, among Christians and Muslims, and Palestinians at home and in ‘shattat’, or Diaspora.

The Israeli response was equally firm. Starting July 2, 1980, an assassination campaign against the democratically-elected mayors ensued.

Yet, Camp David and the attempts to eliminate the nationalist leaders in the Occupied Territories, and the increased violence of Jewish extremists in the West Bank inspired mass protests, general strikes and violent confrontations between Palestinian youth and Israeli forces.

The Israeli government moved to dismiss elected West Bank mayors, shortly after it established, in November 1981, a ‘Civilian Administration’ to rule the Occupied Territories directly through its military.  The military administration was aimed at sidelining any truly representative Palestinian leadership, and further cementing the Occupation. Once more, Palestinians responded with a general strike and mass mobilization.

Israel has always vied to construct an alternative leadership for Palestinians. These efforts culminated in 1978, when it established the ‘Village Leagues’, giving its members relatively wide powers, including approving or denying developmental projects in the Occupied Territories. They were armed and also provided with Israeli military protection.

But that, too, was doomed to fail as the League members were widely regarded as collaborators by Palestinian communities.

A few years later, Israel recognized the artificial nature of its creation, and that Palestinians could not be mobilized to embrace Israel’s vision of permanent military occupation and superficial autonomy.

In March 1984, the Israeli government decided to dissolve the ‘Village Leagues’.

Not that Lieberman is an astute student of history, but what does he hope to achieve from this stratagem, anyway?

The 1976 municipal elections galvanized Palestinians’ energies to achieve unity; they rallied around common ideas and found a unifying platform in the Palestine Liberation Organization (PLO).

Now, Palestinian discord is unmistakable. Fatah and Hamas’ protracted fight has fundamentally altered the nationalist discourse on Palestine, turning it into a form of political tribalism.

The West Bank and Gaza are divided, not only geographically but geopolitically as well.  Fatah, which is already embattled in more ways than one, is falling into further divisions among supporters of its current aging leader, Mahmoud Abbas, and the shunned, albeit ubiquitous Mohammed Dahlan.

More dangerous than all of this is that Israel’s system of punishment or rewards have effectively turned Palestinians into classes: extremely poor ones, living in Gaza and Area C in the West Bank, and relatively prosperous ones, most of them affiliated with the Palestinian Authority in Ramallah.

From Lieberman’s viewpoint, the opportunity must be ripe for refining and re-imposing the ‘Village Leagues’. Whether it works in its original form or fails, it makes no difference, since the idea is to engender further division amongst Palestinians, sow social chaos, political conflict and, perhaps, duplicate Gaza’s brief civil war in the summer of 2007.

The international community should totally reject such archaic plans and destructive thinking and force Israel to adhere to international law, human rights and respect the democratic choices of the Palestinian people.

Those powers that have imposed themselves as ‘peace brokers’ and guardians of international law must understand that Israel is well-qualified to start fires, but almost never capable of putting them down. And Lieberman, of all people – the Russian club bouncer-turned politician-turned Defense Minister – must not be given free rein to color-code Palestinian communities, reward and punish as he pleases.

A quick look back at history tells us that Lieberman’s tactics will fail; the question is, however, at what cost?

Whether Sauds, In Effect, Own The U.S. Government

Eric Zuesse

A bill is expected to come up for a vote in the U.S. Senate on Friday September 9th that could enable Saudis to be prosecuted for financing the 9/11 attacks, but the Saudi royal family are pouring millions into buying key members of Congress to block the vote. On 17 March of this year, the Sauds set up in Washington a PR operation to persuade members of Congress to block it. Furthermore, as International Business Times also reported about that matter, “In October, the Saudi government signed a contract to be represented by the Podesta Group, a lobbying firm run by Clinton campaign fundraiser Tony Podesta.” What happens this Friday could culminate these efforts by the family that owns Saudi Arabia, to, essentially, lock-in their U.S. immunity.

As has now been established by overwhelming evidence, the Saudi royal family paid, and oversaw the positioning in the U.S., of some if not all of the 9/11 jihadists. (That article links through to all of the key evidence on this.) For fifteen years, 9/11 families have sought to remove the Sauds’ immunity from prosecution, which George W. Bush and Barack Obama insisted upon continuing. On 17 May 2016, a bill to allow this matter into U.S. courts passed unanimously in the U.S. Senate, despite a threat by the Sauds to bring down the U.S. economy if this bill becomes law.

The Republican head of the U.S. House, Republican Paul Ryan, has been trying to find a way to block the matter from coming to a vote. His Republican colleague Representative Peter King of New York is trying to force Ryan to bring it to a vote. As stated by Politico on September 7th, King says that Ryan:

“has told him that he’d back the bill if Judiciary Committee Chairman Bob Goodlatte (R-Va.) supports it. Goodlatte’s aides wouldn’t comment on the issue, but King said the Virginia Republican informed him multiple times that he supports the measure. ‘Ryan said so long as Goodlatte approves it, he would approve it. And I spoke to Goodlatte, and [Goodlatte] said he approves it and supports it,’ King told POLITICO. ‘There is no reason now for it not to come to a vote. The House Judiciary Committee chairman supports it. It should be over and done. Cut and dry.’ King added: “There is no reason for delay.”

The reason why 100% of U.S. Senators had voted for the legislation wasn’t that all Senators want it to pass; for many Senators the purpose was instead to hand this hot potato on to the House and then (if they pass it) on to the President (Obama, who promises to veto it), so as to drag this matter out until after the November 8th elections, after which time they’ll all be freed-up for enough of them to vote for the Sauds on it so as to kill this bill.

Right now, it’s just a postponing-action in Congress.

On September 5th, two officials of the George W. Bush Administration, John Bolton and Michael Mukasey, headlined an op-ed in Rupert Murdoch’s Wall Street Journal, “The Folly of Fighting Terrorism by Lawsuit: The House should kill a dangerous bill that would lift sovereign immunity in some terror cases”. They said that this matter should not be determined by judges in courts, but by the Congress’s power to declare war and the President’s power to serve as the Commander-in-Chief (the same approach that has preserved the existing immunity from prosecution). They said: “To invite unelected, life-tenured judges to interfere in areas constitutionally assigned to the branches charged with making and declaring war is folly.”

Here is how Britain’s Daily Mail put this matter on 19 May this year: Saudi Arabia’s “Foreign Minister Adel al-Jubeir said his country would sell up to $750 billion in US treasury securities and other assets before the bill puts them in jeopardy.”

Buying U.S. Presidents and members of Congress will cost them far less.

Jimmy Carter has said that in today’s United States:

Now it’s just an oligarchy with unlimited political bribery being the essence of getting the nominations for president or being elected president. And the same thing applies to governors, and U.S. Senators and congress members. So, now we’ve just seen a subversion of our political system as a payoff to major contributors, who want and expect, and sometimes get, favors for themselves after the election is over. 

A dollar paid by a member of the Saudi royal family (or any other foreigner) smells just as sweet to a U.S. Government official as does a dollar paid by an American, especially in the current era of untraceable offshore accounts. And that’s also the reason why Congress is planning to vote on Obama’s unpopular TPP treaty after the election.

Global Enclosures In The Service Of Empire

David Bollier


In September 2010, a group of NATO brass, security analysts and other policy elites held a conference called “Protecting the Global Commons.” Attendees were described as “senior representatives from the EU institutions and NATO, with national government officials, industry, the international and specialised media, think-tanks, academia and NGOs” – surely one of the oddest group of “commoners” ever assembled.

The event, hosted by a Brussels-based think tank called Security & Defence Agenda, had its own ideas about what the commons is. Let’s just say it doesn’t regard the commons as a self-organized system designed by commoners themselves to serve their own needs. No. To NATO decision makers, the “global commons” consists of those empty spaces and resources that lie beyond the direct and exclusive control of nation-states. In other words: NATO sees these spaces as no-man’s land without governance. To NATO, the key “global commons” are outer space, the oceans and the Internet. The problems posed by these “commons,” conference organizers suggest, is that they must somehow be dominated by NATO countries lest hostile countries, rogue states and pirates interfere with US and European commercial and military activities. Hence the need for NATO’s military supervision.

A bit of accuracy is in order: Outer space, the oceans and the Internet are common-pool resources.They don’t belong to anybody individually nor to any state individually. But they are not commons.Commonsrequire the active participation of the people in formulating and enforcing the rules that govern them. Or “the consent of the governed,” as the US Declaration of Independence puts it. That’s not really a NATO priority. Instead, as the conference program put it:

What are the political, policy, and operational challenges faced by NATO in the Global Commons? Is the Alliance adequately prepared to execute its responsibilities in a world where the space, maritime, and cyber domains are increasingly vital to the interests of member states and to the day to day peacetime and wartime operations of the Alliance? What capabilities and responsibilities will the Alliance need to develop to sustain its relevance in a world where the global commons are increasingly important?

In a sense, NATO gets it right: space, the oceans and the Internet must be available to all. They are, in its words, the “vital connective tissue in a globalized world.” However, the question that didn’t seem to get asked at the conference, at least according to its stated agenda and available documentation, is: How shall ordinary citizens and their representatives participate in these deliberations and make sure that governance will serve their interests? That, after all, is what a democratic society is all about.

NATO misconstrues the meaning of the term “commons” by casting it as an ungoverned free-for-all – precisely the error that biologist Garrett Hardin made in his famous 1968 essay on the “tragedy of the commons.” Hardin’s error poisoned the meaning of the commons for at least a generation, something that NATO may in fact be eager to perpetuate; defining oceans, space and the Internet as “commons” in Hardin’s sense of the term, would give it license for dominating these resources. Geopolitical supremacy is the goal. As the program notes put it, “Oceans today are as much a chess board for strategists as a global common. What are the key dynamics of today’s maritime domain? What are those of tomorrow? What are the implications for the Alliance?”

NATO’s misuse of “commons” is starting to get some traction. In 2011, MIT political scientists Sameer Lalwani and Joshua Shifrinson held a Washington policy briefing at the New America Foundation that proposed that the US “pare back its forward-based naval presence in many regions while retaining ‘command of the commons.’ It can accomplish this by relying more on regional powers to help in securing the freedom of the seas while maintaining sufficient over-the-horizon naval power to serve as the security guarantor of last resort.”

Has no one at the Pentagon, NATO or defense think-tanks read Elinor Ostrom’s work? Please, NATO: Simply refrain from using the word “commons.” Alternatively, why not begin to imagine new types of global commons institutions that could transcend the parochial, self-serving interests of national governments and their concern for commercial interests over ecological or civic interests? Why not build some creative new transnational governance structures that could truly represent the commoners?

This will not be the last time that commercial or governmental interests attempt to co-opt the term “commons.” Which is all the more reason why we need to point out Hardin’s error yet again, insist upon the real meaning of the commons, and get institutions like NATO to talk to some real, live commoners every once in a while.

Australian government dismisses international law in The Hague over Timorese oil theft

Patrick Kelly

The Australian government’s contempt for international law was again on display last week as it rejected the authority of the Permanent Court of Arbitration (PCA) in The Hague to conciliate an agreed maritime border between Australia and East Timor.

The legal case underscores Australian imperialism’s staggering hypocrisy. It has joined Washington in publicly demanding that China recognise and abide by a PCA ruling issued last July in favour of the Philippines’ challenge to Chinese maritime claims in the South China Sea.

The Philippines’ case was prepared with US assistance to bolster Washington’s militarist campaign to maintain its geostrategic dominance in East Asia against the threat posed by Beijing, yet the Australian government endorsed it as a legitimate exercise in international law.

However, when it comes to another disputed maritime border—in the Timor Sea, just 2,000 kilometres from the South China Sea—Canberra maintains that the PCA is an illegitimate tribunal.

In 2002, the Australian government declared it would not abide by any International Court of Justice ruling on maritime boundaries, nor accept the procedures on disputed boundaries under the United Nations Convention on the Law of the Sea (UNCLOS).

These moves were made on the eve of East Timor’s declaration of independence and were transparently aimed at securing Australian control over the lion’s share of the oil and gas reserves in the Timor Sea. Canberra had previously supported the 1975 invasion of the former Portuguese colony by General Suharto’s Indonesian military regime, later negotiating a lucrative deal that carved up Timor’s energy wealth between Australia and Indonesia.

In 1999, a year after Suharto was removed from power, Canberra launched a bogus “humanitarian intervention,” deploying troops to East Timor to oversee the transition to nominal independence, while maintaining its dominance over the Timor Sea. This was secured through subsequent treaties negotiated between Dili and Canberra, accompanied by overt Australian bullying and blatant dirty tricks.

East Timor is now challenging the legitimacy of the 2006 treaty known as CMATS (Certain Maritime Arrangements in the Timor Sea). It has invoked a never-before-used UNCLOS compulsory conciliation clause. This involves a five-member PCA panel, chaired by former Dutch diplomat and UN jurist Peter Taksøe-Jensen, hearing the rival Australian and Timorese claims and issuing a non-binding finding that is supposed to form the basis of a negotiated settlement.

The conciliation commission heard the rival submissions over several days last week, mostly behind closed doors but with the opening presentations delivered in a public hearing on August 29.

The Australian government’s legal team began by contesting the “competence of the commission” to hear the case.

Department of Foreign Affairs and Trade (DFAT) deputy secretary Gary Quinlan declared there was “no proper basis” for East Timor “to bring this claim.” He insisted that doing so “violates treaty commitments … under which both countries have committed not to bring proceedings against each other on maritime boundaries.”

Quinlan claimed that Canberra was “motivated by a serious regard for principle … at a time when the rules-based order globally is under serious challenge, it is vital that countries stand by their treaty commitments.” For good measure, he concluded by chiding East Timor that “it is not a mark of good neighbourliness to initiate a compulsory procedure in breach of your own treaty commitments to that neighbour.”

This talk of “principles,” “rules-based orders” and “good neighbourliness” is nothing short of obscene in the context of Australian imperialism’s predatory relationship with East Timor. The treaties that the Australian government now maintains are sacrosanct were delivered through threats and provocations.

In November 2002, then Australian Foreign Minister Alexander Downer met with then Timorese Prime Minister Mari Alkatiri. Downer demanded that the Timorese drop their demand for an equidistant maritime border between the two countries, consistent with international law, and threatened to sabotage the Bayu-Undan gas field that has since provided 95 percent of total Timorese government revenue.

“If you want to make money, you should conclude an agreement quickly,” Downer declared. “We are very tough. We will not care if you give information to the media. Let me give you a tutorial in politics—not a chance.”

This mafioso performance was followed in 2004 by an illegal Australian intelligence operation to bug Timorese government offices, under the cover of a humanitarian construction program. The intelligence gathered was used in the lead up to the finalisation of the CMATS treaty.

Royalties from the massive, as yet undeveloped, Greater Sunrise oil and gas fields were to be split 50-50 between East Timor and Australia, with the setting of a maritime border postponed for 50 years. The arrangement was a blatant theft. Under international legal norms governing maritime boundaries, Australia’s claim of Greater Sunrise would likely be less than 20 percent.

East Timor’s legal team at The Hague was led by Xanana Gusmão, a former president and prime minister, who now serves as the country’s investment minister and chief Timor Sea negotiator.

Gusmão said “the achievement of maritime boundaries in accordance with international law is a matter of national sovereignty and the sustainability of our country.” In the period immediately after independence, East Timor was “vulnerable to duress and exploitation.” Because the government was “desperate for revenue to rebuild our country from ruins, we succumbed to Australia’s pressure and signed the CMATS treaty.”

Gusmão and other Timorese representatives argued that the 2004 spying operation rendered the treaty invalid.

While there is little question that international law is on the side of the East Timorese, the case in The Hague has inadvertently shed light on the desperate manoeuvres of the impoverished country’s government.

Dili does not require the PCA to overturn CMATS—the treaty itself contains provisions for either party to withdraw from it. Rather, the East Timor government wants to use the legal proceedings to put pressure on Canberra for concessions, while at the same time reassuring energy companies of profitable returns on investment.

As Timorese representatives before the conciliation commission explained, the government wants to coordinate a new treaty with Australia in order to “ensure a smooth transition for the benefit of both states, and also of the petroleum industry.”

The Hague court also heard that Timorese government ministers had in the past month travelled to oil and gas company headquarters in Australia and the US, “to see their senior executives personally to explain the situation and to seek their views … those visits have been very well received and we are working on a post-[CMATS] termination plan to meet the investors’ requirements.”

Tens of thousands of Australian public sector workers set to strike

Oscar Grenfell

Tens of thousands of federal public sector workers are set to strike on Friday, in opposition to ongoing moves by the Liberal-National Coalition government of Malcolm Turnbull to slash wages and conditions.

The widespread support for the action among public sector workers reveals an increasing militancy and desire to fight back against a decades-long assault on jobs and working conditions prosecuted by successive governments, Labor and Coalition alike.

The Community and Public Sector Union (CPSU), which covers the public sector, however, has limited the stoppage to 24 hours and is using it to promote the illusion that the government can be pressured into altering its course in enterprise bargaining negotiations. At the same time, the union is seeking to politically corral opposition behind the Labor Party, which has been one of the chief architects of the assault on the public sector.

Workers participating in Friday’s strike action include employees of Centrelink, Medicare, the Tax Office, Child Support Defence, the Bureau of Meteorology, Agriculture and Water Resources, and the Department of Prime Minister and Cabinet. CPSU airport workers are also expected to take limited industrial action, with warnings from the government of delays.

The strikers are among around 100,000 public servants who have opposed regressive Enterprise Bargaining Agreements (EBA) put forward by the Liberal-National governments over the past two-and-a-half years.

As a consequence of the delayed agreements, the bulk of the CPSU’s members in the federal public sector have not had a pay rise in over two years. The government has stated that any agreements will not be back-dated which means that CPSU members have effectively been locked into a pay freeze since 2013. Cost-cutting agreements covering another 50,000 workers have been pushed through. Agreements covering some 20,000 workers over four departments have been imposed since the July 2 federal election.

Over the course of the protracted dispute, the union has reduced its pay claim from a 4 percent increase over four years, to between 2.5 and 3 percent. The government has offered nominal pay increases of 2 percent per year, which it has stated will be tied to “productivity” measures aimed at slashing costs.

Workers have resoundingly rejected deals put forward by a number of departments. Employees in the Department of Immigration rejected an offer of a 3.4 percent over three years last September, with 91 percent voting against. Some 81 percent voted down a 6 percent offer over three years in March. The same month, 71 percent of the Australian Communication and Media Authority’s workers voted down an annual 2 percent pay rise. In May, 71 percent of employees rejected the latest offer put forward by the Australian Tax Office. In most departments, workers have voted against two or three concession EBAs.

The ballot results express widespread anger over the intensified assault on public sector jobs and conditions. In its May budget, the Liberal-National government committed to almost $2 billion in cuts to the public sector in the form of “efficiency dividends” over the next four years.

The government is conducting reviews into a host of departments, and foreshadowed the destruction of up to 250 smaller public sector bodies. At the same time, job cuts are being extended, with 810 sackings slated in the Department of Human Resources, 300 at the Immigration Department and 344 in Social Services. The union has warned that up to 800 more additional jobs may be destroyed in immigration.

The government’s offer for Department of Immigration workers included the abolition of multiple allowances, which could see some workers up to $8,000 worse off annually, along with the scrapping of flexible working hours.

The CPSU has played the central role in preventing the development of a unified struggle against the cuts. Throughout the wage dispute, the union has stressed its willingness to “negotiate” a “reasonable outcome.”

The union has repeatedly appealed to the government to utilise its services to impose new agreements, which would inevitably entail further cost-cutting.

In comments last month, CPSU national president Alistair Waters denounced the government’s “unworkable approach to public sector bargaining” and declared that Michaelia Cash, the employment minister, had “tried to undermine our attempts to help her fix the Turnbull government’s bargaining mess.” Nadine Flood, the union’s national secretary, reiterated in comments published yesterday that the CPSU is appealing for the government to “engage with us on a sensible alternative.”

The CPSU’s role in isolating employees in each department, and limiting industrial action to partial strikes, has been aimed at wearing-down and dissipating opposition.

In March, the union cancelled a strike of airport workers after an appeal from Malcolm Turnbull which included vague references to “terror threats,” establishing a precedent that can be used against other industrial and political actions. The following month, the union acceded to a ruling by the Fair Work Commission, banning industrial action by Border Force workers on the grounds of “national security.”

This has played directly into the hands of the government. On Wednesday, Fairfax Media reported new moves to force through EBAs and stated, “some departmental secretaries and agency chief executives now see an opportunity to capitalise on weariness among their employees with the protracted stoush.”

The union has advanced the lie that the Labor Party will reverse the assault on the public sector. Featured speakers at a strike event in Brisbane will include former Labor treasurer Wayne Swan and other prominent Labor Party figures.

The union campaigned for Labor in the 2016 federal elections and promoted its fraudulent populist posturing, including claims that it would wind back “efficiency dividends” which have been the chief mechanism for decades of cutbacks. One union statement, for instance, was headlined, “Community wins, consultants lose with Labor ‘efficiency’ dividend policy.” In reality, Labor merely committed to a 2017 review into dividends and refused to specify whether it was proposing their abolition.

It was the Labor government of Bob Hawke that introduced “efficiency dividends” in 1987. The measure—an annual funding reduction for government agencies—has been the basis for an unending assault on jobs, wages and conditions across the public sector.

Prior to the 2007 election, then Labor leader Kevin Rudd declared that his government would take a “meat axe” to the public service. The Labor governments of Rudd and Julia Gillard proceeded to destroy as many as 14,500 public sector jobs between 2007 and 2013, repeatedly increasing the “efficiency dividend.” In 2013, the Rudd government boosted the dividend from 1.25 percent to 2.25 percent laying the basis for cuts subsequently enforced by the Abbott Coalition government.

The attack on the public sector is part of a broader offensive against the entire working class, amid relentless demands by the corporate and financial elite for austerity measures in line with the social counter-revolution being imposed in Europe and the United States. During the election campaign, Labor pledged to make some $33 billion in cuts, including to healthcare, education and welfare. Since the formation of a Liberal-National government, Labor has stressed its “bipartisan commitment” to so-called “budget repair”—a code-word for slashing spending.

At the same time, the slowdown of the Australian economy is being used to overhaul working conditions across the board, and eliminate hundreds of thousands of jobs.

The only way forward for public sector workers is to break out of the shackles imposed by the CPSU, and begin an independent political struggle in defence of all jobs, wages and conditions. Workers should establish rank-and-file committees as centres of an industrial and political fight aimed at uniting public sector employees throughout all departments and with other sections of the working class.

Above all, what is required is a socialist perspective and the fight for a workers’ government, which would end the subordination of social need, including to a decent, well-paying job, to the dictates of the capitalist market.

ITT Tech shuts down after federal government withholds student funding

Nick Barrickman

ITT Technical Institute, one of the country’s largest for-profit colleges, announced the sudden closure of its 130 campuses throughout the United States on Tuesday, leaving its more than 40,000 students without a means of obtaining a degree and over 8,000 personnel without jobs.

The closure of ITT marks the second mass closing of a for-profit college program in as many years. In June of 2014, Corinthian College Inc. (CCI) announced the selling-off of 85 campuses after the federal government stopped funding to the college, citing violations of federal law.

The shuttering of ITT came two weeks after officials from the Department of Education (DOE) banned the for-profit institute from receiving any further government-based Title IV student aid. That decision was tied to an investigation launched into ITT by the Accrediting Council for Independent Colleges and Schools (ACICS) in April, which cited the school’s organizational integrity, financial viability and academic standards as cause for concern.

In addition, the DOE required that ITT Tech raise more than $247.3 million, or nearly 40 percent of all government loans received by the education company, to cover any potential student defaults on existing debts.

Speaking to ITT students in a mass email, representatives stated, “Please know we worked diligently to identify alternatives that would have allowed you to start or continue your education at ITT Tech, and earn your degree… But the Department of Education’s actions have forced us to cease operations at the ITT Technical Institutes. We are truly sorry to have to make this decision.”

ITT spokespeople have accused the government of being “inappropriate and unconstitutional” in stopping funds “without proving a single allegation.”

The DOE declared that it plans to help students currently enrolled or out of school by less than 120 days discharge their loans if they choose to drop out, forfeiting all received credits. The total for discharging loans for all 40,000 students at the for-profit could cost well over $500 million for taxpayers.

ITT Tech is currently facing legal challenges at the state and federal levels, including two lawsuits from the Securities and Exchange Commission and the Consumer Financial Protection Bureau, for violations regarding its in-house loans program, which the government alleges was used to lure students into taking on debt with draconian and undisclosed penalties if payments were missed. In connection to these lawsuits, the ACICS launched an investigation into the credit-worthiness of the for-profit last April.

The ACICS, a non-profit agency whose stamp of approval is seen as the “gatekeeper” for several billion dollars in federal aid, has itself come under scrutiny from the US government in recent months for lax standards in school accreditation.

In June, the National Advisory Committee on Institutional Quality and Integrity, a federal body, voted to “de-recognize” the ACICS as the agency in charge of accreditation for for-profit and independent institutions for what DOE Under Secretary Ted Mitchell referred to as a “wide and deep failure” in “making the determinations we, you and the public count on.”

In addressing the interruption the closure could have for thousands of students, employees and their families, Mitchell stated that he knew it could “cause disruption, confusion and disappointment,” but the government’s “responsibility is not to any individual institution. It’s to protect all students and all taxpayers.”

Rising tuition costs and the prospect of graduating without access to decent-paying jobs is a reality for tens of thousands of young people and workers returning to school seeking to receive an education in the US. The current level of student debt in the US is $1.2 trillion, the largest form of debt among the population.

A study released last year by the Brookings Institute discovered that students leaving for-profit schools and community colleges in 2011 constituted nearly 70 percent of all student loan defaults for that year.

Many for-profit universities maintain political ties in order to ward off investigations into their practices and obtain business opportunities.

A recent investigation conducted by the conservative Judicial Watch found that between 2010 and 2015, former President Bill Clinton received $17.6 million serving as “honorary chancellor” at Laureate International Universities, a connection which allowed representatives of the for-profit college to attend State Department functions and receive the latter’s support in overseas endeavors, where the majority of Laureate’s campuses are located.

In addition, the school has donated over $5 million to the Clinton Foundation and owner Douglas Becker is listed as a Hillary Clinton campaign donor. The average tuition costs at Laureate’s US-based schools exceed ITT’s by several thousand dollars and their graduation rates are nearly identical.

A recent Wall Street Journal opinion piece noted, “ITT investors must be wishing they had ponied up for political protection like Laureate International Universities, the for-profit college that paid Bill Clinton $17.6 million to serve as its ‘honorary chancellor.’”