Since our last Eyes on the Ties roundup we’ve continued to cover a wide spectrum of news and events with original research using the LittleSis database. Topping this roundup once again is J.P. Morgan, which sealed it’s $13 billion dollar
bargain settlement deal with the Department of Justice. You may recall Kevin’s post on the thin line that separated the DOJ and JPM at the negotiating table, which revealed that the primary DOJ negotiator, Tony West, represented Washington Mutual when he was a partner at Morrison & Foerster. The media took little notice of this conflict of interest, and even a New York Times article, which offered a glowing bio of Tony West’s career, failed to mention his time representing WaMu. Kevin responded to the article’s omission with more questions about West’s career and his role with WaMu. Unfortunately they remain unanswered.
Reading about J.P. Morgan’s record-setting settlement sent many into sticker shock, including JPM’s own general counsel Stephen Cutler, but much of the coverage failed to remind readers that over half ($7 billion) of the settlement is tax-deductible. Of course J.P. Morgan CFO Marianne Lake was sure to remind shareholders of this fact in a conference call the day the settlement was finalized. I looked into this phenomenon and found that permitting tax write-offs in order to gin-up high-dollar (and more publicly palatable) settlements is a common negotiating practice for our federal prosecutors. You can read more here.
Shining a light on another big money boondoggle Rob reported on the SUNY presidential compensation kickback system, which allows university presidents to receive “top ups” from private non-profits affiliated with SUNY in addition to their SUNY salaries. From the post:
In the SUNY Upstate case, David R. Smith was earning $363,537 from SUNY and $268,923 from the SUNY Research Foundation. On top of that, however, he received “a substantial increase” in compensation from Pediatric Service Group, LLP as well as a $349,296 deferred compensation plan through MedBest Medical Management, both contractors with SUNY Upstate who have received a combined $64 million in contracts since 2008.
Whitney took the big money lens to Washington where local officials pledged the largest state tax subsidy in US history–$8.7 billion through 2040–to defense contractor, Boeing. Turns out Boeing and the Washington state government has its own little revolving door:
One of Inslee’s first hires when he took office in January was David Schumacher, a former Boeing lobbyist, to direct the Office of Financial Management. Inslee and Schumacher likely worked together to craft the budget for this deal. Before taking this position, Schumacher directed the State Senate’s Ways & Means Committee after leaving Boeing.
While state lawmakers hailed the deal as an “authentic marriage,” all we can see is some serious gold digging.
More from the blog
- Kevin on Geithner’s cooling off period: Geithner does the Rubin shuffle
- Whitney on billionaire philanthropist Paul Tudor Jones: Paul Tudor Jones and American public education.
- Gin on EDF’s latest greenwashing venture: Environmental Defense Fund greenwashing: Walmart edition.
Every once in a while we like to post on research tips and LittleSis functionality tricks. Kevin spent some time researching elite social clubs such as the Alfalfa club, the Core club, and Buffalo’s own (aptly named) Buffalo Club, and wrote up some tips on how to research these private social institutions where power networks are forged over stemware and lobster dinners. The details of the leaked Buffalo Club newsletter are not to be missed!
I spent some time reviewing LittleSis’ fantastic list tool, which can turn a lowly top 10 into a sprawling network ripe for analysis. We use this tool to kick off research, following hunches, and organize networks we’re investigating and you should too!
— David Moore (@ppolitics) November 20, 2013
— mary mad (@marymad) November 17, 2013
— Michael Kink (@mkink) November 13, 2013