Corporations That Have Been Fined More Than $13 Billion in Penalties for Misdeeds Have Pocketed COVID Bailouts

Phil Mattera

In implementing the CARES Act passed by Congress to rescue the economy from the effects of the pandemic, the Trump Administration has directed tens of billions of dollars in aid to companies with a track record of misconduct. This transfer of public wealth to private bad actors will likely turn out to be more expensive than the TARP bailout of the banks a decade ago, given that much of the new aid will not be repaid.

My colleagues and I at Good Jobs First have found that more than 43,000 regulatory violators and other business miscreants have so far received $57 billion in grants and $91 billion in loans, including many that are forgivable. Over the past decade, the penalties paid by these companies for their misdeeds amounted to more than $13 billion. Our findings are summarized in a new report titled The Corporate Culprits Receiving COVID Bailouts.

We derived these numbers through a careful comparison of the CARES Act data we have compiled for our Covid Stimulus Watch website and the entries covering the past decade in Violation Tracker.

More than 87 percent of the CARES Act recipients with a record of misconduct are small businesses, while the other 13 percent are units and subsidiaries of larger companies. The latter received $55 billion in grants and $53 billion in loans, while the smaller companies received $2 billion in grants and $38 billion in loans. The large companies account for 90 percent of the penalty dollars.

The largest violation category among all 43,000 companies is government contracting at $5.6 billion, or 42 percent of the total. Employment-related penalties and consumer protection penalties each add up to about $3 billion (23 percent), while environmental and safety penalties total $1.6 billion (12 percent).

Hospitals (both for-profit and non-profit) and other providers that received funding from healthcare-related CARES Act programs account for $9 billion of the penalties, or 68 percent of the total. More than half of these penalties derive from Medicare and Medicaid billing fraud.

Source: Good Jobs First.

Recipients of small-business loans account for $3 billion of the penalties (23 percent), with the largest portions coming from wage theft and workplace safety and health violations.

There are two other groups of CARES Act recipients with a significant history of misconduct: colleges and universities getting aid through the Higher Education Emergency Relief Fund and airlines receiving massive levels of assistance through the Payroll Support Program. They paid $900 million and $600 million in penalties, respectively.

Seventy CARES Act recipients had been involved in cases that included criminal charges. Of these, 33 of the defendants were large companies, which paid total penalties of $3 billion. The 37 smaller defendants paid $47 million.

While the bulk of CARES Act spending comes in the form of grants and loans, the Federal Reserve is also seeking to prop up the commercial credit market by purchasing corporate bonds, especially those issued by Fortune 500 and Global 500 corporations. The corporations whose bonds have been purchased by the Fed account for more than $100 billion in penalties over the past decade. Because the purchases, which averaged about $3 million per company, are small in comparison to the size of these corporations, we decided not to include the associated penalties in the main analysis of the report.

The revelation that tens of thousands of CARES Act recipients have records of misconduct — including some cases of a criminal nature — raises serious questions about how the aid was distributed. It appears that little screening was done by federal agencies before awarding grants and loans, partly because there were no strict eligibility requirements written into the CARES Act. In some programs the money was apportioned by formula rather than choosing some recipients over others.

In the Paycheck Protection Program there was an application process, but it was handled by banks – which received commissions for their efforts – rather than the Small Business Administration. The application form required business owners to state whether they personally had been convicted or pled guilty to felonies such as fraud and bribery, while for the companies themselves the only issue seemed to be whether they had been debarred by a federal agency.

While little can be done about aid awards that were technically legal, there are steps the federal government could take with regard with two categories of recipients. The first consists of those companies and non-profits which were accused of defrauding the federal government and which paid civil penalties (usually through a settlement) for False Claims Act violations. The other category consists of those involved in cases that were serious enough to be brought with criminal charges.

Given that companies involved in FCA cases are usually allowed to continue doing business with the federal government after paying their penalty, it would be difficult to debar them from future Covid stimulus programs. These companies should, however, be subject to additional scrutiny to ensure they do not resume their fraudulent behavior while receiving grants and loans.

The most compelling case for excluding a group of companies from participation in future aid programs concerns those with a history of criminal misconduct. The PPP provision dealing with corrupt business owners should be applied to businesses themselves, especially when the firms involved are larger entities. Doing so would protect taxpayer funds and serve as a deterrent against future corporate criminality.

Myths and Lies About Poverty in America

Jesse Jackson

“The poor will always be with us,” say the cynics.

No doubt, some will always be wealthier than others. We wouldn’t want to live in a society that forced all to be equal. But poverty isn’t inevitable. The 30 million people in America who lived in poverty even before the pandemic when unemployment was at record lows needn’t exist in that state.

Too many myths and lies cloud our understanding of the poor. Most poor people are not black. More are white than black, female than male, young than old. More have a high school education. Some graduate.

Poverty in America used to be far worse; about a third of Americans lived in poverty in the 1950s. Poverty was reduced, dramatically, by Lyndon Johnson’s War on Poverty. The war on poverty was defeated not by poverty, but by the war in Vietnam, which sapped resources, attention and will.

Most poor people work when they can. They take the early bus. They do the hardest jobs for the least amount of money. They bear the most amount of stress. They care for the children of others. They tend to the sick. They serve food in restaurants. They sweep the streets. They clean bedpans beneath hospital beds that they cannot lie in when they get sick. Many are essential workers who are at greater risk in the pandemic.

When the pandemic forced the economy to shut down, millions lost their jobs — and their health care at work, if they had any. Over 30 million still draw unemployment, with over a million new applicants each week as companies continue to lay off workers. Many more children are hungry.

Public policy — the “stimulus checks,” the enhanced unemployment insurance, the expansion of food stamps (SNAP), the partial moratorium on evictions and foreclosures, the aid to businesses if they kept their employees on payroll — saved millions from poverty.

Now those benefits have expired, but the unemployment remains high. Many companies are declaring bankruptcy. Many are slashing payrolls with permanent, not temporary layoffs.

Again, public policy could help. The House passed another rescue package — the HEROES ACT — that would provide another round of stimulus checks, sustain enhanced unemployment benefits, continue the expanded food stamps, extend the payroll protection subsidies and provide aid to states and localities to avoid the layoffs of millions of public employees.

The Republican Senate refused to act — and refused to compromise. Senate leader Mitch McConnell put together a $1 trillion alternative but didn’t even try to get his members to support it. Twenty Republican senators opposed doing anything.

The nonpartisan Urban Institute noted that a second round of stimulus checks alone would keep 8.3 million people out of poverty from August to December. The extension of enhanced unemployment benefits would keep 3.6 million out of poverty. The continuation of food stamp expansions would keep about 1.7 million out. If all three were enacted, 12.2 million people would be kept out of poverty for the rest of the year.

Mitch McConnell refused to act. Donald Trump, the great “deal maker,” refused even to get involved. After the benefits expired, McConnell finally decided to pass a bill out of the Senate, but his Republican colleagues would support only about $300 billion in new money for a bill that did not include the stimulus checks, did not include the SNAP benefits and limited unemployment assistance to $300 a week, half of what it was in the first rescue package. They voted to put millions of Americans into poverty.

Public policy matters. We could eliminate poverty in this country with sensible policy. Raise the minimum wage to a living wage; empower workers to organize and negotiate a fair share of the profits they help to produce. Guarantee affordable health care for all. Provide affordable housing for all. Provide high-quality pre-K and quality education for all. Add a jobs guarantee, so that instead of forcing workers onto unemployment when the economy slows or their company goes belly up, they can move to a public job doing work that is necessary — from retrofitting buildings for solar heating to caring for our public parks to providing care for the elderly and more.

Let’s not fool ourselves. America has millions of people in poverty because Americans choose not to demand the policies that would lift them out of poverty. Because corporate CEOs choose profits and bonuses over fair pay for their workers. Because small-minded legislators are more responsive to those who pay for their party than those who are in need.

This isn’t complicated. The recent decision to block action on a second rescue package is a decision to increase the number of Americans in poverty, the number of children who go hungry. The Bible teaches we will be judged by how we treat the “least of these.” We should shudder at that judgment.

A Post-Coronavirus Economy Can No Longer Afford to Put the Pentagon First

Mandy Smithberger

The inadequate response of both the federal and state governments to the Covid-19 pandemic has had a devastating impact on the United States, creating what could only be called a national security crisis. More than 190,000 Americans are dead, approximately half of them people of color. Yelp data show that more than 132,000 businesses have already closed and census data suggest that, thanks to lost wages, nearly 17% of Americans with children can’t afford to feed them enough food.

In this same period, a number of defense contractors have been doing remarkably well. Lockheed Martin, the Pentagon’s top contractor, reported that, compared to 2019, its earnings are actually up — yes, up! The company’s success led the financial magazine Barron’s to call it a “pandemic star.” And those profits are only likely to grow, given the Trump administration’s recent approval of a 10-year deal to sell $62 billion worth of its F-16s to Taiwan.

And Lockheed Martin is far from the only such outfit. As Defense One reported, “It’s becoming abundantly clear that companies with heavy defense business have been able to endure the coronavirus pandemic much better” than, for instance, commercial aerospace firms. And so it was that, while other companies have cut or suspended dividends during the pandemic, Lockheed Martin, which had already raised its gift to shareholders in late 2019, continued to pay the same amount this March and September.

The spread of Covid-19 has created one of the most significant crises of our time, but it’s also provided far greater clarity about just how misplaced the priorities of Washington have been all these years. Americans — the Trump administration aside — are now trying to deal with the health impacts of the pandemic and struggling to figure out how to safely reopen schools. It’s none too soon, however, to start thinking as well about how best to rebuild a devastated economy and create new jobs to replace those that have been lost. In that process, one thing is crucial: resisting the calls — and count on it, they will come — to “rebuild” the war economy that had betrayed us long before the coronavirus arrived on our shores, leaving this country in a distinctly weakened state.

A New Budget Debate?

For the past decade, the budget “debate” in this country has largely been shaped by the Budget Control Act, which tried to save $1 trillion over those 10 years by placing nominal caps on both defense and non-defense spending. Notably, however, it exempted “war spending” that falls in what the Pentagon calls its Overseas Contingency Operations account. While some argued that caps on both defense and non-defense spending created parity, the Pentagon’s ability to use and abuse that war slush fund (on top of an already gigantic base budget) meant that the Pentagon still disproportionately benefited by tens of billions of dollars annually.

In 2021, the Budget Control Act expires. That means a Biden or Trump administration will have an enormous opportunity to significantly reshape federal spending. At the very least, that Pentagon off-budget slush fund, which creates waste and undermines planning, could be ended. In addition, there’s more reason than ever for Congress to reassess its philosophy of this century that the desires of the Pentagon invariably come first, particularly given the need to address the significant economic damage the still-raging pandemic is creating.

In rebuilding the economy, however, count on one thing: defense contractors will put every last lobbying dollar into an attempt to convince the public, Congress, and whatever administration is in power that their sector is the country’s major engine for creating jobs. As TomDispatch regular Bill Hartung has shown, however, a close examination of such job-creation claims rarely stands up to serious scrutiny. For example, the number of jobs created by recent arms sales to Saudi Arabia are now expected to be less than a tenth of those President Trump initially bragged about. As Hartung noted in February, that’s “well under .03% of the U.S. labor force of more than 164 million people.”

As it turns out, creating jobs through Pentagon spending is among the least effective ways to rebuild the economy. As experts at the University of Massachusetts and Brown University have both discovered, this country would get significantly more job-creation bang for the bucks it spends on weaponry by investing in rebuilding domestic infrastructure, combating climate change, or creating more alternative energy. And such investments would pay additional dividends by making our communities and small businesses stronger and more resilient.

Defense Contractors Campaigning for Bailouts

At the Project On Government Oversight where I work, I spend my days looking at the many ways the arms industry exerts disproportionate influence over what’s still called (however erroneously in this Covid-19 moment) “national security” and the foreign policy that goes with it, including this country’s forever wars. That work has included, for instance, exposing how a bevy of retired military officers advocated buying more than even the Pentagon requested of the most expensive weapons system in history, Lockheed Martin’s F-35 jet fighter, while failing to disclose that they also had significant personal financial interests in supporting that very program. My colleagues and I are also continually tracking the many officials who leave the Pentagon to go to work on the boards of or to lobby for arms makers or leave those companies and end up in the Pentagon and elsewhere in the national security state. That’s known, of course, as the military-industrial complex’s “revolving door.” And as President Trump recently noted, it helps ensure that those endless wars never end, while stoking an ever-increasing Pentagon budget. While his actions on behalf of the arms industry don’t back up his rhetoric, his diagnosis of the problem is largely on target.

And yet, as familiar as I am with the damage that the weapons industry has done to our country, I still find myself shocked at how a number of those companies have responded to the current crisis. Almost immediately, they began lobbying the Department of Defense to make their employees part of this country’s “essential critical infrastructure,” so that they could force them to return to work, pandemic or not. That decision drew a rare rebuke from the unions representing those workers, many of whom feared for their lives.

And mind you, only then did things become truly perverse. In the initial Covid-19 relief bill, Congress gave the Pentagon $1 billion to help respond to the pandemic. Such aid, as congressional representatives imagined it, would be used to purchase personal protective equipment for employees who still had to show up at work, especially since the Department of Defense’s own initial estimate was that the country would need to produce as many as 3.3 billion N95 masks in six months. The Pentagon, however, promptly gave those funds to defense contractors, including paying for such diverse “needs” as golf-course staffing, hypersonic missile development, and microelectronics, a Washington Post investigation found. House appropriators responded that money for defense contractors “was not the original intent of the funds.”

And now those defense contractors are asking for yet more bailouts. Earlier this summer, they successfully convinced the Senate to put $30 billion for the arms industry in its next coronavirus relief bill. As CQ Roll Call reported, the top beneficiaries of that spending spree would be the Pentagon’s two largest contractors: Lockheed Martin and Boeing.

The pandemic has certainly resulted in some delays and unexpected expenses for such companies, but the costs borne by the weapons industry pale compared to the devastation caused to so many businesses that have had to close permanently. Every sector of the economy is undoubtedly facing unexpected costs due to the pandemic, but apparently the Department of Defense, despite being by far the best-funded military on the planet, and its major contractors, among the richest and most successful corporations in America, have essentially claimed that they will be unable to respond to the crisis without further taxpayer help. The chair of the House Armed Services Committee and the lead Democrat for the Senate’s defense appropriations subcommittee recently pointed out that, even though contractors across the federal government are facing pandemic challenges, no other agency has asked for additional funds to cover the costs of the crisis. Instead, they have worked on drawing from their existing resources.

It’s laughable to suggest that the very department that already has by far the most resources on hand and is, of course, charged with leading the country’s response to unexpected threats can’t figure out how to adjust without further funding. But most defense contractors see no reason to adapt since they know that they can continue to count on Washington to bail them out.

Still, the defense industry has become impatient that Congress hasn’t already acquiesced to their demands. In July, executives at most of the major contractors sent a letter to the White House demanding more money. In it, they included a not-so-subtle threat of electoral consequences for the president and Senate Republicans in close races if such funds weren’t provided. Only one major contractor, Northrop Grumman, has stayed away from such highly public lobbying efforts because its CEO apparently had the common sense to recognize that her company was doing too well to demand more when so many others are desperate for money, particularly minority-owned businesses, many of which are likely to never come back.

On a Glide Path to Disaster?

There are signs, however, that someday such eternal winners in the congressional financial sweepstakes may finally be made accountable thanks to the pandemic. This summer, both the House and the Senate for the first time each considered an amendment to cut the Pentagon’s budget by 10%. Such efforts even received support from at least some moderates, including Senate Minority Leader Chuck Schumer (D-NY), although it went down to defeat in both houses of Congress. Although Democratic vice presidential candidate Senator Kamala Harris (D-CA) refused to support the specifics of the amendment, she did at least express her agreement with the principle of needing to curtail the Pentagon’s spending spree during this crisis. “As a member of the Senate Intelligence and Homeland Security Committees, I’m keenly aware of the global threats facing our country,” she said in a statement she released after the vote. “I unequivocally agree with the goal of reducing the defense budget and redirecting funding to communities in need.”

The first real test of whether this country will learn any of the right lessons about national security from this ongoing pandemic moment will undoubtedly come in next year’s budget debate when the question will be: Is everything finally going to be on the table? As I previously wrote at TomDispatch, giving the Pentagon trillions of dollars in these years in no way prepared this country for the actual national security crisis of our lives. In fact, even considering the Pentagon’s ridiculously outsized budget, prioritizing funding for unaffordable and unproven weapons systems over healthcare hurt its ability to keep the military and its labor force safe. No less significantly, continuing to prioritize the Pentagon over the needs of every other agency and Americans more generally keeps us on a glidepath to disaster.

A genuinely new discussion of budget priorities would mean, as a start, changing the very definition of “security” to include responding to the many risks we actually face when it comes to our safety: not just pandemics, but the already increasing toll of climate change, a crumbling infrastructure, and a government that continues to disproportionately benefit the wealthy and well-connected over everyone else.

At the simplest level, the “defense” side of the budget ledger should be made to reflect what we’re really spending now on what passes for national security. That means counting homeland security and veterans’ benefits, along with many other expenses that often get left out of the budget equation. When such expenses are indeed included, as Brown University’s Costs of War Project has discovered, the real price tag for America’s wars in the Greater Middle East alone came to more than $6.4 trillion by 2020. In other words, even to begin to have an honest debate about how America’s other needs are funded, there would have to be a far more accurate accounting of what actually has been spent in these years on “national security.”

Surprisingly enough, unlike Congress (or the Pentagon), the voting public already seems to grasp the need for change. The nonprofit think tank Data for Progress found that more than half of likely voters support cutting the Pentagon’s budget by 10% to pay for domestic priorities like fighting the coronavirus. A University of Maryland poll found bipartisan majorities opposed to cutting funding generally with two notable exceptions: Pentagon spending and agricultural subsidies.

Unfortunately, those in the national security establishment are generally not listening to what the American people want. Instead, they’re the captives of a defense industry that eternally hypes new Cold War-style competition with China and Russia, both through donations to Washington think tanks and politicians and that infamous revolving door.

In fact, the Trump administration is a military-industrial nightmare when it comes to that endlessly spinning entrance and exit. Both of his confirmed secretaries of defense and one acting secretary of defense came directly from major defense contractors, including the current one, former Raytheon lobbyist Mark Esper — and the Biden administration seems unlikely to be all that different. As the American Prospect reported recently, several members of his foreign policy team have already circumvented ethics rules that would restrict lobbying activities by becoming “strategic consultants” to the very defense firms aiming to win more Pentagon contracts. For example, Biden’s most likely secretary of defense, Michèle Flournoy, became a senior adviser to Boston Consulting Group and the first three years she was with that company, it increased its Pentagon contract earnings by a factor of 20.

So whoever wins in 2020, increased spending for the Pentagon, rather than real national security, lies in store. The people, it seems, have spoken. The question remains: will anyone in Washington listen to them?

New York City ruling elite warns Mayor de Blasio of “widespread anxiety”

Fred Mazelis

More than 150 leaders of New York City’s corporate and financial elite sent a letter to Mayor Bill de Blasio last Thursday insisting on ruthless measures to defend the interests of big business, amidst Depression-like conditions triggered by the COVID-19 pandemic.

The letter, issued by the Partnership for New York, was signed by a who’s who of the ruling elite, including, among others, the chairman and CEO of Goldman Sachs, the CEOs of Citigroup and Morgan Stanley, the managing partners of some of the city’s biggest law firms, and the bosses of real estate giants like Tishman Speyer.

Media reports suggested the letter to de Blasio reflects ongoing tensions between big business and the mayor. This is vastly exaggerated. When it comes to fundamental policies and actions, there is virtually no difference.

De Blasio first won office more than six years ago claiming that he would vanquish inequality. Far from fighting inequality, he has presided (as the WSWS explained in advance) over ever-widening gaps between the rich and poor, symbolized by such projects as Hudson Yards, on Manhattan’s Far West Side, alongside new records for homelessness that have been set every month.

The economic collapse in the course of the pandemic has the corporate and financial establishment worried, however. They are demanding an intensified back-to-work drive, and are concerned about whether the “progressive” mayor, whose second term in office concludes next year and who is limited to two terms by law, will be able to keep the lid on growing social discontent.

The business executives’ letter devotes about six words to unemployment and homelessness. Then it moves on to its main concern: “There is widespread anxiety over public safety, cleanliness and other quality of life issues that are contributing to deteriorating conditions. … We need to send a strong, consistent message that our employees, customers, clients and visitors will be coming back to a safe and healthy work environment. People will be slow to return unless their concerns about security and the livability of our communities are addressed quickly and with respect and fairness for our city’s diverse populations.”

Kathryn Wylde, the president of the group, who is regularly quoted in the big business media, told the New York Times, “Until the people come back, the streets aren’t safe. If the streets aren’t safe, the people don’t come back.”

The talk of “safe streets” is a million miles away from the concerns of the millions of workers who cannot pay their rent and are having difficulty buying food and meeting other expenses. The massive business district in midtown Manhattan is largely empty, with only about 10 percent of office workers returning to their offices. In fact, despite spikes in shootings in some areas, crime remains at its lowest level in decades.

It is not public safety that concerns most workers, but safety from the continuing threat of COVID-19, as well as the need for measures to alleviate poverty. Despite the relatively low current level of coronavirus infections, there are still about 500 positive test results reported daily in New York. Workers are not only concerned about conditions in their work locations, but also about commuting daily on crowded trains and buses.

The “widespread anxiety” of the ruling elite is totally different from the anxiety besetting the working class. Just days ago, National Public Radio reported on a survey it had conducted along with the Robert Wood Johnson Foundation and the T.H. Chan School of Public Health at Harvard, on the social and financial impact of the pandemic in the four largest cities of the US—New York, Los Angeles, Chicago and Houston.

Forty-six percent of households in these urban centers report serious financial pain in the wake of the coronavirus pandemic and the economic crisis. This figure rises to 54 percent of households with annual incomes of less than $100,000, and the numbers are higher among immigrants, Hispanic families and African Americans. The survey was taken during the period when $600 in additional weekly jobless benefits were still being received, so today it is even worse.

New York City faces a budget deficit of at least $9 billion, and the Metropolitan Transportation Authority is looking at a $16 billion shortfall, the consequence of the fact that ridership on the buses and subways remains only about 25 percent of its pre-pandemic level.

In the face of these huge gaps, the de Blasio administration is asking for permission from the State Financial Control Board, the agency set up during New York’s near-bankruptcy in 1975, to obtain long-term borrowing to plug the current deficit. New York Governor Andrew Cuomo has not been receptive to the request, and the Partnership for New York has made its opposition to further borrowing clear. “They think the problem is money,” said Ms. Wylde, referring to de Blasio and his advisers. “The problem is not money. The problem is uniting the city around a practical plan for recovery.”

This language is vague, but the message from big business can be summed up in the following terms: an accelerated back-to-work drive, despite the fact that it will guarantee a rising rate of COVID-19 infection and death; no new outlays to meet the needs of the unemployed and the homeless; and a law-and-order campaign in preparation for mass repression of working class resistance.

De Blasio’s record since he took office on New Year’s Day 2014 has demonstrated that, when it comes to fundamental class interests, there is not the slightest difference between him and Cuomo, or the signers of the latest letter from the Partnership for New York. In fact, his response to the letter from the business leaders was to offer his cooperation. “We need these leaders to join the fight to move the city forward,” he said.

The business leaders are also laying down the law for de Blasio’s successor. For 20 years before the current Democratic mayor’s first term began in 2014, the city was run quite openly by Wall Street, through Republican Rudy Giuliani, followed by multibillionaire Michael Bloomberg, who began his mayoralty as a Republican and ended it as a Democrat, though the party label made absolutely no difference.

The reference to “quality of life issues” in the letter to de Blasio is particularly significant, since it harks backs to the vicious law-and-order campaign under Giuliani, continued in slightly more “polite” form by Bloomberg. “Stop-and-frisk,” later ruled unconstitutional, was used to arrest hundreds of thousands, primarily minority youth, under Bloomberg. William Bratton, head of the police force under Giuliani and then for the first two years of the de Blasio administration, was closely associated with these policies. Now working in California, Bratton immediately spoke up in support of the business leaders’ warning about “quality of life” issues.

Over the past six months of the pandemic, the signers of the letter to de Blasio have all vastly increased their wealth, alongside the soaring stock market. They have no hesitation, however, in demanding further sacrifices from the working class. But they want to make sure that appearances are kept up. The Times reports that “Ms. Wylde said she waited to publish [the letter] until after Labor Day, in part because of concern among some members, who had spent months outside the city, that they would be criticized for weighing in on New York’s future from afar. ‘They felt it was unseemly to be writing from the Hamptons.’” What delicacy!

There is no essential difference between de Blasio and the business leaders. The massive borrowing called for by the mayor will run up the debt even more to the banks and bondholders, while doing little to prevent mass layoffs and service cutbacks. The only answer to the current crisis is the fight for a socialist program, including the expropriation of the financial parasites, to provide the resources to end the pandemic and to meet the urgent needs of the working class.

COVID-19 outbreaks force switch to online learning at New Jersey schools

Erik Schreiber & Robert Milkowski

Less than two weeks into the start of the school year, COVID-19 cases among educators and students have already forced the closure of several New Jersey schools. At least eight districts in the state have switched their entire district or individual schools from either full or partial in-person classes to fully remote instruction after faculty or students tested positive for the virus.

The school districts with identified outbreaks are spread throughout 5 of New Jersey’s 21 counties. Chatham High School in Middlesex County sent a letter to parents on September 11 announcing the switch to all-remote learning until September 29 due to an unspecified number of cases. In Washington Township in Gloucester County, three schools had outbreaks, forcing the district to cancel hybrid instruction plans for the next two weeks.

Cases were also reported in Howell, Little Silver, Pompton Lakes, Frankford Township, East Brunswick, and Woodcliff Lake, with each district temporarily switching all schools to remote instruction or simply those schools where outbreaks occurred.

Most of the school districts intend to resume in-person instruction following a 14-day waiting period. The reckless policy is fully backed by Democratic Governor Phil Murphy, who commented to WCBS Newsradio on Tuesday, “It looks like, so far, so good, in terms of how they’re reacting to the modest numbers that we’re seeing so far.”

Murphy played the leading role in pushing hundreds of school districts in New Jersey to re-open for in-person classes, despite grave dangers to students and educators. Educators and staff face shortages of personal protective equipment (PPE), difficulty maintaining social distancing, and outmoded heating, ventilation, and air conditioning (HVAC) systems.

As of last week, 388 school districts received state approval to proceed with the “hybrid” instructional model, which combines in-person and remote learning, while 69 districts were approved for fully in-person re-openings. State education authorities had not approved plans to limit COVID-19 exposure for an additional 87 districts, which were nonetheless allowed to re-open.

At some of New Jersey’s largest school districts that opted for fully online instruction, the resumption of remote classes has been plagued by a shortage of laptops and a lack of access to high-speed Internet. In Newark, where lessons will be online until mid-November, thousands of student laptops ordered in March have yet to arrive.

As is the case across the country, in many districts that are providing only remote instruction, teachers and other staff are still required to report to the school each day to give online lessons. At Thomas Edison Academy in Elizabeth, a custodian tested positive for coronavirus, prompting officials to close the school campus for just one day.

The chaotic and dangerous start comes after the New Jersey state government spent the summer cultivating uncertainty and anxiety among parents, teachers, and students by first delaying, then repeatedly revising, guidance for reopening schools during the pandemic. Districts were given no more than general recommendations and were advised to work out detailed plans for re-opening on their own.

Governor Murphy, a multimillionaire and former Goldman Sachs executive, initially sought to force all schools to provide in-person classes in the fall. Teachers’ opposition grew rapidly, raising the prospects of mass action, with the governor responding last month by allowing districts to opt for all-remote instruction. But this maneuver was only a partial retreat. Murphy’s stated goal remains the rapid re-opening of as many districts as possible with in-person instruction, in order to force parents back to work producing profits for Wall Street.

In addition, the governor made it difficult for districts to switch to remote instruction. At a recent press briefing, Murphy said, “Any resubmitted plans to begin the school year with all-remote learning must cite specific health and safety reasons for the…change, which district leaders must certify to, as well as a timeline to get to in-person instruction.” Moreover, county superintendents and the state Departments of Education and Health must review districts’ plans.

But the state did not release guidance about how school districts can submit their plans until August 29—less than two weeks before the official first day of school on September 8. Furthermore, the state required districts to respond within seven days of the first day of school “or as soon as practicable.” More than 190 districts announced that they would provide all-remote instruction. Among these districts are New Jersey’s largest cities, including Newark, Jersey City, Paterson, Elizabeth, and Edison.

In a report issued after New Jersey published its guidance, the New Jersey School Boards Association (NJSBA) estimated that the PPE, cleaning supplies, and custodial and nursing staff that districts need to re-open will cost approximately $700 million. As with every state in the US, New Jersey faces a looming budget crisis as a result of the economic devastation wrought by the pandemic, while support from the federal government has been totally insufficient.

While school districts are being starved for resources, the claim that there is no money to protect school workers and children is absurd. New Jersey is the second-wealthiest state in the country by median income, with one in 12 residents being millionaires and nine billionaires residing in the state.

The NJSBA warns that “school districts have moved forward with reopening plans designed to meet the needs of their students, but these efforts have come at a financial cost that could have negative consequences in other areas.”

These “negative consequences” were revealed in Toms River, where the school district voted unanimously to lay off 240 employees, including 90 bus drivers, 70 cafeteria and playground aides, 50 cafeteria workers, 25 bus attendants, and five mechanics. The financial effects of the pandemic are only one reason for the cuts, Superintendent David M. Healy told NJ.com, as Toms River has lost $5.2 million in state aid and endured several annual cuts in state funding. “We’ve lost millions and millions of dollars each year,” said Healy. These attacks on education have been carried out by a Democratic governor and a legislature controlled by the Democratic Party.

At least 20 teachers in Hammonton, located in southern New Jersey, requested to teach remotely because of concerns over their families’ health. But in late August, the district abruptly denied all of these requests and declared that teachers would have to report to school buildings every day, including on days when all instruction would be given online.

On the same day the district issued its denial, it increased the daily wage for substitute teachers from $100 to $225 in an attempt to prevent a teacher shortage. Because the district does not have enough custodians, it is paying bus drivers to clean the school buildings, likely without proper supplies or adequate training.

Miranda, a special education teacher in West Milford who previously taught in Paterson for 11 years, shared her experiences with the World Socialist Web Site. During the summer, the West Milford school board approved a plan that entailed half-day schedules on each day but Wednesday, which would be a day of virtual instruction and deep cleaning of the schools.

Miranda recently learned that not only would teachers be required to report to school on Wednesdays, but also that the deep cleaning had been dropped in favor of traditional cleaning. “I don’t understand why we were told that there was going to be this deep cleaning of these buildings,” she said, adding that she was mad about the change. “Is it going to be done after hours? There’s a lot of open questions here.”

The West Milford Education Association, a union that is part of the New Jersey Education Association, has not provided Miranda with any guidance. Instead, she received two questionnaires about her feelings about returning to school. “That was it. There was no, ‘Hey, nontenured teachers, this is what you should be doing. This is what you shouldn’t say,’” said Miranda. “My older cousin and my sister-in-law also work in the district, and they told me, since I’m nontenured, to say absolutely nothing because of the volatile way that the district treats nontenured teachers.”

Miranda’s students have behavioral disabilities and can be defiant or aggressive. They sometimes spit and they may have problems maintaining social distancing and wearing masks. Although Miranda was told that she would receive masks, face shields, goggles, and other PPE, she has not gotten this promise in writing. “I don’t know what’s going to happen if one of my students tests positive,” she said. “Do I have to quarantine? Am I using sick days? There’s no answers for that, and it’s infuriating.”

Earlier this year, the principal with whom Miranda worked in Paterson died of COVID-19. “He was a healthy ox,” she said, adding that she does not feel safe returning to school.

As long as the pandemic is uncontrolled, re-opening schools for any amount of in-person instruction will be unsafe in New Jersey and anywhere else. School superintendents, union leaders, and Democratic and Republican politicians alike are conspiring to force educators and students back into deadly conditions.

University of Wisconsin-Madison and La Crosse quarantine students after infections

Brian Green

After a reported surge in COVID-19 cases among the student body at the University of Wisconsin-Madison (UWM), the school administration ordered 2,230 students living on campus in the Witte and Sellery dorms into a two-week quarantine. A total of 1,800 students have now tested positive for COVID-19 at UWM.

The affected students were given the choice of returning home to live with their families or remain on campus and live in the crowded COVID-infested residence halls for the duration of the quarantine period. For the less privileged students, those with no other housing option, or for those who did not want to risk infecting their families, there was no other option but to quarantine on campus and risk COVID-19 infection.

The University of Wisconsin-La Crosse (UWL), which has a student body of around 10,500, is having a similar outbreak of COVID-19 cases. On the same day as the UWM quarantine orders, UWL also issued a “shelter in place.” Students living in the Coate residence hall are under restrictions after dozens of students tested positive for COVID-19.

With the sudden announcement at UWM, panic and uncertainty quickly set in as it was unclear to students how they would acquire basic necessities. Many of them rushed to the nearest grocery stores to stock up on supplies. Others resigned themselves to their predicament and took the time to take one last leisurely walk.

As the restrictions went into effect, students found they were only allowed to leave their dorm floors for scheduled food deliveries three times a day. These meals will cost students $4.99 apiece. The university is claiming students get a selection of many different entrées along with appropriate sides and a fountain drink. Students, however, are reporting that the meal is less than adequate. Sometimes consisting of only sandwiches on some days while on others breakfast was water and a banana or muffin.

Students have been voicing their dissatisfaction and confusion in interviews conducted by local news network WKOW 27. Freshman Grainne McDonagh, who lives in Sellery, spoke on how information and instructions are not clear. She said, “Because things aren’t in-person, it’s very ambiguous through email so we’re still trying to figure out what we can and can’t do exactly.” Another freshman, Isabel Burgos said, “We’re all kind of wondering what the next step after we get out of quarantine will be.”

In August, before the reopening, Chancellor Rebecca Blank and a group of top UWM leaders held a town hall to address questions about their plans for the campus community. Questions were prepared in advance so that the school could control the discussion and support the narrative that the reopening could be done safely.

Chancellor Blank argued for the importance of “some” on campus in-person instruction, and that the knowledge they had gained would allow them to do so. She claimed that outbreaks at other schools were due to lack of proper knowledge and adequate testing protocols.

However, despite their attempt to convince students otherwise, the meeting was simply a shameless promotion for reopening. Blank remarked, “nonetheless, being on campus does mean there will be interactions among students in the dorms in the residence places of students on and off campus.” She continued, “It lets people meet people from different countries and cultures. It lets them have some of those intense late-night discussions that are a very important part of exploring who you are and where you’re going as you’re in this phase of your life in college.”

While attempting to come off as a defender of a quality educational experience, Blank was in fact tacitly admitting that if campuses reopened an outbreak would occur.

Chancellor Blank made a callous and revealing statement in an interview with PBS Wisconsin on September 11 where Blank admitted knowing an outbreak would take place. “We knew that there would be some spikes. ... Students would come; there would be some partying. The amount of that rise was steeper and faster than we expected, and steeper than some of our fellow schools in the Big Ten.”

In essence, students, workers, faculty and the community are being subjected to an involuntary experiment in complete disregard for the protection of human life. To the administrators and the rest of the ruling elite, however, it is simply the cost the populace must bear for the sake of big business.

In a similar manner in a shared statement published in August by the leaders of La Crosse’s higher education institutions, including UWL, Viterbo University and Western Technical College school officials wrote, “We are prepared for the inevitability of COVID-19 cases on our campuses. As we have seen in recent months, no corner of our community is immune from the virus.” Looking to distance themselves from responsibility they continue, “Our campuses have developed testing and tracing protocols to help us pinpoint when and where cases arise, and take immediate action to prevent further spread. We have also secured isolation space, on and off campus, where infected students can safely recover. We implore everyone in our community to exercise caution. Heed the advice of health experts: Watch your distance, wear a face covering, wash your hands, and if you feel ill, stay home.”

The experience at UWM is not an isolated incident, but part of a global drive by the ruling class to abandon attempts to control the pandemic and return to “business as normal” no matter the cost to human life. The resumption of in-person classes is being done in defiance of warnings by health experts of the potential for a catastrophic resurgence of the virus.

Teachers, workers and students of Wisconsin’s education system must take a stand in defense of health and safety. There is a growing movement against the deadly reopenings. In Michigan, graduate student instructors are striking, while in Iowa, students are conducting a sickout and 4,000 service workers at the University of Illinois walked, out joining strikes by 800 nurses at a University of Illinois hospital in Chicago. This struggle must be expanded into a broader fight of the entire working class against a social and economic system, capitalism, which subordinates the needs of society to the accumulation of profit by and for the rich. This requires a political program that is independent from the pro corporate trade unions and the two big business political parties on the basis of a socialist program.

Surge in COVID-19 infections as in-person classes resume at many Illinois college campuses

Fabian Salgado

As with schools across the US, many Illinois college campuses have seen a spike in coronavirus infections since the decision by state authorities to permit in-person classes. While some universities in the state have switched to online learning or to an in-person/online hybrid model, others have brought students back onto campus and are holding regular classes.

Despite promises made to students and faculty that universities would open safely, the return to campus has resulted in massive outbreaks. Lack of administrative action and reports of poor and unsafe conditions, hasty student quarantines and general negligence have evoked a substantial backlash by students.

Illinois State University (Image credit: David Wilson)

The University of Illinois (U of I) at Champaign-Urbana, the largest university in the state with 48,000 students, opened August 24 with students on campus, but with classes being held through a hybrid model of both online and face-to-face. U of I even developed its own COVID-19 test. The test is saliva-based and is faster, easier to administer and far cheaper than standard tests.

Despite this, there has been a surge of COVID-19 cases among faculty and staff. More than 1,900 cases have been reported on campus, the vast majority among undergraduate students. Undergraduates have been urged to restrict their activities to essential ones only. This includes going out to buy groceries, attending religious events, seeking urgent medical help and receiving their twice-weekly COVID test. This temporary quarantine is set to last only until the 16th of this month. After that time, the plan is to resume normal functions, with the potential for a new outbreak.

Some Illinois colleges with later start dates are attempting to implement measures aimed at convincing students that a return to campus will be safe, without providing plans that could realistically provide a safe environment. For example, Northwestern University in Evanston, Illinois, which is set to begin classes September 24, is not admitting first- and second-year students on campus (with few exceptions) and is having them conduct all their classes online. But, third- and fourth-year students are being welcomed on campus and have the choice of taking classes in person, through a hybrid model, or completely online. Northwestern is also requiring students who plan to return to campus to get tested before arriving and regularly throughout the fall.

Yet, such caution is not the norm but the exception. At schools like Illinois State University in Normal, Illinois, with roughly 20,000 students, there have been 1,383 positive tests recorded so far. This amounts to over 5 percent of the student body. This despite the fact the school is holding all classes online except those it deems absolutely necessary be conducted in person.

No information is listed online about which classes necessitate face-to-face meeting and which do not. A student who spoke with the WSWS said classes like her metalwork and jewelry class were still meeting in person, and that she was aware of only about five classes in the art department that were still meeting. She also stated that the switch to mostly online classes came with little to no warning.

Students have reported that Illinois State is providing little guidance and withholding important information about COVID outbreaks. Sky, a student at Illinois State, told the WSWS about the total lack of communication between the university, the resident assistants and housing staff, and the students.

She said, “There is a quarantine room right next door, which we found out for ourselves when I got off the elevator after my shift and found university blankets, tp, and sheets stacked outside my neighbors’ door.” Sky went on to speak about the difficult position of the residential assistants who are threatened with losing their housing scholarship if the university determines they are to blame for an outbreak, “Our RAs and CAs [community advisors] are having a hard time communicating with all of us because they feel very out of the loop and are afraid to lose their jobs and housing right now. I reached out to my CA when I saw the blankets outside and she said she knew just about as much as me, which was very concerning.”

At a recent press conference, Illinois State President Larry Dietz was asked if he would have done anything differently regarding resumption of classes. In effect he said “no,” stating, “What we’ve had to do is be as nimble as we can, knowing what we know at the particular time, and I think we’ve done that.” He continued, “It’s difficult to do that with a large organization and turning some things on a dime.”

Temporary, bare minimum measures have been paired with focus on students’ “personal responsibility” to avoid COVID infection. A large party thrown by YouTube influencers, the “Nelk boys,” with the participation of Illinois State students made local news when the crowd of young people reportedly had to be dispersed by local law enforcement. Dietz used the incident to scapegoat students for the recent COVID outbreak, saying he would be collaborating with police to penalize students caught on video at the party.

Many schools, including Illinois State, U of I, and Northwestern, have emphasized the need for personal protective equipment (PPE) and social distancing in all their school re-opening plans. Yet even these measures fall short of what epidemiologists consider safe.

The decision to open schools is a blatant choice to put profit ahead of the lives of people. It’s clear that campuses should not be open. Without a scientific plan for a safe return, thousands will die, including many young people and students.

There is growing resistance to this homicidal policy. At the University of Michigan, graduate student instructors are continuing their strike against the school administration’s re-opening policy. The action has won broad support from students, RAs, faculty members, dining room workers, and local construction workers as well as workers internationally.

On Monday, nearly 4,000 clerical, maintenance, and other service workers walked out at the U of I at Chicago and medical centers in Chicago, Peoria, and Rockford after voting 94 percent in favor of strike action. The service workers joined 800 nurses who walked out of the U of I Hospital to protest under-staffing, unsafe conditions, and long work hours.