Archive for the ‘Waste and Fraud’ Category

Putin and the Panama Papers

Sunday, April 3rd, 2016

Here’s a potentially huge scandal that’s just unfolding now:

An unprecedented leak of more than 11 million documents, called the “Panama Papers”, has revealed the hidden financial dealings of some of the world’s wealthiest people, as well as 12 current and former world leaders and 128 more politicians and public officials around the world.

More than 200,000 companies, foundations and trusts are contained in the leak of information which came from a little-known but powerful law firm based in Panama called Mossack Fonseca, whose files include the offshore holdings of drug dealers, Mafia members, corrupt politicians and tax evaders – and wrongdoing galore.

The law firm is one of the world’s top creators of shell companies, which can be legally used to hide the ownership of assets. The data includes emails, contracts, bank records, property deeds, passport copies and other sensitive information dating from 1977 to as recently as December 2015.

It allows a never-before-seen view inside the offshore world — providing a day-to-day, decade-by-decade look at how dark money flows through the global financial system, breeding crime and stripping national treasuries of tax revenues.

There’s 2.6 terrabytes of data released, including Donald Trump’s favorite Russian dictator:

The most extraordinary allegations in the archive revolve around Putin’s closest associates, including Sergey Roldugin, a close friend since the late 1970s when Putin was a young KGB agent.

Roldugin is a cellist for the St Petersburg orchestra, yet his name appears as the owner of offshore companies that have rights to loans worth hundreds of millions of dollars. A Russian news service report in 2010 disclosed that he owned at least three per cent of Bank Rossiya, Russia’s most important bank.

When Mossack Fonseca helped open a bank account in Switzerland on behalf of Roldugin, the application form asked if he had “any relation to PEPs (politically exposed persons) or VIPs.”

The one-word answer was, “No.” Yet, Roldugin is godfather to Putin’s daughter Mariya.

“Roldugin is, by his proximity to a serving head of state, clearly an exposed person,” Mark Pieth, a former head of the Swiss justice ministry’s organized crime division, told the ICIJ team.

The documents show how in 2008 a company controlled by Roldugin had influence over Russia’s largest truck maker Kamaz, joining with several other offshore companies to help another Putin insider acquire majority control of the company. They wanted foreign investment, and German carmaker Daimler later that year bought a 10 per cent stake in Kamaz for $250 million.

The offshore company that connects many Putin loyalists is Sandalwood Continental Limited in the British Virgin Islands. Roldugin was a shareholder until 2012, as was Oleg Gordin, a little-known businessman whom incorporation documents describe as linked to “law enforcement agencies.”

The files also mention a company co-owned by Putin friend Yury Kovalchuk, the largest shareholder of Bank Rossiya. Kovalchuk was among those targeted by US sanctions in 2014 in retribution for Russia’s invasion of Crimea. Another friend, Arkady Rotenberg, Putin’s judo partner and a billionaire construction mogul, openly obtained companies through Mossack Fonseca. The US Treasury Department, when sanctioning him in 2014, suggested that the oligarch acted on behalf of “a senior official.”

That was widely believed to mean Putin, whose fingerprints were not on any offshore company.

The fact that Putin is lining the pockets of himself and his cronies is hardly shocking, but having concrete proof of it is a different thing altogether.

Strangely, the web page for the papers run by the International Consortium of Investigative Journalists‎, doesn’t seem to have any Americans fingered by the papers yet. There’s a good chance that could change.

Developing…

Texas vs. California Update for February 25, 2016

Thursday, February 25th, 2016

Been too long since I did a Texas vs. California roundup, so here it is:

  • Dark Age California:

    There are large areas of Central California that resemble life in rural Mexico. Within a radius of five miles I can go to stores and restaurants where English is rarely spoken and there is no racial or cultural diversity—a far cry from Jeb Bush’s notion of an “act of love” landscape.

    With unemployment at 10% or more in the interior of the state, with the public schools near the bottom in the nation, and with generous entitlements, it is no accident that one in six in the nation who receive public assistance now live in California, where about a fifth of the population lives below the poverty line.

    One in four Californians also were not born in the United States; more than one in four who enter the hospital for any cause are found upon admittance to suffer from Type II diabetes. The unspoken responsibility of California state government is to bring state-sponsored parity to new arrivals from Oaxaca, and to do so in ideological fashion that ensures open borders and more government. It is the work of a sort of secular church, and questioning its premises is career-ending blasphemy.

  • “California has come a long way to dig itself out of budget deficits, but the state remains on shaky ground due to nearly $400 billion in unfunded liabilities and debt from public pensions, retiree health care and bonds.” More: “It’s California’s debt and liabilities that are concerning financial analysts, particularly the state’s rapidly growing unfunded retiree health care costs, which grew more than 80 percent over the past decade. California has promised $74 billion more in health and dental benefits to current and retired state workers than the state has put aside.” (Hat tip: CalWatchdog.)
  • And new accounting rules make those unfunded liabilities harder to ignore.
  • The problem might not be quite as bad as it is did not CalPERS and CalSTARS insist on politically correct investments. (Hat tip: Pension Tsunami.)
  • San Francisco political officials indicted:

    A retired city employee and a former city commissioner who are at the center of bribery allegations involving Mayor Ed Lee were charged with multiple felonies including bribery and money laundering, San Francisco District Attorney George Gascon announced at a news conference Friday afternoon.

    Also charged Friday was political consultant and former San Francisco Unified School District Board of Education President Keith Jackson, who pleaded guilty last year to racketeering charges.

    The district attorney’s office charged recently retired Human Rights Commission employee Zula Jones, ex-HRC commissioner Nazly Mohajer and former political consultant Keith Jackson.

    Remember that Zula Jones and Nazly Mohajer were fingered by Leeland Yee’s attorneys as being the go-betweens for bribing Lee. This brings up the question (yet again): Why hasn’t Lee himself been indicted?

  • And speaking of California government officials being indicted: “Retired Los Angeles County Sheriff Lee Baca pleaded guilty Wednesday to lying to federal investigators, a stunning reversal for the longtime law enforcement leader who for years insisted he played no role in the misconduct that tarnished his agency.” (Hat tip: Dwight.)
  • Jerry Brown vetoes kangaroo court minimums for college sexual assault cases.
  • “Brown pushed for the giant pension fund CalPERS to lower its assumed investment return from 7.5% to 6.5%. Given that the world is headed towards deflation and that CalPERS earned only 2.4% for the fiscal year ended June 30, 2015, Brown’s request seemed entirely reasonable. Instead, the board approved a staff proposal to move to the 6.5% target over 10 years.” (Hat tip: Pension Tsunami.)
  • CalPERS board President Rob Feckner, serving his twelfth term, casts deciding vote against proposal for term limits for board members. “Feckner was president of the California School Employees Association for four years and executive vice president of the California Labor Federation for five. Such a conflict of interest wouldn’t be tolerated with the president of other boards of directors. But with CalPERS, it’s par for the course.” (Hat tip: Pension Tsunami.)
  • San Diego voters: We want pension reform! Union-stacked Public Employment Relations Board (PERB): Get stuffed, peasants! Result: Lawsuit. (Hat tip: Pension Tsunami.)
  • The middle class is fleeing California. “In 2006, 38 percent of middle-class households in California used more than 30 percent of their income to cover rent. Today, that figure is over 53 percent.”
  • California tech industries continue their exodus to Texas:

    The tech industry in the Bay Area has become a victim of its own success – and state policies. Like many other California businesses, tech firms are relocating or expanding operations in others states – particularly Texas – at an alarming rate.

    Some companies spend significant amounts of time and money finding and training the right workers, only to see them poached by a flashy startup within a number of months. The need for a more stable workforce was one of the main reasons cloud-computing company LiveOps Cloud moved from Silicon Valley to a suburb of Austin, Texas, CEO Vasili Triant told the San Francisco Chronicle.

    Other reasons to move or expand out-of-state are government-created: high taxes, burdensome regulations, unaffordable housing due to excessive development fees and restrictive land-use policies. California’s highly-educated workforce is not so unique anymore, and its quality of life has been tarnished by regulatory and affordability issues. Texas, by contrast, has no personal income tax and no corporate income tax (though it does have a less-onerous gross margins tax), and is universally hailed for having one of the friendliest business climates in the nation.

    Google, Facebook, Apple, Dropbox, Oracle and nearly two dozen other Bay Area tech companies have all built or expanded facilities in Texas just since 2014, the Chronicle reported. There have been more than 1,500 publicly reported California “disinvestment events” across all industries over the past seven years, according to a November report from Spectrum Location Solutions, an Irvine-based business relocation consulting firm, although it estimated the actual tally at as high as 9,000. A California business “can save 20 percent to 32 percent of labor costs by relocating a facility out of state,” Spectrum president Joe Vranich told us last year.

  • More on the theme:

    Between 1997 and 2000, during the peak of the dot-com boom, the Bay Area was a net importer of Texans: About 1,500 more households moved into the region from Texas than vice versa, bringing an additional $191 million (2015 dollars) in taxable income into the region, according to IRS data, which tracks the movement of taxpaying residents.

    The trend changed in the early 2000s, and Texas has been a net importer of Bay Area households ever since. Between 2009 and 2012, as the recession was winding down and the second tech boom was revving up, the region lost about 1,430 households to Texas, and nearly $390 million in taxable income.

    Snip.

    I had a guy working for me (in the Bay Area) making $200,000 a year, struggling to pay his bills,” company CEO Triant said. “In lots of places in the country you’re living high on the hog on $200,000. … As far as work life balance and employee morale, we have absolutely seen a remarkable increase since moving here; it’s night and day.”

    The firm still keeps a small Bay Area office, and Triant speaks fondly of his hometown of San Diego and California in general.

    But when it comes to building a company and running a business, he has found a new home in Texas. “I want my employees to be able to have a good quality of life, live in a city with low crime rates, good schools,” he said. “And that’s what we’re doing here.”

  • “It’s no coincidence that Texas and Florida have thrived while New York and California have not. High levels of taxes, spending, and regulations make it more difficult for entrepreneurs to be successful. When entrepreneurs cannot expand their businesses and hire new workers, everyone is hurt, not just the rich.”
  • In the course of verifying a Rep. Joe Straus campaign ad, Polifact confirms that Texas has grown twice as fast as the rest of the country.
  • The University of California, Berkeley, is running a $150 million deficit this year. (Hat tip: Pension Tsunami.)
  • UC Academic Senate rejects task force’s proposed retirement benefits plan that, keeping with Jerry Brown’s modest pension reforms, would pay them a measly $117,020 pension benefit. (Hat tip: Pension Tsunami.)
  • “What’s more important: High-speed rail or water? Proponents of a proposed ballot measure would force voters to choose just that. The measure would redirect $8 billion in unsold high-speed rail bonds and $2.7 billion from the 2014 water bond to fund new water storage projects.”
  • Speaking of water restrictions, looks like Californians will get to enjoy them for another year.
  • Sure, Covered California (California’s ObamaCare) may be incompetent. But it’s also corrupt. The state auditor “criticized the exchange for not sufficiently justifying its decision to award a number of large contracts without subjecting the contractors to competitive bidding.”
  • California is releasing many felons as part of a “mass forgiveness” program. Including a murderer who tied up a husband and wife and beat them to death with a pipe.
  • California adds Aloe Vera to list of cancer-causing substances. “The problem is that the 800+ chemicals listed in Proposition 65 are not devised to protect consumers, but rather serve as a cash cow for private trial lawyers to sue small business and reap the hefty settlement payout. Since 1986, nearly 20,000 lawsuits have been filed, adding up to over half a billion dollars in settlement payments by business owners.” (Hat tip: Ed Driscoll at Instapundit.)
  • San Francisco’s planning process is designed for gridlock.
  • Bankrupt San Bernardino has reached a settlement with its firefighters union.
  • Heh. “The movement to emblazon state legislators with the logos of their donors has collected tens of thousands of signatures for its would-be ballot initiative.The measure, formally called the ‘Name All Sponsors California Accountability Reform (or NASCAR. Get it?) Initiative,’ would require all state legislators to wear the emblems or names of their 10 top donors every time they attend an official function.” The ballot initiative has already collected 40,000 signatures…
  • Huge soda pop collection is coming to the Dr Pepper museum in Waco.
  • LinkSwarm for February 8, 2016

    Monday, February 8th, 2016

    I emptied the link bucket on Friday, but lo and behold, a whole new torrent of news has come rushing down the pipes:

  • You know all that “Ted Cruz is too unpopular to win” talk? Cruz is killing it with blue collar voters:

    According to entrance polling, among the roughly half of all Republican voters without a college degree, Cruz won 30 percent of the vote, eclipsing Trump’s 28 percent. Marco Rubio was a distant third, winning the support of just 17 percent of voters without college degrees. Cruz did 5 points better among voters without college degrees than among college grads (30 percent to 25 percent), while, among all candidates included in the entrance polling (Cruz, Trump, Rubio, Ben Carson, Hillary Clinton, and Bernie Sanders), Rubio was the candidate who had the lowest portion of his support come from those without college degrees—he did 10 points worse among voters without college degrees than among college grads (17 to 27 percent).

    According to the entrance polling, Cruz also fared better than Trump or Rubio among younger voters. Among voters under the age of 30, Cruz won 26 percent of the vote to Rubio’s 23 percent and Trump’s 20 percent. Among voters in their 30s and early 40s, Cruz won 30 percent of the vote to Trump’s 23 percent and Rubio’s 21 percent. (Meanwhile, on the Democratic side, Hillary Clinton got clobbered among younger voters, winning less than 30 percent of the vote among those under the age of 45.)

  • “A couple of days ago on the ONT we were reminded that Ted Cruz is only five months older than Marco Rubio. That’s one month for every case he’s won before the Supreme Court. So don’t let anyone tell you Cruz has no accomplishments.”
  • Five New Hampshire state reps who backed Rand Paul are now supporting Cruz.
  • Des Moines Register: “What happened Monday night at the Democratic caucuses was a debacle, period. Democracy, particularly at the local party level, can be slow, messy and obscure. But the refusal to undergo scrutiny or allow for an appeal reeks of autocracy.”
  • At least one Iowa delegate was unilaterally changed from Bernie Sanders to Hillary Clinton.
  • Hillary Clinton’s minions push polling Democrats in Nevada.
  • Hillary is bad at faking sincerity.
  • Gee, look how tremendously unpopular the name “Hillary” became after 1992.
  • “Marco Rubio Is Diminished by a Caustic Chris Christie.”
  • If you’re an Iraqi “refugee” who hasn’t had sex in months, do you: A.) Hire a prostitute, B.) Wank to porn, or C.) Rape a 10 year old boy in a public pool?
  • Meanwhile, in Belgium, seven men (including five “migrants”) danced and sang in Arabic as the took turns raping an unconscious 17 year old girl.
  • UK Muslim rape gang sentenced to collective 140 years in prison for raping a schoolgirl.
  • “In the Safe Spaces on Campus, No Jews Allowed.”
  • Obama Administration reinstates “catch and release” for illegal aliens. (Hat tip: Doug Ross.)
  • First confirmed case of Zika virus in Travis County. It’s funny how, just as with Enterovirus D-68, novel pathogens have a habit of showing up just when illegal alien populations do…
  • The effects of immigration on unemployment: “None of the net gain in employment over the entire 14-year period went to natives.”
  • The world’s most miserable economies: Socialist paradise Venezuela ranks first (which is to say last), followed by Argentina, South Africa, Greece and Ukraine. (Hat tip: NRO’s The Corner.)
  • Welfare mom complains about the free food and room service. (Hat tip: Doug Ross.)
  • Cherokee artist arrested for not being a real Cherokee artist. I look forward to the coming felony indictment of Elizabeth Warren…
  • For fans of the art of newspaper headline writing: “Former London Zoo meerkat expert fined for glassing monkey-handler in row over llama-keeper.”
  • Texas vs. California Update for January 19, 2016

    Tuesday, January 19th, 2016

    Been a while since I did a Texas vs. California update, due to Reasons, so here’s one:

  • Texas ranks as the third freest state in the union, behind New Hampshire and South Dakota. California ranks second to last, just ahead of Massachusetts.
  • Texas added 16,300 Jobs in November.
  • How’s this for heavy-handed symbolism? California’s legislature plans to close one of its doors to the public, but continue to allow access to lobbyists. Because you’ve always got to see your real boss when he comes around…
  • California’s unfunded liabilities for CalPERS and CalSTARS spiked by $24 billion is fiscal 2014/2015. (Hat tip: Pension Tsunami.)
  • The much ballyhooed pension reform plan won’t make it on the ballot this year. Supporters are now aiming for 2018. Who knows how broke California will be by then… (Hat tip: Pension Tsunami.)
  • That’s probably because the game is rigged against pension reform. (Hat tip: Pension Tsunami.)
  • Jerry Brown unveils a budget in California. The budget increases are relatively modest, by California standards, but $2 billion into the rainy day fund isn’t even remotely going to cover California’s huge unfunded pension gap, and most of the structural bloat in the budget remains.
  • More on the same theme:

    While all the numbers are constantly in flux, in 2014-15, the California Public Employees’ Retirement System saw its status fall from 76.3 percent funded to 73.3 percent, likely due to the fact that investment returns fell far below expectations. The long-neglected California State Teachers’ Retirement System, as of June 30, 2014, was 69 percent funded. Combined, the systems report unfunded pension promises of more than $160 billion.

    The current budget shows steep and consistent increases in state funding to the two systems. Whereas CalPERS is set to receive $4.3 billion in state contributions in the 2015-16 fiscal year, which ends June 30, it could receive $4.8 billion the following year. CalSTRS is to receive $1.9 billion this year and about $2.47 billion next year.

    In comparison, CalPERS and CalSTRS received $3.1 billion and $1.26 billion, respectively, in 2011-2012.

    While it is perfectly reasonable for costs to rise over time, the rate that costs have risen for the two giant pension funds is mainly a consequence of California trying to play catch-up for years of inadequate forecasting and planning, aggravated by investment losses. But because the pension systems are run for public employees – CalPERS’ board is full of former public employee union leaders – the necessary changes and adjustments have been made far too late to avoid calamity.

    (Hat tip: Pension Tsunami.)

  • On the actual mechanics of pension reform, and the impossibility implementing them at the state level in California. (Hat tip: Pension Tsunami.)
  • Part 2, examining the possibility of reform at the local level. (Ditto.)
  • “California government, however, serves one purpose. It always reminds America what not to do.” Also:

    California has given us three new truths about government.

    One, the higher that taxes rise, the worse state services become.

    Two, the worse a natural disaster hits, the more the state contributes to its havoc.

    And three, the more existential the problem, the more the state ignores it.

    California somehow has managed to have the fourth-highest gas taxes in the nation, yet its roads are rated 44th among the 50 states. Nearly 70 percent of California roads are considered to be in poor or mediocre condition by the state senate. In response, the state legislature naturally wants to raise gas taxes, with one proposal calling for an increase of 12 cents per gallon, which would give California the highest gas taxes in the nation.

  • Federal judge rejects San Bernardino’s bankruptcy proposal, saying it doesn’t contain enough information.
  • Sacramento continues to ignore the needs of rural residents. (Hat tip: Ed Driscoll at Instapundit.)
  • Half of California’s driver’s licenses are issued to illegal aliens.
  • After years at the top of the relocation list, Texas was only the 9th biggest relocation destination in 2015.
  • On the other hand, Texas was still the top destination according to Allied Van Lines.
  • But businesses continue to flee California:

    In California, costs to run a business are higher than in other states and nations largely due to the states tax and regulatory policies and the business climate shows little chance of improving. It is understandable that from 2008 through 2015, at least 1,687 California disinvestment events occurred, a count that reflects only those that became public knowledge. Experts in site selection generally agree that at least five events fail to become public knowledge for every one that does. Thus it is reasonable to conclude that a minimum of 10,000 California disinvestment events have occurred during that period….For about 40 years California has been viewed as a state in which it is difficult to do business. Gov. Jerry Brown’s Administration’s less than candid approach regarding the business climate has misled the Legislature, the news media and the public about the flight of capital, facilities and jobs to other states and nations.

    The study also shows that Texas had the most new facilities opening up in the nation in 2014, with 689. California, despite being the most populous state, tied for 12th with 170.

  • 85% of Marin County’s special district workers collected over $100,000.” Bonus: Their pensions are underfunded too. (Hat tip: Pension Tsunami.)
  • Troubled California Wine Retailer Files for Bankruptcy. Premier Cru owes customers almost $70 million for wines it never delivered.”
  • This county-by-county breakdown of recession recovery is full of (very slow loading) data, and I haven’t come close to digesting it yet.
  • Texas vs. California Update for December 7, 2015

    Monday, December 7th, 2015

    Finally, some news from California that doesn’t involve radical islamic jihadis killing innocent people…

  • California lost 9,000 business HQs and expansions, mostly to Texas, 7-year study says. “It’s typical for companies leaving California to experience operating cost savings of 20 up to 35 percent.” (Hat tip: Pension Tsunami.)
  • Remember those “temporary taxes” that made California’s state income taxes the highest in the country? Well, to the all-devouring maw of a broke welfare state, no tax is temporary.
  • Los Angeles County: center of American poverty:

    The Census Bureau’s 2012 decision to begin releasing an alternative measure of poverty that included cost of living has appeared to have far-reaching effects in California as politicians, community leaders and residents react to the new measure’s depiction of the Golden State as the most impoverished place in America.

    The fact that about 23 percent of state residents are barely getting by has helped fuel the push for a much higher minimum wage and prompted renewed interest in affordable housing programs. It’s also put the focus on regional economic disparities, especially the fact that Silicon Valley and San Francisco are the primary engine of state prosperity.

    While the tech boom and the vast increase in housing prices it has triggered in the Bay Area are national news, prompting think pieces and thoughtful analyses, the poverty picture in the state’s largest population center isn’t covered nearly as fully. Although the fact is plain in Census Bureau data, it’s not commonly understood that Los Angeles County is the capital of U.S. poverty. A 2013 study by the Public Policy Institute of California and the Stanford Center on Poverty and Inequality based on 2011 data found 27 percent of the county’s 10 million residents were impoverished, the highest figure in the state and the highest of any large metro area in the U.S.

  • Why California’s cities are in trouble: “The problems here, as the bankruptcies of San Bernardino and other cities have shown, are mismanagement and high costs incurred as a result of the state’s public-employee unions.” (Hat tip: Pension Tsunami.)
  • How CalPERS created a ticking time bomb. (Hat tip: Pension Tsunami.)
  • CalPERS also paid $3.4 billion in private equity firm fees since 1990, despite returns that were not that great. (Hat tip: Pension Tsunami.)
  • And CalPERS also has a huge problem with self-dealing and conflicts of interest. (Hat tip: Pension Tsunami.)
  • Texas’ largest employer is Wal-Mart. California’s largest employer is the University of California system.
  • But I doubt Wal-Mart has 35,065 employees who make more than $100,000 a year…
  • What good is California’s open meetings law if officials still feel free to ignore it? “Six decades after Brown Act passage, elected leaders still hold illegal meetings.” (Note: The Brown Act is named after Assemblyman Ralph M. Brown, D-Modesto, not either Jerry Brown.) (Hat tip: Pension Tsunami.)
  • Though Texas is doing much better at fiscal restraint than California, TPPF notes that Texas’ could still use additional spending restraint:

    “Though Texas legislators did an excellent job by holding the total budget below population growth plus inflation during the last session, the state’s weak spending limit remains a primary cause of excessive budget growth during the last decade,” said Heflin. “Legislators can strengthen the limit by capping the total budget, basing the growth on the lowest of three metrics, and requiring a supermajority vote to exceed it. These reforms would have helped keep more money in Texans pockets where it belongs.”

  • All segments of Texas housing market show strong gains in 2015.”
  • Mojave solar project operator files for bankruptcy.
  • “Fresh off of a major expansion, iconic San Francisco craft brewery Magnolia Brewing Co. filed voluntarily for Chapter 11 bankruptcy.” So a brewery that opened in 1997 is “iconic”?
  • “Fuhu Holdings Inc, a maker of kid-friendly computer tablets, has filed for Chapter 11 bankruptcy protection, according to a court filing on Monday.” Eh, included for completeness. That sounds like a bad business model for a startup no matter what state it was in…
  • Fresno Democratic assemblyman resigns to make more money in the private sector. Evidently a year to wait until his term expires was just too long to avoid climbing aboard the revolving door gravy train…
  • This Week in Democratic Party Corruption

    Wednesday, December 2nd, 2015

    It’s been a big week for Democratic Party corruption.

    First, Democratic Speaker of New York’s Sheldon Silver was convicted of all the corruption charges against him:

    “The Democratic speaker of the state Assembly for more than 20 years, Mr. Silver was found guilty by a 12-person federal jury in Manhattan of four counts of honest-services fraud, two counts of extortion and one count of money laundering.”

    More on Silver from Steve Malanga of City Journal:

    For years, New York State has ranked among the most litigation-friendly places in America. (Those unlucky enough to get caught up in the state’s civil justice system call it “Sue” York.) Lawsuit reform has bypassed New York largely because one of the state’s most powerful politicians, former assembly speaker Sheldon Silver, was himself a plaintiff’s attorney who benefited from the system he helped create. Over the years, Silver not only blocked attempts to change unique features of New York’s civil justice system, but he also appointed other trial lawyers to key legislative positions, including on the crucial Assembly Judiciary Committee. So it’s not shocking that when Silver himself finally fell from grace, the case revolved around state grants Silver arranged to a cancer researcher, who then referred mesothelioma patients back to the former speaker’s law firm so that they could become clients in the lucrative asbestos-litigation business.

    Snip.

    Silver thought the people’s money was his money. For years, he helped lead a regime in which legislators from both parties received millions of dollars to distribute as “earmarks”—money handed out directly by elected officials to favored organizations outside of the state’s regular contracting or granting process. The New York Times dubbed Silver the “king of earmarks” because he used them as a way of exercising power over members of his political caucus. In doing so, Silver was accountable to no one. He handed out millions of dollars of state money, for instance, to the Metropolitan Council on Jewish Poverty, an organization run by William Rapfogel, the husband of Silver’s longtime chief of staff. Judy Rapfogel sat in on meetings about funding for her husband’s group, according to press accounts. In 2013, William pled guilty to stealing some $3 million over a nearly 20-year period from the largely government-funded Met Council. He served 14 months of a 3- to 10-year sentence in an upstate prison and recently entered a supervised work-release program.

    In New York, the earmark process is so corrupt that politicians can create their own nonprofits and then finance them with taxpayer money—a remarkably blatant display of conflict-of-interest.

    Meanwhile, in Rahm Emmanual’s Chicago:

    THERE’S been a cover-up in Chicago. The city’s leaders have now brought charges against a police officer, Jason Van Dyke, for the first-degree murder of 17-year-old Laquan McDonald. But for more than a year, Chicago officials delayed the criminal process, and might well have postponed prosecution indefinitely, had it not been for a state court forcing their hand.

    They prevented the public from viewing crucial incriminating evidence — first one police car’s dashboard camera video; now, we learn, five such videos in total. And these senior officials turned a blind eye to the fact that 86 minutes of other video surveillance footage of the crime scene was unaccountably missing.

    Snip.

    The video of a police shooting like this in Chicago could have buried Mr. Emanuel’s chances for re-election. And it would likely have ended the career of the police superintendent, Garry F. McCarthy.

    And so the wheels of justice virtually ground to a halt. Mayor Emanuel refused to make the dash-cam video public, going to court to prevent its release. The city argued that releasing the video would taint the investigation of the case, but even the attorney general of Illinois urged the city to make it available.

    Then the city waited until April 15 — one week after Mr. Emanuel was re-elected — to get final approval of a pre-emptive $5 million settlement with Mr. McDonald’s family, a settlement that had been substantially agreed upon weeks earlier. Still, the city’s lawyers made sure to include a clause that kept the dash-cam video confidential.

    Compared to those scandals, allegations of garden variety marital infidelity with a lobbyist by Texas Democratic State Senator Carlos Uresti is relatively small peanuts… (Hat tip: Push Junction.)

    Three Texas Planned Parenthood Clinics Raided Over Medicaid Fraud

    Thursday, October 22nd, 2015

    “Health investigators with the state of Texas went into Planned Parenthood’s clinic in San Antonio, Houston, and Dallas Thursday morning, but declined to say why.”

    Snip.

    “Earlier this week, the [Texas Health and Human Services Commission] alleged that Planned Parenthood “committed and condoned numerous acts of misconduct captured on video that reveal repeated program violations and breach the minimum standards of care required of a Medicaid enrollee.”

    I’m sure Planned Parenthood’s backers will soon tell us why abortion is such an important and fundamental right that the organization should be allowed to commit Medicaid fraud at will…

    Texas vs. California Update for October 14, 2015

    Wednesday, October 14th, 2015

    Time for another Texas vs. California update:

  • Texas is the best state for small businesses.
  • Supreme Court to hold hearing on mandatory union dues in Friedrichs v. California Teachers Association.
  • “Transparent California, a watchdog website provided by the Nevada Policy Research Institute, revealed 19,728 former government retirees across California received monthly stipends of $8,333.34 or more — adding up to at least a $100,000 a year for each person.”
  • [Orange County] government workers receive an “average full-career pension of $81,372 for miscellaneous [employees], which includes all nonsafety retirees, and $99,366 for safety [mostly police and fire] retirees of all Orange County cities enrolled in CalPERS.”
  • Republicans manage to defeat California tax hikes.
  • California politicians excel at corruption and self-dealing. (Hat tip: Pension Tsunami.)
  • “If money and household wealth follow people, then Texas is doing better than any other state in nearly every way.”
  • San Francisco drives last existing gun store out of the city with burdensome regulations.
  • Judge strikes down law requiring landlords to pay up to $50,000 in relocation fees to evicted tenants.
  • Texas continues to earn the highest possible credit ratings.
  • New law mandates that CalPERS and CalSTARS must stop investing in coal. (Hat tip: Pension Tsunami.)
  • Stockton update: “After only one full budget year, the city has already broken three fundamental promises and is destined to return to insolvency within four years.”
  • Bankrupt supermarket chain Haggen has found buyers for some of its California stores.
  • This story is so strange I suspect it could only happen in California. (Playboy link, so it may be blocked at your place of work.) Despite the large number of guns. ($5 million for 1,200 guns? I call BS. That would mean each gun was slightly more expensive than the list price for a bolt-action Barrett .50 BMG sniper rifle. The photos mostly show pretty common hunting rifles.)
  • Texas vs. California Update for October 1, 2015:

    Thursday, October 1st, 2015

    Ah, that October chill…is not evident yet here in Austin. It’s supposed to hit 94° today.

    Time for another Texas vs. California roundup:

  • The joys of working in Los Angeles: a $30,000 tax bill on $500 worth of freelance income.
  • California nears passage of another trial lawyer full employment act.
  • Texas had five of the ten fastest growing metropolitan areas in 2014. Austin isn’t on this list, but Midland and San Angelo are numbers one and two. (San Jose, California’s lone entry, checks in at eight.)
  • 72% of Californians polled thinks the state has a pension crisis. Too bad this thinking doesn’t seem to influence their voting patterns yet… (Hat tip: Pension Tsunami.)
  • And yet a new bill would exempt some new hires from paying their fair share of pension costs. (Hat tip: Pension Tsunami.)
  • New pension accounting rules are about to show that a lot more California municipalities are insolvent.
  • “Instead of building freeways, expanding ports, restoring bridges and aqueducts, and constructing dams, desalination plants, and power stations, California’s taxpayers are pouring tens of billions each year into public sector pension funds.” (Hat tip: Pension Tsunami.)
  • Stockton’s bankruptcy didn’t solve it’s pension crisis.
  • Texas had a net gain of 103,465 people in 2014, the largest number of which came from California.
  • San Francisco wants to keep housing affordable…by restricting supply. Looks like somebody failed Economics 101…
  • Pension reform initiative to be refiled?
  • Unions are trying to undo San Diego’s voter-approved pension reforms. Because of course they are.
  • Texas is like Australia with the handbrake off. There is no individual income tax and no corporate income tax, which explains the state’s rapid economic and population growth. A recent downturn has sparked some concern, however. Apparently Texas will only create another 150,000 jobs during 2015 – about the same number as Australia, from a population only a few million larger. In a good year, that number of jobs is easily generated by a single Texan city.” Also: IowaHawk’s illegal human organ trafficking!
  • Texas ranks 13th in budget transparency. California? Dead last.
  • Even some California Democrats balked at increasing the state’s already high gas prices.
  • As part of the bankruptcy of northwest supermarket chain Haggen (which bought a bunch of Albertson’s stores just six months ago), they’ll be closing all their California stores. And if you guessed that Haggen is unionized, you would be correct.
  • Jerry Brown revives the state’s redevelopment agency…and its potential for eminent domain abuse.
  • Reminder: Texas is enormous.
  • A scourge spreads out upon California. Crack gangs? Illegal aliens? Try “short term rentals.”
  • Historical note: 105 years ago today, three union guys bombed the Los Angeles Times, killing 21 people.
  • ObamaCare: The Fail That Keeps Failing

    Monday, September 28th, 2015

    The opaque, dishonest nature by which ObamaCare was passed ensured that the full brunt of many provisions wouldn’t be felt before Obama’s 2012 reelection bid. While that stratagem worked for Obama, it also ensured that ObamaCare would turn into an unending supply of timebomb policies with unpleasant consequences which would continue to plague Democrats (and America) long after the bill’s passage.

    And those bombs continue continue to explode:

  • “The more time Americans have had to experience the health care reform legislation first-hand, the more obvious it has become that, like virtually all government-controlled social experiments, Obamacare’s waste of taxpayers’ money has grown to epic levels. And there’s no sign the poorly managed program is improving.”
  • ObamaCare deductibles are now rising seven times faster than inflation. “Premiums have risen nearly $5,000 since Obama promised to cut them.”
  • Even Democrat’s own direct-mail advertising admits that “fewer than half of all U.S. doctors accept Medicaid,” a direct consequence of ObamaCare’s “cost control” features while dumping millions more patients into Medicaid.
  • All of which explains why ObamaCare remains deeply unpopular with voters, with 52% viewing it unfavorably, and 36% very unfavorably.
  • All of which explains why American consumers are still staying away from ObamaCare in droves.
  • Despite all that, Hillary Clinton is vigorously defending ObamaCare. In fact, what Hillary is actually doing is propising ObamaCare 2.0:

    The solution is obvious: Reduce federal coverage mandates to reduce premiums and deductibles. Instead, Mrs. Clinton wants even more mandates that are guaranteed to make premiums and deductibles rise even higher.

    First, on Tuesday in Iowa, Mrs. Clinton released her plan to make prescription drugs more “affordable.” (Sound familiar?) She proposes capping patients’ monthly out-of-pocket prescription costs at $250. Making insurers pay more toward retail drug costs ensures those costs will be passed on to employers and policy holders through premium increases, forcing the young and healthy to further subsidize the old and the sick. And Mrs. Clinton wants to stick it to drug makers by prohibiting them from deducting the cost of advertising on their taxes (as other kinds of businesses can) and shortening their patents, which will give them shorter horizons to recover their sizable investments. Making it more expensive for pharmaceutical companies to do business will either increase the costs of drugs or prevent their development in the first place.

    Then, on Wednesday, Mrs. Clinton said she wants to expand the “free” services mandated under Obamacare to include three doctor visits per year, on top of preventive care such as vaccines and screenings. When Democrats were selling Obamacare to taxpayers, they said fully covered preventive care would help reduce overall health care spending by giving Americans an incentive to take better care of themselves and not avoid seeking care because of cost concerns. But the law of supply and demand can’t be suspended by Congress; increasing demand for health care increases costs. Now Mrs. Clinton wants sick care to be fully covered as well, which will — wait for it — increase demand for a limited supply of doctors and providers, and increase costs through higher premiums and deductibles. She also wants to deny insurers the ability to charge higher out-of-network costs for hospital care when those very networks help insurers keep costs down.

    And there’s plenty more time for more ObamaCare-fueled rate and deductible explosions between now and the 2016 election…