Government
agencies find hands tied by shoestring
Austin American Statesman
May 28, 2008
Editorial
A new report from
the staff of the Texas Sunset Advisory Commission warns that the state’s
Department of Public Safety “is facing a critical personnel shortage, weakening
its ability to protect the public.” The problem isn’t that the Legislature
doesn’t allow DPS to hire more troopers, but that the agency cannot hire and
keep enough troopers to fill the authorized slots.
If this problem
sounds familiar, that’s because it is - throughout state government today. To
give just a few examples:
— The state’s
Health and Human Services Commission fell badly behind last year in hiring and
keeping enough qualified workers to handle applicants - about 3.7 million
people - for food stamps and Medicaid services. Employee turnover was high, and
that turnover cost taxpayers, because not only is the former employee’s
experience and efficiency lost, but a new employee has to be trained. A
commission spokeswoman this week reported “a dramatic reduction in our
turnover” after a way was found to boost pay and speed up raises.
— The Department of
Family and Protective Services has had high turnover of caseworkers in its
Child Protective Services division. The agency was fined $4 million by the
federal government this year for not checking on the 17,000 foster children in
its care often enough, though the state is appealing. About one-third of the
caseworkers left state employment last year, mostly because of a heavy workload
and low pay, according to the state auditor.
— The Texas
Department of Corrections was short 3,481 guards as of April 30, 13 percent of
its authorized guard force of 26,356. In March, the agency adjusted its pay
scale to help alleviate the shortage, raising the pay for starting guards from
$23,046 to $25,416 and moving up pay raises for others. In addition, it began
awarding $1,500 bonuses to guards who would agree to spend at least a year at
state prisons with particularly severe understaffing. In March, the prison
system’s executive director, Brad Livingston, said the shortage of guards was
“the most critical issue we face.”
These are real
shortages, not the whining of empire-building executives. Often the problem
isn’t that the Legislature didn’t authorize enough positions but that the pay
is too low to attract or keep a guard, a caseworker, a trooper.
Employee shortages
can be dangerous, not just inconvenient. Prison guards might be more easily
overcome, harmed or killed by inmates in a disturbance. A shortage of troopers
could mean a longer wait for back-up during a nighttime highway stop, or for
help at an accident.
The Sunset
commission staff said DPS has problems hiring enough troopers not only because
of “higher-paying jobs in the private sector” but negative publicity about
racial profiling and excessive use of force, as well as the increased demand
for government security employees - Border Patrol, for example .
The report also
suggests that DPS could make more efficient use of the troopers it has.
Still, the pattern
across state government strongly suggests that when lawmakers convene in
January, higher pay for such frontline service jobs as trooper, prison guard
and human services case worker must get serious attention - and money.
After court decision on CPS case, Perry did the right thing
by standing firm
June 9, 2008
Jacquielynn Floyd
Not being one to
fawn over politicians of any stripe, I'm surprising even myself today: If I
could, I would send Gov. Rick Perry a bouquet of yellow roses. I'd buy him a
beer.
First, his house
burned down over the weekend. Well, he doesn't actually own it – I guess you
could say the Governor's Mansion is our house – but you know what I
mean.
More important, our
governor illustrated last week, with a few sharp and uncompromising words, that
it is possible for an elected official to fade a little negative press. It is
possible to support subordinates who are under fire without waffling or
crawfishing or running for the hills.
It is even possible
to think more about what's right than about protecting yourself.
Because right now
would be an easy and opportune time to back away from Child Protective
Services' decision to remove all the children they found at the polygamist-cult
ranch in Eldorado.
After all, it was a
week of touching photographs showing family reunions and of headlines outlining
the state's dark plans to separate mothers from their babies, a week
during which the public was left with the inaccurate conclusion that
allegations against the sect have been disproved.
It might have been
understandable if the governor had tried to ease back a step or two from this
political ant bed.
He did not. If
anybody thinks the state of Texas is ready to back away from negative publicity
stemming from the raid – as did the states of Utah and Arizona in 1953,
following strikingly similar political fallout from a raid on this very same
sect – they are mistaken.
"I still think
that the state of
And all this time,
I had been feeling that I was shouting down a dark well in pointing out that
the Fundamentalist Church of Jesus Christ of Latter Day Saints has long been
accused of manipulating public perception and discouraging scrutiny by
outsiders.
I had very much
feared that the obsessive ruminating over whether CPS "overstepped
itself" was eclipsing the larger and far more serious issue of a culture
of institutionalized abuse, hiding behind the guise of religion, here in our
state.
A few outspoken
experts have kept an eye on the ball. New York-based legal professor Marci
Hamilton, who has written extensively on state-religion and child-abuse issues,
believes the Texas Supreme Court's ruling returning the FLDS children to their
parents has been generally misunderstood.
"[T]hat
decision was misread by some as a complete vindication of the parents,"
she wrote in an article published at the Web site FindLaw last week.
"The media
seems intent on focusing on the disruption to these children's lives [resulting
from the raid]... as if that is the major issue before us, and as though the
abuse allegations are now irrelevant history.
"Felonious
behavior by FLDS adults caused the misery here, not the state," she wrote.
"Ignorance and denial are the enemies of these children."
The governor gets
it. Convenient as it would be to regard the matter as settled and look away
right about now, he says
Gov. Perry also
impatiently brushes aside the breathless questions about whether people over at
CPS will wind up with their heads on sticks because of this nonexistent,
made-up "debacle."
"[T]hey acted
with the best interest of those children," he said. If anybody needs to be
concerned, he adds, it's anyone who believes it's A-OK to marry and force sex
on multiple teenage "wives," entrapping more generations in abuse and
ignorance.
"If you don't
want to be prosecuted for those activities, then maybe
Good for our
governor, y'all. That's guts.
Rising campus costs make panel rethink regents' power
to set rates
Copyright 2008
"It was done
after much anguish," said Welcome Wilson Sr., chairman of the
Senators weren't
moved, suggesting legislators have grown weary of ever-rising costs in the
years since they gave regents the power to set tuition and raising the question
of another way to pay for higher education.
Wilson and
representatives of eight other universities — including the University of
Texas, Texas A&M,
"I supported
(deregulation)," said Sen. Robert Duncan, R-Lubbock. "I still do. ...
But I get concerned that boards of regents, in justifying their increases, say
the Legislature has not kept up. I don't think that's fair."
State spending on
higher education has increased. But it hasn't kept pace with inflation and
growing enrollment, so per-student state spending has dropped. Regents across
the state say that has forced them to increase tuition.
Whitmire said UH
regents should have waited until January and asked the Legislature for more
money.
"We are trying
to attract the best and brightest from all over the world,"
Everyone agreed
with the need to recruit top faculty. But that may require new funding sources,
said Sen. Royce West, D-Dallas.
He suggested a
local sales tax. Another option could be to require universities with
endowments of at least $5 million to spend some of that money to keep costs in
check.
Several regents predicted
voters would not approve a sales tax for a state university.
"There would
be competing interests for that money," said Glenn O. Lewis, chairman of
the board of regents at Texas Southern University and a former state
representative.
Lewis voted for tuition
deregulation in 2003, and he still supports it. "I would love to have
college education free in
West asked if
higher tuition has kept some students out of college.
Many regents,
including Scott Caven. Jr. of the
That may be because
schools now offer more financial aid, Caven said.
But Scott Dueser,
chairman of the
And
Statewide,
enrollment at four-year colleges has been flat, while community colleges have
grown exponentially, said
Students also are
taking out bigger loans, Paredes said.
The subcommittee
will meet throughout the summer and fall to prepare for the next session. In
the meantime, Zaffirini asked regents to determine what will happen if
deregulation is rolled back, as well as how much state money they would need to
put an end to the annual tuition increases.
"It isn't
enough to talk about the problem," she said. "We have to come up with
some solutions."
Perry
defends state raid on polygamist retreat
June 5, 2008
Perry,
who was in La
"That's
my bottom line on this," Perry said in a story for the newspaper's online
edition.
He
also warned members of the Fundamentalist Church of Jesus Christ of Latter Day
Saints that child sex abuse won't be tolerated and even suggested that
followers of the renegade Mormon sect may want to leave the state.
"If
you are going to conduct yourself that way, we are going to prosecute
you," Perry said. "If you don't want to be prosecuted for those
activities, then maybe
Willie
Jessop, a Utah-based FLDS elder, said Perry's remarks were shocking,
particularly given a Texas Supreme Court ruling that forced this week's return
of 440 sect children on the grounds that Child Protective Services provided
scant evidence that the children were in danger.
"It's
an outrage that he should even make such gross and broad allegations,"
Jessop said. "He's listening to people that tell lies about the
FLDS."
FLDS
officials have accused the state of persecuting sect members for their
religious beliefs.
Perry
said based on the information state authorities had at the time "they
acted with the best interest of those children."
"If
responsibility needs to be taken for (court edicts) saying that we stepped
across some legal line, I'll certainly take that responsibility," the
governor said. "I am substantially less interested in these fine legal
lines that we're discussing than I am about these children's welfare, that's
where my focus is. That's where CPS' focus is."
Jessop,
who has insisted that children at the ranch were not mistreated, has
sidestepped questions about underage marriages at the YFZ ranch. But he did
announce earlier this week that the church would no longer sanction marriages
of any girl under the legal age of consent in the state where she lives.
Though
the children have been returned, a criminal investigation is ongoing.
The state's red-headed stepchild
Copyright
2008
They're the abused
stepchild of state government, given too little food and too much work and
yelled at mercilessly when, in their fatigue and malnourished condition, they
make a mistake.
When Child
Protective Services makes a mistake, to be sure, it can have terrible
consequences. Children mistakenly left in abusive homes are sometimes killed.
Children mistakenly taken from their parents are scarred.
Right now CPS is
getting yelled at for aggressive handling of one of the biggest child abuse
cases in the history of the nation.
The public has been
riled by images of nursing babies being ripped from their mothers.
Carnal consequences
Earlier, of course,
we were riled by images of 14-year-old girls being consigned to older men in
"spiritual marriages" with carnal consequences.
The Texas Supreme
Court was, in my opinion, right to rule that a state district judge should not
have given CPS all of the more than 400 children taken from a ranch run by the
polygamist Fundamental Church of Jesus Christ of Latter Day Saints (FLDS) near
Only girls who
could be shown to be in imminent danger, mainly those who had reached puberty,
should have been removed, the high court says.
CPS should and will
follow the law. But it's not as though they willfully broke it.
CPS out-lawyered
Texas laws covering
removal of children from their homes were not written to deal with large,
secretive, polygamist sect compounds in which "wives" and their
children can be reassigned from one husband to another by church elders.
When Texas lawmen
conducted the raid on behalf of CPS, the agency had no idea so many children
were living in the compound.
And although the
phone call that led to the raid turned out to be, apparently, a hoax,
investigators quickly found evidence confirming suspicions that underage girls
were either pregnant or had given birth.
CPS decided, not
unreasonably, to apply a well-established rule that if one child in a home was
being abused, other children in the home should be removed if their safety
could not be assured.
What was novel was
applying that rule to a large compound of homes. But CPS reasoned that the
entire sect was acting like a family, with all the adults complicit in what the
law considers rape of young girls.
The number of
children who turned out to be involved quickly overwhelmed CPS and the court.
Soon the agency was out-lawyered and out-public relationed. Given the resources
of CPS, church leaders had no trouble coming up with horror stories of children
being scattered around the state.
Church leaders
hired high-dollar San Antonio civil rights and criminal defense attorney Gerry
Goldstein, former head of the National Association of Criminal Defense Lawyers,
and reportedly flew him to San Angelo in their private jet.
The court provided
lawyers for all the children, and Legal Aid lawyers represented many of the
mothers. The courtroom scene was chaotic.
CPS had to rely on
its own staff lawyers. The agency's caseworkers have twice the caseload of the
national average, and I doubt that its legal arm is any better staffed.
As controversy
grew, state leaders appeared to seek to place some distance between themselves
and CPS.
The first words in
the brief section of the state Constitution covering the attorney general are
these: "The Attorney General shall represent the State in all suits and
pleas in the Supreme Court of the State in which the State may be a party ...
"
At first, the AG's
office informed the Supreme Court it may be filing a brief in the case, but
later in the day notified the court it would not.
Jerry Strickland, a
spokesman for Attorney General Greg Abbott, said the case was left to CPS staff
attorneys because "they have a specific expertise and knowledge base"
in the relevant law.
A lawyer familiar
both with family law and state politics, who asked not to be named, had a
different explanation for the attorney general's unwillingness to put his name
on the appeal.
"This was a
political statement to the judges: I'm the attorney general and I think this is
too scary, and you better know the same thing," he said.
When the Austin
Court of Appeals previously ruled that CPS had overstepped its authority, a
Salt Lake newspaper reported: " 'We are being briefed by DFPS (the
Department of Family and Protective Services, which includes CPS), who is
determining the next step,' governor's spokeswoman Krista Piferrer said, making
it clear the governor was not named in the legal action."
No, but he appoints
the commissioner and the entire nine-member board of the Texas Health and Human
Services Commission, of which CPS is a part.
If this state had
leaders, they would be trying to help CPS handle this terribly difficult case
in the best possible manner – not treating the agency like the proverbial
red-headed stepchild.
At least
no one died in this standoff
Waco Tribune Herald
Sunday, June 08, 2008
John Young
Parents
of the polygamist sect in Eldorado have their children back, but they aren’t
all in the clear.
Until
the DNA speaks, it’s not clear who’s a parent and who, as a child victim,
became a parent.
Criminal
charges may spring from what remains in play after the Texas Supreme Court
ruled Child Protective Services overreacted when it took 440 FLDS children into
custody.
If
this was a certifiable overreach, as two appellate courts say, I gladly vote
for this over the chain of reactions in 1993 which left charred corpses on a
blackened patch of prairie outside Waco. The initial concerns in that debacle were
the same.
In
that case, to prosecute something that started out as a child abuse case,
officials chose federal SWAT teams in cattle trailers over caseworkers and
deputies.
The
feds opted for flash-bang grenades over diplomacy. They chose a big production
over a quiet arrest of David Koresh away from the compound on the many
occasions in Waco when he was being a guitar-loving messiah about town.
In
the resulting shoot-out, 51-day standoff and horrific end by fire, 85 people
died.
The
DNA ultimately would speak to crimes that demanded someone’s attention. Koresh
fathered 13 children who died in the fire. Some were the result of his bedding
minors.
Throughout
those events, in which Waco became the media center of the universe, I got to
sample a bizarre night-and-day divide of letters to the editor from two groups
of outraged people.
On
the one hand were the locals who wrote, “Support law enforcement.” On the other
hand were faxes from afar (before most of us were e-mailing) denouncing law
enforcement as “jackbooted Nazi thugs.”
In
either case, the observers were blind to the culpability of those with whom
their sympathies lay. Both the feds and the Branch Davidians were egregiously,
horrifically at fault.
Now,
with the case in Eldorado, I’ve seen mass e-mailed letters to newspapers like
ours flinging charges at Texas for Gestapo tactics and for pursuing “fictional
abuse.” We’ve also heard from a “polygamy rights” group.
Breathe
deeply.
The
state’s claims — that 31 teenage girls were impregnated — were way off. It
turns out that all but five were legal adults.
This
may sound to you like an exoneration of the FLDS. It may also bring to one’s
mind the phrase “a little bit pregnant.” Five pregnant children is no small
deal.
Sect
members say all was consensual. Texas law says, “If she’s a minor, there’s no
such thing.”
FLDS
members now say they no longer will countenance marriages involving minors, a
confession of something forbidden in the first place.
Once
again, feel free to denounce CPS for overreaching and exaggerating. I vote for
child advocates who move their feet when clear suspicions present themselves.
Due
process has prevailed thus far in this child abuse investigation. It had no
such opportunity in 1993.
The
investigation continues in Eldorado, as it should. In the incident that became
known as “Waco,” all the truth that was left about the crimes that first
alerted investigators was in the DNA.
By
rene howitt
Jun
9, 2008 10:45 AM | Link
to this
The
public needs to understand that returning children to the abusive/neglectful
parent is the norm. CPS=Child Protective Services not....Parental Rights....but
watch how the system works. Due to the parental rights laws returning children
to their parents is the goal of the system. What the parental rights law
presumes is that the "best interest" of the child is served by
"family reunification." So in the vast majority of child abuse cases
children will be removed by CPS to protect the child. However, CPS is mandated
by law to set up a service agreement with the parents so that reunification can
happen. The judge in this case overrode the service agreements returning the
children to the parents sooner. Everyone needs to understand the children would
have went back anyway because....reunification is the ultimate goal. Anyone
having a problem with this need not take their anger out on CPS, they have to
follow the law and the courts interpretation of the law. Maybe we, as a
society, need to take a look at this law! Anyone wanting to have a better
understanding of this law really impacts the lives of children who have already
been abused needs to read "Whose Best Interest". The unintended
results of this parental rights law are the reason we have most of the problems
we have within our child protection agencies. www.whosebestinterest.com
Children who are abused do love their parents they just want the abuse stopped.
Their first choice would be for their parents to get healthy so they can live
with them in a loving, nurturing, permanent environment. Children are also
naive and certainly don't understand that most often this will never happen. As
our government spend billions of dollar nationally trying to make these parents
get this so that reunification can happen, the children are lingering in foster
care and then ultimately lose their entire childhood. The law needs to address
this issue but doesn't. Children often want things that aren't good for them.
This law has been in place for over three decades, so here is the question we
need to ask.....If the experts and law were so right on....why aren't we seeing
better results by now? Children who are failed by their parents and then
ultimately the system set up to protect them will grow up angry. Angry children
become angry adults. Angry adults will act out on society. So the cycle
continues.
Wall
Street says -2 + -2 = 4 as companies claim gains from growing liabilities
It's legal
but 'it doesn't make sense,' professor says.
BLOOMBERG NEWS
Tuesday, June 03, 2008
Leave it to Wall
Street to profit from its own distress.
Merrill Lynch &
Co., Citigroup Inc. and four other U.S. financial companies have used an
accounting rule adopted last year to book almost $12 billion of revenue after a
decline in prices of their own bonds. The rule, intended to expand the
"mark-to-market" accounting that banks use to record profits or
losses on trading assets, allows them to report gains when market prices for
their liabilities fall.
The new math, while
legal, defies common sense. Merrill, the third-biggest U.S. securities firm,
added $4 billion of revenue during the past three quarters as the market value
of its debt fell. The decline was the result of higher yields demanded by
investors who were spooked by the New York-based company's $37 billion of
writedowns from holdings hurt by the subprime mortgage collapse.
"They can post
substantial gains as a result of a decline in their own creditworthiness,"
said James Cataldo, a former director of treasury risk management for the
Federal Home Loan Bank of Boston and now an assistant professor of accounting
at Suffolk University in Boston. "It's completely legitimate, but it
doesn't make sense by any way we currently have of thinking of net
income."
The paper profits
have helped offset more than $160 billion of writedowns taken by U.S.
financial-services companies during the past year. Now some investors and
analysts say the winnings are illusory and might have to be reversed.
"The piper
will have to be paid eventually," said Robert Willens, a former Lehman
Brothers Holdings Inc. analyst who left the New York-based firm this year to
become an independent consultant.
The debate over what
is known as Statement 159 adds to the number of accounting techniques called
into question as the U.S. debt market unravels. Investors have criticized banks
for booking some writedowns in an accounting category called "other
comprehensive income" that bypasses their income statements. Accounting
rulemakers are now proposing changes to standards that let banks use
off-balance-sheet vehicles to juice earnings without tying up precious capital.
Statement 159,
formally known as the "Fair Value Option for Financial Assets and
Financial Liabilities," was issued in February 2007 by the Financial
Accounting Standards Board, or FASB, which sets U.S. accounting rules. It was
adopted by most large Wall Street firms in the first quarter of last year and
becomes mandatory for all U.S. companies this year, although they have wide
latitude in how to apply it, if at all.
The rule was
enacted after lobbying by New York-based companies, led by Merrill, Morgan
Stanley, Goldman Sachs Group Inc. and Citigroup, which wrote letters to FASB
arguing that it wasn't fair to make them mark their assets to market value if
they couldn't also mark their liabilities.
Companies are
allowed to decide for themselves which of their outstanding bonds, loans and
other liabilities will get mark-to-market treatment. That's an unprecedented
degree of leeway, said Willens, who is also an adjunct professor at Columbia
University in New York. "It's kind of a dumb rule. In the entire panoply
of accounting, this is the most flexible and elective and optional rule that we
have."
Here's how it
works, according to Richard Bove, an analyst at New York-based Ladenburg
Thalmann & Co. A company decides to designate $100 million of its
subordinated bonds as subject to mark-to-market accounting. The price of the bonds
drops to 80 cents on the dollar from 100 cents. So the firm books $20 million
on the "presumed savings that you have on your liabilities," Bove
said. "In the real world you didn't save a dime. You still owe the $100
million."
The Federal
Reserve, Federal Deposit Insurance Corp., Office of the Comptroller of the
Currency and Office of Thrift Supervision objected to the rule before its
passage, saying in a joint 2006 letter to the FASB that it would "have the
contrary effect" of increasing a bank's net worth at the same time its
"financial condition is deteriorating."
The regulators
remain so skeptical that they refuse to let banks apply the phantom revenue
toward minimum capital requirements, according to reporting rules posted on the
Web site of the Federal Financial Institutions Examination Council. Deborah
Lagomarsino, a spokeswoman for the Federal Reserve, declined to comment.
"The statement
was thoroughly discussed with users and preparers" in advance of its
publication, said Neal McGarity, a spokesman for Norwalk, Connecticut-based
FASB. A March survey by the CFA Institute, a Charlottesville, Virginia-based
group that administers a financial-analyst designation program, showed that 74
percent of investors think the standard "has improved market integrity,"
he said.
Merrill has said
its gains from the liabilities don't add to true earnings power. In a
spreadsheet posted on its Web site, Merrill says that investors who want a
"more meaningful period-to-period comparison" should exclude the $2.1
billion of revenue recorded in the first quarter.
Spokespeople for
Merrill, Lehman, Morgan Stanley, Goldman, Citigroup and JPMorgan declined to
comment. Merrill owns a passive 20 percent stake in Bloomberg LP, the parent of
Bloomberg News.
Bank
Downgrades Drive Dow Lower
New York Times
June 3, 2008
By MICHAEL M. GRYNBAUM
Stocks
markets fell on Monday after a trio of Wall Street’s biggest banks were hit
with a ratings downgrade, leaving investors shaken and worried that additional
billion-dollar write-downs and losses may be in the offing.
The
Dow Jones industrials were down
140 points as the session wound to a close.
Shares
of Lehman Brothers, Merrill Lynch and Morgan Stanley — marquee names in the investment banking
world — sank after a major ratings agency, Standard & Poor’s, issued a
downgrade and said it had lost some confidence in the banks’ ability to meet
financial obligations.
Lehman
shares fell 7.2 percent, Merrill dropped 3.4 percent and Morgan Stanley
declined 3 percent.
In
addition, the rating agency revised to negative outlooks for two other
investment firms — Bank of America and JPMorgan Chase. JPMorgan shares
dropped 2 percent and Bank of America 1.5 percent.
The
discouraging news came twinned with a shake-up at a yet another bank, Wachovia, which ousted its chief executive, G. Kenneth
Thompson, after a string of painful losses on mortgage-related assets.
Wachovia’s stock dipped 2.2 percent, to $23.36, its lowest level since 1995.
And Washington Mutual said it would strip its chief executive,
Kerry E. Killinger, of his chairman post.
Banks
and other lenders and financial services firms watched their stocks fall in
tandem, sending the Standard & Poor’s 500-stock index down about 1 percent.
The Dow was off nearly 200 points for much of the afternoon, sliding to
12,456.10 before 3:30 p.m. and erasing its gains from last week. The Dow
recovered a bit just before the close
Crude
oil prices rose to $127.58, up 23 cents, while the euro fell against the
dollar. The yield on Treasury bonds fell.
The
developments on Wall Street revived fears that the tight credit market, which
has led to the virtual collapse of billions of dollars of assets, would
continue to bedevil banks in the coming months. Shares of Citigroup were down about 2 percent.
The
report from Standard & Poor’s cited a fragile outlook for financial markets
as a cause for the ratings downgrade.
“Write-downs
will likely continue to depress earnings,” the report said. S.&P. also said
banks had not sufficiently calculated the risk of some of their investments,
and said it expected revenues to decline.
A
middling batch of economic data added to the gloom, after a crucial measure of
manufacturing activity showed that the industry contracted for a fourth
consecutive month.
The
Institute of Supply Management’s activity index rose to 49.6 in May from 48.6
in April, on a scale where readings below 50 indicate contraction.
Separately,
the government said that spending on construction projects had fallen 0.4
percent in April to $1.12 billion, although commercial construction ticked up
for the month.
Gramm-UBS Lobbyist Questions Dog McCain Campaign
Newsweek
Monday, June 9, 2008-06-02
by: Mark Hosenball, Newsweek
For weeks now, John McCain's presidential campaign
has faced awkward questions about the outside activities of several top
advisers. Add one more name to the list: former Texas senator Phil Gramm,
McCain's longtime friend and one of his five campaign co-chairs. (A sixth,
former congressman Tom Loeffler, quit recently after NEWSWEEK reported on his
lobbying work for Saudi Arabia.) According to McCain spokeswoman Jill
Hazelbaker, the co-chair position affords Gramm "broad input into the
structure, financing and conduct of the campaign." She added that Gramm,
who has a doctorate in economics, is also "a valued voice on economic
policy." Gramm is not a paid McCain adviser, but his day job-vice chairman
of a U.S. division of Zurich-based financial giant UBS-could pose new tests for
a candidate who has promised high ethics standards and ditched advisers who
failed to meet them.
UBS has recently written off huge losses in
subprime-mortgage-based securities, and last week liberal bloggers noted that
Gramm was a registered UBS lobbyist on mortgage-securities issues until at
least December 2007.
Newsweek has learned that UBS is also currently the
focus of congressional and Justice Department investigations into schemes that
allegedly enabled wealthy Americans to evade income taxes by stashing their
money in overseas havens, according to several law-enforcement and banking
officials in both the United States and Europe, who all asked for anonymity
when discussing ongoing investigations. In April, UBS withdrew Gramm's lobbying
registration, but one of his former congressional aides, John Savercool, is
still registered to lobby legislators for UBS on numerous issues, including a
bill cosponsored by Sen. Barack Obama that would crack down on foreign tax
havens. "UBS is treating these investigations with the utmost seriousness
and has committed substantial resources to cooperate," a UBS spokesman
told NEWSWEEK, adding that Gramm was deregistered as a lobbyist because he spends
less than 20 percent of his time on such activity. Hazelbaker said the McCain
campaign "will not comment on the details ... of ongoing investigations
and legal charges not yet proved in court."
McCain's campaign is already distancing itself from
some of Gramm's other work for UBS: his involvement in attempts to sell
financial products known as "death bonds," which BusinessWeek
described last summer as one of "the most macabre investment scheme[s]
ever devised by Wall Street." Not long after joining UBS, the Houston
Chronicle reported, Gramm helped lobby Texas officials, including Gov. Rick
Perry, to sign on to a UBS proposal in which revenue would be generated for a
state teachers' retirement fund by selling bonds, whose proceeds would in turn
be used to buy annuities and life-insurance policies on retired teachers. UBS
would advance money to the retirement fund, then repay itself, compensate
bondholders and pocket profits when insurance companies paid off on retirees
who died. According to a banking-industry source, who asked for anonymity when
discussing a sensitive matter, Gramm was involved in efforts to pitch similar
UBS products to other financial institutions.
Gramm's office declined NEWSWEEK's request for
comment. A source familiar with the bank's current business, who also asked for
anonymity, said UBS no longer markets the kind of plan that Gramm was allegedly
trying to sell to Texas. Hazelbaker said that McCain, who has been critical of
the financial industry's performance in the subprime market, disapproves of
death bonds and "supports increased accountability, transparency and
capital backing in our financial markets as a solution to these problems."
Death bonds, she continued, "move markets away [from]-not toward-these goals."
El Paso Times
06/04/2008
Brandi Grissom
AUSTIN -- The Texas environmental agency is suing the state's top attorney,
hoping to keep secret documents related to its decision earlier this year to
allow the Asarco smelter to reopen in El Paso.
The
Texas Commission on Environmental Quality, or TCEQ, filed a lawsuit Thursday
against Texas Attorney General Greg Abbott after he ordered the agency to
release records about Asarco to state Sen. Eliot Shapleigh, D-El Paso.
This
type of lawsuit, an Abbott spokesman said, is "very, very rare." The
agency is challenging the constitutionality of a decades-old open-records law
that allows legislators access to confidential information about agencies they
oversee.
Buck
Wood, an Austin lawyer who is representing Shapleigh, said the case could
reverberate through the Capitol because the TCEQ argues that lawmakers should
not be privy to information that would allow them to monitor state government
and write laws to solve problems that arise.
"To
claim that's somehow unconstitutional is laughable, but that's the position
they're taking," Wood said.
TCEQ
spokeswoman Lisa Wheeler said the agency did not comment on pending litigation.
The
TCEQ in February granted Asarco LCC, which owns the smelter, a five-year permit
allowing its smelter to restart over the objections of local leaders in El
Paso, New Mexico and Mexico. Opponents say the smelter would pollute the
region's air, while Asarco argues its operation would be clean.
After
that decision, Shapleigh asked the agency to provide him a list of documents he
suspected could reveal possible illegal interactions between Asarco lawyers and
TCEQ commissioners.
Texas
law prohibits agency decision-makers from having one-sided communications with
parties in contested cases.
Texas
law also allows state legislators access to inside agency information that
might otherwise be considered confidential.
The
agency challenged Shapleigh's request. It asked Abbott to allow the documents
to remain confidential, in part, because they were communications between
attorneys and their clients. TCEQ attorneys also said Shapleigh's request would
raise questions about the constitutional separation of powers between the
legislative, executive and judicial branches of government.
Abbott,
however, told the TCEQ last month to give Shapleigh the information.
"The
commission has failed to sufficiently demonstrate that such interference is
present," wrote Justin Gordon, an attorney in Abbott's open records
division.
TCEQ
attorneys gave Shapleigh some documents.
They
filed a lawsuit in Travis County to keep the rest secret and argue that the law
Abbott said entitles legislators to review agency information is an
unconstitutional breach of the separation of powers.
"That
principle forbids excessive interference by the legislative branch in the
business of the executive branch," TCEQ attorneys wrote.
Tom
Kelley, an Abbott spokesman, said the lawsuit had recently arrived, and he
could not comment. The attorney general has until June 23 to file a response.
Only
one-half of 1 percent of the open records rulings the attorney general makes
each year wind up in court, Kelley said.
Shapleigh
said he planned to join the lawsuit and press for the information from TCEQ to
determine whether the agency broke the law when officials met with Asarco
lawyers.
Already
released court documents in Asarco's bankruptcy proceedings, he said, show that
attorneys for the company met with TCEQ officials.
"When
polluters run the agency, the public is not protected," Shapleigh said.
Asarco
public relations representative Teresa Montoya declined to comment for this
story.
Company
officials have previously said that their attorneys met with TCEQ officials but
that their interactions were neither illegal nor improper.
Wood,
Shapleigh's attorney, said it appeared that TCEQ wanted to keep something from
the light of legislative scrutiny.
"It
is very extreme," he said. "Very few agencies have fought over
something like this."
Brandi
Grissom may be reached at bgrissom@elpasotimes.com; 512-479-6606.
Waco Tribune Herald
June 2, 2008
AUSTIN — State officials and bureaucrats are still using a
state airplane fleet to shuttle them around the country, even though Texas
leaders tried to disband the fleet to save taxpayer dollars five years ago.
Officeholders
including Gov. Rick Perry use the service to fly to meetings, award ceremonies,
funerals and even a neighboring GOP governor's inauguration. Flyers say they
look at cost and efficiency before deciding whether to use the aircraft, which
range from $258.75 to $977.50 per flight-hour.
But
critics question the necessity of the fleet, since bills are often footed by
taxpayers and commercial airfare may be cheaper.
"It
sure does raise the eyebrows and make the nose crinkle a bit," said
Michael Quinn Sullivan of Texans for Fiscal Responsibility. "Between two
really good Texas-based airlines, there's any number of options to get from
anywhere to anywhere by air pretty quickly."
Then-Comptroller
Carole Keeton Strayhorn and Perry talked about selling the planes during the
2003 budget crunch.
But
the Texas Department of Transportation, which oversees the fleet, expects it to
log 1,227 more flight hours this two-year budget period than last. The planes
are expected to fly a total of 3,350 hours at a cost of $2.3 million this
budget cycle.
"State
agencies have seen the value of our services as an effective business
tool," said Texas Department of Transportation spokesman Chris Lippincott,
noting the cost to fly on commercial airlines "continues to rise and its
reliability continues to deteriorate."
In
choosing a state plane, officials say they consider factors including the
number of people traveling, availability of commercial flights and whether the
costs and delays of overnight stays can be avoided.
Many
of the trips are paid by the state, including a $3,962 trip by Perry, a staffer
and a member of his security detail to Baton Rouge for the inauguration of
Louisiana Gov. Bobby Jindal, a fellow Republican.
An
online booking service currently shows round-trip commercial flights for less
than half of what the state paid for the Louisiana trip: $480 per person or
$1,458 for three people. Perry spokeswoman Allison Castle noted Perry's
schedule and commercial flight schedules play into such decisions.
Perry,
who heads the Republican Governors Association, spoke at the prayer breakfast.
"I'd
want to know, did he go to (Democratic New Mexico Gov.) Bill Richardson's inauguration?"
asked state Rep. Jim Dunnam of Waco, head of the House Democratic Caucus.
"If he didn't go to Richardson's, I think it's pretty apparent this is a
partisan political trip. If he's going to do that, he ought to do it on his own
dime. ... Taxpayers shouldn't pay for it."
Perry
spokesman Robert Black dismissed the idea that the trip was political.
"Most
Texans recognize that the states of Louisiana and Texas have a unique
relationship that has grown out of the natural disasters that happened a few years
ago," Black said.
Perry's
Baton Rouge trip was among a slew of state-airplane records covering the six
months ending in March examined by the San Antonio Express-News and Houston
Chronicle.