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FOCUS: Nothing Fosters More Congressional Bipartisanship Than Carrying Out the Wishes of Big Banks Print
Written by <a href="index.php?option=com_comprofiler&task=userProfile&user=36361"><span class="small">Robert Reich, Robert Reich's Facebook Page</span></a>   
Saturday, 25 November 2017 12:55

Reich writes: "Who says bipartisanship is dead? Consider the agreement reached between 9 Senate Democrats and the top Republican on the Senate Banking Committee to roll back several key financial regulations, including sections of the Dodd-Frank Act."

Former Clinton labor secretary Robert Reich. (photo: Steve Russell/Toronto Star)
Former Clinton labor secretary Robert Reich. (photo: Steve Russell/Toronto Star)


Nothing Fosters More Congressional Bipartisanship Than Carrying Out the Wishes of Big Banks

By Robert Reich, Robert Reich's Facebook Page

25 November 17

 

ho says bipartisanship is dead? Consider the agreement reached between 9 Senate Democrats and the top Republican on the Senate Banking Committee to roll back several key financial regulations, including sections of the Dodd-Frank Act.

1. Banks with less than $10 billion in assets would be allowed to sell high-risk mortgages without the disclosure and ability-to-pay rules in place across the industry.

2. They’d also be free from several reporting requirements, the Volcker rule restrictions on market trading with their own deposits, and numerous capital standards.

3. The bill raises the threshold for “systemically important financial institutions" from $50 billion to $250 billion in assets, thereby freeing dozens of banks from enhanced Federal Reserve supervision and larger capital requirements.

4. There’s also an exemption from mortgage rules for manufactured homes like trailers, the largest producer of which is Clayton Homes, a division of Warren Buffett’s conglomerate Berkshire Hathaway. Congress has already exempted auto dealers from many lending regulations.

5. Another measure would allow hedge funds to create investment vehicles that share a name with an affiliated bank. It’s a marketing effort to give funds credibility; the biggest advocate for the change was BlackRock, the largest asset manager in the world.

Consumer protections in the bill are relatively modest. With the scandals at Wells Fargo and Equifax, Congress doesn't need to do favors for banks in order to pass robust new consumer protections.

Four Banking Committee Democrats — Joe Donnelly, D-Ind., Heidi Heitkamp, D-N.D., Jon Tester, D-Mont., and Mark Warner, D-Va. — negotiated the bill with committee chair Mike Crapo, R-Idaho. Tim Kaine, last year’s vice presidential nominee, signed on as an original co-sponsor along with Joe Manchin D-W.Va., Claire McCaskill, D-Mo., Gary Peters D-Mich., and Angus King, I-Maine.

Why would Senate Democrats ever agree to this banking bonanza? Five of these senators face re-election next year and come from states won decisively by President Donald Trump. The rest either don’t know how bad the bill is or depend on campaign donations from Wall Street.

Nothing fosters more bipartisanship in Congress than following the wishes of the banking industry.

What do you think?


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How the Rich Stay Rich Print
Saturday, 25 November 2017 09:19

Henwood writes: "In early November, over thirteen million documents from the Bermuda-based law firm Appleby were released to the public. Known as the Paradise Papers, these documents detail a vast effort to shield the wealth of some of the world's richest people from the tax authorities, as well as creditors and estranged family members."

Businessmen on Wall Street. (photo: AP)
Businessmen on Wall Street. (photo: AP)


How the Rich Stay Rich

By Doug Henwood, Jacobin

25 November 17


A peek inside the world of wealth managers, offshore tax havens, and the uber-wealthy.

n early November, over thirteen million documents from the Bermuda-based law firm Appleby were released to the public. Known as the Paradise Papers, these documents detail a vast effort to shield the wealth of some of the world’s richest people from the tax authorities, as well as creditors and estranged family members. This follows the leak last year of the Panama Papers, a similar set of documents revealing how assets are hidden offshore.

The use of offshore tax havens is facilitated by wealth managers, who tend to the assets of the ultra-wealthy and ensure they can register their wealth in the optimal offshore locations. Brooke Harrington, a professor at the Copenhagen Business School and author of Capital without Borders: Wealth Managers and the One Percent, spent nearly eight years studying wealth managers, interviewing dozens of them about their work.

In the following interview — which first appeared on Doug Henwood’s Behind the News and has been edited and condensed — Harrington explains who is taking advantage of these tax havens, and what the explosion in offshore accounts means for the global economy.

DH: Is there anything in these Paradise Papers that surprised you?

BH: I was a little surprised that Queen Elizabeth would take the risk of using offshore structures. I would have thought that patriotism and duty to country would have precluded that, but it does reinforce my observation since the Panama Papers that above a certain level of wealth, everybody does this.

DH: In your book, you quote a popular study of these offshore financial centers as saying that the characters involved are a peculiar mix of castle-owning members of European aristocracies, fanatical supporters of Ayn Rand, members of the world’s intelligence services, global criminals, British public school boys, and assorted lords and ladies and bankers galore. That’s the entire cast of characters of the very rich we’re talking about, right?

BH: Yeah. I was so struck after the Panama Papers by the photos, the images that the International Consortium of Investigative Journalists put up online, because it was Lionel Messi right next to Jackie Chan right next to Vladimir Putin and Assad of Syria and the prime minister of Iceland. What do those people actually have in common? Apparently what they have in common is that they’re part of this global class of people who are above the law.

DH: What part of the wealth distribution are we talking about? Where does this start? 99th percentile? Is this the 1 percent, is it the 1/10th of 1 percent? What’s the demographic here?

BH: Happily enough, there’s just been a new study from some economists, including a guy here in Copenhagen, at Copenhagen University. They say it’s the .01 percent who are the major users of these offshore facilities. So the 1 percent we would just call affluent, but it’s the .01 percent who really start to get into the kind of money where you can afford to pay a wealth manager, because it’s not cheap to have someone to create and manage offshore structures for you.

DH: I was struck, though, that in your chapter about who these wealth managers are, that their salaries are apparently rather low by the standards of finance: $200,000 or $300,000. This is not something that a big shot at Goldman Sachs would be impressed with. If this is so crucial to the maintenance of wealth of this .01 percent, why are they so modestly compensated?

BH: I asked this question to as many wealth managers as I could, and part of the answer I got is first of all, most of the people who do wealth management for a living live in places where there’s low to zero taxation, so those hundreds of thousands of dollars they’re getting in their salaries, that’s not just gross, it’s net.

Second of all, for a lot of people who do this for a living, it’s a lifestyle choice. They could be doubling their salary working in corporate law or corporate finance, but they’d be working eighty to hundred hour weeks, whereas a lot of them told me explicitly, “I make a really good living working a nine to five job. Plus I get taken on private planes. I get taken on vacation and leisure activities with my ultra-wealthy clients. I have many of the benefits of being an ultra-wealthy person, but I get to have a normal job that isn’t going to keep me away from my family and having fun in life. And I get to live in paradise, like the Cayman Islands.”

DH: But I was also impressed that some bankers look down on these folks because they’re not growing money, they’re just protecting it.

BH: That’s right. Compliance is very important to wealth managers. I have a hard time explaining this to some of my colleagues in sociology who say, “Well of course wealth managers are doing illegal things.” And I said, “Not if they have a brain in their head,” and for the most part, they’re extremely intelligent people because what they have to do is very complex technically and also from a socio-emotional intelligence point of view.

They would never willingly do something that they know to be illegal because that’s going to put them at huge risk. Not just of professional sanctions, but of losing their whole livelihood because no client wants to get dragged into court.

Even if they get off on whatever charges are laid against them, just the fact of being exposed by being charged with something is a disaster because the whole name of the game is secrecy. And as soon as you get charged with a crime, your name is in the paper and you’re faced with potential exposure of all your private financial dealings. That’s apocalyptic for many of these people.

DH: I would think, too, that they would almost be a matter of professional pride to do all these extravagant things fully within the law.

BH: It is. One of the people I interviewed, when I asked him what he liked best about his job, he said, “I love playing cat and mouse with the law.” It’s a game for him to spend 24/7, every day of the year, figuring out how to get right up to the edge of legality, but not cross the line.

DH: Give us an idea of how these things work. I’m a rich person with, I don’t know, a billion dollars I want to hide from the authorities, or maybe my creditors, or maybe a part of my family I don’t like. What do I do?

BH: If you live in, say, continental Europe, you’d probably be introduced by your banker to someone who can manage your affairs offshore. Most of the work that needs to be done would not be legal in continental Europe or the US, at least if you were a passport holder of any of the countries in that region. You’d have to get stuff offshore.

In all likelihood, your billion dollars of assets wouldn’t be just one thing. They’d be a bunch of different things, like vacation properties, yachts, financial instruments, a family business. And each of those would have to be treated separately because all these tax havens compete with each other to form a little niche. So Switzerland doesn’t go head-to-head with the Cayman Islands. Cayman creates its own special niche laws to, say, be the best place to put your family business, whereas, say, the Cook Islands is the place where you might want to put your art collection.

It might need to be said for people who don’t know, the business itself and the art collection don’t literally get migrated to those offshore centers. They’re just sort of booked there for legal purposes. It’s a little bit weird to think of having stuff booked almost in an imaginary way in an offshore center, but it’s perfectly legal to do that. What that gets you is that you can put the asset under the protection of the law that allows you the most freedom to do what you want with that asset.

For example, if you want to avoid the United Nations convention on trade in certain kinds of very precious and rare art, you’ll put your art collection in a Cook Islands trust because then you’re sort of immune to that United Nations convention. You can sell the art. You can rent it out to museums without being constrained by those international laws. You can also reap profits from trading in violation of international trade embargoes, and not get in trouble. You can hide money from relatives that you want to disinherit or divorce without giving them a penny. Certain jurisdictions specialize in allowing wealthy people to do that.

The wealth manager would have to have a long conversation with you in which you laid out a lot of very personal information about what your concerns were, what your goals were, and exactly what kinds of assets and liabilities you had.

DH: This is part of what you said earlier about a socio-emotional intelligence that’s required. It’s not just a matter of money and law, but it’s the entire client’s life.

BH: Right. And that is what makes this profession particularly fascinating. You can be a good surgeon technically, but a jerk as a person: no bedside manner, no empathy, no nothing. But people will still come to you because they trust you to be the best person to operate on their brain tumor.

But to be a good wealth manager, you not only have to be top of your game in terms of legal financial expertise, you have to have really extraordinary skills at understanding concerns of multiple cultures, often very different from your own. And you have to be a good psychologist. Several of the people I interviewed said, “I’m a social worker for the rich.” And they weren’t kidding.

DH: A lot of the money we’re talking about here are new fortunes that were created in the eighties with technological and financial revolutions, deregulations, and things like that. So there hasn’t been much of a generational transfer, maybe at most one. There’s a lot of new money that’s sloshing around at great quantities. Is this what’s behind the creation and the explosion of these offshore centers, these new fortunes that are really very phobic about being confiscated?

BH: No, I would say it’s not. And it’s important to realize that economic studies of all these, say, Silicon Valley entrepreneurs who’ve made new fortunes, reveal that the American belief that anybody can bootstrap themselves up and become the next Steve Jobs is actually not true. That the people who engage in entrepreneurial activity are doing so because they have inherited wealth behind them. They have a private safety net.

So that’s really what drives entrepreneurial activity, it’s inherited wealth. Not necessarily the level of wealth that would get you multiple offshore accounts, but enough so that if you fail multiple times as an entrepreneur, you’re not going to be living in a box on the street. You just get up and do it again. You have family resources to fall back on.

But to go back to the question of what spurred the growth of offshore, according to the sixty-five wealth managers that I interviewed all over the world, it had to do with a couple of things that happened simultaneously. Before I was born, there used to be things called currency controls. Some countries still have them, but what they mean is that you’re not allowed to take more than a certain fixed amount out of the country, and it’s usually rather a low amount.

One of the people who taught me in the wealth management training program was British and he said, “In the seventies, if you were in England and wanted to go on holiday, you couldn’t take more than fifty pounds sterling out of the country with you. It made going on holiday quite difficult.”

So imagine if you’re a company and you wanted to do business, because currency controls applied to you, too. Companies had to lobby for the creation of these legal financial no-man’s lands, which we now know as offshore financial centers, where currency controls didn’t apply. So, Channel Islands of Jersey and Guernsey: they’re technically still Great Britain, so you could get money there, but money could leave those places in much greater quantities than they could leave the main island, England. So people started using Jersey and Guernsey, and other crown dependencies of Great Britain, as conduits to plug into the global economy. That was one thing.

The other thing was that in the seventies, a lot of countries began to develop extensive welfare states, so taxes rose. And a lot of wealthy people didn’t want to pay those taxes. They saw the lifting of currency controls, or the availability of offshore financial centers and they said, “Ah ha. If corporations can use them, I can use them, too.” And they would employ bankers and lawyers to get their personal wealth offshore in the same way that corporations were doing.

That became this massive growth industry that multiplied on itself, like a snowball picking up snow as it rolled downhill, because wealth, as Thomas Piketty has shown, tends to multiply itself much more than other kinds of economic assets.

DH: As I was reading your book, I was thinking that this interest in protecting wealth, rather than creating it, seems symptomatic of a certain senescence creeping into capitalism. It reminds me of an older person moving out of growth stocks into municipal bonds, and it’s all about capital preservation. We haven’t mentioned how the bankers are somewhat contemptuous of this goal. But what does it say about the state of capitalism that these immense fortunes are sequestered; not so much engaged with expansion of the system but are being kept from the prying eyes of government or relatives?

BH: People who claim to love capitalism and care about capitalism thriving should be very worried about this, because what this concentration of capital in an increasingly small group of people’s hands means is that the economic system is ossifying. It’s going backwards towards feudalism, where wealth was tied up generation after generation among a very small group of families. That’s exactly what we see happening now.

You may have seen that every year, Oxfam produces a study in which they count the number of people whose wealth exceeds that of the poorest 50 percent of humanity. In 2010, that number was above three hundred. In 2017, as of January, it was eight. The number of people who could fit into an extra-large golf cart now own wealth equivalent to the bottom 50 percent of humanity. That’s neo-feudalism, and we’re already seeing the consequences in the extreme decline of upward mobility in the US.

Now when you get an inheritance in the US, that doesn’t just benefit children or grandchildren of the original rich people. It has a knock on effect to the fifth or sixth generation. Meanwhile, most Americans, especially African Americans, have nothing; nothing but debt when they die. Whereas a very tiny group of people at the very top of the socioeconomic scale have billions to distribute to their heirs when they die. We’ve essentially re-feudalized ourselves.

DH: You would think that the political class would have an interest in getting its hands on the vast amount of tax revenue that’s foregone in this age of constant budget cuts and austerity, but on the other hand, the political class is very dependent upon these folks for their funding. You mentioned, for example, the Pritzker family, with some 2,500 offshore trusts: they’re major funders to the Democratic Party, very close to Obama. Is there any way that you can imagine that we can actually get a hand on some of these fortunes? Or is it off limits at this point?

BH: Well, the pessimistic answer is given by a historian who recently published a book on what has happened in cases of extreme inequality in the past. He said, “When other societies have gotten to the point where we find ourselves now, the only thing that has ever turned around this level of inequality, and really redistributed wealth has been mass death, either through disease or war.”

I hope it doesn’t come to that, but the wealthy people of the world, especially in places like the US, know that this cannot go on. There was an article in the New Yorker recently about the boom in business for luxury underground bunkers. So people, billionaires like Peter Thiel, for example, are buying themselves these high-end bomb shelters, where they can survive the coming civil war or apocalypse.

DH: It seems very unlikely that would succeed.

BH: You can only hide underground for so long, I suppose. In addition, they’ve got their private jets and they bought passports for places like New Zealand. People don’t form escape plans like this without having a pretty good reason, because those things aren’t cheap.


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The Trump Doctrine: Making Nuclear Weapons Usable Again Print
Written by <a href="index.php?option=com_comprofiler&task=userProfile&user=20415"><span class="small">Michael Klare, TomDispatch</span></a>   
Friday, 24 November 2017 14:22

Klare writes: "Maybe you thought America's nuclear arsenal, with its thousands of city-busting, potentially civilization-destroying thermonuclear warheads, was plenty big enough to deter any imaginable adversary from attacking the U.S. with nukes of their own. Well, it turns out you were wrong."

President Trump. (photo: CBC)
President Trump. (photo: CBC)


The Trump Doctrine: Making Nuclear Weapons Usable Again

By Michael T. Klare, TomDispatch

24 November 17

 


Speaking of the situation on the Korean peninsula, he predicted that there would be “the greatest slaughter.”  He later requested 34 nuclear weapons for possible use in connection with the Korean situation.  He would later claim that he had considered dropping “30 to 50 tactical atomic bombs” and had suggested laying a “belt of radioactive cobalt” with “an active life of between 60 and 120 years” across the northernmost part of Korea.  And no, this was not President “Fire and Fury,” nor was it part of the present crisis with “Rocket Man.”

The year was 1950, the Korean War was underway, and the person in question was General Douglas MacArthur who, in terms of pure megalomania and self-regard, was surely the Donald Trump of his moment.  As it happened, the general was gunning not just for Koreans but for a Democrat by the name of Harry Truman, a president who would, in the end, act as a commander in chief should.  In a move deeply unpopular in its moment, he would dismiss his war commander (whom he dubbed “Mr. Prima Donna”) only to watch MacArthur come home to a 19-mile New York City ticker-tape parade (and 3,000 tons of dropped paper) seen by more than seven million cheering spectators.

The Korean War was subsequently fought to a draw without atomic weapons, belts of cobalt, or anything else that might, in the end, have led to a global nuclear conflagration, in part because a president was able to corral an over-the-top general.  Almost three quarters of a century later, the question, when it comes to that same peninsula and those same weapons, is: Who could corral a president with a yen to use them and the “sole authority” to do so?  We’re talking here about a man who, in the 2016 election campaign, wondered aloud to MSNBC’s Chris Matthews why in the world, when it came to nuclear weapons, we would be “making them” if we weren’t planning on using them?

At this very moment, Congress is exploring what, if anything, can be done to contain such a president, a man who, as a member of his own party suggested, could set the U.S. “on the path to World War III.”  Few in that body, however, offer much hope of reining in presidential powers in the nuclear realm, which means that the only thing standing between an “unstable” commander in chief and a type of weaponry not used since August 1945 might be the U.S. military itself -- in other words, a crew trained above all to follow the orders of its commander in chief.

This is the context in which to consider TomDispatch regular Michael Klare’s chilling look at the urge of both President Trump and key figures in the Pentagon to normalize nuclear weapons as a basic war-fighting tool in the American arsenal.  Just imagine what it might mean, given The Donald, for such weaponry to be made ever more -- it’s a term that should take your breath away -- “usable.”

-Tom Engelhardt, TomDispatch


The Trump Doctrine
Making Nuclear Weapons Usable Again

aybe you thought America’s nuclear arsenal, with its thousands of city-busting, potentially civilization-destroying thermonuclear warheads, was plenty big enough to deter any imaginable adversary from attacking the U.S. with nukes of their own. Well, it turns out you were wrong.

The Pentagon has been fretting that the arsenal is insufficiently intimidating.  After all -- so the argument goes -- it’s filled with old (possibly unreliable) weapons of such catastrophically destructive power that maybe, just maybe, even President Trump might be reluctant to use them if an enemy employed smaller, less catastrophic nukes on some future battlefield.  Accordingly, U.S. war planners and weapons manufacturers have set out to make that arsenal more “usable” in order to give the president additional nuclear “options” on any future battlefield.  (If you’re not already feeling a little tingle of anxiety at this point, you should be.)  While it’s claimed that this will make such assaults less likely, it’s all too easy to imagine how such new armaments and launch plans could actually increase the risk of an early resort to nuclear weaponry in a moment of conflict, followed by calamitous escalation.

That President Trump would be all-in on making the American nuclear arsenal more usable should come as no surprise, given his obvious infatuation with displays of overwhelming military strength.  (He was thrilled when, last April, one of his generals ordered, for the first time, the most powerful nonnuclear weapon the U.S. possesses dropped in Afghanistan.)  Under existing nuclear doctrine, as imagined by the Obama administration back in 2010, this country was to use nuclear weapons only “in extreme circumstances” to defend the vital interests of the country or of its allies.  Prohibited was the possibility of using them as a political instrument to bludgeon weaker countries into line.  However, for Donald Trump, a man who has already threatened to unleash on North Korea “fire and fury like the world has never seen,” such an approach is proving far too restrictive. He and his advisers, it seems, want nukes that can be employed at any potential level of great-power conflict or brandished as the apocalyptic equivalent of a giant club to intimidate lesser rivals.

Making the U.S. arsenal more usable requires two kinds of changes in nuclear policy: altering existing doctrine to eliminate conceptional restraints on how such weapons may be deployed in wartime and authorizing the development and production of new generations of nuclear munitions capable, among other things, of tactical battlefield strikes.  All of this is expected to be incorporated into the administration’s first nuclear posture review (NPR), to be released by the end of this year or early in 2018.

Its exact contents won’t be known until then -- and even then, the American public will only gain access to the most limited version of a largely classified document.  Still, some of the NPR’s features are already obvious from comments made by the president and his top generals.  And one thing is clear: restraints on the use of such weaponry in the face of a possible weapon of mass destruction of any sort, no matter its level of destructiveness, will be eliminated and the planet’s most powerful nuclear arsenal will be made ever more so. 

Altering the Nuclear Mindset

The strategic guidance provided by the administration’s new NPR is likely to have far-reaching consequences.  As John Wolfsthal, former National Security Council director for arms control and nonproliferation, put it in a recent issue of Arms Control Today, the document will affect “how the United States, its president, and its nuclear capabilities are seen by allies and adversaries alike.  More importantly, the review establishes a guide for decisions that underpin the management, maintenance, and modernization of the nuclear arsenal and influences how Congress views and funds the nuclear forces.”

With this in mind, consider the guidance provided by that Obama-era nuclear posture review.  Released at a moment when the White House was eager to restore America’s global prestige in the wake of George W. Bush’s widely condemned invasion of Iraq and just six months after the president had won the Nobel Prize for his stated determination to abolish such weaponry, it made nonproliferation the top priority.  In the process, it downplayed the utility of nuclear weapons under just about any circumstances on just about any imaginable battlefield.  Its principal objective, it claimed, was to reduce “the role of U.S. nuclear weapons in U.S. national security.”

As the document pointed out, it had once been American policy to contemplate using nuclear weapons against Soviet tank formations, for example, in a major European conflict (a situation in which the USSR was believed to possess an advantage in conventional, non-nuclear forces).  By 2010, of course, those days were long gone, as was the Soviet Union.  Washington, as the NPR noted, now possessed an overwhelming advantage in conventional weaponry as well. “Accordingly,” it concluded, “the United States will continue to strengthen conventional capabilities and reduce the role of nuclear weapons in deterring non-nuclear attacks.”

A nuclear strategy aimed exclusively at deterring a first strike against this country or its allies hardly requires a mammoth stockpile of weaponry.  As a result, such an approach opened the way for potential further reductions in the arsenal’s size and led in 2010 to the signing of the New Start treaty with the Russians, mandating a sharp reduction in nuclear warheads and delivery systems for both countries.  Each side was to be limited to 1,550 warheads and some combination of 700 delivery systems, including intercontinental ballistic missiles (ICBMs), submarine-launched ballistic missiles (SLBMs), and heavy bombers. 

Such an approach, however, never sat well with some in the military establishment and conservative think tanks.  Critics of that sort have often pointed to supposed shifts in Russian military doctrine that suggest a greater inclination to employ nuclear weapons in a major war with NATO, if it began to go badly for their side.  Such “strategic deterrence” (a phrase which has a different meaning for the Russians than for Western strategists) could result in the use of low-yield “tactical” nuclear munitions against enemy strongpoints, if Russia’s forces in Europe appeared on the verge of defeat.  To what degree this doctrine actually governs Russian military thinking no one actually knows.  It is nevertheless cited regularly by those in the West who believe that Obama’s nuclear strategy is now dangerously outmoded and invites Moscow to increase its reliance on nuclear weaponry.

Such complaints were typically aired in “Seven Defense Priorities for the New Administration,” a December 2016 report by the Defense Science Board (DSB), a Pentagon-funded advisory group that reports to the secretary of defense.  “The DSB remains unconvinced,” it concluded, “that downplaying the nation’s nuclear deterrent would lead other nations to do the same.” It then pointed to the supposed Russian strategy of threatening to use low-yield tactical nuclear strikes to deter a NATO onslaught.  While many Western analysts have questioned the authenticity of such claims, the DSB insisted that the U.S. must develop similar weaponry and be on record as prepared to use them.  As that report put it, Washington needs “a more flexible nuclear enterprise that could produce, if needed, a rapid, tailored nuclear option for limited use should existing non-nuclear or nuclear options prove insufficient.”

This sort of thinking now appears to be animating the Trump administration’s approach to nuclear weapons and is reflected in the president’s periodic tweets on the subject.  Last December 22nd, for example, he tweeted, “The United States must greatly strengthen and expand its nuclear capability until such time as the world comes to its senses regarding nukes.”  Although he didn’t elaborate -- it was Twitter, after all -- his approach clearly reflected both the DSB position and what his advisers were undoubtedly telling him.

Soon after, as the newly-installed commander-in-chief, Trump signed a presidential memorandum instructing the secretary of defense to undertake a nuclear posture review ensuring “that the United States nuclear deterrent is modern, robust, flexible, resilient, ready, and appropriately tailored to deter 21st-century threats and reassure our allies.”

Of course, we don’t yet know the details of the coming Trumpian NPR.  It will, however, certainly throw the Obama approach to the sharks and promote a far more robust role for nuclear weapons, as well as the construction of that more “flexible” arsenal, capable of providing the president with multiple attack options, including low-yield strikes.

Enhancing the Arsenal

The Trumpian NPR will certainly promote new nuclear weapons systems that are billed as providing future chief executives with a greater “range” of strike options.  In particular, the administration is thought to favor the acquisition of “low-yield tactical nuclear munitions” and yet more delivery systems to go with them, including air- and ground-launched cruise missiles.  The argument will predictably be made that munitions of this sort are needed to match Russian advances in the field.

Under consideration, according to those with inside knowledge, is the development of the sort of tactical munitions that could, say, wipe out a major port or military installation, rather than a whole city, Hiroshima-style.  As one anonymous government official put it to Politico, “This capability is very warranted.”  Another added, “The [NPR] has to credibly ask the military what they need to deter enemies” and whether current weapons are “going to be useful in all the scenarios we see.”

Keep in mind that, under the Obama administration (for all its talk of nuclear abolition), planning and initial design work for a multi-decade, trillion-dollar-plus “modernization” of America’s nuclear arsenal had already been agreed upon.  So, in terms of actual weaponry, Donald Trump’s version of the nuclear era was already well underway before he entered the Oval Office.  And of course, the United States already possesses several types of nuclear weapons, including the B61 “gravity bomb” and the W80 missile warhead that can be modified -- the term of trade is “dialed down” -- to produce a blast as low as a few kilotons (less powerful, that is, than the bombs that in August 1945 destroyed Hiroshima and Nagasaki).  That, however, is proving anything but enough for the proponents of “tailored” nuclear munitions. 

A typical delivery system for such future nukes likely to receive expedited approval is the long-range standoff weapon (LRSO), an advanced, stealthy air-launched cruise missile intended to be carried by B-2 bombers, their older cousins the B-52s, or the future B-21. As currently envisioned, the LRSO will be capable of carrying either a nuclear or a conventional warhead.  In August, the Air Force awarded both Raytheon and Lockheed Martin $900 million for initial design work on prototypes of that delivery system, with one of them likely to be chosen for full-scale development, an undertaking expected to cost many billions of dollars.

Critics of the proposed missile, including former Secretary of Defense William Perry, argue that the U.S. already possesses more than enough nuclear firepower to deter enemy attacks without it.  In addition, as he points out, if the LRSO were to be launched with a conventional warhead in the early stages of a conflict, an adversary might assume it was under nuclear attack and retaliate accordingly, igniting an escalatory spiral leading to all-out thermonuclear war.  Proponents, however, swear that “older” cruise missiles must be replaced in order to give the president more flexibility with such weaponry, a rationale Trump and his advisers are sure to embrace. 

A Nuclear-Ready World

The release of the next nuclear posture review will undoubtedly ignite a debate over whether the country with a nuclear arsenal large enough to destroy several Earth-sized planets actually needs new nukes, which could, among other dangers, spark a future global arms race.  In November, the Congressional Budget Office (CBO) released a report indicating that the likely cost of replacing all three legs of the U.S. nuclear triad (intercontinental ballistic missiles, submarine-launched missiles, and strategic bombers) over a 30-year period will reach a minimum of $1.2 trillion, not including inflation or the usual cost overruns, which are likely to push that figure to $1.7 trillion or beyond.

Raising questions about the need for all these new weapons and their phenomenal costs couldn’t be more important. After all, one thing is guaranteed: any decision to procure such weaponry will, in the long term, mean budget cuts elsewhere, whether in health, education, infrastructure, or fighting the opioid epidemic.

And yet questions of cost and utility are the lesser parts of the new nuclear conundrum.  At its heart is the very idea of “usability.”  When President Obama insisted that nuclear weapons had no battlefield use, he was speaking not just to this country, but to all nations.  “To put an end to Cold War thinking,” he declared in Prague in April 2009, “we will reduce the role of nuclear weapons in our national security strategy and urge others to do the same.”

If, however, the Trump White House embraces a doctrine that closes the distance between nuclear weapons and ordinary ones, transforming them into more usable instruments of coercion and war, it will also make the likelihood of escalation to all-out thermonuclear extermination more imaginable for the first time in decades.  There is little question, for instance, that such a stance would encourage other nuclear-armed nations, including Russia, China, India, Israel, Pakistan, and North Korea, to plan for the early use of such weaponry in future conflicts.  It might even encourage countries that don’t now have such weaponry to consider producing them.

The world imagined by President Obama in which nukes would be a true weapon of last resort was certainly a more reassuring one.  His vision represented a radical break from Cold War thinking in which the possibility of a thermonuclear holocaust between the planet’s two superpowers seemed like an ever-present possibility and millions of people responded by engaging in antinuclear protest movements. 

Without the daily threat of Armageddon, concern over nukes largely evaporated and those protests came to an end.  Unfortunately, the weaponry and the companies that built them didn’t.  Now, as the seemingly threat-free zone of a post-nuclear era is drawing to a close, the possible use of nuclear weapons -- barely conceivable even in the Cold War era -- is about to be normalized.  Or at least that will be the case if, once again, the citizens of this planet don’t take to the streets to protest a future in which cities could lie in smoldering ruins while millions of people die from hunger and radiation sickness. 



Michael T. Klare, a TomDispatch regular, is a professor of peace and world security studies at Hampshire College and the author of 14 books including, most recently, The Race for What’s Left. He is currently completing work on All Hell Breaking Loose, a book focused on climate change and American national security.

Follow TomDispatch on Twitter and join us on Facebook. Check out the newest Dispatch Book, Alfred McCoy's In the Shadows of the American Century: The Rise and Decline of U.S. Global Power, as well as John Dower's The Violent American Century: War and Terror Since World War II, John Feffer's dystopian novel Splinterlands, Nick Turse’s Next Time They’ll Come to Count the Dead, and Tom Engelhardt's Shadow Government: Surveillance, Secret Wars, and a Global Security State in a Single-Superpower World.

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Under Cover of Darkness, Female Janitors Face Rape and Assault Print
Friday, 24 November 2017 14:12

Yeung writes: "About 50 people a day are sexually assaulted or raped while they're on the clock, according to the U.S. Department of Justice. Any statistic about sexual violence, though, is a farce - only a fraction of victims ever come forward to report the crime."

Former janitor Erika Morales filed a complaint with the Equal Employment Opportunity Commission stating that her supervisor, José Vasquez, had harassed her. (photo: FRONTLINE)
Former janitor Erika Morales filed a complaint with the Equal Employment Opportunity Commission stating that her supervisor, José Vasquez, had harassed her. (photo: FRONTLINE)


Under Cover of Darkness, Female Janitors Face Rape and Assault

By Bernice Yeung, Reveal

24 November 17

 

t was the isolation that made Erika Morales most wary of her job as a night shift janitor. The solitude had begun to feel like a trap.

Then one fall evening, after everyone else had gone home, she arrived to clean a Bank of America branch. In the binding silence of the empty building, she scrubbed toilets and vacuumed hallways. She’d catch her distorted reflection in the window, though she knew there was only darkness on the other side of the glass.

“There’s no one to ask for help when certain things happened and you screamed,” she said. “No one can hear. And there are certain places where there are no cameras. There’s no sound. There’s nobody.”

During her shift, the only person she’d often come into contact with was her supervisor. It was his job to drive around town to check on Morales and other janitors who worked for a subsidiary of ABM Industries Inc., the largest cleaning company in the country. The janitors he oversaw mostly worked solo, at low-slung offices and health clinics across Bakersfield, in California’s Central Valley.

These were conditions that Morales said her supervisor, a broad-shouldered man with salt-and-pepper hair named José Vasquez, chose to abuse.

As she cleaned, she’d spot him in the window watching her from outside. He’d sneak up behind her to grab her breasts, she said, and stare at her while saying things like, “You are so delicious.” Morales regularly pleaded with him to stop, and he laughed at her.

She had appealed to another supervisor. He turned out to be Vasquez’s cousin. “He would always tell me, ‘I don’t know what you’re talking about,’ ” Morales said.

Morales frequently thought about quitting. She constantly was running the numbers in her head, but without a steady paycheck, she didn’t see how she could manage. At the time, she was 29 with two kids.

“In that moment, my children’s father wasn’t there,” she said. “I didn’t have another income for myself and my two children. So I hoped it would change.”

That warm September night in 2005, Morales was vacuuming the first floor of the bank when Vasquez appeared like a ghost, she said. He asked her to help him put away paper towels in the supply closet.

Morales steeled herself as she entered. This time, nothing was going to happen, she told herself.

Once inside, she said Vasquez cornered her and unbuttoned her pants. She fought him, which seemed to make him angry. He started to take off her shirt and bra. Morales said the next part was a blur.

“He knew there weren’t any cameras,” she said. “I would yell and nobody would hear me, nobody could see me.”

He groped her and grabbed her by the hair. “Don’t do this to me,” she said.

Vasquez laughed and left suddenly before he got her shirt completely off. To this day, she’s not sure how she defended herself. But what had happened in the supply closet was the limit of what she could bear.

“That’s when I said: ‘No more. I can’t stand this,’ ” Morales said. A few days later, she turned in her keys and quit.

When Vasquez’s cousin wanted to know why she was leaving the job, Morales told him that Vasquez was “doing things that he shouldn’t be doing and you know it.”

In fact, it wasn’t just his cousin who had been warned about Vasquez’s behavior. Company officials had reason to believe they had a predator on their hands. They even had the rarest of things in a sexual abuse complaint – a willing and credible witness. Someone had come forward three months before to report that Vasquez had assaulted another female janitor at a nearby church.

They had a chance to stop the abuse that Morales said she endured. Instead, company officials let Vasquez go back to work, where it was his job to drive an ABM-issued truck to visit women as they cleaned buildings alone at night.

Sexual assault can happen anywhere: in the military and on college campuses, in the Catholic church and at world-renowned yoga studios.

But the way the problem has played out in the workplace largely has escaped public attention. About 50 people a day are sexually assaulted or raped while they’re on the clock, according to the U.S. Department of Justice. Any statistic about sexual violence, though, is a farce – only a fraction of victims ever come forward to report the crime.

When they do, companies can hide complaints from the public by settling them secretly before a lawsuit is filed. The results of cases that do make it to court often are cloaked by confidentiality agreements.

“It is a black box,” said Laura Beth Nielsen, a professor at Northwestern University who has studied employment discrimination lawsuits. “No one can talk about it.”

The night shift janitor is an easy target for abuse. She clocks in after the last worker has flipped off the lights and locked the door. It’s tough work done for little pay in the anonymity of night, among mazes of empty cubicles and conference rooms. She’s even less likely to speak up if she’s afraid of being deported or fired.

Across the country, janitors at companies large and small say their employers have compounded the problem by turning a blind eye to complaints and attacking their credibility when they report abuse at the hands of their supervisors or co-workers.

In the janitorial world, ABM is the largest. It employs the most cleaners in the country and has a history of facing charges that it failed to prevent sexual violence. It’s among a rare group of 15 American corporations to have been targeted multiple times by the federal government for sexual harassment.

The U.S. Equal Employment Opportunity Commission has sued ABM three times since 2000 for mishandling complaints of sexual harassment or worse. Two of those cases involved allegations of rape, which is striking considering how rare it is for people to make these types of allegations publicly. In all three cases, the company settled and agreed to make improvements.

Anna Park, a government attorney who eventually would pick up Erika Morales’ complaint, said ABM’s response in that case was one of the worst she’d seen. Troubling violence wasn’t investigated. Victims or eyewitnesses were not interviewed.

“I think that’s what shocked us the most. As large as they were, the lack of action, lack of attention, lack of a sense of responsibility,” Park said.

We found 42 lawsuits from the past two decades in which ABM janitors said they had been sexually harassed, assaulted or raped at work. An unknown number of cases have been hidden from public view through confidential settlements. And despite government-imposed reform plans, similar accusations continue to crop up. In Los Angeles, two lawsuits filed in the past year say women who complained about explicit comments or sexual assault were ignored.

After more than a year of correspondence, ABM officials declined to be interviewed. The company instead provided a statement from its lawyer, Miranda Tolar. It said the way ABM handles the issue is the “gold standard” for the industry.

“In some cases, we’ve been made aware of inappropriate behavior and taken action. In other cases, allegations of wrongdoing have proven to be false and even malicious, often by individuals previously in consensual relationships that ended,” she said. “Sometimes, there are other motivations.”

ABM cleans high-rises, airports, universities and government buildings across the country. It has anti-harassment policies and training. It has a human resources department. About half of its nearly 65,000 janitors are unionized.

By contrast, most janitorial companies are tiny mom-and-pop operations that might not be worth taking to court. Or they’re off-the-books, fly-by-night operations that could disappear before a complaint can even be filed.

So ABM is one of the few janitorial companies with a paper trail. It is professional enough to respond to lawsuits. It turns large enough profits that aggrieved workers can file suit with the hope of a financial payoff at the end.

And among the larger, licensed businesses, ABM hardly is alone in being accused of botching sexual assault claims.

In Massachusetts, seven female janitors cleaning universities and office buildings for a company called UGL Unicco sued their employer after they said their supervisor touched and harassed them. The case settled in 2002 for $1 million; the company did not admit wrongdoing. Janitors have sued the company five times in federal courts since then.

In Minnesota, a janitor filed a lawsuit in 2009 that claimed she was raped repeatedly by her boss while on the clock cleaning a shopping mall. When it got notice of her complaint, cleaning company Service Management Systems asked the accused manager to gather evidence for the case. The company settled the case and later said this was against its protocol. The janitor now works uneventfully for ABM.

Operations like these do the thankless work of keeping everyone’s office space clean and humming. The very fact that their workers are supposed to remain unseen in an industry that takes all comers means that when it comes to sexual violence on the job, almost everything that could go wrong does.

Before Erika Morales came forward, ABM already had been put on notice about José Vasquez.

Out of a bit of serendipity, Scott Stevenson had stayed late one night in June 2005 to clean the kitchen of the Valley Bible Fellowship in Bakersfield. Most evenings, large sections of the megachurch are dark and vacant.

As he wiped down the counters, he asked a couple of his 12-year-old helpers to take a box of trash to a gated dumpster. A few minutes later, the kids came back still holding the garbage. Someone’s being hurt, one of the boys said.

Stevenson rushed out to where the dumpsters were enclosed by brick walls and a chain-link fence. The scene that was playing out stunned him into silence.

Under the glow of parking lot bulbs, Stevenson said he watched as an ABM supervisor he recognized as Vasquez pinned a worker against a brick wall behind the trash bins. Vasquez seized at the woman’s breasts and crotch as she tried to break free.

Helping others is a compulsion for Stevenson. He has fostered dozens of kids and runs a religious ministry for truck drivers passing through the loneliest stretches of Nevada. But in that moment, Stevenson didn’t know what to do. He hefted the box of trash into the dumpster with a deep bang.

Vasquez pivoted to face the church volunteer, looking nonchalant while his open belt buckle jingled. “Almost like it happens all the time,” Stevenson said.

He called the police. When the officers arrived, the female janitor was hesitant. Her situation was similar to that of Morales. She had kids to support, and she wanted to keep the job she had. Vasquez was her supervisor. She eventually told detectives that Vasquez had scared her by trapping her near the dumpster for about two minutes, where he had tried to touch her chest. (We’re not naming the woman because we couldn’t locate her to get her permission.)

A few days later, Vasquez was called to the police department to give his side of the story. He showed up with the woman Stevenson had seen him groping. She recanted, and the police closed the case.

But the church didn’t drop the issue. The day after the dumpster incident, Stevenson drafted a letter to church leaders explaining what he’d seen. Before the church canceled its contract with ABM, one of the pastors reported the incident to the company.

Figuring out what had happened fell to Tom Cazale, who was the head of ABM’s regional human resources. Cazale no longer works for ABM and declined to comment for this story. But he later told government attorneys that if the allegations against Vasquez were correct, he’d be “extremely embarrassed.”

It’s standard practice for a company to dispatch a trained investigator to get to the bottom of a severe sexual harassment claim. That investigator should conduct all of the interviews in person to weigh credibility, take good notes and talk to all potential witnesses.

In Cazale’s investigation into the church incident, these industry standards were all but ignored. In the rush to respond quickly, he asked an untrained administrative assistant to interview the victim. The assistant spoke to the janitor by phone.

Later, another ABM employee interviewed Vasquez. He said they’d been “playing around.”

Based on the interviews with Vasquez and the cleaner, Cazale said he was unable to confirm an assault. Cazale gave the supervisor a written warning because he’d admitted to touching the female janitor’s arm.

It’s easy to get lost in the nuances of sexual assault claims. Each one is a wild turn through what she said and then what he said, between what can be remembered and what can be proven.

But this wasn’t one of those cases.

Eyewitnesses to a sexual assault claim such as Stevenson are rare to the point of exceptional. But Cazale did not talk to him. To this day, Stevenson said, no one from ABM has contacted him.

In late August 2005, two months after ABM found out about Scott Stevenson’s report, the company got another clue that it had a problem on its hands. An anonymous letter written in Spanish arrived at the ABM office in San Francisco.

José Vasquez had harassed someone at the Valley Bible Fellowship, it said. Also, the letter continued, Javier Vasquez, another Bakersfield supervisor and José Vasquez’s relative, was abusing his authority by hiring relatives and forcing ABM janitors to work for his side business on company time.

“Please take this seriously,” the author wrote. “Some employees with a need to work are asking you to put a stop to these people without respect for the employees.”

A week passed and another note arrived, this time in English. “First of all, we hope you take this letter seriously,” it began. The last complaint had been forwarded to Javier Vasquez. The author wrote: “He just laughed and told me, ‘You see, nothing was done.’ ”

Written in careful script, the letter reiterated José Vasquez’s offenses at the Bakersfield church. It also described a new victim. At Clinica Sierra Vista, he “grabbed another ABM worker by the breast and ask ‘Are they Real?’ Her name is Erica. She got so nervous and just left.”

The letter reported that José Vasquez had served time for “sexual harassment.” The author closed the letter with a postscript: “This is not gossip, it is all true. Please help us.”

The company started another investigation, again putting Tom Cazale in charge. He asked a regional supervisor to look for Erica by checking the payroll records for that month. The supervisor spent about 15 minutes looking at a printout but couldn’t find anyone with that name.

Cazale sent a note on company letterhead in both English and Spanish to the return address on the anonymous letter. It said ABM was aware of the sexual harassment allegation at the church and had dealt with it according to company policies. Cazale closed the letter by saying that unless someone gave him more information, he couldn’t move forward with a detailed investigation.

Then Cazale failed to do the obvious. He did not have an investigator talk to anyone at the clinic to find out whether they knew anyone who’d worked there named Erica. Nor did he check to see if the letter’s return address matched that of any ABM employees.

Days and weeks passed. Cazale heard nothing more.

It would take another year for ABM to discover that José Vasquez was a convicted rapist.

About eight months after ABM received the anonymous letters at its San Francisco office, the company found the elusive “Erica,” though it didn’t locate her on its own.

A complaint had come into the U.S. Equal Employment Opportunity Commission, the federal agency responsible for policing on-the-job discrimination and harassment.

A cleaner named Erika Morales said her supervisor, José Vasquez, had harassed her.

Once it received Morales’ complaint, the commission sent a team to investigate. Its lawyers found 11 more janitors willing to publicly share their stories about being harassed or assaulted by Vasquez. This included Maria Magaña, who said she’d been raped by Vasquez while cleaning a Rabobank branch one night.

Tiny and tough, Magaña already had fought back a few times by hitting him with a duster or shoving him with a broom. The night she says she was raped, he summoned her to a conference room – where there were no security cameras – by telling her that the customer had complained about her work there. Once inside, he pushed her to the ground. Before she hit her head, she said she remembers thinking that there was nothing she could use to protect herself.

“I would have defended myself if I had been on guard,” she said recently. “That day, I was not on guard.”

Magaña lives with her son and elderly mother in Bakersfield, in a neighborhood at the intersection of farm fields and modest houses. She doesn’t mind working the night shift, but day or night, she is careful to avoid the bank where she said Vasquez raped her.

“Every time I pass by this bank, I remember what happened,” she said. “That’s why I try not to travel on this street. I take a turn.”

Until the commission came to her, Magaña had not reported the problem to the company or police.

“I was silent because of shame,” she said. “He would laugh and say that they weren’t going to believe me anyway.”

The government investigators found male co-workers who witnessed Vasquez’s behavior. One said he had personally seen Vasquez assault or harass female workers about a half-dozen times.

The commission also did what the company had not: It ran a basic background check on Vasquez and quickly discovered that he’d been convicted of rape in 1987 and sentenced to eight years in prison.

The commission notified ABM of Vasquez’s criminal record in December 2006, more than two years after he started working for the company. For the first time, someone at the company typed Vasquez’s name into California’s online sex offender registry. If company officials had pulled the criminal records, they would have learned that when Vasquez worked at a small Bakersfield movie theater, he raped his boss’s 18-year-old daughter at her home after a night of drinking.

On his job application, Vasquez hadn’t answered the question about whether he had ever been convicted of a crime. If he had, he would’ve had to include more than the rape. Not long before filling out the application, he’d been released from prison after serving a four-year sentence for possessing drugs he planned to sell.

Once ABM discovered the rape conviction, the company planned to put Vasquez on unpaid suspension until it completed its own investigation. Instead, he quit on the spot. His cousin, Javier, kept his position and wasn’t disciplined. He couldn’t be reached for comment.

José Vasquez now lives in a one-story house in Lamont, just outside Bakersfield. Cars share the driveway with a display of outdated appliances and spilled garbage.

When we knocked on his door one afternoon, he emerged shirtless and pulling on a pair of dark green trousers. At 60, his chest is still broad, if sunken. One arm bears a tattoo of a she-devil with the words “JV Hot Stuff” surrounding it.

We asked him about the claims that had been made against him when he worked at ABM. The women were “money hungry,” he said as his young kids ran in and out of the front hallway. “They were doing it all for the money. I didn’t even know some of the women.”

He’s never been charged with any crimes based on claims from the Equal Employment Opportunity Commission lawsuit. Morales never went to the police.

The ABM allegations were hard on him, he said. After he left the company, no one wanted to hire him. He ended up starting his own business called R&B Cleaning Co. with his girlfriend, a janitor he met at ABM. Together, they have four young kids with a fifth who was on the way.

Before José Vasquez fell on the job and started receiving disability payments, the couple had bought a truck and begun cleaning houses that had been foreclosed by banks. The company isn’t registered with the state.

Although Vasquez had decided to strike out on his own, his departure didn’t resolve ABM’s problems.

The federal government sued the company in 2007 for failing to prevent sexual harassment. Anna Park, the government attorney, saw systemic breakdowns at ABM, and it’s her job to hold employers – not perpetrators – accountable. The case she put together went well beyond Vasquez, growing to include 21 women who said they’d been sexually harassed by 14 men across California’s Central Valley.

The company responded to the Equal Employment Opportunity Commission in court filings by saying that few of the women’s claims met the legal definition of sexual harassment, which must be sustained and serious. ABM also said the women had received copies of the company’s sexual harassment policies, but not everyone had reported what was happening.

Before the 1980s, most businesses had their own janitorial staff. Then building owners and stores began outsourcing the work to cut costs. This created an explosion in contract cleaning companies.

In janitorial work, there’s a low barrier to entry – you need little beyond a mop and bucket to get a business off the ground – so many companies are tiny enterprises. About 93 percent of the 780,000 companies in the United States are registered as one-person outfits, according to the Census Bureau.

Much of the industry functions on a convoluted system of subcontracting. Some companies land cleaning gigs with big-box retailers or high-end high-rises but subcontract the actual cleaning to a different company. Some of the subcontractors might then subcontract the work to yet another business. This creates layers under which exploitation can thrive.

To stay competitive, cleaning companies of all sizes have to keep prices low. According to what’s reported to the federal government, janitors earn about $25,500 a year. The primary expense is labor, so wages are the first place where they cut corners.

“The way you make money in this industry is to cheat because the profit margin is so thin,” said Stephen Lerner, who led the first national effort to organize janitors for the Service Employees International Union in the 1980s.

Janitors have claimed that they were forced to clock in using two different names to avoid racking up overtime, Lerner said. They say unscrupulous contractors call them independent contractors so they don’t have to follow labor laws. Segments of the workforce aren’t authorized to work in the U.S., a scenario that makes workers vulnerable to abuses and puts companies at risk for legal problems.

Another part of the industry operates completely on the black market. The outfits go unregistered with the government to avoid paying taxes or insurance. These off-the-grid companies can charge far less than their competitors, said Lilia Garcia-Brower of the Maintenance Cooperation Trust Fund, which is partially funded by ABM to ferret out labor violations among nonunionized companies.

A recent study of 826 low-wage employees working illegally in San Diego County found that 64 percent of the janitors surveyed had been cheated out of pay or suffered some other labor violation. About one-third said they’d been forced to work against their will, and 17 percent of that group said they’d experienced some kind of physical threat, including sexual violence, according to the study from Cornell University and San Diego State University professors.

In one of the most horrific displays of what can go awry, a band of brothers from Ukraine trafficked about 70 people from their home country to Philadelphia and forced them to work as cleaners after winning subcontracting gigs at companies such as Target and Wal-Mart from 2000 to 2007. Two women told prosecutors that they’d been raped by one of the traffickers.

At the other end of the spectrum is ABM, which has a long history of enviable success and expansion. American Building Maintenance Co., as it initially was called, was started in 1909 by Morris Rosenberg, who volunteered to clean the windows of San Francisco hardware stores and pharmacies. Pay me whatever you feel the job is worth, he’d tell owners. Soon, he was working for major department stores and theaters.

One of his first big contracts was for a bank run by his childhood friend, an Italian immigrant named Amadeo Giannini who started an outfit now known as Bank of America.

Today, ABM is a publicly traded company headquartered in New York with $5 billion in annual revenue. Its workers clean 2 billion square feet each day. It has expanded its offerings to security, parking and facility maintenance of all kinds. It handles sustainable energy projects for high-rises, operations support for military bases and maintenance that keeps golf courses pristine.

Despite growth into other areas, the bulk of ABM’s revenue still comes from its janitorial business, and cleaners make up 57 percent of its workforce. Its market share is five times larger than that of its janitorial competitors.

Like other larger and unionized outfits, ABM has human resources departments that distribute written policies on wages, breaks and workplace conduct. ABM’s policies say it does not tolerate sexual harassment. Those written policies instruct workers that it’s their responsibility to immediately report a problem to human resources. Workers also can call a 24-hour complaint hotline in 100 languages.

From there, the company promises to do a swift and effective investigation. A document handed to investigators, called a “blue letter,” gives them two missions: Address the worker’s concerns and help defend the company in possible legal actions.

And while written policies are critical for companies, they’re only a starting point, said Louise Fitzgerald, a renowned sexual harassment researcher at the University of Illinois at Urbana-Champaign. From there, a responsible company should publicize the policies to its workers and make it easy for them to complain. And if the company believes something has happened, it needs to take action.

“That’s one of the things we do know: If a company sends a strong message that it does not tolerate this behavior, there will be less sexual harassment,” she said.

Over the course of more than a year, we reached out to more than a dozen ABM board members, ex-employees and shareholders to ask them about the sexual assault claims brought by workers such as Erika Morales and Maria Magaña. Most did not want to talk – and some hung up on us – but others told us anonymously about the inherent challenges that come with addressing sexual harassment in the janitorial industry and how ABM has the best policies in the business. But they wouldn’t go on the record.

To truly get an insider’s view, we traveled some 2,000 miles from the company’s New York headquarters to eastern Washington state to talk to Mary Schultz, a lawyer who consulted for the company for three years.

ABM had hired Schultz after she successfully sued it for gender discrimination on behalf of a former ABM manager. As part of her consulting work for the company, Schultz traveled the country to talk to employees from all ranks.

What Schultz learned during her time with ABM was that the company was trying to address sexual harassment, but there were hot spots at different branches across the country where the issue had gotten away from them.

“When I got involved with the company, I certainly understood and believed that there was a definite intent to address these issues,” she said. “But it’s a huge undertaking and will continue to be.”

She said it’s a point of pride for the company that ABM offers an on-ramp to the American dream. At ABM job sites, people show up to work from China, Mexico and the Caribbean. They bring with them different customs, expectations and languages.

“You have a very diverse employee base, spread out across the country,” Schultz said. “You have a lot of really good people, and you have some really bad people. And the dilemma for the company is to try and identify and contain.”

When her three-year term ended in 2009, she left believing that both companies and workers have a responsibility to prevent harassment. Bosses needed to create policies, show vigilance and make it clear that there are consequences. And workers needed to report the problem.

This was the crux of a case Schultz helped ABM litigate in Minnesota, where eight women made claims in 2006 that they’d been harassed or assaulted by their superiors.

Miriam Pacheco was among them. Wearing a red sweater and velvet pants to ward off the winter chill, Pacheco told us not long ago that she’d been raped repeatedly by her co-worker in a conference room and a private office she cleaned. He had terrorized her by pulling all of the telephone wires so she couldn’t call for help, then blamed her for breaking the cords, she said.

Schultz took Pacheco’s deposition in 2007, at a moment when the ex-janitor was living in a homeless shelter with her two kids. Pacheco didn’t get much of an education before she came to the United States from Mexico, and she was in the country without immigration papers.

At the deposition, Schultz grilled Pacheco on the fact that she’d signed documents acknowledging receipt of ABM’s sexual harassment and workplace policies but didn’t use them to bring forward her complaint. Pacheco said she didn’t understand them, and she had taken the papers home and thrown them away.

At the time, Schultz was unrelenting, but now she acknowledges that workers like Pacheco are in a tough position.

“Everyone goes home to sleep. These folks are out there working,” she said. “What happens in that environment can be confusing, and if something happens, where do they turn? The question for the company becomes, ‘How can we get at those incidents? How do we protect?’ And there are limited ways of doing it. I mean, you can’t post a federal marshal at the door.”

After four years of litigation, the Minnesota case was thrown out in 2010. The judge said that in some cases, the women did not properly complain about the problem, and in others, the company had dealt appropriately with the issue. The judge also said some of the women’s complaints didn’t meet the legal definition of sexual harassment.

Looking back on that case, Schultz recognizes that workplace sexual harassment cases often hinge on what laypeople might consider a technicality.

“The law is the law,” Schultz said, and “some of that has little to do with what actually happened.”

“The company is not saying, nor has it ever, that these things don’t happen,” she added.

Schultz said civil lawsuits are a necessary but imperfect way to demand accountability, forcing companies into a position where they need to fight them.

“Do companies just start opening the wallet, paying out money to people whose circumstances they believe?” she said. “I think that would be horribly risky for any company. You would end up getting complaints from every angle. You would end up with varying motivations for complaints. You would be overwhelmed with trying to sort out the good from the bad.”

A year after Schultz left the company, ABM agreed to settle the case sparked by Erika Morales’ complaint. It paid $5.8 million but didn’t admit any wrongdoing.

ABM promised to improve sexual harassment training, ensure its policies are distributed in both English and Spanish and conduct on-site audits for sexual harassment. It also pledged to train its investigators, hire bilingual human resources staff and create a centralized database of worker complaints. Some of the provisions were national; others were specific to California’s Central Valley. Finally, it agreed to have the government’s expert witness oversee its progress through 2013.

ABM’s attorneys said the company has updated its policies and training since the government lawsuit.

“They did comply with the terms that we laid out, which we felt addressed some of it. Does that speak to the national practice?” said Anna Park, the government attorney. “I can’t say. We hope.”

Today, ABM continues to face sexual harassment cases in court. Since the beginning of 2010, the company has been sued seven times in federal court and at least nine times in California courts.

Most of the time, the company settles the cases without admitting guilt. Sometimes, the company prevails.

Its next test could come this fall. The company is slated to go to trial in a case in which three Southern California women allege that they were harassed, assaulted or raped by the same ABM floor waxer. The women have a familiar charge: They say their complaints to ABM management were ignored.

For months, they said, the abuse escalated. One woman said she was raped in fall 2009, and several months later, another woman said she was sexually assaulted by the same man. When she immediately reported it to a manager, she said she was told to go back to work. The manager told her that she should not contact security and that he’d call the police.

Eventually, the woman got tired of waiting for a response, she said, and went to the authorities on her own. The floor waxer ended up pleading guilty to sexual battery. He served one year in jail and got five years of probation.

ABM argues in court documents that it took immediate action once it received a complaint, firing the floor waxer, and that the women should be barred from bringing the lawsuit because they had settled workers’ compensation claims with the company based on these same allegations.

In the end, few win at trial against ABM. Maria Bojorquez is one of them.

She accused a supervisor of raping her while she cleaned a law office in San Francisco’s iconic Ferry Building in 2004. After she complained, she said she was fired. ABM’s investigator had decided Bojorquez’s claims were inconclusive, but when the case went to trial in 2012, the jury found that ABM had failed to prevent harassment and had fired her for making the claims. Bojorquez was awarded more than $800,000 in damages. The company appealed.

In a recent hearing in that case, ABM’s lawyer argued that workplace violence cases involving other janitors shouldn’t have been brought up at trial. Standing before a panel of judges, he noted that the company has “tens of thousands of employees located across the United States and internationally, many who work in remote locations at night with minimal supervision.”

“Bad things sometimes happen,” he said.

For the past six years, Erika Morales has become known to the masses as DJ Bunny for Ligera FM, a shoebox of a station inside a bustling Bakersfield mercado.

After she quit her job at ABM, Morales managed a restaurant and nightclub. Her boss eventually tapped her to plug events on the local radio station. She discovered that even though she’s not the showy type, her voice becomes irresistibly golden once it meets a microphone.

Watching her transition from Erika to Bunny is like seeing an ember catch flame. At the station, she puts on headphones and effortlessly reads the horoscopes or promotes rock en Español concerts. Between news bits, she gives throaty shoutouts to the people who have written to her on Facebook from California, Argentina or Peru.

In the boundless Internet radio landscape, Morales is especially beloved because she has been willing to talk candidly about hard topics. Teary callers have sought her advice on how to file a police report for sexual assault or how to leave an abusive relationship.

Until a day in late February, she never had let on that she spoke on these topics with her own kind of tragic authority. But she found herself on the edge of a moment. She had one of her regular guests lined up, a California Highway Patrol officer, and she’d promised her listeners a program about workplace problems.

When the music stopped, she leaned into the mic and the words spilled out: “This is something delicate, and personally, I’ve never told this part of my life on air. Very few people know about this period, but I want this to serve as …”

Morales’ voice became uncharacteristically shaky. “And sorry if I may get a little emotional, but it’s still a question that I am trying to overcome,” she said.

Morales told her listeners that she’d been sexually harassed at work and that she knows it’s hard to come forward. She never did make it to the police herself. She just couldn’t summon the courage at the time. She told her listeners that in her case, she and others had tried to tell their bosses, but nothing was done.

“The problem is when they don’t believe you,” Morales said.

Nevertheless, she exhorted her listeners to report the problem. She reminded them that it wasn’t right and that it was never their fault.

“That’s not right,” she said. “You go to work and keep your head down, make your money and stay out of trouble.”

For nearly half an hour, Morales and the California Highway Patrol officer went back and forth on how to deal with sexual harassment. Then it was time for the rock music hour. She said farewell to the officer, put on a song with a bracing backbeat and turned off her mic before exhaling deeply.

Her phone was blazing with messages. “We are with you,” one said. Another read: “Continue fighting.” She was surprised by the response. She had expected to be judged.

Back on the mic, she thanked everyone for their support as she prepared to play Guns N’ Roses’ “Sweet Child O’ Mine.” Her upbeat cadence and rich delivery had begun to return. She let the song rage.

A decade has passed since Morales quit her job at ABM. She said she had set aside her fears to file a complaint because she was thinking of her daughter, her mother and the other women who were not yet ready to come forward.

When Morales had handed over her keys and tried one final time to tell a supervisor what was going on and he had dismissed her, she remembers spitting out her words. “There will be someone. Someone will speak out, and they are going to come and tell you that what you are doing is wrong,” she had said.

Morales still is amazed by the way her voice can carry. “I never imagined that I would be the one to speak out,” she said.


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FOCUS: I Shut Down an Oil Pipeline - Because Climate Change Is a Ticking Bomb Print
Friday, 24 November 2017 12:36

Johnston writes: "Normal methods of political action and protest are simply not working. If we don't reduce emissions boldly and fast, that's genocide."

The Valve Turners are a group of climate activists who shut down five oil pipelines in October 2016. From left, Emily Johnston, Annette Klapstein, Higgins, Ken Ward and Michael Foster. (photo: Climate Direct Action)
The Valve Turners are a group of climate activists who shut down five oil pipelines in October 2016. From left, Emily Johnston, Annette Klapstein, Higgins, Ken Ward and Michael Foster. (photo: Climate Direct Action)


I Shut Down an Oil Pipeline - Because Climate Change Is a Ticking Bomb

By Emily Johnston, Guardian UK

24 November 17


Normal methods of political action and protest are simply not working. If we don’t reduce emissions boldly and fast, that’s genocide

little over a year ago, four friends and I shut down all five pipelines carrying tar sands crude oil into the United States by using emergency shut-off valves. As recent months have made clear, climate change is not only an imminent threat; it is an existing catastrophe. It’s going to get worse, and tar sands oil—the dirtiest oil on Earth—is one of the reasons.

We did this very, very carefully—after talking to pipeline engineers, and doing our own research. Before we touched a thing, we called the pipeline companies twice to warn them, and let them turn off the pipelines themselves if they thought that was better; all of them did so.

We knew we were at risk for years in prison. But the nation needs to wake up now to what’s coming our way if we don’t reduce emissions boldly and fast; business as usual is now genocidal.

In shutting off the pipelines, we hoped to be part of that wake-up, to put ourselves in legal jeopardy in order to state dramatically and unambiguously that normal methods of political action and protest are simply not working with anywhere near the speed that we need them to.

One major hope of ours was to set legal precedent by using the “necessity defense” and bringing in expert witnesses to testify that because of the egregious nature of tar sands crude and the urgency of the climate crisis, we’d actually been acting in accordance with higher laws.

The classic example of a legitimate use of the necessity defense is when someone is arrested for breaking and entering after they hear a baby crying in a burning building, and rush in to save her.

Because it requires a high bar of proof—you must have tried everything else, the danger must be imminent, the action must be likely to be effective—courts seldom even allow this defense to be argued, or expert witnesses to be brought; their only concern, generally, is did you break and enter? Not why.

Three of our trials (which are in four states) had already rejected the use of the necessity defense. In North Dakota, the judge said essentially “I’m not going to let you put US energy policy on trial”. But recently, I and the other Minnesota defendants were finally granted it.

I have little doubt that the awful weather events of the last couple of months played some role in this—it’s not just scientists seeing the truth anymore: the building is indeed burning, and all the world’s babies are in it.

I was struck by the North Dakota judge’s implicit understanding that letting science be spoken in her courtroom would have had the effect of putting energy policy on trial—of reversing, in effect, who was the defendant, and who the prosecutor.

We had no demagogues lined up; we had the nation’s pre-eminent climate scientist ready, as well as two people who were to speak on the effectiveness of actions such as ours (often referred to as nonviolent resistance). How far awry must a system go, before the laws of physics are forbidden in a court of law?

Yet it is indeed a dangerous thing to speak the truth sometimes—dangerous in particular to those who have been lying to us for decades, and who have gotten very, very rich by doing so. Those who are also, at the moment, running our country.

So I find myself feeling peculiarly exposed now. When I first heard the news, elated, I called and texted and emailed family and friends. I deeply regretted that my mother—who died in June—didn’t live long enough to see us do our best to change legal history.

I wish she had known that a judge had been persuaded by the legitimacy of our argument (if not yet of its rightness)—a judge, no less, in a county where the pipeline company, Enbridge, is the single largest property tax payer.

I’m heartened by the way the law can be supple—not a thing that, once set, holds that exact shape forever (or we’d still have slavery, and I couldn’t vote or marry), but a thing that responds—slowly—to our evolving understanding of what is just and true.

When it comes to climate change, there’s little enough to feel heartened by, so I’ll take it.

  • Emily Johnston is a poet and co-founder of 350Seattle.org. She will face trial starting 11 December on felony charges for shutting the emergency valve on the Enbridge tar sands pipeline in Leonard, Minnesota, together with her co-defendant Annette Klapstein. The charges carry maximum penalties of some 20 years in prison and fines up to $40,000.

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