Culture of Corruption: Obama and His Team of Tax Cheats, Crooks, and Cronies (32 page)

Only the highest ethical standards for Hope and Change.

GEORGE THE GENEROUSLY PAID GENERAL COUNSEL

Corporate lawyer George W. Madison worked for retirement management company TIAA-CREF before the Obama administration tapped him for the general counsel position at the Treasury Department. The firm has spent big bucks lobbying in Washington. But Treasury ethics bureaucrats saw no conflict of interest problems. In fact, they approved a deal allowing Madison to collect a government salary of $153,200 while receiving an additional $955,000 next year from TIAA-CREF as part of a corporate buyout. Madison is slated to receive another $1.6 million from TIAA-CREF in 2011 and $333,000 in 2012, according to the
Washington Times
.
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Obama officials state blithely that Madison will simply recuse himself from any matter affecting TIAA-CREF. The company, however, has lobbied every corner of the federal government on every major corporate financial issue ranging from the banking bailout to executive compensation to accounting and securities regulations to mortgage reform, and the stimulus. What would be left for Madison to counsel the Treasury Department on?

MARK THE CORPORATE LOBBYIST

There’s always room for another Goldman Sachs water-carrier in the House of Barack. Even if it means breaking Obama’s own no-lobbyist rules. In January 2009, Treasury Secretary Tim Geithner chose former Goldman Sachs lobbyist Mark Patterson to serve as his top deputy and overseer of the $700 billion TARP banking bailout—$10 billion of which went to Goldman Sachs. In the understatement of the year, left-leaning government watchdog Melanie Sloan of the Citizens for Responsibility and Ethics in Washington responded: “It makes it appear that they are saying one thing and doing another.”
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Give her the Sherlock Holmes Award!

Paul Blumenthal of the Sunlight Foundation noted that, while at Goldman Sachs, Patterson lobbied against executive pay limits that Obama had crusaded for as Senator (before, that is, his administration carved out exemptions for AIG). While Patterson agreed to recuse himself on any Goldman Sachs-related issues or related policy concerns, Blumenthal wrote, it “still creates a serious conflict for Geithner, as Treasury is being partly managed by a former Goldman lobbyist. Geithner is also placed in a tough position considering that his chief of staff is limited in the areas in which he can work (supposedly).”
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As if that weren’t enough baggage,
Washington Examiner
columnist Timothy P. Carney reported that Patterson was also a former Tom Daschle acolyte and adviser who carved out a niche in alternative energy mandates and subsidies. He championed an ethanol firm in Canada, Iogen Corporation, which received $30 million from Goldman Sachs in a bid to boost its green image. The logs started rolling. Iogen soon received an $80 million Bush Energy Department grant and millions more in energy bill set-asides. “So now you see how it works,” Carney demonstrated.

A well-connected company invests in a technology that is currently unprofitable. That company then uses its high-dollar lobbyists and friends inside government to subsidize or mandate that product into profitability. Goldman similarly invested in—and lobbied for—greenhouse gas credits, which are literally worthless without climate change legislation that caps emissions. A good lobbyist is like an alchemist, turning lead into gold. Mark Patterson and Goldman Sachs may not have figured out how to turn switchgrass into energy, but they did figure out how to turn it into profit. Patterson is a rainmaker, leveraging his government connections into private profit. He’s emblematic of both the “green revolution” Obama touts, and the “revolving door” Obama assails.
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Yes, so much for Obama’s “close the revolving door between K Street and Capitol Hill.”
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So much for ridding Washington and Wall Street of “excess greed, excess compensation, excess risk taking.”
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So much for giving the American people “more than window-dressing when it comes to ethics reform.”
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Whenever the White House needed a good distraction, the political strategists dispatched Obama to harangue his Wall Street friends. In December 2009, he decried the “fat cat bankers” whose banks he helped bail out and make even bigger.
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In April 2010, he assailed the culture of greed and recklessness practiced by the men of Goldman Sachs. He sauntered up to Wall Street to demand “financial regulatory reform”—just as the U.S. Securities and Exchange Commission filed civil suit against Goldman Sachs for mortgage-related fraud. Question the timing? Darn tootin’. There are no coincidences in the perpetually orchestrated Age of O. Everyone from disgraced former New York Attorney General Eliot Spitzer, to analysts at the Brookings Institution and Barclays Capital, to the GOP leadership and Rush Limbaugh noted the reeking political opportunism in the air.

The Democratic National Committee immediately bought sponsored Internet ads on Google that direct web surfers who type in “Goldman Sachs SEC” to Obama’s fundraising site. “It’s time to hold the big banks accountable,” the money-grubbing DNC message bellowed. But as we have seen, the White House can no more disown Goldman Sachs than Da Boss-in-chief can disown Chicago politics.

It’s not that bona fide capitalism is evil, or that lawyers, lobbyists, hedge fund managers, or corporate executives should have no role in government. It’s the cognitive dissonance. This is the same Obama, remember, who said, “Let’s be clear who Senator McCain’s fighting for. He’s not fighting for Joe the Plumber; he’s fighting for Joe the Hedge Fund Manager. John McCain likes to talk about Joe the Plumber but he’s in cahoots with Joe the CEO.”

Words. Just words. Words that were, in fact, the reverse of the truth.

And, as we’ll see, not only do the titans of Wall Street enrich themselves at the House of Obama, but so do the president’s fat-cat union friends, with the added unctuousness of claiming to save America’s workers while screwing them over.

CHAPTER 7

SEIU

LOOK FOR THE UNION LABEL

B
arack Obama donned a purple silk tie for one of his most important campaign speeches in the fall of 2007. “It’s time to turn the page on the old way of doing business,” he urged the rowdy crowd. Extending thanks to “Andy and Anna,” his “Illinois crew,” and the rest of his “homies,” Obama told attendees he was “so grateful to them for their unbelievable love and support.” It was, he gushed, “so good to be among friends.”

A hyperkinetic Obama adopted the tone, accent, and swagger of a Chicago street preacher at the event, which turned into an unabashed revival meeting as his forty-minute speech progressed. “We look after each otha!” he shouted. Supporters responded with “Amens” and “Uhm-huhms.” With finger jabbing and voice rising, Obama vowed: “I will open up the doors of government and ask you to be involved in your democracy again!” Audience members interrupted repeatedly with whoops, applause, and standing ovations.

Recounting his early years as a community organizer, Obama reminded the crowd that he had walked with them before—“I’ve been there, done that,” he boasted—and he would do it again if he needed to as president. “The White House is the people’s house,” he bellowed. “It’s our time!” The crowd went wild.

“Fired up?” Obama asked at the climax of his speech. “Fired up!” the crowd shouted in response. “Ready to go?” he hollered. “Ready to go!” they shouted. “Let’s go change the world!” he exhorted them, and they broke into a deafening chant: “Obama! Obama!”
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This was no ordinary reunion of family and friends. The setting was the 1.8 million-member Service Employees International Union’s political action conference in Washington, D.C. Obama’s purple tie was a nod to the “spirit color” of the labor organization. And his effusive shout-outs went to SEIU’s heaviest hitters:

“Andy” is militant left-wing social worker-turned-union heavy Andy Stern, who broke off SEIU from the old guard AFL-CIO to consolidate low-skill service workers and create a twenty-first century labor empire.

“Anna” is Anna Burger, Stern’s partner at SEIU. Known as the “Queen of Labor,” she climbed from welfare caseworker in Pennsylvania to strategist for old-guard union king John Sweeney to “the most powerful woman in the labor movement.”
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The “Illinois crew” to which Obama referred repeatedly is SEIU’s Local 880, the Chicago chapter of home care and hotel workers, which Obama assisted in his early activist days.

The “homies” Obama personally thanked are Tom Balanoff (Illinois President of SEIU Local 1, with 40,000 janitors and security guards), whom Obama worked with as a community organizer; Keith Kelleher, president of SEIU’s Local 880; and Christine Boardman, president of SEIU’s Local 73, which represents 25,000 public service workers in Illinois and Indiana.

“I’ve spent my entire adult life working with SEIU. I’m not a newcomer to this,” Obama bragged—a remark that reporter Marc Ambinder saw as a dig at Democratic rival John Edwards, who had been diligently courting SEIU officials. Obama didn’t just promise to walk with SEIU members on picket lines. He vowed to “play offense,” to reclaim the Bush Administration’s Labor Department for Big Labor (“we’re gonna take it back!”), and to deliver a radical legislative agenda pushed by the unions. Obama promised to pass universal health care “by the end of my first term” and the Orwellian-titled “Employee Free Choice Act” (EFCA) to do away with private-ballot union elections in the workplace. In 2007, he co-sponsored EFCA (also known as “card check”) legislation in 2007 and pledged to SEIU members to “make it the law of the land when I am president of the United States.”

Obama’s fierce support from the SEIU rank and file convinced Stern and the union bosses (who had favored Edwards) to delay a primary endorsement. Obama “rocked the house,” one union official admitted.
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Five months later, after Edwards abandoned his campaign and Obama was battling Hillary Clinton for the nomination, the SEIU crowned its torch-bearer. “There has never been a fight in Illinois or a fight in the nation where our members have not asked Barack Obama for assistance and he has not done everything he could to help us,” Andy Stern, the union’s president, said at his February 2008 press conference announcing the decision.
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Stern put his membership’s dues money where his mouth was. The SEIU political action committee poured an estimated $80 million worth of independent expenditures into the campaign coffers of Democratic candidates in 2008—more than $27 million of which went to Barack Obama.
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The union proudly claimed that its members “knocked on 1.87 million doors, made 4.4 million phone calls, registered 85,914 voters and sent more than 2.5 million pieces of mail in support of Obama,” in addition to sending SEIU leaders to seven states in the final weekend before the election to get out the vote for Obama and other candidates.
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SEIU’s enforcers have set aside another $10 million to spend on un-electing any of its political beneficiaries who abandon their pledges to do the union’s legislative bidding. The campaign money was raised by slapping an extra $6 per-member fee on top of regular dues payments—which was funneled straight to the union’s political action committee.

What major private company could escape scrutiny or criticism for forcing all of its employees to subsidize its political activities, whether they agreed with them or not?
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And what does it say about Obama’s credibility as a reformer that the massive infusion of union dues into his campaign treasury didn’t trouble him in the least?

SEIU paid—and Obama played. Within two weeks of moving into the White House, Obama immediately signed a series of executive orders championed by union bosses. The new rules authorized sweeping powers for the Labor Secretary that essentially blackball non-union contractors targeted by labor organizers and blacklist non-union employees in the private sector from working on taxpayer-funded projects.
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Such regulatory favoritism limits freedom in the workplace and raises the cost of doing business. Another measure immediately adopted by President Obama requires that when a government service contract runs out—and there’s a new contract to perform the same services at the same location—the new contractor must retain the old workers. Mickey Kaus of the left-leaning
Slate
magazine dubbed the move the “Labor Payoff of the Day.”
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President Obama and Vice President Biden invited labor leaders to join them for a public ceremony unveiling the executive orders repealing Bush policies that had reined in Big Labor. “Welcome back to the White House,” Biden gloated.
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Who authored the orders? Carter Wood of the National Association of Manufacturers traced the original executive order files to Craig Becker, legal counsel for the SEIU and member of Obama’s transition team for labor issues.
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In May 2009, the
Los Angeles Times
reported that the White House had included the SEIU in a conference call with California government officials over federal stimulus money. State officials said the union pressured them to repeal a bipartisan-approved wage cut for home health care workers as a condition for receiving the federal funds.
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An Obama lawyer for the Centers for Medicare and Medicaid Services (which regulates home health care) sided with the SEIU and concluded that California arguments in defense of the wage cuts were “unsupportable.” (The feds later backed off, but not before Andy Stern’s union received unprecedented access to negotiations.)
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