Archive | August 5th, 2020

The Antifa Bogeyman

by EVE OTTENBERG

Photograph by Nathaniel St. Clair

In an unparalleled assault on the Constitution recently, federal agents descended on Portland, Oregon. They behaved like storm troopers. They snatched people off the street, tossed them into unmarked vans and detained them without charge. This is what happens in a police state. Mindful of that, the governor and mayor implored the agents to leave. The Trump regime refused, threatening to send its Gestapo to other Democratic-run cities. Trump cited, of course, anarchists and antifa.

Now, anti-fascism is a virtue. This, for the simple reason that fascism is a form of evil. The antifascist Red Army defeated the Nazis. The antifascist American soldiers who landed at Normandy helped defeat Nazi fascism. Antifascist partisans harried Nazi troops behind the lines throughout World War II.

But by that war’s end, the CIA’s precursor, the OSS, had grown weary of antifascists. They were communists, Jews, leftists of all stripes. And so, under Allen Dulles, the newly created CIA began to hunt their erstwhile allies, the antifascist partisans, in the forests of Europe, just as the U.S., alarmed at the dizzying popularity of European communist parties, moved to suppress them. The new enemy, of course, was the U.S.S.R. Antifascism was forgotten.

But not by everybody. People continued to resist fascism, as this poisonous political plant took root in Latin America and thrived under Franco in Spain. Many leftists who fought these fascists did not call themselves antifa – but that’s what they were. Antifascism was and remains a frame of mind and a determination to act morally – against fascism.

So it was something of a surprise in the early twenty-first century to see antifascists smeared as dangerous, violent thugs. This reactionary recasting of an old struggle reached its zenith in 2020, when Donald Trump, a demagogue with fascist leanings, announced that he would designate antifa a domestic terror organization. No matter that doing so is probably illegal. No matter that antifa is not an organization. These people who fight fascism must be put down by the police, Trump said. And then, in Portland, Oregon, he proceeded, probably illegally, to do so.

Perhaps as part of its anti-anti-fascism, the Trump reelection campaign posted a Nazi symbol on Facebook, removed by FB in mid-June. The red inverted triangle was used “by the Nazis to designate political prisoners in concentration camps,” the Washington Post reported. It was used as “a salvo against antifa and ‘far-left’ groups.” The symbol marked the Nazi’s political enemies. It is very telling that the Trump campaign deployed it; just as Trump issued a tweet attacking Hillary Clinton in the 2016 campaign, which featured a yellow star of David of the sort Nazis compelled Jews to wear. Trump and his followers just can’t seem to conceal their ideological roots. They just can’t seem to resist posting fascist and Nazi symbols. It doesn’t take a genius to figure out why.

Right-wing radio and TV egg on these crypto-fascists. That means Fox News. This reactionary news outlet was caught doctoring photos and footage from Seattle almost two months ago, where an anarchist collective – oh heavens! – had set up shop. Fox deployed footage from Minneapolis of violent protests and presented it as what was occurring Seattle. It also falsely added a photo of a heavily armed somebody, presumably an antifa fanatic. No matter that unlike their enemies – the right-wing militias who are armed to the teeth with semi-automatic weapons – antifascists generally don’t carry guns. More commonly, they carry baseball bats, if anything. But that didn’t stop Fox from faking propaganda and sundry reactionaries from claiming vindication when violence really did erupt in Seattle.

People with power in the American empire are rabidly right-wing, and so, frequently throw temper tantrums about the left. Trump has denounced socialists and the radical left for months. Reactionary Senator Ted Cruz introduced an anti-antifa bill in the senate, some time back.

When these political dingbats tire of antifascists, they start screaming about Bolsheviks, as Congressmen Louie Gohmert and Andy Biggs did last month. Biggs saw fit to announce that “what we’re seeing today reminds me an awful lot of…the Bolshevik Revolution,” – if he can remember that revolution then he is one of the oldest men on earth – while Gohmert announced that “American history is being erased and rewritten in the manner of Stalin and Mao.”

What’s with these dimwitted congressmen and the red menace? Have workers’ committees stormed the white house? Imprisoned Trump? Has the military charged over to the workers’ side? Are Bolsheviks giving speeches in the Capitol? Or do we just have a group of unimaginative partisan hacks whose default setting is knee-jerk anti-communism?

Seventy-five years of Soviet rule in Russia clearly traumatized the capitalist empire’s elite. The rest of the world moved on, but Republican politicians and the Chamber of Commerce still peer under their beds in search of leftists. Too bad they won’t find any. The world would be better for billions of dispossessed people if they did.

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Ohio Nuclear Power Scandal

by KARL GROSSMAN

Photograph Source: David_Besse_NPP.jpg: Nuclear Regulatory Commission. Original uploader was Theanphibian at en.wikipedia – Public Domain

The U.S. Attorney’s Office and FBI this week charged the speaker of the Ohio House of Representative and four others in a $61 million scheme to use $1 billion in ratepayers money to keep two decrepit nuclear power plants operating.

And, said the U.S. Attorney for the Southern District of Ohio, David DeVillers, at a press conference after the arrests Tuesday: “This is by no means over. We are going to continue with this investigation.”

Those charged were involved in a “Conspiracy to Participate, Directly or Indirectly” in the scheme “through a Pattern of Racketeering Activity,” declared the “Offense Description” that headed an 81-page federal “Criminal Complaint.”

As DeVillers described it at a press conference: it was the “largest bribery, money laundering scheme ever perpetrated against the people of Ohio.”

FirstEnergy Corp., whose former subsidiaries owned the Davis-Besse nuclear power plant 21 miles from Toledo and the Perry nuclear power plant 40 miles from Cleveland, funneled “dark money,” he said, through a social welfare non-profit corporation to help Larry Householder become speaker of the Ohio House and get other legislators elected. Together, they then got a $1 billion bailout passed that places a fee on every electricity bill in the state through 2026 for the plants.

Arrested with Ohio House Speaker Larry Householder was former Ohio Republican Chairman Matt Borges, lobbyists Neil Clerk and Juan Cespedes and political consultant Jeff Longstreth.

Last November, the Columbus Free Press ran an article by Bob Fitrakis and Harvey Wasserman headlined “Ohio’s Pro-Nuke Assault Threatens American Democracy with Violence & More.”

The nuclear industry’s violent assault on democracy in Ohio has taken a surreal leap,” it began. “Ohio’s GOP secretary of state has now asked the Ohio Supreme Court NOT to provide a federal judge with answers about key procedural questions surrounding the state’s referendum process. The short-term issue is about a billion-dollar bailout for two nuke reactors and two coal burners. Long-term it asks whether targeted violence perpetrated by paid thugs will now define our election process. And whether the public referendum will remain a workable part of our democracy.”

“The battle starts,” it continued, “with House Bill 6, the now-infamous billion-dollar nuke bailout approved by the corrupt, gerrymandered Ohio legislature in late July. HB 6 forces all Ohio ratepayers to subsidize two crumbling nukes on Lake Erie, along with two decrepit coal burners, one of them in Indiana. It helps underwrite ten small solar farms, but undercuts much larger subsidies for other wind and solar facilities.”

“The Perry reactor east of Cleveland, and Davis-Besse near Toledo, are among the world’s most dangerous, decrepit reactors. Both were set to shut because they cannot compete with wind and solar, as well as fracked gas. But Akron-based FirstEnergy spent millions to ‘persuade’ the legislature to hand them a billion dollars to keep their uncompetitive, uninsured and essentially unregulated reactors on line.”

“When the bailout passed, a statewide group called Ohioans Against Corporate Bailouts turned in a petition for a repeal referendum on the 2020 ballot. The law allows 90 days for referendum sponsors to gather signatures to get on the ballot. In this case 265,711 would be required. Ohio’s Attorney General David Yost sat on the request for 19 days, then rejected it. OACB filed a second application, which the AG sat on for another 19 days before approving it. That left the petitioners just 52 days to gather signatures.”

“But signature gatherers were immediately attacked with violent threats and bribery offers. In the field, they (and potential signatories) were physically assaulted by ‘blockers’ hired by the nuclear industry.”

“And now Ohio’s Republican secretary of state has asked that Court NOT to comply, in a direct attempt to prevent Ohioans from voting on whether they’re to be forced to pay a billion dollar subsidy for two lethal, money losing atomic reactors,” the article went on. “This shocking combination of overt threats, bribery and outright physical violence, combined with judicial stall tactics by elected Ohio officials, breaks new ground in the assault on democracy itself in the American heartland.”

“From the rise in violent white supremacist bigotry, to unaccountable police murders, to Charlottesville, to the recent attack on Code Pink’s Medea Benjamin to the concerted Republican assault on paper ballots and fair, inclusive voting practices, it’s clear the GOP intends to gut democracy in 2020 and beyond,” said the article.

There was the piece by Kathiann M. Kowalski in the newsletter of the Energy News Network this March headlined “Dark money dominated Ohio’s nuclear subsidy saga.” It began: “After-the-fact filings show that First Energy’s generation subsidiary paid nearly $2 million to Generation Now, one of the special interest groups that orchestrated ads, political donations and other efforts behind Ohio’s nuclear and coal bailout.”

“House Bill 6 gutted Ohio’s renewable energy and energy efficiency standards while putting ratepayers on the book for nearly $1 billion in subsidies for nuclear power plants, plus an additional amount for aging coal plants. Multiple groups spent heavily to promote HB 6 and prevent a referendum on the law following its passage,” said the piece.

“In some cases, nonprofit and for-profit organizations funded each other or shared the same spokesperson. Groups active in the HB 6 campaign also had links to some of the same lobbyists and consultants who acted for companies that stood to benefit from HB 6…But only limited amounts of funding could be traced.”

“As First Energy Solutions’ bankruptcy case wrapped up in February and the company began doing business as Energy Harbor, a filing posted to the company’s investor relations page shows a wire payment of $1,859,457 from First Energy Solutions to Generation Now, Inc. on July 5, 2019.”

The article quoted Dave Anderson, policy and communications manager at the San Francisco-based Energy and Policy Institute, “who first spotted the Energy Harbor filing,” as saying this funding “proves that House Bill 6 was always primarily a bailout for the bankrupt utility and its wealthy investors…Powerful corporations, and utilities in particular, often fund groups to do their dirty work in an attempt to avoid accountability. In the case of Generation Now, that dirty work included millions of dollars in misleading ads and hiring petition blockers…”

The article noted, “The rise of so-called ‘dark money’ groups, which don’t have to disclose their donors, follows a 2010 Supreme Court case, Citizens United, that held corporations have a constitutional right to unlimited spending.”

The piece noted that Generation Now was “formed in 2017 as a tax-exempt organization under Section 501(c) (4) of the Internal Revenue Code. That code section covers a broad range of civic and ‘social welfare’ organizations.”

With the arrest of the Ohio House speaker and his co-defendants, the organization Beyond Nuclear issued a statement by Kevin Kamps, its radioactive waste specialist, long involved in challenging Davis-Besse and Perry.

“What’s really scary is that the corruption is not just monetary, or legislative. Davis-Besse’s containment structure is corrupted, in the sense that the Shield Building is severely cracked, even to the point of potential collapse,” said Kamps. “The reactor pressure vessel is corrupted, in the sense of neutron embrittlement risking pressurized thermal shock through-wall fracture, as well as boric acid corrosion. The high-level radioactive waste storage pool is corrupted, in the sense that it is leaking. The replacement steam generators are corrupted, in the sense that they are experimental, maximizing profits at the expense of safety.”

“The physical corruption of the Davis-Besse nuclear power plant is what really worries me, regarding the health, safety, and environment for countless Ohioans—and Great Lakes residents beyond—downwind, downstream, up the food chain, and down the generations, in terms of the worsening risks of a catastrophic release of long-lasting hazardous radioactivity,” said Kamps.

“Davis-Besse should have been retired a long time ago, for the sake of safety alone. And yet the reactor sails ever deeper into the uncharted waters of reactor meltdown risk, while churning out ever more high-level radioactive waste, for which we have no good solution.

Perry, for its part, is infamous for worker over exposures to hazardous radioactivity. It was also the first U.S. atomic reactor to suffer damage from earthquake activity, a risk that only worsens with Perry’s age-related degradation,” said Kamps.

“Both atomic reactors should be shut down ASAP,” said Kamps. “Just consider the Nuclear Regulatory Commission CRAC-II study, short for Calculation of Reactor Accident Consequences, also known as the 1982 Sandia Siting Study, or as NUREG/CR-2239. For Davis-Besse, the report predicted 1,400 peak early fatalities, 73,000 peak early injuries, 10,000 peak cancer deaths, and $84 billion in property damage, in the event of a reactor core meltdown and catastrophic radiation release onto the winds and waves. Perry’s CRAC-II figures are 5,500 acute radiation deaths, 180,000 radiation injuries, 14,000 latent cancer fatalities, and $102 billion in property damage.”

“But as AP investigative reporter Jeff Donn reported in June 2011, in his series ‘Aging Nukes,’” said Kamps, “populations have soared around atomic reactors like Davis-Besse and Perry since 1982, so casualties would now be significantly higher. And when adjusted for inflation alone, Davis-Besse and Perry’s property damage figures would be $225 billion, and $273 billion, respectively. Given such risks, and now given the apparent corruption associated with their ongoing operations, both reactors should be shut down as soon as possible.”

“From 2010 to 2016,” Takoma Park, Maryland-based “Beyond Nuclear helped lead a coalition of environmental groups, including Don’t Waste Michigan, the Ohio Green Party, and Citizen Environmental Alliance of Southwestern Ontario, that unsuccessfully challenged Davis-Besse’s 20-year license extension,” he said. “From 2013 to 2014, Beyond Nuclear joined with that same coalition, as well as the Sierra Club Ohio Chapter, to challenge Davis-Besse’s experimental steam generator replacements; Fairewinds Energy Education chief engineer, Arnie Gundersen, served as expert witness for the coalition. In both proceedings, Toledo, Ohio attorney Terry Lodge served as the coalition’s legal counsel.”

At the press conference Tuesday, U.S. Atttorney DeVillers said that those involved in the scheme “were able to line their pockets.” Householder took in “a half a million dollars for his personal benefit.”

DeVillers thanked the “brave people who came forward” with information on the scheme. And now, he said the year-long investigation can move from “covert”—done to avoid having the targets know they were being probed—to “overt.” He said: “As of this morning there are a lot of FBI agents knocking on doors, there are a lot of FBI agents asking questions, fulfilling subpoenas.”

Chris Hoffman, special agent in charge of the Cincinnatti office of the FBI, at the press conference described “public corruption” as the “top priority of the FBI.”

The “Criminal Complaint” speaks of how in 2016 “Company A Corp.’s [referring to FirstEnergy Corp.] “nuclear generation looked grim.” It and “its affiliates reported a weak energy market, poor forecast demands, and hundreds of millions of dollars in losses.” So, the company “actively sought a ‘legislative solution’ for its two-affiliated nuclear power plants in Ohio.” There are then pages and pages of details about the investigation. The “Criminal Complaint” can be viewed online here.

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Catch and Kill: the Protection Racket Used by Trump, Weinstein, Epstein and Wall Street

by PAM MARTENS – RUSS MARTENS


When it comes to the crime families of New York, they literally do catch and kill people who can’t be trusted to keep the secrets of their criminal operations. When it comes to the superrich in New York, they’re more inclined to “catch and kill” the story, rather than the accuser. (Jeffrey Epstein’s untimely death last year may be an exception.)

On October 11, 2017, Jim Rutenberg, writing for the New York Times about the aiders and abettors to Harvey Weinstein’s sexual assaults, explained the catch and kill strategy as follows:

“There is also another dynamic at play, involving something akin to a protection racket. This is the network of aggressive public relations flacks and lawyers who guard the secrets of those who employ them and keep their misdeeds out of public view.”

Keeping the secrets out of public view can involve a payoff to the victim and an NDA (non-disclosure agreement) or it can involve a more twisted version: getting a news outlet or Hollywood studio to pay big bucks to buy the story rights from the victim, with the promise to release the story to the public, then killing the story and making sure it doesn’t see the light of day anywhere else. This happens to a far greater extent than Americans currently understand.

The mushrooming transmutations of catch and kill today involve not just public relations flacks, high-priced lawyers, publishers, mainstream media and Hollywood studios. Increasingly, catch and kill includes the U.S. Department of Justice, making this version of catch and kill exponentially more dangerous to American democracy.

We’ll start off with a few of the catch and kill operations that you may have heard something about and then move on to the insidious Wall Street operations that have not, heretofore, been looked upon as catch and kill operations.

Trump’s Woman Problem and the National Enquirer

In December 2018, Donald Trump’s personal attorney, Michael Cohen, was sentenced to 3 years in jail for, among other things, two catch and kill operations that were meant to “influence the 2016 election and did so in coordination with one or more members of the campaign,” according to the U.S. Attorney’s Office. The catch and kill plots involved a payment of $150,000 to Karen McDougal, a former Playboy model who alleged an affair with Trump. The payment was made by American Media, Inc. (AMI), the parent of the National Enquirer. AMI bought McDougal’s story, killed it, and then assigned the rights to the story to Cohen’s LLC. In addition, Cohen paid porn star Stormy Daniels $130,000 for her silence about an alleged affair with Trump.

In AMI’s non-prosecution agreement with the Department of Justice, it admitted that its Chairman and CEO at the time, David Pecker, had met with Cohen and hatched a plan to “help deal with negative stories” about Trump’s relationships with women, by “assisting the campaign in identifying such stories so they could be purchased and their publication avoided.” AMI also admitted that in purchasing McDougal’s “limited life rights for $150,000,” it had no intention “to publish the story or disseminate information about it publicly.”

Ronan Farrow and the Harvey Weinstein Investigation

Ronan Farrow has cast a harsh light on NBC, suggesting that it may have been involved in a nuanced form of catch and kill during his investigation of Harvey Weinstein’s alleged sexual assaults on women. NBC failed to broadcast Farrow’s story despite having filmed witness interviews. After NBC told Farrow that his story wasn’t reportable, Farrow took it to the New Yorker, where the article was published and won him a Pulitzer Prize in 2018. That article includes allegations of three rapes by Weinstein.

Farrow appeared on the MSNBC Rachel Maddow program shortly after his article ran in the New Yorker. Farrow was asked by Maddow why NBC did not air the story. Farrow responded:

“I walked into the door at the New Yorker with an explosively reportable piece that should have been public earlier. And immediately, obviously, the New Yorker recognized that and it is not accurate to say that it wasn’t reportable. In fact, there were multiple determinations that it was reportable at NBC.”

Jeffrey Epstein and the U.S. Attorney’s Office

Catch and kill is about the only logical way to view what happened to Jeffrey Epstein at the hands of Alex Acosta, then U.S. Attorney for the Southern District of Florida when Jeffrey Epstein got the sweetheart deal of a lifetime.

In July of 2006, the Palm Beach, Florida Police Chief, Michael Reiter, delivered a deeply investigated case against Epstein to the FBI, according to the November 2018 intrepid reporting of Julie Brown in the Miami Herald. Brown indicated that it took just eight months of FBI interviews for the U.S. Attorney’s office in Florida to have a 53-page Federal indictment ready to file against Epstein involving sexual assaults against dozens of underage girls.

But the indictment was never filed. A deal was worked out by then U.S. Attorney, Alex Acosta, and Epstein’s well-connected lawyers. Federal charges were dropped against Epstein and he was allowed to plead guilty to only Florida state charges: one count of soliciting sex from a minor and one count of soliciting sex from an adult woman. Epstein was able to serve just 13 months in jail while also given a work release program to sit in his well-appointed office 12 hours a day, and driven around by his chauffeured limo. The deal was so outrageously constructed that it even denied his dozens of victims knowledge of the terms of the deal.

Had Julie Brown not conducted that courageous investigation for the Miami Herald, had the Miami Herald declined to publish it, the U.S. Attorney’s Office for the Southern District of New York would not have been embarrassed into bringing the new charges against Epstein on July 8, 2019. Acosta, who had curiously become Trump’s U.S. Labor Secretary, was embarrassed into resigning as a result of the public uproar.

JPMorgan’s Catch and Kill Deal with the Department of Justice

On November 19, 2013, the Department of Justice and other regulators settled their mortgage securities fraud case against JPMorgan Chase for an unprecedented $13 billion. One year later, we would learn from Matt Taibbi’s reporting at Rolling Stone that the Justice Department had a highly reliable lawyer-whistleblower that had worked at JPMorgan Chase, Alayne Fleischmann, who had documentary evidence that she had warned the bank that it was peddling defective mortgages.

The Statement of Facts offered to the public along with the settlement strongly suggested a catch and kill operation. There were none of the typical smoking gun internal emails; there were none of the internal documents showing an intent to defraud; there were none of the documents that Alayne Fleischmann had provided to Justice Department investigators. And there were no names of employees that had engaged in the fraudulent practices.

Citigroup’s Catch and Kill Deal with the Department of Justice

On July 14, 2014, the Justice Department settled a similar mortgage securities fraud case against Citigroup for $7 billion. Loretta Lynch, then U.S. Attorney for the Eastern District of New York, said this about the investigation:

“After nearly 50 subpoenas to Citigroup, Trustees, Servicers, Due Diligence providers and their employees, and after collecting nearly 25 million documents relating to every residential mortgage backed security issued or underwritten by Citigroup in 2006 and 2007, our teams found that the misconduct in Citigroup’s deals devastated the nation and the world’s economies, touching everyone.”

But just like a good ole National Enquirer catch and kill operation, those 25 million documents were locked tightly away from public view.

The preposterously skimpy details the Department of Justice released to the public in its 9-page Statement of Facts (SOF) was devoid of anything that could have allowed the public to connect the dots in the fraud. Instead of Appendix 1 being filled with incriminating emails or whistleblower letters proving Citigroup’s intent to defraud, it was a meaningless listing of deal names which told the public absolutely nothing about the nature of the fraud.

Fortunately for America, Citigroup had an internal whistleblower who wasn’t going to wait around for “justice” from the U.S. Department of Justice. Richard Bowen first testified to the Financial Crisis Inquiry Commission (FCIC). According to Bowen’s testimony in FCIC archives, he shared the following with the Commission:

“In June 2006, Bowen discovered that as much as 60% of the loans that Citi was buying were defective. They did not meet Citigroup’s loan guidelines and thus endangered the company—if the borrowers were to default on their loans, the investors could force Citi to buy them back. Bowen told the Commission that he tried to alert top managers at the firm by ‘email, weekly reports, committee presentations, and discussions’; but though they expressed concern, it ‘never translated into any action.’ Instead, he said, ‘there was a considerable push to build volumes, to increase market share.’ ”

The FCIC document also reports that Bowen “finally took his warnings to the highest level he could reach—Robert Rubin, the chairman of the Executive Committee of the Board of Directors and a former U.S. treasury secretary in the Clinton administration, and three other bank officials. He sent Rubin and the others a memo with the words ‘URGENT—READ IMMEDIATELY’ in the subject line. Sharing his concerns, he stressed to top managers that Citi faced billions of dollars in losses if investors were to demand that Citi repurchase the defective loans.”

Richard Bowen went even further, giving his documents and story to 60 Minutes. The program aired on December 4, 2011. It was ironically titled “Prosecuting Wall Street,” a dig at the U.S. Justice Department that was missing in action when it came to prosecuting any Wall Street executive for crimes that led to the financial crash of 2008.

To more fully reflect on what a catch and kill operation looks like when it’s run on behalf of a big Wall Street bank by the Justice Department, versus what a meaningful investigation on behalf of the American people looks like, consider the evidentiary recordreleased to the public by the U.S. Senate’s Permanent Subcommittee on Investigations when it was Chaired by Democratic Senator Carl Levin in 2013. The investigation probed JPMorgan’s $6.2 billion in losses from its London Whale derivative bets gone bad using bank depositors’ money. The public was presented with a 306-page report, 98 pages of meaningful exhibits including internal emails with names, and two volumes of testimony under oath.

Unfortunately for the American people, that Subcommittee hasn’t conducted any meaningful investigations of Wall Street banks since Republicans took control of the Senate in 2015.

The only element of truth and facts that the American people have today when it comes to Wall Street crime is when a courageous whistleblower comes forward before they are nabbed in a catch and kill operation.

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Thawing Arctic Permafrost

by ROBERT HUNZIKER

Photograph Source: Steve Jurvetson – CC BY 2.0

It’s no surprise that first prize, or the blue ribbon, for exceeding 2°C above baseline goes to the Arctic with permafrost that covers 25% of the Northern Hemisphere. Recognition is long overdue, as it’s been totally neglected far too long by the Intergovernmental Panel on Climate Change (IPCC).

This crucial nugget of knowledge comes by way of a recent virtual science session (1:27 in length) sponsored by the National Academy of Sciences.

The webcast is entitled: Thawing Arctic Permafrost: Regional and Global Impacts, hosted by John P. Holdren, Teresa & John Heinz Professor of Environmental Policy, John F. Kennedy School of Government, Harvard University.

The timing couldn’t be better. The Arctic Circle has been very newsworthy. As such, people must be wondering what to make of the disturbing news that’s unsettling, to an extreme.

According to Euronews, as of July 14th:

“The extreme north and beyond the Arctic Circle has this year registered record temperatures. On June 20, the meteorological service of Russia recorded a peak of 38°C in Verkhoyansk, the highest recorded temperature since records began in the late nineteenth century.”

“This is contributing to the rapid melting of permafrost, the region’s frozen ground, on which are built many industrial construction sites and buildings, many for mining hydrocarbons,” Ibid.

“The melting of the poles that act as temperature controls for atmospheric currents has consequences for the entire climate,” Ibid.

Decidedly, what happens in the Arctic does not stay in the Arctic.

According to Professor Holdren: “Temperatures across the Arctic are increasing 2 to 3 times faster than the global average… The Arctic will continue to be the leading edge of climate change.”

The first speaker on the virtual webcast was Dr. Susan M. Natali, Associate Scientist and Arctic Program Director, Woods Hole Research Center, an Arctic ecologist focusing on the ecosystem and carbon cycling consequences of permafrost thaw.

According to Dr. Natali, the Arctic temperature anomaly is already 2°C warmer than the long-term average. The consequences include sea ice loss, melting of Greenland ice sheets, and permafrost thaw.

Permafrost thaw is monitored by boreholes drilled at depths of 20 meters (66 feet) throughout the Arctic. Thus, measured temperature changes avoid seasonal dynamics. These deep permafrost temperatures, in some instances, have been measured for up to 40 years. Results: Permafrost temps are markedly warming across the board, regardless of season.

Of note, Northern Hemisphere permafrost contains 1100-1500 billion tonnes of carbon in the form of ancient organic matter. For comparison purposes, this is twice the amount of carbon already in the atmosphere, and it is three times as much carbon as in the world’s forest biomass.

An obvious implication of Dr. Natali’s statements is humanity is playing with fire in a very big way by allowing anthropogenic greenhouse gas emissions (cars, planes, and trains, etc.) to run wild, increasing by the month, by the year, by the decade with absolutely no end in sight, none whatsoever. At some point in time all of those billions of tonnes of carbon stored in frozen permafrost will start breaking lose beyond normal background rates and humanity will find its goose cooked, maybe well done.

According to Natali, permafrost carbon emissions are not included in the IPCC’s global carbon budget that targets 2°C or below, preferably below 1.5°C. Well, maybe a suddenly overheated Arctic will bring on an eventual recalculation of how the IPCC looks at and calculates the carbon budget. Better late than never.

And, here’s the distressing part (one of many): Fieldwork by scientists proved that permafrost is already a “net emitter of CO2,” this after thousands of years as a “carbon sink,” but no longer! As such, thousands of years of one of the largest carbon sinks on Earth erased by recklessness of human-generated over-heating ecosystems.

Not only that, according to Natali, permafrost thaw alone is equivalent to ~25% of the IPCC’s allowable emissions to stay below 1.5°C. Yet, the IPCC does not include permafrost in its carbon budget, meaning there’s a very nasty surprise down the line for the rah-rah climate mitigation crowd.

The second virtual speaker was Katey Walter Anthony, Aquatic Ecosystem Ecologist and Professor, Water and Environmental Research Center, University of Alaska/Fairbanks.

Dr. Anthony has done fieldwork throughout Russia with a lot of work in Siberia (a hothouse nowadays). Her research focuses on thermokarst, lake formation, and greenhouse gas methane.

Per Dr. Anthony, current climate models in the world do not include carbon emissions from thermokarst lakes. Yet, they’re plentiful with millions of thermokarst lakes expanding and releasing methane all across the Arctic.

Not only that but permafrost soils contain 1500 gigatons of carbon, which according to Dr. Anthony, equates to 150 years of fossil fuel emissions under present conditions. Imagine turning lose a sizeable fraction of that carbon. Once again, nation/states’ carbon emission mitigation plans are dead certain to come up real short of professed goals.

Field tests on thermokarst lakes are conducted by lowering a bubble trap into the water to trap microbial methane seeps as the methane bubbles year round. Bubble traps exist in over 300 lakes throughout the Arctic.

It was 14,000 years ago, as the climate warmed, when permafrost thermokarst lakes flared up on the landscape, bringing 4°C warming over a period of 8,000 years. Nowadays, according to Dr. Anthony, a similar 4°C warming will likely occur over only 80 years in sharp contrast to 8,000 years in the paleoclimate record. Obviously, without her stating as such, it implies a climate system that’s on turbo charger training-wheels, real big ones.

“We are standing at the threshold of abrupt change in permafrost carbon emissions.” (Anthony)

Mercy! And, all of those mitigation plans by 195 nations, but did they ever really get off the ground? The truth is emissions relentlessly climb upwards, ad nauseam. Thus, questioning who’s seriously watching the store?

John Holdren wrapped up the virtual session: We’re probably looking at 80 to 100 gigatons of carbon released from permafrost over this century. In turn, this takes a big bite out of the global carbon budget. According to Dr. Holdren, that prospect is in addition to a global temperature increase, to date, of 1.1°C to 1.2°C above baseline.

Permafrost, which is not included in the global carbon budget by the IPCC, could add 25% to 40%. That’s an enormous problem that lends itself to big trouble down the line. What’s a nation in the throes of carbon emission mitigation plans to do?

Nevertheless, Dr. Holdren, who co-chaired Obama’s President’s Council of Advisors on Science and Technology, says it is still possible to mitigate enough to hold temps to 2°C. But at a cost of ~3% of world GDP. Ahem! He further nearly apologetically suggested that the hit to civilization for failure to mitigate would far exceed that cost, which happens to be 3% of $85T or a whopping $2.55T (that’s trillions). Hello, anybody still out there?

Meanwhile, after years of handwringing and gushing teardrops of green sympathizers, the world is still 80% dependent upon fossil fuels, a fact revealed by Dr. Holdren at the close of his presentation. That’s very troubling.

That’s the same 80% as 50 years ago and a clear signal of absolute failure by governments around the world and a resounding failure by the IPCC to fully implement/organize/promote its heavenly Paris ’15 plans to save the planet. It’s disgraceful!

As for final questions/thoughts via the virtual webcast:

According to Dr. Anthony: The East Siberian Arctic Sea is a place where “we’ve seen really large numbers of CH4 release.”

The following was not discussed in the webcast: Temperatures were recently 30-34C (86-93F) in the East Siberian Arctic Sea (ESAS) region, which region is equivalent in size to Germany France Gr Br Italy and Japan combined and with 75% of the area in 50-80m, shallow waters, allowing quick and easy CH4 release from the subsea permafrost without oxidation. Drilling by other scientists has discovered enormous quantities of frozen methane, and noticeable thinning of the subsea permafrost. Trusted sources that closely follow CH4 emissions in the ESAS region are of the opinion: “It may be out of control.” But, it’s important to note that’s anecdotal information.

Also, disconcertingly, the heaviest season for methane release into the atmosphere has only just begun.

Making matters even worse, at the Top of the World, Arctic Ocean sea surface temperatures, which this time of year are typically 0.3°C (32°F) were recently 12°C (54°F). That’s downright spooky!

Postscript: Scientists have identified the first active methane gas leak in Antarctica, announced July 22nd, discovered by researchers led by Andrew Thurber/Oregon State University, who commented: “I find it incredibly concerning.” (Source: Andrew R. Thurber, et al, Riddles in the Cold: Antarctic Endemism and Microbial Succession Impact Methane Cycling in the Southern Ocean, The Royal Society, July 22, 2020).

Speechless!

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We Don’t Need No Stinkin’ Oil Money to Fund Public Lands

by CHRISTOPHER KETCHAM – JIMMY TOBIAS

Oil wells on federal lands in Colorado. Photo: BLM.

What does it take to get the Sierra Club, the Wilderness Society, the Natural Resources Defense Council, and the League of Conservation Voters in bed with anti-conservation Republicans like Cory Gardner of Colorado, the fossil fuel lobby group Western Energy Alliance, and President Trump, whose tenure has brought a wrecking ball to environmental law?

Behold the Great American Outdoors Act. The legislation passed the Senate in June and the House this week with ringing bipartisan support. Ballyhooed as providing many hundreds of millions of dollars for public land maintenance and acquisition, it has been lavished with adoring praise from enviro groups and progressive media. Mother Jones declared it “a resounding victory,” Outside magazine said it was a “remarkable breakthrough,” and Sierra magazine called it “good news for all Americans.”

Gardner, otherwise known for his execrable environmental record, championed the bill in the Senate, and Trump, as the legislation made its way to passage, repeatedly tweeted that the moment it hit his desk he would sign it. “We MUST protect our National Parks for our children and grandchildren,” said the great hater of public lands.

So what’s going on here?

The Great American Outdoors Act is a devil’s bargain, a sad oil-soaked compromise with politicians like Trump and Gardner who feed at the tit of fossil fuel interests. Mainstream greens, for the most part, went along because they are politically weak, lacking in bold visions, and so beaten down after years of taking losses that they assented to this obviously bad deal, a deal that will further entrench the fossil fuel industry and promote the interests of corporate recreation concerns – both of which are helping ruin the “great American outdoors.”

Read the bill closely and you’ll comprehend what’s at stake: it establishes a new pot of cash, the National Parks and Public Land Legacy Restoration Fund, that directly ties rehabilitation of our dilapidated national parks and other federal parcels to industrial energy development. The new fund garnishes 50 percent of “revenues due and payable to the United States from oil, gas, coal, or alternative or renewable energy development on Federal land and water,” and uses that money specifically for public lands maintenance. In other words, maintenance funding for the Park Service, the Forest Service and other federal land management agencies will be increasingly dependent on drilling for oil and gas and mining of coal, the primary extractive activities on the public domain today and in the immediate future.

This explains the U.S. Chamber of Commerce’s fulsome support for the legislation. The chamber tied its support to the continuation of fossil fuel exploitation at current levels, opposing “any efforts to establish moratoria on energy production” and averring that legislative amendments that would curb drilling and mining would be viewed as a “poison pill.”

Within the context of the climate and ecological catastrophe we face, green groups should regard the Great American Outdoors Act as an object of shame, not celebration. For greens to promote a rapid shift away from fossil fuels while accepting fossil fuel pay-outs as a financial basis of public land maintenance and management is bald hypocrisy – after all, the fossil fuel industry, with its monstrous sway over American society, stands at the forefront of climate-change denial, manufacturing lies and funding candidates like Cory Gardner who spread those lies. In a time of climate consciousness, divestment campaigns, and youth-led street protests, green supporters of the bill are implicitly telling the public to rely on oil, gas and coal production in order to restore and improve our parks.

Granted, there is a precedent for the linking of conservation and fossil fuel development: the Land and Water Conservation Fund Act of 1965 (LWCF). The Great American Outdoors Act funds in full the LWCF for the first time at a total of $900 million. Subsidized by the federal receipts from off-shore oil and gas drilling, the Land and Water Conservation Fund’s worthy goals have included the purchasing of land to expand the public domain, which, done right, can protect landscape-scale habitat, wildlife and biodiversity.

Indeed, the fund has achieved many good things. On the other hand, much of the money in LWCF over the course of its history has been used not to protect habitat but to facilitate recreational infrastructure for the public to play in that habitat, play that by its very nature involves not only more burning of fossil fuels but endangerment of the very wildlife supposedly intended for conservation. It should be noted, too, that the LWCF, dependent on drilling activity uniquely destructive to ocean ecosystems, was established before the climate crisis was widely known. It is an outmoded model of public land funding.

But no matter: with the Great American Outdoors Act, green groups and their Democratic allies have gotten full permanent funding for LWCF, which they have long sought, in part because they see recreational infrastructure as an unalloyed good, regardless of how it’s financed. Republicans, meanwhile, get green cover in closely contested Montana and Colorado Senate races this year despite their loathsome conservation records. And fossil fuel interests get the honor of financing national parks, shoring up their tottering legitimacy. As the president of the Western Energy Alliance Kathleen Sgamma put it, “For too long our parks have suffered from eroded trails, crumbling roads and bridges, and other maintenance shortfalls” – and now it’s the worst climate polluters of our time to the rescue.

Bill proponents like Sgamma were joined in the run-up to the bill’s passage by a chorus of green groups highlighting the need for massive cash infusions to address the backlog of “deferred maintenance” in the parks. While the cost to fix the parks is now estimated at roughly $12 billion, half of that, $6 billion, is for maintaining paved roads. Some $389 million is for upkeep of infrastructure for the private businesses, known as concessionaires, that operate hotels, restaurants, and trinket shops in the parks. Less than $1 billion is for maintenance of trails and campgrounds. Under the Great American Outdoors Act, as much as 45 percent of the new fund will go to fix roads, bridges and tunnels, allowing more motorists to burn more fossil fuels on better, smoother, faster infrastructure. Among the beneficiaries: the private, for-profit concessionaires that depend on easy motorized access in parks.

The conservation movement did not need to support this ugly bill. If it had more courage and political influence it wouldn’t have.

Instead, greens would have pushed for full permanent public funding of the LWCF that divorces it from any dependence on energy industry royalties (and pushed to ensure that land and water, not human recreation, is what’s protected). They would have demanded that those royalties instead go toward a program that transitions our economy away from fossil fuels. They would have opposed any further entrenchment of the ill-conceived LWCF model of an industry-dependent financing scheme for public lands. They would have cried out that tying conservation priorities to fossil fuel developers and other energy interests is terrible folly in an era that demands drastic and immediate decarbonization and an end to industrial habitat destruction. They would have fought furiously to force Congress to deliver ample appropriations for public land health and regulation, just as Congress regularly doles out money for the military, banks, agribusiness, and the investor classes.

If there is enough to go around for huge tax breaks for the rich and generous subsidies for other favored parties, there ought to be enough to support the national parks and national forests. Conservationists can do much better than the Great American Outdoors Act, its pretty name notwithstanding. In this era of ecological crisis, they must.

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Papa John’s fails to deliver

Sheffield pizza workers force bosses to pay withheld wages through collective action.

Proletarian writers

Papa John’s pizza shops (PJ), contrary to their folksy name, are a massive American chain with over 350 franchises across Britain and 5,000 franchises elsewhere. The franchises are managed locally by numerous franchisees.

On Saturday 25 July, workers and ex-workers gathered outside the Papa John’s on Ecclesall Road in Sheffield to protest at the treatment meted out to them.

When the previous franchise holder, Tofur Ali, was running the shop, wages were not paid on time and in some cases amounted to less than the legal minimum. There was no access to private toilets and staff worked long shifts without breaks. The shop stayed open throughout the coronavirus lockdown under these conditions.

Then on 27 June, staff turned up to work only to learn that the shop was closed, Tofur Ali had been ousted and the business was under new management. In the ensuing month the new franchisee failed to take responsibility for the wages that Tofur Ali had illegally withheld from the workers.

It was only when they stood outside the shop, supported by the bakers union (BFAWU) and local community activists, demanding that Papa John’s pay them what they were owed that a grudging undertaking was extracted that the issue would be resolved and the workers paid.

It is through such struggles as these for basic pay and decent working conditions that workers in Britain will finally start to regain confidence in themselves and their class, learning how to exercise their collective power and discovering their true class interests.

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Bayer AG forced to pay over $10bn to settle cancer claims

A US court has unexpectedly agreed that Roundup does indeed cause cancer – and awarded unprecedented damages to victims.

Proletarian writers

Monsanto has managed to shuffle off its toxic liabilities onto German company Bayer, leaving the latter to carry the Roundup can as US courts are suddenly motivated to teach capitalism a lesson.

In June this year the German pharmaceutical and chemical giant Bayer AG agreed to pay out over $10bn (around £8bn) to settle almost 100,000 lawsuits brought against it in the USA.

This followed over a year of talks during which the agritech giant had attempted to wriggle out of accepting responsibility for its weedkiller Roundup causing non-Hodgkin’s lymphoma in regular users.

“The deal, announced Wednesday, is among the largest settlements ever in US civil litigation. Negotiations were extraordinarily complex, producing separate agreements with 25 lead law firms whose clients will receive varying amounts.

“Individuals, depending on the strength of their cases, will receive payments of $5,000 to $250,000, according to two people involved in the negotiations.”

Of this massive sum, £1.25bn (£1bn) will be set aside for the 30,000 as yet unresolved claims. Part of the figure “will be used to establish an independent [!] expert [!] panel to resolve two critical questions about glyphosate: Does it cause cancer, and if so, what is the minimum dosage or exposure level that is dangerous?”

It will come as no surprise that Bayer itself has said that “the settlement included no admission of liability or wrongdoing”. (Roundup maker to pay $10bn to settle cancer suits by Patricia Cohen, New York Times, 24 June 2020)

Roundup, a glyphosate-based herbicide, is the most well-known product made by notorious US agritech multinational Monsanto. After Bayer acquired and merged with Monsanto in 2018, at a cost of around $63bn, it also acquired Monsanto’s enormous liabilities.

Although Bayer knew that legal action was being taken in connection with Roundup, it was presumed that this could not possibly be successful given ‘expert’ advice, including from the US’s Environmental Protection Agency, that there was insufficient evidence that Roundup caused cancer. (EPA reaffirms glyphosate safe for users as court cases grow by Ellen Knickmayer, Associated Press, 30 April 2019)

So Bayer was caught on the hop when, quite unexpectedly, not only did three separate US courts award damages to plaintiffs who claimed that their cancer was caused by Roundup but also awarded damages far in excess of anything that would have been entertained in a European court, whether the defendant were European or not.

Monsanto is a past master of dodging responsibility for the devastating social consequences of its activities. During the Vietnam war it manufactured Agent Orange for the US military – a notoriously toxic defoliant spray that is still causing birth defects amongst the population today.

Shrugging off all responsibility, Monsanto has boasted that “US courts have determined that wartime contractors … who produced Agent Orange for the government are not responsible for damage claims associated with the chemistry”. (Vietnam to seek compensation from Monsanto for Agent Orange victims after US court found co. liable in lawsuit over allegedly cancer-causing weedkiller, Business and Human Rights Centre, 26 August 2018)

This is how monopoly capitalism operates. Nothing is allowed to stand in the way of its mad desire to realise the absolute maximum profit, at whatever cost to the environment – or to the profitability of rival interests.

Now Monsanto has managed to shuffle off its toxic liabilities to the German company Bayer, leaving the latter to carry the Roundup can as US courts are suddenly motivated to teach capitalism a lesson – provided that it is not US capitalist concerns that are in the dock.

It is yet to be seen whether this decision will impact the attitude of Britain’s local councils and agribusinesses, most of whom routinely soak vast areas of Britain’s parks, pavements and fields in glyphosates, preferring to repeat the ‘expert’ mantra that this practice is ‘perfectly safe’ than to employ gardeners and farm labourers to do the work of removing weeds in a way that is demonstrably safe to the environment and the public.

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Bury FC: a victim of capitalism

One more reason for workers to burn with indignation against a social order that can never be made to serve their interests.

Proletarian writers

Giggs Lane, the grounds of Bury Football Club. The club has been forced into bankruptcy and kicked out of the League as a result of speculative deals and dodgy accounting by investors, all aimed at gaining maximum profits using the club’s assets.

Bury Football Club, founded 134 years ago, is a typical product of working-class Victorian life. The club badge features an anvil, representing metalwork, a fleece, representing wool, two shuttles, representing the textile industry, and culms of the papyrus plant that represent the paper-making industry.

The crest shows a bee for industry between two branches of the cotton plant alongside the Latin phrase ‘Vincit – Omnia – Industria’, which translates as “Hard work conquers all”.

The growth of the industrial proletariat in Victorian England brought into being many of the cultural institutions held dear by workers for generations. British workers enjoyed, followed, supported and used the same football clubs, parks, pubs, libraries and swimming pools as their grandparents, great-grandparents and even their great-great-grandparents.

But football clubs, particularly the smaller local ones, the provincial product of a now collapsed industrial society, are under the very same pressures that brought to an end the thousands of factory sports clubs, working men’s institutes and social societies that were once supported by largescale industrial society and which were a typical part of every town and city across the country.

Society in general is suffering from the unceasing quest for maximum profit. Culture, sport, and in the final analysis football, too, will be the victim of the banker, the businessman and the investor.

A basic economic law of capitalism, as Josef Stalin remarked, is the law of the jungle: the strong take from the weak. In today’s footballing world it’s the big clubs that benefit from the adulation and marketing of football.

The 20 clubs in the Premier League, English football’s top tier, made record revenue of £4.8bn over the 2017/18 season, with combined operating profits before transfers of £900m, according to an analysis by the Deloitte consultancy. These clubs benefit from multibillion-pound broadcasting deals, match day ticket sales and global sponsorship deals.

By contrast, the 72 clubs below them in the Championship, League One and League Two made combined losses of £411m over the same period, partly owing to heavy spending on players in an effort to reach the top division.

In today’s reality, there can be no escape from that rat race, the quest to crawl up into the big league. But for those that fail, financial disaster looms. Football is a business, and the very idea that a club belongs to the fans is a touching though naive bit of wishful thinking.

When Wimbledon decided, against the wishes of its London-based fans (from Wimbledon, would you believe) to up sticks and move to Milton Keynes, no amount of expensive PR could hide from the fans that the decision had been a purely commercial one. The fans had their club stolen from them – possibly a fate even worse than that of the supporters of Bury FC.

Likewise in Coventry, where an FA Cup-winning club with a proud history now plays its matches 20 miles away in Birmingham, having lost all its assets – its stadium, car parks, club house, pub and glory – to greedy chairmen, investors and capitalists.

Football as a business

For the people of Bury, the collapse of the football club has been a heavy blow. As George Galloway remarked on his RT television show Sputnik: “You could see the grief in the local population … it’s punched a big hole in the heart of the town.”

The BBC reported that locals said they “feel as if we have been tortured”.

“I would never watch another football match if Bury went out of business. Whatever happens in your life, on Saturday afternoon, we always had the anchor of the club.

“Just for two hours we could forget all those other worries and be part of the big Bury family.” (Bury FC: Anger and tears at League One club before EFL decision by Matt Davis, BBC, 21 August 2019)

What happened at Bury?

A report in the Financial Times detailed some of the financial background to the Bury tragedy. It involved the usual tale of making a buck, and featured a cameo appearance from Alastair Campbell’s son (yes, that Alastair Campbell).

“Two years after Stewart Day became owner and chairman of Bury FC, the English football club became involved in an unusual financial arrangement with a property company the businessman also ran.

“In 2015, Mederco Ltd, of which Mr Day was the sole director, entered into leases on the car park that the Greater Manchester club owned outside its Gigg Lane stadium. The spaces were then subleased to retail investors for £9,995 each, with the company offering the buyers returns of 9 percent a year for five years.

“Four years on, the 134-year-old club has been expelled from professional football, Mederco is in administration, and investors are left with car park spaces that generate no income at all, according to Companies House filings …

“Mr Day, who stepped down as Bury’s chairman at the end of last year, oversaw large losses at the club during his tenure. And other property schemes connected to Mederco, such as student accommodation developments, have collapsed into administration.

“According to a Mederco administrator’s report, the Bury car park investors should have received a total of £232,000 annually. The payments are currently about £190,000 in arrears …

“In December, he sold the club for £1 to Steven Dale, who has had a long career in the building trade, mainly through equipment hire. In an interview with BBC Radio earlier this month, Mr Dale said that prior to taking ownership of the club, ‘I didn’t even know there was a football team called Bury. I’m not a football fan.’

“In July, Bury’s creditors met to discuss the terms of a company voluntary agreement (CVA), a proposal to settle its outstanding debts, agreeing that ‘non-football’ creditors would be paid just a quarter of the £4m they were owed.

“The measure was pushed through over the objections of some groups, such as HM Revenue & Customs, the UK tax authority, because the main creditors were Mr Dale and RCR Holdings, an Oldham-registered company founded days before the CVA meeting. As the largest debtholders, they had voting rights that overrode other creditors’ objections.

“Mr Dale could not be reached for comment. He has previously declined to comment on media reports that RCR Holdings is connected to members of his family, saying: “All dealings with the CVA have been done in a correct and proper manner.”

“The CVA was considered an insolvency event by the EFL, for which it enforced a 12-point penalty on Bury before the start of the season.

“The EFL also said it did not have assurances that Mr Dale had sufficient funds to run the club, it cancelled several fixtures, and gave a final deadline of 5.00pm on Tuesday for Bury to secure a takeover or face expulsion from the league.

“Last week, the club received a takeover offer from C&N Sporting Risk, a sports analytics company part-owned by Rory Campbell, son of Alastair Campbell, the former communications chief for Tony Blair when he was prime minister …

“A person close to the talks said C&N pulled out for many reasons, but one issue was a mortgage attached to Gigg Lane taken out by Mr Day worth £3.7m. Mr Dale told The Guardian newspaper in May that the mortgage on the stadium had accrued interest at almost £1,500 a day.

“It was a heavy burden for a club already sustaining big losses. According to its latest available annual accounts, Bury made revenues of £4.66m in the year to May 31, 2017, but operational costs meant the club had made a pre-tax loss of £2.8m over the period.” (Bury finally beaten by speculative property deals by Thomas Hale, Murad Ahmed and Andy Bounds, Financial Times, 29 August 2019)

As George Galloway pointed out, such debt, though a mountain to an ordinary worker, is small change in the world of modern football. “Bury had a level of debt that was roughly speaking equal to the profits of one of Man United’s pie stalls. How couldn’t the big clubs have come to the rescue?”

Former footballer and retired football agent Barry Silkman summed up the situation neatly when he remarked to Galloway: “Football is now 90-95 percent a business; it’s only 5 percent a sport.”

‘Caring’ capitalism?

Bury FC fans, and those from the wider traumatised football family, can console ourselves that in this ruthless, tooth and claw, yet crushingly liberal society, those struggling to come to terms with the demise of their cherished club are being offered mental health support sessions courtesy of the NHS (or, more likely, by some outsourced provider that the NHS fund will be handsomely recompensing).

A mental health service run by the Pennine Care NHS Trust wants to help supporters with “emotional distress or upset” following the club’s expulsion from the Football League.

“Strong emotional reactions are completely understandable,” a service manager explained. (Bury FC: Mental health support offered to club’s suffering fans, BBC, 4 September 2019)

This is the best the liberal do-gooders can offer to the victims of capitalist society, as their living standards and expectations are pushed steadily downward. According to this philosophy, since there’s no fixing the system, workers must learn to live with and stoically accept the pain it inflicts while their lives are gradually denuded of all enjoyment, dignity and meaning.

Marx and Engels, the founders of scientific socialism, had another view of the matter. They saw the working class not merely as unfortunate victims, but as a force capable of smashing the capitalist system and building in its place a socialist society, where the needs of workers would replace the need to make profits as the motive force for all production and social activity.

As a young Friedrich Engels pointed out in his groundbreaking study The Conditions of the Working Class in England: “There is, therefore, no cause for surprise if the workers, treated as brutes, actually become such; or if they can maintain their consciousness of manhood only by cherishing the most glowing hatred, the most unbroken inward rebellion against the bourgeoisie in power. They are men so long only as they burn with wrath against the reigning class. They become brutes the moment they bend in patience under the yoke, and merely strive to make life endurable while abandoning the effort to break the yoke.” (1845, Chapter 7, our emphasis)

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Dilemma of the covid crash vultures

Having maximised indebtedness in order to avoid paying taxes, vulture capitalists now find they are missing out on state aid during the crisis.

Proletarian writers

Whilst workers are driven to their wits’ end trying to make ends meet and keep their families safe through the current health emergency, spare a thought for the trials and tribulations endured by those private equity firms that specialise in buying up troubled companies, stripping their assets, sacking their workforce and then leaving them burdened with enormous debts, earning for themselves the title of vulture capitalists.

Such private equity dealings reach fever pitch during the crisis of overproduction when footloose capital, starved of opportunities for productive investment, instead indulges in an orgy of debt-fuelled speculation in which vast fortunes can be made or lost on the turn of a dice.

Workers will be interested to learn that these public-spirited adventures are funded by the taxpayer. A recent article in The Times explained how companies that have been snaffled up by private recentequity firms manage to dodge taxes by misrepresenting their true level of profitability – and all with a minimum of hard cash fronted by the vultures in the first place.

“Private equity deals typically are structured to include a thin layer of equity capital and a large proportion of debt. The cost of servicing the debt pushes down the company’s profits, which has the effect of lowering its taxes. It can result in healthy businesses announcing statutory losses.”

But now the vultures have a dilemma. While all around them other private businesses are tapping into a bonanza of state aid to prop up capitalism, companies bought out by private equity firms are panicking that they will miss the boat.

As The Times puts it: “In the race to access the government’s coronavirus loan schemes, which carry those reassuring 80 percent state guarantees, businesses owned by private equity groups have been left behind, unable to clear the hurdle of European state aid rules.”

The problem is that, whilst downplaying company profitability may reduce the tax burden, it may simultaneously disqualify the company from receiving state aid.

“Under European rules, a company is blocked from receiving state aid if it is an ‘undertaking in difficulty’ and has accumulated losses that are equal to or greater than 50 percent of its subscribed share capital.

“The rule is aimed at stopping businesses that are unviable from being propped up artificially. Unfortunately for private equity-owned companies, they are also being classed as undertakings in difficulty because of the losses they publish as a result of their debts. As a result, they are being rejected for state-guaranteed loans by the commercial lenders handling Britain’s rescue schemes.

“A survey carried out by the British Private Equity & Venture Capital Association in early May provided a snapshot of the woes facing businesses controlled by buyout firms. It found that 51 private equity-owned companies had been blocked from accessing the coronavirus business interruption loan scheme and a similar lending programme for larger firms.

“A further 93 companies had not applied because they knew that they would be barred by the rules drawn up in Brussels.” (Private equity firms fear a day of reckoning by Ben Martin, The Times, 26 May 2020)

But before we get too grief-stricken by the plight of the hapless vultures, we should remember that there will be plenty more carcasses for them to batten on in the months to come.

As one private equity executive put it: “About a third of the leisure, retail and consumer-facing sectors will be bankrupt, no question about that. So how they get out of that will require corporate activity and there will be opportunities, for sure.”

You bet.

Posted in HealthComments Off on Dilemma of the covid crash vultures

Hedge funds flourish on covid misery

As the vaccine race heats up, holders of the right pharma shares are making a killing out of insider trading.

Proletarian writers

There can be no better illustration of the truly barbaric nature of US imperialism than the way in which the race to find an anti-covid vaccine has instantly morphed into a race to take maximum advantage of the chance to make a killing on the stock exchange.

Whilst countries like China and Cuba are sharing their knowledge of the coronavirus with the world as part of international efforts to combat the pandemic, corporate America can only see new opportunities for making a fast buck.

If a genuine vaccine is actually found in the US, the race will be on to corner the market, slap on a patent and ramp up the price to astronomic levels. Meanwhile, even before that, a killing is already being made by dodgy insider deals on the stock exchange.

As speculation intensifies over which pharmaceutical company might be progressing towards the holy grail, or might be finding favour with the federal government, share prices become volatile, making dizzying ascents and descents. And those who are prescient enough, or bent enough, to be able to forecast these highs and lows are able to buy shares cheap and sell them dear.

None of this gets anyone an inch closer to beating the pandemic, but it does wonders for the bank balances of a tiny minority of bloodsuckers who look at suffering humanity and see only dollar signs.

Picking its way gingerly through a legal minefield, a recent article in the New York Times gives us a flavour of the stunts that are being pulled on Wall Street. (Corporate insiders pocket $1bn in rush for coronavirus vaccine by David Gelles and Jesse Drucker, New York Times, 25 July 2020)

The author’s scope is wide, but one company emerges as the quintessential example of capitalism at its most incestuous, corrupt and parasitical. The story is worth relating.

Vaxart is a small company in San Francisco employing just fifteen people. At the beginning of 2020 its shares were around 35 cents apiece. But then the company started working on a covid vaccine in pill form. As investors scented an opportunity, lured on by clever company PR, its shares began to climb.

Although it’s a tiny outfit, behind Vaxart stood a New York hedge fund called Armistice Capital. In 2019 this hedge fund grabbed the lion’s share of Vaxart’s shares.

“Vaxart’s largest shareholder was a New York hedge fund, Armistice Capital, which last year acquired nearly two-thirds of the company’s shares. Two Armistice executives, including the hedge fund’s founder, Steven Boyd, joined Vaxart’s board of directors. The hedge fund also purchased rights, known as warrants, to buy 21 million more Vaxart shares at some point in the future for as little as 30 cents each.”

So with remarkable prescience, Armistice fixed things so that if the share value rose in the future it would be able to buy at the old price and sell at the new.

The tale continues: “Throughout the spring, Vaxart announced positive preliminary data for its vaccine, along with a partnership with a company that could manufacture it. By late April, with investors sensing the potential for big profits, the company’s shares had reached $3.66 – a tenfold increase from January.

“On 8 June, Vaxart changed the terms of its warrants agreement with Armistice, making it easier for the hedge fund to rapidly acquire the 21 million shares, rather than having to buy and sell in smaller batches.

“One week later, Vaxart announced that its chief executive was stepping down, though he would remain chairman. The new CEO, Mr Floroiu, had previously worked with Mr Boyd, Armistice’s founder, at the hedge fund and the consulting firm McKinsey.

“On 25 June, Vaxart announced that it had signed a letter of intent with another company that might help it mass produce a coronavirus vaccine. Vaxart’s shares nearly doubled that day.

“The next day, Vaxart issued its news release saying it had been selected for Operation Warp Speed. Its shares instantly doubled again, at one point hitting $14, their highest level in years.”

Operation Warp Speed (OWS) was the ludicrous Star Trek name given by the government to its quest for a vaccine. Although it turned out that Vaxart had only a minor role in OWS, the smell of government approval was enough to send its share prices rocketing, giving Armistice the precise circumstances for which it had planned.

“Armistice took advantage of the stock’s exponential increase – at that point up more than 3,600 percent since January. On 26 June, a Friday, and the next Monday, the hedge fund exercised its warrants to buy nearly 21 million Vaxart shares for either 30 cents or $1.10 a share – purchases it would not have been able to make as quickly had its agreement with Vaxart not been modified weeks earlier.

“Armistice then immediately sold the shares at prices from $6.58 to $12.89 a share, according to securities filings. The hedge fund’s profits were immense: more than $197m …

“At the same time, the hedge fund also unloaded some of the Vaxart shares it had previously bought, notching tens of millions of dollars in additional profits.

“By the end of that Monday, 29 June, Armistice had sold almost all of its Vaxart shares.”

Vaxart’s CEO also did well personally. “When he became chief executive in mid-June, Mr Floroiu received stock options that were worth about $4.3m. A month later, those options were worth more than $28m.” As he told an investor conference: “It’s OK to make a profit from covid vaccines, as long as you’re not profiteering.” Quite so.

It is possible that the readiness of the New York Times to dish the dirt quite so freely indicates that Vaxart/Armistice may be in line for scapegoating. But the string of similarly ‘lucky’ share-dealing adventures detailed in the article makes it clear that this case is not exceptional – just exceptionally brazen.

Posted in Campaigns, HealthComments Off on Hedge funds flourish on covid misery

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