Category Archives: In the News

Trump Treasury pick cultivated close ties to police while running “foreclosure machine”

by Gin Armstrong and Kevin Connor

Trump’s pick for Treasury Secretary is Steven Mnuchin, a former Goldman Sachs executive and hedge fund manager. Mnuchin has been receiving critical coverage for his role as chairman of OneWest, a California lender that became notorious for its predatory foreclosure practices, which disproportionately affected communities of color.

His close ties to the Los Angeles Police Department also deserve more scrutiny – and reveal mechanisms through which Wall Street curries favor with the police.

Continue reading Trump Treasury pick cultivated close ties to police while running “foreclosure machine”

SUNY Poly administrator who evaluated developer bids worked for decades at CHA

An engineering firm targeted in federal investigations of potential bid-rigging in New York State enjoyed an especially cozy relationship with one of the state officials who evaluated some Buffalo Billion developer bids, LittleSis has learned.

The firm, CHA (formerly known as Clough Harbour & Associates), was in the news last month because it paid consulting fees to a top aide to Governor Cuomo, Joe Percoco, and also received contracts through the Buffalo Billion, Cuomo’s signature economic initiative in western New York. Additionally, CHA has donated over $200,000 to Cuomo and his lieutenant governor, Kathy Hochul.

What hasn’t been reported: CHA also has strong ties to an official at SUNY Polytechnic who was directly engaged in evaluating Buffalo Billion developer proposals.

The official, Thomas O’Brien, joined SUNY Poly in 2013 after a 30-year career at CHA, most recently as a senior vice president and group manager. He is also tied to the company through his family: his daughter, a college student, indicates that she is an intern at CHA on her social media accounts.

Continue reading SUNY Poly administrator who evaluated developer bids worked for decades at CHA

Hochul raised $35k from Buffalo Billion contractors now under investigation

Campaign finance records show that in early August 2014 Lieutenant Governor Kathy Hochul brought in more than $35,000 from at least eight people and businesses named in subpoenas in the investigation into Governor Andrew Cuomo’s Buffalo Billion initiative. The donations coincide with a private fundraiser Hochul held at a Buffalo law firm, suggesting that numerous beneficiaries of the Buffalo Billion program all gathered with Hochul in Buffalo to donate to her and Cuomo’s campaign.

On August 4, 2014, Hochul told a central New York newspaper that she was going to make economic development a major focus of her campaign as Cuomo’s running mate. “I have a good handle on economic development issues for sure from my time in Congress, so we’ll be laser focused on that issue,” Hochul told Canandaigua’s Daily Messenger.

Photo via Giancarlo's Restaurant Instagram
Photo via Giancarlo’s Restaurant Instagram

The next day, Hochul held a fundraiser at the headquarters of Buffalo law firm Phillips Lytle LLP, and, over the following two days, Hochul’s fundraising committee reported $333,741 in donations, more than any other three-day stretch in her campaign. Tens of thousands of dollars of the contributions during that period came from people and businesses that had benefitted from Cuomo’s economic development programs, including the Buffalo Billion.

Continue reading Hochul raised $35k from Buffalo Billion contractors now under investigation

Buffalo Billion developer flouted New York State disclosure laws

Buffalo developer Paul Ciminelli was legally required to file annual financial disclosure statements with New York State during his four-year tenure on the public authority controlling Buffalo Billion spending, Empire State Development (ESD). But Ciminelli’s forms are extremely deficient for the first two years he served on the board and missing for the second two. And New York State’s ethics watchdog appears to have done nothing to compel Ciminelli to file an accurate statement.

The statements require disclosure of income, contracts, assets, and other financial interests and in Ciminelli’s case could have shed some light on the nature and scale of his interests – and conflicts of interest – as a major Buffalo developer and ESD board member. As we reported last week, Ciminelli has benefited significantly from the Buffalo Billion, which is now under federal investigation (LPCiminelli, run by his brother Louis, has received a subpoena in that investigation). In his position on ESD’s board, Ciminelli recused himself from Buffalo Billion funding votes but never disclosed the nature of his conflicts.

Continue reading Buffalo Billion developer flouted New York State disclosure laws

Paul Ciminelli and Ciminelli Real Estate’s conflicted Buffalo Billion roles

Though much of the reporting around Andrew Cuomo’s Buffalo Billion project has focused on Buffalo construction firm LPCiminelli, relatively little attention has been paid to another major beneficiary of Buffalo Billion spending: Ciminelli Real Estate.

Owned by Paul Ciminelli, the brother of LPCiminelli chairman & CEO Louis Ciminelli, Ciminelli Real Estate has been involved in four Buffalo Billion projects to date, three of which were awarded while its executives held governance positions at state agencies and donated generously to Governor Cuomo’s campaigns.

While these projects were procured by Fort Schuyler Management Corp (FSMC), a non-profit affiliate of SUNY Polytechnic, their funding came from Empire State Development. Ciminelli Real Estate’s president, CEO, and sole owner Paul Ciminelli sat on the Empire State Development board from 2010 through 2014. The land for the SolarCity project was sold to Fort Schuyler by the Buffalo Urban Development Corporation, where Ciminelli Real Estate Executive Vice President Dennis Penman is vice chair.

Though Ciminelli recused himself from votes that benefitted his and his brother’s companies, he did not leave the room during the deliberation and voting process. Penman raised his affiliation with Ciminelli Real Estate, but was permitted to participate in voting and discussion without recusing.

Neither executive disclosed their participation in LPCiminelli’s bid to the boards they sat on as they were making decisions on the project.

Continue reading Paul Ciminelli and Ciminelli Real Estate’s conflicted Buffalo Billion roles

New York Times runs Michael Hayden pro-drone op-ed; fails to disclose ties to drone manufacturers

In its Sunday Review section on February 21, 2016, the New York Times ran a column titled “To Keep America Safe, Embrace Drone Warfare.” The article’s thesis is summarized in its second-last sentence: “Civilians have died, but in my firm opinion, the death toll from terrorist attacks would have been much higher if we had not taken action;” and it was written by Michael V Hayden, who directed first the National Security Agency and then the Central Intelligence Agency under George W Bush. Hayden currently serves on the board of several defense industry corporations, including drone manufacturers.

Though the Times identified Hayden’s past government positions at the end of the article, the newspaper failed to disclose Hayden’s present role on the board of Motorola Solutions, a military and defense contractor that recently made an investment in CyPhy Works, which produces unmanned aerial vehicles – drones. Motorola Solutions paid Hayden $240,125 for his service on its board in 2015.

The Times also did not mention that Hayden served, until last year, on the board of Alion Sciences, a information technology firm that serves the US military. Hayden joined Alion’s board in 2010 in a term that ended in 2015. In 2012, Alion was awarded a $24 million contract to develop the US Navy’s unmanned and automatic weapons systems. From Alion’s press release:

Alion’s NSWC PCD work includes technical engineering to increase unmanned and automated weapon systems capabilities for such tasks as the implementation of unmanned systems payloads on “commercial off the shelf” or existing non-developmental unmanned underwater vehicles (UUVs) with limited modifications. Under the contract, this work can include UUVs, unmanned surface vehicles (USVs), unmanned ground vehicles (UGVs) and unmanned aerial vehicles (UAVs).

In 2014, Alion issued a notice that it was suspending its filings with the SEC because it had fewer than 300 security holders, so Hayden’s compensation from that firm is not available.

It is also noteworthy that Hayden is a principal at the Chertoff Group, a consulting firm that advises defense industry clients on how to obtain government contracts, another detail that went unmentioned in the Times.

Hayden’s positions on the boards of the defense contractors whose business he advocated for in the Times can be seen in the map below:

The Times’s failure to disclose Hayden’s ties to the industry he was advocating in its pages is the latest example of a trend of media outlets running commentary by defense experts that also have a financial stake in perpetuating warfare. PAI reported on this phenomenon – and Hayden’s involvement – in 2013 with respect to President Obama’s proposed war in Syria.

Vulture Fund Feminism

A newly-reported contract between Madeleine Albright’s consulting firm and a major Wall Street hedge fund has only been a footnote in presidential campaign coverage, but it speaks volumes about how elites in both parties find common ground above the fray of partisan bickering and gridlock that tends to dominate the news cycle.

A consulting firm founded and led by Madeleine Albright, who recently made a colorful feminist appeal to women voters on behalf of Hillary Clinton, just landed a new contract with billionaire Paul Singer’s hedge fund, Elliott Management. Singer is a major backer of Marco Rubio.

On Tuesday Politico Influence reported that Elliott Management hired the former secretary of state’s firm, Albright Stonebridge, to advise on the fund’s ongoing rift with Samsung. Politico noted that Elliott had previously hired Albright Stonebridge to support its efforts to wring massive profits out of Argentina.

Continue reading Vulture Fund Feminism

The financial industry gives Geithner some credit

Earlier this week, Bloomberg reported that former Treasury Secretary Timothy Geithner secured a line of credit from JPMorgan Chase, one of the too-big-to-fail recipients of bailout cash.

Geithner is looking to buy in to a new $12 billion fund at Warburg Pincus, the private equity firm where he now works. He reportedly stands to make a 20-30% return on the investment. Although he is not required to disclose the size or purpose of the credit line, a source told Bloomberg that Geithner was among several staff members to borrow money to invest in the fund.

So JPMorgan Chase, one of the banks Geithner bailed out, is about to help Geithner make loads of money.

As Huffington Post’s HuffPost Hill newsletter put it: “It’s almost like the entire Wall Street bailout was just one elaborate scheme to help him pay for heated bathroom tiles.”

We have previously noted that Geithner’s post-Treasury career has closely followed the path taken his mentor, Clinton-era Treasury Secretary Robert Rubin. Both had a brief cooling-off period at the Council on Foreign Relations, a think tank, before taking high-paying Wall Street jobs (optics be damned). For Rubin it was Citigroup. For Geither it is Warburg Pincus, one of the largest private equity firms in the country.

Follow Geithner’s path from regulator to Wall Streeter in this map (click through for a larger version):

The Flint water crisis and the billionaires behind Governor Rick Snyder

In March 2014, the city of Flint began sourcing its water from the Flint River, a decision that would have ostensibly saved the city $5 million over two years, at the behest of state-appointed Emergency Manager Darnell Earley. Soon after the switch, residents began complaining of water with a rank smell and taste, and samples tested in coming months were found to contain fecal coliform bacteria, trihalomethanes (a disinfection product), and high levels of lead. The latter has been found in the bloodstreams of Flint’s children and infants.

Governor Rick Snyder declared a state of emergency on December 15, but evidence indicates that officials in Snyder’s administration not only acknowledged the severity of crisis in Flint for months prior – they tried to cover it up.

Last September, the ACLU found that officials from the Michigan Department of Environmental Quality manipulated lead tests from Flint so as not to attract the ire of the Environmental Protection Agency. And emails sent last July by Snyder’s Chief of Staff, Dennis Muchmore, revealed that the administration was aware of the severity of the crisis months before it decided to switch Flint’s water source back to Detroit.

Now, as Michigan state police go door-to-door delivering bottled water and water filters to Flint residents, people are calling for Snyder’s resignation and even his arrest.

As these demands intensify, it’s worth examining the network of out-of-state billionaires propping up Snyder. It includes not only far-right bogeyman David Koch, but prominent centrists and Democratic donors that fund work around environmental, public health, and education issues. In fact, some of these Snyder donors are major funders of organizations that have taken action around the Flint water crisis, including the Natural Resources Defense Council and the Sierra Club. Below is a list of notable donors, all of whom maxed out to Snyder’s 2014 campaign (a full list is here).

Given the scale of crisis and the nature of their philanthropic interests, will Snyder’s billionaire network continue to stand behind their guy in Michigan?

Continue reading The Flint water crisis and the billionaires behind Governor Rick Snyder

Industry-tied Department of Energy study finds gas exports will drive fracking, makes no mention of climate

On December 28, Bloomberg reported on a US Department of Energy analysis that found that increasing exports of liquefied natural gas (LNG) from the United States would result in a 5% decrease in natural gas prices in Asia along with a 1% increase in US prices. The contracted researchers concluded that this would be a net benefit for the US economy as higher gas prices would result in larger profits for US gas companies and more spending on increasing gas drilling.

The study, conducted by researchers at the consulting firm Oxford Economics and the James A Baker III Institute for Public Policy at Rice University, does not appear to contemplate the climate effects of increased natural gas drilling and burning, despite the fact that experts have identified climate change as a significant threat to US security interests and the economy. In fact, the word climate only appears once in the entire report (in a passing reference to the COP21 climate negotiations), and the researchers built the assumption that there would be no change in environmental policies into their models.

The researchers found that increasing LNG exports would expand natural gas drilling in the United States. In the first of the key points in the report’s executive summary, the authors write: “The majority of the increase in LNG exports is accommodated by expanded domestic production rather than reductions in domestic demand.”

The authors’ second key point is that the increased LNG exports advocated will result in higher energy prices in the United States. From the executive summary: “In every case, greater LNG exports raise domestic prices and lower prices internationally.” Higher prices with no reduction in demand, as well as access to international markets, would entail bigger profits for US drillers.

The increase in GDP from gas producers’ higher profits would offset the negative impact of higher prices on the US economy, according to the report.

As mentioned above, the study was conducted on contract by economists at Oxford Economics, a UK-based consulting firm, and by Kenneth Medlock III, the James A. Baker, III, and Susan G. Baker Fellow in Energy and Resource Economics at Rice University. On its website, Oxford Economics touts its work for multinational corporate clients, including a number of oil and gas firms. Oxford’s clients include supermajor oil producers BP, Chevron, Eni, and Shell as well as the mining giants BHP Billiton and Rio Tinto.

The James A Baker III Institute for Public Policy, where report author Medlock is a fellow, is an oil-and-gas-industry-funded unit at Rice University. Its members, which fund the institute at levels between $25,000 and $75,000 per year, include BP, Chevron, ConocoPhillips, ExxonMobil, and Shell as well as LNG export company Cheniere Energy. FTI Consulting, a public relations firm that runs the Independent Petroleum Association of America’s Energy in Depth campaign, is a “Director’s Circle” member of the Baker Institute, paying $75,000 per year for access to the institute’s advisory meetings and conferences and private briefings at their headquarters. In 2012, the Baker Institute, in conjunction with Harvard’s industry-funded Belfer Center, published “The Geopolitics of Natural Gas,” a project steered by a Shell employee and funded by ConocoPhillips, that also endorsed increasing LNG exports.

The Department of Energy study, dated October 29, 2015, seems to be another iteration of the Obama administration’s climate ambivalence. As the President publicly describes climate change as a major threat that can’t be dealt with “through pouring money at it,” his administration has relied on analyses by oil and gas industry consulting firms to justify policies that promise to increase the production and consumption of fossil fuels. Since Obama has taken office, his administration has issued permits to liquefy and export natural gas, approved oil drilling in the Arctic Ocean, and, most recently, approved a budget deal lifting the ban on crude oil exports.

PAI has covered the industry-tied science used to advance the oil and gas industry’s agenda in great depth since 2012. This study, and others, can be found in our database of “frackademic” studies here. We have also created a guide to the “frackademia” phenomenon, with profiles of its major players, which is available here.

Update (January 11, 2016):
Itai Vardi published an examination of Rice University’s Baker Institute at DeSmogBlog that goes into the institute’s oil and gas ties in greater depth than the discussion above.

The Baker Institute’s oil and gas backing and its experts’ connections to the industry are mapped below using the LittleSis oligrapher tool: