“Texas is the national testing ground for bad public policy,” the journalist Molly Ivins used to say.
It was a Texas attorney general, Gregg Abbott, who sued in federal court in Brownsville, Texas, challenging Barack Obama’s 2014 executive memorandum that attempted to provide temporary legal status for undocumented parents of children born in the United States. Twenty-five other Republican state attorneys general joined Abbott in the lawsuit.
Abbott, currently in the media spotlight because floodwaters created by Hurricane Harvey have inundated much of the city of Houston, used to brag that his job entailed “going to the office in the morning, suing the federal government, and going home in the afternoon.” He prevailed in Brownsville, blocking the implementation of Obama’s program, thus denying legal status to some 4 million undocumented residents of the United States. Their children might be citizens, or legal residents, but Abbott’s lawsuit ensured that they continue to live in the shadows.
Since filing suit against the Deferred Action for Parents of Americans program (DAPA), Abbott was elected governor, and has moved further to the right, out of both conviction and a legitimate concern that his lieutenant governor, an evangelical extremist not unlike Vice President Mike Pence, will challenge him in a primary.
Abbott’s successor in the elected AG’s office is Ken Paxton, perhaps as extreme as Abbott, if not as bright and articulate, and currently under indictment for securities fraud.
In the footsteps of Abbott, Paxton is now leading a group of Republican state attorneys general in a lawsuit in the same Brownsville federal court, this time attempting to overturn a widely popular Obama executive action that currently defers the deportation of 886,814 young, undocumented residents, allowing them to obtain work permits and driver’s licenses, after paying a $495 fee and passing a background check.
It’s an odd designation, applicants are not granted “legal residence” per se, but rather allowed certain privileges while their deportation is deferred for two years, after which they can reapply to renew their Deferred Action for Childhood Arrivals (DACA) status. DACA status provides no path to citizenship, nor can people granted DACA status receive any federal financial benefits, such as Social Security, college financial aid, or food stamps.
But Attorney General Jeff Sessions, an implacable opponent of immigration reform while he was in the Senate, appears to be at least supportive of Paxton’s lawsuit, telling “Fox and Friends” hosts: “I like that our states and localities are holding the federal government to account, expecting us to do what’s our responsibility to the state and locals, and that’s to enforce the law.”
Easy to confuse, two similar acronyms for two Obama programs for undocumented immigrants, DACA for children; and DAPA, which has been suspended while tied up in court, for parents. At least it was suspended until Secretary of Homeland Security John Kelly rescinded it in mid-June, months before becoming Trump’s Chief of Staff.
For Paxton, rescinding DAPA, which was never implemented because it was tied up in court, wasn’t enough. On June 27, Paxton wrote to Sessions, demanding that he also order the Secretary of Homeland Security to end DACA.
Paxton warned Sessions that if the administration fails to issue a memorandum rescinding DACA by September 5, he will amend the lawsuit that successfully blocked DAPA and ask the same federal court to kill DACA.
Kill is not a legal term, but Paxton writes that unless the Trump administration rescinds Obama’s DACA order, he will ask the court for a ruling that lets the program die: “We respectfully ask the Secretary of Homeland Security to phase out the DACA program.…Specifically…not renew or issue any new DACA or Expanded DACA permits in the future.” If that request is not met, Paxton will go to court.
The suit Paxton intends to amend is sitting in the courtroom of Judge Andrew S. Hanen, whose animus toward undocumented immigrants is of record. As we reported in February 2015, Hanen was the author of a 2015 legal opinion in which he ruled on the enforcement authority of a federal agency, then went on to write 50 superfluous pages of dicta critical of the nation’s undocumented population.
A few examples:
“In 1992, the Attorney General estimated that the country’s immigrant population was as low as three million individuals. Today, California alone is said to have at least that many illegal aliens residing within its borders.”
“Evidence shows that Texas spends $9,473 to educate each illegal alien child … Texas also complains of the millions of dollars it must spend each year in providing uncompensated health care for these increasing numbers of undocumented workers.”
“This influx, for example, is causing the States to experience severe law enforcement problems … And in [Arizona’s] most populous county, these aliens are responsible for disproportionate share of serious crime.”
There is more in the public record that illustrates Hanen’s anti-immigrant bias.
Abbott was aware of Hanen’s hostile disposition toward undocumented immigrants when he carefully steered his 2015 DAPA lawsuit into his Brownsville courtroom. Now, Paxton will be trying his DACA case on the same playing field.
If Paxton goes ahead with the lawsuit, it will be left to Jeff Sessions to put together a defense for the 886,814 Dreamers whose temporary legal status Paxton is determined to end. After all, Paxton and his fellow attorneys general are suing Sessions’ client: the federal government.
On the campaign trail, Trump promised to rescind DACA, but he has been ambivalent since taking office, suggesting that children shouldn’t be held responsible for their parents’ decision to bring them into the country.
But all this might be beyond Trump’s control, unless he requests Sessions to make the DACA suit go away, as he requested him to stop the criminal prosecution of Arizona Sheriff Joe Arpaio. He failed with Arpaio and had to resort to a pardon. And his odds were better in Arizona, where the federal government was the prosecution in a criminal case, than in Texas, where it is a defendant in a civil action.
Beyond Hanen’s courtroom is the extremely conservative Fifth Circuit, never a friendly forum for undocumented residents of the country, and a conservative Supreme Court likely to be hostile to Obama-era executive orders and undocumented residents in general.
Perhaps this ends up a win-win proposition for Trump. He directs his Secretary of Homeland Security to kill the program. Or Paxton and his cohorts kill it in a Texas courtroom. Either way, a campaign promise is fulfilled. And a decision that at the moment appears inevitable forces almost 900,000 Dreamers back to a life in the shadows.
It all began in a courtroom in Texas.
One day before President John F. Kennedy was assassinated in Dallas in November 1963, Richard Hofstadter was in London, delivering a lecture that a year later would appear in Harper’s as “The Paranoid Style in American Politics.”
At 47 years of age, Hofstadter was an American brand. He held an endowed chair at Columbia University—not to mention two Pulitzers. He was considered to be one of the finest historians and public intellectuals of his time.
Right-wing putschists led by Barry Goldwater (and the evidently immortal Phyllis Schlafly) had seized control of the Republican Party, muscling aside Nelson Rockefeller and the moderate wing he represented. Hofstadter was alarmed. “The Paranoid Style” was his red flag.
In the introduction to a 2007 Vintage Books collection of Hofstadter’s political writing, Princeton historian Sean Wilentz describes the 1964 essay as “a study of political cranks and zealots” in which the author described “a chronic, rancid syndrome in our political life.”
Indigenous and deeply rooted in American history, the paranoid politics Hofstadter described began with a panic among Federalists, echoed in New England’s pulpits in 1789, when preachers warned of the Bavarian Illuminati plots to undermine the new republic.
In the 1820s and 1830s the nation was seized with a fear of Masons, who were perceived to be a threat to republican government because Masonry was a secret society with its own system of loyalty and its own jurisdictions. Public hysteria about Masonic plots was followed by an anti-Catholic movement focused on the Society of Jesus, better known as Jesuits. “Anti-Catholicism has always been the pornography of the Puritans,” Hofstadter wrote.
All of this is understandable in a young nation defining itself and defending itself from external and internal threats. It’s when Hofstadter takes what he describes as the long jump to the contemporary right wing that the paranoid style of politics he describes speaks to our current political moment.
It doesn’t take much more of a leap to conclude that the same rancid syndrome, which Hofstadter chronicled as occurring in episodic waves in American political life, is upon us today, and the political cranks and zealots are Republican voters animated by Donald Trump, Ted Cruz, and Marco Rubio.
In the sixties, the country hadn’t entirely moved beyond McCarthyism, and the fear that the highest levels of the federal government had been infiltrated by communists who were selling out U.S. national interests. That particular obsession is largely a relic of the past, perhaps with the exception of religious loons such as Pat Robertson, and Rev. Rafael Cruz (father of Ted), who has referred to Barack Obama as a socialist aligned with Cuba’s Castro brothers.
Read “The Paranoid Style”—eliding the references to the communist menace—and you’ll discover an insightful analysis of the overheated rhetoric and reckless posturing that is the 2016 Republican presidential primary.
Hofstadter quoted Harvard professor Daniel Bell’s description of “the modern right wing” of the 1960s. If Bell’s description weren’t so articulate, it could be passed off as briefing notes for Sarah Palin’s speechwriter.
America has been largely taken away from them and their kind; though they are determined to try and repossess it and to prevent the final destructive act of subversion. The old American virtues have already been eaten away by cosmopolitans and intellectuals; capitalism has been gradually undermined . . . the old national security and independence have been destroyed by treasonous plots, having as their agents not merely outsiders and foreigners but major statesmen at the very centers of American power.
The “modern right wing” of 2016? You can find it at a Trump rally in a Birmingham stadium or a Cruz caucus in Iowa—even with Palin on the hustings in New Hampshire—promising to take back our country from the intellectual elites who have dispossessed “real Americans.”
Like today’s Republican presidential candidates, Hofstadter’s paranoids opposed the income tax and worked to repeal it. They were anti-intellectual and anti-cosmopolitan. They had a deep-seated aversion to “the democracies of Western Europe.” They harbored a “nativist desire to develop in North America a homogeneous civilization.” They envisioned the enemy eroding our values and undermining our national security: “A perfect model of malice, a kind of amoral superman, sinister, ubiquitous, powerful, cruel, sensual, luxury loving.”
Throw in “African-American”—which was beyond even the most febrile delusions of the hysterical conservatives of the 1960s— and you’ve almost got Rev. Raphael Cruz’s description of the sybaritic, foreign-born Muslim pretender to the American presidency.
How close are we to Yogi Berra’s “deÌjaÌ€ vu all over again?”
Hofstadter’s essay quoted a New York Times story about conspiracy theorists who warned of a covert collaboration between the Department of Defense and the United Nations:
A United States Army guerrilla warfare exercise in Georgia, called Water Moccasin III, is actually a United Nations operation preparatory to taking over our country.
At the time, only one inconsequential three-term Congressman from Orange County, California, bought into the alleged plot that had President Kennedy dismantling the U.S. military and replacing it with a U.N. peacekeeping force.
Last summer, when a group of “patriots” in the small Texas town of Bastrop claimed that a routine training operation conducted by the U.S. Army was a covert U.N. mission, and that U.N. vans had been filmed in Walmart parking lots, Governor Greg Abbott deployed the Texas Guard to monitor the operation. As senator, Cruz directed his staff to begin an inquiry at the Pentagon.
Abbott recently travelled to Israel and Switzerland, and he has drafted a revised U.S. Constitution, which he intends to bring before a Constitutional Convention. He’s obviously positioning himself for something larger than elected office in Texas. Cruz, meanwhile, has a reasonable shot at his party’s presidential nomination. And Palin is back, sounding the alarm about the “leftists in Washington destroying our military.”
“Style has more to do with the way in which ideas are believed than with the truth or falsity of their content,” Hofstadter wrote. “I am interested here in getting at our political psychology through our political rhetoric.”
If political rhetoric is any measure of the moment, a short excerpt of the speech Sarah Palin delivered when she endorsed Donald Trump on January 19 illustrates how far around the bend the extremists in the modern Republican Party have gone.
Tell me, is this conservative? GOP majorities handing over a blank check to fund Obamacare and Planned Parenthood and illegal immigration that competes for your jobs, and turning safety nets into hammocks, and all these new Democrat voters that are going to be coming on over border as we keep the borders open, and bequeathing our children millions in new debt, and refusing to fight back for our solvency, and our sovereignty, even though that’s why we elected them and sent them as a majority to D.C. No! If they’re not willing to do that, then how are they to tell us that we’re not conservative enough in order to be able to make these changes in America that we know need to be . . . Now they’re concerned about this ideological purity? Give me a break! Who are they to say that? Oh tell somebody like, Phyllis Schlafly, she is the Republican, conservative movement icon and hero and a Trump supporter. Tell her she’s not conservative. How ’bout the rest of us? Right wingin’, bitter clingin’, proud clingers of our guns, our God, and our religions, and our Constitution. Tell us that we’re not red enough?
Palin might be considered a marginal figure by sensible moderates in both parties. But she’s revered on the far right, and in the 200 words above she addresses most of the paranoid fears of today’s right: a treasonous government selling out our sovereignty, coming after our guns, eroding religious rights, inviting aliens into the country to take our jobs, treating the Constitution with contempt. Palin managed to include in one over-the top speech most of what animates today’s Republican right wing—a constituency of “political cranks and zealots” who have moved far beyond the extremists Hofstadter described in an essay written half a century ago.
They Make Cheney Look Like Chomsky: Cruz, Trump, Rubio and the Frightening Bellicosity of Today's GOP
In 2005 I was doing a regular Tuesday–Friday commute between Austin and Washington. One of the regulars on the flights was Karen Hughes, a longtime advisor to then-President George W. Bush. At the time, she was commuting to her State Department office, where she was the undersecretary for public diplomacy.
On one Tuesday morning flight, my traveling companion, a journalist who wrote about international oil-and-gas interests and the Middle East, took a seat beside the undersecretary and began querying her about her reading on the region.
As it turned out, she had read very little. Her seatmate recommended half a dozen familiar titles, as Hughes politely said she would “put it on my list,” though she wrote down nothing and seemed more than eager to get back to her Austin American-Statesman.
The brief conversation ended with a telling exchange.
My journo friend observed that Islamic societies were once among the most literate in the world. As the United States had a significant presence in two Muslim countries, he asked, was the State Department considering literacy programs, investing in teaching young men and women to read?
“We don’t care if they can read,” Hughes said. “We just want to make sure they don’t bomb us again.”
Her response said a lot about the administration’s policy in the region. No sense of history, no anthropology, no cultural sensitivity.
That sort of ignorance led to women in the U.S. Army humiliating nude Muslim men at the Abu Ghraib Prison; to the defiling of Korans in GuantÃ¡namo; to the use of dogs, considered unclean by Muslims, in interrogations. These were crude and widely publicized affronts that will take generations to repair, if they can be repaired. (Then there was the actual torture.)
O.K., the disastrous Bush-Cheney foreign policy has been sufficiently re-litigated.
Today, Iraq is divided between the terrorists in the so-called Islamic State and a Shia government aligned with, if not controlled by, Iran. The United States has offered some support, such as U.S. Special Forces and tactical air support helping the Iraqi army retake Ramadi. (It was previously conquered by American soldiers, Marines, and Navy SEALS in 2006.) Stability still remains hard to come by, with the region poised to explode yet again in response to Saudi Arabia’s state assassination of Shia Cleric Sheikh Nimr al Nimr. Barack Obama’s foreign policy, at least his rapprochement with Iran, looks downright inspired.
If you don’t consider Obama’s more restrained foreign policy a better alternative than what came before it, I invite you to revisit the essay Col. Lawrence Wilkerson wrote for the Spectator in August 2014. Wilkerson, an Army officer who concluded his career with General Colin Powell at the Defense Department and then the State Department, laments George W. Bush’s decision to squander the decades of costly and bloody realpolitik by which the United States achieved a delicate balance of power in the Middle East.
Wilkerson describes what is required to achieve a fragile balance in the Middle East: the United States supporting Iraq in the bloody war that began with Saddam Hussein’s attempt to conquer Iran; the U.S. reflagging of Kuwaiti tankers and assumption of the role of Coast Guard in the Persian Gulf; an American warship that “absorbed two Iraqi Exocet missiles” and another almost sunk by Iranian mines; the United States taking out Iran’s command and control systems then tragically shooting down a civilian Iranian airliner and killing all 250 on board.
“From 1953 to 2000 we crafted and maintained a balance of power in the Persian Gulf, however ignominiously to the purer hearts of the world,” Wilkerson wrote. “In 2003, we destroyed that balance.” (Wilkerson is back in our January issue, describing what a Marco Rubio foreign policy might look like.)
There is a sense that this gets worse before it gets better, maybe even abysmally worse if Ted Cruz, Marco Rubio, or Donald Trump end up calling the shots.
“We will carpet bomb [ISIS] into oblivion,” Cruz said in Iowa. “I don’t know if sand can glow in the dark, but we’re going to find out.”
“ISIS is making a tremendous amount of money because of the oil that they took away, they have some in Syria, they have some in Iraq,” Trump said. “I would bomb the shit out of them.”
Rubio, meanwhile, promises to be a president “who will destroy terrorists overseas by authorizing whatever tools our commanders need.”
He is more specific regarding what he will do with suspected terrorists captured overseas. Rubio would expand GuantÃ¡namo, warning terrorism suspects that they will get “a one way ticket” to the island gulag Obama is trying to close. Americans suspected of engaging in terrorism or collaborating with terrorists will also be locked up in GuantÃ¡namo.
The more they talk, the more you realize that the top tier Republican candidates are more bellicose than Dick Cheney. It’s almost enough to make you feel warm and fuzzy about a Hillary Clinton presidency.
Donald Trump is constantly bemoaning the “War on Christmas” and ripping Starbucks for its plain red cups.
“I tell my wife don’t go to those stores, I want to see Christmas,” he told attendees at the 2015 Values Voter Summit.
But the Donald is a rhetorical Christian soldier. Real believers take the Fox News “War on Christmas” talking point seriously. Some, such as evangelical brand specialist Chris Stone, are acting on it.
Stone—the founder of Faith Driven Global—launched a Christian retail index earlier this year, which seeks to harness the $30 billion in Christmas buying power of the nation’s “Biblically Orthodox Christians.”
As Stone sees it: “Today’s marketplace is tribalized.”
Stone’s base of evangelical BOCs are already almost as tribal as the Williamsburg Lubavitchers. The BOCs have their own Boy Scouts (Trail Life U.S.A.), Girl Scouts (American Heritage Girls), and their own Liberty University. They even read their own newspapers, like the dreary, tendentious Washington Examiner, where Stone announced his 2015 “ChristmasBuycott”—complete with a hashtag, of course.
A “buycott” is the flip side of a “boycott.” It guides faithful consumers toward Christian-friendly retail outlets, while ranking the places they can avoid by spending their money with merchants who share their biblical worldview. I’m not sure there’s a difference, but Stone argues that a buycott is not as negative as a boycott. Informing these buycott consumers is Stone’s Faith Equality Index—a ranking of “how well brands acknowledge Faith Driven Consumers (FDCs) by welcoming, embracing, and celebrating them.”
Stone’s Index draws heavily on the Human Rights Campaign’s “hugely successful” Corporate Equality Index, which ranks brands, workplaces, and retail outlets by policies and practices regarding the LGBTQ community—and has even been “largely successful in compelling brands to include transgender transition in health coverage.” The Faith Equality Index site even compares HRC rankings with each product or outlet it ranks—a subtle “buy here or buy queer” message.
The Index includes a leaderboard where a consumer can track the FDC-plus points earned by reaching out to brands and recruiting family and friends. The real-time competition invites FDCs to engage in a mercantile evangelical movement that rewards the faithful and punishes the not-so-faith-friendly retailers.
Starbucks was an early buycott target. Like Trump, Stone came down hard on Starbucks after it replaced its traditional “Christian-themed” cups with a “solid red blank canvas design.”
Stone’s Index directed believers looking for a more Christ-centered cup of coffee to Dunkin’ Donuts, which honors the faith by serving coffee in red cups emblazoned with the word “Joy.” Krispy Kreme donuts is offered up as another option.
Here’s the FEI as pitched in one of its promotional e-mails. (Attend a Faith & Freedom convention, or a Values Voter Summit, and you, too, will be on the mailing list.)
But caveat emptor: the FEI’s preferred retailers are often high-calorie, low-salary outfits—not to mention generous donors to right-wing causes.
A few examples.
Cracker Barrel, a restaurant chain of painfully treacly country-store knockoffs complete with porch rockers, is a nutritionist’s nightmare, serving calorie-laden plates of down-homey “Fancy Fixins.”
But paychecks are lean. Cracker Barrel servers earn an average $3.52 an hour (plus tips), and cashiers get $8.40 an hour. The chain’s management has an affinity for right-wing politicians. In fact, former House Majority Leader Tom DeLay almost ended up in prison, partly because of the money the chain’s CEO lavished on him.
The FEI’s top-ranking restaurant, though, is Chick-Fil-A, which pays its cooks from $7.70 to $9.41 an hour and its team leaders $9.81. It is privately held, so executive compensation isn’t published, but co-owners Dan and Ronald Cathy are worth $1.5 billion each, according to the PrivCo research firm. The chain was mired in controversy in 2012 for its openly anti-gay politics; millions of company dollars were funneled through the Cathy family’s WinShape foundation to anti-LGBTQ groups like the Family Research Council.
Sam’s Club tops the Faith Equality Index big-box retail outlet rankings, while Costco is at the bottom. Sam’s Club, of the Sam Walton (Walmart) dynasty, pays cashiers $9.50 an hour; Costco provides cashiers with an hourly wage of $15.18. Sam’s Club’s CEO earns $23.1 million a year and pays his employees an average annual salary of $22,400. Costco’s CEO earns $2.6 million a year and pays his employees an average salary of $45,800.
The Waltons also own the top-ranking grocery chain on the Index, Walmart. With $487.7 billion in annual revenue in 2014, Walmart is the world’s largest company. Yet, it wasn’t until April 2015 that it increased its salaries from minimum wage to $9.00 an hour in response to a protracted and ongoing fair-wage campaign advocating for a living hourly wage of $15.
Plus, when it comes to political donations, you could say the Waltons are the Koch Brothers of big grocery retail.
The Index might be useful to the secular shopper, or the Christian not completely given over to Biblical orthodoxy.
Buy from the FEI’s low-scoring retailers and odds are you’re supporting workplace equity while undermining right-wing philanthropy.
It’s not entirely reliable. (Bank of America is an FEI loser; but that’s no reason to champion that behemoth). But turned on its head, the Faith Equality Index is a decent consumers’ guide that will at least keep the alert secular shopper out of Walmart, Cracker Barrel, and Sam’s Club.
There’s some value in that.
The GOP Is a Neo-Confederate Party Now: The South and the Religious Right Have Devoured the Republicans Whole
When Lester Maddox was governor of Georgia in the late 1960s, he insisted that the problem with the state’s prisons was “the poor quality of its inmates.”
To understand the posturing of the Republican candidates this year, you have to take into account the quality of the inmates––the Southern, conservative, anti-immigrant base that dominates the party Lincoln helped create to confront the nativism and anti-immigration politics of the Democrats and Know Nothings in the 1850s.
The candidates––not their backers and constituency-group leaders––got most of the media attention at last month’s Values Voters Summit in Washington because they are the candidates––and because their pronouncements, which range from deeply disturbing to utterly risible, are newsworthy.
When Ted Cruz implies that if elected, he will kill Iranian Supreme Leader Ali Khamenei, that’s news. When Mike Huckabee promises to invoke the Fifth and Fourteenth Amendments to ban abortion with the stroke of a pen, because the unborn are fully fledged citizens of the United States (“None of your daughters and daughters-in-law called you up and said ‘Guess What? I’m going to have a blob of tissue.’”), that’s also news. As is Rick Santorum’s promise to pass a constitutional amendment defining marriage “as between a man and a woman.”
As is, I suppose, Donald Trump’s truculent defense of Christmas. “I love Christmas. You go to stores now and you don’t see the word ‘Christmas.’ It says ‘Happy Holidays’ all over. I say ‘where’s Christmas?’ I tell my wife ‘don’t go to those stores!’ I want to see Christmas!”
Where’s the market for political discourse of this caliber? It plays particularly with the constituency groups that make up today’s Republican Party.
The Values Voters Summit is an annual production of the Family Research Council, Tony Perkins’s non-profit (and tax-exempt) foundation that for decades has been at the center of anti-abortion, anti-LGBT campaigns. During the presidential election cycle, its national and regional events are a magnet for candidates in pursuit of the Republican evangelical base. This year, roughly 2,500 attended the D.C. event.
“You’ve been amazing! And to have such a fantastic room!” Donald Trump said as he wrapped up his 30-minute “speech.” The Don Rickles, Vegas-style sign-off was pitch-perfect for Trump, even if waving his Bible in the air as he closed seemed contrived, and even if he had no idea of the second bananas who opened and closed for him.
Consider the Benham brothers.
Identical twins Jason and David Benham became Christian-right martyrs when the HGTV cable network cancelled their “Flip it Forward” reality show before it went into production.
The network had been careless in vetting its two stars. The twins’ father, the Rev. Flip Benham, is a virulent and confrontational anti-abortion crusader and anti-LGBT activist. The sons have followed in the father’s footsteps.
HGTV, an apolitical home-and-garden network, had been sold on a program that followed the brothers as they bought, remodeled, and flipped houses. Then network executives discovered some of David’s anti-gay advocacy, which might have made selling ads a challenge.
One example was a passage in an article the rowdier of the two twins wrote for a Christian publication:
In the Leviticus passage above it says that death is the consequence for homosexual sin. This is how detestable this type of sin is to God.
Benham did go on to observe that because “homosexual sin is covered by the blood of Jesus,” it will never again be considered a capital offense. But network execs decided that his anti-gay writing and advocacy was a reasonable justification to abort the reality program.
The “firing” catapulted the twins into a new career, their hugely popular two-man show booked by hundreds of Christian event planners. The brothers are handsome, virile, and charismatic. Their act plays off a gently mocking sibling rivalry, quibbling about who was the better player on their high school basketball team in North Carolina, or who is the harder-bodied Cross-X trainer.
On the Values Voter stage, they added to their routine a group of heroes in “the war on religion”––the Oregon couple who owned Sweet Cakes Bakery and refused to sell a wedding cake to a gay couple; Iowans Rich and Betty Odgaard, who refused to rent their wedding chapel to a same-sex couple; Baronelle Stutzman, the septuagenarian Washington State florist who refused to provide floral arrangements for the same-sex wedding of one of her longtime clients; Kelvin Cochran, a former Atlanta fire chief relieved of his duties after he had published a book in which he described “homosexuality, lesbianism, pederasty, bestiality,” as related forms of “biblically unclean sexual perversion,” et al.
Secular liberals are targeting only Christians, David said.
“I haven’t seen a Muslim baker gettin’ sued yet,”he said. “And I haven’t seen the imams and the clerics getting pressure to marrying gay couples.”
Redemption and the unredeemable
Martyrdom is one powerful Christian theme, redemption another.
Star Parker is a tall, imposing African-American woman given to stylish long braids. She, too, is in demand at Christian and other conservative political events. She has run for Congress, written books, and is a columnist whose work appears in right- wing news outlets.
Parker often prefaces her speeches (actually strident, high-decibel rants), with a short take on her CV: “I’ve been in and out of criminal activity, drug activity, sexual activity, welfare activity, until Christ reached out into my heart to reconcile me.”
Her focus is usually abortion and her performance is as Grand Guignol as political theatre gets. She tells a large Saturday morning crowd gathered in Northwest Washington’s Omni Shoreham Hotel ballroom that the nation is in a civil war. Committed Christians are the Union Army engaged in a campaign to free the unborn from secular forces that would have them aborted.
“One baby was big enough to walk to the bus stop, and he slashed that little boy’s neck and tossed him in a shoe box,” she says.
There is a description of parts of “47 babies in a freezer that had to be thawed out like a TV dinner.” Then Star moves seamlessly to Planned Parenthood (never in any way associated with Gosnell’s private, for-profit Philadelphia clinic).
“Did Congress pay attention to Gosnell? See if there are any more Gosnells out there? . . . Planned Parenthood is still in business, the taxpayer-subsidized abortion business. And selling baby body parts.”
Owning an enrapt audience, she goes on.
“Homosexuals, now that they are married . . . are going to get their children right out of our foster care system.”
“Any Christian parent who has their child in one of those cesspools we call public schools is going to receive back a liberal.”
“A government that wants to retire our seniors through a taxation scheme called Social Security.”
Until I can’t go on and head out to Calvert Avenue to hail a cab.
But this road goes on forever and this party never ends––at this event, at CPAC, at Ralph Reed’s Faith and Freedom gatherings, at hundreds of venues and before tens of thousands of activists across the country, where the religious right, the Tea Party right, and the American Conservative Union, et al. convene.
The Benham Twins, Star Parker, Oliver North on patriotism, Gary Bauer’s account of every execution that has occurred in the Middle East since Obama took the oath of office; Congressman Louie Gohmert on the prospects of impeaching Barack Obama.
Until it ends, the neo-Confederate, mostly white, Christian party that Kevin Phillips envisioned in 1968 continues as half of our republic’s two-party system.
At a right-wing luncheon of rubber chicken in a Washington hotel ballroom three months ago, Marco Rubio told the story of his father, an immigrant bartender and waiter who had also worked in hotel ballrooms.
Waiters labored under heavy trays balanced on one hand as they hustled plates to the tables within the eight minutes allowed them.
“My father was a hotel bartender, just like these people you see here,” Rubio said.
Twice in a 20-minute speech, Rubio referred to “these people” as if they were inanimate objects.
No: “Please take a moment to thank them.” No: “MuchÃsimas gracias.”
It was only one missed moment. Yet the son of an immigrant father who spent his life serving food and drinks in places where he couldn’t afford to buy himself a beer missed it.
Bill Clinton would have known all the waiters’ names.
Two months after Senator Rubio spoke at the Washington luncheon, CNBC correspondent John Harwood asked Rubio how his plan to eliminate capital gains taxes would be received by people who live paycheck to paycheck. Rubio returned to the theme of his immigrant father.
“First of all, capital gains and dividends is investment,” Rubio responded. “My father had a job as a bartender at a hotel. And the reason why he had a job as a bartender is because someone with money invested in a hotel. That’s why he had a salary, and that’s why he had tips.”
Harwood suggested that elimination of the capital gains tax (a $1 trillion tax break over 10 years for the top 1 percent) is a losing proposition.
Rubio wasn’t buying it.
“Anything you tax, you’re gonna get less of,” he said. “That’s why we tax cigarettes, because we don’t want people to smoke. We want more investment. Why would we tax it?”
Rubio, like Texas Senator Ted Cruz, assumes he stays in the picture beyond the late fall, early-winter shakeout of third- and fourth-tier candidates because David and Charles Koch have designated him a contender. And Rubio has additional support beyond the Kochs and their network. If this shift of a tax burden is a betrayal of his father’s economic class, it is good tax policy for Rubio’s surrogate father.
In an interview with The New York Times, the senator described Norman Braman, a Miami billionaire who once owned the Philadelphia Eagles and now sells BMWs, Rolls-Royces, Cadillacs, Audis and Bugatis, as “a father figure who had given him advice on everything, from what books to read to how to manage a staff.”
Braman, the Times reported, gave Rubio more than advice.
He contributed $255,000 to an advocacy group Rubio formed to lobby for one of his signature-mark initiatives while he was speaker of the Florida House of Representatives: a dramatic reduction of property taxes and increase in the state sales tax.
When Rubio left state government, he got a job teaching at Florida International University, committing to raise his salary from private donors. Braman contributed $100,000 to the university, earmarked for Rubio’s salary.
Braman donated to Rubio’s U.S. Senate campaign, and hired Rubio as a lawyer for seven months while he campaigned. He hired Rubio’s wife, and her company, to work for his charitable foundation. And he is reported to have committed $10 million to Rubio’s presidential campaign.
The New York Times reporters suggested that Rubio’s involvement with Braman will lead to a more thorough examination of the Florida Senator’s personal finances as the presidential campaign continues.
What inevitably will be reported is that elected service in Florida was always something of a hustle for Rubio.
The young legislator was “virtually broke,” The Tampa Bay Times reported in 2010, when he began his speaker’s race by founding the Floridians for Conservative Leadership PAC in 2006. Leadership PACs usually fund other candidates to cultivate their support. Floridians for Conservative Leadership donated $4,000 to Republican candidates for office. While it listed the Rubios’ modest West Miami home as its address, it declared $85,000 in office and operating costs, and $16,000 in administrative costs. Rubio’s wife was the treasurer.
Another leadership PAC Rubio formed, Floridians for Conservative Leadership in Government, funneled much of the $386,000 it raised to Rubio’s own consultants and strategists, while $14,000 designated as courier expenses went to members of Rubio’s family working on his campaign.
Rubio’s income from practicing law also increased dramatically as he ascended the leadership ladder in the Florida House.
When he began serving in the Legislature in 2000, Rubio’s annual income from his own small firm was $72,000, The Tampa Bay Times reported. By the time he announced he had secured the votes to elect him speaker, he was earning $270,000 a year as an employee of three separate law firms.
By 2005, Rubio was earning $300,000 from Broad and Cassel, a Miami law firm that had earned millions doing legal work for the Florida House, over which Rubio presided as speaker.
Yet in his initial financial filing as a senator in 2009, Rubio listed his net worth as -$37,495, according to OpenSecrets.org, at a time when $13.3 million was the average net worth of his fellow senators. He has remained at the bottom in net worth among his colleagues, so more than most candidates he needs the job because he needs the pay increase—and the housing that comes with the American presidency. (The Rubios currently owe between $350,000 and $750,000 on two home mortgages and a home equity credit line, according to Senator Rubio’s 2015 filing with the U.S. Government Office of Ethics.)
“I was raised paycheck to paycheck,” Rubio told Harwood in August. Apparently he lives paycheck to paycheck, and it’s not always clear who is signing the check.
That line, and Rubio’s tropes about a father who lived on meager wages and tips, is a calculated attempt to illustrate the difference between him and the swinishly rich Hillary Clinton.
The “poor dad, poor son” biography might turn out to be more of a liability than an asset.
He has called President Obama a “socialist” and a “village idiot,” threatened to “unmask” him and suggested he “go back to Kenya.” In a rich and distinctly Cuban accent, he preaches the prosperity Gospel: tithe and accept God’s anointment and wealth will be bestowed upon you.
He is a Dominionist, devoted to a movement that finds in Genesis a mandate that “men of faith” seize control of public institutions and govern by biblical principle. He fluidly quotes long passages of the Bible when he preaches at big-box churches or addresses large Republican audiences.
And the man who is essentially an itinerant preacher appears to have wildly exaggerated his ministerial credentials. Consider the Rev. Rafael B. Cruz’s frequently cited biography, as it appears on the Great American Speakers booking website.
Pastor Rafael Cruz was born in Cuba and immigrated to this country over 55 years ago to flee an oppressive communist regime. He fought in the revolution and was imprisoned and tortured. He fled to Texas penniless and not speaking a word of English.
Today Rafael Cruz is a pastor at a church in Dallas and serves as the Director of Purifying Fire Ministries ministering in the U.S., Mexico, and Central America. He is also a professor Bible [sic] and Theology and the president of Kingdom Translation Services.
Up to the phrase “penniless and not speaking a word of English” the Rev. Cruz’s professional bio appears to be true, unless a literalist were to quibble with “penniless” and “arrived with only $100 sewn into his underwear.” (The latter is often repeated by Senator Ted Cruz when telling his father’s story.)
Beyond that, the story on which the Cuban-American evangelical has been dining out (and collecting speaker’s fees) doesn’t quite wash.
Until it folded in 2014, Purifying Fire was a Costa Mesa, Calif., ministry owned by Suzanne Hinn, the divorced (then remarried) wife of faith healer Benny Hinn. A spokesman for the Cruz presidential campaign said Rev. Cruz has never been associated with the Hinns, but “used the Purifying Fire name for a while then he dropped it.”
“Pastor at a church in Dallas” isn’t exactly right either, although according to the campaign: “You don’t have to have a church to be a pastor.”
Cruz has claimed to have studied theology at Advanced Bible College (or Advance Bible College), neither of which appear to exist. The Cruz campaign says Rev. Cruz “audited courses at Southwestern [Baptist] Theological Seminary and was ordained at Mundo de Fe.” They could provide no details on Mundo de Fe (World of Faith), but it is a non-denominational church in the Dallas suburb of Arlington, run by Stephen and Courtney Holland. Rev. Cruz told National Journal he was ordained by Ralph Holland, another Dallas-based preacher.
The campaign spokesman also said Rev. Cruz is affiliated with no seminary or Bible college but he is a professor.
Kingdom Translation Services Inc. has been registered with the Texas Secretary of State since 2012, with a billing address in an apartment complex in a Dallas suburb. It has no working website or listed phone number. “It is Rev. Cruz’s one-man translation service,” according to the campaign.
News outlets, including The Washington Post (April 2015) and The Detroit News (August 2015) continue to repeat Rev. Cruz’s bona fides (as did this publication in 2014).
For $59.95 on Amazon, you can purchase a 68-CD Audio Biblia read aloud by Rev. Cruz. That much is factual.
American politics is not easy for believers.
“This is a forum where our candidates can share their faith and testimony and not feel ostracized. Except maybe by the press,” Mary Frances Forrester told me. “Here, we can ask questions and candidates can include their faith when they’re talking about important social issues.”
Forrester—a state director of Concerned Women for America and the widow of James Forrester, a North Carolina state senator who led a successful campaign to pass a constitutional ban on same-sex marriage—was one of 1,500-plus Christians (and an inconsequential scattering of Jews) attending Ralph Reed’s Faith & Freedom Coalition national conference in late June. The event was co-sponsored by Concerned Women, a national organization that promotes “Biblical values among all citizens.”
Since the Spectator’s coverage of the first Faith & Freedom Coalition conference nearly five years ago, the annual event has moved from the basement of a smaller hotel in downtown Washington to the Shoreham, one of the larger conference venues in the city.
Reed earned his chops with Jerry Falwell’s Christian Coalition of America in the 1980s; escaped indictment despite billing tribes more than $1 million in the Indian-casino lobbying shakedown that landed Jack Abramoff in a federal penitentiary in 2006; then lost a race for lieutenant governor of Georgia. He is well into his fourth act, as the founding director of an organization that claims more than 700,000 members.
This year, 13 of the Republicans chasing the party’s 2016 presidential nomination pitched their candidacies at his event. The only no-shows were Mike Huckabee and Donald Trump.
Reed has created a forum in which candidates can speak freely about the intersection of religious belief and pubic policy.
To Out-Herod Herod
Yet something is happening here that is larger than that. At events such as this one—and this has become an A-List conference—Republican candidates meet “the base” whose support they must have to win a primary.
The conference is four days of dialogue between candidates and their supporters. Posturing is predictable: Louisiana Governor Bobby Jindal’s three-minute prayer after other speakers had observed only a moment of silence was followed by public testimony that he gave himself over to Christ at six years of age.
But there’s also a dynamic in which each candidate is compelled to out-Herod Herod. To be outflanked on the right is to lose ground.
“Last month, I was in Israel,” Santorum said. “And one of Prime Minister Netanyahu’s advisers told me, ‘Senator, you need to tell the American people that the next president the country elects will have to be a wartime president.’”
Rand Paul promises to defend the “sanctity of life in the womb.”
Rick Perry says he’s the candidate with a record on abortion: “You know, a lot of candidates say—they say the right things about protecting life. But no candidate’s done more to protect unborn life. I helped pass a parental-consent law. I signed a sonogram law so mothers facing an agonizing choice could witness that beating heart within them. I signed a law outlawing abortion at 20 weeks.
Issue by issue, policy position by policy position, the candidates drag their party to the right.
These People Are Afraid
Faith & Freedom congregants are more reserved than the angry political activists who turn out for hard-right ideological gatherings like the annual Conservative Political Action Conference (CPAC). Earnest men and women from their fifties through retirement age, most married couples. In 20 interviews that I did over three days, I spoke to one unattached male.
There’s a small 30-and-younger cohort, many with expenses covered by scholarships. The youngest are home schooled. (I talked to a father of seven with two thoughtful and devout adolescents in tow.) Or they attend private Christian academies.
This event is also overwhelmingly white. During a morning session of speeches by presidential candidates, I counted 12 African Americans in a packed hotel ballroom.
Everyone here seems to feel flown-over and disrespected. Their religious values are under attack by their government and by business forces they cannot control. They are misrepresented by the liberal news media and mocked by the liberal entertainment industry.
The single issue that dominated every interview I did was same-sex marriage, which all described as a threat to their way of life.
Another persistent preoccupation was radical Islam. A close third was threats confronting Israel, a place central to evangelical Christian faith.
These people are, in a word, afraid. And their candidates have mastered the exploitation of their fears.
The IRS Is Coming
Consider one passage in Texas Senator Ted Cruz’s riveting 20-minute speech on the first day of the conference. Cruz is a brilliant and impassioned extemporaneous speaker.
A week and a day before the U.S. Supreme Court handed down its historic Obergefell v. Hodges decision, Cruz was praying that the Court would avoid “an act of naked and lawless judicial activism, tearing down the marriage laws adopted pursuant to the Constitution.”
Any ruling upholding same-sex marriage, he warned, would be the beginning of a broad assault on the Christian faith.
Cruz quoted from the oral argument in Obergefell v. Hodges to warn people of faith what will follow an adverse ruling on marriage:
“Justice [Samuel] Alito asked U.S. Solicitor-General Donald Verrilli: ‘If the Obama administration prevails and you convince this court to strike down the marriage laws of every state, would the next step be that the IRS would start going after Christian schools, Christian charities, and next after that Christian churches? Any institutions that follow a biblical teaching of marriage? Or for that matter, Jewish schools? Mormon schools? Any institution that follows religious teaching?’
“And the answer from the Obama administration was: ‘Yes, that is a very real possibility. That the next step is the IRS coming after schools, universities and charities.’”
It was an effective rhetorical device. Cruz had already described three “religious freedom” cases he had litigated at the Supreme Court before he was elected to the Senate. With his stark warnings about same-sex marriage, he was framing the fight he would undertake as president.
But that question was not asked during the Obergefell v. Hodges oral argument.
Here, from the official transcript, is the exchange the senator “quoted”:
JUSTICE ALITO: Well, in the Bob Jones case, the Court held that a college was not entitled to tax-exempt status if it opposed interracial marriage or interracial dating. Should the same apply to a university or college if it opposed same-sex marriage?
GENERAL VERRILLI: You know, I—I don’t think I can answer that question without knowing more specifics, but it’s certainly going to be an issue. I don’t deny that, Justice Alito. It is going to be an issue.
Cruz’s warnings about same-sex marriage (which were echoed by Rand Paul, who followed him), and the broader assault on the Christian faith resonated with one woman I interviewed in the hotel lobby. With her husband, she had traveled from Collegeville, Pennsylvania.
“My husband pastors a church,” she said.
“A lot of these issues involving same-sex marriage are going to affect our church in a huge way. We worry about the repercussions. Are they going to make my husband perform same-sex marriages? When he refuses, is that going to affect our IRS tax-exempt status?”
She had listened to the candidates’ speeches and was impressed by what Cruz had said about religious freedom. While he seems an unlikely nominee, the Texas senator was the overwhelming favorite in my random sampling of those attending the conference. And the extreme positions he articulates are shaping the debate.
No candidate—except Ohio Governor John Kasich, who, in a quiet conversation with an audience of 1,000, explained that his faith requires that he care for those who can’t care for themselves—deviated from a requisite litany of topics: same-sex marriage; abortion; ISIS and Islamic terror in general; Obama’s “abandonment” of Israel and engagement with Iran; and the government’s encroachment on religious freedom.
These 13 candidates, declared and undeclared, competing for the support of evangelical Christians who make up 25 percent of Republican primary voters, are resuming the culture wars that began with Pat Buchanan’s speech at the party’s 1992 national convention in Houston.
“For Moses. For God. For Jesus”
With the Supreme Court poised to hand down its Obergefell decision, one topic dominated interviews and sidebar conversations.
“Do you know that two justices have already performed same-sex marriages,” Forrester asked me, referring to Elena Kagan and Ruth Bader Ginsberg.
“They have disqualified themselves and can’t vote on the issue.”
Louie Gohmert, the shrill and frequently unhinged Congressman from Texas, described his legal bona fides (attorney, judge, chief justice in state courts), cited the U.S. Code, the law God conveyed to Moses as “restated by Jesus,” and expanded on the meme Forrester was working, though as a former judge he should have known better.
Any decision on same sex-marriage in which Kagan and Ginsberg participated would be, Gohmert said, “an illegal law … and not something we would have to follow.”
“America is going to have to stand up and say you were disqualified. And now you have tried to substitute your opinion for Moses. For God. For Jesus. For most states’ marriage laws.
“And we just may get you impeached.”
Gohmert has said he’s considering joining the pack of 15 Republicans (as of this writing) pursuing the party’s presidential nomination.
Yet as the primary begins in earnest, there’s not, as George Wallace used to say, “a dime’s worth of difference” between this member of the U.S. House who has turned himself into a cable-news curiosity and all but two or three “moderates” in the Republican class of 2016.
Sometimes prison time actually does rehabilitate. Or perhaps it was Alan Gross’ December 2014 rescue from a Cuban prison by the patient, quiet diplomacy of the Obama administration.
Gross, a small player in the failed U.S. policy to overthrow Fidel (then Raul) Castro, was a USAID contractor who spent five years in a Cuban prison for engaging in illegal covert activity on the island. (Illegal there and probably illegal in the United States)
The Wall Street Journal reported last month that Gross is working for a Miami-based PAC that will fund candidates who support President Obama’s move to normalize relations with Cuba:
A political-action committee backing candidates in favor of a U.S.-Cuba policy shift will launch its campaign effort Monday with the help of a notable guest: Alan Gross, the U.S. citizen who spent five years in Cuban prisons.
The committee, called New Cuba PAC, will back candidates who favor reorienting U.S.-Cuba policy, particularly with more trade and travel between the two countries. President Barack Obama took steps to lift financial and travel regulations in December as part of a normalization push, but it will take congressional action to fully lift an embargo and allow for full travel to the island.
As we reported at the time of his release, Gross was both a victim of George W. Bush’s Cuba regime-change policy and a perpetrator of several crimes in Cuba.
Gross, who spoke no Spanish and had no background in Cuban politics or policy, was arrested at the JosÃ© MartÃ Airport on his fifth smuggling trip. On the U.S. taxpayer’s tab, he had been installing internet hubs in an attempt to break the Castro brothers’ electronic blockade of foreign websites and internet communication.
Among the items Cuban investigators found in Gross’s contraband were sophisticated encryption systems normally available to only the U.S. Army or the CIA.
An American Jew who belongs to a reform congregation in Maryland, Gross used the Cuba’s Jewish community for cover, working with rabbis and the leaders of several synagogues on the island, who were unaware that he was a U.S. agent. He also used unwitting American Jews engaged in humanitarian work for U.S.-based Jewish charities as “mules” to smuggle electronic devices in their luggage when visiting Cuba.
Gross’ arrest panicked USAID officials, who were aware of what he was doing and of the program’s use of mulas to smuggle contraband. One email the Spectator obtained at the time read:
If you knew that the risks associated with sending travelers to the island were high, would your travelers still want to go? Why or why not?
Please complete the attached table and return it to me by COB Thursday 21 January. You will note that we are not asking you for the travelers’ names. We are also not asking for information about mulas. We’re interested in programmatic travelers who spent time on the island.
The American Jewish USAID operative working in a Cold War program flush with new funding demanded by President George W. Bush was sprung from prison by a Barack Obama diplomatic initiative that had enlisted the support of Pope Francis.
The president’s “home for Hanukkah” delivery of Gross completely unhinged anti-Castro Republicans, most notably presidential candidates Marco Rubio and Ted Cruz.
It’s going to take more than a couple of chilled Cuba Libres to calm their nerves now that their Cold Warrior has come in from the cold to work on behalf of Obama’s Cuba policy.
The collapse of InnoVida Holdings LLC in 2011 didn’t get much traction in the media. Except in South Florida where a small group of investors lost more than $40 million on a scheme to market hurricane- and earthquake-resistant homes assembled from prefabricated plastic panels. The company CEO had promised a highly publicized roll-out in Haiti followed by expansion into more lucrative markets. Neither ever occurred.
Even in South Florida, the story had receded into endless litigation (with more than 1,000 pleadings filed in bankruptcy and civil proceedings). It resurfaced in The New York Times in April, because it involved former Florida Governor Jeb Bush, who is emerging as the preferred 2016 presidential candidate among establishment Republicans who consider New Jersey Governor Chris Christie unelectable.
Bush was both a director on the corporate board and a marketing consultant for InnoVida Holdings LLC while it was the subject of a criminal investigation that sent its two top executives to jail.
The Times surveyed business dealings Bush pursued after leaving office in 2007. He had returned to the private sector with a modest net worth of $1.3 million, lagging behind his brothers. George W., for example, made $14 million on the sale of his partial ownership of the Texas Rangers while he was governor of Texas. Jeb, the Times reported, scrambled to make up for time lost while governor and had earned $3.2 million since leaving office.
There is much more to Jeb Bush’s role in the InnoVida scam, which wiped out every dime of shareholder wealth, than the Times reported. Bankruptcy documents, a lawsuit filed by the Securities and Exchange Commission, and filings in criminal and civil cases suggest an ethical blind spot that led Bush to ignore the fact that the book value and returns reported by InnoVida executives were impossible under any reasonable set of financial assumptions.
Corporate board directors have a fiduciary responsibility to shareholders whose interest they represent. Bush endorsed a company that defrauded its shareholders and the government while failing to deliver its product to market.
“Corporate Ponzi scheme”
Before the indictment and bankruptcy, InnoVida was a quintessential South Florida story unfolding on the business and lifestyle pages of the Miami Herald. An extravagant and strikingly handsome South American CEO, arts patron, and political donor hosting A-List parties in a $12 million waterfront mansion on Star Island, a gated community on a man-made island in Biscayne Bay. The Venezuelan-born Gatsby had a $75,000 speedboat at the end of the dock. And a Maserati in the garage. He was also a major Democratic Party donor.
Claudio Osorio is now Inmate #01273-104 at the Miami Federal Detention Center. A bankruptcy trustee sold the property rights to his resilient plastic panels to a Brazilian company. Forensic accountants continue to search for funds in offshore banks. And investors are asking what became of $40-$50 million they staked on a company that promised turnkey prefabricated residential units assembled in one day.
Osorio, it turns out, was damaged goods long before Bush signed on. An unnamed Bush aide told the Times that he had done a background search on Osorio and found one bankruptcy but “nothing to suggest wrongdoing.”
Before the bankruptcy that the aide referred to, Osorio’s CHS Electronics was in federal court in Miami, defending itself against class-action suits by shareholders who claimed the company had engaged in securities fraud. Several of the shareholders’ suits were consolidated in 1999, and in 2001 a bankruptcy judge in Miami used proceeds from insurance policies that had been purchased by the company’s board of directors and officers to pay shareholders $11,750,000, according to court records.
Those records were available to anyone doing a background research and should have been a red flag regarding any Claudio Osorio business venture.
An attorney who would later sue Osorio told me that, “This is a small world down here,” and that it would almost require “willful ignorance” to miss the paper trail of litigation that led to Osorio’s corporate suite.
Offshore Alert’s financial database later published a report linking Osorio to potential criminal activities in Switzerland:
“Claudio Osorio Rodriguez et al. Application for the appointment to collect evidence for a criminal investigation in Switzerland into Claudio Eleazar Osorio Rodriguez, Marc Schurtz, John Metzger, William Ferrero and Andre Tinguely into alleged fraud and forgery regarding the bankruptcy of CHS Financial Suisse SA in May 2000.”
Seven years before he invited Bush to join InnoVida’s corporate board, Osorio was pursuing a $200-million loan in Switzerland with what was alleged to be a fraudulent application.
But the more critical story played out in federal courts in the Southern District of Florida, where plaintiffs claimed that Osorio submitted false financials based on forged documents and fake orders. And that CHS Electronics had reported near-impossible increases in profits—from $1.34 million to $4.7 billion in a four-year period. After attorneys for shareholders discovered widespread accounting irregularities, stock value evaporated and the company’s remaining assets were parceled out to creditors in bankruptcy court.
What happened at CHS foreshadowed what would happen at InnoVida. The same patterns and practices that resulted in the loss of all shareholder value at CHS would be repeated seven years later.
David Nunez, a Florida lawyer who represented several shareholders who together lost more than $5 million when InnoVida collapsed, said there was a lack of corporate due diligence.
“There’s nothing wrong with filing bankruptcy,” Nunez told me. “But if you had done your research, you would have learned that this guy [Osorio] took a multi-national company into bankruptcy after he took out a $200-million loan with forged papers. The Swiss government asked the U.S. Attorney’s office here in South Florida to assist in their probe, because they felt the loan was made under fraudulent terms. To me, that would be an indication that I should look deeper.”
Why didn’t Bush or someone on his staff look deeper? The former governor wasn’t a novice. He had been involved in commercial real estate in South Florida, was the director of a business-consulting firm and he was sitting on five other corporate boards. How did he end up on the board of directors of a corporate Ponzi scheme—or so InnoVida is described in the 21-count federal indictment of Osorio and his Chief Financial Officer Craig Toll.
According to the indictment, “newly collected investor money was being used to pay annual returns on interest payments promised to investors and to repay investors’ principal in order to create the false and fraudulent impression that InnoVida was successful and profitable.”
“An air of legitimacy”
Bush is not mentioned in the indictment that sent Osorio to prison for 12-and-a-half years. Nor is there any suggestion that he was culpable of criminal wrongdoing.
But a Securities and Exchange Commission lawsuit filed against InnoVida and Osorio in 2013 alleges that Bush was brought on “to add an air of legitimacy to InnoVida,” which “helped Osorio raise approximately $16.8 million from at least five investors.” More than half that money, according to the complaint, was used by Osorio to pay for private homes in Florida, Colorado and Switzerland.
The fraudulent financial statements detailed in the SEC complaint should have set off alarms for Jeb Bush and the other board members.
Osorio and his CFO created one financial statement showing that InnoVida had more than $35 million in cash and more than $100 million in equity, both of which were not true.
Osorio informed one prospective investor that InnoVida was valued at $50 million and another that it was valued at $250 million. Neither statement was true.
In March 2009, one financial statement listed “more than $35 million in cash and cash equivalents” while there was only $185,000 in company accounts.
InnoVida executives used fraudulent statements to lure investors who were solicited at board meetings. After one meeting, “an investor subsequently increased his investment and a potential investor made his initial investment based on the fraudulent financial statements.”
Cash value and equity, according to the SEC complaint, were adjusted as needed on paper to lure investors. During a September 2009 board meeting, for example, prospective investors were told the company was valued at $250 million, although InnoVida’s most recent evaluation in December 2008 was for $20 million.
“I saw their books,” Nunez said in a phone interview. “And I’ll put ‘books’ in quotes. Their books were forged. I took an accountant to look at them. When we saw their numbers, we knew that they were a crock of you-know-what.
“Now I can’t imagine someone who has been in government, in the public sector, then in the private sector, having performed any kind of due diligence and concluded that this company was legitimate.”
Nunez wouldn’t disclose the names of his clients. According to bankruptcy filings, two of his clients were NBA power forward Carlos Boozer and his former wife, Cindy, listed as unsecured creditors in bankruptcy proceedings while suing InnoVida for $6 million.
“My clients did not rely per se on board members having done their due diligence,” Nunez said. “Having said that, I can’t imagine anyone looking at the company and saying Governor Bush is on the board, General Wesley Clark is on the board and thinking this is anything but a seal of approval. This was an all-star cast of board members.”
Miami attorney Abbey Kaplan represented a client who invested $6.3 million in the company, then loaned Osorio $1.7 million, according to court records.
In 2011, Kaplan told the Miami Herald that Osorio used his board members to attract his client. “Osorio used his apparent wealth, connections and success story to lure him in. A who’s-who was listed as his board of directors: Wesley Clark, Jeb Bush [Miami condo developer] Jorge Perez.”
In a telephone interview, Kaplan told me his client’s claim was stayed when InnoVida went into bankruptcy. “Unsecured creditors are the last to get paid,” Kaplan said.
(Among the list of unsecured clients in the Chapter 11 filings was the Overseas Private Investment Corporation, a federally-backed agency that lost $3 million, the first installment of a $10-million loan to InnoVida.)
Bush repaid $270,000 of $468,901 he had earned as a consultant between 2007 and 2010. He stipulated in court documents that he was voluntarily surrendering the funds to the court and had not been compelled to repay them.
The discovery process in shareholders’ suits filed against Osorio and InnoVida ended when bankruptcy proceedings began, so Bush’s compensation as a board member was never revealed to shareholders or other creditors. Nor do documents explain why Bush repaid less than half the money he received from InnoVida.
As the company was never profitable and constantly solicited new investors, all of its money was investors’ money.
A front-row seat
A spokesperson for Bush did not respond by deadline to emails or phone calls regarding InnoVida. But as Bush begins to eclipse Chris Christie as the moderate Republican alternative in the 2016 race, questions will persist.
Was the former governor of Florida in the room when Claudio Osorio wildly overstated the value of the company to secure millions from an investor who lost everything? Did it occur to Bush to inquire about a multimillion-dollar investor from a Middle East sovereign-wealth fund who never existed? Did Bush ask how company value increased from $20 million to $250 million in nine months in 2009?
Perhaps his staff bungled what should have been a simple background check on Claudio Osorio, thus missing his first shakedown of investors. But according to documents on file in state and federal courtrooms in Florida, what happened the second time around, in InnoVida’s corporate board room, put two men in jail and destroyed tens of millions of dollars in shareholder wealth.
And Jeb Bush either had a front-row seat to a corporate scam or he ignored his duty to the shareholders he represented on a corporate board.