After the Billionaires Plundered Alabama Town, Troops Were Called in ... Illegally
Editor's Note: The shocking transfer of public wealth to Wall Street's pockets is illustrated vividly in Mark Ames' article below, which covers some very disturbing recent events in Alabama, where billionaires and banks are squeezing the locals so hard that they're literally going bankrupt just for flushing their toilets, where violence and the threat of violence are reaching a boiling point and where even the Posse Comitatus Act is under threat. "We have to tolerate the inequality as a way to achieve greater prosperity and opportunity for all," said one Goldman Sachs vice-chairman recently. Well, here's a tale of the kind of inequality the finance industry expects citizens to tolerate.
One of this year's more disturbing stories that were ignored was the illegal Army occupation of Samson, Alab., in March following a shooting spree that raged across two towns by a disgruntled worker, leaving 11 people dead.
As I wrote at the time, Michael McLendon, 27, went on a killing rampage following years of relentless corporate exploitation and harassment against him, his mother (whom he mercy-killed), and the entire rural Alabama region, which suffered like so many parts of rural America at the hands of billionaire goons like chicken oligarch Bo Pilgrim of Pilgrim's Pride notoriety.
One of the creepiest details to emerge in the shooting rampage were reports that troops from nearby Fort Rucker were brought into Samson and other surrounding areas to patrol the streets. This is a clear violation of the Posse Comitatus Act, every freedom-loving American's worst nightmare.
And now, finally, the Army officially agrees that its occupation of the Alabama streets was illegal, according to an internal report the Associated Press got a hold of, following a Freedom of Information Act filing:
An Army investigation found that soldiers should not have been sent to man traffic stops in a small Alabama town after 11 people were killed in March during a shooting spree.
An Army report released to the Associated Press on Monday in response to a Freedom of Information Act request said the decision to dispatch military police to Samson from nearby Fort Rucker broke the law. But an Army spokesman said no charges have been filed following the Aug. 10 report.
The report from the Department of Army Inspector General found the use of military personnel in Samson violated the Posse Comitatus Act, which prohibits federal troops from performing law-enforcement actions. The names of those involved were redacted from the report.
According to the report, the officer's "intent was to be a good Army neighbor and help local civilian authorities facing a difficult, unique tragedy affecting the local community. There were no apparent adverse collateral effects to the support provided."
Indeed. For a lot of Americans, the sight of troops occupying their towns is their worst nightmare come true -- part of the reason that America came into existence was to create a country where this sort of thing would never happen, even if the Army's sole intent was to be a good neighbor and help old ladies cross the streets.
Strangely enough, there was almost no media coverage of the occupation -- you had to rely on various right-wing outlets like CNSNews.com, whose article I blogged at the time, or the left-wing Democratic Underground.
But what even the right-wing anti-government people won't report is the true reason why the Army was called out in the first place, something that goes right back to the cause of the shooting rampage: billionaire exploitation of the local Alabamans, not just by the chicken oligarch, but from higher up the predator food chain -- Wall Street banking behemoth JP Morgan Chase.
You see, thanks to a combination of corporate-tax holidays (which reduce local revenues), billionaire greed like the sort that bankrupted Pilgrim's Pride, and Wall Street investment-banking scams on places like Alabama that result in corrupted local officials and bankrupted municipalities, counties and states -- now, there's no money left to fund local police forces, as the U.S. Army report reveals:
The soldiers arrived in the hours after the shootings, which stretched the town's tiny police force and county officers to the limit with several different crime scenes. The report said troops were dispatched after the Geneva County Sheriff's Office and Samson Police requested assistance from Fort Rucker to relieve law enforcement at traffic checkpoints around the crime-scene area.
As I wrote earlier this year, Pilgrim's Pride hooked up with Wall Street to leverage itself into bankruptcy while enriching the executives' family and a handful of insiders at the expense of tens of thousands of Americans workers:
In 2006, Pilgrim's Pride, then the second-largest chicken processor in the world, made a huge gamble that will seem familiar to anyone who's been following the financial crash: the company borrowed hundreds of millions of dollars, leveraging itself well beyond its means, in order to acquire a rival company and become the nation's No. 1 chicken processor, slaughtering 45 million chickens per week.
That might have given the executives a nice, big hard-on, but it also meant they would have to come up with more money to pay for all that debt. So the company did do what every post-Reagan company has done and gotten away with: it made the workforce pay for the executives' bonuses.
That meant squeezing lower-middle-class workers for more work for less pay, or in Pilgrim's case, more work for no pay: In August 2007, the U.S. Department of Labor filed a lawsuit against Pilgrim's Pride accusing it of grossly undercompensating its employees. That same year, 10,000 Pilgrim's Pride employees launched a class-action lawsuit demanding compensation for their work.
The damage extended well beyond Pilgrim's Pride's plants. With bankruptcy came huge unpaid local tax bills, leading to further layoffs and reduced services for the already-beleaguered locals:
Suwannee County could be out about $2 million if Pilgrim's Pride doesn't pay its property-tax bill, according to property appraiser Lamar Jenkins.
The biggest taxpayer in the county filed for bankruptcy protection Dec. 1. Now it's not clear when -- or if -- the bill will be paid.
"It's certainly going to put a hurt on the budget of the county," Jenkins told the [Suwanee] Democrat by phone Thursday. Jenkins said the unpaid bill represents 7.4 percent of the money local schools get from property taxes; 5.3 percent of county funds from that source; and 8 percent of the money the Suwannee River Water Management District receives from local property-tax revenues.
A spokesman for Pilgrim's did not respond to a request for comment.
Bo Pilgrim, the head of Pilgrim's Pride, once told his Texas church that he was worth over $1 billion before the market crash, and he's still worth hundreds of millions. His rapacity was boundless, and in the end it was the undoing of Pilgrim's Pride -- not the Pilgrim family, mind you, which is still filthy disgusting rich, but the company is through.
Last month, 64 percent of Pilgrim's Pride was sold to JBS, a Brazilian beef giant, making it the largest meat company in the world, topping America's Tyson. The American cattle industry tried to block the deal, which it says could result in the destruction of the American beef industry, but the Justice Department already approved JBS' takeover.
In the billionaires' Third World model for America, it makes awful sense that a Brazilian meat company would take control of a bankrupt, corrupt American chicken company. For Wall Street and the billionaires, the more they destroy in America, the richer they get, consequences be damned. And anyway, it's not like Pilgrim's Pride was a model of corporate responsibility while under American ownership; just read some of the comments on this recent Reuters article:
Gilmer, Texas, Sep. 8, 2009 -- working as a supervisor in mt pleasant plant use to be injoyable, but lately they expect you to work 50/70 hours for no extra pay. pilgrims pride does not care about family life just their money. Everyone is afraid to say anything, because upper management may let you go with no warnning because you voiced your oppion
robert, Carrollton, Ga. -- i work carrollton,ga former goldkist plant we were goldkist 1 plant now we fill like we in pure hell working for pilgrim pride these people want you to kiss there ass and work three times hard for same money no rasied in two years old chicken farmer
Doddridge, Ark. -- While I was raising chickens for Pilgrim's Pride, I became friends with many lower management employees of the company. The manner in which they were terminated was just simply unmerciful. While the growers had the brunt of the financial devastion, many that were nearing retirement were left with no prospects of employment in the near future. I know some that have had to uproot their families and settle for a considerable more modest lifestyle with their retirement benefits in doubt after a number of years of employment. It is just a shame that Bo Pilgrim has pocketed the money of many hard working people. I still believe Bo needs to be in the jail cell next to Bernie Madoff.
The comments section is where you'll find the real, unvarnished, ungrammatical rage among America's cheated majority, because for the most part, people are too desperate and afraid to complain in public.
But here's the rub: Selling Pilgrim's Pride to a Brazilian meat monopoly doesn't mean things will get better for Alabamans. Just weeks after the buyout was announced, Pilgrim's Pride closed another plant, this one in northern Alabama. According to the AP:
A chicken-processing plant owned by Pilgrim's Pride Corp. is shutting down this week after almost six decades, putting more than 600 people out of work and creating ripples that will be felt all over town.
The city of almost 20,000 is preparing for the end of a relationship that began in 1952 when James Beasley founded Sweet Sue Poultry, which originally ran the plant. Owners included Beatrice Foods and ConAgra before Pilgrim's Pride purchased the business in 2003.
Which looks a lot like an even more depressing Pilgrim's Pride story from a few months earlier, this from rural Arkansas. The town of Clinton filed a lawsuit in June against Pilgrim's Pride, accusing it of turning the town into a "ghost town":
"With its largest and sole remaining employer, Pilgrim's, now evacuated, the city faces a crisis of revenue, bond payments and economic devastation, and as a result of the Pilgrim's evacuation is threatened with becoming a modern-day ghost town," the lawsuit filed by the city said. "This serious economic situation is, however, a direct consequence of Pilgrim's illegal purpose in shuttering the Clinton plant and operations."
This story is repeated all over the rural South. So guess who put together the deal that bankrupted Pilgrim's Pride? Lehman Bros., the king of bankruptcy.
On the other side of the deal, serving Gold Kist, was Merrill Lynch, which also collapsed last year. But Merrill's banker in the Pilgrim's Pride acquisition is still doing well, thank you very much. In fact, he was recently hired by JPMorgan Chase as vice chairman of mergers and acquisitions.
Which makes perfect sense, because JPMorgan Chase has been laying waste to Alabama on a level that makes Pilgrim's Pride's destruction look downright humanitarian. JP Morgan Chase has plundered so much wealth from one county in Alabama, using a complex derivatives scheme and old-fashioned bribery, that some locals are calling it "Armageddon." According to Bloomberg:
In its 190-year history, Jefferson County, Ala., has endured a cholera epidemic, a pounding in the Civil War, gunslingers, labor riots and terrorism by the Ku Klux Klan. Now this namesake of Thomas Jefferson, anchored by Birmingham, is staring at what one local politician calls financial "Armageddon."
The spectacle -- a tax struck down, about 1,000 county employees furloughed, a politician indicted over $3 billion in sewer debt that may lead to the largest municipal bankruptcy in history -- has elbowed its way up the ladder of county lore.
"People want to kill somebody, but they don't know who to shoot at," says Russell Cunningham, past president of the Birmingham Regional Chamber of Commerce.
Jefferson County's debacle is a parable for billions of dollars lost by state and local governments from Florida to California in transactions done behind closed doors. Selling debt without requiring competition made public officials vulnerable to bankers' sales pitches, leaving taxpayers to foot the bill for borrowing gone awry.
[T]he county bet on interest-rate swaps, agreements that a representative of New York-based JPMorgan Chase & Co. told commissioners could reduce their interest costs. Instead, the swaps -- covering more than $5 billion in all -- blew up during the credit crisis after ratings for the county's bond insurers fell.
JPMorgan, through spokeswoman Christine Holevas, declined to comment for this story.
Yeah, why bother commenting to the public when you own the bastards? JPMorgan, which took $25 billion in direct bailout money and tens of billions more in backdoor subsidies and handouts, just posted a massive $3.6 billion quarterly profit, and has set aside at least $11.1 billion for management bonuses. Meanwhile, Alabamans can't afford to flush their toilets.
This is what inequality looks like. From Wall Street, it must look extremely appealing; for the rest of America, it's a nightmare that's only getting worse.
So far, it's clear that Birmingham and the entire Jefferson County are following the wretched script of a typical Third World scenario, where the Wall Street bankers corrupt the politicians and eventually bankrupt the place and then, while the corpse is still warm and the bankruptcy deals are cut, Wall Street makes sure it's first in line to profit off the chaos it created, while its corrupt local shill (in this case Birmingham's mayor) takes the fall for the crime of accepting the JP Morgan bribes … and the locals get screwed worst of all, paying off the bill for years or decades.
Just this week, it emerged that Goldman Sachs, employer of Brian "Inequality Is Good" Griffiths, bilked the state of New Jersey using a similar scheme involving interest-rate swaps on bonds that don't even exist. According to Bloomberg, New Jersey is considering raising its gasoline tax to pay the $1 million a month they have to pay out to Goldman for the scam -- a regressive tax that once again takes from the struggling middle class and poor, and puts in thepockets of the billionaires.
Meanwhile, over in Jefferson County, Ala., there's so little left to steal from the impoverished locals that Wall Street has been forced to come up with a new, grotesquely evil plan to line their pockets: taxing the local residents for taking a shit:
In August, Bank of New York Mellon Corp., as trustee for owners of about $3 billion in sewer warrants, filed suit in Jefferson County Circuit Court seeking an appointed receiver for the sewer system. The receiver should have authority to raise rates enough to meet the debt service, the bank said in the complaint, which is pending. The sewer system is already charging customers about 300 percent more to drain bathtubs or flush toilets than a dozen years ago.
By one county estimate, average annual bills are now about $750, compared with the national average of $331, according to a 2007 survey by the Washington, D.C.-based National Association of Clean Water Agencies, a coalition of utilities.
It's impossible to boost them enough without putting them beyond the means of many residents, County CommissionerJim Carns says. "We're like a guy making $50,000 a year with a $1 million mortgage."
In Wall Street's eyes, Alabamans really do shit gold.
The thing now will be to convince the locals to use their toilets rather than, say, gas to heat their homes.
As I wrote a few months ago, Jefferson County residents have become so desperate that they're being forced to choose between water and heating, as this article shows:
As nighttime temperatures plunged in Birmingham, Ala., last October, Dora Bonner had a choice: either pay the gas bill so she could heat the home she shares with four grandchildren, or send the Birmingham Water Works a $250 check for her water and sewer bill.
Bonner, who is 73 and lives on Social Security, decided to keep the house from freezing.
"I couldn't afford the water, so they shut it off," she says.
Bonner's sewer bills have risen more than fourfold in the past decade. So have those of others in Jefferson County, which has 659,000 residents and includes Birmingham, the state's largest city.
The logical outcome of the billionaires' plundering of Alabama is the same thing that happens all over the Third World: violence, fear and calling in the troops, the only way to secure the billionaires' dirty profits:
In August and September … Jefferson County residents got a taste of what bankruptcy might look like. As the county began putting about 1,000 workers on leave without pay, one disgruntled employee allegedly e-mailed bomb threats to officials and was promptly arrested, according to the Jefferson County Sheriff's Office.
Lines soon formed outside the courthouse as such tasks as renewing driver's licenses slowed.
A kind of legal civil war broke out when three county agencies -- the sheriff's department, an indigent-care hospital and the tax-assessor's office -- sued the county commission to stop the budget cuts on the grounds that they posed a danger to public safety.
Bettye Fine Collins, the commission president, declared the situation, "our Armageddon."
The state's response is right out of the Central America banana republic playbook: When there's no money left for the people, send in the troops.
The cuts in the sheriff's department budget were so severe that he was planning to call in the National Guard to keep order:
The sheriff in Alabama's most populous county may call for the National Guard to help maintain order, a spokesman said Tuesday, as a judge cleared the way for cuts in the sheriff's budget, and lawmakers reached a compromise they hope will end the budget crisis.
In light of all of this, the Army's brief, illegal occupation of a string of towns in Alabama this past spring no longer looks like a freak one-off, but rather a logical progression in the ongoing billionaire plunder of America.
It gives new meaning to what MSNBC host Dylan Ratigan is calling "corporate communism." Not only are banking billionaires on permanent state wealthfare, but even worse, as the wealth available becomes increasingly scarce and there isn't enough left to satisfy the billionaires' grotesque appetites and regular citizens' needs to flush their toilets or heat their homes, we're heading to the point that all Third World countries come to -- calling out the troops to ensure that the peasants pay their tithes to their absentee masters in New York and Connecticut and don't get all uppity like those Europeans.
Now you can see why Alabamans are loading up on so many weapons. That makes sense. Now they need to understand who the real enemy is. Not the make-believe liberal bogeymen of their nightmares. Rather, Alabamans should focus their anger on the real-world billionaires who are making this country a living hell.