DC Report

Here's the truth about COVID inflation

Lots of luck right now trying to find a bicycle for under a thousand dollars. And if you insist on building a new house right now the price of lumber will be dear, adding perhaps $4,000 to construction costs for a typical home.

But don't assume that ruinous inflation is on the way. It's not. These are just temporary bumps and those who just wait a bit will see prices fall back.

It may be hard to appreciate this given all the scary stories in the news about inflation, stories that often lack context and nuance. But don't be scared.

And don't pay attention to the brief ups and downs in the price of stocks because half of American stock trading is done not by investors but by traders whose computers move so fast they can be in and out of a stock in less than a second. Besides, stocks don't make goods or services so they aren't part of the economy that creates jobs and produces paychecks.

Yes, the news is full of unsettling stories about inflation, but if you read carefully, you'll notice that the talk is about prices rising perhaps 4% this year. Not a big deal.

Indeed, the highest inflation rate ever in our country was 29.8% in 1778. Since 1913, the highest rate was 19.7% in 1917, according to Investopedia. In 1946, inflation was 18.1%

In 1979 and 1980 combined, prices rose by a quarter. Now that would be scary today, but that is not what is happening.

Post-WWII Boom

This is more like 1946 when soldiers and sailors came home and wartime rationing left huge deficits in people's demand for goods. No cars or trucks had been built in America, other than to prosecute World War II, since 1941. People were getting married, so they needed homes and apartments and there was a boom in babies that lasted until the end of 1964. That made prices soar even though the economy fell into a brief recession as we moved from a wartime economy to a peacetime economy.

That was then; this is now. The pent-up demand from the pandemic is for only 15 months, not almost four years as in the 1940s.

Also, today, we have 8.2 million fewer jobs than before the Covid pandemic. We should have added another three million or so jobs since the coronavirus first appeared in America. That means millions of households are struggling just to pay the rent and eat. But for the social safety net spending under both Trump and Biden, we would be in a very deep recession. Instead, our economy grew 6% in the first quarter, roughly double the growth under Trump in his first three years.

Working, Spending Less

At the same time many millions of households, a large majority of them, continued working. Their spending fell, however, because they didn't have to go into work. They stopped going out to restaurants as they ate at home. Dry cleaners saw their customers evaporate. These people deferred spending on vacations and big purchases like cars and trucks.

Some of those who kept on working paid down or paid off their debt. Others added to their savings. In both cases they are primed to spend. That will mean a surge in consumption, but it won't last.

'Price Indifferent'

These folks can afford to be what economists call price indifferent. They may not be happy about it, but if the price of a bicycle doubles, they can just hand over the money. That won't go on for long. Bicycles are still being manufactured and once the surge in demand is fulfilled retailers will no longer be able to charge premium prices.

For the 12 months ending in April overall inflation, before adjusting for seasonal factors, was 4.2%, according to the government Bureau of Labor Statistics. That's the highest rate in this century, but it's not ruinous.

Used Car Prices Zoom

Prices of used cars and trucks accounted for a third of the inflation in the past 12 months. These prices were up 10% in April, the government reported. Prices surged because people who have put off buying used vehicles rushed to market as the economy and jobs began opening.

The prices of some foods are up right now because after 15 months of limited mobility, some shortages of crop workers and weather, both droughts and deluges. Trump's tariffs that savaged the price of American soybeans and enriched Brazilian soybean farmers also played a role.

These are temporary effects. We always see such temporary effects after a major shock to the economy.

We still have a shortage of money in the hands of most Americans. Purchasing by those who were able to save a great deal more during the pandemic in the short term is causing this blip of inflation.

Think Peaches vs. Plums

This is pretty much the same effect we see when bad weather ruins the peach crop and prices rise so much that many people decide to eat plums, apricots or apples instead. Likewise, when a bumper crop of peaches hits the market and prices fall, people by fewer plums, apricots and apples.

The key reason inflation is not going to turn long-term and ruinous is the huge excess cash held by those toward the top of the income and wealth ladders. They have far more cash than can be profitably invested. Just a year ago there was serious talk the banks might start charging people to hold their cash, which we have seen in a very limited fashion in Europe.

America is so awash in cash, though highly concentrated cash, that banks pay a tiny fraction of 1% on savings accounts. If you have $25,000 in your bank it may pay just 20-cents interest each month.

That's because demand for cash in the business world is extremely weak compared with the oceans of greenbacks being held in checking, savings and money-market accounts.

Every day, banks pitch mortgages to people with solid credit scores at about 2% interest. Back in the early 1980s, mortgages ran 12% to 14%.

So, if all the flowers budding in the warming Spring weather are making you desire a new bicycle, just hold off for a bit. Ride your old bike, arrange to borrow your neighbor's or take a walk. As soon as the people who are price indifferent have fulfilled their demand for new bikes, prices will fall back.

Why Congress and the White House aren't treating the Colonial Pipeline security breach seriously enough

Whether the cyber-attacks that shut 5,500 miles of oil pipeline this weekend are coming from private crooks or a state-sanctioned effort is almost beside the point. Somehow our response to this attack, as the big one apparently triggered by what looked like Russian-sponsored hackers on government agencies and companies last month, ought to be generating a lot more urgency.

The idea that a small group of bad guys in a faraway darkened room can control our electric grid, our fuel supplies, our business functions, our very defenses virtually at will should be as frightening as the prospect of powerful bombs in the likes of Iran or North Korea.

In 10 minutes, these same people will be in a position to send electric cars and trucks awry or kill appliances of industrial-scale built with Internet or network connections.

Instead, what we're hearing is much concern about whether oil and gas costs are going to go up in the next weeks as the result of immediate shortages in delivering 2.5 million barrels of oil a day or almost half of production across the East Coast. Actually, if operations are restored within a week, even that result is unlikely.

What we're not hearing our Democratic and Republican leaders on the barricades over cyber at anywhere near the volume we hear harangues about nonexistent election fraud already six months old or whether so-callef socialism is going to end the American Dream as we know it or about a dozen cancel culture disasters that some perceive.

Instead, our Congressional leaders seem content holding occasional check-in hearings and leaving the actual work to the Cyber Command agencies to resolve.

One might even call such defenses critical to, um, infrastructure in a realistic look at current technology.

It might be nice to see an approach to international policing approach the fervor of our continuing community policing debate.

Colonial Pipeline system map (CP)

In the next week, the administration is expected to issue an executive order intended to bolster the security of federal and private systems after two major attacks from Russia and China in recent months caught by surprise American companies and intelligence agencies.

Meanwhile, Colonial Pipeline, a private company, is being tight-lipped over whether it plans to pay a ransom demanded by the suspected criminal hacker group, or has already paid, or when normal operations will resume from closings ordered to prevent further problems from the hackers.

The FBI, the Energy Department and Cyber Command at Fort Meade, Md., all have dived into the detective work, along with FireEye, a private security company hired by Colonial.

This time, officials said they believed the attack was the act of a criminal group, rather than a nation seeking to disrupt critical infrastructure in the United States. But at times, such groups have had loose affiliations with foreign intelligence agencies and have operated on their behalf. That doesn't make it better.

Breaking In

Ransomware is the uncharted attempt by evildoers to threaten damage to computers connected into a network, encrypting the business data that control increasingly vast operations in return for payment of millions of dollars and the decryption code. It's kidnapping without emotion. When backed by state powers, it veers into somewhere beyond espionage and into an actual act of war.

The recent disclosure of a massive breach of government agencies and corporations explains sanctions against Russia last month. If there is more retaliation planned, we won't know about it until Moscow's red lights turn green. We still don't even know how deep and wide the break was. In either case, this is where I'd like to see all that Law & Order haranguing wasted on suppressing votes and threatening jail time for peaceful protests go instead. Where's the Blue in these cases? Where's the send-troops-to-Afghanistan-for-20-years demand?

Colonial Pipeline, based in Georgia, said the ransomware attack Friday affected information technology systems and that the company moved proactively to take certain systems offline, halting pipeline operations, to forestall further damage.

I've worked in news companies that dealt with hackers who entered networks that were private and not connected to the Internet, and experienced both in the fear that our newsroom operations could be touched—they weren't—and in the difficult creation of defensive shields and practices. Hackers often can find doors opened through getting an employee to unintendingly allow a malicious piece of software to enter through an otherwise innocent-looking email. Or they can criminally seek to obtain employee identification information allowing more direct access.

It can be hard to protect against in a working environment or a society that prizes individualism over security, which is exactly where America finds itself. We're relying more and more on machinery and the networks that increasingly operate it, often without human intervention. That creates opportunity for bad guys.

The Associated Press notes that while there have long been fears about U.S. adversaries disrupting American energy suppliers, ransomware attacks by criminal syndicates are much more common and have been soaring lately. The Justice Department has a new task force dedicated to countering ransomware attacks across types and size of businesses or agencies.

So far, the advice in the security industry and government alike is akin to coronavirus—take heed of the problem and take common-sense steps toward hardening network defenses. There are no vaccines that outlast the latest and greatest hacker attempts.

Rising Attacks

Attacks by criminal syndicates operating out of Russia and other countries reached epidemic proportions last year, costing hospitals, medical researchers private businesses and state and local governments and schools 10s of billions of dollars, AP reports. Average ransoms paid in the United States tripled to more than $310,000 last year, as compared with the cost of an average outage of business for 21 days for each incident, according to security firm Coveware.

American cyber folks say that some of these criminals have worked with Russia's security services and that the Kremlin benefits by damaging adversaries' economies and cover for intelligence-gathering.

Anne Neuberger, the Biden administration's deputy national security adviser for cybersecurity and emerging technology, told AP that the government has an effort under way to help electric utilities, water districts and other industries defend themselves. The goal seems to be to ensure that control systems serving 50,000 or more Americans have the core technology to detect and block attacks. The White House has announced a 100-day initiative aimed at protecting the country's electricity system by encouraging owners and operators of power plants and electric utilities to improve capabilities for identifying cyber threats to their networks.

U.S. Cyber Command and the Department of Homeland Security last month released details on eight code files attributed to the Russian Foreign Intelligence Service that were used in the so-called Solar Winds attacks discovered earlier this year. The disclosure was described as part of "Hunt Forward" operations to generate insights to understand the source of attacks.

It's not exactly 100 million shots of vaccine in the arm in 100 days, but it is a start. I'd prefer that we wipe out the bad guys rather than issuing sanctions and warnings to protect ourselves.

All roads for Biden's infrastructure plan lead through West Virginia

Moderate Republicans announced yesterday, Earth Day, a counter-offer to the Biden administration's $2 trillion-plus infrastructure proposal.

Led by Sen. Shelley Moore Capito (R-W.Va.), the moderates put out a two-page glossy marketing blurb that significantly scales down Biden's package. It cuts critical infrastructure investment and has a price tag of $568 billion.

Some of the ways Republicans suggest going from $2 trillion to $568 billion are by cutting the investments in safe drinking water and essential repairs on public schools.

As it happens, Capito's own state of West Virginia is playing a pivotal role in hindering Biden from moving forward with his historic infrastructure package. The two senators from West Virginia—Capito and Joe Manchin (D-W.Va.)—may be from opposing sides of the aisle, but they have each put up similar obstacles that the Biden team must navigate to get its much-needed infrastructure package through.

No Corporate Tax Increase

The common theme among the two West Virginian senators? Both senators are doing their best to ensure that wealthy corporations don't have to pay for the much-needed upgrades of the nation's infrastructure.

Their views ignore two big problems for the majority of their constituents: West Virginia desperately needs infrastructure improvements, and both senators promised constituents they were going to advocate for, not obstruct, it.

In a unique power dynamic, West Virginia's Manchin is the Democrats' major roadblock in passing Biden's plan by threatening to vote against the bill, while Capito is the GOP's point person in trying to severely trim a package that could add 2.7 million jobs.

Manchin's reasoning? He says he won't vote for the bill if the corporate tax rate is raised from the 21% rate enacted under Trump to 28%. The rate before Trump was 35%, so the Biden plan is a halfway restoration.

The GOP plan announced by Capito doesn't have any mention of corporate America paying for the plan. Instead, the GOP suggests that users of electric vehicles get taxed.

A 51-Vote Majority

The Senate parliamentarian ruled that a simple majority of 51 Democrats can pass Biden's infrastructure package and some other legislation, circumventing the Senate's arcane filibuster rule that requires 60 votes for most legislation.

But this only works so long as all 50 Democrats are unified, allowing Vice President Kamala Harris to break the tie.

That Democrat Manchin won't vote for the bill if the corporate tax is increased, puts the other West Virginia senator in a unique position. Capito is standing somewhere between Biden and Mitch McConnell (R-Ky.) The notoriously obstructionist Senate minority leader, McConnell, vowed that no Republican will vote for Biden's proposal.

But McConnell will have an especially tough time corralling all Republicans. Many promised major infrastructure spending all throughout the Trump presidency but never delivered—not even when the party held majorities in both houses of Congress.

As far back at the Continental Congress, infrastructure spending has been the preferred bring-home-the-bacon move for representatives and senators. There are few less controversial ways to spread federal dollars on home-state projects.

Moderate Republicans

And in recent months a loose, if tight-fisted, coalition of Republican senators has emerged, showing some willingness to stray from McConnell's sternly shepherded senatorial flock. In February, seven senators voted to convict in Donald Trump's second impeachment trial. And 10 Republican senators, including Capito, proffered a Covid relief package that, like Thursday's infrastructure counteroffer, would have cost hundreds of billions less than Biden's.

Both Manchin and Capito say that they want to improve their desperately poor state's infrastructure. Twenty percent of West Virginia's bridges are deemed structurally deficient, the worst in the nation. West Virginia broadband quality and access rank 45 out of 50. And the state has the worst drinking water in the country.

Joint Efforts

In November, Manchin and Capito jointly secured a federal investment of $485,000 to improve water from the Appalachian Regional Commission (ARC), a partnership between the federal government and 13 states. Biden just nominated Joe Manchin's wife Gayle Manchin to be the co-chair of ARC.

The two senators put out a joint statement taking credit for the ARC money, and Manchin promised to keep fighting for more "good-paying jobs and ensuring our fellow West Virginians have access to basic human needs such as clean drinking water."

Biden's infrastructure plan invests $111 billion to improve water infrastructure. So why isn't Manchin advocating for West Virginia's share of this historical and unprecedented level of investment?

"Everything that's being proposed is a drop in the bucket compared to what's needed," said Stephen Smith the co-chair of a group called WV Can't Wait.

Big Campaign Donors

Overall, Smith speaks of West Virginia with pride, but he also points to frustrations after 150 years of "outside interests getting rich off of West Virginia. First timber; then coal; now natural gas, agribusiness and Big Pharma."

So it's no surprise to Smith that Manchin may hold up national legislation to protect corporate interests, "His top donors are financiers, corporate leaders—he doesn't answer to the people of West Virginia. He's made a career of doing for those at the top."

Eric Engle, of the Mid-Ohio Valley Climate Action Group, also supports Biden's infrastructure bill. He considers the climate change component of the bill a game-changer for the Mid-Ohio region.

"This infrastructure bill is an enormous start, and we support it." He points to all of the jobs it probably would create in West Virginia: "Good jobs, union jobs, family-supporting jobs, living wage jobs and all with a focus on a sustainable green economy."

'DINO Joe'

Like Smith, Engle isn't surprised Manchin—whom he calls "DINO Joe," as in Democrat in Name Only—may block any investment:

"If you're a Democrat, why are you blocking your own party's initiatives? Why is it that the vast majority of the time you seem to be more supportive of the Republican objective?"

Arguably, since Trump overwhelmingly won in West Virginia, a Democratic senator is considered especially vulnerable in the state. Both Engle and Smith dismiss this as a media narrative not reflective of reality.

Manchin, who was governor before running for the Senate, is not up for re-election until 2024. "If he keeps holding up progress on the Democratic platform in the Senate," says Engle, "no West Virginia Democrats are going to vote to re-elect him."

Powerful Position

All this again puts Capito in an unusually strong bargaining position. Despite her own low-ball proposal, Capito is on the record saying there's plenty in the Biden plan that she likes. She expressed confidence after a February White House meeting with Biden and Transportation Secretary Pete Buttigieg, and last month she positively promoted parts of Biden's plan.

Capito is leading the infrastructure negotiations. But it remains to be seen whether she—like Sen. Susan Collins (R-Maine), who led moderate Republicans to offer a severely downsized version of the Covid bill—will, in the end, choose to vote no if Biden turns down her skinflint counterproposal.

Unlike Collins, who had no particular dog in the Covid hunt, Capito has long tied her political fortunes to winning federal dollars for West Virginia improvements. To ultimately obstruct her very own pet projects would, no doubt, leave her with a lot to explain to folks back home.

If Biden and the Democrats find themselves scrambling for 50 votes, they might still have to make a pilgrimage to West Virginia—to woo Capito rather than Manchin.

They'll just have to hope that bridge doesn't collapse as they cross it.

Here's the case for increasing the size of the US House of Representatives

Across the country today, newspapers are headlining the results of the 2020 Census and the coming reapportionment of the U.S. House of Representatives. There are, the Census Bureau tells us, now 331,449,281 Americans in the 50 states and the District of Columbia, up 7.4% from 2010.

Booming Texas was the decade's big winner, with 3,999,944 new residents and two new members in the House. One of those Congressional seats will come from poor, struggling West Virginia, which lost 59,278 people and one representative in the House.

Unlike my colleague, Terry H. Schwadron, I'm willing to concede that the census count is accurate. It's impossible to take an exact count of a nation the size of the United States on one day once a decade, but what the Census Bureau has done every 10 years is plenty good enough.

But while accepting the Census results, I strenuously object to the fairness of the apportionment. There is no reasonable justification for how the 435 seats in the House of Representatives are divvied up every 10 years. There is sound mathematics behind the process of apportionment, but bad politics and worse governance.

We must increase the number of seats in the House.

Each member of Congress is supposed to represent roughly the same number of citizens. In a perfect world, we would divide the number of citizens by the number of seats, and each representative would come from a district with about 760,000 people.

Representing Growth

But apportionment doesn't work that way. First, the Constitution guarantees one representative for each state, cutting the apportionment pool to 385 seats. From there, the process of apportionment undergoes some arcane calculations that tend to, but don't always, grant faster-growing states more seats and slower-growing states fewer. So Texas wins; West Virginia loses.

More unfathomable, however, is Montana, which gained just 95,000 new residents and a new member of Congress while Michigan, which grew by 194,000 people, loses a Congressional seat. Nevada grew by 15% (404,000 new citizens), and Oregon grew by 10.6% (406,000). Nevada keeps its four House seats, but Oregon gains one and soon will have six votes in Congress.

Different Sized Districts

As bad as the unfairness of reapportionment is the huge disparity between the populations of various districts. Consider the least populated state, Wyoming with 577,000 people. They have one representative in the House, the same Congressional vote as the 990,000 citizens of Delaware.

For those keeping score, that means that Rep. Liz Cheney's (R-Wyo.) seat in the House is worth 42% more than Rep. Lisa Blunt's (D-Del.).

Rhode Island's two representatives come from districts with about 549,000 residents, but Hawaii's two House members each represent about 728,000 people. And remember those now two Montana representatives? They'll be coming from districts with populations of about 542,000. Next door in Idaho, two representatives come from districts with 920,000 residents each.

This has to stop. The current House of Representatives makes a mockery of the fundamental democratic (and republican) notion that one vote is equal to another. The screwball U.S. Senate makeup, where the 2.5 million cows of Wyoming have the same vote as the 40 million people of California, is bad enough. But the House is supposed to be more representative of the people. It's not.

That's because 100 years ago, the size of the House was fixed at 435 members—one seat for 244,000 people, one-third of today's figure. It was no coincidence that the House was fixed with the 1920 Census, the first in which the majority of Americans were living in cities. The argument at the time was that the House was growing too large, too unwieldy for proper governance.

Rural Dominance

Malarkey. It was an undisguised ploy to retain control of the House by rural political interests.

In 1920, only 15 states were majority urban. By fixing the number of House seats, the 33 majority rural states could assure themselves of a two-to-one advantage among the then 48 unapportioned House seats.

Plus, it already was apparent in the 1920s that long-term demographic trends would tend to favor the regions outside the heavily urbanized Northeast. Fixing the size of the House and basing reapportionment on growth rates pretty much assured that Congressional voting power would flow to the West and South.

Texas and Florida have gained Congressional seats every decade since 1920. New York has lost seats every 10 years since 1940, even as its population has grown to 20 million from 13 million. Heavily urbanized California is losing a seat from the first time in history despite gaining five times the number of new residents as Oregon and 24 times as many as Montana.

The only way to address these kinds of disparities is to significantly increase the size of the House. This can be done with simple majority votes in Congress — another argument against the filibuster; no Constitutional amendment required.

By my figuring, under a fair apportionment plan based on House districts equal to the smallest state, the House next year should have 573 members. That's one member for every 577,000 people—the number of people represented by Liz Cheney's sole Wyoming House seat. By assigning the value of one house seat as the population of the smallest state, we would immediately discount the unapportioned advantage of the small states while significantly reducing the number of constituents for each representative.

Narrower Spread

Such apportionment won't do away with the difference in the size of districts. South Dakota's two representatives (one more than the state is entitled to today) would come from districts with 443,000.

At the other end, North Dakota would still have just one representative for 779,000—still a wide spread, but narrower than we currently have.

The problem could be ameliorated by the fact that no state's people would ever again lose representation. It is indefensible, for example, that Ohio, which grew from 11.5 million in the 2010 Census to 11.8 million in 2020, should have to lose a representative, but Mississippi, which lost 6,000, holds its four House seats. What political logic is that?

As to the argument that the House will grow too large, it's been too small for a century. It has to catch up. If the House grows in tandem with the country (or more precisely, with the smallest state) it will be many, many decades before the current house chamber in the Capitol will require expansion. More than 1,600 people fill the chamber for the annual State of the Union address.

Nor would an increased House result in an unwieldy number of representatives. Other legislatures do quite well with far more members. The U.K.'s House of Commons has 650 members representing a nation one-fifth the size of America, France's lower house has 577 members, and Germany's parliament has 709. Even the rubber-stamp legislatures of Communist Cuba (612), North Korea (687) and China (2,980) outrank us.

Finally, as much as we should do away with the Electoral College, such a move is unlikely. Increasing the size of the House will at least mitigate some of the arcane system's stupidity, diluting some of the power of the smaller states while enhancing the power of the larger ones. It's not the end-all and be-all, but it needs to be done.

Louis DeJoy strikes again: How our postal service helped Amazon win controversial Alabama union battle

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After the failed union vote at an Amazon warehouse in Alabama, the critical postmortems ignored a reality that may result in another election: Amazon cheated.

And Louis DeJoy, the Trump-era holdover dismantling the U.S. Postal Service, helped.

A May 7 labor board hearing will consider a request for a new vote sought by the Retail, Wholesale and Department Store Union. Its complaint details a campaign of intimidation to pressure employees to reject the union.

The Labor Board has a long history of looking the other way when given evidence of cheating by employers in union elections. But this time may be different because of who helped cheat --- from local on up to national officials.

The Jeff Bezos company installed drop boxes to collect votes on company property. Amazon placed these boxes despite being told by the National Labor Relations Board staff not to do so.

The drop boxes were placed with the connivance of the service led by DeJoy. Former President Donald Trump installed this high-rolling donor to worsen mail delivery during the fall presidential election Trump was hellbent to win. Less mail, less votes; less votes, less competition.

Here, we use the pejorative verb connivance because the drop box installed inside Amazon's Bessemer parking lot did not carry any postal insignia.

Amazon can leverage the Postal Service because Amazon has made itself crucial to USPS finances.

The Postal Service generated nearly $4 billion in revenue from Amazon in 2019 and counted an eye-popping $1.6 billion of that in profit. The volume of business Amazon delivered grew bigly last year because of the coronavirus pandemic.

This reliance on Amazon for highly profitable business likely explains why, beyond his well-documented anti-union animus, DeJoy would help Amazon fight the union.

The struggle between American workers and the bosses has been, and continues to be, fantastically lopsided.

A pro-union worker, Jennifer Bates, told reporters last month that colleagues at the Bessemer Fulfillment Center were reluctant to deposit ballots in the mysterious drop box that suddenly appeared in the parking lot.

Workers Feared Amazon

"Some of the people are afraid to put them in there," Bates said. "The 'yes' voters feel that Amazon will probably try to steal their ballots."

Labor lawyer Brandon Magner tweeted: "If Amazon did install these mailboxes, or if they exercise control over the mailboxes, such as having a key to the ballot box, that would clearly merit setting aside the election if the union were to lose."

During the voting, which lasted from Feb. 8 to March 29, Amazon demonstrated just how crucial controlling the Bessemer warehouse parking lot — and what went on inside it — was to the company.

'Coercion and Intimidation'

The union made the following claims:

  • Amazon hired police officers to patrol the parking lot and surveil interactions between employees and union organizers. The constant presence, according to the union's protest filing, "created an atmosphere of coercion and intimidation thereby interfering with the right of employees to a free and fair election."
  • The company used local government officials to change policies governing employees exiting the workplace. Amazon got the timing on a traffic light located outside the facility changed so union organizers wouldn't have much time to approach departing workers.
  • Workers were forced to sit through hours of mandatory indoctrination meetings. These sessions, often used by companies to scare workers into believing their jobs will disappear if they vote for a union, are often effective with workers who have not yet experienced the benefits of collective bargaining.

Without a union, individual workers have no power. And while some who voted against the union told journalists after the vote that Amazon paid them well, the issue is whether it should pay them even better along with improving their benefits and work rules.

Record Profits

Last year, Amazon reported a profit of $24.2 billion before taxes, up from $13.9 billion in 2019 and almost 10 times its 2016 pretax profit.

Amazon pays little in federal income tax. In 2020 its "effective federal income tax rate of just 9.4%, less than half the statutory corporate tax of 21%." So said Mathew Gardner of the Institute on Taxation and Economic Policy earlier this year when Amazon announced its latest financial success.

Amazon has been so successful that a dollar invested when it first sold stock in 1997 has now grown to $2,300, making it one of the most fantastically profitable investments even in this era of high profits in high tech.

While the company doesn't want to share more of its gains with the blue-collar Americans whose labor makes its profits possible by quickly fulfilling orders, it does lavish money on its executives. One reason to favor the top is that the way Amazon pays executives provides a stealth financial and tax subsidy.

Costly Stock Options

The company showered so many valuable stock options on its highest-paid people that the tax savings alone came to more than $600 million last year, Gardner calculated.

Stock options save companies on corporate income tax. The companies get to deduct their value even though the cost is borne by existing stockholders. The stockholders' share of the company is diluted by the new shares given to executives. In other words, it's a tax deduction that costs the company nothing.

Options are also a form of compensation that cost the company nothing, unlike the hard cash it must pay out to rank-and-file workers like those at the Bessemer warehouse.

What's most troubling about this union election is that a federal government corporation worked with management against the workers. That's a troubling sign of authoritarianism.

Remember Amazon worked in concert with the service to install the dropbox to collect ballots on company property. The service acted after staff at the Labor Board, the federal agency tasked with protecting the rights of American workers in the private sector, told them they couldn't do it. But just as it pressured workers, Amazon pressured the service into pleasing Bezos, the richest person in America.

No Answers

Dave Partenheimer, a postal public relations manager, would not talk about who ultimately gave the go-ahead to install the dropbox in the Amazon warehouse parking lot.

Partenheimer declined to say whether the service knew that the Labor board already denied Amazon's request for such a dropbox. He also declined to identify who ultimately approved installation.

Instead, Partenheimer reiterated an earlier statement about a "Centralized Box Unit [CBU] with a collection compartment" being "suggested by the postal service as a solution to provide an efficient and secure delivery and collection point."

The Labor board isn't talking about the dropbox either, at least not while it considers the 23 separate objections filed by the Retail Store, Wholesale and Department Store Union.

The Labor board spokeswoman, Kayla Blado, declined to comment on whether the Postal Service has the authority to supersede her agency's decisions. She would not even confirm that the agency did, in fact, deny Amazon's request to have a ballot drop box installed on its property.

DeJoy Strikes Again

The persistent controversy about the dropbox and the Bessemer vote overall, however, parallels the madness that surrounded mail-in ballots during the last presidential election. DeJoy ordered the removal of mail sorting machines in the run-up to the vote, while the rest of the Trump administration whined about the supposed inability of the Postal Service to properly deliver ballots.

Trump also complained throughout his four years in office that the Postal Service was subsidizing Amazon. This was to advance his attacks on the aggressive reporting by The Washington Post, which Bezos owns, but whose newsroom he has never influenced according to the top editor and reporters working there.

We now know that the prices Amazon paid generated outsize profits for the Postal Service, exposing yet another Trump lie though only a few Americans, like DCReport readers, know this.

Fought Mail-in Votes, Then Didn't

At first, Amazon fought hard to block mail-in voting. It dismissed the potential dangers of in-person voting during the pandemic. Then it reversed course and challenging the ability of the Postal Service to deliver mail-in ballots in a timely fashion. Taken together it was a classic case of Amazon talking out of both sides of the company's mouth.

Lisa Y. Henderson, the Labor board's acting Region 10 director, dismissed the company's contradictory arguments in January and ordered that balloting be conducted by mail.

How the Labor board rules, and whether the long list of federal rules that hobble union organizing, will be addressed by President Joe Biden's administration. Decisions will be crucial to whether Americans as a whole prosper, or we continue to create inequality through policies that tilt heavily to the side of business owners and investors.

The struggle between American workers and the bosses has been, and continues to be, fantastically lopsided.

The Economic Policy Institute's Unequal Power Project, for instance, notes an "inherent imbalance in bargaining power between employers and employees" that creates "a lack of freedom in the workplace."

Pro-union workers at Amazon's Bessemer Fulfillment Center remained undaunted after losing the initial vote, declaring, "This battle has just begun."

"I'm not discouraged, Linda Burns told reporters after losing the vote by a more than 2-to-1 margin. "This is the beginning. [Jeff] Bezos, you misled a lot of our people. We're going to fight for our rights."

Co-worker Emitt Ashford said if the Labor board does order a new election, "We would see a change in the tide now that people have the information."

"We would win," he said.

How Elaine Chao used her Trump cabinet post to help her family make millions

In January 2017, upon her confirmation as secretary of the Department of Transportation, Elaine Chao committed to separating herself from her family's shipping interests. Looking back on the last four years, it's clear she didn't.

In an administration awash with emoluments and ethics concerns, it has mostly flown under the radar just how much Chao, who is married to Senate Republican leader Mitch McConnell, stood to gain financially from her position as secretary of transportation and how government watchdogs failed to challenge her repeated wrongdoings.

The Chao family business is deeply entangled with Beijing. The Chao family dry bulk ship company has borrowed hundreds of millions of dollars from Chinese banks, all of which are partly or fully owned by the communist regime.

In 2019, Elaine Chao faced some criticism for public appearances with her family members that seemed to be elevating the profile of the family business long after she was sworn in as transportation secretary.

The report shows clearly that numerous documented Chao actions could be felonies under federal laws designed to avoid official favoritism.

Walter Shaub, the former head of the Office of Government Ethics, said Elaine Chao's actions appeared to be a clear abuse of power. "This is the kind of thing you would use in a training class to teach government officials what a misuse of a position looks like," Shaub said. "This conduct falls into the category of extreme rather than gray."

Case Referred to Justice Department

What the public knew was minor, though, compared to the damning facts in a 38-page inspector general report that was hidden until after the Trump administration ended. That report revealed that in December 2020 the inspector general referred its findings about Chao's conduct to the Justice Department for criminal prosecution.

Attorney General William Barr, whose policy was to personally review all cases involving high-level Trump appointees, declined to prosecute Chao. A spokesman for Chao said that the Justice Department's decision not to prosecute "closes the book" on the issues and exonerates Elaine Chao.

Does it?

The inspector general made extensive findings that have astonished ethics officials in Washington, some of whom say they've never seen anything like it. The report shows clearly that numerous documented Chao actions could be felonies under federal laws designed to avoid official favoritism.

Fleet Value Doubled

Significantly, during the four years Chao served as transportation secretary, her family's shipping business did exceptionally well.

Her father, James Si-Cheng Chao, fled mainland China after communists lead by Mao Zedong won the Chinese civil war in 1948. Chiang Kai-shek's defeated Kuomintang Party withdrew to Taiwan. Chao and his wife Ruth Mulan Chu Chao went first to Taiwan, where Elaine, the oldest of their six daughters, was born in 1953 in Taipei.

Chao, a ship captain in his 20s, made his way to New York. In 1964 he started acquiring dry bulk ships, when he landed his first big contract with the United States government, shipping rice to Southeast Asia during the Vietnam War. Often referred to as "Dr. Chao," he received an honorary degree from the Massachusetts Maritime Academy in 2018.

The family's shipping firm, Foremost Group, operates mainly between the United States, Brazil and Canada and China with more than 70% of their freight going to China. The company has done so well that it donated $40 million for a building at the Harvard Business School named for Elaine Chao's mother, a graduate of that school.

The family business grew substantially over the four years that Elaine Chao was in the Trump cabinet—by almost half a million dollars a day. Its fleet value when Chao assumed office in January 2017 was valued at half a billion dollars, but its value more than doubled to $1.18 billion by the time she left office, according to VesselsValue, a private vessel valuation service which shared its analysis with DCReport.

According to VesselsValue, the Chao family fleet in January 2017 consisted of 22 vessels. After selling off some of their older ships and ordering new vessels, the family fleet will reach 32 vessels this summer.

Chao-McConnell Net Worth Grows

Most of the wealth of Chao and McConnell have disclosed in their annual government ethics filings comes from her inheritance when her mother died in 2007. She received as much as $25 million from her mother, these forms indicate.

Elaine Chao has no stake in the family business, a point emphasized by her staff in their interviews with the inspector general. That is true but misleading.

She still had a lucrative reason to use her government position to tout her father's shipping company. It encouraged shippers to choose it rather than competitors because of her ties to Trump, and it helped the company expand because it was more attractive to mainland China and Taiwan bankers. So long as she remains in the good graces of her father, it is likely she stands to inherit a second time along with her five sisters, a contingent interest that could be worth many tens of millions of dollars.

List of Abuses

With that background, here are some telling examples of Elaine Chao using the Transportation Department as a promotional arm to build the profile and reputation of her family's Sino-American shipping empire. The report focused on 14 events the secretary attended or planned to attend with her father between 2017-2018, including the 50th anniversary of the Dept. of Transportation, among other instances of mixing family matters with her official duties:

    • Chao planned a China trip in which she would be accompanied by her father and sister, Angela Chao, CEO of Foremost Group. Draft itineraries included book signings and appearances for her father and her family joining her in official events and high-level meetings. State Department personnel at the American embassy in Beijing were alarmed at this plan, which was a breach of well-developed protocols about mixing official duties and family business. The trip was ultimately canceled because of diplomatic staff concerns. While planning that trip, a transportation department official emailed the secretary about whether her father wanted to meet with a former classmate, thought to be former Chinese President Jiang Zemin. Arranging such a meeting would not be appropriate conduct for a government agency.
    • Various department staffers were charged with providing media and public affairs support to the secretary's father, even maintaining lists of his awards and creating a media strategy and public relations plan for him and Foremost Group. Chao had her staff, on taxpayer time, edit a chapter from a book on her father, and she directed department public affairs staffers to edit her father's Wikipedia page. The department's public affairs director devised and recommended a strategy "amplifying the coverage in regional [Chinese] press, a means to build Chao's profile and to share the story of his journey."
    • Repeatedly transportation public affairs staffers arranged media coverage and coordinated photo opportunities for Elaine Chao and her father. They arranged targeted in-depth interviews with the secretary and her father intended solely for the Chinese market. In one event where Elaine Chao was asked to speak, the former secretary first asked if they would be distributing 500 copies of her father's biography, Fearless Against the Wind. When Elaine Chao was invited to be the keynote speaker at a maritime event, she asked the sponsors to give her father an award, evidently as a condition of coming. Once the secretary got confirmation of an award for her father Elaine Chao agreed to attend. Arrangements for that event included placing a copy of her father's book on the chair of each attendee at the gala.
    • Elaine Chao asked transportation staff to act as personal assistants for her and her family, especially her father. They were instructed to organize repairs of his personal belongings, schedule personal appointments for him, FedEx him Christmas ornaments – and sending the secretary and Sen. McConnell a list of those ornaments – and to get Chao to autograph photos for Transportation Department files.

The inspector general's investigators interviewed transportation ethics lawyers, who revealed that "they had no record of a request to provide ethics advice" for a number of the specific events listed above. More often than not, Chao's top staff failed to bring potential conflicts to the attention of the ethics lawyers, as required by longstanding policy.

Ethics Policy Ignored

When ethics lawyers were consulted they emphasized how the secretary should minimize her connections to the Foremost Group and their transportation interests. The ethics lawyers outlined specific steps to ensure her official government position was not conflated with Foremost in a way that advantaged the reputation and prestige of the family business.

Nevertheless, Chao cultivated her and her family's image in China. The New York Times reported that the Secretary's official calendar showed at least 21 interviews or meetings with Chinese-language news organizations in her first year as transportation secretary.

Before Chao's confirmation, conflict of interest issues were raised. Her spokeswoman said no conflict existed because Elaine Chao had no "ownership stake" in Foremost. That statement ignored her contingent interest provided she remains in the good graces of her father in a business with ships valued at more than a billion dollars, a business that would prosper if shippers believed choosing Foremost Group ships would curry favor with the Trump administration.

The investigation into former Secretary Chao started in June 2019 under the direction of Acting Inspector General Mitchell Behm. In May 2020, after many on Chao's staff had been interrogated and the direction of the IG investigation had become clear inside Transportation, Trump tried to remove Behm using the limited power presidents have to fire IGs.

Watchdog Conflict

The Inspector-General Act requires that an inspector general be appointed "without regard to political affiliation and solely on the basis of integrity and demonstrated ability." The act was intended to, but in this case failed to, insulate inspectors general "from political retribution," a common Trump administration theme.

Behm was one of five inspectors general whom Trump attempted to remove as their staffs were digging into corruption in his administration. Trump was unable to remove Behm but had to wait for the Senate to confirm Trump's nominee to take over.

Trump's nominee as the new inspector general at transportation was the head of its pipelines safety office. The nominee was to retain his pipeline job while also becoming inspector general, an unusual arrangement putting a subordinate in a post that is supposed to be independent.

McConnell to the Rescue

Still in his acting position, seven months after Trump had tried to remove him, Behm sent Chao's file to Justice with a referral for a criminal investigation. It was sent to the Justice Department on Dec. 16, 2020. After one justice office declined to open an investigation, the inspector general's report was sent to a different part of justice the next day.

The reaction was swift. That same day, Dec. 17, McConnell, Chao's husband, abruptly brought to the Senate floor a vote to confirm Trump's nominee to be the new Transportation inspector general.

The first vote failed but ultimately on Dec. 21, the nominee was confirmed on a party-line vote of 48 to 47. That ended Behm's acting role. Of the five inspectors general that Trump tried to fire, the only one removed was the one investigating McConnell's wife. Behm has since returned to his previous position as deputy inspector general at transportation.

On the last week Trump held office, Attorney General Barr declined to prosecute Chao. Whether the Biden administration will review that under Attorney General Merrick Garland is unknown.

A new plan to combat money laundering starts by beefing up an existing federal crime-fighting department

Money laundering, both for terrorist finance and tax evasion, threatens national security. Now a private group that watches the quality of anti-money laundering efforts has put forth a smart plan to modernize and upgrade our government's capacity to track illicit cross-border financial transactions.

This is news you will be hard-pressed to find elsewhere.

Global Financial Integrity has a plan, and it's a good one, to better America's Financial Crimes Enforcement Network. FinCEN, as it's known, is a critical government agency housed at Treasury and staffed heavily with IRS financial sleuths. It doesn't get nearly the respect or budget it deserves.

Global Financial Integrity is itself an underappreciated Washington nonprofit funded by a host of sources including the Ford Foundation and five governments, though not the United States. On a budget of not much more than $1 million per year, it has done solid work calling attention to the growing problem of illicit finance.

At least $40 trillion of illicit money sloshes around the globe…maybe $50 trillion.

Jim Henry, DCReport's economics correspondent, has spent decades documenting the flow of illicit money. He estimates from analysis of official banking and trade documents that at least $40 trillion of illicit money sloshes around the globe. The total may be $50 trillion.

To get an idea of the gigantic size of that bag of corrupt money consider this: Henry's lower-end estimate almost equals the combined annual economic output of the world's two largest economies, America and China.

Global Financial Integrity, in a report titled "Enhancing National Security by Re-imagining FinCEN," makes these recommendations:

  1. Give the FinCEN director a seat on the Deputies Committee of the National Security Council (NSC) to raise the agency's stature within the national security community.
  2. Create within FinCEN a National Anti-Money Laundering Data Center for advanced data collection, synthesis, analysis, and distribution to law enforcement for AML activity.
  3. Establish a "Manhattan Project" to identify, develop and use state-of-the-art technologies needed to fulfill the technology for that data center.
  4. Launch within FinCEN a National Anti-Money Laundering Training Center which will be an anti-money laundering knowledge and education hub for FinCEN staff, financial institution regulators, law enforcement at the federal, state, and local levels and for both state and federal prosecutors.
  5. Create a Strategic Analysis Team to examine emerging and long-term trends in money laundering methods and computer technologies to counter those threats.

Those are superb ideas all. But will Congress care?

A core problem with hunting for terrorist finance is that the tools used to sift through billions of transactions involving trillions of dollars are the financial equivalent of trawling the ocean bottom for cod. Trawlers catch plenty of cod, but they also drag in many unwanted species.

Tax Cheats Off the Hook

The George W. Bush administration was averse to a serious hunt for big-league tax cheats. It disconnected from a nascent movement by major countries to coordinate their tax policies, a boon to tax cheats. It even refused to hire 80 more IRS investigators to hunt for transactions by Al Qaeda and other terrorist groups in the wake of 9/11.

Source: UN Office on Drugs and Crime

The official excuse was that taxpayers couldn't afford an extra $12 million in spending. That is an absurdity when trillions were being spent on the wars in Afghanistan, still underway, and Iraq. But the funding denial made perfect sense if you knew that anti-money laundering nets catch tax cheats along with terrorists. And since the political donor class is rife with tax cheating, catching tax cheats can be inconvenient for politicians in power, and fellow party members, as a Congressional staffer recently reminded me.

In writing about money laundering in casinos since 1988, in my coverage of taxes since 1995, and on terrorist finance after 9/11, I developed a deep appreciation for the unsung work of FinCEN – and recognition of its weaknesses.

More People, Better Tech

What is needed now to strengthen FinCEN: more staff, super-sophisticated computers on par with the National Security Agency, and, most of all, adding a seat for FinCEN at White House National Security Council meetings.

A FinCEN director once told me that given enough time and resources his staff could find a single $19.99 credit card transaction anywhere in the world. The 9/11 attacks were cheap, costing only about $100,000. We shouldn't forget that relatively small expenditures can be used to cause enormous harm.

To find the little transactions behind big attacks in the future FinCEN needs enormous computer power to separate golden nuggets of fact from the massive overburden of routine financial transactions. FinCEN also needs to be set free to find not just terrorists, but tax cheats.

With trillions of dollars of illicit money in the hands of criminals, kleptocrats, and terrorists, and hundreds of billions of dollars of federal income taxes evaded each year, it's long past time to upgrade FinCEN.

Former Yale psychiatrist sues university — says she was fired for efforts to expose Trump's mental illness

As Dr. Bandy X. Lee's frequent publisher, we, the editors of DC Report.org. believe she has made vital contributions to our understanding of public mental health and the damaging effects of a deeply mentally ill individual, Donald Trump, holding the most powerful position in the world.

Trump's delusions, which are well-documented and go back decades, have resulted in the spread of baseless conspiracy theories, numerous acts of deadly violence and the failed attempt to overthrow our government on Jan 6. These assaults continue although there are indications that some Trump followers who embraced his delusions appear to be recovering from their own temporary loss of rationality and mental well-being.

Yale University fired Dr. Lee, an established professor on its medical school faculty, citing the misnamed "Goldwater Rule." That policy directs mental health professionals to hold their tongue about the mental well-being of officials, something American citizens do every day around their kitchen tables, in public forums and on national television. To deny the citizenry the insights of educated mental health professionals is more than absurd, it is an attack on the very principle of American democratic self-governance.

Trump's delusions, which are well-documented and go back decades, have resulted in the spread of baseless conspiracy theories, numerous acts of deadly violence and the failed attempt to overthrow our government on Jan 6. These assaults continue although there are indications that some Trump followers who embraced his delusions appear to be recovering from their own temporary loss of rationality and mental well-being.

Yale University fired Dr. Lee, an established professor on its medical school faculty, citing the misnamed "Goldwater Rule." That policy directs mental health professionals to hold their tongue about the mental well-being of officials, something American citizens do every day around their kitchen tables, in public forums and on national television. To deny the citizenry the insights of educated mental health professionals is more than absurd, it is an attack on the very principle of American democratic self-governance.

All Americans should be deeply disturbed at Yale's implicit attack on robust public debate by punishing Dr. Lee and seeking to intimidate other well-informed mental health scholars about our elected leaders and their fitness to hold office. This is especially so for any president because his finger is on the nuclear button.

We have published more than 40 articles by Dr. Lee and expect to carry more of her work. We believe every one of her opinion columns and interviews falls well within the boundaries of the highest standards of responsible journalism. Her writing also advances our mission, which is to cover what politicians do, not what they say, and to encourage citizens to act like the owners of our government.

Lawsuit Filed

On Monday, Dr. Lee filed a lawsuit against Yale for wrongful termination, as the student-run Yale Daily News reported today, March 23.

Her complaint, filed in U.S. District Court in Connecticut, asserts that "Yale violated its contractual obligations to Dr. Lee and violated the implied covenant of good faith and fair dealing. Yale further committed the tort of negligent misrepresentation by not adhering to its policies on academic freedom, upon which Dr. Lee had relied."

We hope that the trustees and academic leaders at Yale University cease their attack and acknowledge their error and that they embrace the fundamental principle of American democracy which depends on rational and reasoned debate, not dogma like the misnamed "Goldwater Rule."

Her lawsuit notes that the American Psychiatric Association reinterpreted its "Goldwater Rule" shortly after Trump became president.

'Gag Order'

"The reinterpreted Goldwater Rule created a gag order, recommending that its members not comment on public figures… even where there is a responsibility to society to protect public health," unless these politicians have submitted to psychiatric evaluation, her complaint states, noting that the APA is a voluntary professional organization of psychiatrists, not a regulatory body with government powers. She was last a member of that organization in 2007.

Dr. Lee says, and we agree, that the APA's new interpretation of the rule is "in conflict with [the] duties, responsibilities, and role in the interest of public health in light of her belief that Donald Trump posed a dangerous threat to this country and the world. For this reason, she held an ethics conference at Yale in April 2017 with some of the most respected members of her profession. This conference initially had approximately two dozen attendees and then drew national attention and led to the public-service book, The Dangerous Case of Donald Trump: 27 Psychiatrists and Mental Health Experts Assess a President."

That book became a New York Times bestseller.

While Yale did not sponsor the conference, Dr. Lee discussed the conference in advance with Yale, and Yale provided an auditorium without charge, making her firing all the more incoherent and indefensible academically, politically and morally.

Dr. Lee's more than 40 opinion pieces and interviews, some of them co-authored by other eminent authorities in mental health, can be read by clicking on this DCReport.org link.

DCReport is a reader-supported nonprofit and advertising-free public service journalism organization led by former senior and widely respected journalists from The New York Times, The Wall Street Journal, the Los Angeles Times, and other serious news organizations.

Here's how Marco Rubio turned the Senate Intelligence Committee into a Trump defensive team

When Marco Rubio (R-Fla.) took over Senate Intelligence last spring he politicized the committee's long-running investigation of Russian interference in the 2016 presidential election…and more.

Rubio, as acting chairman, turned the Senate Select Committee on Intelligence away from dispassionately investigating myriad connections between the Kremlin and Donald Trump's campaign. Rubio created a Republican defense line between the compromised former president and the American public.

The Florida senator, who Donald Trump called "Little Marco" during the contentious 2016 GOP primary, submitted to Trump after he and a raft of contenders lost. Bold characterizations of Trump as an embarrassment and nonsensical left Rubio's vocabulary.

Aligning the Intelligence committee with the Trump administration itself, Rubio politicized intelligence, downplayed Russian interference, white-washed Trump-Kremlin contacts and purposely deflected attention from Russia to China.

Soon, Rubio publicly sparred with the committee vice chairman, Sen. Mark Warner (D-Va.), over how much to reveal before the 2020 election. The panel issued a heavily redacted fifth and final 950-page volume of its work on Aug. 18, just 77 days before Election Day.

But unlike the four previous reports issued with bipartisan agreement, the last volume was presented as a confusing they-said-they-said hodgepodge of observations and conclusions pitting Republicans and Democrats against each other.

Upon the release of the report, Rubio and Warner even issued conflicting statements, as if characterizing two different investigations. Rubio and the Republicans on the committee asserted that they "found absolutely no evidence that then-candidate Donald Trump or his campaign colluded with the Russian government to meddle in the 2016 election."

Warner, in marked contrast, said the investigators found "a breathtaking level of contacts between Trump officials and Russian government operatives that is a very real counterintelligence threat to our elections."

Democrats, who claimed the Republicans redacted portions even more damaging to Trump, said: "Trump and his associates' participation in and enabling of this Russian activity, represents one of the single most grave counterintelligence threats to American national security in the modern era."

So who was right?

The facts are quite clear. Trump and his campaign worked hand-in-glove with Kremlin interests.

Just as former Attorney General William P. Barr lied about the findings of the Mueller Report and Trump's first impeachment defense team mischaracterized his infamous phone call to Ukraine's prime minister, Rubio and fellow committee Republicans lied and denied the extent of the Trump-Kremlin connections.

The lies were detrimental to our democracy but a great boon to the dictatorial regime of Russian President Vladimir Putin. Indeed, just last week, the U.S. intelligence community outlined Putin's efforts to influence the 2020 election—again in favor of Trump.

Lost in the News

Released amid the COVID-19 pandemic and the presidential election, the damning revelations of the Senate committee's report didn't register with many people. News accounts at the time didn't always give the full flavor of the report, relying on characterizations rather than the telling details establishing how thoroughly the Kremlin's agents and the Trump campaign coordinated.

But a simple reading of the massive report shows documented connection after connection, coordination and, yes, collusion between the Trump inner circle and Putin's associates.

  1. Trump's convicted and now-pardoned campaign manager Paul Manafort coordinated directly with Konstantin Kilimnik. The report states without equivocation that "Kilimnik is a Russian intelligence officer." At Manafort's direction, the campaign sent sensitive campaign strategy and polling data to Kilimnik every day. Manafort and Kilimnik hid their interactions through encryption apps, private phone numbers handled at higher priority than public lines and clandestine meetings. Campaign and polling data was sent daily to Kilimnik and then deleted, using the Facebook-owned encrypted platform WhatsApp. The FBI is seeking Kilimnik and is offering a large $250,000 reward for information that leads to his arrest.
  2. Trump advisers Kellyanne Conway, pre-emptively pardoned Steve Bannon and convicted and pardoned Gen. Michael Flynn knowingly negotiated with Russian hackers to obtain Hillary Clinton's stolen emails. They conducted a multi-pronged approach to get the hacked information. Flynn was in close contact with Barbara Ledeen, a Senate staffer working for the Senate Judiciary Committee who was tasked with obtaining Hillary Clinton's emails.
  3. WikiLeaks and Trump's campaign together weaponized the Democratic National Committee documents that Russia hacked as part of the Kremlin's strategy to damage Hillary Clinton's campaign. At the direction of "Trump and senior campaign," Roger Stone "took action to gain inside knowledge" from Wikileaks and "shared" this information with Trump. He and senior campaign officials coordinated the timing of the release of the documents with WikiLeaks through Stone, who was convicted of obstructing a Congressional investigation. Trump commuted his sentence.
  4. Wikileaks was in contact with Donald Trump Jr. directly, even providing him with a username and password to a then-private website, putintrump.org, used by journalists investigating Trump-Kremlin links. Don Jr. also coordinated the June 9, 2016 Trump Tower meeting with him, Manafort, Trump son-in-law Jared Kushner and Russian lawyer Natalia Veselnitskaya. She also had an entourage. Participants claimed they discussed adoption, but the report reveals that the subject line of Trump Jr.'s email invite was "FW: Russia—Clinton—private and confidential." Meeting notes from Manafort's phone included cryptic financial references to offshore accounts such as "Offshore – Cyprus/ 133m shares."
  5. Trump regularly received gifts from his Russian friends including a watch, artwork and decorative box holding a personal letter from Putin. The Putin gift was hand-delivered to Trump's Manhattan apartment after his infamous 2013 Moscow visit for Trump's Miss Universe pageant. The report indicates that in addition to gifts, messages were being transmitted. Days after the 2016 election, admitted Russian spy Maria Butina received a message that "Trump has already received a good letter from VVP [Putin]."
  6. Kushner spoke to the Russian ambassador during the transition about setting up a secret backchannel to communicate without detection directly with Putin's staff, a fact that had been known. There were various groups working to establish this backchannel for Putin. Kirill Dmitriev, a Russian oligarch who is head of the $10 billion Russian sovereign wealth fund RDIF texted George Nader who was close to the Trump campaign. Dmitriev said that Putin had "emphasized that this is a great priority for us and that we need to build this communication channel to avoid bureaucracy." Nader was working with the campaign at that time and helping Dmitriev establish that channel.
  7. American Carter Page admitted to the FBI that he was "on the books" as a Russian intelligence source. Butina, the spy, sent a Twitter direct message to her Russian contacts asking about Page and saying that Page and Putin were together at a meeting in Moscow in 2015. Despite these obvious and significant security concerns, Trump put Page on his campaign's foreign policy team, and Page even obtained permission from the campaign to travel to Russia in June 2016. The campaign only distanced itself from Page after a news report that U.S. intelligence was investigating whether Page had private communications with senior Russian officials.

'No Collusion'

The list of contacts and links goes on, but the overwhelming evidence of collusion was simply ignored by Rubio and his fellow Republican committee members. They wouldn't let the facts get in the way of their party leader's story: No collusion.

While that was the Trump and the GOP line, until then it had not been the committee's narrative. That changed, however, when Rubio took over the committee chairmanship under most unusual and extraordinary circumstances.

Before Rubio, the committee ran a bi-partisan three-year investigation under its chairman, Sen. Richard Burr (R-N.C.) and Warner. In the nine months from July 2019 to April 2020, Burr and Warner jointly released four 100-page reports documenting the "irrefutable evidence of Russian meddling" in our elections. The reports were considered highly informative with no hint of partisanship. USA Today said the committee was "a rare symbol of unity on the divisive issue of Russia's role in the presidential race—quite a feat for a panel with members ranging from conservative Trump ally Tom Cotton (R-Ark.) to liberal Trump critic Kamala Harris (D-Calif.)"

Indeed, the Intelligence committee, by design, is supposed to minimize partisanship. Established in 1976 in the post-Watergate era, the committee has a long history of serious, responsible oversight of the intelligence community and intelligence issues.

Burr Booted

But that all fell apart when FBI agents raided Chairman Burr's North Carolina home in May 2020, seeking evidence of insider stock trading based on information Burr had learned at closed-door briefings about the COVID-19 pandemic. Burr stepped down from his chairmanship. Then Majority Leader Mitch McConnell (R-Ky.) tapped Rubio for the job, and the fix was in.

Sidelined, Burr was told on Jan. 19, Trump's last day in office, that the trading case would be dropped. Probably not insignificantly, Burr was one of seven Republican senators voting to convict Trump for inciting the Jan. 6 Capitol insurrection. Two other Intelligence committee Republicans—Susan Collins of Maine and Ben Sasse of Nebraska—also voted to convict.

Today, since the Joe Biden presidential win, Burr remains a member of the committee; Rubio sits in the vice chairman's seat; Warner is chairman.

The Virginia Democrat has said he isn't interested in looking backward but wants to look forward at rebuilding the U.S. intelligence community, especially the Office of the Director of National Intelligence. He said the Office emerged "decimated" and "in shambles" from the last four years. And Warner may well have summed up the challenge he will face in leading his committee going forward saying, "We don't want to go back to that non-fact-based world."

Republican House Leader McCarthy plays his partisan cards — and folds

There was another skirmish on the floors of Congress this week that made no sense other than the endless outpouring of partisanship.

This time it was a vote forced by Republican Minority Leader Kevin McCarthy (R-Calif.), to drop Rep. Eric Swalwell, a Democrat from California, from the House Intelligence Committee. The conflict was about allegations that a Chinese spy had raised funds for Swalwell's congressional campaign in 2015. The measure lost, with all Democrats and Republicans voting on party lines.

It's not a vote that would change anything. Speaker Nancy Pelosi would appoint a potential replacement.

Apart from the idea that it was a futile effort if you are the minority party, it was simply a partisan slap that follows the pattern of knocking the other guy.

Just what passes as Republican ideology other than saying 'No' has become massively unclear.

But in this case, the underlying thought – that a foreign power is trying to have an influence on choosing our leadership – struck as particularly galling. Remember we just had that declassified national security assessment that Russia, and to a lesser degree, Iran, had a huge campaign under way to use our legislators and members of the Donald Trump campaign team to funnel disinformation to the American public.

Those figures include Sen. Ron Johnson (R-Wis.), who openly talked loudly about information fed him by an identified Russian agent Andrei Derkach, a Ukrainian lawmaker, and Rep. Devin Nunes (R-Calif.), the ranking minority Intelligence Committee member, for work to spread disinformation about then-candidate Joe Biden and family. Both Johnson, who also has repeatedly offered his racist defense of the Jan. 6 attack on the U.S. Capitol, and Nunes, who has opposed Biden's certification as president, remain active in their public damnations on behalf of Trump.

These people have drawn no response from McCarthy.

I'm not big on "whataboutism" as tit-for-tat partisanship is termed, but the coincidental timing here seems unusually gross.

The Swalwell Case

McCarthy sponsored his resolution to oust Swalwell over the fact that he has not denied "public reporting that a suspected Chinese intelligence operative helped raise money" for his campaign and helped interns seek potential positions in his congressional office. Since the fall, McCarthy has targeted Swalwell, one of the Trump impeachment managers, after Axios published information about Swalwell's relationship six years ago with a suspected Chinese operative known as Fang Fang or Christine Fang.

According to the story, Swalwell was among several California politicians reportedly pursued by Fang, who did fund-raising work for his campaign and was photographed alongside Swalwell at a political function and reports that they had dated. When the FBI reported its suspicions in 2015, Swalwell cut off contact.

House leaders were told in 2015, and Swalwell was allowed to serve on the Intelligence Committee. There was another review with McCarthy and Pelosi last year, with opposing views from the two.

McCarthy charged that based on what has been publicly reported, Swalwell "cannot get a security clearance in the private sector" — and thus had no business being on the intelligence panel.

"Only in Congress could he get appointed to learn all the secrets of America — that's wrong," McCarthy told reporters. "If you can't meet that bar, you shouldn't be able to meet a bar to serve on the intel committee." McCarthy tweeted out a picture of the form upon which individuals are required to disclose relationships with foreign nationals.

Hmm. Then what are we to make of Johnson and Nunes, their staff members and non-congressional figures.

Figures include:

  • Michael Flynn, who served as national security adviser despite foreign entanglements
  • Paul Manafort, Trump campaign chair despite his foreign contacts
  • Trump son-in-law Jared Kushner who did not always report contacts with foreigners

Republican Outliers

Naturally, Swalwell and Democratic defenders noted that McCarthy failed to mention that Swalwell changed his behavior after the FBI alert to him. The same cannot be said of Johnson, Nunes and the others.

Of course, all this may be in response to the vote by Democrats and 11 Republicans last month to remove Rep. Marjorie Taylor Greene (R-Ga.) from two committees for her extremist QAnon ideologies and threats to other members of Congress. A new effort was introduced yesterday to oust her altogether.

McCarthy wrote on Twitter that "Every Democrat is now on the record. They chose politics over national security."

Well, yeah, as Republicans have been doing as well. These guys seem to do so on every question, real or not.

A dozen Republicans voted this week to oppose honoring police from the Capitol and the city for defending the Capitol on Jan. 6 because the resolution contained the work "insurrection."

Then, yesterday, 172 Republicans voted against renewing the so-called defense against violence to women act. They found the bill unneeded even in the week following the shooting of two men and six women massage parlor workers in Georgia. The act did have an anti-gun ownership clause for boyfriends found guilty of domestic violence.

Just what passes as Republican ideology other than saying "No" has become massively unclear.

Even on a straight partisan basis, how does knocking Swalwell off this committee make anyone more likely to vote Republican than Democratic?

What has been gained here? If anything, shouldn't we thank Swalwell for heeding an FBI alert and ask why Johnson and Nunes continued to carry water for identified Russian agents despite intelligence warnings? How does anything in all this help with coronavirus, economy, the border, education, environment or anything that we actually care about?

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