NEWS ARCHIVE - WHERE IS THE MONEY GOING?

House Committee Accuses Air Force of Not Allowing Others to Compete with Lockheed and Boeing for Satellite Launch Contracts

Tuesday, August 21, 2012
House Committee Accuses Air Force of Not Allowing Others to Compete with Lockheed and Boeing for Satellite Launch Contracts
Two of the nation’s largest defense contractors have enjoyed a virtual monopoly over the launching of Air Force satellites into orbit. But a bipartisan effort in the U.S. House seeks to end the sweetheart deal and open up opportunities for smaller commercial rivals.
 
United Launch Alliance, a joint venture created by Lockheed Martin and Boeing, has handled all of the Air Force’s satellite launches for six years. The armed service wants to extend this arrangement for another five years, during which the two companies would be paid $19 billion. The new contract would include lightweight satellites that could be manufactured by smaller companies.
 
But two lawmakers object to the cost as well as allowing Lockheed and Boeing to dominate satellite launches. House Intelligence Committee Chairman Mike Rogers (R-Michigan) and ranking member C.A. Dutch Ruppersberger (D-Maryland) wrote to the Department of Defense in early August complaining that the arrangement with United Launch Alliance lacks competition “and is unable to compete internationally due to high costs.”
 
Rogers and Ruppersberger want the Air Force to consider two other companies, SpaceX and Orbital, before awarding the next launch contract. They also called on Congress to eliminate a taxpayer-financed subsidy of $100 million per launch to United Launch to cover maintenance and overhead. The subsidy is only provided to United Launch.
-Noel Brinkerhoff
 
To Learn More:
 
Sioux Tribe Reaches Out on Internet to Raise Money to Buy Back Sacred Land
Tuesday, August 21, 2012
Sioux Tribe Reaches Out on Internet to Raise Money to Buy Back Sacred Land
Having lost their lands two centuries ago, members of the Sioux Nation are now trying to buy back a portion of the Black Hills.
 
The Rosebud Sioux Tribe and the Native American blog Last Real Indians want to raise $1 million to purchase 1,943 acres that is going on sale on August 25. The land is considered sacred to the Sioux, who call it “the Center and heart of everything that is.”
 
So far the campaign has raised $137,000, considerably less than what is needed to buy the Reynolds Prairie, named after the family who owns it. The Lakota Sioux call it “Pe’Sla” (Old Baldy).
 
“We shouldn’t have to buy back something that’s already ours,” said Chase Iron Eyes, who’s involved in the fundraising effort. “But, we’re adaptable.”
 
The Black Hills were granted to the Sioux Nation under the Laramie Treaty of 1868. A few years later, prospectors began encroaching on the land after gold was discovered in the area.
 
The U.S. government seized the Black Hills in 1877 following battles between the Sioux and American cavalry, including the infamous Battle of Greasy Grass (what the Sioux call Little Big Horn) where General George Custer and his men were killed.
 
Donations to the purchase campaign can be made here.
-Noel Brinkerhoff
 
To Learn More:
Pe’Sla: Protecting Sacred Sites as the Next Battle Ground (by Chase Iron Eyes, Last Real Indians)
Support Is Needed to Save Black Hills Sacred Site (by Gale Courey Toensing, Indian Country)
 
4-Star General Faces Possible Demotion for Wasteful Spending
Saturday, August 18, 2012
4-Star General Faces Possible Demotion for Wasteful Spending
Army General William “Kip” Ward may lose a star and a million dollars in retirement pay for overspending on travel and accommodations while serving in Africa.
 
Ward, a four-star general (the Army’s highest rank) and the first head of the new U.S. Africa Command, has been under investigation for 17 months after the Department of Defense learned he authorized spending hundreds of thousands of dollars to fly non-military personnel, including, in 15 cases, his wife, on government planes. Ward also spent large sums on hotel rooms, transportation and other expenses when he traveled as head of Africa Command.
 
According to a report by the Defense Department’s inspector general, Ward accepted “complimentary meals and Broadway show tickets in excess of $20.00 in value for himself and his wife from a prohibited source with multiple DoD contracts.” He also “misused a government vehicle by allowing his spouse to use a hardened vehicle in Germany without required threat assessments or authorization.”
 
Defense Secretary Leon Panetta is reviewing Ward’s case. One option under consideration involves demoting Ward to three stars, which could cost him as much as $1 million in retirement pay over time.
 
Ward is no longer in charge of the Africa Command. Based in Northern Virginia, he is currently serving as a special assistant to the vice chief of the Army. He tried to retire in 2011, but was forced to remain in the Army until the investigation was complete. Since then, he has been paid as a two-star general.
-Noel Brinkerhoff, David Wallechinsky
 
To Learn More:
4-Star General Investigated Over Spending (by Lolita Baldor, Associated Press)
 
 
Pentagon Exploits Lower Drought-Related Prices to Stockpile Meat
Saturday, August 18, 2012
Pentagon Exploits Lower Drought-Related Prices to Stockpile Meat
The Department of Defense has a reputation for wasting a lot of money, but in at least one case the Pentagon has found a way to save money.
 
Because of this year’s drought, the meat industry has been forced to drop its prices. The military already buys about 94 million pounds of beef, 64 million pounds of pork, and 500,000 pounds of lamb a year, and doesn’t really need more. But it’s hard to resist a bargain, so the Defense Logistics Agency is negotiating to take advantage of the reduced prices to purchase more meat and freeze it for future use.
 
The Pentagon is promoting the expenditure as a magnanimous gesture to help the beef, pork and lamb industries, but economists warn that the extra purchases will have only a tiny effect on the crisis, in which the drought damaged the corn crop, which is used to feed livestock. This raised the price of growing animals and has forced producers to sell their cows, pigs and lamb early.
-David Wallechinsky
 
 To Learn More:
DOD to Review Meat Purchases During Drought (U.S. Department of Defense)
Pentagon's Stimulus Plan: Buy More Meat (by Tom Shoop, Government Executive)
Feds To Buy More Meat During Drought (by Jennifer Rizzo, CNN)
 
Retired Federal Workers Receiving 6-Figure Pensions Now Top 21,000
Friday, August 17, 2012
Retired Federal Workers Receiving 6-Figure Pensions Now Top 21,000
Retiring from years of service in the federal government can really put the gold back into the golden years.
 
Washington is currently paying more than 21,000 retired federal workers pensions of $100,000 or more per year, according to USA Today and Gannett News Service. This total represents 1.2% of all federal retirees.
 
Almost 10% of the 21,000 receive an annual pension of $125,000 or more. More than 150 retirees enjoy $150,000 or more, and six individuals get more than $200,000 a year.
 
The six-figure pensions were earned at various federal agencies, with the U.S. Postal Service producing 714 of these retirees. The Social Security Administration has 444, the Drug Enforcement Administration 326, the Internal Revenue Service 237 and the Federal Bureau of Investigation 186.
 
According to data released for 2011, I. King Jordan, the first deaf president of Gallaudet University in Washington, D.C., collected $375,900, and Maxey D. Love Jr., former president of a farm credit union, $322,272.
 
Almost all of the six-figure pensions go to federal workers who were hired before 1984, since the method of determining pensions changed for those who hired after that year. The average federal pension pays $32,824 a year.
-Noel Brinkerhoff, David Wallechinsky
 
To Learn More:
Some Federal Pensions Pay Handsome Rewards (by Dennis Cauchon, USA Today and Paul D’Ambrosio, Asbury Park (New Jersey) Press)
 
Two Campaign Groups with Anonymous Donors Outspend all Super PACs Combined
Friday, August 17, 2012
Two Campaign Groups with Anonymous Donors Outspend all Super PACs Combined
There are currently two kings of the hill among campaign donor groups and both wear conservative crowns.
 
Crossroads GPS and Americans for Prosperity have spent almost $60 million on television ads so far this election this season, putting them ahead of all super PACs combined.
 
Unlike super PACS, which do have to reveal their donors, Crossroads GPS and Americans for Prosperity are organized as 501(c)(4) social welfare nonprofits, which are permitted to hide the names of their individual or corporate donors. 501(c)(4)s are allowed to engage in a certain amount of political activity, but politics cannot be their primary focus.
 
Crossroads GPS, founded by Republican strategist Karl Rove, spent nearly $42 million, while Americans for Prosperity, which helped launch the Tea Party movement and is supported by billionaire brothers David and Charles Koch, spent more than $18 million.
 
Neither group has to disclose the names of its donors under federal law, much to the consternation of campaign-finance reform advocates.
 
“First of all, it shows how much desire there is for secrecy among huge donors who want to be able to spend money to influence this election without leaving any fingerprints,” Fred Wertheimer, head of Democracy 21, a watchdog group, told ProPublica. “Secondly, it shows that so far, there is an enormous advantage being played in this election by just two groups that are exercising undue influence in the elections.”
-Noel Brinkerhoff
 
To Learn More:
 
Timber, Beef and Off-Road Vehicle Industries Accuse Forest Service of Paying Too Much Attention to Scientists
Friday, August 17, 2012
Timber, Beef and Off-Road Vehicle Industries Accuse Forest Service of Paying Too Much Attention to Scientists
Federal forestry officials have too often made decisions regarding National Forests that ignore the private sector’s bottom-line in favor of preservation and sustainability, according to a lawsuit by timber, ranching and off-road vehicle interest groups.
 
The Federal Forest Resource Coalition, which represents timber companies, and 13 other industry organizations sued the U.S. Forest Service for what they say is the illegal regulation of forest lands, which involved giving too much weight to scientists’ analyses over the concerns of businesses. The lawsuit follows the March finalizing of an Obama administration planning rule that determines how the Forest Service revises land management plans for each national forest.
 
The plaintiffs accuse Secretary of Agriculture Thomas Vilsack and the Forest Service of breaking numerous federal laws, including the National Forest Management Act, the Multiple-Use Sustained-Yield Act, the Organic Administration Act and the Administrative Procedure Act.
 
According to the industry lawyers, the government has improperly used the Organic Administration Act to justify policies with “aesthetic, environmental, recreational, or wildlife-preservation purposes.” But the plaintiffs claim the U.S. Supreme Court interpreted the law to have only two purposes—to conserve water and furnish a continuous supply of timber.
-Noel Brinkerhoff
 
To Learn More:
Federal Forest Resource Coalition et al. v. Thomas Vilsack (U.S. District Court, District of Columbia) (pdf)
 
Like Athletes who Dope, Wall Street’s High-Speed Traders Try to Keep Ahead of Regulators
Thursday, August 16, 2012
Like Athletes who Dope, Wall Street’s High-Speed Traders Try to Keep Ahead of Regulators
Cheating is a diehard temptation for athletes and speculators, making it imperative for regulators to keep up with changes in the game and ways for people to skirt the bounds of legality. This is especially true on Wall Street, where high-speed computer trading has grown significantly, and so have accompanying risks.
 
High-speed trading firms now account for more than 50% of all stock trading, with shares bought and sold within millionths of a second. This reality has created opportunities for wealth making and dirty dealing, or just expensive mistakes. Recently, Knight Capital lost $440 million in less than an hour because of bad computer software intended to upgrade the firm’s high-speed abilities.
 
As previously reported by AllGov, in traditional stock trading, a broker, or “specialist,” matches buyers and sellers at a price that is satisfactory to both. Generally, a buyer will tell the broker his top price and expect the broker to actually find a seller at a lower price. However, in computerized high-speed trading, wealthy firms can use “flash trading” to send out automated sell offers at higher and higher prices until one comes back with no buyer. The program then drops back to the highest acceptable price and sells at what the buyer set as his maximum limit.
 
Edgar Perez, author of The Speed Traders: An Insider’s Look at the New High-Frequency Trading Phenomenon That Is Transforming the Investing World, says government regulation must accelerate in order to keep up with Wall Street. Perez adds that this means the Securities and Exchange Commission must be able to perform real-time oversight of firms. He admits that “this would require significant commitments to invest in both human capital and information technology, but the investment is worthwhile: it is vital for regulators to level the playing field of high-frequency trading.”
 
Nicole Gelinas, a contributing editor to the Manhattan Institute’s City Journal, concurs with Perez, saying traders “whose programs run amok should be banned from trading–and should bear the cost of restitution to other investors, even if the cost forces them into liquidation.”
 
It’s not just a matter of making things right, Gelinas says. It’s about preserving the future of the stock market. If the government doesn’t do something to show future investors that markets are safe, the country will risk losing them, “if it already hasn’t.”
-Noel Brinkerhoff
 
To Learn More:
On Wall Street, the Rising Cost of Faster Trades (by Nathaniel Popper, New York Times)
 
Federal Election Commission Accused of Deleting Campaign Donor Records from 2008 Election
Saturday, July 21, 2012
Federal Election Commission Accused of Deleting Campaign Donor Records from 2008 Election
Political contributions totaling millions of dollars made during the 2007-2008 election cycle have been erased from a federal database maintained by the Federal Election Commission (FEC).
 
According to three university academics studying campaign financing from the 2008 election, the FEC, for reasons unknown, deleted numerous donations, including those referred to as “dark money.”
 
Dark money represents funds given to nonprofit groups, otherwise referred to as 501(c)s, that run advertisements for and against candidates without coordinating with the campaigns in question.
 
One example cited by the researchers (Thomas Ferguson and Jie Chen of the University of Massachusetts and Paul Jorgensen, a Harvard fellow) involved conservative benefactor Harold Simmons, who contributed to the American Issues Project in 2008. Simmons helped finance political ads that tried to link Barack Obama with William Ayres, a former 1960s radical and member of the Weather Underground.
 
But Simmons’ nearly $3 million in contributions to the American Issues Project can no longer be found in the FEC database.
 
The same was true for Republican supporter Jack Templeton, Jr.’s donations, worth almost $3 million, to Let Freedom Ring, which also received $100,000 from Foster Friess, another wealthy GOP donor.
 
The researchers said the FEC’s removal of campaign contributions without public comment was “scandalous.”
 
“It flouts the agency’s legal mandate to track political money and mocks the whole spirit of what the FEC was set up to do. No less seriously, as legal challenges and public criticism of similar contributions in the 2012 election cycle rise to fever pitch, the FEC’s action wipes out one of the few sources of real evidence about how dark money works.”
 
The story, published by AlterNet, created a stir among some members of the media. It also may have prompted the FEC to restore some of the records, according to the researchers in a follow-up article.
-Noel Brinkerhoff
 
To Learn More:
Cover Ups Are Worse Than Vanishing Data: The Facts About the FEC’s Data Downloads (by Thomas Ferguson, Paul Jorgensen and Jie Chen, AlterNet)
 
Consumer Protection Bureau Orders its First Penalty and Refund…$165 Million to Capital One for Misleading Credit Card Customers
Friday, July 20, 2012
Consumer Protection Bureau Orders its First Penalty and Refund…$165 Million to Capital One for Misleading Credit Card Customers
Capitol One Bank has earned the distinction of being the first bank penalized by the new Consumer Financial Protection Bureau (CFPB), which discovered the financial institution had duped millions of customers into buying products they didn’t need.
 
For using “deceptive marketing tactics,” Capitol One must refund $140 million to two million of its customers. The CFPB also ordered the bank to pay a $25 million penalty.
 
Among Capitol One’s misdoings, the bank told customers that buying add-on products, such as payment protection and credit monitoring, would improve their credit scores and help them increase the credit limit on their credit cards.
 
Also, the bank neglected to tell some consumers that buying the products was optional. Others experienced difficulties trying to cancel the extras.
 
In addition to paying the $165 million ordered by the CFPB, Capitol One was ordered by the Office of the Comptroller of the Currency (OCC) to pay another $10 million in refunds to customers. The OCC, which regulates banks, levied its own fine of $35 million, bringing the combined total to $210 million that Capitol One will fork over.
-Noel Brinkerhoff
 
To Learn More:
Ending Deceptive Marketing Practices (Consumer Financial Protection Bureau) (pdf)
In Its First Action, Consumer Bureau Takes Aim at Capital One (by Ben Protess and Jessica Silver-Greenberg, New York Times)
Capital One To Refund $150 Million To Credit Card Customers (by Jim Puzzanghera, Los Angeles Times)
Stipulation and Consent Order (Consumer Financial Protection Order) (pdf)
 
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