Posts tagged ‘RICO’

The New Rich -- Living the High Life Through Your Non-Profit

Several months ago, a lot of folks where shocked to find that the Clinton Foundation only spent $9 million in direct aid out of a total budget of $150 million, with the rest going to salaries and bonuses and luxury travel for family and friends and other members of the Clinton posse.

None of this surprised me.  From my time at Ivy League schools, I know any number of kids from rich families that work for some sort of trust or non-profit that has nominally charitable goals, but most of whose budget seems to go to lavish parties, first-class travel, and sinecures for various wealthy family scions.

But this week comes a story from the climate world that demonstrates that making a fortune from your non-profit is not just for the old money any more -- it appears to be a great way for activists to build new fortunes.

The story starts with the abhorrent letter by 20 university professors urging President Obama to use the RICO statute (usually thought of as a tool to fight organized crime) to jail people who disagree with them in a scientific debate.  The letter was authored by Jagadish Shukla of George Mason University, and seems to take the position that all climate skeptics are part of an organized coordinated gang that are actively promoting ideas they know to be wrong solely for financial enrichment. (I will give the near-universal skeptic reply to this:  "So where is my Exxon check?!"

Anyway, a couple of folks, including Roger Pielke, Jr. and Steve McIntyre, both folks who get accused of being oil industry funded but who in fact get little or no funding from any such source, wondered where  Shukla's funding comes from.   Shukla gets what looks like a very generous salary from George Mason University of $314,000 a year.  Power to him on that score.  However, the more interesting part is where he makes the rest of his money, because it turns out his university salary is well under half his total income.  The "non-profits" he controls pays him, his family, and his friends over $800,000 a year in compensation, all paid out of government grants that supposedly are to support science.

A number of years ago Shukla created a couple of non-profits called the Institute for Global Environment and Security (IGES) and the Center for Ocean Land Atmosphere Interactions (COLA).  Both were founded by Shukla and are essentially controlled by him, though both now have some sort of institutional relationship with George Mason University as well.  Steve McIntyre has the whole story in its various details.

COLA and IGES both seem to have gotten most of their revenues from NSF, NASA, and NOAA grants.    Over the years, the IGES appears to have collected over $75 million in grants.  As an aside, this single set of grants to one tiny, you-never-even-heard-of-it climate non-profit is very likely way higher than the cumulative sum total of all money ever paid to skeptics.   I have always thought that warmists freaking out over the trivial sums of money going to skeptics is a bit like a football coach who is winning 97-0 freaking out in anger over the other team finally picking up a first down.

Apparently a LOT of this non-profit grant money ends up in the Shukla family bank accounts.

In 2001, the earliest year thus far publicly available, in 2001, in addition to his university salary (not yet available, but presumably about $125,000), Shukla and his wife received a further $214,496  in compensation from IGES (Shukla -$128,796; Anne Shukla – $85,700).  Their combined compensation from IGES doubled over the next two years to approximately $400,000 (additional to Shukla’s university salary of say $130,000), for combined compensation of about $530,000 by 2004.

Shukla’s university salary increased dramatically over the decade reaching $250,866 by 2013 and $314,000 by 2014.  (In this latter year, Shukla was paid much more than Ed Wegman, a George Mason professor of similar seniority). Meanwhile, despite the apparent transition of IGES to George Mason, the income of the Shuklas from IGES continued to increase, reaching $547,000 by 2013.

Grant records are a real mess but it looks like from George Mason University press releases that IGES and its successor recently got a $10 million five-year grant, or $2 million a year from the government.  Of that money:

  • approximately $550,000 a year goes to Shukla and his wife as salaries
  • some amount, perhaps $90,000 a year, goes to Shukla's daughter as salary
  • $171,000 a year goes as salary to James Kinter, an associate of Shukla at George Mason
  • An unknown amount goes for Shukla's expenses, for example travel.  When was the last time you ever heard of a climate conference, or any NGO conference, being held at, say, the Dallas-Ft Worth Airport Marriott?  No, because these conferences are really meant as paid vacation opportunities as taxpayer expense for non-profit executives.

I don't think it would be too much of a stretch, if one includes travel and personal expenses paid, that half the government grants to this non-profit are going to support the lifestyle of Shukla and his friends and family.  Note this is not money for Shukla's research or lab, this is money paid to him personally.

Progressives always like to point out examples of corruption in for-profit companies, and certainly those exist.  But there are numerous market and legal checks that bring accountability for such corruption.  But nothing of the sort exists in the non-profit world.  Not only are there few accountability mechanisms, but most of these non-profits are very good at using their stated good intentions as a shield from scrutiny -- "How can you accuse us of corruption, we are doing such important work!"

Postscript:  Oddly, another form of this non-profit scam exists in my industry.  As a reminder, my company privately operates public recreation areas.  Several folks have tried to set up what I call for-profit non-profits.  An individual will create a non-profit, and then pay themselves some salary that is equal to or even greater than the profits they would get as an owner.  They are not avoiding taxes -- they still have to pay taxes on that salary just like I have to pay taxes (at the same individual tax rates) on my pass-through profits.

What they are seeking are two advantages:

  • They are hoping to avoid some expensive labor law.  In most cases, these folks over-estimate how much a non-profit shell shelters them from labor law, but there are certain regulations (like the new regulations by the Obama Administration that force junior managers to be paid by the hour rather than be salaried) that do apply differently or not at all to a non-profit.
  • They are seeking to take advantage of a bias among many government employees, specifically that these government employees are skeptical of, or even despise, for-profit private enterprise.  As a result, when seeking to outsource certain operations on public lands, some individual decision-makers in government will have a preference for giving the contract to a nominal non-profit.   In California, there is even legislation that gives this bias a force of law, opening certain government contracting opportunities only to non-profits and not for-profits.

The latter can have hilarious results.  There is one non-profit I know of that is a total dodge, but the "owner" is really good at piously talking about his organization being "cleaner" because it is a non-profit, while all the while paying himself a salary higher than my last year's profits.

These 20 Scientists Want to Make it A Crime to Disagree with Them

I think it is important to publicize these names far and wide:

  • Jagadish Shukla, George Mason University, Fairfax, VA
  • Edward Maibach, George Mason University, Fairfax, VA
  • Paul Dirmeyer, George Mason University, Fairfax, VA
  • Barry Klinger, George Mason University, Fairfax, VA
  • Paul Schopf, George Mason University, Fairfax, VA
  • David Straus, George Mason University, Fairfax, VA
  • Edward Sarachik, University of Washington, Seattle, WA
  • Michael Wallace, University of Washington, Seattle, WA
  • Alan Robock, Rutgers University, New Brunswick, NJ
  • Eugenia Kalnay, University of Maryland, College Park, MD
  • William Lau, University of Maryland, College Park, MD
  • Kevin Trenberth, National Center for Atmospheric Research, Boulder, CO
  • T.N. Krishnamurti, Florida State University, Tallahassee, FL
  • Vasu Misra, Florida State University, Tallahassee, FL
  • Ben Kirtman, University of Miami, Miami, FL
  • Robert Dickinson, University of Texas, Austin, TX
  • Michela Biasutti, Earth Institute, Columbia University, New York, NY
  • Mark Cane, Columbia University, New York, NY
  • Lisa Goddard, Earth Institute, Columbia University, New York, NY
  • Alan Betts, Atmospheric Research, Pittsford, VT

These 20 people, who nominally call themselves "scientists", have written a letter to President Obama urging him to use the RICO statute to prosecute people who disagree with them on climate science, essentially putting scientific disagreement in the same status as organized crime.  If they can't win the scientific debate with persuasion, they will win it with guns.  From the letter:

One additional tool – recently proposed by Senator Sheldon Whitehouse – is a RICO (Racketeer Influenced and Corrupt Organizations Act) investigation of corporations and other organizations that have knowingly deceived the American people about the risks of climate change, as a means to forestall America’s response to climate change.

Of course "deceive the American people" is defined by these folks in practice as "disagreeing with us".

Andrew Thomas Disbarred, but Only Because His Prosecutorial Abuse Was Against Elected Officials

The good news:  Andrew Thomas was disbarred, a fate he richly deserved for his amazing prosecutorial abuses, for example bringing fake RICO and bribery charges against a judge to force him to recuse himself from another case in which he was likely to rule against Thomas.  Some of my many articles on Thomas are here.

But here is what depresses me:  I believe he was disbarred only because his prosecutorial over-reach and abuse was aimed at public officials.  Similar or worse abuses against private parties are seldom if ever punished.   This is lawyers and public officials defending their own.  When I see this much concern aimed at abuses of private individuals, I will be more likely to cheer.

Update:  I am a terrible editor, but I am sure I did not type "Proprietorial" rather than "Prosecutorial" in the original title.  I think I have some kind of weird auto-correct problem going on.  Though until now I did not know "proprietorial" was a word.

More on the Thomas/Arpaio RICO

I will say that I have a certain fondness for the idea of tossing everyone in Congress in jail on a giant RICO prosecution.  So Thomas and Apraio's crazy RICO suit naming most everyone of any importance in the county government and judicial system as conspirators has a certain appeal.  Unfortunately, unlike my dream RICO suit, the basis for the suit is that Arpaio and Thomas were consistently prevented from excercising unchecked power

In essence, the lawsuit alleges that any county official who at any point attempted to stop Thomas and Arpaio from doing anything -- whether it's prosecuting Don Stapley, "investigating" the $341 million court tower project, or repeatedly suing Thomas' own clients -- is part of a criminal enterprise. That includes judges who ruled against them, attorneys who opposed them in court (like Ed Novak and Tom Irvine) and county employees who attempted to stop the insanity.

Could This Be The Tipping Point for Arpaio and Thomas?

It is not uncommon for certain shady dealing to go on for years, with a small group of critics but never really breaking out into the media.  We skeptics have been criticizing climate scientists for years for various problems with their temperature indexes and historical temperature reconstructions, but never really got traction until the CRU emails were made public, and then there has been a real firestorm of media attention.  Criticisms that never got much traction before are now being actively investigated.

I am hoping that we have a similar situation with Sheriff Joe Arpaio and County Attorney Andrew Thomas.  The story is so wacky it simply defies easy description, but Arpaio and Thomas have been pursuing a number of corruption probes against their bosses in the County government.  All well and good, except for the funny fact that the targets of the probes all seem to be historic critics of Arpaio and Thomas, who have brought out their biggest guns for the one Democrat on the County Council (Arpaio and Thomas are both Republicans).

Both these men have  a history of indifference to civil liberties.   When Arpaio is not busy arresting folks for breathing while Mexican (he once managed to make a crime sweep through the 99% Anglo neighborhood of Fountain Hills and arrest 75% Mexicans), he likes to haul folks off to jail whose only crime is speaking out against the Sheriff .   He arrested (with Thomas's help) newspaper reporters and editors who wrote critically of him.  This is a man who in his paranoia invented an assassination plot (against himself, of course) and got the city to spend $500,000 protecting him.  If his deputies want to see a defense attorney's working papers, they just take them.  If he can't get a judge to release computer records, he has his posse storm into the County computer center and take it over at gunpoint.

Most recently, Thomas and Arpaio wanted a judge who has handed them a number of court losses removed from a certain case.  To make that happen, Arpaio and Thomas bizarrely charged the judge and numerous other county employees in a giant RICO case, a case attorneys are still laughing about because it was so transparent and shoddy.  When that didn't work, he charged the judge with felony bribery, apparently on the interesting theory that getting a new, updated court house building was effectively a bribe to the judges working there.

It gets much weirder even than this, with Arpaio's stealing documents from a defense counsel in court (caught on video) with this same judge holding Arpaio's deputy in contempt for the action and then the sheriff's deputies essentially going on strike at court, refusing to bring in prisoners.

But after years of fawning, positive publicity as "Americas Toughest Sheriff," the dam may finally be breaking.  When the AZ Republic finally covers it, you know the situation has to be bad:

Hundreds of attorneys gathered on the courthouse steps in downtown Phoenix to protest Thomas and Arpaio's public campaign against public corruption.

LOL, I have a picture of these guys with suits and holding placards.  Anyway, this was a real blow:

And, in a scathing letter to The Arizona Republic, the Yavapai County attorney

, who previously handled some of Thomas' cases against county officials, blasted the prosecutor and sheriff as "a threat to the entire criminal-justice system."

Oops, so much for the respect of your peers.  Shelia Polk, the Yavapai County attorney (that is a neighboring county) handled the investigations into some of Arpaio and Thomas's early charges against our County officials, so she knows the details of the story.  And she is a Republican, the same party as Arpaio and Thomas:

In her letter, Polk wrote that although Maricopa County isn't her jurisdiction, she can't sit by and watch the abuses from a distance anymore.

"I am conservative and passionately believe in limited government, not the totalitarianism that is spreading before my eyes," she wrote. "The actions of Arpaio and Thomas are a disservice to the hundreds of dedicated men and women who work in their offices and a threat to the entire criminal-justice system."

Polk had stayed out of the legal drama in Maricopa County, and her remarks offer the first insight from an outside law-enforcement official who has some knowledge of the cases Arpaio and Thomas have lodged against county officials.

Arpaio's response was predictable:

Hendershott spoke on behalf of Arpaio. Hendershott said that Polk's office repeatedly failed to issue subpoenas the Sheriff's Office needed.

"It seemed clear to us that this case was being deliberately stalled," he said. "We basically let her know that her work product was ineffective."

This is a constant refrain from the sheriff - anyone who seeks to impose any limit on his power is therefore evil and conspiring to thwart his will.  It comes up time and time again - he simply does not react well when denied a subpoena, or a search warrant, or access to certain information.  If they are not rubber stamping Sheriff Joe's requests, then they must be corrupt.  If he had been honest, his RICO charges would have simply read "they didn't give me what I want."  But there is a reason these third parties are part of the process, and you can see it in Polk's letter:

Polk said she worked with the Sheriff's Office on the cases for the next six months, then returned the cases to the Maricopa County Attorney's Office.

In Polk's letter, she wrote that she was "happy to remove myself from the cases and from contact with Sheriff Arpaio. My discomfort grew daily and my role in restraining potential abuses of power increasingly more difficult."

America's Worst Sheriff

I am working on a longer post on Sheriff Joe Arpaio's sweeps through Hispanic neighborhoods to round up the usual suspects (Mayor Phil Gordon has asked the feds to investigate these practices, which I hope they will do).

But this one is just weird.  Apparently Phoenix tax money is being used by Arpaio to train Honduran police, in a program that makes sense (from a Phoenix point of view) to no one.  Sheriff Joe watchers will enjoy his numerous nonsensical explanations, though the last one probably is the correct one.  For those outside of Phoenix, sit back and enjoy the weirdness -- its the only consolation we here in Arizona get for having the worst and most abusive sheriff in the country.

Explanation One:  Arpaio looks to small Latin American countries as models for his police force

Sheriff's officials told the county Board of Supervisors that the
Honduran National Police possess the "intelligence data, knowledge and
cultural experiences to benefit the Maricopa County Sheriff's Office."

Explanation Two:  We can't tell you, because it would endanger Sheriffs' lives (this is an Arpaio oldie but goodie):

discussing efforts in Honduras could endanger the lives of law-enforcement officers in both countries....revealing details could put lives at risk

Explanation Three:  Honduras supplied millions of photos for Arpaio's facial recognition software (yeah, I know non-Phoenicians, this is weird)

The sheriff's facial-recognition software program is supposed to be among the biggest beneficiaries of the Honduras engagement....When Arpaio was first confronted about the department's trips to
Honduras, he said the agency had received "millions" of photos from
Honduran officials.

Explanation Four:  Its a RICO thing, so we can't tell you (at least, it uses RICO funds)

The agency has spent more than $120,000 on Sheriff's Office employee
salaries in Honduras, and an additional $30,000 in RICO funds seized
from criminals. And some of the trips occurred during a time period
where the Sheriff's Office overspent its overtime budget by nearly $1

Explanation Five:  We can't talk about it, because that would open up public officials to scrutiny for their actions:

The Sheriff's Office will not grant interviews to explain how and why
the program was started and what the benefits are to Maricopa County,
because officials say discussing the program fuels criticism