Activist Ray Kimble has turned his home in Dimock Township, Pennsylvania into a symbol of opposition to fracking. Credit: Emilio Godoy/IPS

By Emilio Godoy
MONTROSE, Pennsylvania, USA , Sep 17 2015 (IPS)

U.S. activist Vera Scroggins has been sued five times by the oil industry, and since October 2013 she has faced a restraining order banning her from any properties owned or leased by one of the biggest players in Pennsylvania’s natural gas rush, Cabot Oil & Gas Corporation.

“I feel like a half-citizen, because corporations can do whatever they want and citizens can’t. Corporations have broken environmental laws and keep working,” the retired real estate agent, who is a mother of three and grandmother of two, told IPS.

Since 2008 Scroggins, with the Shaleshock Media network of artists and media activists, has been fighting hydraulic fracturing or “fracking”, the technique used to produce shale gas, in the rural community of Montrose, Pennsylvania, population 1,600.

In Montrose, which is in Susquehanna County, there are some 1,100 wells in 600 gasfields, as well as 43 compressor stations, which help the transportation process of natural gas from one location to another.“There is polluted water, flow-back water, the transformation of rural areas damaged by the operation of wells. There are quite a few long-term legal and financial liabilities to ensure that that legacy is properly addressed.” -- Tyson Slocum

This infrastructure, owned by seven companies, is near homes and schools.

The Marcellus shale formation stretches across the northeastern U.S. state of Pennsylvania. It is one of the large shale gas deposits that have led to the United States being dubbed “Frackistan”.

Fracking involves the massive pumping of water, chemicals and sand at high pressure into a well, which opens and extends fractures in the shale rock deep below the surface, to release the natural gas trapped there on a massive scale. The technique is considered damaging to health and the environment.

Fracking generates enormous volumes of liquid waste that must be treated for reuse, as well as emissions of methane, a greenhouse gas that is far more potent than carbon dioxide, the most important cause of global warming.

“The wells pollute the water and the methane escapes into the air. Many people don’t know what’s going on, they don’t have information. I don’t feel safe with how fracking has been done,” said Scroggins, who lives in Montrose with her husband, a retired teacher. There is a gas well just one kilometre from their home.

Fracking, with its tall steel drilling rigs, has modified the local landscape, along with the constant traffic of trucks hauling soil, sand and water.

Activists complain that the development of industry in rural areas like Montrose is ruining the countryside, while the accumulation of methane can lead to explosions or respiratory ailments among local residents.

Shale drilling rig in Montrose, Pennsylvania. Many rural areas in this northeastern state have seen their lives disrupted by the development of shale gas and the controversial fracking technique used to produce it. Credit: Emilio Godoy/IPS

In its Annual Energy Outlook 2015, the U.S. Energy Information Administration (EIA) reported that about 11.34 trillion cubic feet of dry natural gas was produced directly from shale gas in the United States in 2013 – about 47 percent of total U.S. dry natural gas production that year.

And about 4.2 million barrels per day of crude oil were produced directly from shale oil or tight oil resources in the United States in 2014 – 49 percent of total U.S. crude oil production.

Oil is the main source of energy in the United States, accounting for 36 percent of the total, followed by natural gas (27 percent), and coal (19 percent).

In Pennsylvania, gas production soared from 9,757 cubic feet in 2008 to 3.05 million in 2013.

In this state, the site of the first U.S. oil boom, 9,200 wells have been drilled, and over 16,000 permits for fracking have been granted.

The United States is the country that is most heavily exploiting shale gas and oil at a commercial level.

Fracking was given a boost in 2005, when the Energy Policy Act exempted the technique from seven major federal environmental laws, ranging from protecting clean water and air to preventing the release of toxic substances and chemicals into the environment.

With that backing, the industry unleashed a flood of lawsuits seeking to dismantle local and state environmental, health and contractual regulations adverse to its interests.

In the case of Pennsylvania, the state legislature approved the Oil and Gas Act (Act 13) in September 2012, which restricted local governments’ ability to zone and regulate natural gas drilling and required municipalities to allow oil and gas development in all zoning areas.

But city councils, local residents and environmental organisations fought the law, and in 2013 the Pennsylvania Supreme Court struck down sections of it, saying they were unconstitutional and violated citizens’ environmental rights. This allowed local communities to once again apply zoning rules in granting permits for shale gas production.

Along the side of the road, the traveller constantly sees signs reading Keep Pennsylvania Beautiful. But what is happening in rural areas does not seem to be in line with the slogan.

Ray Kimble, a 59-year-old mechanic, has experienced that contradiction in Dimock Township, where he lives. He told IPS that in his community, which is near Montrose, the water has been polluted since 2009 by drilling and fracking operations.

“They have damaged the town. We don’t want them here,” said Kimble, who added that he has a chronic cough and his ankles are swollen from contact with toxic waste while he worked for the industry as a driver.

Now he refuses to drink the tapwater and dedicates his time to carrying clean water to families affected by the contamination.

Dimock, population 1,500, was featured in the prize-winning documentary “Gasland” by U.S. filmmaker Josh Fox, which exposed the damage caused by fracking and helped spawn the first lawsuits against the shale gas industry, which were settled out of court.

Kimble’s house is just over 150 metres from a gas well.

“There are short-term profits with shale gas, but what happens when the wells dry up and the waste is left?” activist Tyson Slocum remarked to IPS.

“There is polluted water, flow-back water, the transformation of rural areas damaged by the operation of wells. There are quite a few long-term legal and financial liabilities to ensure that that legacy is properly addressed,” said Slocum, the director of the Energy Programme of Public Citizen, a consumer interest group that has provided advice to people affected by fracking.

The industry is now facing the sharp drop in international oil prices, the credit crunch, and growing public opposition to fracking.

In the last eight months, some 400 towns and cities in 28 states have adopted vetoes or moratoriums on fracking. The most far-reaching decisions were taken in the states of Vermont, the first to ban fracking, in 2012, and New York, which did so in December.

“Why don’t they build a well besides a politician’s home? Citizens don’t want them near our houses,” said Scroggins.

“I hope there won’t be a major leak, because it will be devastating. But the industry doesn’t acknowledge it has done something bad,” the activist added.

Slocum says the states have bowed to the industry’s interests. “The balance between profits and public health has been vilified, the debate on jobs and economic benefits is secondary,” he said.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

Rally outside the TPP talks in Sydney, Oct. 25, 2014. Credit: SumOfUs/cc by 2.0

By Carey L. Biron
WASHINGTON, Nov 11 2014 (IPS)

For the third year in a row, government negotiators for 12 Pacific Rim countries have missed an internal deadline to reach agreement on a controversial U.S.-led trade deal.

And though negotiators for the accord, known as the Trans Pacific Partnership (TPP), say the process is nearing completion, critics of the deal are expressing optimism that both public opinion and political timing are increasingly against the deal.“TPP proponents know they’re under the clock. The resistance against the TPP is as strong as it’s ever been, and is only growing stronger.” -- Arthur Stamoulis of the Citizens Trade Campaign

“The reason the Obama administration keeps missing deadline after deadline, year after year, is that it’s pushing an extremely unpopular agenda that benefits a handful of big corporations at the expense of the economy, environment and public health in each TPP country and beyond,” Arthur Stamoulis, executive director of the Citizens Trade Campaign, an advocacy group that opposes the TPP, told IPS.

“People and parliaments across the Pacific Rim are starting to realise that the TPP would be bad news for their countries. That includes here in the U.S.”

TPP negotiators confirmed the news on Monday at a regional summit in Beijing. President Barack Obama’s administration, which has been spearheading the TPP talks, had set the meeting of the Asia-Pacific Economic Cooperation (APEC) grouping as a key target for agreement.

President Obama has made the TPP a central part of his attempt to reorient the United States towards Asia – and to economically circumscribe China, which isn’t party to the talks. On Monday, the president himself was in Beijing, where he acknowledged that the TPP process now needed additional political pressure.

“During the past few weeks, our teams have made good progress in resolving several outstanding issues regarding a potential agreement. Today is an opportunity at the political level for us to break some remaining logjams,” the president told trade ministers in Beijing.

“To ensure that TPP is a success, we also have to make sure that all of our people back home understand the benefits for them – that it means more trade, more good jobs, and higher incomes for people throughout the region, including the United States.”

The president said the TPP talks have the possibility of resulting in a “historic achievement”. A statement released by the 12 countries party to the talks suggested that “the end” of the negotiations is “coming into focus”.

Yet disagreements remain, with media reports pointing to agricultural protectionism as proving to be particularly thorny. Others say that substantive frustration remains over a raft of disparate issues, many far from traditional trade concerns – including environmental impact, labour safeguards, medicinal pricing, patent rules and investors’ ability to circumvent national law, among other concerns.

In many ways, it is the broad scope of issues on which the TPP touches that is responsible for strengthening public concern. Now, with President Obama down to his final two years in office, critics are increasingly confident in their ability to stave off agreement.

With the U.S. 2016 president elections likely to heat up as early as the middle of next year, passage of any major trade agreement by U.S. lawmakers would be improbable until 2017 at the earliest.

“TPP proponents know they’re under the clock,” the Citizen Trade Campaign’s Stamoulis says. “The resistance against the TPP is as strong as it’s ever been, and is only growing stronger.”

Corporatist concerns

Last week’s national election here in the U.S. did change the discussion around one issue that would be key for any eventual TPP agreement: whether President Obama is allowed to negotiate unilaterally, or whether he would need Congress’s point-by-point approval of a proposed accord.

Because trade agreements typically touch on so many domestically sensitive issues, U.S. presidents in the past have asked for approval to negotiate without input from lawmakers. Such “fast track” authorities then allow Congress only a single up-or-down vote at the end of the process.

Yet due to concern among U.S. constituents over the potential impact of the TPP on the domestic economy, both houses of the U.S. Congress has been reluctant to approve President Obama’s requests for these authorities. Still, last week’s election some have suggested that this could change.

The issue could now come down to a debate that is taking place within the Republican Party, which increased its majority in the House of Representatives and in January will take over control of the Senate. Yet while the House has consistently opposed passage of fast track authorities for President Obama, the new Republican Senate leadership has suggested that such legislation could now be a key priority early next year.

“Most of [President Obama’s] party is unenthusiastic about international trade. We think it’s good for America,” Mitch McConnell, the top Republican in the Senate and the figure who will set the body’s agenda this coming year, said at a press conference following last week’s election.

“And the president and I discussed that … and I think he’s interested in moving forward. I said, ‘Send us trade agreements. We’re anxious to take a look at them.’”

The new potential movement on fast track authorities has sparked a furious debate among conservatives, particularly between those who have traditionally supported big business and those increasingly concerned about globalisation’s impact on U.S. workers. This division has strengthened since the 2008 economic downturn.

“It’s only in the past few years that we’ve seen a small cabal of internationalist, Big Business-allied Republicans emerge, and it is this corporatist wing that has pushed for free trade,” Curtis Ellis, a spokesperson with the American Jobs Alliance and executive director of ObamaTrade.com, a conservative watchdog site, told IPS.

“If we’re going to move all of our factories overseas, the American people are going to get stuck with the short end of stick. And really, even supporters of the TPP admit that it’s not about trade but rather about investment – about securing overarching global governance rules on investment.”

Indeed, of the TPP’s 29 proposed chapters, just five deal directly with trade, according to Public Citizen, a consumer interest group here.

“[T]he non-trade provisions would promote lower wages, higher medicine prices, more unsafe imported food, and new rights for foreign investors to demand payments from national treasuries over domestic laws they believe undermine the new TPP privileges they would gain,” Lori Wallach, the head of the group’s Global Trade Watch programme, said Monday.

“Despite the intense secrecy of the negotiations … many TPP nations have woken up to the fact that the deal now on offer would be damaging to most people, even if the large corporations pushing the deal might improve their profit margins.”

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org

The Supreme Court ruling is almost certain to fuel the growing debate over increasing economic inequality in the U.S. CC-BY-SA-3.0/Matt H. Wade, http://en.wikipedia.org/wiki/User:UpstateNYer, http://creativecommons.org/licenses/by-sa/3.0/

By Jim Lobe
WASHINGTON, Apr 2 2014 (IPS)

In a decision with major implications for the U.S. political system, a bare majority of the Supreme Wednesday ruled that the government cannot limit total spending by individuals on federal elections.

The highly anticipated judgement, rendered by the Court’s five right-wing justices, declared unconstitutional the legal cap on aggregate contributions individual donors can make to political candidates and party committees during the two-year election campaign cycle.“If the court in Citizens United opened a door, today’s decision may well open a floodgate.” -- Justice Stephen Breyer, writing for the minority.

That limit, which was 123,200 dollars for the current cycle, was enacted by Congress and signed into law by former President George W. Bush in 2002 as part of a larger effort to reform campaign finance laws.

The ruling in the case, McCutcheon v. Federal Election Commission (FEC), was strongly denounced by civic groups that have argued that the rich already exert far too much influence on elected officials.

“The Supreme Court majority overrode the Legislative and Executive branches to empower a miniscule number of millionaires and billionaires to use their wealth to exercise extraordinary distortive influence over federal officeholders, government decisions and elections,” said Fred Wertheimer, the president of Democracy 21 and a leading voice for taking money out of politics since the 1970s.

“The Supreme Court majority has refused to learn the lessons of history from our past corruption scandals and from decades of actions taken to protect citizens against government corruption,” he noted.

The ruling, which comes just as the 2014 Congressional campaigns are getting underway, is almost certain to fuel the growing debate over increasing economic inequality – ignited two-and-a-half years ago by the Occupy Movement – and its effects on the political system.

In just the past week, for example, op-eds decrying influence of money on government appeared in several of the nation’s most influential newspapers.

In the Washington Post, for example, Stein Ringen, an emeritus professor at Oxford University, compared the current U.S. system to that of ancient Athens where, he noted, “democracy disintegrated when the rich grew super-rich, refused to play by the rules and undermined the established system of government.”

Similar concerns surfaced when four potential Republican 2016 presidential candidates, including New Jersey Governor Chris Christie and former Florida Governor Jeb Bush (George W.’s brother), trooped to Las Vegas last weekend for a convention of the Republican Jewish Coalition (RJC), a right-wing, strongly pro-Israel group chaired by casino mogul Sheldon Adelson.

Adelson contributed nearly 100 million dollars of his 39-billion-dollar fortune to so-called super-PACS (political action committees) during the last political cycle in an ultimately vain effort to defeat President Barack Obama re-election bid in 2012.

Noting that, along with Adelson, two of the world’s other top-10 billionaires, David and Charles Koch, are already “pouring tens of millions [of dollars] into the 2014 midterm elections in an effort to swing the Senate to Republican control,” Post columnist Dana Milbank wrote Wednesday that “These and other wealthy people …are buying the U.S. political system in much the same way Russian oligarchs have acquired theirs.”

The McCutcheon decision, which drew a strong dissent from four of the justices on the nine-member court, complements the equally controversial “Citizens United” decision which the same majority handed down in 2010.

That decision found that limits to political contributions by corporations and unions violated the free speech rights guaranteed by the Constitution’s First Amendment. So long as those contributions were made to an entity that was not directly co-ordinating its advocacy work with a specific candidate’s political campaign or party, they were permissible, according to the majority.

As a substantial result of that decision, the 2012 election was the most expensive in U.S. history by far – most estimates place the amount at well over six billion dollars. In the 1960 election, by contrast, the comparable total was just over 100 million dollars adjusted for inflation.

While Citizens United applied to corporations and unions and permitted the creation of super-PACs to which anyone, such as Adelson and the Koch brothers, could contribute, it did not address the issue of direct donations by individuals to specific candidates or party organisations.

The McCutcheon case, which was based on a wealthy businessman who wanted to exceed the FEC’s 2012 aggregate limit by donating to dozens of Congressional campaigns, essentially fills that gap.

While the majority upheld FEC limits on individual contributions to specific candidates (2,600 dollars) and party organisations (5,000 dollars), it declared that the FEC’s aggregate limit (currently123,200 dollars) on any one individual’s contributions to political campaigns and parties during an election cycle violated the First Amendment.

“There is no right more basic than the right to participate in electing our political leaders,” wrote Chief Justice John Roberts in the majority opinion that drew heavily on the four-year-old Citizens United decision to establish precedent for its ruling.

“An aggregate limit on how many candidates and committees an individual may support through contributions is not a modest restraint at all,” Roberts wrote. “The government may no more restrict how many candidates or causes a donor may support than it may tell a newspaper how many candidates it may endorse.”

The majority opinion provoked a strong retort by the four more-liberal justices. “If the court in Citizens United opened a door, today’s decision may well open a floodgate,” wrote Justice Stephen Breyer for the minority.

“The result… is a decision that substitutes judges’ understandings of how the political process works for the understanding of Congress; that fails to recognize the difference between influence resting upon public opinion and influence bought by money alone; that overturns key precedent; that creates huge loopholes in the law; and that undermines, perhaps devastates, what remains of campaign finance reform,” he argued.

His arguments were echoed by democracy advocates. “The First Amendment was intended to facilitate the exchange of ideas and information among all of us and thereby encourage our informed participation in our government,” said J. Gerald Hebert, director of the Legal Center here.

“This decision turns the First Amendment on its head by enabling those with the biggest chequebooks to gain even more influence and access to our elected officials,” he added.

The head of Public Citizen, another Washington-based civic group, called the ruling a victory for “plutocrat rights.” “There are literally only a few hundred people who can and will take advantage of this horrendous ruling. But those are exactly the people our elected officials will now be answering to,” said Robert Weissman.

“That is not democracy. It is plutocracy,” he said.

With the notable exception of Sen. John McCain, the 2008 Republican presidential candidate who had co-sponsored the 2002 campaign finance reform law, Republicans expressed satisfaction with the ruling.

“What I think this means is that freedom of speech is being upheld,” House Speaker John Boehner told reporters. “You all have the freedom to write what you want to write. Donors ought to have the freedom to give what they want to give.”

For his part, McCain denounced the ruling. “I predict as a result of recent Court decisions, there will be scandals involving corrupt public officials and unlimited, anonymous campaign contributions that will force the system to be reformed once again,” he said in a statement.

Jim Lobe’s blog on U.S. foreign policy can be read at Lobelog.com.

Nuclear energy accounts for about a fifth of U.S. electricity, although the last construction cycle for U.S. nuclear power plants ended abruptly in 1979. Credit: Bigstock

By Carey L. Biron
WASHINGTON, Feb 20 2014 (IPS)

The U.S. government has announced that it will be offering substantial loan guarantees for two new nuclear reactors, giving a major boost to what would be the first such projects to go forward in the United States in more than three decades.

The move was immediately hailed by the nuclear industry, which has faced mounting concerns in recent years over the economic feasibility of nuclear power in today’s energy landscape. Yet public interest groups and environmentalists offered quick criticism, warning that U.S. regulators have failed to learn lessons from recent nuclear disasters and that the projects are too risky for taxpayer funding."This is a technology that continues to be beset with safety issues and produces toxic wastes that we still don’t have a solution for." -- Allison Fisher

Ahead of a Thursday trip to the southeastern state of Georgia, where the two plants are to be built, Energy Secretary Ernest Moniz noted that the loan guarantees, worth 6.5 billion dollars, are specifically meant to rejuvenate the U.S. nuclear industry.

“The construction of new nuclear power facilities like this one … is not only a major milestone in the [Obama] administration’s commitment to jumpstart the U.S. nuclear power industry,” Moniz told reporters here, “it is also an important part of our all-of-the-above approach to American energy as we move toward a low-carbon energy future.”

The administration provisionally approved the loans four years ago, and these were expected to be finalised in 2012 (a loan for a third project remains under negotiation). Around that time, however, the high-profile and politically contentious failure of a solar energy start-up company, another recipient of federal government backing, failed, causing officials to pull back temporarily.

Private capital, meanwhile, remained largely uninterested in funding the projects, in part due to the ongoing recovery from the 2008 recession and in part due to continued reverberations from the 2011 nuclear disaster in Fukushima, Japan. Indeed, the Energy Department is now touting a new reactor design to be used for the two projects, which in part is distinguished by having an automatic shutoff system in case of emergency.

Yet green groups say significant safety concerns remain.

“We have particular concerns about this current design – we were part of a challenge to that design after the Fukushima disaster, and the United States hasn’t yet incorporated lessons learned from that experience,” Katherine Fuchs, a nuclear subsidies campaigner at Friends of the Earth US (FOE), an advocacy group here, told IPS.

“Just last week we had an earthquake in Georgia and [nearby] South Carolina, underlining continued risks that we need to make sure are taken into account. It’s significant that these are the first two plants being built in decades – there are lots of good reasons for this, particularly economics and safety concerns.”

Prohibitive expense

Although nuclear energy continues to produce about a fifth of U.S. electricity, the last construction cycle for U.S. nuclear power plants ended abruptly in 1979.

In March of that year, a nuclear reactor in Pennsylvania partially melted down, the result of a confluence of poor design, technical malfunction and user error. Although the resulting release of radioactive material was never officially held responsible for any public health problems, the incident led to broad changes in regulation and oversight of nuclear power plants.

While U.S. nuclear plants have come online since then – the most recent was in the mid-1990s, for a project that began during the 1970s – the focus of both federal authorities and the private sector has largely moved on. Particularly in the context of new “fracking” technologies that allow engineers to access previously hard-to-reach natural gas deposits, the heavy capital investment required to build a new nuclear reactor – estimated by some at around nine billion dollars – has increasingly come to be seen as prohibitive.

Over the past year alone, four nuclear power plants have closed down in the United States over financial feasibility concerns, and FOE’s Fuchs points to several plans for new plants that have been shelved. Meanwhile, Wall Street investors have reportedly refused to get involved in the Georgia projects, making the federal government’s backing all the more critical if these proposals were to go forward.

Such a situation leads many critics to suggest that any nuclear project today would be too risky for the use of federal funds.

“The construction of the two new reactors … are 21 months behind schedule and 1.6 billion dollars over budget,” Allison Fisher, outreach director for the energy programme at Public Citizen, a watchdog group here, said Wednesday.

“This not only calls into question the decision to underwrite this risky project with taxpayer dollars, but … this is a technology that continues to be beset with safety issues and produces toxic wastes that we still don’t have a solution for – hardly a technology the government should be promoting and propping up with taxpayer funds.”

Clean and green?

Reaction from the nuclear industry, meanwhile, has underlined the importance of the Energy Department’s backing. On Thursday, the Nuclear Energy Institute (NEI), a trade association, dubbed the new agreement “historic”.

“The agreement demonstrates the Obama administration’s recognition of the key role nuclear energy must play in a successful clean energy policy,” Marvin Fertel, the NEI’s president, said in a statement sent to IPS. “The loan guarantee program … will act as a catalyst in hastening the construction of low- and non-emitting sources of electricity, such as nuclear power plants.”

As Fertel notes, the new loan guarantees are coming from a pot of money created by the U.S. Congress in 2005 to support new and “innovative” energy technologies. In announcing the new deal, the Energy Department, too, has been keen to conflate nuclear power and clean energy.

The new reactors “will produce enough clean electricity to power more than 1.5 million homes,” Peter W. Davidson, a senior Energy Department official, wrote in a blog post Thursday. “At the same time, this project will help fight climate change by keeping about 10 million tons of carbon dioxide pollution out of our atmosphere. That’s like taking 2 million cars off the road.”

The debate over nuclear energy’s impact on global warming has heated up somewhat in the environmental community in recent years. Yet for many green groups, such conflation is misleading.

“Nuclear power is not clean energy,” FOE’s Fuchs says. “There is no way to deal with the waste, and we don’t yet have safe designs or adequate regulation. It’s entirely wrong to lump nuclear energy in with green energy, and it’s unbelievable that the administration would tout such a thing.”

Fast food workers on strike in New York City, July 2013. Credit: mtume_soul/cc by 2.0

By Carey L. Biron
WASHINGTON, Sep 19 2013 (IPS)

Regulators here are proposing that most U.S. corporations be required to provide annual public reporting on how the pay received by their chief executive compares to that of their average workers, a requirement proponents say could be a first step in reining in an unprecedented swelling in executive compensation.

If the rule is adopted, corporations would need to calculate this ratio for all workers, “including full-time, part-time, temporary, seasonal and non-U.S. employees”, according to an official release. This would also apply to workers employed by a company’s subsidiaries, including those not located in the United States.“It was misaligned pay that caused bankers to blow up Wall Street in the first place." -- Bartlett Collins Naylor of Public Citizen

The Securities & Exchange Commission (SEC), which voted to approve the proposal on Wednesday, was directed by the U.S. Congress to create the pay gap rule nearly three years ago. Although full details have not yet been made public, proponents of the rule say the proposal appears to have come out quite strong.

“We think it’s a home run – it includes basically everything we wanted,” Sarah Anderson, director of the Global Economy Project at the Institute for Policy Studies, a Washington think tank, told IPS.

“There was an intense effort made to water down this rule, particularly to allow companies to exclude overseas and part-time seasonal workers, so we’re thrilled to see the SEC stood up to that pressure. It’s important that shareholders and the public understand that the process of globalising the workforce and the extreme pay gap within companies have just as much of a detrimental effect for U.S. companies that might be operating in other countries as for U.S. workers.”

At 3-2, Wednesday’s vote by the SEC commissioners was close, with both “no” votes coming from Republican commissioners. Company executives and business lobby groups have repeatedly stated in recent years that the new rule would be burdensome, warning that the information is unnecessary and only feeds into populist attempts to embarrass top executives.

On Wednesday, the Centre on Executive Compensation, an advocacy group that has strongly opposed the pay ratio requirement, criticised the new proposal as a “political disclosure, rather than a substantive one”.

The U.S. Chamber of Commerce, the country’s largest industry lobby group, likewise came down on the rule as “another example of special interests promoting policies contrary to the interests of investors and the businesses they invest in”.

Yet the Institute for Policy Studies’ Anderson notes that since the late 1970s management scholars have been warning against allowing CEO-to-worker pay ratios from becoming too large. She points to years’ worth of research that suggests that extreme pay differentials are bad for worker morale and productivity, thus making companies and the overall economy less efficient.

Yet in the United States, this pay gap has grown larger than at any other point in modern history. While CEOs of major companies in 1982 ago took home around 42 times the pay of their average workers, by last year that number had grown to 354 times larger, according to analysis by the AFL-CIO, one of the country’s largest labour unions.

While the new disclosure is seen as empowering shareholder decision-making, Anderson says it could also have an impact on workers around the world.

“One argument by corporations was that this calculation was too difficult to figure out because they didn’t know how much they were paying workers in other countries – another sign of companies’ attempts to distance themselves from taking responsibility for their actions in other countries,” she says.

“The SEC clearly didn’t buy that argument, and this rule emphasises that U.S. corporations are responsible for their overseas operations. Perhaps this could now help with the broader push towards corporate accountability.”

Growing inequality

The new proposal is part of a mammoth financial-services overhaul bill, the Dodd-Frank Act, that passed Congress in 2010 and aimed at dealing with the regulatory failures blamed for leading to the financial collapse of 2008-09. The pay-gap rule, known formally as Section 953(b), is one of several regulations the SEC has been mandated to write to tighten oversight of CEO compensation, particularly in the banking sector.

“It was misaligned pay that caused bankers to blow up Wall Street in the first place, though because CEOs are so overpaid they can afford to attack anybody that makes even a small effort to reform how much money is wasted on them,” Bartlett Collins Naylor, a financial policy advocate with Public Citizen, a consumer advocacy group here, told IPS.

“This new proposal seems generally fine, though it’s such a simple rule it’s hard to see how they could screw it up. Imagine – it only took the SEC 1,825 days to implement the first Dodd-Frank rule on pay reform!”

Naylor did express some frustration over some of the exemptions the SEC has included in the new proposal, however. These include small companies as well as “emerging growth” corporations, meaning those with less than one billion dollars in annual gross revenues.

In both instances, Naylor says, calculating the ratio between a CEO’s pay and that of a median employee should be very simple.

Wednesday’s vote on the rule proposal now kicks of a 60-day public comment period, though the issue has already received attention. Introducing the pay ratio vote Wednesday morning, SEC Chair Mary Jo White noted that the proposed rule has already prompted more than 20,000 comment letters, which she characterised as “significant interest”.

If the rule eventually passes, the United States would be the only country to require such disclosure. That may make sense, however, given that the pay gap between workers and company heads is larger here than anywhere else in the developed world – another indication of broader inequality that continues to grow.

On Tuesday, the U.S. Census Bureau released an annual study on poverty that found that both annual median income and the poverty rate failed to change over the previous year. This means that average full-time workers in the United States are actually receiving lower compensation than they were in the early 1970s, according to the Economic Policy Institute, a think tank here.

And last week, a California researcher published findings showing that U.S. economic inequality is currently worse than at any time since 1927. In looking at tax data, economist Emmanuel Saez found that, last year, the top 1 percent of U.S. earners took in some 19.3 percent of all household income, while the top 10 percent took in nearly half of all income.

Critics of a potential free trade agreement between the United States and European Union worry that such an agreement could lead to increased exportation of liquified natural gas from the U.S. Credit: Bigstock

By Jared Metzker
WASHINGTON, Jun 19 2013 (IPS)

Controversy is building following the announcement that negotiations will soon begin on a free trade agreement between the United States and European Union, with critics warning that any such agreement could negatively affect a host of regulatory concerns.

On Monday, during the Group of Eight (G8) summit held in Northern Ireland, the United States, European Commission and European Council jointly announced that negotiations will begin on Jul. 8 in Washington for what British Prime Minister David Cameron called “the biggest bilateral trade deal in history”.

Proponents characterise the Transatlantic Trade and Investment Partnership (T-TIP), also known as the Trans-Atlantic Free Agreement (TAFTA), as a way to improve the struggling economies of the United States and European Union.

“The whole point,” Cameron stated on Monday, “is to fire up our economies and drive growth and prosperity around the world – to do things that make a real difference to people’s lives. And there is no more powerful way to achieve that than by boosting trade.”

He asserted that the deal could “add as much as a 100 billion pounds to the EU economy, 80 billion pounds to the U.S. economy, and as much as 85 billion pounds to the rest of the world”.

Nevertheless, there is significant opposition to the proposed deal.

“The claims that this deal will somehow be an economic cure-all and generate significant growth are simply not supported by any reliable evidence,” Lori Wallach, director of Public Citizen‘s Global Trade Watch, a public interest watchdog group based in Washington, said Tuesday.

“But we do know that the talks are based on the demands of U.S. and EU corporations that have been pushing for decades to eliminate the best consumer, environmental and financial standards on either side of the Atlantic.”"The claims that this deal will somehow be an economic cure-all and generate significant growth are simply not supported by any reliable evidence."
-- Lori Wallach

Tariffs between the U.S. and E.U. are already low, and critics note that that what the deal really seeks to accomplish is the removal of “non tariff barriers” (also referred to as “trade irritants”).

“Non-tariff barriers is a commonly-used euphemism which refers to the array of financial, environmental, health and other policies which the public has put in place to safeguard its own interests,” Ben Beachy, a research director for Public Citizen, told IPS.

Under T-TIP, standards such as those mentioned by Beachy would be “converged”, so that regulations from state to state would be more closely aligned. Supporters of the deal say this uniformity would facilitate trade, but Beachy contended that the greater effect would be to lower regulation levels to a point that “democratic electorates would never stand for.”

“The resulting effect of ‘convergence'”, he said, “will be to limit the ability of democratic policymakers to establish their own preferred levels of regulation.”

Chilling effect

Environment groups are likewise worried that such harmonisation will allow for an increase in certain energy technologies, particularly the sudden prevalence in the United States of natural gas hydraulic fracturing or “fracking”.

Countries of the European Union currently restrict fracking within their own borders due to environmental concerns. But some analysts suggest these countries would be less averse to consuming imported gas fracked in the United States.

“There are concerns that the U.S. would become a major exporter of liquefied natural gas to the E.U.,” Ilana Solomon, of the Sierra Club, an environmental protection group, told IPS.

The United States recently approved private licenses for companies seeking to liquefy gas, indicating that in the future it will export liquefied natural gas, something it does not currently do.

Under free trade agreements in the past, Solomon noted, important regulatory reviews normally undertaken when considering the advantages of exportation have often been replaced by automatic approvals.

There are also health concerns related to the agreement. Some worry that food safety standards in the United States, for example, could be compromised if European exporters –  currently subject to lower standards – could deliver their, say, milk to U.S. stores.

Regardless of where U.S. standards stood, the less-well-regulated (and possibly less expensive) European milk would be available to U.S. consumers.

Another controversial aspect of the agreement would allow European privately owned corporations to challenge U.S. domestic laws that may negatively affect their profits or even expected profits.

In what are known as “investor-state” tribunals, foreign corporations would be eligible to receive compensation from taxpayers if the corporations could demonstrate that they lost money because of laws that inhibit trade.

Being subject to these tribunals could lead to what Public Citizen’s Beachy refers to as a “chilling effect”, meaning policymakers would be less likely to pass regulations because of perceived vulnerability.

Chipping away regulation

Beachy also noted the deal could carry “very real economic costs” if it undermines financial regulations and increases the risk of economic crisis.

According to a European Commission study, regulations that may be subject to “convergence” include financial safeguards such as those included in policies enacted by the United States following the economic crisis that began in 2008.

Last year, the Association of German Banks indicated what it hoped would emerge from any transatlantic deal regarding the aligning of U.S. and European standards.

“We would not like to see U.S. regulators applying standards to our banks that are extraterritorial, duplicative or discriminating … we have a number of such concerns regarding the ongoing implementation of the Dodd-Frank Act,” said the Association, referring to the most significant U.S. regulatory legislation passed in the aftermath of the financial crisis.

According to Beachy, it is doubtful that the free trade agreement could succeed in removing all its targeted “irritants”.

The European Commission study confirmed that this would be “unlikely”, noting that to do so in some cases would require “constitutional changes” and that “political sensitivities” might stand in the way.

Still, opponents worry that by specifically targeting these barriers, the broad agreement could succeed in chipping away at a significant number of them.

“The corporations that favour the agreement know they won’t get everything they want,” Beachy said. “But they think they can get a lot.”

Oil giant Chevron's corporate offices in Houston Texas are housed in the old Enron buildings at 1400 Smith St. Credit: Jonathan McIntosh/cc by 2.0

By Carey L. Biron
WASHINGTON, May 29 2013 (IPS)

At an annual shareholder meeting held Wednesday, upper-level management for the oil conglomerate Chevron faced renewed questioning over its record-setting political contributions during last year’s national election.

At the meeting, a shareholder resolution on the issue focused on Chevron’s alleged refusal to explain how the company’s political spending has benefited shareholders, particularly given the excoriating criticism the contribution has garnered, and called for a cessation of the practice.

The resolution failed to pass, however, receiving just four percent of shareholder backing.

Of particular interest has been a lump payment of 2.5 million dollars spent by a Chevron subsidiary. Given that Chevron receives government contracts, the contribution’s timing (in the last weeks of the election) and its beneficiary (a group focused on electing Republicans to the House of Representatives) have raised concerns that the payment could have violated U.S. law.

Chevron is wrapping up “its most expensive year of political spending to date,” Green Century Capital Management, which filed the resolution, stated Tuesday, just ahead of the shareholder meeting. The advisory firm is now formally urging the company to “refrain entirely from political spending, arguing that doing so would protect against risks to shareholder value”.

Chevron, the second-largest oil company in the United States, reportedly spent a total of 3.9 million dollars during the 2012 campaign. Yet it was the 2.5-million-dollar payment to a group called the Congressional Leadership Fund that has become the focus of much interest, in part because it is the largest single corporate political contribution to date.

In 2010, the U.S. Supreme Court handed down a controversial ruling that lifted restrictions on most corporate election-related spending. The decision made the 2012 presidential election the most expensive to date.

It has also sparked a significant public backlash: according to a September poll, more than four-fifths of U.S. respondents would support limiting election spending. Further, at least 14 states have now passed resolutions urging a constitutional amendment to overturn the judicial decision, known as Citizens United.

Against this backdrop, Chevron has been widely pilloried for having racked up the largest-yet corporate political contribution since the Citizens United decision was handed down.

“This issue is important for our members because Chevron has not been willing or able to demonstrate value to shareholders of its political expenditures,” Leslie Samuelrich, a senior vice-president with Green Century, told IPS.

“Given high negative press coverage that Chevron’s contribution garnered for the company, we feel that it’s important that Chevron explain why it made this contribution, as well as a long list of growing political contributions over the years. They weren’t able to do so, so we went forward with the resolution.”

Following Wednesday’s vote, Samuelrich lauded the results, telling the media the process represented “a turning of the tide”.

Risky business

The Citizens United decision appears to have led to an immediate response from Chevron. The company has reported spending a little more than a million dollars on political contributions in 2008 and a little less than that amount in 2010, when the Supreme Court ruled.

Two years later, those figures have almost quadrupled. In addition, watchdog groups have noted that around 90 percent of corporate spending in the 2012 election went to Republicans.

“This appears to be very risky business to us,” Samuelrich says, noting that Green Century has filed similar resolutions this year with the oil company ExxonMobil, Bank of America and 3M, a manufacturing conglomerate.

“We spoke with Chevron earlier this year, but that dialogue resulted in no change whatsoever – they didn’t offer any analysis about why they made the initial contribution, nor any evaluation of the impact of their highly publicised political spending.”

Further, the company continues to be dogged by allegations that the Congressional Leadership Fund contribution could have been illegal in the first place, given Chevron’s contracts with the government.

“Under a legislative prohibition known as ‘pay to play’, government contractors can’t make these types of contributions,” Kelly Ngo, a legislative assistant at Public Citizen, a consumer watch group, told IPS. “The law is pretty clear on this.”

In March, Public Citizen and several environment groups filed a joint complaint on the issue with the Federal Election Commission, though the commission has yet to respond. The company, meanwhile, has pointed out that the payment was made through a subsidiary that doesn’t hold a government contract.

In documentation sent to IPS, Chevron’s board unanimously recommended that shareholders vote against the resolution to halt political spending.

“Chevron exercises its fundamental right and responsibility to participate in the political process … [and] advocates positions on proposed policies that will affect the Company’s ability to realize strong financial returns while meeting the world’s growing demand for energy,” the Chevron board states.

“[The] Board is confident that the Company’s political activities are aligned with its stockholders’ long-term interests.”

Ecuador legacy

Two additional resolutions floated by Chevron shareholders on Wednesday dealt with longstanding litigation against the company’s predecessor, Texaco, for having wilfully dumped oil wastes in a remote part of Ecuador from the 1960s until the 1990s. (Extensive documentation on the case can be found here, while Chevron’s responses can be found here.)

While the Ecuadorian courts have repeatedly assessed the company for 19 billion dollars in liability, Chevron has taken an aggressive line in refusing the penalty, saying a multi-million-dollar remediation has already taken place. In an unusual step, in December the company even subpoenaed some of its own shareholders, alleging that they were colluding with the Ecuadorians.

Shareholders floated a related resolution, impugning the Chevron management for the ongoing Ecuador situation, at last year’s meeting.

Although that move was rejected, it did win the backing of around 40 percent of shareholders – slightly more than was ultimately received during Wednesday’s vote, indicating continued shareholder interest to resolve the issue.

Meanwhile, the Ecuadorian plaintiffs, who allege health problems and ruined lands, are now suing Chevron in other countries in which the company operates. Following on an order earlier this month, Chevron CEO John Watson will now have to testify in a fraud-related counter-suit filed by the company against the Ecuadorians.

This year, activists have increasingly targeted Watson himself, singling him out for having originally overseen the acquisition of Texaco.

“My parents both died from cancer due to Chevron’s contamination,” Servio Curipoma, from San Carlos in Ecuador’s northeast, told Chevron shareholders and management Wednesday.

“I am still fighting for justice so that no one else will have to suffer the pain they did, and the loss I have. Chevron has lied to its shareholders, to the world, to me. I’m here on behalf of all of us to say that CEO Watson should be fired.”

Local and state campaigns have become a moneyed battleground this year for corporations and special interest groups hoping to sway the results of elections for local and state offices on Nov. 6.

From California to Texas to Florida, global businesses as well as ideological organisations and extremely wealthy groups have helped channel more than 1.6 billion dollars through political action committees and into local campaigns and issues this year, according to the National Institute on Money in State Politics, a non-governmental organisation (NGO) that analyses state campaign-spending reports.

Some of the cash went into campaigns of local lawmakers. Other amounts supported campaigns for judges. More than 6,000 legislators are running for election Tuesday, according to the National Council of State Legislators, with most relying on private funding.

Campaign money can be difficult to track, since states set their own campaign finance laws, and money flows in and out of state and federal political parties, political action committees and non-profits and into campaigns and issue advocacy.

“Money is access, and it definitely influences the outcomes of elections,” Judy Nadler, a government ethics expert at Santa Clara University in California, told IPS. In some states, “huge amounts of money [go] unreported and unregulated.”

This “outside spending” increased 38 percent between 2006 and 2010, according to the National Institute on Money in State Politics. Spending by candidates increased 19 percent during that time, it found.

Large chunks of special interest money also were directed at state ballot measures, which are decided by voters in individual states. This year, 38 states have ballot measures, according to the National Council of State Legislatures.

From coast to coast

A national overview of money spent per state on election campaigns and committees. Credit: National Institute on Money in State Politics/Creative Commons

Nowhere is the impact of moneyed interests more obvious than in California, where 570 million dollars have been spent leading up to Tuesday’s elections. Of that amount, 421 million dollars have gone to groups arguing for or against ballot measures, including those related to tobacco and genetically modified foods.

A California proposal to raise taxes on a package of cigarettes by one dollar was voted on and narrowly defeated earlier this year during the state’s primary election. Pro-health groups spent 18.2 million dollars advocating for the measure, but tobacco companies, including global giants Philip Morris and Reynolds, spent 46 million dollars to bolster their pro-tobacco stance through advertisements.

A measure to label genetically modified foods has pitted consumers, organic farmers and businesses, who have ponied up 8.2 million dollars, against well-armed agricultural corporations and supermarkets, which have spent 48.7 million dollars.

The biotechnology giant Monsanto has contributed 7.1 million dollars to defeat the labelling proposal, followed by Dupont (4.9 million) and Pepsico, (2.1 million), among many others.

“We have been shut down by biotech on this issue,” Grant Lundberg, CEO of Lundberg Family Farms, an organic rice grower and processor, and co-chair of the Non-GMO Project, told IPS. “They have had a big impact. They have gotten their lies out and confused people. We have limited resources.”

In Texas, where donations to this year’s candidates exceeded 113 million dollars, some individuals and businesses stood out for their especially large contributions to the electoral process.

Bob Perry, the Houston real estate mogul who helped bankroll presidential candidate Mitt Romney, mainly by donating more than 10.7 million dollars to the Super PAC Restore Our Future, is one, according to the Centre for Responsive Politics, a Washington NGO that analyses campaign finance reports. This year, Perry has made a mark of 2.4 million dollars on Texas politics.

More than 72.5 million dollars were dumped into Florida campaigns for 2012, where pro-business special interests figured prominently. The utility company Progress Energy gave the most money – 709,000 dollars – to candidates, about 90 percent of them Republican.

Other major corporate donors include private health insurance company Blue Cross Blue Shield, which gave 648,000 dollars, and the Walt Disney Company, which donated 497,000 dollars. Multi-billionaire conservative Sheldon Adelson, a Las Vegas casino magnate, also got involved in Florida politics; he gave 250,000 dollars to the state Republican Party.

“What we shouldn’t have is corporate financing of elections. Corporations are not people. They don’t vote and should not be involved in selecting our government,” said Craig Holman, a government affairs lobbyist for Public Citizen, a consumer advocacy NGO in Washington, DC.

Influential PACs

Political action committees (PACs) and political non-profits also are influencing politics in Florida, as they do in many other states.

Three Florida Supreme Court justices are at risk of being unseated by conservative groups angry about the justices’ support for President Barack Obama’s 2010 healthcare law. According to an investigation by the Centre for Public Integrity, the attack against the judges is being waged largely by two well-funded ultra-conservative political organisations, Restore Justice 2012 and Americans for Prosperity, funded by the conservative billionaire Koch brothers. A third politics group, Defend Justice from Politics, is backing the judges.

How much money is involved in the judges’ re-election campaigns is unclear, however, due to Florida’s murky reporting requirements.

Grassroots efforts to expel money from politics are underway in a number of states, including New York. And a number of states including Arizona, Connecticut and Maine have already tightened up their campaign finance rules, mostly due to citizen efforts. A sweeping law to reform relaxed campaign finance rules in Massachusetts was passed by citizens in 1998, but was repealed by lawmakers.

Some candidates are taking matters into their own hands by refusing corporate money or in the case of one candidate running for the Massachusetts state house, refusing money altogether.

Mike Connolly, also known as No Cash Mike, told IPS that “money in the political system gets in the way of actual progress”. He added, “94 percent of the time the candidate who raises the most money wins. When a few individuals can have a profound impact on an election and on the direction of government, that really cuts against the essence of democracy.”