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12.10.2011 A Pigovian Foreclosure Tax? Some types of taxes are levied on things that are considered socially harmful. For example, there are alcohol and cigarette taxes, the intended purposes of which are to dissuade people from consuming these drugs in excess, and to raise funds to deal with the legal and health consequences of alcohol and tobacco abuse. Negative externality price-demand curve These types of levies are known as Pigovian taxes. Named after the economist Arthur Pigou, a Pigovian tax attempts to correct for negative externalities in the market. Negative externalities are costs not reflected in prices, but still born in human suffering, environmental harm, or price increases in other goods and services. Foreclosures generate numerous and significant negative externalities that are not reflected in the cost of carrying out a foreclosure. So why not institute a tax on foreclosures to dissuade banks from taking people's homes, and to compensate communities hit hard by the housing crisis? Foreclosure of residential homes has undeniably harmed millions of families and individuals who have lost their residences in the last three years. The dislocation, stress, and loss of equity affects more than just the family losing their home, however. Harm is spread throughout communities where foreclosures are concentrated. School districts and cities lose property tax revenues and population. Local businesses lose workers and customers. Empty homes drag down local economies and become blighted. Solution: tax the banks when they cause harm. Prevent foreclosures by modifying the incentives and disincentives for creditors dealing with customers who fall behind in payment. Create a source of funds to compensate communities harmed by foreclosures that do proceed. Here's how it could work. Suppose a family, we'll call them the "Morgans," bought a house for $300,000 at the height of the real estate bubble in 2006. Since the financial crash in 2008, the Morgan's house has plummeted in value to $150,000, but they're still paying a mortgage on the sale price of 300k. They're underwater and struggling. Now let's say the Morgan family has recently been missing payments. It could be because of an adjustable rate mortgage that kicked into high gear. Or maybe a Grandpa Morgan is sick, and the medical bills have exhausted the family's savings. Or maybe Mrs. Morgan lost her job, and there simply aren't opportunities to make nearly as much income again. Whatever the problem, this family will soon be foreclosed upon. The bank, let's call it "JP-America-Fargo," will take their home, and they'll have to move. But now suppose there's a Pigovian foreclosure tax. We could design the tax in innumerable ways, but here's a very simple one just to illustrate the point: When JP-America-Fargo Bank forecloses on the Morgan family, it must pay 10% of the home's last sale price, or $25,000 — whichever is greater. (Or maybe we should peg it at 27%?) This tax payment, or "bailout" if you will, could be split two ways. 25% of the foreclosure tax could go to the Morgan family, to help them recover from foreclosure, and 75% could go to the local school district where the house is located. So if the Morgan's lost their home, JP-America-Fargo Bank would have to pay 10% of $300k - $30k. The Morgan's get $7,500 of this, and local public schools get $22,500. There are conceivable cases where a home's sale price is incredibly small because it was purchased decades ago, thus a 10% tax on that price would be a bargain for a bank to pay in order to foreclose on property worth much more. This is why we have the alternative minimum of $25,000. The tax is high enough to create a massive disincentive for banks to foreclose on homeowners, pressuring banks instead to help homeowners who are underwater or who are otherwise having trouble making payments refinance their mortgages and stay put. 10%, or $25,000 might seem like an enormous tax, but keep in mind that the federal government bailed out most of the biggest banks that are carrying out the bulk of foreclosures. Trillions of dollars were spent making the JP-America-Fargo Banks of the world solvent. Little to nothing has been done to help homeowners (and what was tried earlier was geared too much to the needs of banks, not homeowners). A Pigovian foreclosure tax could help reverse this injustice and prevent socially harmful corporate behavior such as mass foreclosures from continuing to damage America. POSTED BY DARWIN BONDGRAHAM AT 11:18 AM 0 COMMENTS 11.30.2011 Who Rules Oakland? Part 1., Corporate Directors and the Oakland Metropolitan Chamber of Commerce By Darwin BondGraham and Adrian Drummond-Cole [Download a pdf of this article for end notes, higher resolution images and print layout.] The Oakland Metropolitan Chamber of Commerce is a non-profit "business league" organization, chartered under Section 501 (c) 6 of the IRS Code. According to the IRS, business leagues are not organized for profit, and no earnings may directly benefit their members. However, business leagues can lobby government leaders for laws and policies in the interest of their members, and they can also engage in political campaigning for and against candidates and specific ballot initiatives. These are, in fact, the main reasons business leagues are chartered, and in this sense, chambers of commerce and similar groups are entirely about profit. The goal of a business league is to promote political conditions in which their members can obtain lucrative government contracts, avoid local and state taxes, pass off operating expenses onto the public, and privatize public goods. Chambers of Commerce are essentially political committees of regional business leadership organized to secure favorable laws and regulations. They further serve as public relations fronts for big business, publishing propaganda, organizing promotional events, and serving as advocates for the “business community” to the media. The membership of most chambers of commerce is split between two kinds of businesses. The first group is comprised of smaller companies, usually based in the same city as the chamber, and usually dealing in some kind of product that depends on the local business climate — think tourism, entertainment, conventions, food, sports, and real estate, among other things. The second category is comprised of larger corporations with national and transnational operations. Often though, these larger corporations have significant enough investments in a particular place to make participation in a local chamber strategically useful. Large banks are a good example of this latter category of members in that they frequently participate in local chambers to promote local branches and ensure access to local housing, consumer, and business lending markets. Mining and manufacturing corporations are also frequent participants in local chambers of commerce. The business practices of these corporations often have negative environmental and social impacts on communities, so they utilize the public relations functions of local chambers to influence public opinion. Another key reason why large corporations and smaller companies form business leagues is to build business networks. The concept of "networking" is so ubiquitous today that it's almost unnecessary to explain. But in the business world, networking specifically refers to the establishment of professional and social ties that advance mutual power aspirations. Business executives participate in chambers of commerce to network with their peers, building the relationships and creating the cultural cohesion that sustains and enriches their rule. In the Oakland Metropolitan Chamber of Commerce, these two groups —local smaller business owners and representatives of larger corporations— overlap to some extent. It is the larger corporations, however, which hold the most power in the Chamber. Large corporations find membership in the Oakland Chamber of Commerce to their advantage because Oakland is a major consumer market, a major port of entry for goods into the United States, and headquarters to both regional government offices and peer corporations with multi-million, and in some cases, billion dollar revenues. The following analysis is concerned with these major corporations and their membership in the Oakland Chamber of Commerce. In this report we focus on the networks created by directors of the Clorox Company and PG&E to illustrate linkages that are applicable to large corporate members of the Chamber more broadly. Most of these companies have large dollar stakes in the Bay Area and California markets. Their membership and control of the Oakland Chamber of Commerce is just one small part of multifarious political operations intended to influence lawmakers and regulators across numerous local and state governments. This, in turn, is part of a larger national network of business lobbies and think tanks focused on the federal government and international institutions. Finally, although space limitations here prohibit it, at the end of this report we are including a brief analysis of the other sixteen major corporations currently represented by board members on the Oakland Chamber of Commerce. Investigation into the power wielded by their directors and owners awaits further study. Corporate Networks How do these different corporations come to agree on a shared political program to pursue through the Oakland Chamber of Commerce? At first this would seem very difficult, as some of these companies have drastically different legal and regulatory concerns, and some are in fact competitors. If we look at the directors and major shareholders of these companies, however, a picture of cohesive networked governance emerges. Yes, some of these companies compete with one another, and many have differing legal and regulatory concerns, but there is much overlap in both ownership and management of these companies. The following information pertains to their mutual direction and ownership by powerful board members and the private equity groups some of them represent. Figure 1 illustrates the core network of corporate power embodied in the Oakland Chamber of Commerce. Five board members of the Chamber in this network, identified as large circular red nodes, represent the interests of five major corporations that fund the Chamber. These five corporations have the most reciprocal ties to other companies in the entire network represented in our data set. Figure 1., Core Corporate Network Represented Through the Oakland Chamber of Commerce: Red square node positioned at center represents OMCC board. Five large red circular nodes represent select OMCC board members. Black square nodes represent corporate entities. Small red nodes represent directors or senior executives of select corporations with OMCC membership. Selections determined by deleting pendants, leaving only directors with more than one link to the network’s core corporate entities. 1. Micky Randhawa - Wells Fargo 2. Victoria Jones - Clorox 3. Nathan Nayman - VISA 4. Alicia Bert - PG&E 5. George Granger - AT&T If we explore the network of governance and ownership through persons linked to each of these companies, we find that often, through only one or two degrees of separation, these corporations are linked back to each other in a web of mutual governance. They share some of the same directors on their boards, and some of their directors are linked to each other by third-party corporations which they also control. This is often, but not always, due to concentrated ownership of voting shares across many corporations by powerful private equity funds (i.e. hedge funds, private equity groups, investment banks, etc.). Owning large shares of each company, a powerful investment firm uses its shares to appoint its own directors to each corporate board. When this structure of ownership is viewed from a distance, we can see how powerful corporations in seemingly divergent industries are often owned by, and ultimately governed by, the same wealthy elites. Let’s zoom closer in. Micky Randhawa represents the regional interests of Wells Fargo Bank on the Oakland Chamber of Commerce's board of directors, but Wells Fargo's board members are interested in more than just their company's fortunes. Among Wells Fargo's directors is John Chen, chairman and CEO of Sybase, Inc., a computer software company. Chen was a director of Pyramid Technology Corporation, a manufacturer of server hardware, and later worked for Siemens after the German company bought Pyramid in 1995. Incidentally, Chen is also a director of the Walt Disney Company and a former board member of the US Chamber of Commerce. Chen is not just a director. He is a significant owner of both Disney and Wells Fargo stock. His ownership of shares in these companies is a result of his compensation as a board member. He and his peers, who together own a large share of these companies, ultimately determine the strategic goals of both. Chen's income in 2010 as a shareholder and director of Wells Fargo and Diseny totals $505,438. Although this is by no means his sole source of income, and only a small fraction of his total net worth, this sum alone puts him in the top 1% of America's income distribution. (At the end we have attached a detailed breakdown of income distribution in the US between 1979 and 2009 in order to demystify the so-called 1%, and provide benchmarks for understanding inequality in relation to the fortunes of those discussed here.) Alongside Chen on the board of Walt Disney Co. is Robert Matschullat. Matschullat is a board member of Clorox and VISA, both companies with direct representation on the Oakland Chamber of Commerce board. The Clorox company is linked back to Wells Fargo by route of other directors who also sit on the board of the San Francisco headquartered McKesson Corporation, the world's largest distributor of health care systems, medical supplies, and pharmaceuticals. These links can be confusing, but by referring back to Figure 1, we can visualize them and see how this creates a cohesive network of corporate governance and ownership. McKesson, Disney, and Sybase (a subsidiary of the giant German software company SAP AG) are all governed by directors who in turn sit on dozens of other corporate boards, but this data has been omitted from Figure 1 to keep the diagram as simple and intelligible as possible, and also to only illustrate directors who create a cohesive network of governance among the five corporations which partly control the Oakland Chamber of Commerce. If, however, we were to map these extended linkages, we would discern an ever expanding and relatively cohesive network of corporate ownership and governance, and we would find that these other corporations cooperate with one another to operate business leagues in other cities in the United States and beyond. For example, Kim Delevett, Corporate Community Affairs Manager for Southwest Airlines, sits on the board of both the Oakland Chamber of Commerce and the San Jose Silicon Valley Chamber of Commerce. Similarly, Ken Maxey, Regional Government Affairs Manager for Comcast, sits on the boards of the Oakland Chamber and the Livermore Chamber. Although Figure 1 does not show these extended linkages to other corporations and business leagues, here are a few more examples we could map if we were to plug in the data: McKesson's Chief Financial Officer is a board member of the San Francisco Chamber of Commerce. Disney has placed executives on the boards of many business leagues including the Florida Chamber of Commerce and Los Angeles Chamber of Commerce. SAP AG's current CEO is a past member of the US Chamber of Commerce. Other corporate links in Figure 1 are worth exploring in detail, so let's take a look at the networks of two companies which fund and steer the Oakland Chamber of Commerce: the Clorox Company and Pacific Gas & Electric. The Clorox Company The Clorox Company, headquartered in Oakland, is a multi-billion dollar business with manufacturing facilities in nineteen countries worldwide. While Clorox is most commonly associated with liquid bleach, they also own twenty brands including Brita, Glad, Hidden Valley, Scoop Away, K C Masterpiece, Pine-Sol, and Burt's Bees. Figure 2 is a network diagram emphasizing the Clorox Company's links to other corporations through its board of directors. Figure 2., Clorox’s Core Corporate Network in Relation to the OMCC: Blue square dots represent corporate entities. Red circular dots represent directors or senior executive officers. Egonets for all corporations besides Clorox have been deleted to reduce clutter and emphasize only ties connecting Clorox directors and OMCC directors. OMCC board appears as dense cluster in upper right of Figure. The first thing you will probably notice is that two of Clorox's directors also sit on the boards of VISA and AT&T, corporations that also fund and steer the Oakland Chamber of Commerce through their representatives on that board. Robert Matschullat, mentioned above, is a director of VISA. Besides Disney, Matschullat is also a director of the Transamerica Corp., USA Networks, and Joseph Seagram & Sons. Transamerica is an insurance corporation owned by AEGON, a Dutch company. It's office tower in San Francisco is internationally famous for its pyramid shape. USA Networks is a television company owned by NBCUniversal. Joseph Seagram & Sons was originally an alcohol distiller based in Canada, but it became a conglomerate in the 1980s by acquiring large ownership stakes in other companies, including DuPont. When it sold its DuPont shares in the mid-1990s Seagram's, under Matschullat's leadership, bought into media and entertainment companies like Universal Studios (now part of NBCUniversal — see the links and how they develop across time as companies are bought, merged, and sold?). That Matschullat is a board member of USA Networks, now owned by NBCUniversal, and Seagrams, which used to own Universal, is obviously no coincidence. Matschulatt was a key figure in shuffling the organization of ownership and direction of these companies. Not coincidentally, Matschullat also used to be a director of the McKesson Corporation. Clorox board members Carolyn Ticknor and George Harad are linked to one another through their past positions as a director and as CEO (respectively) of Boise Cascade, which briefly owned OfficeMax until the latter was spun off in 2004 in a highly complex corporate restructuring driven by Chicago financiers. Ticknor is also a member of AT&T, which is a corporate member of the Oakland Chamber of Commerce. All in all, the board members of Clorox are shareholder in, or independent directors of, many additional powerful corporations and private equity groups. Clorox director, Edward Miller, is a board member of the seemingly ubiquitous McKesson Corp. Clorox director Donald Knauss is a director of the global construction and engineering giant URS which has innumerable major military contracts and co-manages the two US nuclear weapons labs at Los Alamos, New Mexico, and Livermore, California in limited liability partnerships that include Bechtel and the University of California. Clorox director Tully Friedman was a board member of APL Limited, a shipping corporation that uses the port of Oakland's facilities. We'll return to APL in a moment, but first let's look more closely at Friedman. Tully Friedman is a current and past board member of numerous other corporations that his San Francisco investment firm, Friedman Fleischer & Lowe, LLC, has bought equity stakes in. The multi-billion dollar pots of money that Friedman oversees include contributions from very wealthy individuals, many of whom sit on the boards of companies already discussed above, or who had past executive positions at these very companies. For example, Robert Matschullat, the presiding director of the Clorox Company mentioned above, has invested part of his personal fortune in Friedman's firm. The retired chairman and CEO of Clorox, G. Craig Sullivan, is also an investor in Friedman Fleischer & Lowe, LLC. A retired CEO of McKesson, a retired chairman of Wells Fargo, and a current director of AEGON (parent company of Transamerica) are all investors in Friedman's capital fund. Like many finance capitalists, Friedman is involved in steering national non-profit corporate advocacy groups. He is a director of the ultra-conservative American Enterprise Institute; a think tank that promotes political reforms that would further empower corporations and the wealthy. Now quickly back to APL. Beginning as a state-owned US shipping company, APL was privatized after World War II. In 1997 it was sold to Singapore-based NOL Lines for $825 million, or $33.50 per share. Alongside Tully Friedman on the board of APL Limited were Frederick Hellman and Barry Williams. In 1984, Frederick Hellman and Tully Friedman co-founded Hellman & Friedman LLC, another private equity firm. Although Friedman left the firm in 1998 to start his own equity group, he reportedly maintains a collegial relationship with Hellman, perhaps best symbolized by the fact that Hellman didn't drop Friedman's name from the company's moniker. Today both firms are headquartered in the same building, One Maritime Plaza in San Francisco. When APL was sold to NOL Lines Friedman and Hellman each owned more than 2 million shares. Hellman is as blue-blooded as Californians come. He is the great grandson of financier Isaias Hellman who, among other things, created Wells Fargo Bank and occupied a seat on the UC Board of Regents for the better part of four decades. Isaias Hellman's son and grandson served as presidents of Wells Fargo, among other roles. The Hellman family's history is deeply intertwined with Wells Fargo and the UC, which are further linked together in a web of financial and political connections that deserves its own detailed analysis. Former APL director Barry Williams is not depicted in Figure 2, but he is strongly connected to the Oakland Chamber of Commerce. Moving on to Figure 3, we will further investigate the corporate networks of power that steer the Chamber, starting with Williams. PG&E The network of Pacific Gas and Electric, an Oakland Chamber of Commerce corporate member, is depicted in Figure 3. Barry Williams sits on PG&E’s board of directors. In addition to his seat on APL's board, Williams is a director of numerous other companies, including the Colorado-headquartered environmental engineering giant CH2M Hill, which has a major regional office in Oakland. Refer back to Figure 1 to visualize how Williams occupies power within the corporate network that steers the Oakland Chamber. Figure 3., PG&E’s Core Corporate Network in Relation to the OMCC: Blue square dots represent corporate entities. Red circular dots represent directors or senior executive officers. Egonets for all corporations besides PG&E have been deleted to reduce clutter and emphasize only ties connecting PG&E directors and OMCC directors. OMCC board appears as dense cluster in upper right of Figure. Blue square dots represent corporate entities. Red circular dots represent directors or senior executive officers. Egonets for all corporations besides PG&E have been deleted to reduce clutter and emphasize only ties connecting PG&E directors and OMCC directors. OMCC board appears as dense cluster in upper right of Figure. Like Clorox, many of PG&E's board members are the owners and directors of a vast array of other major corporations. Of particular interest in terms of the cohesive network of corporate governance underlying the Oakland Chamber of Commerce is Forrest Miller. Mr. Miller is a director of PG&E, having been elected in 2008. He is also a senior executive of AT&T. At AT&T, Miller is responsible for "corporate strategy and development." This title refers to a school of business management thinking developed over the last several decades which emphasizes the ways that companies can systematically analyze their strengths and weaknesses in their "operating environment." The "environment" here is conceived of largely as the laws and regulations affecting a corporation's behavior, but can also mean industrial competitors and external forces like broader changes in consumer preferences or the availability of resources, labor, and other inputs. In practice, only half of “corporate strategy and development” is about making “internal” changes to a company in response to "external" factors. The other half involves changing the “external environment.” In this respect, Mr. Miller's job entails strategizing ways that AT&T can increase its power and profits by altering existing laws and regulations, eliminating potential competitors through mergers and acquisitions, preventing competition by maintaining current telecommunications laws and policies, and gaining entry to new markets controlled by foreign states. This is why Miller is a past director of the US Telecom Association, a 501 (c) 6 business league that is organized to promote the interests of its membership, large telecommunications companies (AT&T, Verizon, etc.). US Telecom is one of the largest lobbyists in Washington D.C., spending millions each year to influence lawmakers and regulators in Congress, the White House, Federal Communications Commission, and Federal Trade Commission. To be fair to Forrest Miller, his job, notwithstanding its elaborate title, is not particularly different from that of nearly every other corporate director or executive at PG&E, or any of the other corporate directors discussed so far. They are all intensely focused on influencing lawmakers, packing bills with beneficial provisions for their firms, shaping regulations to strengthen their control of markets, and undermining environmental and labor policies. Who Rules? In subsequent parts to this series, we will present more network data illustrating the Oakland Chamber of Commerce's member companies. We will also give more detailed information about the directors and executives of these companies, and provide an analysis of their social cohesion, profit-driven collusion, and political influence. More broadly, we will explore networks and institutions of economic and political power in the Bay Area. Below, however, is a brief explanatory list of the current corporations with representatives on the Oakland Metropolitan Chamber of Commerce: 1. Clear Channel Outdoor, an advertising company owning and operating billboards and other outdoor display faces, currently valued at $3.7 billion. Clear Channel owns and operates numerous billboards, bus shelter ads, and other display faces on both private and publicly owned properties in the Bay Area. 2. Swinerton, a private construction company based in San Francisco, builds for developers, government, and corporate clients. Swinerton projects in Oakland include the Ice Center, the twenty-story Essex tower on Lake Merritt, the twelve story Ellington Condominiums, and the famous "comic book" retrofit of the Oakland Police Headquarters. Outside of Oakland Swinerton has built casinos, military installations, and headquarters for companies like The Gap, Inc. 3. Pankow Builders, similar to Swinerton in scope, is a major construction company headquartered in Pasadena with a regional office in Oakland. Pankow built the Whole Foods in Oakland. 4. The global communications giant AT&T is valued at $162 billion. It has numerous operations in the Bay Area. AT&T's economic reach and political influence are too expansive to detail here. 5. PG&E, the region's behemoth investor owned utility, operates gas and nuclear fired power plants in California, and owns much of the state's electricity and gas distribution grid and pipeline infrastructure. Headquartered in San Francisco, PG&E is valued at $15 billion. Its profit margin is highly dependent on California state laws and regulations. Thus PG&E fields an army of lobbyists across all levels of government. 6. Securitas is a Swedish private policing company that hires out security personnel, including guards and investigators, to secure corporate property, wealthy residential associations, and high net worth individuals, among other glittery things. Securitas has a regional office in East Oakland, and is valued at $21 billion. 7. Southwest Airlines operates in the United States and is headquartered in Dallas, Texas. It is valued at $5.8 billion. The Oakland Airport is a major hub. 8. Grubb & Ellis buys, owns, and sells real estate. The company leases out several hundred thousand square feet of office space in downtown Oakland, much of this right along Broadway between 20th and 15th Streets. The company's business model is predicated on increasing land values in Oakland and other cities. Grubb & Ellis is headquartered in Orange County and valued at $21 billion. 9. CIM Group is another real estate corporation, specializing in ownership and management. It's headquarters are in Los Angeles. It's regional Bay Area office is at 1333 Broadway in the 1 Kaiser Plaza building, a 28-story office tower the company owns and manages. CIM Group owns over 1 million square feet of office and hotel real estate in downtown Oakland. The company's business model is predicated on increasing land values in Oakland and other cities. 10. Colliers International is yet another real estate company that brokers much square footage in Oakland, especially downtown on Broadway, Harrison, and Franklin Streets. Colliers leases out office space in the Wells Fargo Bank Center building on Harrison, among other corporate properties. The company's business model is predicated on increasing land values in Oakland and other cities. 11. Sunwest Bank is a business bank headquartered in Tustin, a city in Orange County, California. It's Oakland office is at 1999 Harrison in the Lake Merritt Plaza. 12. Summit Bank is an Oakland-based, privately owned bank with assets between $100 million and $3 billion. 13. Waste Management transports and disposes of residential, industrial, healthcare, and construction wastes. The company has an Alameda regional office and contracts with the city of Oakland and other regional governments to haul trash. Headquartered in Houston, Texas, Waste Management is valued at $14 billion. 14. Clorox, a consumer products company, is the largest corporation headquartered in Oakland with a market value of $8.4 billion. Located one block from Oscar Grant Plaza, the corporation's executives have long been involved in Oakland and the East Bay's politics, even though the legislative and regulatory issues the company is most focused on are federal. 15. Comcast, another telecommunications giant valued at $57 billion, specializes in cable. It counts the Bay Area among its largest markets. It's economic reach and political influence are too expansive to detail here. 16. VISA is headquartered in San Francisco on Market Street. The credit card company's entire business model is predicated on helping banks and other lenders intensify consumer debt. Visa is worth $61 billion. It's main corporate campus is in Foster City in San Mateo County. 17. Bank of America was headquartered in San Francisco until 1998 when it merged with NationsBank. The company, valued at $52.4 billion, counts California and the Bay Area among its biggest consumer and home loan markets. Bank of America absorbed Merrill Lynch during the financial crisis in 2009 and now operates Merrill as its investment bank subsidiary. 18. Wells Fargo is still headquartered in San Francisco. Valued at $123 billion, it counts California and the Bay Area among it biggest consumer and home loan markets. Wells Fargo absorbed Wachovia during the financial crisis in 2009, and retired the Wachovia brand in October, 2011. Source: Congressional Budget Office. “Trends in the Distribution of Household Income Between 1979 and 2007.” October, 2011. http://www.cbo.gov/ftpdocs/124xx/.../10-25-HouseholdIncome.pdf POSTED BY DARWIN BONDGRAHAM AT 6:11 PM 1 COMMENTS 11.28.2011 "Dr." Taser/Mr. Clorox On November 16 about two-hundred and fifty Oaklanders convened a general assembly in the city's central square, Frank Ogawa/Oscar Grant Plaza. It was yet another experiment in direct democracy, one of many public meetings held since the city's encampment was established a month earlier. Buoyed by a massive march to UC Berkeley's campus the day before, Oakland's occupiers floated proposals to guide the movement's next steps. A national day of action against the coordinated police crackdown on various occupy encampments around the nation received 90% of votes. An occupation of a park on 19th and Telegraph got another 90% of votes cast. Before adjourning, the assembly opened the floor to general announcements. Protesters from San Francisco spoke last. They were worried the police were coming for them again, armed with batons and pepper spray. "Please come help us defend ourselves," they asked. Taking this into consideration, the Occupiers adjourned. Just a block away on the same day another kind of "assembly" was taking place, the CloroxCompany's annual shareholders meeting held in the corporation's office tower at 1221 Broadway. While a contractor tallied proxy votes, Clorox's executives, directors, and representatives of its major shareholders huddled to chart their future. Clorox's board of directors was re-elected. It's directors in turn recommended a package of executive compensation for the year ahead. Chair and CEO Don Knauss was paid $9.1 million. VP Lawrence Peiros was approved for $2.9 million in pay and stock. Most of the other executives received similar seven figure packages. It's likely that Clorox's leadership also talked about the Occupy encampment, rallies, and assemblies occurring just steps outside their building. It's quite likely they had been worrying if the protests would disrupt their annual meeting. Clorox, like other major corporations with offices in Oakland, is a member of the Oakland Chamber of Commerce, one of several business organizations that had pressured the Mayor to send in the cops on amission to violently evict the movement. On the Clorox committee making recommendations regarding compensation is one "Dr." RichardH. Carmona. Carmona has been a board member of the Oakland-based Clorox since 2007. In that time he has been paid several hundred thousand in fees, and has obtained an option on upwards of 7,000 shares in the company. Carmona is a wealthy man. Guiding aspects of Clorox's corporate decision making is only one of Carmona's jobs, however. He's much more involved in a different company headquartered in his home state of Arizona. Dr. Carmona joined the board of TaserInternational in the same year he joined Clorox. Not coincidentally, that was just after he left office as the 17th Surgeon General of the United States under the administration of George W. Bush. Taser International is what you think it is; the company that makes and sells the electronic guns popularly known by their most famous brand name. Taser's biggest customers are police departments. Carmona joined Taser because of his top-shelf political connections, and his longtime police connections. According to various accounts, Carmona joined the Army in 1967, just as the Vietnam War was getting hot. He quickly became a member of the Army Special Forces known as the Green Berets, and learned medicine by treating fellow soldiers in the battlefield. After the war —in which he became a highly decorated combat veteran— he attended medical school, earning a bachelors degree from UCSF in 1979. Carmona's early medical career was spent mostly as a nurse and paramedic. In 1986 Carmona joined the Pima CountySheriff's Office where he would become a leader of the SWAT team, and also worked as a police medic. Carmona killed in the line of duty in 1999, shooting a mentally ill man who fired at him. The deceased had reportedly killed his father earlier that day with a knife. In Pima County, Carmona served in different management roles in the healthcare system while working as a cop. Lacking the advanced research and education that such jobs require, he obtained a Masters in Public Health from the University of Arizona in 1998. He is a professor in the University ofArizona College of Public Health, and a prior chair of the Arizona Southern Regional Emergency Medical System. It was out of this context, somewhat out of the blue, that George W. Bush nominated Carmona for the post of Surgeon General in 2002. Physicians from the University of Arizona Medical School, where Carmona lectured, even criticized the nomination. Against Carmona's confirmation, Dr. Charles Putnam wroteto Senator Ted Kennedy saying the nominee's work as a sheriff's deputy was in direct conflict with his oath as a doctor to do no harm. Putnam noted that Carmona was a poor manager and that, "he was removed from his two previous administrative appointments [in Tucson]…. because he could not work in an effective or even a civil manner with health professionals and other constituencies of those positions." Putnam concluded that Carmona's "panache in the face of objective danger has on occasion overwhelmed his identity as a physician." Even so, Carmona was eventually confirmed, and by some reports was competent in office, even emerging as a critic of the Bush administration after his departure. As a board member of Taser International Carmona sits at that table with other retired military officers and representatives of major investors, some who specialize in investing in weapons manufacturing companies. In 2010 Carmona was paid $30,000 in fees and given another $58,000 in stock options as compensation by the company. All told he owns about 25,000 shares of Taser International stock. In the world of corporate governance Carmona is considered an "independent" director of Taser because he is not an official employee, and because his equity stake is less than 1% of outstanding shares. Nevertheless, Carmona has a stake in the company's fortunes. His compensation there is ultimately linked to how many Tasers the company sells. It should come as no surprise to readers that the Oakland Police Department is a major customer of Taser International. According to the OPD's 2010 Training SectionReport, the department currently owns and fields 530 model X-26Tasers. The City Council authorized purchasing most of these weaponsin 2008 with $645,000, and tacked on an appropriation of another $55,000 every subsequent year for training and other costs associated with fielding them. The Oakland City Council even chose to waive the normal competitive bid process, apparently because Carmona's company, Taser International is the only authorized distributor of the weapons in California. In Taser International's 2010 annualreport the company notes that one of its primary problems is the possibility that local governments will not buy their X-26 weapons, which account for the bulk of sales revenues. The company states: "Most of our end-user customers are government agencies. These agencies often do not set their own budgets and therefore, have limited control over the amount of money they can spend. In addition, these agencies experience political pressure that may dictate the manner in which they spend money. As a result, even if an agency wants to acquire our products, it may be unable to purchase them due to budgetary or political constraints." In the case of Oakland, neither the city's dire fiscal situation, nor widespread opposition within the community scuttled the 2008 Taser deal. Officers wielded Tasers during the several evictions of Occupy Oakland. In March of 2010 San Francisco's PoliceCommission again rejected spending upwards of $1 million to outfit officers with Taser weapons. The Pima County Sheriff's Department, Carmona's old stomping grounds, is a Taser International customer. POSTED BY DARWIN BONDGRAHAM AT 11:22 AM 0 COMMENTS Newer Posts Older Posts Home Subscribe to: Posts (Atom) ABOUT ME My photo DARWIN BONDGRAHAM I'm a writer, ethnographer, and historian with a PhD in sociology. My current work focuses on economic and social development. I write occasionally for Counterpunch, East Bay Express, Z Magazine, Foreign Policy in Focus, Dollars and Sense, the Anderson Valley Advertiser, and other publications. VIEW MY COMPLETE PROFILE BLOG ARCHIVE ▼ 2012 (4) ▼ March (1) Moving to a new blog ► February (1) ► January (2) ► 2011 (15) ► 2010 (25) ► 2009 (38) ► 2008 (10) ► 2007 (21) ► 2006 (31) LIKE MY WRITING? THROW ME A DOLLAR! PayPal - The safer, easier way to pay online!