Thursday, November 29, 2007

Oscar and Lynn Wyatt Dance Around the Potholes: How About a Pardon, George?

Houston socialite and philanthropist Lynn Wyatt said there are lessons to be learned from all events in life, even watching a husband of four decades plead guilty to conspiring to funnel illegal kickbacks to Saddam Hussein's regime.

"My philosophy is you have to dance around the potholes," Lynn Wyatt said, adding: "This was a particularly deep pothole."

The pothole in question was a federal indictment charging that Oscar Wyatt Jr., her 83-year old husband, paid illegal surcharges demanded by Saddam's regime to purchase Iraqi oil under the United Nations' Oil-for-Food program in 2001. Wyatt was accused of multiple felonies that could have resulted in lengthy jail time—including conspiracy, wire fraud and violating U.S. laws governing dealings with Iraq. He would not have survived the theoretical maximum, 74 years.

Wyatt did himself and his family a favor by agreeing to plead guilty to one count of conspiracy, acknowledging that he orchestrated a single $200,000 surcharge payment.

Defense and prosecution attorneys stipulated that under federal sentencing guidelines the plea meant imprisonment of 18 to 24 months. But in a move that may be unprecedented, Denny Chin, the federal judge on the case, reduced the sentence to a year and a day, citing an avalanche of support from admirers who spoke up for Wyatt’s multiple acts of generosity over several decades, often anonymously and to strangers.

With good behavior, Wyatt could actually reduce his confinement by about 45 days and spend the last 30 days in a halfway house.

Back in Houston yesterday to get his affairs in order before he starts his sentence in January, Wyatt said “I’m bearing up pretty well for an old man who’s going to jail.”

Given all that the Wyatts have done philanthropically and for Houston, it’s astonishing that some local official hasn’t suggested that a presidential pardon would be appropriate. Multiple justifications apply.

The case against Wyatt had some Martha Stewart aspects—in that several oil companies did what he did, yet so far only two oil executives have been convicted, counting him.

Wyatt never claimed to be a saint. He was sometimes regarded as the meanest Texas oilman. But his success in a cut-throat industry was attributable in part to a reputation for stretching regulations almost to the breaking point. He skated on thin ice often enough that sooner or later it was bound to collapse. In the Oil-for-Food abuses he seemed to be selected as an easy target (like Stewart for not fully disclosing her insider trading), even though there were certainly more egregious offenders.

In contrast with Ken Lay and several of the Enron perps, Wyatt at least had the fortitude and good grace to say in public that he had indeed broken the law, that he understood he was accountable for his actions—and to state candidly that he was settling because he was too old to waste what days he has left on earth on the futility of fighting an inevitable jail sentence.

Above and beyond the years of good deeds that influenced the judge, has the federal government ever truly thanked Oscar Wyatt for his pivotal role in December of 1990, when during a visit to Baghdad he secured the release of two dozen U.S. oil workers whom Saddam Hussein had captured in Kuwait and was holding hostage on the eve of Desert Storm?

At the time Wyatt succeeded where U.S. policy had failed. Certainly that experience colored his attitude that U.S. strictures about the Oil-for-Food program would not be very successful either. And the current Bush administration pretty much agreed with him when it pushed its own invasion of Iraq.


In other words, the country and the Bush family owe the Wyatt family big time on Iraq. Bush has cut himself, Cheney and other members of his administration a lot more slack on laws about Iraq than the government did Wyatt. It would be a nice touch for George W. Bush to pardon him.

Thursday, November 22, 2007

FEMA to New Orleans Aquarium of the Americas: Happy Thanksgiving, After All

My 11/14 post has a happy ending. After a 17-month dispute, the staff of New Orleans' Audibon Aquarium of the Americas got a letter yesterday from Carlos Castillo, FEMA assistant director of disaster assistance, saying that FEMA has reversed itself and would reimburse the aquarium for the cost of restocking after Hurricane Katrina.

FEMA had declined to pay for the new fish because the aquarium staff had caught them on their own instead of acquiring them from commercial sources--even though FEMA's approach would have cost five times as much.

Castillo said simply, "the applicant has demonstrated that it was more cost-effective to catch the replacement fish."

Melissa Lee, a spokeswoman for the aquarium, said the facility would use the money to help it rebound from nine months of closure after Katrina. A linchpin of the city's tourism-based economy, the aquarium is seeing only 70 percent of its pre-storm visitors and has been forced to lay off 80 percent of its staff. "We felt confident that our appeal would go through. But of course, it's a nice Thanksgiving."

Thursday, November 15, 2007

FDR vs. Citigroup: Managed Capitalism Beats Laissez-Faire, Over and Over Again

Businessman and philanthropist Sir John Templeton—as in Templeton Funds, the Templeton Foundation, and the annual, financially stunning Templeton Prize for Progress Towards Research or Discoveries about Spiritual Realities (the 2007 winner got $1.5 million)—once observed that the four most dangerous words in the English language are, “This time it’s different.”

This tidbit we learn from Robert Kuttner in an op-ed piece entitled
“Painful truth: Free-market ideology has failed the test,” in yesterday’s Houston Chronicle and originally in the Los Angeles Times.

Kuttner, author of “The Squandering of America: How the Failure of Our Politics Undermines Our Prosperity,” is a fellow at Demos, a nonpartisan public policy research and advocacy group.

What was supposed to be different this time? Starting in the 1970s, Kuttner says, “Free-market economists and financial elites convinced Congress and presidents of both parties that a deregulated economy would be a more dynamic one; that something new about technology or trade or ideology meant that markets were at last truly self-governing.”

But the subprime mess revealed this to be a “failed fantasy.” As Kuttner puts it succinctly, “We have just had a full field test of free-market ideology, and once again it failed.”

Not only did it fail. The failure involved some of the same mistakes that culminated in the stock market crash of 1929—and even more telling, some of the same players.

The repeated mistakes? “Revisit the financial abuses of the laissez-faire 1920s and you will find different details but the same essentials: deceptive claims about stocks, bonds and balance sheets; conflicts of interest on the part of insiders; excess leverage to finance speculative bets; financial engineering that extracts wealth and does nothing for the real economy.”

And who was one of the players in the 20s? National City Bank—of which Citigroup is lineal successor! Like Citigroup and other huge financial institutions today, National City Bank turned dubious loans into bonds.

Kuttner continues: “In the subprime affair, unregulated mortgage lenders threw away underwriting rules and made teaser loans to people with sketchy credit histories. In more than half the cases, they didn’t even ask for the borrower’s income.

“But in the Alice-in-Wonderland world of financial deregulation, a Wall Street bank could turn the loan into a bond; a credit rating agency using obscure alchemy could bless the bond with a triple-A rating, and some consenting adult could be found to buy it. At each step, bankers, brokers and bond-raters could conveniently extract fees.”

The whole episode shows anew that FDR was exactly right to build a system of managed capitalism. “Government mandated extensive disclosures and bank supervision, and it prohibited a broad range of conflicts of interest. Commercial banking was separated from the underwriting and sale of securities.

“That regulatory system anchored 30 years of broadly distributed prosperity after World War II, an era when the financial economy played its appropriate role as servant rather than master of the real economy.”

The final irony is that Congress passed a law in 1994 that should have headed off the entire subprime debacle. It required all mortgage lenders to use prudent underwriting standards. “But the Federal Reserve, a devout believer in the magic of markets, refused to issue regulations.”

Kuttner notes there is one crucial difference between 1929 and 2007—a difference that, hopefully, ensures “only” a bad recession and not another depression: the Federal Reserve is a lot better now at bailing out Wall Street’s speculative failures.

But even that has downsides: imprudently lower interest rates, which risk higher inflation, increase pressure on the dollar and enable more cheap money, to fuel “the next round of speculative excess.”

Cogently and wryly, Kuttner can’t resist noting that even this level of Fed activity “is one more piece of proof that markets don’t regulate themselves.”


Congress needs to reverse the dismantling of FDR’s managed capitalism. As the last 80 years of U.S. history have shown over and over again, it is the only system capable of saving capitalism from itself.

Wednesday, November 14, 2007

FEMA Punishes New Orleans Aquarium—For Saving Taxpayers a Half Million Dollars!

Once more with FEMA in New Orleans, no good deed goes unpunished.

Here’s some math even a fifth-grader would find bizarre:

What FEMA pledged to restock the New Orleans Aquarium after Hurricane Katrina: $616,000.
What the aquarium actually spent: $99,766.
What FEMA will reimburse: $0.

So reports the Associate Press in an article posted on the WWL-TV website.

What did the Audibon Aquarium of the Americas do wrong? It showed too much ingenuity and creativity in getting the job done as efficiently and as cost-effectively as possible!

Before FEMA bothered to share some critical bits of red tape with them, the aquarium staff went out and replaced the dead fish the old fashioned way, with hooks and nets!

But FEMA’s reading of disaster recovery laws is that they required the aquarium to buy replacement fish of the same age and size as those in the tanks when Katina killed the power—and buy them only from commercial sources.

It would have made no sense to apply these rules even if FEMA had properly communicated them. With 900,000 annual visitors before Katrina, the aquarium was a money-maker that wanted to reopen as early as possible. Audibon sent a team on an expedition to the Gulf of Mexico, the Florida Keys and Bahamas, where they caught 1,681 fish for $99,766.

About a dozen aquarium staffers went fishing, snorkeling and scuba diving between January and May 2006, catching tiny highhat fish, yellowtail snapper, jackfish and others. The staffers worked 12-hour days but put in for only eight hours a day, according to invoices.

The catch was placed in a 1,000-gallon tank fitted to a flatbed trailer for the trip to New Orleans. TV crews and a local newspaper reporter tagged along on some trips but paid their own bills.

Most of the fish were caught in Florida waters for one-fifth the price charged by online vendors and specialty stores—suppliers FEMA recommended using.

The aquarium has appealed to FEMA offices in Texas and Washington. It would serve FEMA right if the dispute winds up in federal court, where a judge may tell the agency that stupidity is not much help with disaster recovery.

Tuesday, November 13, 2007

Congress Hands Bush First Veto Override, But Funding the Water Bill Is Another Battle

New Orleans City Business reported yesterday that even though both houses of Congress voted last week to override President Bush’s veto of the Water Resources Development Act (WRDA)—the first veto override of Bush’s presidency—celebration is premature.

Rep. Richard Baker, R-Baton Rouge, told City Business that WRDA could exert a $77-billion impact on the Louisiana economy while preserving the eroding coastline.

But Mark Davis, director of Tulane University’s Institute on Water Resources Law, said the bill authorizes projects, but appropriates no money to begin construction.

“There’s a lot of critical stuff here but as valuable as many of these projects are, they carry with them no cash,” Davis said. “You can’t accuse Congress of being fiscally irresponsible for passing bills that don’t carry with them a nickel of expenditure. Passing this bill is like you’re qualifying for a race; it doesn’t mean you’re winning the race. This is a license to beg.”

Mark Ford, executive director of the Coalition to Restore Coastal Louisiana, said WRDA includes $1.9 billion in vital coastal restoration projects but it could take more than 10 years for any projects to be funded. Some may never receive any money.

“Occasionally we get projects authorized, and decades pass and they don’t get appropriated,” Ford said. “Everglades restoration was authorized in 2000 and there’s been no money appropriated to help with that project. All the money that has gone into restoration of the Everglades has been put up by the state of Florida. That’s what we’re worried about. We just hope we get some of the more important things like coastal restoration so we can get some meaningful work done in Louisiana in the near term, which realistically is five to 10 years.”

Baker said WRDA has gone six years without being passed largely because Sen. Trent Lott, R-Miss., put a hold on it every time. Baker said Lott cited as his reason an unfulfilled agreement with Louisiana to divert freshwater from the Mississippi River through Lake Pontchartrain and into the Gulf of Mexico to reduce salinity levels along the Mississippi coast.

Once Baker included language in the bill addressing Lott’s concerns, the Mississippi senator cleared the way for WRDA’s passage. Baker said it is unusual for him to break with Bush but WRDA was too important to Louisiana.


Davis said passing WRDA was essential, but the fact it has taken seven years and four congressional votes to secure passage does not speak well of the system. “This should not be celebrated as a victory, and it should not be taken as proof that the system works,” Davis said.

“To take seven years to come up with a bloated, vetoed water bill that depends on an override vote is not the kind of good news people should be celebrating. I think this was a critically important thing to pass but we need to recognize that this WRDA is just as important for teaching us the limits of what this system can deliver right now.”

Monday, November 12, 2007

Armitage Says Blowing Valerie Plame's CIA Cover Was Foolish, But Not Ill Willed

Just back from Santa Fe, where Valerie Plame and Joe Wilson office in the same building as a friend, I was greeted this morning by a CNN article reporting that Richard Armitage told Wolf Blitzer in an interview on Sunday that he did not realize Plame was a covert agent when he discussed her with columnist Robert Novak in 2003.

Armitage, a former Deputy Secretary of State, said he was "extraordinarily foolish" to leak Plame's name, but that he did so in part because, seeing a memo that Plame had publicly chaired a meeting, he mistakenly assumed she did not have a covert status with the CIA. Armitage said that in 43 years with a security clearance he had never seen a covert operative's name in a memo.

At the end of July, discussing the importance of convicting Scooter Libby, I noted that Armitage, Karl Rove and others involved in blowing Plame's cover had never been held accountable in court--and that the Special Prosecutor had never made clear why.

If Armitage is being accurate about his own role, his self-judgment sheds some light on why it may have been impossible to prove criminal intent on his part when he told Novak that Plame was in the CIA.

It also tends to argue that Armitage, near the top of the diplomatic corps, may have been used by Rove, Cheney and others who were all too eager to sell the public on the U.S. invasion of Iraq, regardless of the consequences.

Wednesday, November 07, 2007

Louisiana Slams Bush Veto of Critical Flood Control Projects; Historic Override Likely

President Bush carried out his threat, discussed here in a posting on 8/2/07, to veto the Water Resources Development Act of 2007 (WRDA). It included more than $3.7 billion in specific hurricane recovery projects for Louisiana and up to $7 billion in total projects that would benefit the state—as part of $23.2 billion in water projects nationwide.

Bush’s callous action certainly merits the scathing criticism by the Louisiana Recovery Authority (LRA) on 11/2.

LRA is the planning and coordinating body that Gov. Kathleen Blanco created after Hurricanes Katrina and Rita, to lead one of the most extensive rebuilding efforts in the world. The hurricanes devastated South Louisiana, claiming 1,464 lives, destroying more than 200,000 homes and 18,000 businesses. The 33-member body is charged with coordinating across jurisdictions, supporting community recovery and resurgence, ensuring integrity and effectiveness, and planning for the recovery and rebuilding of Louisiana.

LRA stressed Bush’s record of broken promises since Katrina:

"WRDA is undoubtedly one of the single most significant pieces of legislation passed by Congress to restore Louisiana's hurricane and flood protection infrastructure in the aftermath of Katrina and Rita.

"In 2005, President Bush delivered a historic speech from Jackson Square and declared that the Administration would 'do what it takes' to rebuild our devastated region.

"This August, when he visited us for the second anniversary, President Bush acknowledged again how important safety and flood protection are to our recovery, saying, 'We fully understand that New Orleans [and South Louisiana] can't be rebuilt until there's confidence in the levees.'

"When the Administration had an opportunity to back up rhetoric with substantive action to enhance hurricane protection for our communities, it did not deliver.

"By vetoing WRDA, President Bush has denied the authorization of critical funds to establish the Louisiana's Coastal Area Ecosystem Restoration (LCA) project, expedite closure of the Mississippi River Gulf Outlet (MRGO), establish the Morganza to the Gulf hurricane protection system and other projects that will enhance our wetlands and protect our coastal communities."

WRDA passed House of Representatives 381-40 and the US Senate 81-12. LRA was hopeful that showed enough bipartisan votes to override the veto: "We all hoped it would not be necessary -- but it is -- so we urge Congress to take immediate action and override President Bush's veto of this bill."


It appears LRA is right. Yesterday the House overrode Bush’s veto by a vote of 361-54. Governor-elect Bobby Jindal returned to the House to cast his vote in favor of the override. The Senate could cast its override vote as early as today. If the Senate follows suit, it will be the first overturned veto of the Bush presidency.

Tuesday, November 06, 2007

Archbishop Tutu Challenges Catholic University to Uphold Academic Freedom

The 11/2 print edition of the National Catholic Reporter (NCR) has a follow-up article on the continuing controversy at a St. Paul, MN, Catholic university over its president's decision to bar Anglican Archbishop Desmond Tutu as keynote speaker for an on-campus youth conference on peacemaking, cosponsored by the university's Justice and Peace Studies program.

Tutu, a Nobel peace laureate for taking the lead in ending South African apartheid with minimal violence and broadly inclusive reconciliation, was invited to the University of St. Thomas to speak in April 2008 at an event called Peace-Jam.

But last May, Fr. Dennis Dease, the university president, revoked the invitation after the Jewish Community Relations Council of Minnesota and the Dakotas, which lobbies in favor of the Israeli government, said Tutu's criticisms of Israel were "hurtful" to some in the Jewish community. Two months after Tutu was told of the revocation, a faculty committee dismissed professor Cris Toffolo as director of the Justice and Peace Studies program.

In October Dease reversed himself and reinvited Tutu to speak at the campus. However, Dease did not overturn the faculty committee's decision to demote Toffolo, even though 100 faculty and staff signed a petition calling for her reinstatement and 40 people attended a rally supporting her on 10/23.

After Tutu was disinvited, the 2008 Peace-Jam was moved to Metropolitan State University in St. Paul, with Tutu still the keynote speaker. NCR and the Minneapolis Star Tribune both report Tutu is open to accepting the new invitation to St. Thomas--but that he has told both Toffolo and Dease in writing that he will not do so unless Tofollo is reinstated and all negative documentation about the matter is removed from her record.

Like Tofollo's supporters, Tutu sees her demotion as a significant attack on academic freedom and reversing it essential to reassuring the faculty that they can take leadership roles on engaging significant issues without being penalized. Of course, accrediting agencies will also regard the university unfavorably if the demotion is allowed to stand.

But a new word of caution for all concerned. Archbishop Tutu has long been an outspoken advocate of gay rights and a vocal opponent of discrimination against gay people. His position on those topics is quite in contrast with several official positions of the Roman Catholic Church and the U.S. bishops.

That's no more reason to deprive a Catholic university community of his thoughts on peace than the qualms of the Jewish Community Relations Council of Minnesota and the Dakotas. But it is the kind of objection that right-wing Catholics and evangelicals have raised against speakers at other Catholic universities. It should not surprise anyone at St. Thomas, including Fr. Dease, if someone raises it there.

Hopefully they have learned their lesson and won't again make the mistake of sacrificing academic freedom to political pressure.

Friday, November 02, 2007

Survey Finds 67% of Parents Favor Schools Giving Contraceptives to Teenagers

MSNBC has posted an AP article about the recent poll results displayed at the left. The poll found that just over two-thirds of U.S. parents surveyed support schools giving contraceptives to students.

The poll was conducted in late October after a school board in Portland, Maine, voted to allow a middle school health center provide full contraceptive services to students.


As the graphic shows, about half of those who favor of the idea would support it only after a parent gave consent. Minorities, low-income people and older Americans were most likely to want parental consent. Those favoring no restriction tended to be younger and from cities or suburbs.

Those saying sex education and birth control were better for reducing teen pregnancies outnumbered people preferring morality and abstinence by a slim 51 percent to 46 percent. Younger people were more likely to consider sex education and birth control a better way to limit teenage pregnancies, as were 64 percent of minorities and 47 percent of whites. Nearly seven in 10 white evangelicals opted for abstinence, along with about half of Catholics and Protestants.

In addition, 49 percent say providing teens with birth control would not encourage sexual intercourse and a virtually identical 46 percent said it would. Though men and women have similar views about whether to provide contraceptives to students, women are likelier than men to think it will not encourage sexual intercourse, 55 percent to 43 percent.

For perspective, it is important to note that less than one percent of middle schools and barely five percent of high schools make condoms available for students, according to a health scientist with the federal Centers for Disease Control and Prevention. In other words, we are a long way from seeing this idea implemented on a widespread basis any time soon.

The survey shows clearly that a substantial majority of U.S. parents support schools providing birth control to students. But with just a slim majority grasping that it would reduce teen pregnancies, more efforts are necessary to document that is so.

Reducing teen pregnancies would in turn reduce the number of abortions by teenage mothers. It would add one more piece of evidence to support another recent finding, discussed in my 10/17 posting below: outlawing abortion is not effective for reducing it, but providing contraception is.

Thursday, November 01, 2007

Fundamentalist Fred Phelps Pays Dearly for "God Hates Fags" Sign at Marine's Funeral

CNN reports that it will cost fundamentalist preacher Fred Phelps $10.9 million for using a military funeral in an attempt to further his bigotry against gay people.

A federal jury in Baltimore, Maryland, Wednesday awarded $10.9 million to a father of a Marine whose funeral was picketed by members of a fundamentalist church carrying signs blaming soldiers' deaths on America's tolerance of homosexuals.

The family of Lance Cpl. Matthew Snyder -- who was killed in a vehicle accident in Iraq's Anbar province in 2006 -- sued the Westboro Baptist Church in Topeka, Kansas, and its leaders for defamation, invasion of privacy and intentional infliction of emotional distress.

Church members showed up at Snyder's funeral chanting derogatory slogans and holding picket signs with messages including "God Hates Fags."

They've picketed the funerals of dozens of troops killed in Iraq and Afghanistan, claiming that God is punishing the United States because of its tolerance for homosexuality.

Al Snyder, father of the slain Marine, said he considered filing the lawsuit for a long time before going forward and that he hoped the judgment would make it harder for the church to continue such protests.

"It's hard enough burying a 20-year-old son, much less having to deal with something like this," he said, recalling that some of the other signs at the funeral included "Thank God for dead soldiers" and "Thank God for IEDs."

"As far as their picketing goes, they want to do it in front of a courthouse, they want to do it in a public park, I could care less. But I couldn't let them get away with doing this to our military," Al Snyder said.

"Every day in court I would just think of Matt and have him on my mind and know that he was watching out for me."

Snyder's attorney told jurors to pick an amount "that says don't do this in Maryland again. Do not bring your circus of hate to Maryland again," according to The Associated Press.

The award includes $2.9 million in compensatory damages and $8 million in punitive damages, a clerk in the judge's chambers said.

Lawyers for the church members argued Matthew Snyder's funeral was public and the First Amendment protects all points of view, even offensive ones, the AP reported.

Church founder Fred Phelps said the church would appeal the decision, adding it would "take about five minutes to reverse that thing."

"This will elevate me to something important," Phelps told reporters. "This was an act of futility."

Later, Phelps said the case was about "putting a preacher on trial for what he preaches."

"All it was, was a protestation by the government of the United States against the word of God. They don't want me preaching that God is punishing the country by killing their servicemen."

The church had made a new sign to carry after the jury's decision, said his daughter, Margie Phelps.

"Our message is 'Thank God for 10.9 [million dollars],' " she said.

"By that mechanism [the award], the entire world will look over and see that America is doomed and that in doomed America there is no such thing as religious liberty."

The judgment would not change the message the group was carrying, said another of Phelps' daughters, church attorney Shirley Phelps-Roper.

"It's going nowhere," she said of the jury's decision. "This is a nothing. God is not going to stop killing your soldiers. He's not going to stop pouring his wrath out on this nation. America is doomed."

Church members were persecuted for their teachings and the court "mocked and scoffed at our religious beliefs," she said.

Phelps-Roper added that protests were planned later this week in Boston and Acton, Massachusetts, and in Norton, Kansas.

The group plans to protest a Veterans Day rally in Washington, she said.

Phelps and the Westboro Baptist Church -- which has no connections with any mainstream Baptist organizations -- are longtime anti-gay protesters.

Before launching their protests at the funerals of American troops killed in Iraq and Afghanistan, they routinely picketed the funerals of gay people and those who died of AIDS.

Phelps and his followers also picketed the February 2006 funeral of Coretta Scott King, widow of slain civil rights leader Martin Luther King Jr., because of her support for gay rights.

Several states have implemented laws about funeral protests and Congress has passed a law barring protests at federal cemeteries.