Hats off and thanks to Carol L. Burnett of AFSCME Headquarters:
Writing in response to a Post article outlining the efforts of Sen. Bernie Sanders (I-VT) in securing Made-in-the-USA souvenirs from the Smithsonian:
Finding souvenirs that fit our values
As someone whose job it has been for a decade to buy not only American-made goods but also U.S. union-made products, I was surprised to read the Smithsonian’s Peters Gibbons quoted as saying that he can’t find dog tags and magnets made in the United States [“A souvenir shift at the Smithsonian,” news story, April 17]. It may be more difficult to find American manufacturers, but it is not impossible, and with a little work, Mr. Gibbons will find that he can even get competitive bids on U.S., union-made goods.
I have long been appalled that Americans buy so many products made outside the country, much to the detriment of our workers who have seen their jobs shipped overseas, hence our high unemployment rate. The new Smithsonian policy to buy American should be applauded.
Carol L. Burnett, Washington
The writer is an assistant director of public affairs at the American Federation of State, County and Municipal Employees.
The Crooks Who Caused U.S. Financial Pickle That the Politicians Now Blame on Public
Workershere was a crime wave raging in America in 2008, but the news media never picked up on it. No one can say how much was stolen, but it’s clear that politicians in states as diverse as California, Michigan, Texas, New York, Alabama, Ohio, Florida, Indiana, Tennessee, Maryland and even Wisconsin are trying to recover what was lost by taking it out of the paychecks of their public workers. Victims of this theft by some of the best known names in banking included public employee pension funds, individual IRAs, millions of homeowners and, of course, taxpayer funds held in trust by states, counties and cities. Chances are, you, your family and your neighbor were all victims, more than once.
In the $2.8 trillion municipal bond market, gangsters with brief cases conspired with major banks and financial intermediaries to fix bids. Agents from firms that were supposed to advise state and local offi cials were instead
giving inside information to bidders in exchange for generous kickbacks from the bankers. The Bank of America, Citigroup Inc, JP Morgan, Chase & Co., Lehman Brothers Holdings, Wachovia, General Electric Co., and 10 other financial organizations have been implicated. At times, these banks conspired to take turns losing bids to infl ate interest
rates, keep profi ts high and business booming.
The U.S. Justice Department, working with the Securities Exchange Commission, the FBI, the Comptroller of the Currency
and the Federal Reserve Bank of New York, secured guilty pleas from a number of individuals who were involved in the
municipal bond fraud scheme which had apparently been underway since the mid-1990s, according to details released by the Justice Department.
An investigative report by Bloomberg News Service estimates that the fraud cost taxpayers billions of dollars.
Here’s how the fraud hit the people of Jefferson County, Alabama. Over a decade ago, County offi cials elected to finance $2.9 billion to update sewers for the region, which includes the city of Birmingham. They issued bonds to pay 5.25% interest to investors. When the bond market got overheated and interest rates dropped in the early 2000s,
bankers swarmed into the County offering to restructure the debt and theoretically save the County millions of dollars
in interest payments. Jefferson County then restructured $3 billion in new financing, agreeing to purchase “auction
rate security swaps” combined with some fi xed rate debt. (An arrangement similar to deals offered to homeowners
at the time to purchase ARM loans, or “floating” rate mortgages in exchange for their standard 30-year fixed rate
notes. Who would have thought interest rates might climb?)
All that renewed activity in the bond market cost Jefferson County another $55 million in fees to get on the gravy train. Next, Jefferson County paid $120 million in fees—about six times what it should have—to offl oad its risk of higher interest rates to buy “interest rate swaps” that were structured by JP Morgan. Morgan “earned” the right to create those swaps the old fashioned way, by paying $3 million in bribes to persuade Goldman Sachs to withdraw from the bidding. It’s alleged that additional bribe money went to at least one Jefferson County commissioner. But, all that debt came right back on Jefferson County when the bond auctions failed to draw new investors—forcing rates up again. Later, when
the County tried to withdraw from the deal, Morgan fi led suit against Jefferson County for $647 million.
Once the SEC began investigating this and other deals, Morgan dropped that lawsuit. Nevertheless, in Jefferson
County poorer residents are facing the choice of either heat or water service and the County is mulling the possibility of bankruptcy.
At least a dozen executives from CDR, the fi nancial consulting fi rm that advised Jefferson County, have been
indicted and most have already pleaded guilty. The CDR executives were on the receiving end of kickbacks ranging
from $4,500 to $475,000 from the banks in return for inside information on the bidding process.
According to the Bloomberg report, the conspiracy included more than 200 deals on tens of billions of dollars
worth of guaranteed investment contracts (GICs) issued by state or local revenue authorities. CDR is one of
several fi rms that are hired by jurisdictions to solicit competing offers to sell their bonds.
Two other advisory fi rms—Investment Management Advisory Group Inc., known as Image; and Sound Capital Management—have been raided by FBI agents as part of the investigation.
Investigators say that the key witness is a Bank of America insider who has been cooperating with the government.
Bank of America began “cooperating” with the government in 2007 in return for an amnesty agreement. B of A
also agreed to pay $137 million—which its press release carefully noted was not a fi ne; $101.8 million of that is for
restitution; $25 million goes to the IRS for abuse of the tax free status of muni bonds; $4.5 million to reimburse state attorneys general for the costs of investigating the bank’s behavior. Twentyseven bank employees at 17 banks have
also been named as part of the conspiracy, according to the Bloomberg report.
These and other criminal acts are included in a list compiled by the Financial Crisis Inquiry Commission and published at the end of last year. According to that report, the Department of Justice and the Securities and Exchange Commission have prepared—
- 500 mortgage fraud related charges and are pursuing 2,700 pending investigations.
- 664 separate enforcement actions. Wrongdoers—many of them familiar household names, such as Citigroup, JP Morgan Chase, Bank of America, Countrywide, Merrill Lynch, UBS—have been ordered to repay $2.09 billion.
Additionally, state attorneys general have filed actions against other miscreants—
- Illinois sued Wells Fargo for deceptive lending practices preying largely on African American and Latino homeowners.
- Iowa secured a global settlement with Countrywide on behalf 400,000 borrowers.
- Massachusetts won a settlement against Goldman Sachs, requiring Goldman to provide $50 million in relief to homeowners and an additional $10 million to the state.
- California settled with three affi liates of Wells Fargo in the amount of $1.4 billion to repay investors, charities and small businesses that purchased securities based on misleading advice.
- New Jersey recovered $148 million for banking and fi nance improprieties including consumer fraud.
- Ohio sued national ratings agencies—Standard & Poors, Moody’s and Fitch— charging that the fi rms provided inflated and inaccurate credit ratings on investment agencies.
- An additional 392 class action lawsuits have been privately filed by investors seeking $1.4 trillion in damages.
As Charles Ferguson, the producer of Inside Job, the documentary on the financial meltdown said when he collected his
Oscar: “Not a single financial executive has gone to jail, and that’s wrong.”
By Kelly Arsenault
From the Huffingtonpost.com
As we draw closer to a government shutdown, I have been reading with great interest. You see, I am a federal employee employed at Fort Drum as a civilian mail clerk. I am looking at the possibility of a furlough for as long as it takes for Congress to reach an agreement. It could be days or it could be weeks, but regardless of how long, I am more concerned at how much. How much will this affect my family? How much will it hurt us financially? The uncertainty is maddening as I, and my fellow federal workers, watch the stage show that is called Washington Politics gamble with our way of making a living.
As I have been reading articles about the progress, or lack thereof, in Congress, I am more dismayed by the comments of so many. Comments such as “SHUT IT DOWN!” and “let the federal workers get a real job!” are common. There seems to be a misinterpretation about being a federal employee that is rampant in not only the general public, but with certain members of Congress as well. Yes, as with any government agency, there is waste and certain things need to be pared down. Maybe there are more upper level employees in the federal system than there were ten years ago, but that is not the proper snapshot of a federal employee. Many of us are on the lower end of the pay scale, making the same or slightly less than our counterparts in the civilian sector.
I am one of those federal workers at the lower end of the pay scale. I am not rolling around in the big bucks like others may think. I came to the federal service because, quite honestly, the local economy of Watertown, New York, was not affording me many opportunities. Many of the jobs here are part time. Some want a higher education, but do not offer a higher wage. Positions that were once wide open to me with my Associates degree are now being offered to those with Bachelors and Masters degrees because there is little for those with the higher degrees either. The job position may say “Associates required” but if an employer can get a person with a Masters for the price of an Associates, we all know who they will choose. How does it make me a bad person because I chose to work for the federal government to provide for my family comfortably? How did we become the bad guy?
Hopefully I can dispel some myths that the general population may be thinking about federal workers and the government shutdown. One myth is that if we are furloughed, that we will get a paid vacation because we will get back pay anyway. While it is true that after the government shutdown during the Clinton administration that Congress approved the back pay for non-essential personnel, it is up to Congress to do so. In the climate permeating Congress this time, it’s not a given and many of us that rely on our paycheck will not receive one. That’s no income for scores of federal employees that need to buy the groceries that are at their most expensive in thirty years, the gasoline that rises in price daily, and the financial obligations that must be met.
Another myth is the term “non-essential personnel”. This term, non-essential personnel, seems to imply not relevant or not really needed. I saw a comment on an article stating that “if they are not essential, why not fired them all?!” This is why. Essential is defined as someone whose primary job responsibilities are directly related to constitutional responsibilities, related to the protection of human life, or related to the protection of property. That means employees like police officers, firefighters, medical workers, and security. Essential personnel will have to work during the furlough and will get paid but only when Congress passes a budget. The rest of us, are non-essential, but we are still needed. We are the people in the background, the ones not always seen; clerks, budget, personal care, public works crews. Hardworking individuals just trying to make a living, just trying to live that American Dream we hear so much about.
Federal Workers are like everyone else. We get up in the morning, we go to work, we work a job, and we get paid. We work to provide for our families and hope for a little left over to enjoy the fun things in life. We are not underworked and overpaid. We are not the biggest draw on the economy. People need to see that the repercussions on shutting down the government are larger than what they appear. This are working families we are talking about, not ideology.