U.S. - COLUMBIA TRADE PROMOTION AGREEMENT - CONGRESS GETS SOME GUTS

Finally, Congress exhibited its long absent intestinal fortitude - guts - to stand up to the administration’s incessant scare tactics surrounding free trade agreements, notably the U.S. - Columbia Trade Promotion Agreement. Congress or should I say the Democrats - with a few exceptions - took action to delay the implementation of yet another lopsided and unfair free trade agreement.

H. Res. 1092 passed this week in Congress states as follows:

Resolved, That section 151(e)(1) and section 151(f)(1) of the Trade Act of 1974 shall not apply in the case of the bill (H.R. 5724) to implement the United States-Colombia Trade Promotion Agreement.

The sections mentioned detail time constraints under which free trade agreements are to be considered by Congress under the Free Trade Agreement Act of 1974. That Act required that Congress take up consideration of trade agreements 90 days after they are received from the White House. The recently-passed Resolution removes that timetable and allows delay in consideration of the Agreement.

The Indiana house congressional delegation voted on an expected partisan line with Visclosky, Donnelly, Carson, and Ellsworth voting to delay consideration and Souder, Burton, Pence, and Hill voting to take up the bill immediately. Buyer did not vote, and Hill was the lone Indiana Democrat to jump ship and side with the Republicans.

The Administration continues to use statements such as “helping an important ally in South America is in the political and security interests of the United States.” Absent from Bush’s yammering on security and political interests is any hint of how, once again, American workers will be benefited rather than hurt by another free trade agreement.

Free trade agreements are nothing more than corporate gifts from the administration. And, while many administrations have entered into these agreements over the past, the effect has now become painfully obvious. The agreements require few, if any, reciprocal efforts in the areas of environmental protection or human rights violations. Corporate powers-that-be are the beneficiaries of the following policy that can be found at the government’s export website:

Free Trade Agreements (FTAs) can help your company to enter and compete more easily in the global marketplace. Trade agreements help level the international playing field and encourage foreign governments to adopt open and transparent rulemaking procedures, as well as non-discriminatory laws and regulations. FTAs help strengthen business climates by eliminating or reducing tariff rates, improving intellectual property regulations, opening government procurement opportunities, easing investment rules, and much more.

The informational description contains no reference to how FTAs help American workers. The reason? FTAs do not help our workers. When the statement says “trade agreements help level the international playing field, what actually occurs is that American job losses increase through outsourcing.

As a final note, the new agreement is called a “trade promotion” agreement rather than a “free trade” agreement. The change in terminology is simply an exercise in semantics. A rose is a rose is a rose, and a trade agreement is a trade agreement no matter how you disguise it.

THE CAYMANS - TAX SHELTER FOR TOP AMERICAN CONTRACTOR IN IRAQ

The nation’s top Iraq war contractor, and until last year, a Halliburton subsidiary, provides a shining example of how to avoid a fair share of its taxes and garner the benefits of political nepotism. Kellogg, Brown & Root (KBR) has avoided paying hundreds of millions of dollars in federal Medicare and Social Security taxes by hiring workers through shell companies based in the well-known tropical tax haven.

About half the 21,000 workers hired by KBR are American workers - workers who should fall under the requirement to pay into Medicare and Social Security along with the requisite contribution by the employer, KBR. The Defense Department has known since 2004 that KBR was avoiding taxes by declaring the American workers as employees of the shell companies. And the reason this is acceptable? The maneuvering offshore allowed the corporation to perform work more cheaply. The practice is unusual enough that only one other major contractor in Iraq does the same thing.

KBR is the largest contractor in Iraq with eight times the work of its nearest competitor. The corporation was the beneficiary of a no-bid, lopsided contract awarded in 2002 when the Bush, Chaney crowd decided to favor those with ties to Halliburton. KBR has an estimated $16 billion in contracts - a nice hefty bonus for being part of Chenay’s Halliburton circle. Although Congress has consistently attacked the practice used to avoid paying taxes, it has failed to act with any authority.

Senator John Kerry of Massachusetts, a Democrat on the Senate Finance Committee, recently has introduced legislation to close loopholes for companies registering overseas. Let’s hope it passes although I would almost bet that the legislation will not get far. Corporations seem to have a lot more pull in Congress than we average taxpayers do.

KBR not only avoids federal taxes but also avoids paying unemployment taxes in Texas, its location of registration. Since it doesn’t pay into the unemployment pool, it is not responsible for claims of unemployment compensation filed by workers who return to the United States after they complete their work in Iraq.

Photo Credit: KBR website

_____________________________________________________________________________

What a sweet deal, and many of the workers don’t even realize that they have been employed by a foreign company until they reach their destination in Iraq and are told by their foremen. And KBR’s competitors in Iraq have not gone to the same length to avoid paying their fair share of taxes. The likes of Bechtel, Parsons, Washington Group International, L-3 Communications, Perini, and Fluor - all corporations receiving contracts in Iraq - pay Social Security and Medicare taxes for their American Workers.

Over the past five years of the Iraqi occupation, KBR has avoided more than $500 million in tax liabilities. What an “in your face” assault on the average American taxpayer. While we struggle to pay ever-increasing tax burdens, the power of corporations in our “free-market” system once again proves that there is no free-market - that power is king and enough power buys a tax haven in a tropical paradise.

NEW YEAR - NEW CAFO LEGISLATION MOVES FORWARD

Last year not one of the three CAFO-related bills made it out of the legislative session.  This year, maybe common sense and the reality of environmental and health issues intertwined with huge factory farms will prompt our legislators to do what they are supposed to do:  pass laws that protect citizens.

New legislation regulating CAFOs would require annual inspections and other tightened regulations under a bill given initial approval by a House committee.   The House Agriculture and Rural Development Committee last week voted along party lines, with seven Democrats endorsing it and five Republicans opposing it.

The current bill would affect Indiana’s roughly 2,200 confined feeding operations, of which 625 are large enough for a separate distinction of concentrated animal feeding operations. The sprawling farms with thousands of hogs, cattle, or chickens are often opposed by neighbors because of their odor and potential impact on property values and the environment.

Several GOP members had concerns about additional regulations on the industry possibly driving up food prices.  That argument is simply a red herring.  The increased meat production is to benefit up and coming economies such as China, whose middle-class population is growing at an astounding rate, and, with that growth, the desire to live on a meat-based diet. 

“This bill is very troubling,” said Rep. Eric Gutwein, R-Rensselaer who, along with others, wanted to wait until an agricultural regulatory task force established by Lt. Gov. Becky Skillman finalized its recommendations.  You bet they wanted to wait.  That would be like waiting for the fox to tell the chickens how to protect themselves. 

Daniels and Skillman came up with their “Possibilities Unbound” plan in 2005 which focused on increasing pork production while backing off regulations.  One of the goals of the Plan was to review regulations to make Indiana a more “business friendly” environment.  In other words, Daniels and Skillman wanted to reduce regulations as much as possible. 

Among other provisions, the bill would require farm operators to disclose “good character” information, including violations in other states or pending legal action. It allows the Indiana Department of Environmental Management to consider this information before granting a permit.  This session our legislators appear to be ready to step up and make some tough but necessary decisions to protect us from the health and environmental impact of CAFOs.

Photo Credit:  Wikipedia

SLIGHT OF HAND - DANIELS AND JOB COMMITMENTS

As a starter, here are the JOBS LOST numbers for 2007 under the Guv:

January - 911
February - 334
March - 569
April - 1836
May - 962
June - 111
July - 570
August - 1088
September - 908
October - 1115
November - 118
December - 483

9005 Hoosiers out of work.

Daniels is astute at using the podium from which to announce job “commitments” while in the background Hoosiers are losing jobs.  Many of the new jobs Daniels brags about are two to three years in the future.  A commitment is simply that - it mean a pledge or promise.  And pledges and promises can be broken as the Guv has learned with Getrag.  For those who don’t recognize the name, Getrag is a leading manufacturer of manual automatic transmissions.

Earlier this month, Inside Indiana News reported that autoparts supplier Getrag had suspended construction of a $530m dual sequential gearbox (DSG) transmission plant in Tipton County. Starting in 2009, the factory was set to produce 700k transmissions per year and employ some 1400 people.

Photo Credit: The Truth About Cars website

Indiana had provided several incentives to Getrag.  The Indiana Economic Development Corporation (IEDC) ponied up $8.75m worth of performance-based tax credits and offered up to $500k for training grants. The state was on the hook for $3.4m for local road improvements.  According to Getrag Human Resource Director, Randy Cyman, the plant is on hold indefinitely while Chrysler and Getrag work out a supply agreement. 

But look for the Guv to step up his job announcements this next year. Something tells me we will be hearing more and more “commitment” announcements which have no impact on unemployed Hoosiers today.

VERA BRADLEY - THE ULTIMATE OUTSOURCER TO CHINA

A big thank you to TDW for a blurb about Vera Bardley and her outsourcing to China. I was absolutely amazed when I read the post. And, not one to believe things without checking them out, I researched and found that others had posted online that they, too, had looked at their labels and found that yes, indeed, the labels say:

MADE IN CHINA

Still incredulous and somewhat skeptical about those statements online, I looked at the two items I had received as gifts. The first was a huge duffel bag I had received a couple of years ago. It said “Made in the USA.” Then I looked at my second, smaller bag - also a gift but received within the last year. The label had been slit with scissors right on the name “China”, but it did, indeed, say:

MADE IN CHINA

I have been so accustomed to thinking of Vera Bradley as a company totally devoted to maintaining jobs for Americans and right here in Fort Wayne, that the thought never crossed my mind that this icon of Fort Wayne fame and charity would make such a blatantly profit-making decision.

Photo Credit: SCORE

Vera Bradley’s president and CEO is former Indiana Department of Commerce Secretary Patricia Miller (left in the above photo), who helped lead a state trade mission to Asia from July 30, 2005 to August 7, 2005. Is it just possible she was making “deals” for herself while she was there? Or were the negotiations already in progress? How does one go about making plans to outsource American jobs?

After all, the duffel bag I received in 2006 still said “Made in the USA” while the handbag I received in 2007, 1 1/2 years later, said “Made in China.” Just about the right amount of time between a visit and a switch to outsourcing.

Photo Credit: ebay

The Vera Bradley website touts locations where its handbags have been spotted. Now the company can not only say “spotted in China” but also “Made in China.”

The website also states:

Located in Fort Wayne, Indiana, Vera Bradley continues to remain steadfast in our commitment to excellent quality, exclusive designs and dependable customer service.

 

Committed to many things but not the American worker.

And here is a statement from SCORE:

Today, Vera Bradley Designs’ 75 employees produce over 800 products from a 25,000-square-foot manufacturing center in Ft. Wayne.

I suggest SCORE change its statement to include the locations in China which now make Vera Bradley items. Just to be fair about this, I do not know how many of the Vera Bradley products have been outsourced to China. But with every outsourced product, go American jobs.

Don’t look for the outsourcing of Vera Bradley items to lower product prices either. Visit the website, and it will be quickly apparent that prices have not dropped. The duffel bag in the picture above from eBay has a price tag of $139.95. The one I received as a gift - exactly the same but a different pattern - cost $85.00. Not only are prices not any cheaper at the website, the annual Vera Bradley sale at the Coliseum has simply become a way for women to show up, buy a large quantity of Vera Bradley products, and then proceed to overprice them on eBay.

So all you Vera Bradley obsessives out there, dig out those handbags and check the labels. Maybe you don’t care if Vera Bradley items are made in China instead of here, but, if you do, then you have the power to make a choice and commit to not purchasing any more Vera Bradley products.

$736,000,000 BAGHDAD BEMEMOTH CALLED A “FIRE RISK”

The firefighting system in the massive $736 million embassy complex in Baghdad has potential safety problems that top U.S. officials dismissed with a “not to worry” attitude. In their rush to declare construction largely completed by the end of last year, officials ignored defects according to internal State Department documents, e-mails and interviews.

Some officials assert that in the push to complete the long-delayed project, potentially life-threatening problems have been left untouched. A State Department official who spoke anonymously because he feared retaliation said the problems are serious enough to get someone killed. The fire systems are the tip of the iceberg; no one has ever inspected the electrical system, the power plant and other parts of the embassy complex, which will house more than 1,000 people and is vulnerable to mortar attacks.

Other sources involved in the project, also requesting anonymity, insisted that disputes involve technical paperwork issues, largely because the contractor had never built an embassy and did not realize that under State Department rules it needed approval for substituting certain materials. Much of that work needs to be reexamined and checked, delaying the project even further. A Congressional Services Research report provides the breakdown in expenditures accumulating under the Bush administration.

But, heck, what’s a billion dollars more when Bush has already sunk close to 500 billion dollars trying to make Iraq safe for the largest U.S. embassy in the world. Looks like Bush is anticipating an unending presence in Iraq and the Middle East.

Yep, build it, and we will stay.

The unfinished embassy in Baghdad

Photo Credit: MSNBC

HE’S AT IT AGAIN - DANIELS BRAGGING ABOUT JOBS THREE YEARS AWAY

Columbus software firm to add 320 jobs
High-tech posts pay $35 to $37 per hour

—————————————————————————–

I guess I have come to expect that Governor Daniels simply likes to put on a good show. The headline is from the The Courier-Journal of Louisville, Kentucky.

Dave Glass, president of LHP Inc., joined Governor Mitch Daniels for the announcement in the governor’s office. The software development company plans to add 320 jobs in Columbus by 2011 to nearly triple its current work force. Glass said the new high-tech positions will be in engineering services and engineering research and will pay $35 to $37 per hour. He said the company expects to recruit many of its workers from out of state because it can’t find enough in the area with the appropriate advanced degrees.

LHP, an international developer of software and hardware solutions for the military, automotive and medical industries, also will invest more than $1 million to expand its Columbus, Indiana, headquarters and development center, making room for new research and development equipment and new computer hardware.

The Indiana Economic Development Corp. will give LHP up to $2.1 million in performance-based tax credits and up to $50,000 in training grants based on the company’s job creation. Columbus will provide the company with property tax abatements.

Photo Credit: Wikipedia

————————————————–

Daniels called the announcement “another major economic expansion.” He said the new jobs are among nearly 22,000 that will be created in the coming years by economic development deals the state closed in 2007. Daniels said that beats the number of jobs created by deals in 2006 and 2005. However, the total includes more than 3,000 jobs that have not yet been announced.

Indiana Economic Development Corp. spokesman Mitch Frazier said in those cases, companies have accepted the state’s incentive offer and committed to the jobs but haven’t completed negotiations with local governments or completed other business transactions.

What really concerns me is that he gets up on his podium and makes these announcements, many of which have no practical effect on Hoosiers today. But, boy it sure sounds good when he touts his newly created jobs - jobs that are years in the future.

It really gets old after a while. I just hope that the man who blithely estimated the Iraq War would cost $40 - $50 billion dollars (now approaching $500 billion dollars) and who made a shambles of the OMB under Bush is not able to hornswoggle Indiana voters to return him to another term.

 

 

 

NORTH RIVER OPTION EXTENDED - AND, AT NO COST

The North River project option runs out tomorrow, December 31, 2007. But the Omni Source land deal is still in the works aided by the benevolence of the owners of the property. OmniSource has decided to extend the option on the land for six months until June 2008 at no additional cost to the city.

In my view, the OmniSource property suffers from two negatives: 1) the potential of toxic and/or hazardous materials lying beneath its surface, and, 2) the location of the property in a floodplain. The Allen County iMAP site shows the property as located in a floodplain and not the actual floodway. While the property is located outside the floodway itself, it falls completely within the floodplain. I would hope that the county’s iMAP is accurate and kept current.

On the issue of toxic or hazardous materials, Deputy Director of Community Development Greg Leatherman has indicated that the city has tested the land for metals and other residue that could be left over from when the land served as a scrap metal yard. However, he has also declined to reveal the results of the study because of confidentiality clauses in the option.

I am assuming the extension of the option contract carries the same terms as the option as originally signed - that would include the confidentiality clauses. This is nothing more than wiggle room for OmniSource and the city to delay releasing the results of the study. And, why would OmniSource need confidentiality clauses in the option if they didn’t think or know toxic materials were present? If the land is “clean”, why would they have to worry about keeping the results from the public?

Leatherman also added, “It’s going to be made public at some point.” The phrase “at some point” is ambiguous and could mean after the purchase if the purchase does, indeed, occur.

Why would OmniSource extend the lease without any additional payment? Two reasons come quickly to mind. First, the property is contaminated and OmniSource knows it, and, second, no one else wants to purchase the property. The city is, apparently, the only one interested in the property.

The public has a right to know “what lies beneath” the surface of the OmniSource property. No “ands, ifs, or buts” about it. The public also has the right to know how the location of the property in a floodplain could impact any materials beneath the surface of the property. Falling back on confidentiality clauses is not an answer the public needs to hear.

And, the public needs to know now before the process continues. If confidentiality clauses are the only roadblock to releasing the study, then the city should have re-negotiated any additional option without the relevant confidentiality clause. The city might have incurred new expenses, but it would certainly be cheaper in the long-run to know upfront the hazardous nature of the property and its potential for flooding before going forward with the purchase.

I supported Harrison Square, and I wholeheartedly support downtown revitalization but not at the potential hazard to the public’s health. Maybe there isn’t anything to the study, but how do we, as the public, know that unless we are allowed to see the study? I get the sense that stonewalling is occurring and that is not good open government.

From the website “NorthRiver Now”

RANDOLPH COUNTY COULD ZONE 220,000 ACRES FOR CAFOs

Even though dozens of residents oppose the proposed ordinance, Randolph County commissioners do not care. The County Commissioners are on the way to adopting an ordinance proposed by the Area Planning Commission that would create a new intensive agricultural district covering about 220,000 acres of Randolph County.

Randolph County contains 289,813 acres, which means 75.9% of the county would be zoned for the industrial farms and 24.1% would be zoned residential only. The ordinance provides a buffer of one mile between CAFOs and cities and towns in Randolph County as well as a buffer of half a mile between CAFOs and residents of unincorporated communities, subdivisions, and heavily populated highways. That means more than 18,000 of the county’s 26,581 people would live within a half mile or a mile of a CAFO. That is not a great distance when looking at the smell, the transmission of dust and dirt through the air, and the potential pollution of land and rivers.

The map below is of Indiana and its major rivers. The increasing number of CAFOs will ultimately impact water quality all over the state.

The rush to date to construct CAFOs has been in the east central region of Indiana - just to the south of Allen County. Wells County now has 10 CAFOs, and Allen County is about to get its third CAFO. This issue is not going away, and, if you, as citizens of Allen County and of the State of Indiana, are concerned, then contact your county commissioners immediately to express your concerns.

DANIELS AND MEDCO - WHAT A DIFFERENCE THREE - OOPS - FOUR YEARS MAY MAKE

Mitch Daniels is doing it again. His method of job creation seems to be 1) obtain a commitment of some type; 2) ignore the fact that the jobs won’t be here for two or three years; and 3) take credit.

Here’s the headline:

INDIANA IS HOME TO MEDCO ‘FLAGSHIP’ - $150 MILLION PHARMACY TO GENERATE 1,300 JOBS.

What isn’t reflected in the headline are the particulars of the deal, so here they are:

1. Medco Health Solutions, a New Jersey based corporation, will build a 318,000-square-foot pharmacy right here in Indiana
2. No location selected yet but potential sights are somewhere in either Johnson, Hendricks, or Boone counties - perhaps throwing a dart may be the way the location will be established (location to be picked within the next 30 days according to the president and CEO, Kenneth Klepper)
3. The pharmacy will be automated
4. Construction will start next year - that would be 2008
5. Pharmacy to open in 2009
6. Hiring will start next year with most of it being done in 2010 and 2011 - got that?
7. By 2012, the company expects to employ around 1,300 people

Daniels and Klepper have already announced all of this exciting news even though most of the jobs won’t be filled - gasp - for three to four more years.

And, if you want to know where your tax dollars are going, well, Daniels and the state offered Medco up to $18.25 million in performance-based tax credits and up to $450,000 in training grants.

In addition, new rules passed by the Indiana Board of Pharmacy board Friday, just coincidentally, establish standards covering facilities that use automation technology to store, package, dispense and distribute prescription drugs. The new rules will allow Medco to install the latest technology in its mail-order distribution center.

I sure hope that the average reader of news media looks past the large headlines that Daniels seems to be so fond of generating to see that Daniels truly has perfected his one-two-three plan of obtaining a commitment, ignoring the time line, and taking credit for feats yet to be accomplished.

Here’s a thought - I wonder if we will see any major donations from the pharmacy industry - namely Medco - to Daniels campaign?