"There is danger from all men. The only maxim of a free government ought to be to trust no man living with
power to endanger the public liberty." - - - - John Adams

Saturday, May 25, 2013

CORRUPTION - The Shakedown of Apple Computers

"If God didn't want them sheared, he
would not have made them sheep."
 Eli Wallach
The Magnificent Seven (1960)

Political Extortion
Apple joins the list of companies that have been shaken down for hard cash by both parties

The Washington Examiner reports that Senators are angry that tech giant Apple isn't paying its fair share.

I'm not talking about taxes. This is about the bipartisan extorting of campaign contributions and lobbying fees.

An investigation by Sen. Carl Levin and a grilling of Apple CEO Tim Cook on Tuesday by the Senate's Permanent Subcommittee on Investigations were ostensibly about Apple's low tax bill. But nobody accused Apple of breaking the law. The company moved money around to minimize the tax it owed and then paid the amount the law required. Apple didn't write the tax law or even lobby very hard to shape it.

And that's just the problem. The grilling of Apple is best understood as a shakedown by politicians upset with Apple for not playing the Washington game that yields contributions, power, and personal wealth for congressmen and their aides reports the Washington Examiner.

The American Sheeple think they live in a Democracy,
instead we have a Kleptocracy.

Apple doesn't have a political action committee to fund incumbents' re-elections. Apple doesn't hire many congressional staff or any former congressmen as lobbyists. Apple mostly minds its own business -- and how does that help the political class

The Beltway Shakedown is an old game. Microsoft may be its most famous victim. In the 1990s, while the Federal Trade Commission investigated the software giant for supposed antitrust violations, the Senate Judiciary Committee, run by Republican Orrin Hatch of Utah, held hearings to beat up CEO Bill Gates.

Microsoft's crime? "I have given [Microsoft] advice, and they don't pay any attention to it," fumed Hatch, who described this as "knuckle-headed and hard-nosed."

"The industry had an attitude that government should do what it needs to do but 'leave us alone,' " a congressional aide complained to Businessweek at the time. "Their hands-off approach to Washington will come back to haunt them."

Microsoft got the message and ramped up its lobbying and campaign spending. From $2 million on lobbying in 1997, the company's lobby shop grew to nearly $10 million by 2004. From less than $50,000 in contributions in the 1996 cycle, Microsoft's PAC grew twentyfold in two cycles, to $1.2 million 2000 and $2.3 million in 2012.

Hatch, in 2000, made sure others learned from Microsoft's experience, telling a tech conference, "If you want to get involved in business, you should get involved in politics."

In the 2012 election, where Hatch faced a tough primary, he pocketed $10,000 of Microsoft PAC money.

Lawmakers have sent that message to many industries, sometimes more subtly.

When Democrats took control of the Senate in 2007, Democratic Sen. Chuck Schumer of New York invited top hedge fund moguls to dinner in January, where, as the New York Times put it, he "had some simple advice for the billionaires in his midst: If you want Washington to work with you, you had better work better with one another."

In the following election, hedge funds tripled their campaign contributions over the previous cycle. The industry's lobbying spending increased twelvefold that year. One way in which the industry ramped up its lobbying: hiring Schumer's banking staffer, Carmencita Whonder, as a lobbyist. Whonder then became a Schumer bundler, raising money for him.

Politicians beat up Wal-Mart until Wal-Mart hired Democrat Leslie Dach in 2006 as its top political aide. The retailer started heavily funding the liberal Center for American Progress, run by Obama transition director John Podesta -- and hiring the lobbying firm Podesta co-founded.
Congress at Work

Apple has held out, though. Every couple of years, Politico, the trade publication of the Beltway, has run a piece warning Apple of the dangers of ignoring Washington. "Its low-wattage approach in Washington is becoming more glaring to policymakers," a 2010 article said, pointing out that the company doesn't have a PAC and its lobbying spending was a paltry $1 million.

The 2012 Politico warning to Apple included an explicit threat from a Judiciary staffer-turned-lobbyist, Jeff Miller: "There have been other tech companies who chose not to engage in Washington, and for the most part that strategy did not benefit them."

"Not engag[ing] Washington" includes spending only $1.97 million on lobbying in 2012 -- Google spent more than twice that much in last year's first quarter alone. Just as offensive, Apple still doesn't have a PAC.

A year ago, recounting the Microsoft saga, I wrote, "Wal-Mart underwent this same shakedown last decade ... Next on the menu is Apple."

That's the best way to understand Levin's investigation and the hearing. The thing to watch now: Does Apple make peace with Washington? Does it start a PAC? Does it hire the Podesta Group and employ Levin's aides?

Or will Apple try to stand up to the Beltway Shakedown.

Bill Moyers Essay:  Washington's Revolving Door
Bill shares his perspective on one of the most corrupt D.C. fixtures -- the revolving door between Washington leadership and lobbying. That lucrative pathway ensures that "when push comes to shove, corporate interests will have the upper hand in the close calls that determine public policy... no matter which party is in power."

Congress extorts billions in "voluntary" contributions
  • If you don't pay you can't play.


Sector Totals, 2011-2012

RankSectorAmountDemsRepubs To DEMS To REPUBS
1Finance/Insur/RealEst$658,268,99724.6% 52.0% $162,174,164
2Other$554,499,84845.7% 42.2% $253,545,905
3Misc Business$459,033,14326.5% 39.6% $121,703,651
4Ideology/Single-Issue$322,409,52342.7% 41.0% $137,674,061
5Health$260,409,80533.5% 42.4% $87,340,167
6Lawyers & Lobbyists$247,301,40861.8% 29.9% $152,838,851
7Communic/Electronics$202,445,50046.1% 27.4% $93,342,748
8Labor$141,435,38543.1% 4.3% $60,925,828
9Energy/Nat Resource$139,287,17015.8% 64.1% $22,068,589
10Construction$122,516,90920.3% 50.9% $24,845,599
11Agribusiness$90,609,78222.4% 66.0% $20,294,590
12Transportation$76,849,59521.7% 69.0% $16,700,411
13Defense$27,438,70339.5% 59.6% $10,844,126

For more go to Open Secrets.org - industries.

The Corrupt Revolving Door

Ex-Senator Jon Kyl, Covington & Burling

Conservative Sen. Jon Kyl (R-Ariz.) has gone 360 degrees through the revolving door with his decision to join top-earning lobbying firm Covington & Burling upon his retirement from the Senate.

Kyl began his career as a lawyer and lobbyist for the Arizona firm Jennings, Strouss & Salmon decades before he became Senate minority whip, that body's second-ranking Republican.

He first won a seat in the House of Representatives in 1987 and served until 1995 before beginning his 18-year Senate career. Kyl was ranked the fourth most conservative senator by National Journal in 2007 and has been an outspoken critic of Planned Parenthood and the Affordable Care Act.
Kyl occupied many different leadership positions during his tenure on Capitol Hill, including senior roles on the Senate Finance and Judiciary Committees. He was named one of the top 100 most influential people in the world in 2010 by Time Magazine. In his post-Senate career, Kyl has already been named a visiting fellow at the American Enterprise Institute and a contributor to Fox News

.In a statement on its website, Covington & Burling cited Kyl's "encyclopedic" legislative knowledge and said he's respected on both sides of the aisle. He is expected to work mostly on expanding Covington's global public policy practice, according to the firm. As a former senator, Kyl will have to wait two years before he may lobby his former colleagues in Congress, but, as he emphasized in an interview with the Wall Street Journal's law blog, he is "not prohibited from giving them his best advice."

For more go to Open Secrets.org - Revolving Door.

Political Extortion
Give us the "voluntary" campaign contributions and high paying jobs for our buddies or Congress will fuck you over so hard that your company will never recover.

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