On Fox and Friends one morning last week, Gretchen Carlson was going after the Buffalo, New York, teachers’ union.
What had Ms. Carlson fired up? The fact that union members’ health benefits included coverage for plastic surgery. Taxpayers, she fumed—and nobody fumes with more conviction than Gretchen Carlson—were stuck with $2.7 million in bills.
Fox News hates unions, and Fox News wants viewers to hate unions. That much about News Corporation is clear.
What’s harder to grasp, unless we consider the possibility that Fox is nothing more nor less than the mouthpiece for a Plutocrat Class, is why Carlson never seems to get fired up about the bad behavior of our nation’s corporate citizens. They are citizens aren’t they? Didn’t conservative justices on the U. S. Supreme Court decide corporations are people with free speech rights? Too bad we can’t jail some of these “people.”
How about solitary confinement for JPMorgan Chase and Credit Suisse, after they agreed to pay $417 million “to settle federal civil charges of selling risky mortgage bonds to investors that the banks knew could fail ahead of the 2008 financial crisis.” Screwing investors out of $417 million? Or evil unions and $2.7 million in plastic surgery?
Do the math. Which is the bigger story?
If Fox wants to do “righteous indignation” why not this story from today’s New York Times, about an investigation involving “wiretaps, cooperators and informants—[techniques] once reserved for infiltrating the Mafia and narcotics rings.”
Who are the crooks in this sleazy tale? Not greedy unions. Nope. Hedge fund managers. White collar types, up to the tops of their $500 imported Italian loafers in shitty dealing. In fact, in this case the brown footprints lead upward, through the ranks of SAC Capitol Advisors, and stop, for now, but only for now, at the door of billionaire Steven A. Cohen.
(Remember, Fox viewers, we can’t raise his taxes!)
It’s a long, winding trail. So here are the bread crumbs. April 2009: an F.B.I. agent visits with Richard Choo-Beng Lee in Silicon Valley. The agent explains that the government has proof he has engaged in insider trading. Lee promptly confesses and agrees to cooperate. Eighteen months later the same agent stops Noah Freeman in the parking lot of a school and plays back a secretly recorded conversation of Freeman getting insider tips from a woman named Winifred Jiau. Freeman quickly agrees to help investigators and save his own neck. In the winter of 2011 F.B.I agents visit Mathew Martoma. Confronted with evidence of his own illegal activities, Martoma faints on the lawn in front of his 8,000-square-foot Florida mansion.
(Don’t raise that man’s taxes!)
When he recovers he calls his lawyer.
The plot thickens, as they say. Mr. Lee has close ties to Raj Rajaratman, the since-convicted billionaire head of Galleon Group.
(Oh, oh, oh, woodman spare that billionaire and don’t raise his taxes!)
Lee is heard in 2008, on a recorded conversation, receiving insider tips from Danielle Chiesi, who works for Galleon. Pressed by the F.B.I. he reveals a sub-culture of “expert-network firms” that are “cesspools of inside information.” These firms feed tips to the Big Boys on Wall Street, allowing them to buy stocks they know—and smaller investors do not—are going up and sell stocks they know are going down—same idea as above—to suckers.
Meanwhile, Freeman, a Harvard graduate, is hired by SAC Capitol Advisors at a guaranteed salary of $2 million per year for two years.
(Do not, we repeat, DO NOT raise his taxes by 3% to help keep the country from plunging over the fiscal cliff!)
As noted, recorded calls pick him up, receiving insider information from Jiau. Freeman passes on the tip to a friend and colleague at SAC, Donald Longueuil, who uses it to earn SAC a quick $1.1 million.
(That would get you plenty of plastic surgery.)
The F.B.I continues to follow leads in the investigation. Ms. Jiau is charged, convicted, and sent to prison. Longueuil, who served as best man at Freeman’s wedding, joins her behind bars. Seven individuals at two more hedge funds are ensnared in an expanding federal net, as well as an SAC tech-stock analyst named Jon Horvath. Horvath admits to insider trading, agrees to cooperate, and points a finger at Michael S. Steinberg, a SAC manager, who is named in court filings as an “unindicted co-conspirator.”
The case continues to build. Evidence is uncovered that Martoma was receiving insider info from Dr. Sidney Gilman, a neurologist involved in clinical trials of a new drug to fight Alzheimers, then under development by Elan and Wyeth, two pharmaceutical giants. The drug was failing, Dr. Gilman warned. SAC quickly sold out its huge holdings and then turned around and made negative bets on Elan and Wyeth stock to plunge. News of the failure broke and down the stock went and SAC was $276 million to the good, in terms of losses avoided and profits garnered.
(That would buy a hell of a lot of plastic surgery; but, still, don’t raise taxes on capital gains, whatever you do!)
THESE STORIES AREN’T DIFFICULT TO FIND. Maybe a producer for Fox and Friends could try Google.
How about Hyundai and Kia inflating gas mileage figures to bilk customers? That meant a $100 million hit to unsuspecting consumers.
How about UBS, the Swiss banking company, preparing to pay $450 million in fines to settle claims by British and U. S. regulators that they manipulated interest rates to the detriment of ordinary folks seeking home or auto loans?
How about news this week that Bank of America (BoA) is facing potential penalties of $3 billion related to “brazen fraud” in the mortgage business? The company has already paid fines of $2.4 billion for fleecing investors. BoA’s legal troubles are far from over, having to do with ties formed with Countrywide Financial, a company at the epicenter of the 2008 home-mortgage crisis.
Let’s hear it for former Countrywide CEO Angelo R. Mozilo who agreed to pay $67.5 million to settle civil fraud charges. Or David Sambol, second in command at Countrywide, who got off with a lighter fine: only $5.5 million for crooked dealings.
If you look at it realistically, which means doing something besides swallowing the Fox News line, you come to realize unions aren’t the problem. The boys and girls who keep Big Business in this country running smoothly are willing to do anything to pile up huge profits.
If they can close down American factories and ship jobs to China, they’ll do it and be glad they did. If they can simultaneously break labor unions in the U. S. and hire illegal immigrants to drive down wages, they’ll do it and be glad. At times, the whole ugly picture can seem surreal, like Salvidor Dali explaining economics.
One final example should suffice: this time involving James F. McCann, minority stock holder of the New York Mets, and founder of 1-800-Flowers. According to documents in a recent federal lawsuit, McCann and other retailers were involved in a carefully designed scheme to rip off customers. The deal went like this, according to plaintiffs: Callers dialed up the number and asked for a dozen roses for mom on Mother’s Day or their special girl on Valentine’s Day. They entered a credit card number, hit “purchase,” and were told they could apply for a rebate. Great! Or was it?
According to the New York Times:
“If the customer clicked on the rebate option and failed to read the fine print, however, he or she wound up registering for a near-worthless club membership that would charge the credit card for months, sometimes years, before the expenses on the credit card statements were detected. Outfits like 1-800-Flowers.com received a cut of the operation, what regulators and others have called ‘bounties.’”
“A recent legal filing by lawyers in the case asserted that ‘1-800-Flowers was well aware that its customers were getting defrauded.’”
So there you have it loyal Fox viewers. Next time you see Carlson having a bad day, fuming about greedy unions, send her some flowers.