Nonprofit picks up governor's travel bill

Los Angeles Times
Jul 05, 2007 - 01:00 AM
by Paul Pringle, Times Staff Writer

Nonprofit picks up governor's travel bill;

The group that funds Schwarzenegger's jets and luxury suites writes off the cost. Its donors can get tax breaks.

SACRAMENTO, CA -- California's larger-than-life governor is unabashed about living large, but keeping him in luxury sometimes depends on the same taxpayer subsidies granted to hand-to-mouth charities.

Arnold Schwarzenegger, a millionaire many times over, bills much of his overseas travel to an obscure nonprofit group that can qualify its secret donors for full tax deductions, just as if they were giving to skid row shelters or the United Way.

Whether journeying to China, Japan or last week's destinations -- Austria, England and France -- Schwarzenegger typically flies on top-of-the-line private jets like the plush Gulfstream models and has booked hotel suites that can run thousands of dollars a night.

Nonprofit watchdogs say using charitable write-offs to pay for sumptuous travel is an abuse of tax codes.

"Wow, that's a problem," said Daniel Borochoff, president of the American Institute of Philanthropy. "Why should our tax dollars subsidize his lavish lifestyle?"

Making matters worse, Borochoff and others say, is that the nonprofit that finances Schwarzenegger's globe-trotting, the California State Protocol Foundation, could be a vehicle for interests that hope to curry favor with the governor.

By giving to the foundation, donors avoid having their identities made public, because charities are not governed by the disclosure rules that apply to campaign contributions. And they can donate unlimited amounts to the nonprofit, which is not subject to contribution ceilings the way campaign accounts are.

Representatives for Schwarzenegger and the foundation say there is nothing inappropriate about his arrangement with the group, which is closely associated with the California Chamber of Commerce.

The foundation declined to release details of its expenditures, despite expectations in the nonprofit world that charities be as transparent as possible.

"Good nonprofits are open books," said Trent Stamp, president of Charity Navigator, an online rating service. "Good nonprofits relish the opportunity to be accountable."

Schwarzenegger has tapped at least one other charity for some of his travel. The Simon Wiesenthal Center, celebrated for its Museum of Tolerance in Los Angeles and far-flung Nazi-hunting efforts, paid more than $51,000 to help send the governor to Israel in 2004, a year when the charity ran a deficit, records show.

The trip carried a steep tab because of the private jet, said people familiar with Schwarzenegger's travel.

A Wiesenthal spokesman said that the center had invited the governor to Israel for a museum groundbreaking and that the $51,000 paid for part of the jet costs.

The governor could easily pick up outsized travel bills himself, and a spokesman said Schwarzenegger does pay for his private jet when he flies domestically on state business.

But trips abroad are something else.

"That jet for those international jaunts is extremely expensive," said one person with knowledge of the governor's itineraries, who requested anonymity so as not to alienate him. "China was probably well north of $100,000."

Schwarzenegger spokesman Aaron McLear said specific breakdowns for the governor's jet expenses were not immediately available. But costs for flying on a Gulfstream or similar aircraft often are many times greater than the price of a first-class ticket on a commercial airline.

On that basis alone, well-run charities generally bar or strictly limit private flying, the watchdogs say.

Allan Zaremberg, the Chamber of Commerce president and a foundation board member, said the protocol group pays whatever bills the governor's office submits. "How they allocate that money is up to them," he said.

He declined to release any financial information about the charity beyond the summary data on its tax returns, which it must disclose by law.

In an e-mail, a foundation spokesman said the returns are "sufficient to demonstrate how the foundation pursues its mission of relieving the taxpayers of the cost burden of certain government activities, especially those related to international trade and diplomacy."

McLear echoed that statement in part, saying the foundation saves tax dollars.

"I think that's a good thing," he said. "The governor looks to save the taxpayers' money every chance he gets."

But charity watchdogs and others say taxpayers should foot the bill for a governor's official travel. They also say Schwarzenegger would face a storm of rebuke if he tried to charge the state for private jets and posh hotel suites.

"Using nonprofits to pay for this type of travel is a way to avoid that," said Ned Wigglesworth, policy advocate for California Common Cause.

Schwarzenegger turns to other nonprofits to finance a range of his political activities, and to lease a Hyatt Regency hotel suite while he is in Sacramento. The suite costs about $65,000 a year.

The number of charities tied to elected officials has grown in recent years, even as they have figured in a spate of corruption scandals, including those centered on jailed lobbyist Jack Abramoff. What sets Schwarzenegger apart in the nonprofit arena are his vast personal fortune and his repeated pledge to shun special-interest dollars.

Schwarzenegger's aides say the governor needs to fly privately for safety reasons -- that commercial airlines cannot provide sufficient security for a celebrity with his drawing power. They also note that the protocol organization and its predecessors, such as the Golden State Host Committees, paid some travel costs for previous governors.

During the Gray Davis administration, the group's spending peaked at $427,000 in 2000. Darius Anderson, its executive director that year, said Davis "flew commercially 90% of the time" but did charter a private jet while touring the Middle East.

The protocol foundation's expenditures have exploded since Schwarzenegger began relying on it -- from $55,000 in 2003 to $1.8 million in 2005 and $1.3 million last year, its tax returns show.

Nonprofit monitors say it is almost impossible to justify routine spending of charitable dollars on aircraft that can cost $6,000 to $10,000 an hour to lease.

"The boards of most charities would not accept such exorbitant travel expenses for their board members or executives," said Aaron Dorfman, executive director of the National Committee for Responsive Philanthropy.

The protocol organization is a 501(c)(3) nonprofit, occupying the highest rung of tax-exempt groups as a public charity. The Governor's Residence Foundation, the nonprofit that pays for Schwarzenegger's home away from home at the Hyatt, is also a 501(c)(3).

The category includes basic-needs charities like soup kitchens and the Red Cross as well as nonprofit hospitals, schools and museums. All must provide a public benefit, are barred from engaging in elective politics and cannot take part in legislative or lobbying activity to a substantial degree.

Contributions to many other types of nonprofits, including chambers of commerce, are not tax deductible unless they can be claimed as legitimate business expenses or are directed to a charitable purpose. (Campaign contributions are not deductible.)

Most of Schwarzenegger's foreign sojourns have been trade missions, though his critics say the trips really are little more than junkets designed to boost his international profile.

Corporate executives who have accompanied the governor overseas prize the opportunity to make contacts in distant markets, Schwarzenegger confidants say.

Foundation backers have said that because the group doesn't disclose the names of donors, Schwarzenegger would not know if his corporate travel-mates helped pay for a trip and thus could not be influenced by their donations.

McLear said the missions have attracted investment and produced jobs on these shores: "The economic benefit to California is substantial."

State disclosure forms that Schwarzenegger filed for 2004 showed that the foundation spent about $27,000 and $18,000 for his trips to Austria and Japan, respectively. McLear said most of the money paid for the governor's hotel suites.

Schwarzenegger declines to take his state salary, and he does give to charities. From 2002 through 2004, for example, he reported $2.5 million in charitable donations and about $55 million in total income.

The governor's other charitable activities include his sponsorship of nonprofits that provide recreation programs for children.
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Contact the author at: paul.pringle@latimes.com

Add Tax Brackets for the Super-Rich

Add Tax Brackets for the Super-Rich: Budget Expert Published: Monday, 23 Aug 2010 http://www.cnbc.com/id/38819213/Add_Tax_Brackets_for_the_Super_Rich_Budget_Expert woodleywonderworks Treasury Seal The U.S. should add income tax brackets for those making $1 million, $5 million and $10 million, a tax and federal budget expert from the think tank the Center for American Progress told CNBC Monday. “It doesn’t really make sense that somebody making $500,000 pays the exact same marginal tax rate on their last dollar of earnings as somebody making $10 million or $50 million,” said Michael Linden from the center, which is headed by John Podesta, White House chief of staff under Bill Clinton. "The richest 400 Americans in 2007 made an average of $138 million, and they paid an effective tax rate that was lower than most people making $150,000 to $200,000."Michael LindenCenter for American Progress “In fact, the richest 400 Americans in 2007 made an average of $138 million in one year and they paid an effective tax rate that was lower than most people who were making $150,000 to $200,000.” As the Bush tax cuts are set to expire at year's end, experts of different political views are weighing in on taxes. Nobel laureate and economist Paul Krugman argued in the New York Times on Monday in favor of letting the Bush tax cuts expire and for taxing the rich at a higher rate. New Yorker business columnist James Surowiecki, who in an August 16 piece called “Soak the Very, Very Rich,” called for more tax brackets that would tax the extremely wealthy so they pay more taxes.

All night parties. Hotel rooms rented for years to store her gym gear. What REALLY happened to the millions Madonna pledged to Malawi's children

All night parties. Hotel rooms rented for years to store her gym gear. What REALLY happened to the millions Madonna pledged to Malawi's children By Andrew MaloneLast updated at 1:51 AM on 2nd April 2011 Comments (1) Add to My Stories Ray of light? Madonna with adopted son David Banda in 2007 Cycling home through the African night, his feet bare and wearing only ragged shorts and a grubby shirt, a crop farmer stops under the stars to give his views about the latest scandal involving Madonna, a woman whose lifestyle could hardly be further removed from his. And yet his views are worth listening to, for this is Yohane Banda, the biological father of the Malawian boy adopted by the Material Girl when she decided to add ‘poverty-chic’ to the long list of fads she has followed in her 30-year career. And in the darkness, Yohane, a pleasant, mild-mannered individual, gave me some news for Madonna: his son David, five — who now lives with the singer — is about to have a new half-brother or sister. For Yohane had just returned from taking his new wife to a rural clinic to give birth. Yet he does not expect David or Madonna ever to see the child. ‘She took my son away for ever,’ says Yohane. ‘Madonna is only interested in herself.’ Yohane is not alone in feeling cheated. Once dubbed Saint Madonna of Malawi, the American singer is now at the centre of an astonishing feud in the land to which David Livingstone, the British missionary, first brought Christianity almost 150 years ago. It involves allegations of sexual shenanigans, millions of dollars squandered on parties and high-living and claims that Madonna was allowed to adopt her Malawian children — she also took on a girl called Mercy James, now five — on the basis of promises that are, so far, unfulfilled. And at the centre of the scandal is the fact that the school Madonna promised to build here has been abandoned. Where it should have been standing, this week there was nothing but a dusty field. To understand the background to this story — and the depth of anger of the local people — we must go back five years to when Madonna first came to Malawi. While Dr Livingstone arrived on the shores of Lake Malawi at the end of a five-year African odyssey, Madonna did things rather differently — and more extravagantly. Travelling by private jet and accompanied by her personal trainer, public relations men and high-powered lawyers, her appearance was described by local politicians as a ‘gift from heaven’. Determined to adopt an African child, despite having her own two children from separate relationships, she toured orphanages in search of the perfect addition to her brood.Read more: http://www.dailymail.co.uk/news/article-1372552/What-really-happened-millions-Madonna-pledged-Malawis-children.html#ixzz1IMyn4jGo Announcing plans to set up schools, orphanages and medical centres, the singer pledged millions to the country. And though all non-Malawians have to be resident for 18 months before adopting a child, Madonna duly left on her private jet with little David Banda, who had been temporarily placed in an orphanage after his mother died and his father was unable to provide milk for the baby (there is no bottle-feeding in the African bush). At the same time, Madonna announced that she was setting up a charity called Raising Malawi, run through her Kabbalah religious centre in Los Angeles, which would build a school for orphaned girls. What she was less keen to advertise was the fact that all local Malawians she employed would have to be instructed in Kabbalah. Having offered such largesse, the law was waived a second time in 2009 when she adopted Mercy — a Malawian girl whose Read more: http://www.dailymail.co.uk/news/article-1372552/What-really-happened-millions-Madonna-pledged-Malawis-children.html#ixzz1IMyxGXFB Today, however, local feelings towards Madonna are much changed. It was announced this week that her school for girls was being scrapped, more than three years after work began and staff were hired to oversee the project. In a statement issued by her office, the singer said: ‘There’s a real education crisis in Malawi. Our team is going to work hard to address this in every way. I’m frustrated that our education work has not moved forward in a faster way.’ At the same time, Madonna dismissed the entire board of directors of Raising Malawi, claiming that $3.8million (£2.4million) had been squandered without a brick being laid at the school outside Lilongwe, the country’s capital. (The singer reportedly donated $11 million of her own money to the charity.) So what’s going on? Why are these orphaned children now being denied care after so much fanfare? To find out, I travelled to Malawi — and discovered the truth is far more complex and disturbing than Madonna’s explanation. My findings also unearthed allegations that her fascination with Africa has run into the sand — a fad to be cast aside when she lost interest. Certainly, that’s the view of staff summarily fired by the pop star this week. All have been forced to sign gagging orders by her lawyers, promising that they will take to the grave any secrets they have about the singer and her operations.Read more: http://www.dailymail.co.uk/news/article-1372552/What-really-happened-millions-Madonna-pledged-Malawis-children.html#ixzz1IMz4exgz But sources close to the staff refer to Madonna’s own wastefulness and extravagance, pointing out that they were forced to hire two rooms at the country’s most upmarket hotel for three years — simply to store the singer’s gym equipment in case she ever returned. Branding Madonna ‘racist’ for implying that African corruption was to blame, they also point to the role of one of Madonna’s closest advisers, who oversaw Raising Malawi from his offices in Los Angeles. He is Philippe van den Bossche, who was the executive director of Raising Malawi until he resigned from his post last autumn. He got the job with Madonna around the same time he was having an affair with Tracy Anderson, the singer’s personal trainer, who accompanied her on her six trips to Malawi. According to sacked staff members, he spent money in a manner that would not have embarrassed an African dictator. Flying out first class to Malawi regularly, he took up residence in the same exclusive hotel where Madonna used to stay. Not a single brick was laid at the school His parties became the stuff of legend. Thrown at least once a month, they involved more than 100 guests at a time being plied with vintage wines, rare malt whiskies and fine cognacs. The parties often lasted until dawn, with all bedrooms block-booked to prevent other guests prying. At the same time, Madonna’s aide opened offices in the most prestigious office block in Lilongwe, furnishing the charity’s luxurious premises with African artefacts and offering his staff astonishing perks. Each member of his eight-man executive team was supplied with annual membership at the capital’s exclusive golf club and leisure resort, costing thousands of pounds a year. They were also provided with luxury cars; indeed, two vehicles were assigned to staff that didn’t even exist. Meanwhile, the charity’s local director, also something of a party-lover — who is the sister of Malawi’s vice-president — was a prime beneficiary of these perks. Anjimile Oponyo, who worked at the United Nations Development Programme in Africa before being appointed to run Madonna’s Malawi school project, was allowed virtually free rein financially — and wasted hundreds of thousands of pounds.Read more: http://www.dailymail.co.uk/news/article-1372552/What-really-happened-millions-Madonna-pledged-Malawis-children.html#ixzz1IMzCbtUt As well as paying a local journalist £1,000 a day to count how many times Madonna and Malawi were mentioned on the internet, Oponyo paid more than £100 a day for three years to hire luxury vehicles. In a country where the average wage is less than ten pounds a week, she ignored pleas by other staff to take the cheaper option of buying a car, saying she wanted to be able to change her vehicle regularly, which paying by the day enabled her to do. Like her boss, she was also an enthusiastic party organiser, staging events at restaurants, the golf club, as well as countless bars and restaurants, for elite politicians and businessmen in the country. Details of some of the allegations of lavish spending also emerged in a Global Philanthropy Group audit commissioned by Madonna. Now consulting her lawyers, along with the rest of the fired staff, Oponyo was this weekend in New York plotting her next move. She, too, is banned from speaking publicly about her time with Madonna. But friends insist she had spent less than one million dollars in funds, using it for offices, vehicles and staff over the past three years. They say all her expenditure was passed by Madonna’s aides in Los Angeles. Her staff spent money like an African dictator And the sources close to Oponyo suggest that Madonna’s decision to scrap her plans for a girls’ academy in Malawi are not solely related to educational issues, but rather money. ‘After the initial fuss she created about Malawi, lots of money was raised,’ one source told me, speaking on condition of anonymity during a clandestine meeting in a Lilongwe restaurant. ‘Public donors and celebrities passed on money. That was enough for us to get started, get a staff and draw up plans for the building. But only £5 million was raised through Madonna’s charity for a project that was going to cost £11 million.’ A local journalist, who first broke the news in 2006 that Madonna was planning to adopt a local child, points out that all the perks for African staff were written into their contracts — but that large amounts were wasted flying in ‘experts’ from the U.S. to advise on the project. And now the lawsuits are piling up. With her Malawian staff suing for unfair dismissal and local politicians in uproar about what they see as Madonna’s broken promises, the singer is threatening her own legal action to recover some of the money wasted so far. At the same time, the pop star’s beloved Kabbalah Centre headquarters in Los Angeles, which she helps fund — and uses to distribute her fortune to charity projects such as Raising Malawi — is being sued for £15 million by a wealthy heiress, who claims she was duped into donating money to its coffers. Courtenay Geddes, who inherited billions from her industrialist father, claims in a lawsuit that ‘while looking for spiritual enlightenment, personal growth and improvement, she was manipulated by the Kabbalah Centre, which took advantage of her sincere, trusting nature to deprive her of her monies’.Read more: http://www.dailymail.co.uk/news/article-1372552/What-really-happened-millions-Madonna-pledged-Malawis-children.html#ixzz1IMzM6L5g The legal document adds: ‘The Kabbalah Centre has a historical pattern and practice of defrauding people by soliciting monies for various projects that never come to fruition. Geddes is but one of numerous people who have been taken advantage of.’ This week the singer issued a statement which said: ‘I remain deeply committed to helping the children of Malawi ... and I realise that the plans we had in place for the Raising Malawi Academy for Girls simply would not serve enough children. ‘My original vision is now on a much bigger scale. I want to reach thousands not hundreds of girls. I want to do more and I want to do it better. ‘While I am grateful to all the people who have given me guidance and support up until now, we are in the process of implementing several changes and additions to the management of Raising Malawi in the U.S. and Malawi.’ ‘I’d just like my son back to live with the new baby coming. I’m the only one not to get any cash. But money isn’t everything.' She continued: ‘This is a larger challenge than I thought, but I welcome it. We are currently determining the size, location, staffing and curriculum of the schools. I will continue to monitor the process of reaching these goals here and through my ongoing visits to Malawi.’ Certainly, she’s raised awareness of poverty in Malawi, with many aid projects set up to help children as a result. While the millionaire singer continues to insist she is involved in Malawi — she still funds other projects for children there — perhaps the last word in this tawdry dispute should go to Yohane Banda, standing beside his rusty bike on a dirt track in the African bush. ‘I hoped my boy would be given an education and then given back to me,’ he said. ‘He may be better off for money with Madonna, but he should be with his family. ‘I’d just like my son back to live with the new baby coming. I’m the only one not to get any cash. But money isn’t everything. ‘Perhaps this rich lady should learn that.’ Read more: http://www.dailymail.co.uk/news/article-1372552/What-really-happened-millions-Madonna-pledged-Malawis-children.html#ixzz1IMzRvEhj

Tax the Super Rich now or face a revolution

I am not sure whether this author talks simply about top 1% or one-tenth of the 1%. It makes a huge difference since in that top 1%, there is huge disparity. The botom 1% of that group without inheritance still has to work every day like everyone else plus performance pressure and 24/7 committment the high paying job normally requires. As to the one-tenth of the 1%, I highly doubt that they have to really "work." So here is the article I completely agree excluding those who stilll have to work to pay the bill and save for their retirement. By Paul B. Farrell, MarketWatch SAN LUIS OBISPO, Calif. (MarketWatch) — Yes, tax the Super Rich. Tax them now. Before the other 99% rise up, trigger a new American Revolution, a meltdown and the Great Depression 2. Revolutions build over long periods — to critical mass, a flash point. Then they ignite suddenly, unpredictably. Like Egypt, started on a young Google executive’s Facebook page. Then it goes viral, raging uncontrollably. Can’t be stopped. Here in America the set-up is our nation’s pervasive “Super-Rich Delusion.” U.K. workers protest turns violent A splinter group is blamed for smashing windows and attacking police vans as tens of thousands march against government cuts. We know the Super Rich don’t care. Not about you. Nor the American public. They can’t see. Can’t hear. Stay trapped in their Forbes-400 bubble. An echo chamber that isolates them. They see the public as faceless workers, customers, taxpayers. See GOP power on the ascent. Reaganomics is back. Unions on the run. Clueless masses are easily manipulated. Even Obama is secretly working with the GOP, will never touch his Super Rich donors. Yes, the Super-Rich Delusion is that powerful, infecting all America. Here’s how one savvy insider who knows described this Super-Rich Delusion: “The top 1% live privileged lives, aren’t worried about much. Families vacation at the best resorts. Their big concerns are finding the best Pilates teacher, best masseuse, best surgeons, best private schools. They aren’t concerned with the underlying deterioration of America or the world, except in the abstract, because they aren’t directly affected by it. That’s not to say they aren’t sympathetic, aware, or don’t talk about the issues you bring up. They are largely concerned with protecting and enhancing their socio-economic positions, ensuring their families live well. And nothing you write about will change things.” Warning, in 2011 that attitude is delusional, deadly, yet pervasive in America. Super Rich replaying “Great Gatsby” age, won’t learn till it’s too late Our top 1% honestly believe they’re immune, protected from the unintended consequences of beating down average Americans for three decades with the free-market, trickle-down Reaganomics doctrines that made them Super Rich. They honestly believe those same doctrines will protect them in the next depression. Why? Because they have megabucks stashed away. Provisions for the long haul. Live in gated compounds with mercenaries guarding them. They believe they’ll continue living just fine in a depression. But you won’t. Nor will your retirement. Neither will the rest of America. And still the Super Rich don’t care, “except in the abstract, because they aren’t directly affected.” Warning: The Super-Rich Delusion has pushed us to the edge of a great precipice: Remember the Roaring Twenties? The Crash of 1929? Great Depression? Just days before the crash one leading economist, Irving Fisher, predicted that stocks had “reached what looks like a permanently high plateau.” Yes, he was trapped in the “Great Gatsby Syndrome,” an earlier version of today’s Super-Rich Delusion. It was so blinding in 1929 that the president, Wall Street, all America were sucked in … until the critical mass hit a mysterious flash point, triggering the crash. Yes, we’re reliving that past — never learn, can’t hear. And oddly it’s not just the GOP’s overreach, the endlessly compromising Obama, too-greedy-to-fail Wall Street banksters, U.S. Chamber of Commerce billionaires and arrogant Forbes 400. America’s entire political, financial and economic psyche is infected, as if our DNA has been rewired. The Collective American Brain is trapped in this Super-Rich Delusion, replaying the run-up to the ’29 Crash. Nobody predicted 2011 revolutions in the oil-rich Arab world either Warning: Mubarak, Gaddafi, Ali, Assad, even the Saudis also lived in the Super-Rich Delusion. Have for a long time. Were vulnerable. Ripe for a revolution. They, too, honestly believed they were divinely protected, chosen for great earthly wealth, enjoyed great armies. Then, suddenly, out of the blue, a new “educated, unemployed and frustrated” generation turned on them, is now rebelling, demanding their share of economic benefits, opportunities, triggering revolutions, seeking retribution. Still, you don’t believe there’s a depression ahead here in America? The third great market crash of the 21st century? A new economic revolution about to blow up in our faces? No, you don’t believe, can’t believe … you, me, we are all infected by the Super-Rich Delusion, just as Americans were in the Roaring Twenties. Check the stats folks: The last time America’s wealth gap between the Super Rich and the other 99% was this big was just before the 1929 Crash and the Great Depression. You can’t remember? Or you won’t? America is trapped in “terminal denial,” a setup for failure. Too many still live in the false hope of this Super-Rich Delusion. Do you believe government stats hyping a recovery? Believe Wall Street’s nonsense about a new bull market ahead? Believe Exxon-Mobile’s misleading ads about energy stocks. Believe Bill Gross’ when he says dump Treasurys, and buy his emerging country bonds? Dream on. Start preparing for the third meltdown of the 21st Century, and depression Denial and lies. Remember, 93% of what you hear about markets, finance and the economy are guesses, wishful thinking and lies intended to manipulate you into making decisions that suck money from your pockets into Wall Street. They get rich telling lies about securities. They hate any SEC fiduciary rules forcing them to tell the truth. But the fact is, on an inflation-adjusted basis, Wall Street lost 20% of your retirement money in the decade from 2000 to 2010, over $10 trillion. And “Irrational Exuberance’s” Robert Shiller warns of a third meltdown coming. You better start preparing now. Before you start betting any more at Wall Street’s rigged casinos, think long and hard about these six megatoxins lurking in America’s Super-Rich Delusion, a mind-altering pandemic infecting our nation’s leadership in Washington, Corporate America and Wall Street … but also “trickling down,” infecting many Americans. Listen: 1. Warning: Super Rich want tax cuts, creating youth unemployment Bloomberg warns: “The Kids Are Not Alright.” Worldwide, youth unemployment is fueling the revolution. In a New York Times column, Matthew Klein, a 24-year-old Council on Foreign Relations researcher, draws a parallel between the 25% unemployment among Egypt’s young revolutionaries and the 21% for young American workers: “The young will bear the brunt of the pain” as governments rebalance budgets. Taxes on workers will be raised and spending on education will be cut while mortgage subsidies and entitlements for the elderly are untouchable,” as will tax cuts for the rich. Opportunities lost. “How much longer until the rest of the rich world” explodes like Egypt? 2. Warning: rich get richer on commodity prices, poor get angrier USA Today’s John Waggoner warns: “Soaring food prices send millions into poverty, hunger: Corn up 52% in 12 months. Sugar 60%. Soybeans 41%. Wheat 24%. For 44 million the “rise in food prices means a descent into extreme poverty and hunger, warns the World Bank.” Many causes: Speculators. Soaring oil prices. Trade policies. Population explosion. But altogether they expose “the underlying inequalities and issues related to the standard of living that boil beneath the surface,” says a Pimco manager. 3. Warning: Global poor ticking time bomb targeting Super Rich A Time special report, “Poor vs. Rich: A New Global Conflict” warned that a “conflict between two worlds — one rich, one poor — is developing, and the battlefield is the globe itself.” Just 25 developed nations of 750 million citizens consume most of the world’s resources, produce most of its manufactured goods and enjoy history’s highest standard of living.” But they’re now facing 100 underdeveloped poor nations with 2 billion people with hundreds of millions living in poverty all demanding “an ever larger share of that wealth.” Think Egypt. British leader calls this a “time bomb for the human race.” 4. Warning: Next revolution coming across ‘Third World America’ We are ripe for one: In “Third World America” Arianna Huffington warns: “Washington rushed to the rescue of Wall Street but forgot about Main Street … One in five Americans unemployed or underemployed. One in nine families unable to make the minimum payment on their credit cards. One in eight mortgages in default or foreclosure. One in eight Americans on food stamps. Upward mobility has always been at the center of the American Dream … that promise has been broken… The American Dream is becoming a nightmare.” Soon it will implode. a meltdown, revolution, depression. 5. Warning: Super Rich must be detoxed of their greed addiction In “Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (And Stick You With the Bill),” David Cay Johnston, warns that the rich are like addicts, and to “the addicted, money is like cocaine, too much is never enough.” A few years ago an elite 300,000 Americans in “the top tenth of 1% of income had nearly as much income as all 150 million Americans who make up the economic lower half of our population.” The Super Rich Delusion is an addiction that requires a painful detox. 6. Warning: Politicians infected by Super-Rich Delusion, revolution In “Washington’s Suicide Pact,” Newsweek’s Ezra Klein warns: “Congress is careening toward the worst of all worlds: massive job losses and an exploding deficit.” How bad? As many as 700,000 more jobs lost, says Moody’s chief economist, Mark Zandi. What a twist: Remember vice president Dick Cheney said “deficits don’t matter.” Today the GOP is so blinded by its obsession to destroy Obama’s presidency, deficits are now the only thing they say matters. Wake up folks. The Super-Rich Delusion is destroying the American Dream for the rest of us. The Super Rich don’t care about you. They’re already stockpiling for the economic time bomb dead ahead. Don’t say you weren’t warned. Time for you to plan ahead for the coming revolution, for another depression

mrs senator part2

The “specifically named individual” is Michelle Obama, who was appointed to the Board of TreeHouse Foods, a WAL-MART vendor, on June 25, 2005, even though she did not have experience in the private sector previous to the appointment. Here are the benefits the Obama family received as a result of Michelle Obama’s stint with the WAL-MART vendor:
According to the couple’s tax returns, Mrs Obama earned $51,200 (£25,700) for her work as a non-executive director on Treehouse’s board last year, on top of the $271,618 salary she was paid as a vice-president of the University of Chicago Hospitals.
She also received 7,500 Treehouse stock options, worth a further $72,375, as she did the previous year, when she banked a $45,000 salary from the company.
Michelle Obama is the “specifically named individual” who was able to sit on corporate boards, although she lacks the experience of Blagojevich’s wife. And notice how Michelle Obama’s position with the WAL-MART vendor helped alleviate the “financial stress” of the Obama family at a time when they were purchasing a mansion from Rezko they could not afford.
Why is this relevant?
Blagojevich, according to the FBI complaint, thought Barack Obama could appoint his wife to corporate boards if he were to appoint Valerie Jarrett to the open Senate seat vacated by Obama. I quote pages 54-55 of the criminal complaint filed by Special Agent of the FBI David Cain:
By law, after the President-elect’s resignation of his position as a U.S. Senator, which was effective on November 16, 2008, ROD BLAGOJEVICH has sole authority to appoint his replacement for the two years remaining of the President-elect’s Senate term. See 10 ILCS 5/25-8. During the course of this investigation, agents have intercepted a series of communications regarding the efforts of ROD BLAGOJEVICH, JOHN HARRIS, and others to misuse this power to obtain personal gain, including financial gain, for ROD BLAGOJEVICH and his family. In particular, ROD BLAGOJEVICH has been intercepted conspiring to trade the senate seat for particular positions that the President-elect has the power to appoint (e.g. the Secretary of Health and Human Services). ROD BLAGOJEVICH has also been intercepted conspiring to sell the Senate seat in exchange for his wife’s placement on paid corporate boards or ROD BLAGOJEVICH’s placement at a private foundation in a significant position with a substantial salary. ROD BLAGOJEVICH has also been intercepted conspiring to sell the Senate seat in exchange for millions of dollars in funding for a non-profit organization that he would start and that would employ him at a substantial salary after he left the governorship.
Blagojevich, in other words, assumed Obama would appoint his wife to a Board for the political favor of selecting Valerie Jarrett for the Senate seat. Blagojevich is not a stupid man. Indeed, he only assumed Obama would participate in this “pay to play” scheme, for he knows Obama is acutely aware how the game is played in Illinois and in Chicago. This explains why Blagojevich mentions Michelle Obama and her lack of qualifications to serve on the Board of TreeHouse Foods when he discusses how Obama could appoint Mrs. Blagojevich to a Board for the political favor of appointing Jarrett to the US Senate seat. Michelle, after all, was appointed to sit on the Board of TreeHouse foods AFTER Obama was elected to the US Senate. Moreover, Michelle Obama’s salary at The University of Chicago nearly TRIPLED after her husband gained the power to submit earmark requests on her employer’s behalf. Just appoint the spouse to a Board and increase his or her salary if you need a political favor from an Illinois politician. That is how the “play to pay” game is played.
Blagojevich understands this, and he knows Obama understands this. Why else does FBI Agent Cain report the following discussion that occurred on Nov 8, 2008?
On November 8, 2008, ROD BLAGOJEVICH talked with JOHN HARRIS about the Senate seat. During the conversation, ROD BLAGOJEVICH and HARRIS discussed whether it would be possible to obtain a financial benefit for ROD BLAGOJEVICH’s wife in relation to the Senate seat. Specifically, ROD BLAGOJEVICH referred to his wife’s Series 7 license and asked “is there a play here, with these guys, with her” to work for a firm in Washington or New York at a significantly better salary than she is making now. Also, ROD BLAGOJEVICH wanted to know whether SEIU could do something to get his wife a position at Change to Win until ROD BLAGOJEVICH could take a position at Change to Win.
Michelle Obama, Blagojevich implies, received an appointment to a Board for which she was not qualified as a result of a “pay to play” scheme. What about his wife? After all, Obama ally Valerie Jarrett wants the Senate seat. What about Blagojevich’s wife? What about Blagojevich’s “financial stress?”
Blagojevich and his advisers only thought of this as a possibility, for they know Obama has already played the game. Again, these are smart men who know the rules of the game. Why else would they think Obama would participate in a “pay to play” scheme? Michelle was paid for someone to play, they thought. What about Mrs. Blagojevich? Besides, Mrs. Blagojevich has a Series 7 license. All Michelle has is a license to practice law that was revoked as a result of a court order in 1993.
Blagojevich thought Obama would “pay to play,” as the Obamas have been engaged in “pay to play” schemes in the past. That is what Blagojevich thought, and that is why the Obamas are yet again mentioned in a complaint filed in a Court of law.

mrs senator

By Obama’s definition, first lady Michelle Obama is a model capitalist. Remember: After serving with real-estate mogul Valerie Jarrett in Chicago mayor Richard M. Daley’s administration, Mrs. Obama took a post at the University of Chicago Medical Center, where Jarrett was serving as vice-chair of the medical center’s board of trustees. Mrs. Obama was promoted in 2005 after her husband won his U.S. Senate race with Jarrett’s invaluable aid. As “vice president for community and external affairs” and head of the “business diversity program,” her annual compensation nearly tripled from $122,000 in 2004 to $317,000 in 2005. Even after she went on leave in 2007 to help her husband on the presidential campaign trail, the hospital paid Mrs. Obama $62,709 in 2008, prompting one skeptic to ask: “We know this is Chicago, but isn’t $63,000 quite a lot for a no-show job?”

Add Tax Brackets for the Super-Rich: Budget Expert

Add Tax Brackets for the Super-Rich: Budget Expert
Published: Monday, 23 Aug 2010 3:16 PM ET
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By: Michelle LodgeCNBC.com Writer

The U.S. should add income tax brackets for those making $1 million, $5 million and $10 million, a tax and federal budget expert from the think tank the Center for American Progress told CNBC Monday.
“It doesn’t really make sense that somebody making $500,000 pays the exact same marginal tax rate on their last dollar of earnings as somebody making $10 million or $50 million,” said Michael Linden from the center, which is headed by John Podesta, White House chief of staff under Bill Clinton.
"The richest 400 Americans in 2007 made an average of $138 million, and they paid an effective tax rate that was lower than most people making $150,000 to $200,000."Michael LindenCenter for American Progress
“In fact, the richest 400 Americans in 2007 made an average of $138 million in one year and they paid an effective tax rate that was lower than most people who were making $150,000 to $200,000.”
As the Bush tax cuts are set to expire at year's end, experts of different political views are weighing in on taxes.
Nobel laureate and economist Paul Krugman argued in the New York Times on Monday in favor of letting the Bush tax cuts expire and for taxing the rich at a higher rate. New Yorker business columnist James Surowiecki, who in an August 16 piece called “Soak the Very, Very Rich,” called for more tax brackets that would tax the extremely wealthy so they pay more taxes.
However, Dan Mitchell, a senior fellow at the conservative think tank the Cato Institute, told CNBC Monday that the problem was not taxes, it was the initiatives of both George W. Bush and Barack Obama, under whom government spending has “skyrocketed.”
He called for a 15 percent flat tax for all Americans and a reduction in government spending. Mitchell also said raising taxes for the rich would punish investors and entrepreneurs.
Mitchell was with the George H.W. Bush/Quayle transition team in 1988.