The Hightower Report
Why the Homeland Security Department Is So Beloved; and Put Some Bite in Our Financial Watchdogs
Why the Homeland Security Department Is So Beloved
Arizona Gov. Janet Napolitano is moving to Washington to become head of the Department of Homeland Security in the Obama administration, and I sure hope she's bringing a load of two things this humongous agency totally lacks: common sense and common decency.
Homeland Security is in charge of building the ridiculous and absurdly expensive 40-foot-high wall that our government is erecting along the U.S. border with Mexico. The very idea of this divisive wall is offensive to the people who live in U.S. border towns, but the insufferable arrogance of the agency has made the wall's offensiveness explosive.
The department's charm was on glaring display just before Christmas, when it sued the Nature Conservancy to condemn land near Brownsville for the project. The Nature Conservancy owns and runs a unique 1,000-acre preserve along the Rio Grande, and the federal wall builders wanted to take a 60-foot-wide strip from the preserve – amounting to about 8 acres.
Why fuss over 8 acres? Well, you'd assume that the wall would be going up on the actual border, but no. They want to build this section a mile-and-a-half from the border, thus putting three-fourths of the preserve in a no-man's land between the wall and Mexico. The most critical part of the wildlife habitat, and even the home of the preserve's manager, would be cut off by the wall, effectively destroying the park, which is home to two kinds of endangered wildcats and a rare palm forest.
A decade ago, the Nature Conservancy paid $2.6 million to buy this gem, yet Homeland Security now insists that it should pay only $114,000 as "fair compensation" for the 60-foot stretch it intends to take from the center of the preserve. It's this kind of swaggering lunacy that has made the agency so beloved. Good luck to Napolitano.
Put Some Bite in Our Financial Watchdogs
After Bernard Madoff confessed to looting some $50 billion from investors in a widespread Ponzi scheme, a Democratic member of Congress complained that this huge fraud "fell through the cracks of our regulatory system."
Indeed it did, but let's be honest – there are now more "cracks" than "system" in America's regulatory apparatus.
In the past decade, credible evidence of Madoff's theft had been brought numerous times to the Securities and Exchange Commission, which is supposed to be the watchdog against financial fraud. Yet the SEC conducted only one cursory investigation, exonerating him based on data that Madoff himself so helpfully gave to the agency. Indeed, Madoff even served on various SEC advisory committees while he was going about his dirty business!
His case is no anomaly. It's the SEC, after all, that offered not so much as a bark while the biggest firms on Wall Street built their own Ponzi schemes on flimsy subprime mortgage scams, leading to today's economic crash and massive bank bailouts.
None of this is accidental. Under both George Bush and Bill Clinton, there has been a deliberate, fantasy-based defanging of our public watchdog. "Free Wall Street hucksters from the yoke of regulation," was the ridiculous political demand, and Washington meekly complied.
SEC's enforcement budget was slashed, fraud investigators were neutered, and bankers came to be treated as the agency's "customers." In 2000, the once-proud SEC prosecuted 69 cases of securities fraud; in 2007, it prosecuted nine.
Good regulation has to have real bite to it. Barack Obama promises to put some teeth back in our watchdog, but he can't do it alone, for Wall Street lobbyists are already swarming Washington to stop real change. To help push them back, contact OMB Watch at www.ombwatch.org.