Archive for the ‘Regulation’ Category

497px-edward_snowden-2Oliver Stone’s 2016 film Snowden debuted at the height of a controversy over whether or not President Obama should pardon Edward Snowden. His defenders argue that his disclosures prompted important legal and policy changes, while his opponents argue that he’s a criminal who should come back to the United States to stand trial.

The film itself paints a portrait of Snowden as a young conservative from a military background. He begins his career with the Central Intelligence Agency (CIA) with a loyalty to the United States and a desire to serve his country. As he transitions through different positions with private contractors in the intelligence community, he becomes increasingly disturbed by the breadth of government mass surveillance systems. What he witnesses at work haunts him – he develops an aversion to being photographed – and plagues his relationship with his girlfriend. Eventually, it leads him to flee to a hotel room in Hong Kong where he works in secret with The Guardian’s Glenn Greenwald and Ewen MacAskill and documentary filmmaker Laura Poitras. They race against the clock to make his story public before the government can arrest him.

The rest, as they say, is history.

It’s easy to get lost in the controversy of Snowden’s disclosures, but it’s important to remember the context of his decision to go public. Snowden was familiar with the whistleblowers in the intelligence community who came before him. Despite making their own disclosures through designated channels within the government, these workers had no safeguards against the severe retaliation they faced.

Take the case of Ed Loomis, a former National Security Agency employee and contractor within the intelligence community. After he reported an ineffective and wasteful surveillance program through a designated government hotline, the government responded by revoking his Top Secret security clearance, rendering him unable to work in the intelligence community. The Federal Bureau of Investigation (FBI) also raided his home for five hours. He and his wife watched as agents in Kevlar vests confiscated their possessions.

Contractors in the intelligence community deserve better than what happened to Ed Loomis. Public Citizen and many other organizations committed to open and transparent government support extending protections to contractors who blow the whistle on waste, fraud, and abuse in the intelligence community.  Without safeguards against employer retaliation, whistleblowers may either stay silent about government wrongdoing or make disclosures through the media.

Lawmakers recognize the urgent need for reform, but change has been slow. In 2015, Sen. Claire McCaskill (D-Mo.) introduced a bill to extend whistleblower protections to contractors in the intelligence community. In theory, this bill should not be contentious. Certain intelligence community contractors had access to such protections for a limited time without any evidence of negative consequences to national security. But, lawmakers controversially revoked these rights in 2012. So far, Congress has failed to take action on Sen. McCaskill’s critical measure.

Snowden ends with familiar audio clips from the 2016 presidential primary debates where the candidates voiced their opinions about his actions. Their reactions are mixed, but frustratingly, there is no discussion of the much-needed whistleblower protection reforms like those in Sen. McCaskill’s bill.

The controversy over Snowden and his 2013 disclosures is unlikely to end anytime soon. However, if policymakers want to prevent future national security leaks, they should make whistleblowing safe for all intelligence community workers – including contractors. Congress should enact Sen. McCaskill’s bill to protect these individuals who bravely risk so much in serving the public good.

Our country is still reeling in the aftermath of the greed-fueled contagion of the 2008 economic collapse and Wall Street getting caught in villainous behavior is daily news. The anger of the American public toward Big Banks that were bailed out while average citizens went under—institutions that continue to get away with mere slaps on the wrist to settle claims of severe wrongdoing— is the foundation of the current populist political surge. It’s not surprising that Hollywood wants to get in on the act, and they should be applauded.

oneheart-invite215The Academy Award-winning  film The Big Short spotlighted for the movie-going public the complex web of financial maneuverings that tumbled down like a house of cards, leaving millions without homes and millions more with empty nest eggs. “A-listers” Julia Roberts, George Clooney, and Jodie Foster have even embraced the “us-versus-Wall Street” theme in the recently-available-for-the-small-screen film, Money Monster. The plot focuses on the problems that cascade from an everyman feeling wronged by a high-speed trading firm, and a “glitch” that bottomed out the value of a stock. Without commenting on the quality of the film, it can be said with all conviction that such glitches are not fiction.

In May of 2010, there was a flash crash that brought the curtain down on a trillion dollars of market value in a matter of minutes. And, in October 2013, in an unexpected twist, the normally very steady U.S. Treasury bond market went on a wild ride that was eventually blamed partially on high-frequency trading, computer programs called algorithms that automatically buy and sell financial instruments in much less than a blink of an eye.

Why should we risk our market stability with such rampant speculation? Spoiler alert: we don’t have to!

Right on cue to tamping-down on undesirable market behavior is an idea associated with Nobel prize-winning economist James Tobin, who called for a corrective tax on speculative trading that would  “throw some sand in the wheels” of the market to slow it down. Dozens of countries already have these taxes in place and the U.S. had a tax on Wall Street taxes from 1914 through 1965. Public Citizen has long advocated for reinstating a tax on Wall Street trades to protect consumers.

Not a Hollywood blockbuster, but another recent film, The Same Heart, also chronicles the rise of the high-speed trading ‘bot. However, the problem toward which the documentary film’s lens is primarily pointed is the horrible injustice of childhood poverty. But, instead of showing only the negative—the unthinkable hurdles of hunger, disease, and violence that billions of children face worldwide—it focuses on a possible solution: taxing Wall Street trades. The Same Heart makes the ethical and economic case for the wealthiest among us, the financial elite who make millions and billions of dollars in profit from financial transactions, to fund programs that invest in the world’s youth.

On September 27, at 1 pm in the Capitol Visitor’s Center, Public Citizen, in coordination with Media Voices for Children, which produced the film, the Child Labor Coalition, and the Congressional Progressive Caucus, is hosting an event called “Investing in our Future, One Transaction at a Time,” a panel discussion and screening of an excerpt of The Same Heart. I will be center stage for a dialogue with U.S. Rep. Keith Ellison (D-Minn.), filmmaker Len Morris, and experts from the Center for Economic and Policy Research, Communications Workers of America, the Institute for Policy Studies, and the National Consumers League. In addition to speaking about how the tens of billions in estimated yearly revenues from a Wall Street tax could benefit the next generation, I will outline how current legislative proposals to reinstate a tax on Wall Street trades to make markets less volatile and work better for average investors.

A fairer market does not have to be a celluloid dream. If we want to flip today’s script: the robbers being the banks themselves, bad guys costumed in pinstripes, never jail stripes, we need to take on Wall Street. The first step is making Wild West Wall Street stock market gamblers pay their fair share by taxing their trades at a fraction of a percent.

And, even if you’re not in DC to make the movie and panel event, you can still help set the scene for a legislative win. Please tell your U.S. Representative that you want her or him to be a hero and cosponsor the Putting Main Street FIRST (Finishing Irresponsible Reckless Speculative Trading) Act (HR 5745). If you’ve already done that, be a social media superhero and help spread the word about the Take on Wall Street fight by sharing this blog on Twitter with the hashtags #WallStTax or #TakeOnWallSt.

With your help, soon we will reach a critical consensus: no longer will we let the One Percent steal the show.

Last week, the Consumer Financial Protection Bureau (CFPB) fined Wells Fargo $185 million for the astounding abuse of opening more than two million unauthorized deposit and credit card accounts.

Now, Senate Majority Leader Mitch McConnell (R-Ky.) is employing a rarely used procedure to force a rushed vote on a bill to defang the CFPB.

Ok, now here’s a quiz. Can you guess which member of Congress with his wife holds more Wells Fargo stock than any other, at least according to the most recently available financial disclosure forms?

You guessed right! Mitch McConnell.

Let’s walk this through in more detail.

On Friday, the CFPB announced $185 million in fines and penalties against Wells Fargo for the jaw-dropping, illegal practice of opening deposit and credit card accounts for consumers who did not request them and did not know they existed. Not just a few such accounts — 2 million of them. According to Wells Fargo, more than 5,000 employees were involved in setting up the sham accounts.

One hundred million of that total penalty was imposed by the CFPB; $35 million goes to the Office of the Comptroller of the Currency, and $50 million to Los Angeles. The $100 million fine is the largest ever imposed by the CFPB.

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Enter Mitch McConnell.

This week, he announced plans to rush to the Senate floor S. 3318, “A bill to amend the Consumer Financial Protection Act of 2010 to subject the Bureau of Consumer Financial Protection to the regular appropriations process, and for other purposes,” introduced by Georgia Republican Senator David Perdue.

You might be curious to read the bill.

Too bad.

It was just introduced on Monday, and the text does not yet appear oncongress.gov, the website where proposed bills are posted.

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But the title tells you what you need to know. When the CFPB was created, Congress gave it budget autonomy — it is funded by transfers from the Federal Reserve system, and its budget is set at 12 percent of Federal Reserve operating expenses. The CFPB creators built in this feature because they knew that otherwise the Big Banks could destroy the consumer bureau by stripping its funding. This isn’t unique among banking regulators — the Fed, the OCC, the FDIC and others all share this autonomy, as it has long been recognized that our cops on the financial beat should not be subject to appropriations while policing Wall Street. Since then, the Big Banks have lobbied hard to subject the CFPB to congressional appropriations, almost explicitly for the purpose of slashing its funding and stopping it from doing its job.

S. 3318 is not following the traditional pathway to the floor of the Senate. It has not yet been debated and voted on in committee. Instead, using a special procedure, Majority Leader McConnell is taking it straight the Senate floor.

Which raises the question: Senator, what’s the rush?

Well, it just may be that Mitch McConnell brings a special passion to the issue, in the wake of the CFPB penalty on Wells Fargo.

In his 2015 financial disclosure form, McConnell reports between $1,000,001 and $5,000,000 in deferred compensation for his wife, Elaine Chao, from Wells Fargo. Chao, the former Secretary of Labor, serves on Wells Fargo’s board of directors.

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The bank paid her a not inconsiderable $291,027 in 2015 for her board service.

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Quite something, right?

We cannot assume that McConnell is acting just to punish the CFPB for imposing a modest fine on Wells Fargo for its systematic misdeeds.

It’s entirely possible — arguably more likely — that McConnell is acting to please his Wall Street paymasters, more than out of pique in response to the CFPB penalizing a megabank to which he’s unusually close.

It’s true that that can pass as a kind of ethics defense in Washington, D.C. (see theongoing case of Rep. Roger Williams, R-Texas, also an auto dealer, who is defending himself against charges of wrongdoing related to the introduction of an amendment to benefit auto dealers on the grounds that he was not trying to benefit himself but was instead doing a favor for a lobbyist for the National Automobile Dealers Association). But it doesn’t wash among Americans uncontaminated by Washington corruption.

It’s clear that Americans want transparency when it comes to how companies spend in politics.

Courtesy Flickr/Almond Butterscotch.

Courtesy Flickr/Almond Butterscotch.

The next administration and the U.S. Securities and Exchange Commission (SEC) must address secret corporate political spending because it poses a great threat to democracy and investor confidence, says a new report by Public Citizen. The report, highlighting the historic campaign for an SEC rule requiring publicly held corporations to disclose their political spending, comes in advance of a Sept. 20 event on the state of corporate disclosure and as Public Citizen and its partners in the Corporate Reform Coalition (CRC) review and plan ahead for a new administration and new SEC priorities.

The Sept. 20 event is organized by Public Citizen, the AFL-CIO, Americans for Financial Reform, Ceres the Financial Accountability & Corporate Transparency (FACT) Coalition, the International Corporate Accountability Roundtable (ICAR), Patriotic Millionaires and SIF: The Forum for Sustainable and Responsible Investment, and hosted by the Center for American Progress. It will explore the SEC’s recent “Disclosure Effectiveness” review, which is evaluating corporate disclosure requirements, and the role of environmental, social and governance disclosures in promoting a sustainable economy.

The report details how a five-year campaign has driven 1.2 million comments to the SEC in support of a disclosure rule – the most in the agency’s history. The campaign also has garnered more than 500 stories in local and national press, and brought together powerful champions on Capitol Hill who are working to ensure that an SEC rulemaking on disclosure is not obstructed by congressional Republicans’ insertion of a harmful policy rider into the appropriations process that would stop the SEC from finalizing the rule. In addition, another 20,000 comments supporting political spending disclosure have come into the agency as comments to its “Disclosure Effectiveness” review process and to the agency’s Regulation S-K concept release, which solicited comments on proposed changes to corporate financial statement requirements.

The campaign began in response to the disastrous 2010 U.S. Supreme Court decision in Citizens United v. FEC, which opened the floodgates for corporations to spend unlimited and undisclosed amounts to influence American politics. In 2011, a bipartisan committee of leading corporate and securities law professors filed the first petition requesting a rulemaking at the SEC requiring all public companies to disclose their political expenditures. In response, the agency began a rulemaking, then halted it.

In this election cycle, secret outside spending is the highest it has ever been, clocking in at a whopping $660 million. Americans know that corporate influences lurk behind most campaign ads. Polls show they remain frustrated by the lack of transparency around corporate political spending.

Disclosure is material to investors as they consider the risk of their investment and important to the American voters who want to know who is bankrolling their elections. The SEC needs to take a stand and move forward with this rulemaking.

village-1357192_640At a time when public approval of Congress remains near all-time lows, revisiting campaign finance laws is critical. Party officials have recommended members spend roughly twice as much time fundraising as they do on the floor or in committee. U.S. House members raise on average $2,400 every single day of their term. U.S. Senators will raise roughly twice that.

These campaign spending increases are reflected at the state and local level as well. For example, a single local school board race in California resulted in over $3.5 million in inside and outside spending. The tides may be shifting, however.

California is now poised to enact a law which would lift the state’s ban on publicly financed campaigns. SB 1107 passed with bipartisan backing last week. It gives local and state government to option stick with the current system or switch to public financing. The bill requires public financing laws have a dedicated funding source and that funds be “available to all qualified, voluntarily participating candidates for the same office without regard to incumbency or political party preference.”

Public Citizen’s members in California sent over 1,200 letters to their assembly members in the days leading up to the vote. All that’s left is for Gov. Jerry Brown to sign the bill.  You can contact his office at (916) 445-2841 and ask him to sign SB 1107.

Voters in California will have further opportunity to express their frustration with the current system when Proposition 59 appears on their ballots this November. It is a resolution that calls on California legislators to do everything they can to overturn Citizens United v. Federal Election Commission. Yesterday, the Sacramento Bee endorsed the measure, which is backed by groups such as California Common Cause, calPIRG, Courage Campaign and others.

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