If we look at one instance of city council members acting just as here in Baltimore we see the same behaviors-----the same cronyism----the same ties with real estate developers. Chicago as Baltimore and now all US mid-size cities are filled with this PROCESS OF CLIMBING THE ECONOMIC LADDER----replaced our US system of laws and rights----it is BANANA REPUBLIC third world and always takes hold when there is extreme wealth and extreme power. So good citizens in Baltimore are literally silenced, threatened, pushed out of communities to make way for global Wall Street development. These several years of global militarized policing was more of the same by Wall Street Baltimore Development. Johns Hopkins and their 'labor and justice' organizations.
The only time these criminals inside a crony system are prosecuted is if they fail to do what they are told---SAME SYSTEM AS GLOBAL MAFIA.
So when the global Wall Street players have us shouting at a Trump moving all 99% attention from the real problems in US cities deemed Foreign Economic Zones----THEY ARE LYING, CHEATING, AND STILL STEALING from our communities.
Social Darwinism
A pseudo sociologist named Herbert Spenser theorized that rich folks got that way through a process of Darwinian natural selection. Historian Richard Hofstad...
youtube.com
What started off as an experiment to prove social Darwinism became the network in our US cities to strip the most talented from our communities and tie them to global Wall Street----ergo---no one protesting. It didn't prove social Darwinism but it was used to sustain power of old world MERCHANTS OF VENICE.
THESE ARE THE YOUNG LEADERS BEING TAUGHT TO BE GLOBAL ONE WORLD UNITED NATIONS WORKING FOR OLD WORLD GLOBAL 1%.
The City College of New York
160 Convent Avenue
New York, NY 10031
Our academic programs cover more than a hundred fields, ranging from art and architecture to biomedical engineering, medicine and urban design.Intellectually exciting and rigorous, grounded in solid academic tradition – a tradition that produced nine Nobel Laureates, a Secretary of State and a Justice of the Supreme Court – but fully geared to the 21st century, these programs prepare students for graduate and professional school, for a host of professions, and for the rich, productive life of the educated citizen.
Outstanding City College faculty claim memberships in our national academies, leadership in their professional fields, and scholarship that spans cutting edge discovery in science and engineering and outstanding accomplishment in the arts, as well as dedication to teaching.
A fully accredited institution of higher education, we offer curricula leading to the bachelor of arts, bachelor of fine arts, bachelor of science, bachelor of engineering, master of architecture, master of arts, master of fine arts, master of public administration, master of science, master of science in education, and master of social work degrees, as well as a number of accelerated (BA/MA, BS/MD, etc.) degrees and advanced certificate programs. We also offer doctoral programs in seven engineering disciplines.Several CUNY doctoral programs in science and psychology are based at City College.
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Looking at Baltimore communities---associations and how global Wall Street Development and Johns Hopkins uses them we don't so much see a cronyism among families as we see constant hold on these US city governments by the corporate banking entities----buying and keeping those GLADIATORS OF STREET THUGGERY in place as long as they are useful then finding the next thug to lie, cheat, and steal. Once they pass that test at a community level they then become appointed to committees----allowed to be city council or Maryland Assembly pols who are paid to say to 99% of citizens----OH, WE CAN'T STOP THE FRAUD AND CORRUPTION ===THEY WOULDN'T LIKE THAT.
'A recent survey of Chicago business leaders showed over 90 percent believed city government engages in some form of cronyism'.
As with all media across the US they NEVER IDENTIFY these global institutions literally fat from all of these few decades of fraud and corruption=====they always refer to the mess at community level.
Chicago alderman indicted on federal charges of extortion, theft
By Austin Berg, December 14, 2016 at 12:05 pm
Chicago Alderman Willie Cochran, 20th Ward, has been indicted on federal criminal charges.
The U.S. Attorney’s Office for the Northern District of Illinois on Dec. 14 announced charges that Cochran “pocketed money from a charitable fund that was intended to help families and children in his South Side ward.” He was also charged with extortion of a local liquor store, as well as an Illinois attorney representing real-estate developers.
The attorney’s office alleged Cochran paid for his daughter’s college tuition and financed a gambling habit with money from the 20th Ward Activities Fund.
Cochran was charged with 11 counts of wire fraud, two counts of federal program bribery and two counts of extortion.
This trails October news that Cochran was under FBI investigation for his use of campaign funds. The Chicago Sun-Times previously reported Cochran paid himself more than $115,000 from his campaign funds over a three-year period.
Chicago City Council is one of the most corrupt political bodies in the nation. Over the past 40 years, 33 of some 200 aldermen have been convicted on corruption charges.
This culture of misconduct shows no signs of slowing down. And the lack of seriousness in tackling ethics reform – or even enforcing rules on the books – within city government is disturbing.
A July report from the government watchdog group ProjectSix revealed 37 of 50 Chicago aldermen took illegal campaign contributions in 2015. The group also found 19 aldermen using private email servers for city business. A recent survey of Chicago business leaders showed over 90 percent believed city government engages in some form of cronyism.
ProjectSix CEO Faisal Khan formerly led the now-disbanded Office of the Legislative Inspector General, which oversaw Chicago City Council members. In its announcement of Cochran’s indictment, the U.S. attorney’s office said it initiated the investigation after receiving information from Khan’s office.
“The charges against Alderman Cochran show how effective ethics oversight can make a significant difference in bettering Chicago government,” Khan said in a press release.
Chicago is the nation’s corruption capital, according to researchers at the University of Illinois at Chicago. Regardless of the Cochran investigation’s results, it’s clear Chicago government is steeped in a culture of corruption.
One might think this would spur an intense response from the mayor’s office as well as from reform-minded aldermen. This has not been the case.
A mere 10 of 50 Chicago alderman bothered showing up to the Chicago Board of Ethics budget hearing Oct. 21.
During the budgeting process, politicians have the opportunity to publicly question city officials charged with keeping corruption in check as those officials justify their budgets. But at the Board of Ethics hearing, aldermen did not ask a single question.
Instead, Alderman Anthony Beale, 9th Ward, played “Go Cubs, Go” from his cellphone in reference to the board’s recent ruling that aldermen cannot accept a face-value ticket offer from the Chicago Cubs organization unless they perform a ceremonial duty at the game.
The hearing was over in less than five minutes.
“It had to be a record,” wrote Daily Line reporter Claudia Morell.
This disregard for serious ethics reform is part of a troubling pattern.
After operating without any local watchdog for months following Khan’s departure in 2015, Chicago City Council in February 2016 passed a watered-down oversight ordinance submitting themselves to Inspector General Joe Ferguson’s ethics oversight.
But not to his auditing powers.
Given that Alderman Ed Burke, 14th Ward, led the charge in weakening that ordinance, many speculated the move was meant to shield the city’s $100 million-a-year workers’ compensation program – controlled by Burke’s Finance Committee – from close examination.
Until City Council and Mayor Rahm Emanuel get serious about following the city’s ethics ordinance and subjecting themselves to stricter oversight, stories such as Cochran’s will continue making headlines.
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As global Wall Street pols are telling us to yell at CORPORATE LOBBYING OF CONGRESS none are telling us to look locally because that is to where 99% of citizens can actually make change. These global corporations now lobbyists got that way from all the wheeling and dealing done in our US cities----if we don't fix this we lose. The corruption is getting worse and spreading because of what we described yesterday happening in our local community associations----people are fighting and scrapping for jobs----they need money ---and they are pushed by development corporations tied to IVY LEAGUES to do anything to climb that income ladder----now it is spreading to our suburbs because----US CITIES DEEMED FOREIGN ECONOMIC ZONES are regional----they are huge----they will consume all our state real estate into one great big global corporate campus and global factories owned by these same old world global 1%----no new wealth folks----please stop being PLAYERS.
GREATER BALTIMORE IS REGIONAL AND SENDS THE CITY CORRUPTION OUT INTO RURAL AREAS WHERE CITIZENS THERE ARE MADE DESPERATE FOR JOBS AND MONEY. THEY ARE NOW ACTING JUST LIKE SOMEONE IN CHINA, MALAYSIA, AFRICA----with no Rule of Law, no rights as citizens, no three branches of governance or US Constitution----they just scratch and scrape to serve global Wall Street.
We are told this is simply hard-hitting politics----but NO I AM SURE IT IS COMPLETE BREAKDOWN IN US RULE OF LAW. Our cosmopolitan cities of LA, Chicago, NYC have always had that Foreign Economic Zone structure of ANYTHING GOES. That is now filling our mid-size cities and with that is coming ONE WORLD ONE GOVERNANCE changing anything goes to EVERYONE GOES----INTO A GLOBAL LABOR POOL. These are completely different folks----
Local corruption hits Chicago, suburbs and downstate communities
Good Government / Article
December 4, 2016
November was a sad reminder of the corruption at various levels of Illinois government from retired House Speaker Denny Hastert to the small Village of Bellwood.
Local governments in Illinois took the spotlight for worst offenders in corruption and mismanagement for the month of November.
A former Chicago Police officer-turned firefighter whose ward is home to scores of cops cast a lonely protest vote Tuesday against a $2 million settlement for a pair of police officers who claim they were blackballed by their colleagues for blowing the whistle on police corruption.
The settlement with police partners Shannon Spalding and Daniel Echeverria averted the need for Mayor Rahm Emanuel to comply with a federal judge’s order to testify about the code of silence that the mayor has acknowledged exists in the Chicago
An Illinois state trooper is on trial for allegedly bribing a police officer to ticket his former girlfriend.
Jurors in Vermilion County on Monday heard 2014 recordings of 46-year-old trooper Keith Lumsargis telling a Tilton police officer where and when his ex-girlfriend would be driving. The trooper is accused of offering a steak dinner in exchange for helping him get back at the woman for breaking up with him.
The Illinois congressman who resigned amid scrutiny of lavish spending—including remodeling his Capitol Hill office in the style of the television series “Downton Abbey”—was indicted today on 24 federal counts, including wire fraud and theft of funds.
The 52-page indictment charges Aaron Schock with nine counts of wire fraud, five of falsification of election commission filings, six of filing false federal income tax returns, two of making false statements, and one each of mail fraud and theft of government funds.
The three-year federal prosecution of Chicago’s red light camera program came to an apparent conclusion Thursday as a federal judge blasted the corporate and government corruption at the heart of the decade-long scheme while sentencing the former CEO of the camera vendor to 2 1/2 years in prison.
Karen Finley, who headed Redflex Traffic Systems Inc. through much of the $2 million bribery scandal, marks the third and final defendant to be sentenced in the probe.
“Do you have any conflicts of interest that would be an issue with you taking this job?”
Many people have probably asked or been asked this question in a job interview. It’s a responsible way to head off any potential ethical conflicts and a common sense, routine pre-employment question—except in the office of one of Chicago’s most powerful aldermen.
Project Six has found that Chicago Alderman Brendan Reilly (42nd Ward) employs a registered lobbyist who represents some of the largest real estate developers in the city as his chief of staff. Aside from being ripe with potential ethical conflicts, tax dollars have likely been put at risk because a registered lobbyist has the direct authority to negotiate for both sides of zoning and real estate deals in the heart of Chicago.
Former Chicago Ald. Edward R. Vrdolyak’s defense attorney left the Dirksen Federal Courthouse Tuesday without explaining how his client landed a piece of Illinois’ massive settlement with tobacco companies two decades ago.
Each week, get the top headlines from around the state. From stories of political corruption to government overreach, get the news that matters most to you.
Vrdolyak, a onetime powerhouse 10th Ward politician, was quietly charged earlier this month in a 19-page federal indictment that outlined his role in a scheme to pocket millions from the $9.3 billion settlement reached in 1998. The indictment alleges that Vrdolyak was promised $65 million from the settlement even though he “did no work on the Tobacco Lawsuit.”
It’s not clear how much money Vrdolyak made from the settlement, but federal prosecutors told a judge in 2010 that Vrdolyak “has a guaranteed income stream of $260,000 per year . . . until 2023 from tobacco-related litigation.”
The indictment charges Vrdolyak, who turns 79 next month, with impeding the IRS and tax evasion. He faces a maximum of eight years in prison for allegedly trying to help his co-defendant, attorney Daniel Soso of Alsip, dodge federal income taxes.
He appeared at the federal courthouse Tuesday for arraignment, pleading not guilty in front of U.S. District Judge Amy St. Eve. Assistant U.S. Attorney Amarjeet Bhachu said during the hearing that prosecutors have more than 150,000 pages of evidence to turn over to Vrdolyak’s legal team. …
… A member of the City Council from 1971 to 1987, Vrdolyak earned the nickname “Fast Eddie” for his back-room deals and reputation for dancing on the edge of the law. A federal judge initially handed him a big break in 2009, giving him no prison time for his role in a financial scam with corrupt influence peddler Stuart Levine. But prosecutors appealed, and another judge ultimately sentenced Vrdolyak to 10 months in prison followed by 10 months of home confinement and work release.
He was a twenty-something wannabe developer, the son of immigrants from India, and he dreamed of building a $900 million hotel and convention complex near O’Hare Airport.
He assembled a team of political heavyweights, including Illinois House Speaker Michael J. Madigan, and traveled to China to get investors.
Now, the land sits empty, and Anshoo Sethi awaits sentencing, possibly this week, after pleading guilty to wire fraud.
He’s admitted his role in what federal authorities call a scheme to use fraudulent documents to raise $160 million from Chinese investors willing to bankroll his project in exchange for permanent United States residency under the U.S. government’s much-maligned EB-5 visa program. The program grants residency to foreigners who invest in economic development projects.
Officials from a small, cash-strapped suburban school district have been under scrutiny this year for what critics say is excessive spending, from extensive travel, to adding friends and family to the payroll, to secretly padding the superintendent’s pension.
Now, they are facing new questions about how the district has shelled out hundreds of thousands of dollars for taxi services in recent years under a no-bid arrangement.
Since the 2011 school year began, Bellwood School District 88 has paid People Cab Co. $605,000 to shuttle homeless and special education students to and from school. More than half — or $311,000 — of those expenses were authorized by the board during the past two school years alone, records obtained by the Tribune show.
Bellwood’s taxi bills far outpace those of surrounding districts, state education records show.
During the 2015 school year, the most current statewide data available, for example, Bellwood spent three times as much transporting special-needs students to school than the five neighboring school districts combined. Enrollment in those districts — which draw students from Berkeley, Maywood, Melrose Park, Westchester, Hillside and Broadview — is nearly four times larger than Bellwood, state records show.
In response to the hefty transportation bills, some school board members have called for the taxi service contract to be put out for bid, an idea that has been met with stiff resistance by the board’s president, Marilyn Thurman.
Dennis Hastert is serving a 15-month prison term in a hush-money case that stemmed from his sexual abuse of students when he taught at an Illinois public school over 35 years ago. The ex-U.S. House speaker is now pointing to a technicality to argue that a state body should restore his $17,000-a-year teacher’s pension that it yanked after his April 27 sentencing.
A recent letter from Hastert’s lawyer to the agency overseeing the pensions notes his conviction was not for sexual abuse when he was at Yorkville High School from 1965 to 1981: It was for one count of violating banking law as Hastert withdrew cash from 2010 to 2014 as he sought to pay one victim $3.5 million to ensure his silence. On those grounds, the letter argues, his teacher’s pension can’t be revoked.
East St. Louis Township Supervisor Oliver Hamilton is expected to plead guilty to wire fraud charges Thursday in U.S. District Court in East St. Louis.
Hamilton, 63, was charged earlier this month. He waived indictment and announced his intent to plead guilty before U.S. District Judge Michael Reagan. The hearing begins at 10 a.m. Reporters will be tweeting live from the courthouse.
A months-long investigation by the Belleville News-Democrat reported that Hamilton spent more than $230,000 on a taxpayer-supported American Express card from January 2012 to June 2016. The investigation showed that Hamilton used the credit card to pay for trips to Las Vegas and elsewhere, thousands of dollars in gasoline for his personal vehicle, $34 car washes, flowers and gifts for political allies, restaurant tabs and other purchases.
A former Bellwood official was sentenced to two years of probation Wednesday after he admitted he stole money from the village coffers.
Roy McCampbell, who pleaded guilty to misdemeanor theft before Cook County Judge Timothy James Joyce, also was ordered to pay $100,000 in restitution, according to court records.
McCampbell, who was the village manager and chief financial officer, granted himself numerous unauthorized pay raises and bilked the town of Bellwood for hundreds of thousands of dollars, outgoing Cook County State’s Attorney Anita Alvarez said at the time of his 2012 arrest.
McCampbell, a licensed attorney, drafted new contracts for himself, adding raises, increasing the size of his stipends, amount of annual sick and vacation days and deferred compensation payments, prosecutors said.
The investigation also revealed that he was able to illicitly use taxpayer funds to boost his pension and that he had fraudulently expanded the village’s health insurance plan to pay for a variety of treatments for his family, including horse therapy for his children and to purchase home exercise equipment.
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What was actively prosecuted a few decades ago as CONFLICT OF INTEREST is now done openly and with no fear of criminal or civil justice---in fact many on our city councils and in Congress are either real estate developers or bankers and/or married to each. This is again what third world nations have for leadership-----our US Rule of Law and US Constitution with 3 branches of government was drafted to make these kinds of power grabs IMPOSSIBLE----they are possible of 99% of citizens don't know or care about BEING CITIZENS.
So, this is what has been allowed to happen in our US cities deemed Foreign Economic Zones----where early Clinton era in the 1990s saw this criminality in our mega cities ----these few decades sees it moving to our mid-size cities---and Baltimore has through modern time acted as a Chicago.
The examples from yesterday of citizens in communities moving people, zoning, permitting, ignoring all Rule of Law doing so to please developers ----show who ends being these real estate kings in their communities---below we see the Chicago City Council----what is sad is this---they are putting a life's work behind an economic activity that will not last for their children or grandchildren-----they think they are kings---just as our drug dealers are called KINGPINS----but this coming decade and economic crash will move all real estate to those global Wall Street corporations for whom they work. ALL US CITIES DEEMED FOREIGN ECONOMIC ZONES lose EMINENT DOMAIN and property rights protections and global Wall Street will simply TAKE ALL REAL ESTATE IT WANTS.
These are that 5% to the 1% telling people to YELL AT TRUMP-----IT'S NOT ME!
These KINGS who could not care less about communities are often clueless or don't care that these are far different times in US ----they will lose all to Foreign Economic Zone and global corporate eminent domain on all real estate. This is what drives Baltimore's community development and ergo community association power and it is only these kinds of people allowed power-----and as with all brutish actions they will lose it all.
The Real Estate King of the Chicago City Council
Brand-new 26th Ward alderman Roberto Maldonado owns more properties than any other council rep—including ten in his own ward. That's a lot of potential conflicts of interest.
By Ben Joravsky @joravben and Mick Dumke @mickeyd1971 Johnny Sampson
In May residents of the 1700 block of North Monticello noticed that a sign had been posted on the fence around two overgrown, long-vacant lots on their street. It announced that the owner of the property was applying for a zoning change to build a pair of four-story, ten-unit buildings there and on two adjacent lots to the east, facing North Central Park.
It was jarring news to the residents, since apart from the empty lots the block is made up of modest single-family houses and two-flats, and they hadn't heard about any plans for a new development. On top of that, the property owner seeking the zoning change was Roberto Maldonado—their Cook County commissioner and the Democratic committeeman for the 26th Ward, which includes their block and much of the rest of Humboldt Park.
Several residents went door to door with a petition against the zoning change, and after getting about 100 signatures they contacted Maldonado's attorney and arranged for a meeting to air their concerns. Maldonado says that they were worried he was undertaking an affordable housing development and that he assured them he wasn't. But he didn't agree to drop his plan for high-density buildings.
Maldonado says it won't. "I am not going to pursue the zoning change now that I have become the alderman of the 26th Ward," he told us last week. "I had the support of the previous alderman. . . . But it just so happened that the next alderman was me—and that changed things." Instead, Maldonado said, "At some point I will sell those lots."
He added: "I'm not sure you have much of a story."
Not so fast, alderman. The lots on Monticello and Central Park make up just a small portion of the new council member's real estate holdings. Property records and the financial disclosure statement Maldonado recently filed with the city clerk show that he owns at least ten pieces of property in the 26th Ward. They include three lots on the 1700 block of North Troy Street where he's building a sprawling new house and a building on Division that houses a mortgage business he owns.
He also owns or co-owns at least six other properties in other wards, including a South Loop condo worth more than $700,000 and at least five lots on the west and far south sides. That's a total of 16 properties.
No other member of the council owns close to that much real estate, according to financial disclosure statements. One alderman, the 44th Ward's Tom Tunney, owns 11 properties, though all but his home are units in two adjacent buildings he owns on Belmont. Four others (George Cardenas, Latasha Thomas, Walter Burnett, and Patrick O'Connor) own four, and six others (Michelle Harris, Ed Burke, Willie Cochran, Richard Mell, William Banks, and Joe Moore) own two. The remaining 38 aldermen don't own any properties that they don't live in.
Maldonado acquired many of his holdings for modest sums after their previous owners stopped paying taxes. In several cases—such as with the Monticello and Central Park lots—he sat on them for years as their values soared. And in one instance he cut a land-swap deal with Bickerdike Redevelopment Corporation, which has received both accolades and intense criticism as one of the ward's leading developers of affordable housing.
On several occasions Maldonado has fallen behind on property taxes or other bills himself: in 2002 a contractor put a lien on his Division Street office building, alleging that he had only paid about half of an $11,900 bill for roofing work several years earlier. Earlier this year Maldonado missed a tax payment on the property and as of August 18 owed $3,941, according to the Cook County treasurer. The condo association at 910 S. Michigan, where Maldonado and a business partner purchased a unit in 2004, placed liens on that property in 2005 and again in 2008 for thousands of dollars in unpaid fees.
This past June he took out a $960,000 loan on all nine of his properties on Troy, Central Park, and Monticello. According to a spokeswoman, Maldonado is using the funds to finish building his new house.
There are good reasons not many aldermen deal seriously in real estate—or at least wait till they're out of office. Zoning-change requests are ratified by the full City Council, but the council almost always follows the lead of the local alderman. Some, like the Fourth Ward's Toni Preckwinkle and the 47th Ward's Eugene Schulter, are careful to set up specific ground rules for reviewing zoning requests from developers. The requests are farmed out to a zoning committee, which holds a public hearing in the ward. The alderman then acts as something of a referee, smoothing over differences between residents and developers before deciding whether to advance the proposal to the full council.
But others have not been so rigorous. There are numerous examples of council members who've been busted for taking bribes from developers in return for zoning changes, including Arenda Troutman, the former 20th Ward alderman who went to prison earlier this year. But the classic example of an alderman-developer gone wrong has to be Thomas Keane, a fierce ally of Mayor Richard J. Daley who chaired the council's powerful finance committee from 1958 until 1974, when he was imprisoned for fraud.
"Keane—one of Chicago's most influential political figures—and two of his friends formed a partnership that acquired more than 1,800 parcels of land," a federal judge wrote in summing up the case. "The partnership acquired the land from the City at property-tax-delinquency auctions; it held the land through an Illinois land trust, a device that permits beneficial owners of land to conceal their interests." After using his position as finance committee chairman to get possession of the properties, "Keane then induced his friends in public agencies to buy these parcels."
Maldonado notes that he's been involved in real estate since long before he became an elected official. "I came to Chicago back in 1979, and in 1982 I made my first real estate investment," he says. "I liked it, and I've done fairly well with it over the years."
He says he's planning to curtail his real estate ventures now that he's become alderman. "I would never do anything that would put myself in a conflict of interest," he says. "And obviously these properties I owned before I got appointed to the office. I have no future plans to continue to buy property."
But Maldonado still hopes to sell the lots he already owns on Monticello and Central Park and in other neighborhoods. "At some point I'm going to sell those properties. I'm not going to develop them—I've never done any development. Then whoever buys them will have to go through the [zoning] process if they want, and when it comes up I will recuse myself."
As of August 18, the four lots on Monticello and Central Park were listed on local realty sites for $649,900 altogether. Maldonado's property at 1733 N. Troy had a for sale by owner sign in front of it last week, and four lots he owns on the south and west sides were listed for $39,000 apiece.
Maldonado has been a player in Humboldt Park politics since the early 1980s, when he was part of the first wave of Puerto Rican independents rebelling against the Democratic machine and aligning themselves with Mayor Harold Washington.
In 1988 the Sun-Times alleged that he had solicited campaign contributions on behalf of then-alderman Luis Gutierrez, his former brother-in-law and boss, while working as the top purchasing official for the Mayor's Office of Training and Education. Eight individuals and firms that made campaign loans to Gutierrez received a total of $800,000 in business from Maldonado's agency from 1986 to 1988.
One of them was Bickerdike. "Maldonado arranged for the lease of office and storage space from the Bickerdike Redevelopment Corp., a not-for-profit housing organization whose executive director was Gutierrez's chief fund-raiser," wrote Mark Brown and Deborah Nelson. "Bickerdike has received more than $70,000 in rent payments over the past three years as one of the Office of Training and Education's year-round satellite offices."
Maldonado and Gutierrez denied any wrongdoing, but Maldonado resigned from his city job soon after and started his mortgage business.
In 1994, with Gutierrez's backing, he was elected to the Cook County Board; he was reelected three times. As a commissioner he rarely bucked the lead of board president John Stroger or his successor and son, Todd.
In 2000 Maldonado was elected Democratic committeeman of the 26th Ward, thanks to some clever machinations by Gutierrez and 33rd Ward alderman Richard Mell.
A year earlier Maldonado had moved into the neighboring 35th Ward and made it clear that he was going to challenge alderman Vilma Colom, a Mell protege, for the committeeman's job there. To protect Colom's incumbency, Mell and Gutierrez struck a deal. As Gutierrez would explain in a 2002 Reader article, he agreed to back Colom, and Maldonado moved back to the 26th Ward. Ocasio stayed on as 26th Ward alderman but stepped down as committeeman, and Maldonado ran for the job unopposed. (Three years later Colom was swept from office by Rey Colón, so the Gutierrez deal only ended up delaying her ouster.) He's been committeeman ever since.
This past May Ocasio stepped down as 26th Ward alderman to work as a $120,000-a-year senior adviser to Governor Quinn. Under city law the mayor gets to fill aldermanic vacancies, but by City Council custom he usually follows the recommendation of the outgoing alderman; Ocasio himself had been appointed alderman in 1993 at the behest of Gutierrez when he moved on to Congress. After resigning this spring, Ocasio recommended Wilfredo De Jesús, pastor of the 4,000-member New Life Covenant Ministries, but the suggestion ignited an outburst from gay activists who objected to the minister's characterization of homosexuality as a sin.
Eventually Ocasio withdrew the recommendation, saying it was because De Jesús didn't live in the 26th Ward. He then asked the mayor to select his wife, Veronica, an aide to Gutierrez. But on July 27, Daley announced he was choosing Maldonado instead.
This plot twist set up a classic press-conference exchange where Daley got to unleash his inner Shakespeare. When reporters asked why he didn't appoint Veronica Ocasio, the mayor replied, "It's not, 'Why not his wife?' Why did I pick Roberto Maldonado? That is the question. And I picked him because of experience, his commitment, his working with people, his private sector as well as public sector. It's a combination."
Of course, that private-sector experience consists largely of real estate wheeling and dealing, much of it in the ward he now represents.
.In 1993, according to property records, he took out a $100,000 mortgage to buy a house on a double lot at 1731 N. Troy that just a few years earlier had been in the hands of the Cook County sheriff because the owners hadn't paid taxes. Maldonado still lives there.
Over the next few years he began acquiring other property on the block at bargain-basement prices. In 1994 he bought a lot a few doors south of his home for about $11,000; three years later he acquired a vacant, tax delinquent lot a few doors north.
In 1998 he put in a bid for a city-owned, tax delinquent lot at 1733 N. Troy, right next to his house. Bickerdike acquired it instead. But on October 20, 2004, he bought it from them for $25,000, and on the same day sold Bickerdike his lot at 1739 N. Troy for the same price. This swap left Maldonado with all five lots from 1723 to 1733 N. Troy. The next year he began building a vaguely Prairie-style McMansion on three of those lots; it's still under construction.
Maldonado says he traded with Bickerdike simply to increase the amount of land around his home. "The properties were of equal value," he said. "It was going to be part of our estate. I was never going to develop it."
Sometime in the 1990s (the date is unclear in property records) he purchased the building that houses his mortgage business, People's Choice Mortgage Corporation, at 2548 W. Division. In 2004 he and a partner, attorney Carlos A. Vazquez, took out a pair of mortgages worth about $720,000 total to purchase a condo at 910 S. Michigan. Recently—the transactions haven't even been filed with the county recorder of deeds yet, but they're listed on Maldonado's financial disclosure statement—the two have bought up five long-vacant lots in Englewood, Garfield Park, and West Pullman.
The concrete company was closed and cleared away in the 1990s. Maldonado purchased three of the four lots in 1998 for a total of $50,000, and in 2006 he bought the fourth for $150,000 and razed the house on it. Graham says Maldonado hasn't done a very good job of maintaining the property since then, and as of last week much of it was overgrown with weeds. Shards of glass and trash cluttered the grass along the sidewalks. The lots are fenced off, but Graham says they've still attracted vagrants: "We've had campers out there."
Over the last decade property values in the neighborhood have shot up, but Maldonado says he wasn't ready to do anything with the parcels until it was too late. "Originally I purchased them to sell them, but when I was ready to sell them the market plummeted and I couldn't sell them," he says. "So I was going to partner with an experienced developer to develop them."
In May, while he was still a county commissioner, Maldonado had lawyer Dean Maragos notify residents of his intention to change the zoning from limited manufacturing/business park district to residential multiunit district so he could construct 20 units of housing in two four-story buildings.
Graham, who's president of the block club, called Maragos—a well-known attorney who's donated thousands of dollars to aldermen and other pols and run for office himself—and requested a meeting with Maldonado. It happened in May at Maragos's office. Graham says he and another neighbor expressed concerns about "too many units, too much parking—the usual stuff." He also says he asked Maldonado point blank if he intended to sell the property after getting the zoning change.
"There was a for-sale sign on the property so we thought he might have it on the market," says Graham. "I didn't want him getting the change and then flipping the property to someone else. He said absolutely not—it's not for sale."
After the meeting, Graham says, he wrote Maldonado a letter insisting that he put his pledge not to sell in writing. Maragos responded with a letter saying "the for sale sign has been taken down from the property per your request."
That wasn't enough to address Graham's concerns. "I wanted him to put in writing that he wasn't going to sell the property," he says. "I called Maragos back and he said the commissioner is a very busy guy—it's hard to get ahold of him." (Maragos didn't return our calls.)
Maldonado says he's tried to work with Graham and other residents but says they keep coming up with different reasons to oppose the proposed development, from worries that it would be for low-income renters to concerns it might block their views of the adjacent Bloomingdale railroad viaduct, which is slated to become a park.
"These are vacant lots—I thought most people would like to see them developed," he says. "People are always going to find reasons why they oppose something. Sometimes it makes sense and sometimes it doesn't."
Still, Maldonado says, the equation has changed now that he's the alderman. He promises he'll have the proposed zoning change yanked at the next meeting of the council's zoning committee, which is August 25. Then he'll start making plans to sell the property.
But that won't necessarily end the potential for conflicts of interest. A lot zoned for manufacturing is worth less than one zoned for residential, and any developer who buys Maldonado's land at Monticello and Central Park will probably want to upzone just as he did. If Maldonado the property owner is going to get top dollar for his lots, then Maldonado the alderman will probably be asked to change their zoning. And that would be a conflict of interest, even in Chicago. Even if he recuses himself, his council colleagues will be faced with the task of deciding whether to help him make more money.
Graham and other neighborhood residents wonder if he's too cozy with Bickerdike to appropriately evaluate their future development proposals. Maldonado thinks that's ridiculous. "Anyone who's been a community leader or political leader in this community has a relationship with Bickerdike," he said. "The previous alderman had a relationship with them."
Even the land he owns in other wards could create an issue—is it realistic to expect that an alderman wouldn't get favorable treatment from his colleagues if he applied for a zoning change or floated a development plan in one of their wards?
If he really wants to keep both hands above the table, Maldonado could always put the properties he doesn't live on in a trust, where a third party manages the assets for him, as long as he remains in the City Council. "I have not thought about any sort of blind trust," he said when we asked him about it. "I would not mind looking into it."
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'Jorge Pérez, a developer known as the “Condo King,” told a local real estate conference earlier this year that all these foreign buyers make Miami the only city in America where the cash model works. “It’s a very local market,” he said. “It’s for people who are used to paying cash for most of their second homes.” '
Hmmmm, wonder if this is the old world MERCHANT OF VENICE family tied to PEREZ once LABOR SECRETARY NOW DNC CHAIR? MOST LIKELY.
What mid-size cities like Baltimore are using as a development model is this----as we said dirty money coming in from Asia and Latin America recruited by our city council and mayor with community associations told to PAY-TO-PLAY for these investors.
We are not talking today about the flipping and mortgage loan frauds---we are talking about how our community associations and pathway to city/county government and appointments have been happening. THIS IS THE PROBLEM 99% OF PEOPLE WANT FIXED and it is where all our Federal, state, and local revenue including our public trusts are lost.
YELL AT OUR LOCAL US CITIES NOT TRUMP. IT IS GLOBAL WALL STREET DEVELOPMENT, GLOBAL JOHNS HOPKINS, GREATER BALTIMORE DEVELOPMENT, URBAN LEAGUE, NAACP---and all those 'labor and justice organizations created to be PLAYERS.
Miami: Where Luxury Real Estate Meets Dirty Money
The buyers come from all over the globe, bearing cash and complicated pasts.
By Ken SilversteinOctober 2, 2013
If you fly into Miami International Airport and drive east toward the city and north on Interstate 95, you bypass South Beach and midtown and in about thirty minutes reach the 163rd Street exit. Heading east toward the ocean leads you past several miles of strip malls filled with convenience stores, pawn shops, bodegas, gas stations, chain restaurants, nail salons and an occasional yoga center. Then rising unexpectedly in the distance is a row of condominium skyscrapers so baroque and unattractive that they conjure up the name of only one man: Donald Trump.
You have arrived in the city of Sunny Isles Beach, or “Florida’s Riviera,” as its political and business leaders have dubbed it. Massive skyscrapers along beachfront Collins Avenue include three Trump Towers and three other Trump-branded properties, including the Trump International Beach Resort, where I stayed—very comfortably, I confess—for eleven days in June.
Other luxury properties on the stretch include the gaudy Acqualina Resort & Spa, where the penthouse recently went on sale for $55 million, and the Jade Ocean, which offers “beach amenities thoughtfully conceived to continue attentive service and lavish appointments all the way to the water’s edge” and a Children’s Room featuring Philippe Starck furnishings and a baby grand piano. Meanwhile, ground was recently broken on the Porsche Design Tower, which its developers describe as “the world’s first condominium complex with elevators that will take residents directly to their units while they are sitting in their cars.”
Until the late 1990s, this Miami neighborhood was populated by retirees and tourists and was dotted with dozens of theme motels, many of them named after Las Vegas properties: the Dunes, the Sands, the Desert Inn and the Aztec. Between the 1920s and ’50s, Sunny Isles catered to visitors like Jack Dempsey, Babe Ruth, Grace Kelly, Burt Lancaster and Guy Lombardo, but later became a destination for tourists of modest means.
Everything changed in 1997, when real estate developers and other business groups succeeded in passing a referendum to incorporate Sunny Isles as a town. From that point on, building, planning and zoning decisions were stripped from the Miami-Dade County Commission and put in the hands of the industry-dominated Sunny Isles City Commission, whose current members consist of a real estate executive, a property lawyer and a former advertising executive. What happened next was the most spectacular neighborhood transformation seen in Miami since cocaine money rebuilt the city’s downtown area beginning in the late 1970s.
The first mayor was David Samson, a parking garage magnate from Chicago who retired to Sunny Isles and helped “remake a sleepy area of low-rise motels built along Collins Avenue in the 1950s into a sparking city of condominium towers,” according to his 2003 obituary. Norman Edelcup, a former banker and real estate executive, succeeded Samson upon the latter’s death, and the city has been a property developer’s wet dream ever since.
For all of its wealth, Sunny Isles, which spans just one square mile and has a population of 20,832, is as bland and boring as its political leadership. “Residents are as pampered as hotel guests,” says the glossy official guidebook, which features photos of the beach, shopping boutiques and, mostly, luxury condos. “World- class spas, unparalleled concierge service, beachside wait staff ready to serve, free city transportation, and dozens of cultural opportunities is why Sunny Isles Beach stands out amongst the rest.”
I interviewed a Siberian-born realtor in the lobby of Beach Club, a luxury condominium on South Ocean Drive in Hallandale, just north of Sunny Isles. “Miami is a brand,” she told me as we sat on a sofa in the building’s huge foyer. “People from all over the world want property here.” Developers were only putting up luxury properties because they “know that the crisis has not affected people with money,” she added. By way of example she pointed to the Regalia, a new Sunny Isles condo with only thirty-nine units, one per floor, with prices starting at $6 million.
Most of her clients are Russian—there are now three direct flights per week between Moscow and Miami—and increasing numbers are moving to Florida after spending a few years in London first. “It’s a money center, and it’s a lot easier to get your money there than directly to the US, because of laws and tax issues,” she said. “But after your money has been in London for a while, you can move it to other places more easily.”
* * *
Florida was at the epicenter of the housing bubble that collapsed the country’s economy, and the state’s overall foreclosure rate remained the highest in the country through the first half of 2013. But the luxury real estate market in Miami is flourishing. A March story in Property Week said the “dark age” of the 2009 crash was over: “Fewer than ten percent of downtown Miami units are left and they’re going fast. Meanwhile, super-luxury penthouses at the exclusive southern tip of South Beach…are selling for $25 million.”
This remarkable boom in high-end real estate has been driven by foreign money, with “buyers coming from all over the world but with the highest concentration from Venezuela, Argentina, Brazil and Russia,” according to the website for Miami Condo Investments, which offers high-end properties for sale. Twenty-six percent of real estate sales to foreigners in the United States occur in Florida, more than anywhere else in the country and twice as high as second-place California, according to the National Association of Realtors. Seventy-six percent of condo buyers in Miami don’t take out mortgages but pay cash, versus a national average of 32 percent for cash sales for all properties.
Jorge Pérez, a developer known as the “Condo King,” told a local real estate conference earlier this year that all these foreign buyers make Miami the only city in America where the cash model works. “It’s a very local market,” he said. “It’s for people who are used to paying cash for most of their second homes.”
Born in Argentina to Cuban parents, Pérez faced financial ruin during the last housing bubble. By 2010, his Related Group had lost four of its seven Florida developments to foreclosure and was desperately trying to reschedule $1.5 billion in debt. Now he is hawking a new slate of luxury projects, including One Ocean at the tip of South Beach and the SLS Hotel, a brand whose flagship property is in Beverly Hills.
Enticing foreign buyers may have saved the financial skins of Miami real estate investors like Pérez, but all that offshore money entails risks as well. Obviously not all of the money flowing into Miami from abroad is illegitimate. Yet there are abundant signs—beyond the city’s traditional role as a repository for dirty cash and the fact that much of the inflow is from countries particularly rife with corruption—that significant numbers of foreign condo buyers are political figures and businesspeople seeking to illegally export capital abroad, launder profits or evade taxes.
Corruption and bribery cost developing countries up to $1 trillion per year—lost revenues they are increasingly serious about attempting to recapture. Some of the money ends up in traditional offshore havens like Nevis, Bermuda and the British Virgin Islands, and huge amounts also flow to Western financial centers like Geneva, London and New York. But Miami, and its real estate market in particular, is an especially popular haven for ill-gotten cash. “South Florida has always been a favorite destination for international visitors and political figures, whether it is for vacation or to purchase property along its sandy and sunny beaches,” said a May 2011 Treasury Department report. “As such, Miami finds itself in the distinct position of being a reoccurring hot spot for funds pilfered by politically exposed persons (PEPs) and other criminal proceeds.”
* * *
The combination of tax haven accessibility and weak banking secrecy and corporate registry rules—as in Wilmington, Delaware, where nearly 300,000 businesses are registered at a single address—has created a huge global problem. For the past year, the International Consortium of Investigative Journalists has been making public a vast trove of leaked offshore records that have revealed tax evasion by billionaires, oligarchs, emirs, princes and multinational corporations around the globe. A recent report by the Tax Justice Network described tax havens as “the economic equivalent of an astrophysical black hole” and estimated that they collectively held as much as $32 trillion—roughly double the annual GDP of the United States.
In February, a member of Russia’s ruling party, Vladimir Pekhtin, was forced to resign from the Duma when a blogger published documents showing that he owned three Miami properties worth more than a combined $2 million. Pekhtin’s holdings were especially embarrassing because he had not disclosed his overseas properties in his annual financial disclosure filing, as is legally required under a bill he had written as chairman of the Duma’s ethics committee. In Russia, which saw illegal capital outflows of more than $200 billion from 1994 to 2011, charges of corruption and lavish spending overseas have become major political issues.
In September of 2012, The New York Times reported that wealthy Argentines had been pouring money into Miami real estate “by expensive and sometimes illegal means.” Hugo Chávez’s presidency prompted massive illegal capital flight by wealthy Venezuelans, with vast sums pouring into Miami. His re-election in October 2012, five months before his death, prompted some local realtors to joke that Chávez should have been named condo “Salesman of the Year.” Alvaro Lopez Tardon, the alleged leader of a Spanish drug gang, is currently facing trial in Miami on charges that he bought fourteen condos and a fleet of luxury vehicles to launder $26.4 million in cocaine profits.
It’s difficult to discover who specifically has been snapping up high-end properties, because many buyers are not individuals but Florida limited liability companies (LLCs). In August 2012, a 30,000-square-foot house on Indian Creek Island with thirteen bedrooms and fourteen bathrooms sold for $47 million, the most expensive home sale in Miami’s history. Media accounts identified the anonymous buyer as a Russian but the listed owner is AVK Land Holding, a Florida LLC, whose business address is a pay-by-the-day business center in midtown Manhattan and which was registered a few months before the sale by a Tallahassee company called Incorporating Services Ltd. AVK’s annual report is signed by Andrey M. Kaydin, an attorney based in Coney Island who has also served as a beard for buyers of luxury properties in New York City.
Buying property through business entities set up in Delaware or offshore havens is also common. Condo owners at properties in Sunny Isles include companies that were established or have legal representatives in a multitude of locations, including Argentina, Belize, the Bahamas, the British Virgin Islands, Chile, Guatemala and Trinidad.
Trump’s partner in Sunny Isles is Dezer Development, which began buying up property in 1995 and now owns twenty-seven acres of oceanfront. According to company president Gil Dezer, his firm handles the due diligence on condo buyers. “We do make sure we know our customer by asking for personal information at the time of signing the contract,” Dezer wrote in an e-mail. “We also make sure that anyone buying with an LLC proves to us that they are the rightful owner of that LLC and we check again at closing to make sure that we are still dealing with the same person at the time of delivering title.”
Offshore entities are an especially bright red flag, but domestic LLCs offer a simple means of obscuring property ownership from tax and law enforcement agencies or an aggrieved business partner or spouse. Peter Zalewski, a consultant to real estate developers, told me that Pekhtin “was either naïve or cheap. If he’d just hired a local attorney, he could have structured things in a way that he never would have been caught.”
Democratic Senator Carl Levin of Michigan has long tried to address rampant money laundering by passing a bill that would require companies registered in the United States to reveal their true owners, but it has been blocked by the US Chamber of Commerce, the American Bar Association, and lobbyists for states including Delaware and, notably, Florida. Meanwhile, Florida’s political leaders have been spearheading the fight against a new Treasury Department rule mandating that foreign banks tell the IRS about accounts held by US taxpayers—and which would, reciprocally, require US banks to share the same information with foreign governments. Not surprisingly, Florida banks and realtors don’t like the idea of more sunlight on their lucrative dealings with foreigners. “There is a huge amount of dirty money flowing into Miami that’s disguised as investment,” said Jack Blum, a former congressional investigator and Washington attorney specializing in money-laundering cases. “The local business community sees any threat to that as a threat to the city’s lifeblood.”
I uncovered more than a score of notable foreign property holders in Miami, from a former senior Angolan official to various oligarchs, political cronies and controversial figures from Eastern Europe and Latin America (for summaries of their backgrounds and Miami holdings, see sidebars). That small window came after more than six months of research; dozens of interviews with money-laundering, banking and real estate experts; a visit to the city; and countless hours poring over Florida real estate and corporate records by myself and several research assistants.
I was especially interested in the growing presence of Russians and other Eastern Europeans, who began purchasing properties in Miami soon after the collapse of communism. Early arrivals included various Russian pop stars, among them Igor Nikolaev and Alla Pugacheva, but more than a few bad apples as well. Miami soon became a boomtown for former government officials and post-perestroika businessmen who looted the state during privatization and for mobsters who trafficked cocaine, bought strip clubs and set up offshore banks around the Caribbean. In his book Red Mafiya, Robert Friedman wrote that “Versace-clad” Russian gang leaders found Miami to be an ideal base for money laundering, “where each new day brought the potential for a multimillion- dollar score.” By 1996, according to a Miami Herald story that year, some 300 former Soviet citizens had bought properties in South Florida.
Isaac Feldman, who came to Miami after first emigrating to Israel, founded a real estate agency and became rich selling condos, mostly to Russians. Feldman didn’t seem overly concerned about the source of his clients’ money. “That some people [in the former Eastern bloc] operate by not paying taxes and duties and paying some bribes, yes, that could be,” he was quoted as saying in the Herald story.
Mayor Edelcup later appointed Feldman as a community adviser, and in 2010 he received 26 percent of the vote in a run for the Sunny Isles City Commission. Feldman vowed to mount another campaign, but his political career was cut short when he and two other Russians were indicted last December for conspiracy, wire fraud and money laundering. The trio had employed young Eastern European women to lure rich tourists to bars that bilked them—to the tune of $43,000 in the case of one customer—for overpriced caviar, vodka and champagne.
Thanks to its heavy Russian presence, Sunny Isles has acquired the nickname “Little Moscow.” Shops at a mall across the street from the Trump International Resort include a delicatessen offering blintzes and beef stroganoff, a furniture store with white leather sofas in the display window and restaurants serving an Eastern European clientele.
One night I had dinner at Lula Kebab House, where I felt like I’d been transported into a Russian version of Goodfellas. A Russian singer performed on a small stage with disco lights while customers ordered skewered sturgeon, eggplant salad and pierogis, and clinked forks on glasses to announce toasts before downing shots of vodka. At the table behind me, a man who looked to be almost 70 spoke in Russian to his wife, who appeared to be at least 40 years younger. At a table out front, a man of about the same age was seated with a young woman dressed in blue jean shorts, a halter top and cowboy boots.
Sunny Isles also has numerous real estate agencies owned by Russians that cater heavily to Eastern European clients, among them Exclusively Baranoff Realty, which operates from an office in the lobby of the Trump International Beach Resort and, according to an advertisement hanging near the elevator bank, represents “the most exclusive residences in Sunny Isles Beach, from $250,000 to more than $20 million.” A purple-and-gold advertising flier on a table out front of the agency that listed numerous properties for sale was in English on one side and Russian on the other.
I approached several realtors as a potential buyer. One agent I met with, a beautiful dark-haired Eastern European woman, told me that luxury properties in Sunny Isles were selling fast, mostly to foreigners and New York hedge funds. There were about 300 units in each of the Trump properties in Sunny Isles, but only ten were available in the $2-million-and-up range (which I had said I was looking for). If I was serious about buying, I’d have to move quickly and pay cash.
She took me to see a three-bedroom, three-bathroom unit on the thirty-eighth floor of Trump Palace, which looked out on the turquoise waters of the Atlantic and was on the market for $2.3 million. Building amenities included a bar, business center, cabanas, exercise room, indoor and outdoor pools, a spa and sauna, and tennis courts. “Living in a Trump property is like living in a hotel,” she told me, echoing the sales pitch in Sunny Isles’ official guidebook, as we stood on a balcony and gazed out on the ocean. The unit was attractively priced, she said cheerfully, and all the more so as the owner, a Russian looking to buy a bigger condo elsewhere in the area, had spent at least $350,000 on improvements.
Later that day, I obtained the property records for the condo. The legal owner is a company registered in Belize, an offshore haven where, according to a government website, there “is no requirement to file annual returns or public disclosure of directors, shareholders, charges, loans or agreements.”
In other words, the true owner of the Trump Palace unit is untraceable. He may be a perfectly respectable businessman, but the arrangement was a typically murky Miami affair.
Money Laundering, a Miami Tradition
Miami is a relatively new city, having been incorporated in 1896, and its entire history is inextricably intertwined with the real estate industry and its regular cycle of booms and busts. Miamians chatter incessantly about real estate, in the same way that a certain subset of New Yorkers talks about the stock market, Washingtonians politics and Los Angelenos the movie industry.
One afternoon at a restaurant called Boteco, I sat next to a table of four Brazilians who were cooking up a property deal. When drinking a cup of coffee in front of a strip mall café, I overheard a woman on the phone saying, “I know, I know, but the question is, are you willing to go higher?” At Tatiana—a restaurant and nightclub just north of Sunny Isles that is a favorite of Russians and that, on the weekends, features a show with cabaret dancers, circus performers and an occasional tiger—I overheard half of another phone conversation in which a middle-aged American man talking excitedly about one deal said, “I’m not normally a pyramid-scheme type of guy, but this one I like.”
Tens of thousands of people moved to Miami during the city’s original property rush of the 1920s. Many never intended to settle there but instead hoped to get rich speculating, and the enormous real estate bubble that ensued exploded in 1926. That was the same year as the Great Miami Hurricane, the most destructive ever to hit the United States at that time. It killed nearly 400 people and caused billions in property damage (in today’s dollars), blowing away thousands of unfinished houses that had been abandoned when the real estate market crashed. Next came a post–World War II rush fueled by people who came to stay. “That boom was more legitimate than the first one, and in a sense it has never ended,” says Paul George, a professor of history at Miami Dade College, adding that Dade County’s population has grown from 250,000 in 1940 to about 2.6 million today. “But ever since, we’ve had spikes of excessive speculation that ended badly.”
The wildest ride began in the 1970s, when Latin American drug lords turned Miami into a key hub of their operations and poured billions of dollars into the local economy, with much of it laundered into real estate. It also led to a crime wave—memorialized in Miami Vice and Brian De Palma’s Scarface—that gave Miami the nation’s highest murder rate. Drug money tainted everything from law enforcement to real estate to banking. “Miami’s Federal Reserve branch has a currency surplus of $5 billion, mostly in drug-generated $50 and $100 bills, or more than the nation’s twelve Federal Reserve banks combined,” Time magazine reported.
The city’s last real estate boom resulted from reckless lending by banks during the early 2000s. During the run-up, Miami’s once sleepy downtown and city center were completely transformed by the frantic construction of high-rise residential buildings and office towers. Residents poured in, turning downtown into one of the fastest-growing areas in the entire state. Moscow-based Mirax Group, headed by Sergei Polonsky—who once ate part of his tie on live TV to settle a bet, and whom Forbes has rated one of Russia’s nine most bizarre oligarchs—announced a development project on a private island that the company marketed to Russian buyers, saying it would change “the expectations of elegant and sophisticated living on Miami Beach.” Pérez, the Condo King, announced plans for the Icon Brickell, a $1 billion project that included three towers with 1,640 units, a swimming pool the size of a football field and five restaurants. Marc Anthony told People magazine that he and Jennifer Lopez had bought a unit at the Icon Brickell, “and when we are through decorating the condo, it will be the sexiest place in town!”
Then, inevitably, came the crash. Miami real estate prices fell by 35.8 percent between late 2005 and the same period in 2009. Tens of thousands of downtown condos were unoccupied that year and, as a Property Week story recounted, at night dogs roamed deserted streets in once hot central neighborhoods. Mirax went bust and Polonsky has fled Russia, where he is wanted for real estate fraud. He is reportedly in Cambodia, where he spent jail time earlier this year for allegedly attacking six boatmen with a knife. In May 2010, HSBC Bank seized control of 1,276 condos at the Icon Brickell, and it turned out that Anthony and J. Lo had never purchased a unit there. Instead, they had, in a PR move engineered by developers, leased a condo cheaply.
Things were even grimmer elsewhere in the state. Trash piled up at vacant lots in abandoned ghost subdivisions. Construction came to a screeching halt on giant shopping malls and office buildings that went into foreclosure. In 2010, a real estate expert told NPR that there were enough housing lots in Charlotte County, in the southwestern part of the state, to last for more than a century.
Rampant Corruption, Lax Regulation
Through boom and bust, one constant in Miami has been the political and business establishment’s embrace of offshore cash. Predictably, this has led to an assortment of foreign rogues regularly washing up in the city.
In 2003, US Immigration and Customs Enforcement (ICE) set up what became known as the Foreign Corruption Investigations Group in Miami to track down assets held by foreign officials and business executives in the United States. Within months, the group—which was based in Miami due to the large number of requests for assistance that the local office received from foreign governments—seized a $3.5 million Key Biscayne condo owned by Byron Jerez, former head of Nicaragua’s tax office. The following year, the United States returned to Nicaragua $2.7 million worth of assets that had been stolen by former President Arnoldo Alemán, who was sentenced in his home country to twenty years under house detention for embezzling $100 million from the state treasury. The assets included various Miami bank accounts, a cabana at the Key Biscayne Ocean Club, and a $150,000 deposit for the purchase of another Key Biscayne condominium.
In 2008, after Uruguayan authorities alerted ICE, the feds agreed to extradite Juan Peirano Basso, an international fugitive wanted for embezzling more than $800 million from financial institutions in Uruguay, Paraguay and Argentina, and who had been living comfortably in Miami. Basso’s actions “are believed to have caused the collapse of the Uruguayan economy and to have caused the South American financial crisis of 2002,” said an ICE press release announcing his extradition. Since its inception, the Foreign Corruption Investigations Group has made eighty criminal arrests, secured 148 indictments and seized more than $131 million in assets, according to ICE.
Drug lords and other criminals and swindlers have no doubt been drawn to Miami for some of the same reasons that tourists and retirees flock there—the ocean, sun and natural beauty—but Florida’s reputation for corruption and sleaze has surely been a lure as well. This is, after all, a city that is notorious for bizarre political and business scandals. Earlier this year, Miami-Dade Assistant State Attorney Ari Pregen was fired after he flashed his work badge to gain free admission to a strip club and pulled out his credentials again when the bill came, to avoid paying a 15 percent credit card surcharge.
Overall, Florida led the United States in federal convictions of public officials—781—between 2000 and 2010. Just this summer, three suburban Miami mayors were arrested on corruption charges within a month. “This is a place where it’s easy to lose your moral compass,” says Zalewski, the real estate consultant. “Everyone who moves to Miami wants to live in South Beach, which is fun, but the rule should always be to not renew your lease after the first year. If you do, it’s pretty much guaranteed that you’ll end up in rehab.”
Adding to the area’s decadent appeal is that banks and real estate developers have frequently played fast and loose with the rules as well. Allen Stanford, now serving a 110-year prison sentence for running a massive Ponzi scheme, set up his bank in Florida in 1998 after the state’s banking director authorized it to move huge amounts of money offshore without informing regulators.
Florida’s rate of mortgage fraud was higher than anywhere else in the country between 2000 and 2008. In the latter year, Don Saxon, Florida’s top mortgage industry regulator, was forced to resign after a Miami Herald investigation found that 10,000 criminals—including burglars, cocaine traffickers and identity thieves—had been approved to broker home loans in Florida and had committed at least $85 million in mortgage fraud.
Some flagrant abuses have been addressed, partly due to tighter rules imposed under the Patriot Act following the 9/11 attacks, but Florida banks still have a lot of room for improvement. In 2011, Miami-based Ocean Bank forfeited $11 million to the federal government for willfully failing to establish an anti–money laundering program for seven years. During that time, Ocean Bank took in large sums of cash from Colombia’s Bernal-Palacios drug trafficking organization. Among the group’s leaders was Ricardo Mauricio Bernal Palacios, whom the DEA once described as “one of the most wanted money laundering fugitives in the world.”
The real estate industry is more lightly regulated than financial institutions. Banks are required to file a Suspicious Activities Report (SAR) with the Treasury Department if they suspect a client is depositing or transferring corrupt money. Real estate agents and title insurers are exempt from that requirement—as are businesses that primarily sell luxury goods such as jewelry, yachts and private planes—which makes property an especially attractive vehicle to money launderers. Furthermore, bank tellers don’t receive a commission on the deposits they accept, so they are more likely to ask questions of a dubious customer than a real estate agent, who stands to make a huge commission on a multimillion-dollar luxury condo deal. “SARs are hugely important and often lead to exposure of major cases,” Stefan Cassella, an assistant US attorney based in Baltimore and the former deputy chief of the Justice Department’s Asset Forfeiture and Money Laundering Section, told me. “Requiring a broader range of players to file them would be a big help to law enforcement in terms of keeping corrupt money out of the United States.”
A Law to “Smoke Out” Owners
In 2007, Bradley Birkenfeld, an American director of UBS’s wealth management division in Geneva, approached the Justice Department and revealed disturbing information about his employer’s business practices. In addition to disclosing that he had smuggled diamonds (in a toothpaste tube) across borders for a client, he told US authorities that UBS was helping thousands of rich Americans hide their assets offshore to avoid paying taxes.
The US government went after UBS, and in 2009 the bank settled the case and avoided criminal prosecution by paying a $780 million fine. More important, UBS turned over to the US government the names of more than 4,500 American account holders, and the case “put the first big cracks in Switzerland’s vaunted bank secrecy,” in the words of The Economist. At home, the IRS introduced amnesty programs that allowed Americans to pay a small penalty to repatriate undeclared offshore accounts, a move that has brought the Treasury an estimated $5 billion in back taxes and penalties.
Another result of the UBS affair was that in 2010 Congress enacted the Foreign Account Tax Compliance Act (FATCA), which requires foreign banks to notify the IRS about accounts held by US taxpayers or face stiff penalties.
One section of FATCA that has elicited particularly intense hostility is its provisions for reciprocity, meaning that American banks would have to provide foreign governments with the same information about their nationals who hold US accounts. FATCA was opposed by investment banks like JPMorgan and Bank of America and foreign financial institutions like the Zurich Insurance Group and the Hong Kong Securities Association. But no one fought harder against the rule than Florida bankers, real estate developers, politicians and regulators, who feared it would slow the flow of foreign money into the state’s economy, especially in Miami.
The Florida Bankers Association sued to block the measure for allegedly failing to comply with federal rule-making procedures. The lawsuit said that the measure would impose too high a regulatory burden on banks and that the federal tax code already had sufficient provisions in place to prevent tax evasion. Leading FATCA opponents also included the Florida International Bankers Association, a trade group representing foreign banks from eighteen countries, and the Florida Office of Financial Regulation, which said it would require the “blanket collection” of information on foreign account holders and that the IRS should instead negotiate with foreign governments for “the reciprocal exchange of information” as required in individual cases.
Florida Republican Congressman Bill Posey, a member of the House Financial Services Committee, wrote a letter to President Obama saying that FATCA would “result in the flight of hundreds of billions of dollars from US financial institutions” and the leaking of personal information that might lead to “kidnappings or other terrorist actions” against foreign account holders in their home countries. In reply, Treasury Department official Michael Mundaca said that the IRS does not share information with foreign governments “unless and until several conditions are met, including a review of the protections against the misuse of information.” He also denied the new rules would cause massive capital flight from American banks, and noted that US banks had made similar arguments in the mid-1990s when new regulations required the reporting of bank-deposit interest paid to Canadian account holders. In fact, the amount of money held by Canadians in American banks rose from $1.9 billion in March 1996, just before the final regulations were issued, to $4 billion one year later.
The anti-FATCA lobby was able to delay enactment of the rule and water down some of its provisions, but as of midyear the United States had signed reciprocal agreements under FATCA with nine countries and was negotiating with eighteen more. Charles Intriago, president of the Association of Certified Financial Crime Specialists in Miami, predicted that FATCA would “smoke out” the true owners of a lot of front companies for criminals, including politicians. “The IRS is going to get the names of their girlfriends and aunts and uncles who are serving as directors of companies set up offshore,” he said.
That remains to be seen, as opponents are already campaigning to repeal the rule and the IRS recently announced that it is giving foreign financial institutions an additional six months, until July of next year, to comply. Senator Rand Paul, the Kentucky Republican, has introduced a bill to repeal FATCA, saying it is a “violation of sovereign nations’ laws and privacy matters.” Congressman Posey is leading the repeal effort in the House. On July 1, he wrote a letter to Treasury Secretary Jack Lew saying that FATCA measures “themselves would not bring one penny into the US treasury, they would discourage investment in the United States.”
A number of conservative activists are also involved in the FATCA repeal campaign, including Grover Norquist of Americans for Tax Reform and Andrew Quinlan of the Center for Freedom and Prosperity (CF&P). A Washington Post story in April said that the latter group’s “fundraising pleas have been circulated to offshore entities that make millions by providing anonymity for wealthy clients,” and that the director of a Hong Kong company that creates offshore trusts had sent a CF&P solicitation “to contacts in the Cook Islands, pointing out that CF&P was trying to raise $250,000 for a lobbying campaign to ‘stop the bleeding, build allies and go on the offensive’ against efforts in Washington to regulate the industry.”
No matter what happens with FATCA, cleaning up Florida financial institutions will not be easy, says Brian Kindle, who works for Intriago’s association. “I read a lot of court records about financial crimes, and whether it’s a Midwestern Ponzi scheme or a Caribbean bank fraud, at some point I always come across the phrase, ‘The money moved through a bank in South Florida.’ We have a big banking community, but New York and California are even bigger, and the money doesn’t always move through their banks. Our banking and real estate industries grew up during the cocaine era, and the attitude here has always been to make a quick deal and don’t ask any questions. That’s the whole culture, and it’s pretty antithetical to a rules-and-regulation-based compliance system. Changing that is going to be hard.”
During my last few days in Miami, I visited a few more properties for sale in Sunny Isles and waded through real estate listings. There were dozens of oceanfront properties with all the trimmings: marble floors, custom white Italian doors, built-in bars, multimedia systems, ceiling windows with electric shades, his-and-hers baths and walk-in closets, Jacuzzis, swimming pools and beachfront cabanas. At Ocean Three, a condominium toward the northern end of Sunny Isles, an in-house restaurant, Bistro, delivers to the units, the pool and the beach and offers a seven-course tasting menu that includes options such as foie gras, oysters Rockefeller, lobster, black winter truffles and baby rack of lamb.
And so it goes in Miami, where the welcome mat for the globe’s most pampered people is always out. Today, even as much of Florida has yet to pull out of the last real estate quagmire, at least 170 new condo towers are planned for Miami, many by the same developers behind projects that went bust during the last bubble. The Real Deal, a South Florida real estate publication, recently reported that a new influx of money from the Far East was further buoying the market and that the Ritz-Carlton Residences Palm Beach had already completed several deals with Chinese buyers.
Earlier this year, Flagstone Development announced it would build a mega-yacht resort called Island Garden that will feature high-rise towers, a hotel, shopping and a marina. The project was originally planned five years ago but fell apart when the real estate bubble brought down the global economy. Flagstone promises it will be open for business in 2019.
Jack Blum, the money-laundering investigator, recounted to me a work trip to Miami two years ago, when he was stunned to see condominiums going up in the poor Liberty City neighborhood. “I was in a cab and asked the driver what was going on,” he said. “He didn’t miss a beat—he said, ‘That’s from money laundering.’ When it’s that obvious to cabdrivers, you know the situation is bad. But that’s what the city’s economy is built on, and it is a monumental challenge to fix it.”
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This is where our right wing Republicans are being fooled------Republicans hate eminent domain---which all this development abuses openly----but they love Trans Pacific Trade Pact ----now Congressional Republicans who are simply all Bush neo-cons love TPP=====not rank and file Republican voters.
Trans Pacific Trade Pact tied to US Foreign Economic Zones will allow global corporations to come into US cities and take whatever real estate they want-----no matter who owns it. That is what we are seeing today when city council gives PLANK AND UNDERARMOUR or Larry Hogan gives A CORE OF community real estate to global corporate campus development ---but this will soon be done flagrantly and will take any real estate now being handed to that 5% to the 1% as PAY-TO-PLAY.
TRUMP HAS NOT STOPPED TRANS PACIFIC TRADE PACT no matter how much they pretend----they are simply silencing people protesting as they MOVE FORWARD.
'Republicans hate eminent domain (the taking of private property by the government) and love the Trans-Pacific Partnership (the TPP trade deal), but he .... But conservative real estate developers like Trump depend on eminent domain so that '.
Trump's real estate empire moved overseas with all of global Wall Street so this is simply conservative posing. It is why the KINGS OF REAL ESTATE as in Chicago and Baltimore will lose it all as global corporate campus expansion continues.
Please glance through to see how right wing conservatives are fooled as too left social Democrats with Clinton neo-liberals-----IT IS ALL POSING---
No One Knows Why Trump Is Winning. Here’s What Cognitive Science Says.
The cognitive linguistic psychology behind Trump’s success
By George Lakoff
Editor’s note: the author’s piece below was written during the primaries but it is just as relevant today.
Donald Trump is winning Republican presidential primaries at such a great rate that he seems likely to become the next Republican presidential nominee and perhaps the next president. Democrats have little understanding of why he is winning — and winning handily, and even many Republicans don’t see him as a Republican and are trying to stop him, but don’t know how. There are various theories: People are angry and he speaks to their anger. People don’t think much of Congress and want a non-politician. Both may be true. But why? What are the details? And Why Trump?
Many people are mystified. He seems to have come out of nowhere. His positions on issues don’t fit a common mold.
He likes Planned Parenthood, Social Security, and Medicare, which are not standard Republican positions. Republicans hate eminent domain (the taking of private property by the government) and love the Trans-Pacific Partnership (the TPP trade deal), but he has the opposite views on both. He is not religious and scorns religious practices, yet the Evangelicals (that is, the white Evangelicals) love him. He thinks health insurance and pharmaceutical companies, as well as military contractors, are making too much profit and wants to change that. He insults major voting groups, e.g., Latinos, when most Republicans are trying to court them. He wants to deport 11 million immigrants without papers and thinks he can. He wants to stop all Muslims from entering the country. What is going on?
Some Background
I work in the cognitive and brain sciences. In the 1990’s, I undertook to answer a question in my field: How do the various policy positions of conservatives and progressives hang together? Take conservatism: What does being against abortion have to do with being for owning guns? What does owning guns have to do with denying the reality of global warming? How does being anti-government fit with wanting a stronger military? How can you be pro-life and for the death penalty? Progressives have the opposite views. How do their views hang together?
The answer came from a realization that we tend to understand the nation metaphorically in family terms: We have founding fathers. We send our sons and daughters to war. We have homeland security. The conservative and progressive worldviews dividing our country can most readily be understood in terms of moral worldviews that are encapsulated in two very different common forms of family life: The Nurturant Parent family (progressive) and the Strict Father family (conservative).
What do social issues and the politics have to do with the family? We are first governed in our families, and so we grow up understanding governing institutions in terms of the governing systems of families.
In the strict father family, father knows best. He knows right from wrong and has the ultimate authority to make sure his children and his spouse do what he says, which is taken to be what is right. Many conservative spouses accept this worldview, uphold the father’s authority, and are strict in those realms of family life that they are in charge of. When his children disobey, it is his moral duty to punish them painfully enough so that, to avoid punishment, they will obey him (do what is right) and not just do what feels good. Through physical discipline they are supposed to become disciplined, internally strong, and able to prosper in the external world. What if they don’t prosper? That means they are not disciplined, and therefore cannot be moral, and so deserve their poverty. This reasoning shows up in conservative politics in which the poor are seen as lazy and undeserving, and the rich as deserving their wealth. Responsibility is thus taken to be personal responsibility not social responsibility. What you become is only up to you; society has nothing to do with it. You are responsible for yourself, not for others — who are responsible for themselves.
Winning and Insulting
As the legendary Green Bay Packers coach, Vince Lombardi, said,“Winning isn’t everything. It’s the only thing.”
In a world governed by personal responsibility and discipline, those who win deserve to win. Why does Donald Trump publicly insult other candidates and political leaders mercilessly? Quite simply, because he knows he can win an onstage TV insult game. In strict conservative eyes, that makes him a formidable winning candidate who deserves to be a winning candidate. Electoral competition is seen as a battle. Insults that stick are seen as victories — deserved victories.
Consider Trump’s statement that John McCain is not a war hero. The reasoning: McCain got shot down. Heroes are winners. They defeat big bad guys. They don’t get shot down. People who get shot down, beaten up, and stuck in a cage are losers, not winners.
The Moral Hierarchy
The strict father logic extends further. The basic idea is that authority is justified by morality (the strict father version), and that, in a well-ordered world, there should be (and traditionally has been) a moral hierarchy in which those who have traditionally dominated should dominate. The hierarchy is: God above Man, Man above Nature, The Disciplined (Strong) above the Undisciplined (Weak), The Rich above the Poor, Employers above Employees, Adults above Children, Western culture above other cultures, Our Country above other countries. The hierarchy extends to: Men above women, Whites above Nonwhites, Christians above nonChristians, Straights above Gays.
We see these tendencies in most of the Republican presidential candidates, as well as in Trump, and on the whole, conservative policies flow from the strict father worldview and this hierarchy Family-based moral worldviews run deep. Since people want to see themselves as doing right not wrong, moral worldviews tend to be part of self-definition — who you most deeply are. And thus your moral worldview defines for you what the world should be like. When it isn’t that way, one can become frustrated and angry.
There is a certain amount of wiggle room in the strict father worldview and there are important variations. A major split is among (1) white Evangelical Christians, (2) laissez-fair free market conservatives, and (3) pragmatic conservatives who are not bound by evangelical beliefs.
White Evangelicals
Those whites who have a strict father personal worldview and who are religious tend toward Evangelical Christianity, since God, in Evangelical Christianity, is the Ultimate Strict Father: You follow His commandments and you go to heaven; you defy His commandments and you burn in hell for all eternity. If you are a sinner and want to go to heaven, you can be ‘born again” by declaring your fealty by choosing His son, Jesus Christ, as your personal Savior.
Such a version of religion is natural for those with strict father morality. Evangelical Christians join the church because they are conservative; they are not conservative because they happen to be in an evangelical church, though they may grow up with both together.
Evangelical Christianity is centered around family life. Hence, there are organizations like Focus on the Family and constant reference to “family values,” which are to take to be evangelical strict father values. In strict father morality, it is the father who controls sexuality and reproduction. Where the church has political control, there are laws that require parental and spousal notification in the case of proposed abortions.
Evangelicals are highly organized politically and exert control over a great many local political races. Thus Republican candidates mostly have to go along with the evangelicals if they want to be nominated and win local elections.
Pragmatic Conservatives
Pragmatic conservatives, on the other hand, may not have a religious orientation at all. Instead, they may care primarily about their own personal authority, not the authority of the church or Christ, or God. They want to be strict fathers in their own domains, with authority primarily over their own lives. Thus, a young, unmarried conservative — male or female —may want to have sex without worrying about marriage. They may need access to contraception, advice about sexually transmitted diseases, information about cervical cancer, and so on. And if a girl or woman becomes pregnant and there is no possibility or desire for marriage, abortion may be necessary.
Trump is a pragmatic conservative, par excellence. And he knows that there are a lot of Republican voters who are like him in their pragmatism. There is a reason that he likes Planned Parenthood. There are plenty of young, unmarried (or even married) pragmatic conservatives, who may need what Planned Parenthood has to offer — cheaply and confidentially.
Similarly, young or middle-aged pragmatic conservatives want to maximize their own wealth. They don’t want to be saddled with the financial burden of caring for their parents. Social Security and Medicare relieve them of most of those responsibilities. That is why Trump wants to keep Social Security and Medicare.
Laissez-faire Free Marketeers
Establishment conservative policies have not only been shaped by the political power of white evangelical churches, but also by the political power of those who seek maximally laissez-faire free markets, where wealthy people and corporations set market rules in their favor with minimal government regulation and enforcement. They see taxation not as investment in publicly provided resources for all citizens, but as government taking their earnings (their private property) and giving the money through government programs to those who don’t deserve it. This is the source of establishment Republicans’ anti-tax and shrinking government views. This version of conservatism is quite happy with outsourcing to increase profits by sending manufacturing and many services abroad where labor is cheap, with the consequence that well-paying jobs leave America and wages are driven down here. Since they depend on cheap imports, they would not be in favor of imposing high tariffs.
But Donald Trump is not in a business that makes products abroad to import here and mark up at a profit. As a developer, he builds hotels, casinos, office buildings, golf courses. He may build them abroad with cheap labor but he doesn’t import them. Moreover, he recognizes that most small business owners in America are more like him — American businesses like dry cleaners, pizzerias, diners, plumbers, hardware stores, gardeners, contractors, car washers, and professionals like architects, lawyers, doctors, and nurses. High tariffs don’t look like a problem.
Many business people are pragmatic conservatives. They like government power when it works for them. Take eminent domain. Establishment Republicans see it as an abuse by government — government taking of private property. But conservative real estate developers like Trump depend on eminent domain so that homes and small businesses in areas they want to develop can be taken by eminent domain for the sake of their development plans. All they have to do is get local government officials to go along, with campaign contributions and the promise of an increase in local tax dollars helping to acquire eminent domain rights. Trump points to Atlantic City, where he build his casino using eminent domain to get the property.
If businesses have to pay for their employees’ health care benefits, Trump would want them to have to pay as little as possible to maximize profits for businesses in general. He would therefore want health insurance and pharmaceutical companies to charge as little as possible. To increase competition, he would want insurance companies to offer plans nationally, avoiding the state-run exchanges under the Affordable Care Act. The exchanges are there to maximize citizen health coverage, and help low-income people get coverage, rather than to increase business profits. Trump does however want to keep the mandatory feature of ACA, which establishment conservatives hate since they see it as government overreach, forcing people to buy a product. For Trump, however, the mandatory feature for individuals increases the insurance pool and brings down costs for businesses.
Direct vs. Systemic Causation
Direct causation is dealing with a problem via direct action. Systemic causation recognizes that many problems arise from the system they are in and must be dealt with via systemic causation. Systemic causation has four versions: A chain of direct causes. Interacting direct causes (or chains of direct causes). Feedback loops. And probabilistic causes. Systemic causation in global warming explains why global warming over the Pacific can produce huge snowstorms in Washington DC: masses of highly energized water molecules evaporate over the Pacific, blow to the Northeast and over the North Pole and come down in winter over the East coast and parts of the Midwest as masses of snow. Systemic causation has chains of direct causes, interacting causes, feedback loops, and probabilistic causes — often combined.
Direct causation is easy to understand, and appears to be represented in the grammars of all languages around the world. Systemic causation is more complex and is not represented in the grammar of any language. It just has to be learned.
Empirical research has shown that conservatives tend to reason with direct causation and that progressives have a much easier time reasoning with systemic causation. The reason is thought to be that, in the strict father model, the father expects the child or spouse to respond directly to an order and that refusal should be punished as swiftly and directly as possible.
Many of Trump’s policy proposals are framed in terms of direct causation.
Immigrants are flooding in from Mexico — build a wall to stop them. For all the immigrants who have entered illegally, just deport them — even if there are 11 million of them working throughout the economy and living throughout the country. The cure for gun violence is to have a gun ready to directly shoot the shooter. To stop jobs from going to Asia where labor costs are lower and cheaper goods flood the market here, the solution is direct: put a huge tariff on those goods so they are more expensive than goods made here. To save money on pharmaceuticals, have the largest consumer — the government — take bids for the lowest prices. If Isis is making money on Iraqi oil, send US troops to Iraq to take control of the oil. Threaten Isis leaders by assassinating their family members (even if this is a war crime). To get information from terrorist suspects, use water-boarding, or even worse torture methods. If a few terrorists might be coming with Muslim refugees, just stop allowing all Muslims into the country. All this makes sense to direct causation thinkers, but not those who see the immense difficulties and dire consequences of such actions due to the complexities of systemic causation.
Political Correctness
There are at least tens of millions of conservatives in America who share strict father morality and its moral hierarchy. Many of them are poor or middle class and many are white men who see themselves as superior to immigrants, nonwhites, women, non-Christians, gays — and people who rely on public assistance. In other words, they are what liberals would call “bigots.” For many years, such bigotry has not been publicly acceptable, especially as more immigrants have arrived, as the country has become less white, as more women have become educated and moved into the workplace, and as gays have become more visible and gay marriage acceptable. As liberal anti-bigotry organizations have loudly pointed out and made a public issue of the unAmerican nature of such bigotry, those conservatives have felt more and more oppressed by what they call “political correctness” — public pressure against their views and against what they see as “free speech.” This has become exaggerated since 911, when anti-Muslim feelings became strong. The election of President Barack Hussein Obama created outrage among those conservatives, and they refused to see him as a legitimate American (as in the birther movement), much less as a legitimate authority, especially as his liberal views contradicted almost everything else they believe as conservatives.
Donald Trump expresses out loud everything they feel — with force, aggression, anger, and no shame. All they have to do is support and vote for Trump and they don’t even have to express their ‘politically incorrect’ views, since he does it for them and his victories make those views respectable. He is their champion. He gives them a sense of self-respect, authority, and the possibility of power.
Whenever you hear the words “political correctness” remember this.
Biconceptuals
There is no middle in American politics. There are moderates, but there is no ideology of the moderate, no single ideology that all moderates agree on. A moderate conservative has some progressive positions on issues, though they vary from person to person. Similarly, a moderate progressive has some conservative positions on issues, again varying from person to person. In short, moderates have both political moral worldviews, but mostly use one of them. Those two moral worldviews in general contradict each other. How can they reside in the same brain at the same time?
Both are characterized in the brain by neural circuitry. They are linked by a commonplace circuit: mutual inhibition. When one is turned on the other is turned off; when one is strengthened, the other is weakened. What turns them on or off? Language that fits that worldview activates that worldview, strengthening it, while turning off the other worldview and weakening it. The more Trump’s views are discussed in the media, the more they are activated and the stronger they get, both in the minds of hardcore conservatives and in the minds of moderate progressives.
This is true even if you are attacking Trump’s views. The reason is that negating a frame activates that frame, as I pointed out in the book Don’t Think of an Elephant! It doesn’t matter if you are promoting Trump or attacking Trump, you are helping Trump.
A good example of Trump winning with progressive biconceptuals includes certain unionized workers. Many union members are strict fathers at home or in their private life. They believe in “traditional family values” — a conservative code word — and they may identify with winners.
Why Has Trump been Winning in the Republican Primaries?
Look at all the conservatives groups he appeals to!
The only time these criminals inside a crony system are prosecuted is if they fail to do what they are told---SAME SYSTEM AS GLOBAL MAFIA.
So when the global Wall Street players have us shouting at a Trump moving all 99% attention from the real problems in US cities deemed Foreign Economic Zones----THEY ARE LYING, CHEATING, AND STILL STEALING from our communities.
Social Darwinism
A pseudo sociologist named Herbert Spenser theorized that rich folks got that way through a process of Darwinian natural selection. Historian Richard Hofstad...
youtube.com
What started off as an experiment to prove social Darwinism became the network in our US cities to strip the most talented from our communities and tie them to global Wall Street----ergo---no one protesting. It didn't prove social Darwinism but it was used to sustain power of old world MERCHANTS OF VENICE.
THESE ARE THE YOUNG LEADERS BEING TAUGHT TO BE GLOBAL ONE WORLD UNITED NATIONS WORKING FOR OLD WORLD GLOBAL 1%.
The City College of New York
160 Convent Avenue
New York, NY 10031
Our academic programs cover more than a hundred fields, ranging from art and architecture to biomedical engineering, medicine and urban design.Intellectually exciting and rigorous, grounded in solid academic tradition – a tradition that produced nine Nobel Laureates, a Secretary of State and a Justice of the Supreme Court – but fully geared to the 21st century, these programs prepare students for graduate and professional school, for a host of professions, and for the rich, productive life of the educated citizen.
Outstanding City College faculty claim memberships in our national academies, leadership in their professional fields, and scholarship that spans cutting edge discovery in science and engineering and outstanding accomplishment in the arts, as well as dedication to teaching.
A fully accredited institution of higher education, we offer curricula leading to the bachelor of arts, bachelor of fine arts, bachelor of science, bachelor of engineering, master of architecture, master of arts, master of fine arts, master of public administration, master of science, master of science in education, and master of social work degrees, as well as a number of accelerated (BA/MA, BS/MD, etc.) degrees and advanced certificate programs. We also offer doctoral programs in seven engineering disciplines.Several CUNY doctoral programs in science and psychology are based at City College.
______________________________________________
Looking at Baltimore communities---associations and how global Wall Street Development and Johns Hopkins uses them we don't so much see a cronyism among families as we see constant hold on these US city governments by the corporate banking entities----buying and keeping those GLADIATORS OF STREET THUGGERY in place as long as they are useful then finding the next thug to lie, cheat, and steal. Once they pass that test at a community level they then become appointed to committees----allowed to be city council or Maryland Assembly pols who are paid to say to 99% of citizens----OH, WE CAN'T STOP THE FRAUD AND CORRUPTION ===THEY WOULDN'T LIKE THAT.
'A recent survey of Chicago business leaders showed over 90 percent believed city government engages in some form of cronyism'.
As with all media across the US they NEVER IDENTIFY these global institutions literally fat from all of these few decades of fraud and corruption=====they always refer to the mess at community level.
Chicago alderman indicted on federal charges of extortion, theft
By Austin Berg, December 14, 2016 at 12:05 pm
Chicago Alderman Willie Cochran, 20th Ward, has been indicted on federal criminal charges.
The U.S. Attorney’s Office for the Northern District of Illinois on Dec. 14 announced charges that Cochran “pocketed money from a charitable fund that was intended to help families and children in his South Side ward.” He was also charged with extortion of a local liquor store, as well as an Illinois attorney representing real-estate developers.
The attorney’s office alleged Cochran paid for his daughter’s college tuition and financed a gambling habit with money from the 20th Ward Activities Fund.
Cochran was charged with 11 counts of wire fraud, two counts of federal program bribery and two counts of extortion.
This trails October news that Cochran was under FBI investigation for his use of campaign funds. The Chicago Sun-Times previously reported Cochran paid himself more than $115,000 from his campaign funds over a three-year period.
Chicago City Council is one of the most corrupt political bodies in the nation. Over the past 40 years, 33 of some 200 aldermen have been convicted on corruption charges.
This culture of misconduct shows no signs of slowing down. And the lack of seriousness in tackling ethics reform – or even enforcing rules on the books – within city government is disturbing.
A July report from the government watchdog group ProjectSix revealed 37 of 50 Chicago aldermen took illegal campaign contributions in 2015. The group also found 19 aldermen using private email servers for city business. A recent survey of Chicago business leaders showed over 90 percent believed city government engages in some form of cronyism.
ProjectSix CEO Faisal Khan formerly led the now-disbanded Office of the Legislative Inspector General, which oversaw Chicago City Council members. In its announcement of Cochran’s indictment, the U.S. attorney’s office said it initiated the investigation after receiving information from Khan’s office.
“The charges against Alderman Cochran show how effective ethics oversight can make a significant difference in bettering Chicago government,” Khan said in a press release.
Chicago is the nation’s corruption capital, according to researchers at the University of Illinois at Chicago. Regardless of the Cochran investigation’s results, it’s clear Chicago government is steeped in a culture of corruption.
One might think this would spur an intense response from the mayor’s office as well as from reform-minded aldermen. This has not been the case.
A mere 10 of 50 Chicago alderman bothered showing up to the Chicago Board of Ethics budget hearing Oct. 21.
During the budgeting process, politicians have the opportunity to publicly question city officials charged with keeping corruption in check as those officials justify their budgets. But at the Board of Ethics hearing, aldermen did not ask a single question.
Instead, Alderman Anthony Beale, 9th Ward, played “Go Cubs, Go” from his cellphone in reference to the board’s recent ruling that aldermen cannot accept a face-value ticket offer from the Chicago Cubs organization unless they perform a ceremonial duty at the game.
The hearing was over in less than five minutes.
“It had to be a record,” wrote Daily Line reporter Claudia Morell.
This disregard for serious ethics reform is part of a troubling pattern.
After operating without any local watchdog for months following Khan’s departure in 2015, Chicago City Council in February 2016 passed a watered-down oversight ordinance submitting themselves to Inspector General Joe Ferguson’s ethics oversight.
But not to his auditing powers.
Given that Alderman Ed Burke, 14th Ward, led the charge in weakening that ordinance, many speculated the move was meant to shield the city’s $100 million-a-year workers’ compensation program – controlled by Burke’s Finance Committee – from close examination.
Until City Council and Mayor Rahm Emanuel get serious about following the city’s ethics ordinance and subjecting themselves to stricter oversight, stories such as Cochran’s will continue making headlines.
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As global Wall Street pols are telling us to yell at CORPORATE LOBBYING OF CONGRESS none are telling us to look locally because that is to where 99% of citizens can actually make change. These global corporations now lobbyists got that way from all the wheeling and dealing done in our US cities----if we don't fix this we lose. The corruption is getting worse and spreading because of what we described yesterday happening in our local community associations----people are fighting and scrapping for jobs----they need money ---and they are pushed by development corporations tied to IVY LEAGUES to do anything to climb that income ladder----now it is spreading to our suburbs because----US CITIES DEEMED FOREIGN ECONOMIC ZONES are regional----they are huge----they will consume all our state real estate into one great big global corporate campus and global factories owned by these same old world global 1%----no new wealth folks----please stop being PLAYERS.
GREATER BALTIMORE IS REGIONAL AND SENDS THE CITY CORRUPTION OUT INTO RURAL AREAS WHERE CITIZENS THERE ARE MADE DESPERATE FOR JOBS AND MONEY. THEY ARE NOW ACTING JUST LIKE SOMEONE IN CHINA, MALAYSIA, AFRICA----with no Rule of Law, no rights as citizens, no three branches of governance or US Constitution----they just scratch and scrape to serve global Wall Street.
We are told this is simply hard-hitting politics----but NO I AM SURE IT IS COMPLETE BREAKDOWN IN US RULE OF LAW. Our cosmopolitan cities of LA, Chicago, NYC have always had that Foreign Economic Zone structure of ANYTHING GOES. That is now filling our mid-size cities and with that is coming ONE WORLD ONE GOVERNANCE changing anything goes to EVERYONE GOES----INTO A GLOBAL LABOR POOL. These are completely different folks----
Local corruption hits Chicago, suburbs and downstate communities
Good Government / Article
December 4, 2016
November was a sad reminder of the corruption at various levels of Illinois government from retired House Speaker Denny Hastert to the small Village of Bellwood.
Local governments in Illinois took the spotlight for worst offenders in corruption and mismanagement for the month of November.
- A former Bellwood village manager was given two years of probation for stealing from the village. During his time as the village manager and chief financial officer, he gave himself hundreds of thousands of dollars worth of pay raises, bonuses, and increased his pension.
- Officials from Bellwood School District 88 have also been questioned for excessive spending of the cash-strapped district’s money. The officials have been scrutinized for spending on extensive travel, for assisting friends and family to get jobs in the district, and for an expensive no-bid contract with a taxi service.
- The East St. Louis Township Supervisor was charged with spending more than $40,000 of township funds on personal purchases, including a trip to Las Vegas.
A former Chicago Police officer-turned firefighter whose ward is home to scores of cops cast a lonely protest vote Tuesday against a $2 million settlement for a pair of police officers who claim they were blackballed by their colleagues for blowing the whistle on police corruption.
The settlement with police partners Shannon Spalding and Daniel Echeverria averted the need for Mayor Rahm Emanuel to comply with a federal judge’s order to testify about the code of silence that the mayor has acknowledged exists in the Chicago
An Illinois state trooper is on trial for allegedly bribing a police officer to ticket his former girlfriend.
Jurors in Vermilion County on Monday heard 2014 recordings of 46-year-old trooper Keith Lumsargis telling a Tilton police officer where and when his ex-girlfriend would be driving. The trooper is accused of offering a steak dinner in exchange for helping him get back at the woman for breaking up with him.
The Illinois congressman who resigned amid scrutiny of lavish spending—including remodeling his Capitol Hill office in the style of the television series “Downton Abbey”—was indicted today on 24 federal counts, including wire fraud and theft of funds.
The 52-page indictment charges Aaron Schock with nine counts of wire fraud, five of falsification of election commission filings, six of filing false federal income tax returns, two of making false statements, and one each of mail fraud and theft of government funds.
The three-year federal prosecution of Chicago’s red light camera program came to an apparent conclusion Thursday as a federal judge blasted the corporate and government corruption at the heart of the decade-long scheme while sentencing the former CEO of the camera vendor to 2 1/2 years in prison.
Karen Finley, who headed Redflex Traffic Systems Inc. through much of the $2 million bribery scandal, marks the third and final defendant to be sentenced in the probe.
“Do you have any conflicts of interest that would be an issue with you taking this job?”
Many people have probably asked or been asked this question in a job interview. It’s a responsible way to head off any potential ethical conflicts and a common sense, routine pre-employment question—except in the office of one of Chicago’s most powerful aldermen.
Project Six has found that Chicago Alderman Brendan Reilly (42nd Ward) employs a registered lobbyist who represents some of the largest real estate developers in the city as his chief of staff. Aside from being ripe with potential ethical conflicts, tax dollars have likely been put at risk because a registered lobbyist has the direct authority to negotiate for both sides of zoning and real estate deals in the heart of Chicago.
Former Chicago Ald. Edward R. Vrdolyak’s defense attorney left the Dirksen Federal Courthouse Tuesday without explaining how his client landed a piece of Illinois’ massive settlement with tobacco companies two decades ago.
Each week, get the top headlines from around the state. From stories of political corruption to government overreach, get the news that matters most to you.
Vrdolyak, a onetime powerhouse 10th Ward politician, was quietly charged earlier this month in a 19-page federal indictment that outlined his role in a scheme to pocket millions from the $9.3 billion settlement reached in 1998. The indictment alleges that Vrdolyak was promised $65 million from the settlement even though he “did no work on the Tobacco Lawsuit.”
It’s not clear how much money Vrdolyak made from the settlement, but federal prosecutors told a judge in 2010 that Vrdolyak “has a guaranteed income stream of $260,000 per year . . . until 2023 from tobacco-related litigation.”
The indictment charges Vrdolyak, who turns 79 next month, with impeding the IRS and tax evasion. He faces a maximum of eight years in prison for allegedly trying to help his co-defendant, attorney Daniel Soso of Alsip, dodge federal income taxes.
He appeared at the federal courthouse Tuesday for arraignment, pleading not guilty in front of U.S. District Judge Amy St. Eve. Assistant U.S. Attorney Amarjeet Bhachu said during the hearing that prosecutors have more than 150,000 pages of evidence to turn over to Vrdolyak’s legal team. …
… A member of the City Council from 1971 to 1987, Vrdolyak earned the nickname “Fast Eddie” for his back-room deals and reputation for dancing on the edge of the law. A federal judge initially handed him a big break in 2009, giving him no prison time for his role in a financial scam with corrupt influence peddler Stuart Levine. But prosecutors appealed, and another judge ultimately sentenced Vrdolyak to 10 months in prison followed by 10 months of home confinement and work release.
He was a twenty-something wannabe developer, the son of immigrants from India, and he dreamed of building a $900 million hotel and convention complex near O’Hare Airport.
He assembled a team of political heavyweights, including Illinois House Speaker Michael J. Madigan, and traveled to China to get investors.
Now, the land sits empty, and Anshoo Sethi awaits sentencing, possibly this week, after pleading guilty to wire fraud.
He’s admitted his role in what federal authorities call a scheme to use fraudulent documents to raise $160 million from Chinese investors willing to bankroll his project in exchange for permanent United States residency under the U.S. government’s much-maligned EB-5 visa program. The program grants residency to foreigners who invest in economic development projects.
Officials from a small, cash-strapped suburban school district have been under scrutiny this year for what critics say is excessive spending, from extensive travel, to adding friends and family to the payroll, to secretly padding the superintendent’s pension.
Now, they are facing new questions about how the district has shelled out hundreds of thousands of dollars for taxi services in recent years under a no-bid arrangement.
Since the 2011 school year began, Bellwood School District 88 has paid People Cab Co. $605,000 to shuttle homeless and special education students to and from school. More than half — or $311,000 — of those expenses were authorized by the board during the past two school years alone, records obtained by the Tribune show.
Bellwood’s taxi bills far outpace those of surrounding districts, state education records show.
During the 2015 school year, the most current statewide data available, for example, Bellwood spent three times as much transporting special-needs students to school than the five neighboring school districts combined. Enrollment in those districts — which draw students from Berkeley, Maywood, Melrose Park, Westchester, Hillside and Broadview — is nearly four times larger than Bellwood, state records show.
In response to the hefty transportation bills, some school board members have called for the taxi service contract to be put out for bid, an idea that has been met with stiff resistance by the board’s president, Marilyn Thurman.
Dennis Hastert is serving a 15-month prison term in a hush-money case that stemmed from his sexual abuse of students when he taught at an Illinois public school over 35 years ago. The ex-U.S. House speaker is now pointing to a technicality to argue that a state body should restore his $17,000-a-year teacher’s pension that it yanked after his April 27 sentencing.
A recent letter from Hastert’s lawyer to the agency overseeing the pensions notes his conviction was not for sexual abuse when he was at Yorkville High School from 1965 to 1981: It was for one count of violating banking law as Hastert withdrew cash from 2010 to 2014 as he sought to pay one victim $3.5 million to ensure his silence. On those grounds, the letter argues, his teacher’s pension can’t be revoked.
East St. Louis Township Supervisor Oliver Hamilton is expected to plead guilty to wire fraud charges Thursday in U.S. District Court in East St. Louis.
Hamilton, 63, was charged earlier this month. He waived indictment and announced his intent to plead guilty before U.S. District Judge Michael Reagan. The hearing begins at 10 a.m. Reporters will be tweeting live from the courthouse.
A months-long investigation by the Belleville News-Democrat reported that Hamilton spent more than $230,000 on a taxpayer-supported American Express card from January 2012 to June 2016. The investigation showed that Hamilton used the credit card to pay for trips to Las Vegas and elsewhere, thousands of dollars in gasoline for his personal vehicle, $34 car washes, flowers and gifts for political allies, restaurant tabs and other purchases.
A former Bellwood official was sentenced to two years of probation Wednesday after he admitted he stole money from the village coffers.
Roy McCampbell, who pleaded guilty to misdemeanor theft before Cook County Judge Timothy James Joyce, also was ordered to pay $100,000 in restitution, according to court records.
McCampbell, who was the village manager and chief financial officer, granted himself numerous unauthorized pay raises and bilked the town of Bellwood for hundreds of thousands of dollars, outgoing Cook County State’s Attorney Anita Alvarez said at the time of his 2012 arrest.
McCampbell, a licensed attorney, drafted new contracts for himself, adding raises, increasing the size of his stipends, amount of annual sick and vacation days and deferred compensation payments, prosecutors said.
The investigation also revealed that he was able to illicitly use taxpayer funds to boost his pension and that he had fraudulently expanded the village’s health insurance plan to pay for a variety of treatments for his family, including horse therapy for his children and to purchase home exercise equipment.
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What was actively prosecuted a few decades ago as CONFLICT OF INTEREST is now done openly and with no fear of criminal or civil justice---in fact many on our city councils and in Congress are either real estate developers or bankers and/or married to each. This is again what third world nations have for leadership-----our US Rule of Law and US Constitution with 3 branches of government was drafted to make these kinds of power grabs IMPOSSIBLE----they are possible of 99% of citizens don't know or care about BEING CITIZENS.
So, this is what has been allowed to happen in our US cities deemed Foreign Economic Zones----where early Clinton era in the 1990s saw this criminality in our mega cities ----these few decades sees it moving to our mid-size cities---and Baltimore has through modern time acted as a Chicago.
The examples from yesterday of citizens in communities moving people, zoning, permitting, ignoring all Rule of Law doing so to please developers ----show who ends being these real estate kings in their communities---below we see the Chicago City Council----what is sad is this---they are putting a life's work behind an economic activity that will not last for their children or grandchildren-----they think they are kings---just as our drug dealers are called KINGPINS----but this coming decade and economic crash will move all real estate to those global Wall Street corporations for whom they work. ALL US CITIES DEEMED FOREIGN ECONOMIC ZONES lose EMINENT DOMAIN and property rights protections and global Wall Street will simply TAKE ALL REAL ESTATE IT WANTS.
These are that 5% to the 1% telling people to YELL AT TRUMP-----IT'S NOT ME!
These KINGS who could not care less about communities are often clueless or don't care that these are far different times in US ----they will lose all to Foreign Economic Zone and global corporate eminent domain on all real estate. This is what drives Baltimore's community development and ergo community association power and it is only these kinds of people allowed power-----and as with all brutish actions they will lose it all.
The Real Estate King of the Chicago City Council
Brand-new 26th Ward alderman Roberto Maldonado owns more properties than any other council rep—including ten in his own ward. That's a lot of potential conflicts of interest.
By Ben Joravsky @joravben and Mick Dumke @mickeyd1971 Johnny Sampson
In May residents of the 1700 block of North Monticello noticed that a sign had been posted on the fence around two overgrown, long-vacant lots on their street. It announced that the owner of the property was applying for a zoning change to build a pair of four-story, ten-unit buildings there and on two adjacent lots to the east, facing North Central Park.
It was jarring news to the residents, since apart from the empty lots the block is made up of modest single-family houses and two-flats, and they hadn't heard about any plans for a new development. On top of that, the property owner seeking the zoning change was Roberto Maldonado—their Cook County commissioner and the Democratic committeeman for the 26th Ward, which includes their block and much of the rest of Humboldt Park.
Several residents went door to door with a petition against the zoning change, and after getting about 100 signatures they contacted Maldonado's attorney and arranged for a meeting to air their concerns. Maldonado says that they were worried he was undertaking an affordable housing development and that he assured them he wasn't. But he didn't agree to drop his plan for high-density buildings.
- Daley announcing Maldonado’s aldermanic appointment in July
- Brooke Collins/City of Chicago
Maldonado says it won't. "I am not going to pursue the zoning change now that I have become the alderman of the 26th Ward," he told us last week. "I had the support of the previous alderman. . . . But it just so happened that the next alderman was me—and that changed things." Instead, Maldonado said, "At some point I will sell those lots."
He added: "I'm not sure you have much of a story."
Not so fast, alderman. The lots on Monticello and Central Park make up just a small portion of the new council member's real estate holdings. Property records and the financial disclosure statement Maldonado recently filed with the city clerk show that he owns at least ten pieces of property in the 26th Ward. They include three lots on the 1700 block of North Troy Street where he's building a sprawling new house and a building on Division that houses a mortgage business he owns.
He also owns or co-owns at least six other properties in other wards, including a South Loop condo worth more than $700,000 and at least five lots on the west and far south sides. That's a total of 16 properties.
No other member of the council owns close to that much real estate, according to financial disclosure statements. One alderman, the 44th Ward's Tom Tunney, owns 11 properties, though all but his home are units in two adjacent buildings he owns on Belmont. Four others (George Cardenas, Latasha Thomas, Walter Burnett, and Patrick O'Connor) own four, and six others (Michelle Harris, Ed Burke, Willie Cochran, Richard Mell, William Banks, and Joe Moore) own two. The remaining 38 aldermen don't own any properties that they don't live in.
Maldonado acquired many of his holdings for modest sums after their previous owners stopped paying taxes. In several cases—such as with the Monticello and Central Park lots—he sat on them for years as their values soared. And in one instance he cut a land-swap deal with Bickerdike Redevelopment Corporation, which has received both accolades and intense criticism as one of the ward's leading developers of affordable housing.
On several occasions Maldonado has fallen behind on property taxes or other bills himself: in 2002 a contractor put a lien on his Division Street office building, alleging that he had only paid about half of an $11,900 bill for roofing work several years earlier. Earlier this year Maldonado missed a tax payment on the property and as of August 18 owed $3,941, according to the Cook County treasurer. The condo association at 910 S. Michigan, where Maldonado and a business partner purchased a unit in 2004, placed liens on that property in 2005 and again in 2008 for thousands of dollars in unpaid fees.
This past June he took out a $960,000 loan on all nine of his properties on Troy, Central Park, and Monticello. According to a spokeswoman, Maldonado is using the funds to finish building his new house.
There are good reasons not many aldermen deal seriously in real estate—or at least wait till they're out of office. Zoning-change requests are ratified by the full City Council, but the council almost always follows the lead of the local alderman. Some, like the Fourth Ward's Toni Preckwinkle and the 47th Ward's Eugene Schulter, are careful to set up specific ground rules for reviewing zoning requests from developers. The requests are farmed out to a zoning committee, which holds a public hearing in the ward. The alderman then acts as something of a referee, smoothing over differences between residents and developers before deciding whether to advance the proposal to the full council.
But others have not been so rigorous. There are numerous examples of council members who've been busted for taking bribes from developers in return for zoning changes, including Arenda Troutman, the former 20th Ward alderman who went to prison earlier this year. But the classic example of an alderman-developer gone wrong has to be Thomas Keane, a fierce ally of Mayor Richard J. Daley who chaired the council's powerful finance committee from 1958 until 1974, when he was imprisoned for fraud.
"Keane—one of Chicago's most influential political figures—and two of his friends formed a partnership that acquired more than 1,800 parcels of land," a federal judge wrote in summing up the case. "The partnership acquired the land from the City at property-tax-delinquency auctions; it held the land through an Illinois land trust, a device that permits beneficial owners of land to conceal their interests." After using his position as finance committee chairman to get possession of the properties, "Keane then induced his friends in public agencies to buy these parcels."
Maldonado notes that he's been involved in real estate since long before he became an elected official. "I came to Chicago back in 1979, and in 1982 I made my first real estate investment," he says. "I liked it, and I've done fairly well with it over the years."
He says he's planning to curtail his real estate ventures now that he's become alderman. "I would never do anything that would put myself in a conflict of interest," he says. "And obviously these properties I owned before I got appointed to the office. I have no future plans to continue to buy property."
But Maldonado still hopes to sell the lots he already owns on Monticello and Central Park and in other neighborhoods. "At some point I'm going to sell those properties. I'm not going to develop them—I've never done any development. Then whoever buys them will have to go through the [zoning] process if they want, and when it comes up I will recuse myself."
As of August 18, the four lots on Monticello and Central Park were listed on local realty sites for $649,900 altogether. Maldonado's property at 1733 N. Troy had a for sale by owner sign in front of it last week, and four lots he owns on the south and west sides were listed for $39,000 apiece.
Maldonado has been a player in Humboldt Park politics since the early 1980s, when he was part of the first wave of Puerto Rican independents rebelling against the Democratic machine and aligning themselves with Mayor Harold Washington.
In 1988 the Sun-Times alleged that he had solicited campaign contributions on behalf of then-alderman Luis Gutierrez, his former brother-in-law and boss, while working as the top purchasing official for the Mayor's Office of Training and Education. Eight individuals and firms that made campaign loans to Gutierrez received a total of $800,000 in business from Maldonado's agency from 1986 to 1988.
One of them was Bickerdike. "Maldonado arranged for the lease of office and storage space from the Bickerdike Redevelopment Corp., a not-for-profit housing organization whose executive director was Gutierrez's chief fund-raiser," wrote Mark Brown and Deborah Nelson. "Bickerdike has received more than $70,000 in rent payments over the past three years as one of the Office of Training and Education's year-round satellite offices."
Maldonado and Gutierrez denied any wrongdoing, but Maldonado resigned from his city job soon after and started his mortgage business.
In 1994, with Gutierrez's backing, he was elected to the Cook County Board; he was reelected three times. As a commissioner he rarely bucked the lead of board president John Stroger or his successor and son, Todd.
In 2000 Maldonado was elected Democratic committeeman of the 26th Ward, thanks to some clever machinations by Gutierrez and 33rd Ward alderman Richard Mell.
A year earlier Maldonado had moved into the neighboring 35th Ward and made it clear that he was going to challenge alderman Vilma Colom, a Mell protege, for the committeeman's job there. To protect Colom's incumbency, Mell and Gutierrez struck a deal. As Gutierrez would explain in a 2002 Reader article, he agreed to back Colom, and Maldonado moved back to the 26th Ward. Ocasio stayed on as 26th Ward alderman but stepped down as committeeman, and Maldonado ran for the job unopposed. (Three years later Colom was swept from office by Rey Colón, so the Gutierrez deal only ended up delaying her ouster.) He's been committeeman ever since.
This past May Ocasio stepped down as 26th Ward alderman to work as a $120,000-a-year senior adviser to Governor Quinn. Under city law the mayor gets to fill aldermanic vacancies, but by City Council custom he usually follows the recommendation of the outgoing alderman; Ocasio himself had been appointed alderman in 1993 at the behest of Gutierrez when he moved on to Congress. After resigning this spring, Ocasio recommended Wilfredo De Jesús, pastor of the 4,000-member New Life Covenant Ministries, but the suggestion ignited an outburst from gay activists who objected to the minister's characterization of homosexuality as a sin.
Eventually Ocasio withdrew the recommendation, saying it was because De Jesús didn't live in the 26th Ward. He then asked the mayor to select his wife, Veronica, an aide to Gutierrez. But on July 27, Daley announced he was choosing Maldonado instead.
This plot twist set up a classic press-conference exchange where Daley got to unleash his inner Shakespeare. When reporters asked why he didn't appoint Veronica Ocasio, the mayor replied, "It's not, 'Why not his wife?' Why did I pick Roberto Maldonado? That is the question. And I picked him because of experience, his commitment, his working with people, his private sector as well as public sector. It's a combination."
Of course, that private-sector experience consists largely of real estate wheeling and dealing, much of it in the ward he now represents.
.In 1993, according to property records, he took out a $100,000 mortgage to buy a house on a double lot at 1731 N. Troy that just a few years earlier had been in the hands of the Cook County sheriff because the owners hadn't paid taxes. Maldonado still lives there.
Over the next few years he began acquiring other property on the block at bargain-basement prices. In 1994 he bought a lot a few doors south of his home for about $11,000; three years later he acquired a vacant, tax delinquent lot a few doors north.
In 1998 he put in a bid for a city-owned, tax delinquent lot at 1733 N. Troy, right next to his house. Bickerdike acquired it instead. But on October 20, 2004, he bought it from them for $25,000, and on the same day sold Bickerdike his lot at 1739 N. Troy for the same price. This swap left Maldonado with all five lots from 1723 to 1733 N. Troy. The next year he began building a vaguely Prairie-style McMansion on three of those lots; it's still under construction.
Maldonado says he traded with Bickerdike simply to increase the amount of land around his home. "The properties were of equal value," he said. "It was going to be part of our estate. I was never going to develop it."
Sometime in the 1990s (the date is unclear in property records) he purchased the building that houses his mortgage business, People's Choice Mortgage Corporation, at 2548 W. Division. In 2004 he and a partner, attorney Carlos A. Vazquez, took out a pair of mortgages worth about $720,000 total to purchase a condo at 910 S. Michigan. Recently—the transactions haven't even been filed with the county recorder of deeds yet, but they're listed on Maldonado's financial disclosure statement—the two have bought up five long-vacant lots in Englewood, Garfield Park, and West Pullman.
- Maldonado’s vacant lots at 1755-1757 N. Monticello
- Mick Dumke
The concrete company was closed and cleared away in the 1990s. Maldonado purchased three of the four lots in 1998 for a total of $50,000, and in 2006 he bought the fourth for $150,000 and razed the house on it. Graham says Maldonado hasn't done a very good job of maintaining the property since then, and as of last week much of it was overgrown with weeds. Shards of glass and trash cluttered the grass along the sidewalks. The lots are fenced off, but Graham says they've still attracted vagrants: "We've had campers out there."
Over the last decade property values in the neighborhood have shot up, but Maldonado says he wasn't ready to do anything with the parcels until it was too late. "Originally I purchased them to sell them, but when I was ready to sell them the market plummeted and I couldn't sell them," he says. "So I was going to partner with an experienced developer to develop them."
In May, while he was still a county commissioner, Maldonado had lawyer Dean Maragos notify residents of his intention to change the zoning from limited manufacturing/business park district to residential multiunit district so he could construct 20 units of housing in two four-story buildings.
Graham, who's president of the block club, called Maragos—a well-known attorney who's donated thousands of dollars to aldermen and other pols and run for office himself—and requested a meeting with Maldonado. It happened in May at Maragos's office. Graham says he and another neighbor expressed concerns about "too many units, too much parking—the usual stuff." He also says he asked Maldonado point blank if he intended to sell the property after getting the zoning change.
"There was a for-sale sign on the property so we thought he might have it on the market," says Graham. "I didn't want him getting the change and then flipping the property to someone else. He said absolutely not—it's not for sale."
After the meeting, Graham says, he wrote Maldonado a letter insisting that he put his pledge not to sell in writing. Maragos responded with a letter saying "the for sale sign has been taken down from the property per your request."
That wasn't enough to address Graham's concerns. "I wanted him to put in writing that he wasn't going to sell the property," he says. "I called Maragos back and he said the commissioner is a very busy guy—it's hard to get ahold of him." (Maragos didn't return our calls.)
Maldonado says he's tried to work with Graham and other residents but says they keep coming up with different reasons to oppose the proposed development, from worries that it would be for low-income renters to concerns it might block their views of the adjacent Bloomingdale railroad viaduct, which is slated to become a park.
"These are vacant lots—I thought most people would like to see them developed," he says. "People are always going to find reasons why they oppose something. Sometimes it makes sense and sometimes it doesn't."
Still, Maldonado says, the equation has changed now that he's the alderman. He promises he'll have the proposed zoning change yanked at the next meeting of the council's zoning committee, which is August 25. Then he'll start making plans to sell the property.
But that won't necessarily end the potential for conflicts of interest. A lot zoned for manufacturing is worth less than one zoned for residential, and any developer who buys Maldonado's land at Monticello and Central Park will probably want to upzone just as he did. If Maldonado the property owner is going to get top dollar for his lots, then Maldonado the alderman will probably be asked to change their zoning. And that would be a conflict of interest, even in Chicago. Even if he recuses himself, his council colleagues will be faced with the task of deciding whether to help him make more money.
Graham and other neighborhood residents wonder if he's too cozy with Bickerdike to appropriately evaluate their future development proposals. Maldonado thinks that's ridiculous. "Anyone who's been a community leader or political leader in this community has a relationship with Bickerdike," he said. "The previous alderman had a relationship with them."
Even the land he owns in other wards could create an issue—is it realistic to expect that an alderman wouldn't get favorable treatment from his colleagues if he applied for a zoning change or floated a development plan in one of their wards?
If he really wants to keep both hands above the table, Maldonado could always put the properties he doesn't live on in a trust, where a third party manages the assets for him, as long as he remains in the City Council. "I have not thought about any sort of blind trust," he said when we asked him about it. "I would not mind looking into it."
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'Jorge Pérez, a developer known as the “Condo King,” told a local real estate conference earlier this year that all these foreign buyers make Miami the only city in America where the cash model works. “It’s a very local market,” he said. “It’s for people who are used to paying cash for most of their second homes.” '
Hmmmm, wonder if this is the old world MERCHANT OF VENICE family tied to PEREZ once LABOR SECRETARY NOW DNC CHAIR? MOST LIKELY.
What mid-size cities like Baltimore are using as a development model is this----as we said dirty money coming in from Asia and Latin America recruited by our city council and mayor with community associations told to PAY-TO-PLAY for these investors.
We are not talking today about the flipping and mortgage loan frauds---we are talking about how our community associations and pathway to city/county government and appointments have been happening. THIS IS THE PROBLEM 99% OF PEOPLE WANT FIXED and it is where all our Federal, state, and local revenue including our public trusts are lost.
YELL AT OUR LOCAL US CITIES NOT TRUMP. IT IS GLOBAL WALL STREET DEVELOPMENT, GLOBAL JOHNS HOPKINS, GREATER BALTIMORE DEVELOPMENT, URBAN LEAGUE, NAACP---and all those 'labor and justice organizations created to be PLAYERS.
Miami: Where Luxury Real Estate Meets Dirty Money
The buyers come from all over the globe, bearing cash and complicated pasts.
By Ken SilversteinOctober 2, 2013
If you fly into Miami International Airport and drive east toward the city and north on Interstate 95, you bypass South Beach and midtown and in about thirty minutes reach the 163rd Street exit. Heading east toward the ocean leads you past several miles of strip malls filled with convenience stores, pawn shops, bodegas, gas stations, chain restaurants, nail salons and an occasional yoga center. Then rising unexpectedly in the distance is a row of condominium skyscrapers so baroque and unattractive that they conjure up the name of only one man: Donald Trump.
You have arrived in the city of Sunny Isles Beach, or “Florida’s Riviera,” as its political and business leaders have dubbed it. Massive skyscrapers along beachfront Collins Avenue include three Trump Towers and three other Trump-branded properties, including the Trump International Beach Resort, where I stayed—very comfortably, I confess—for eleven days in June.
Other luxury properties on the stretch include the gaudy Acqualina Resort & Spa, where the penthouse recently went on sale for $55 million, and the Jade Ocean, which offers “beach amenities thoughtfully conceived to continue attentive service and lavish appointments all the way to the water’s edge” and a Children’s Room featuring Philippe Starck furnishings and a baby grand piano. Meanwhile, ground was recently broken on the Porsche Design Tower, which its developers describe as “the world’s first condominium complex with elevators that will take residents directly to their units while they are sitting in their cars.”
Until the late 1990s, this Miami neighborhood was populated by retirees and tourists and was dotted with dozens of theme motels, many of them named after Las Vegas properties: the Dunes, the Sands, the Desert Inn and the Aztec. Between the 1920s and ’50s, Sunny Isles catered to visitors like Jack Dempsey, Babe Ruth, Grace Kelly, Burt Lancaster and Guy Lombardo, but later became a destination for tourists of modest means.
Everything changed in 1997, when real estate developers and other business groups succeeded in passing a referendum to incorporate Sunny Isles as a town. From that point on, building, planning and zoning decisions were stripped from the Miami-Dade County Commission and put in the hands of the industry-dominated Sunny Isles City Commission, whose current members consist of a real estate executive, a property lawyer and a former advertising executive. What happened next was the most spectacular neighborhood transformation seen in Miami since cocaine money rebuilt the city’s downtown area beginning in the late 1970s.
The first mayor was David Samson, a parking garage magnate from Chicago who retired to Sunny Isles and helped “remake a sleepy area of low-rise motels built along Collins Avenue in the 1950s into a sparking city of condominium towers,” according to his 2003 obituary. Norman Edelcup, a former banker and real estate executive, succeeded Samson upon the latter’s death, and the city has been a property developer’s wet dream ever since.
For all of its wealth, Sunny Isles, which spans just one square mile and has a population of 20,832, is as bland and boring as its political leadership. “Residents are as pampered as hotel guests,” says the glossy official guidebook, which features photos of the beach, shopping boutiques and, mostly, luxury condos. “World- class spas, unparalleled concierge service, beachside wait staff ready to serve, free city transportation, and dozens of cultural opportunities is why Sunny Isles Beach stands out amongst the rest.”
I interviewed a Siberian-born realtor in the lobby of Beach Club, a luxury condominium on South Ocean Drive in Hallandale, just north of Sunny Isles. “Miami is a brand,” she told me as we sat on a sofa in the building’s huge foyer. “People from all over the world want property here.” Developers were only putting up luxury properties because they “know that the crisis has not affected people with money,” she added. By way of example she pointed to the Regalia, a new Sunny Isles condo with only thirty-nine units, one per floor, with prices starting at $6 million.
Most of her clients are Russian—there are now three direct flights per week between Moscow and Miami—and increasing numbers are moving to Florida after spending a few years in London first. “It’s a money center, and it’s a lot easier to get your money there than directly to the US, because of laws and tax issues,” she said. “But after your money has been in London for a while, you can move it to other places more easily.”
* * *
Florida was at the epicenter of the housing bubble that collapsed the country’s economy, and the state’s overall foreclosure rate remained the highest in the country through the first half of 2013. But the luxury real estate market in Miami is flourishing. A March story in Property Week said the “dark age” of the 2009 crash was over: “Fewer than ten percent of downtown Miami units are left and they’re going fast. Meanwhile, super-luxury penthouses at the exclusive southern tip of South Beach…are selling for $25 million.”
This remarkable boom in high-end real estate has been driven by foreign money, with “buyers coming from all over the world but with the highest concentration from Venezuela, Argentina, Brazil and Russia,” according to the website for Miami Condo Investments, which offers high-end properties for sale. Twenty-six percent of real estate sales to foreigners in the United States occur in Florida, more than anywhere else in the country and twice as high as second-place California, according to the National Association of Realtors. Seventy-six percent of condo buyers in Miami don’t take out mortgages but pay cash, versus a national average of 32 percent for cash sales for all properties.
Jorge Pérez, a developer known as the “Condo King,” told a local real estate conference earlier this year that all these foreign buyers make Miami the only city in America where the cash model works. “It’s a very local market,” he said. “It’s for people who are used to paying cash for most of their second homes.”
Born in Argentina to Cuban parents, Pérez faced financial ruin during the last housing bubble. By 2010, his Related Group had lost four of its seven Florida developments to foreclosure and was desperately trying to reschedule $1.5 billion in debt. Now he is hawking a new slate of luxury projects, including One Ocean at the tip of South Beach and the SLS Hotel, a brand whose flagship property is in Beverly Hills.
Enticing foreign buyers may have saved the financial skins of Miami real estate investors like Pérez, but all that offshore money entails risks as well. Obviously not all of the money flowing into Miami from abroad is illegitimate. Yet there are abundant signs—beyond the city’s traditional role as a repository for dirty cash and the fact that much of the inflow is from countries particularly rife with corruption—that significant numbers of foreign condo buyers are political figures and businesspeople seeking to illegally export capital abroad, launder profits or evade taxes.
Corruption and bribery cost developing countries up to $1 trillion per year—lost revenues they are increasingly serious about attempting to recapture. Some of the money ends up in traditional offshore havens like Nevis, Bermuda and the British Virgin Islands, and huge amounts also flow to Western financial centers like Geneva, London and New York. But Miami, and its real estate market in particular, is an especially popular haven for ill-gotten cash. “South Florida has always been a favorite destination for international visitors and political figures, whether it is for vacation or to purchase property along its sandy and sunny beaches,” said a May 2011 Treasury Department report. “As such, Miami finds itself in the distinct position of being a reoccurring hot spot for funds pilfered by politically exposed persons (PEPs) and other criminal proceeds.”
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The combination of tax haven accessibility and weak banking secrecy and corporate registry rules—as in Wilmington, Delaware, where nearly 300,000 businesses are registered at a single address—has created a huge global problem. For the past year, the International Consortium of Investigative Journalists has been making public a vast trove of leaked offshore records that have revealed tax evasion by billionaires, oligarchs, emirs, princes and multinational corporations around the globe. A recent report by the Tax Justice Network described tax havens as “the economic equivalent of an astrophysical black hole” and estimated that they collectively held as much as $32 trillion—roughly double the annual GDP of the United States.
In February, a member of Russia’s ruling party, Vladimir Pekhtin, was forced to resign from the Duma when a blogger published documents showing that he owned three Miami properties worth more than a combined $2 million. Pekhtin’s holdings were especially embarrassing because he had not disclosed his overseas properties in his annual financial disclosure filing, as is legally required under a bill he had written as chairman of the Duma’s ethics committee. In Russia, which saw illegal capital outflows of more than $200 billion from 1994 to 2011, charges of corruption and lavish spending overseas have become major political issues.
In September of 2012, The New York Times reported that wealthy Argentines had been pouring money into Miami real estate “by expensive and sometimes illegal means.” Hugo Chávez’s presidency prompted massive illegal capital flight by wealthy Venezuelans, with vast sums pouring into Miami. His re-election in October 2012, five months before his death, prompted some local realtors to joke that Chávez should have been named condo “Salesman of the Year.” Alvaro Lopez Tardon, the alleged leader of a Spanish drug gang, is currently facing trial in Miami on charges that he bought fourteen condos and a fleet of luxury vehicles to launder $26.4 million in cocaine profits.
It’s difficult to discover who specifically has been snapping up high-end properties, because many buyers are not individuals but Florida limited liability companies (LLCs). In August 2012, a 30,000-square-foot house on Indian Creek Island with thirteen bedrooms and fourteen bathrooms sold for $47 million, the most expensive home sale in Miami’s history. Media accounts identified the anonymous buyer as a Russian but the listed owner is AVK Land Holding, a Florida LLC, whose business address is a pay-by-the-day business center in midtown Manhattan and which was registered a few months before the sale by a Tallahassee company called Incorporating Services Ltd. AVK’s annual report is signed by Andrey M. Kaydin, an attorney based in Coney Island who has also served as a beard for buyers of luxury properties in New York City.
Buying property through business entities set up in Delaware or offshore havens is also common. Condo owners at properties in Sunny Isles include companies that were established or have legal representatives in a multitude of locations, including Argentina, Belize, the Bahamas, the British Virgin Islands, Chile, Guatemala and Trinidad.
Trump’s partner in Sunny Isles is Dezer Development, which began buying up property in 1995 and now owns twenty-seven acres of oceanfront. According to company president Gil Dezer, his firm handles the due diligence on condo buyers. “We do make sure we know our customer by asking for personal information at the time of signing the contract,” Dezer wrote in an e-mail. “We also make sure that anyone buying with an LLC proves to us that they are the rightful owner of that LLC and we check again at closing to make sure that we are still dealing with the same person at the time of delivering title.”
Offshore entities are an especially bright red flag, but domestic LLCs offer a simple means of obscuring property ownership from tax and law enforcement agencies or an aggrieved business partner or spouse. Peter Zalewski, a consultant to real estate developers, told me that Pekhtin “was either naïve or cheap. If he’d just hired a local attorney, he could have structured things in a way that he never would have been caught.”
Democratic Senator Carl Levin of Michigan has long tried to address rampant money laundering by passing a bill that would require companies registered in the United States to reveal their true owners, but it has been blocked by the US Chamber of Commerce, the American Bar Association, and lobbyists for states including Delaware and, notably, Florida. Meanwhile, Florida’s political leaders have been spearheading the fight against a new Treasury Department rule mandating that foreign banks tell the IRS about accounts held by US taxpayers—and which would, reciprocally, require US banks to share the same information with foreign governments. Not surprisingly, Florida banks and realtors don’t like the idea of more sunlight on their lucrative dealings with foreigners. “There is a huge amount of dirty money flowing into Miami that’s disguised as investment,” said Jack Blum, a former congressional investigator and Washington attorney specializing in money-laundering cases. “The local business community sees any threat to that as a threat to the city’s lifeblood.”
I uncovered more than a score of notable foreign property holders in Miami, from a former senior Angolan official to various oligarchs, political cronies and controversial figures from Eastern Europe and Latin America (for summaries of their backgrounds and Miami holdings, see sidebars). That small window came after more than six months of research; dozens of interviews with money-laundering, banking and real estate experts; a visit to the city; and countless hours poring over Florida real estate and corporate records by myself and several research assistants.
I was especially interested in the growing presence of Russians and other Eastern Europeans, who began purchasing properties in Miami soon after the collapse of communism. Early arrivals included various Russian pop stars, among them Igor Nikolaev and Alla Pugacheva, but more than a few bad apples as well. Miami soon became a boomtown for former government officials and post-perestroika businessmen who looted the state during privatization and for mobsters who trafficked cocaine, bought strip clubs and set up offshore banks around the Caribbean. In his book Red Mafiya, Robert Friedman wrote that “Versace-clad” Russian gang leaders found Miami to be an ideal base for money laundering, “where each new day brought the potential for a multimillion- dollar score.” By 1996, according to a Miami Herald story that year, some 300 former Soviet citizens had bought properties in South Florida.
Isaac Feldman, who came to Miami after first emigrating to Israel, founded a real estate agency and became rich selling condos, mostly to Russians. Feldman didn’t seem overly concerned about the source of his clients’ money. “That some people [in the former Eastern bloc] operate by not paying taxes and duties and paying some bribes, yes, that could be,” he was quoted as saying in the Herald story.
Mayor Edelcup later appointed Feldman as a community adviser, and in 2010 he received 26 percent of the vote in a run for the Sunny Isles City Commission. Feldman vowed to mount another campaign, but his political career was cut short when he and two other Russians were indicted last December for conspiracy, wire fraud and money laundering. The trio had employed young Eastern European women to lure rich tourists to bars that bilked them—to the tune of $43,000 in the case of one customer—for overpriced caviar, vodka and champagne.
Thanks to its heavy Russian presence, Sunny Isles has acquired the nickname “Little Moscow.” Shops at a mall across the street from the Trump International Resort include a delicatessen offering blintzes and beef stroganoff, a furniture store with white leather sofas in the display window and restaurants serving an Eastern European clientele.
One night I had dinner at Lula Kebab House, where I felt like I’d been transported into a Russian version of Goodfellas. A Russian singer performed on a small stage with disco lights while customers ordered skewered sturgeon, eggplant salad and pierogis, and clinked forks on glasses to announce toasts before downing shots of vodka. At the table behind me, a man who looked to be almost 70 spoke in Russian to his wife, who appeared to be at least 40 years younger. At a table out front, a man of about the same age was seated with a young woman dressed in blue jean shorts, a halter top and cowboy boots.
Sunny Isles also has numerous real estate agencies owned by Russians that cater heavily to Eastern European clients, among them Exclusively Baranoff Realty, which operates from an office in the lobby of the Trump International Beach Resort and, according to an advertisement hanging near the elevator bank, represents “the most exclusive residences in Sunny Isles Beach, from $250,000 to more than $20 million.” A purple-and-gold advertising flier on a table out front of the agency that listed numerous properties for sale was in English on one side and Russian on the other.
I approached several realtors as a potential buyer. One agent I met with, a beautiful dark-haired Eastern European woman, told me that luxury properties in Sunny Isles were selling fast, mostly to foreigners and New York hedge funds. There were about 300 units in each of the Trump properties in Sunny Isles, but only ten were available in the $2-million-and-up range (which I had said I was looking for). If I was serious about buying, I’d have to move quickly and pay cash.
She took me to see a three-bedroom, three-bathroom unit on the thirty-eighth floor of Trump Palace, which looked out on the turquoise waters of the Atlantic and was on the market for $2.3 million. Building amenities included a bar, business center, cabanas, exercise room, indoor and outdoor pools, a spa and sauna, and tennis courts. “Living in a Trump property is like living in a hotel,” she told me, echoing the sales pitch in Sunny Isles’ official guidebook, as we stood on a balcony and gazed out on the ocean. The unit was attractively priced, she said cheerfully, and all the more so as the owner, a Russian looking to buy a bigger condo elsewhere in the area, had spent at least $350,000 on improvements.
Later that day, I obtained the property records for the condo. The legal owner is a company registered in Belize, an offshore haven where, according to a government website, there “is no requirement to file annual returns or public disclosure of directors, shareholders, charges, loans or agreements.”
In other words, the true owner of the Trump Palace unit is untraceable. He may be a perfectly respectable businessman, but the arrangement was a typically murky Miami affair.
Money Laundering, a Miami Tradition
Miami is a relatively new city, having been incorporated in 1896, and its entire history is inextricably intertwined with the real estate industry and its regular cycle of booms and busts. Miamians chatter incessantly about real estate, in the same way that a certain subset of New Yorkers talks about the stock market, Washingtonians politics and Los Angelenos the movie industry.
One afternoon at a restaurant called Boteco, I sat next to a table of four Brazilians who were cooking up a property deal. When drinking a cup of coffee in front of a strip mall café, I overheard a woman on the phone saying, “I know, I know, but the question is, are you willing to go higher?” At Tatiana—a restaurant and nightclub just north of Sunny Isles that is a favorite of Russians and that, on the weekends, features a show with cabaret dancers, circus performers and an occasional tiger—I overheard half of another phone conversation in which a middle-aged American man talking excitedly about one deal said, “I’m not normally a pyramid-scheme type of guy, but this one I like.”
Tens of thousands of people moved to Miami during the city’s original property rush of the 1920s. Many never intended to settle there but instead hoped to get rich speculating, and the enormous real estate bubble that ensued exploded in 1926. That was the same year as the Great Miami Hurricane, the most destructive ever to hit the United States at that time. It killed nearly 400 people and caused billions in property damage (in today’s dollars), blowing away thousands of unfinished houses that had been abandoned when the real estate market crashed. Next came a post–World War II rush fueled by people who came to stay. “That boom was more legitimate than the first one, and in a sense it has never ended,” says Paul George, a professor of history at Miami Dade College, adding that Dade County’s population has grown from 250,000 in 1940 to about 2.6 million today. “But ever since, we’ve had spikes of excessive speculation that ended badly.”
The wildest ride began in the 1970s, when Latin American drug lords turned Miami into a key hub of their operations and poured billions of dollars into the local economy, with much of it laundered into real estate. It also led to a crime wave—memorialized in Miami Vice and Brian De Palma’s Scarface—that gave Miami the nation’s highest murder rate. Drug money tainted everything from law enforcement to real estate to banking. “Miami’s Federal Reserve branch has a currency surplus of $5 billion, mostly in drug-generated $50 and $100 bills, or more than the nation’s twelve Federal Reserve banks combined,” Time magazine reported.
The city’s last real estate boom resulted from reckless lending by banks during the early 2000s. During the run-up, Miami’s once sleepy downtown and city center were completely transformed by the frantic construction of high-rise residential buildings and office towers. Residents poured in, turning downtown into one of the fastest-growing areas in the entire state. Moscow-based Mirax Group, headed by Sergei Polonsky—who once ate part of his tie on live TV to settle a bet, and whom Forbes has rated one of Russia’s nine most bizarre oligarchs—announced a development project on a private island that the company marketed to Russian buyers, saying it would change “the expectations of elegant and sophisticated living on Miami Beach.” Pérez, the Condo King, announced plans for the Icon Brickell, a $1 billion project that included three towers with 1,640 units, a swimming pool the size of a football field and five restaurants. Marc Anthony told People magazine that he and Jennifer Lopez had bought a unit at the Icon Brickell, “and when we are through decorating the condo, it will be the sexiest place in town!”
Then, inevitably, came the crash. Miami real estate prices fell by 35.8 percent between late 2005 and the same period in 2009. Tens of thousands of downtown condos were unoccupied that year and, as a Property Week story recounted, at night dogs roamed deserted streets in once hot central neighborhoods. Mirax went bust and Polonsky has fled Russia, where he is wanted for real estate fraud. He is reportedly in Cambodia, where he spent jail time earlier this year for allegedly attacking six boatmen with a knife. In May 2010, HSBC Bank seized control of 1,276 condos at the Icon Brickell, and it turned out that Anthony and J. Lo had never purchased a unit there. Instead, they had, in a PR move engineered by developers, leased a condo cheaply.
Things were even grimmer elsewhere in the state. Trash piled up at vacant lots in abandoned ghost subdivisions. Construction came to a screeching halt on giant shopping malls and office buildings that went into foreclosure. In 2010, a real estate expert told NPR that there were enough housing lots in Charlotte County, in the southwestern part of the state, to last for more than a century.
Rampant Corruption, Lax Regulation
Through boom and bust, one constant in Miami has been the political and business establishment’s embrace of offshore cash. Predictably, this has led to an assortment of foreign rogues regularly washing up in the city.
In 2003, US Immigration and Customs Enforcement (ICE) set up what became known as the Foreign Corruption Investigations Group in Miami to track down assets held by foreign officials and business executives in the United States. Within months, the group—which was based in Miami due to the large number of requests for assistance that the local office received from foreign governments—seized a $3.5 million Key Biscayne condo owned by Byron Jerez, former head of Nicaragua’s tax office. The following year, the United States returned to Nicaragua $2.7 million worth of assets that had been stolen by former President Arnoldo Alemán, who was sentenced in his home country to twenty years under house detention for embezzling $100 million from the state treasury. The assets included various Miami bank accounts, a cabana at the Key Biscayne Ocean Club, and a $150,000 deposit for the purchase of another Key Biscayne condominium.
In 2008, after Uruguayan authorities alerted ICE, the feds agreed to extradite Juan Peirano Basso, an international fugitive wanted for embezzling more than $800 million from financial institutions in Uruguay, Paraguay and Argentina, and who had been living comfortably in Miami. Basso’s actions “are believed to have caused the collapse of the Uruguayan economy and to have caused the South American financial crisis of 2002,” said an ICE press release announcing his extradition. Since its inception, the Foreign Corruption Investigations Group has made eighty criminal arrests, secured 148 indictments and seized more than $131 million in assets, according to ICE.
Drug lords and other criminals and swindlers have no doubt been drawn to Miami for some of the same reasons that tourists and retirees flock there—the ocean, sun and natural beauty—but Florida’s reputation for corruption and sleaze has surely been a lure as well. This is, after all, a city that is notorious for bizarre political and business scandals. Earlier this year, Miami-Dade Assistant State Attorney Ari Pregen was fired after he flashed his work badge to gain free admission to a strip club and pulled out his credentials again when the bill came, to avoid paying a 15 percent credit card surcharge.
Overall, Florida led the United States in federal convictions of public officials—781—between 2000 and 2010. Just this summer, three suburban Miami mayors were arrested on corruption charges within a month. “This is a place where it’s easy to lose your moral compass,” says Zalewski, the real estate consultant. “Everyone who moves to Miami wants to live in South Beach, which is fun, but the rule should always be to not renew your lease after the first year. If you do, it’s pretty much guaranteed that you’ll end up in rehab.”
Adding to the area’s decadent appeal is that banks and real estate developers have frequently played fast and loose with the rules as well. Allen Stanford, now serving a 110-year prison sentence for running a massive Ponzi scheme, set up his bank in Florida in 1998 after the state’s banking director authorized it to move huge amounts of money offshore without informing regulators.
Florida’s rate of mortgage fraud was higher than anywhere else in the country between 2000 and 2008. In the latter year, Don Saxon, Florida’s top mortgage industry regulator, was forced to resign after a Miami Herald investigation found that 10,000 criminals—including burglars, cocaine traffickers and identity thieves—had been approved to broker home loans in Florida and had committed at least $85 million in mortgage fraud.
Some flagrant abuses have been addressed, partly due to tighter rules imposed under the Patriot Act following the 9/11 attacks, but Florida banks still have a lot of room for improvement. In 2011, Miami-based Ocean Bank forfeited $11 million to the federal government for willfully failing to establish an anti–money laundering program for seven years. During that time, Ocean Bank took in large sums of cash from Colombia’s Bernal-Palacios drug trafficking organization. Among the group’s leaders was Ricardo Mauricio Bernal Palacios, whom the DEA once described as “one of the most wanted money laundering fugitives in the world.”
The real estate industry is more lightly regulated than financial institutions. Banks are required to file a Suspicious Activities Report (SAR) with the Treasury Department if they suspect a client is depositing or transferring corrupt money. Real estate agents and title insurers are exempt from that requirement—as are businesses that primarily sell luxury goods such as jewelry, yachts and private planes—which makes property an especially attractive vehicle to money launderers. Furthermore, bank tellers don’t receive a commission on the deposits they accept, so they are more likely to ask questions of a dubious customer than a real estate agent, who stands to make a huge commission on a multimillion-dollar luxury condo deal. “SARs are hugely important and often lead to exposure of major cases,” Stefan Cassella, an assistant US attorney based in Baltimore and the former deputy chief of the Justice Department’s Asset Forfeiture and Money Laundering Section, told me. “Requiring a broader range of players to file them would be a big help to law enforcement in terms of keeping corrupt money out of the United States.”
A Law to “Smoke Out” Owners
In 2007, Bradley Birkenfeld, an American director of UBS’s wealth management division in Geneva, approached the Justice Department and revealed disturbing information about his employer’s business practices. In addition to disclosing that he had smuggled diamonds (in a toothpaste tube) across borders for a client, he told US authorities that UBS was helping thousands of rich Americans hide their assets offshore to avoid paying taxes.
The US government went after UBS, and in 2009 the bank settled the case and avoided criminal prosecution by paying a $780 million fine. More important, UBS turned over to the US government the names of more than 4,500 American account holders, and the case “put the first big cracks in Switzerland’s vaunted bank secrecy,” in the words of The Economist. At home, the IRS introduced amnesty programs that allowed Americans to pay a small penalty to repatriate undeclared offshore accounts, a move that has brought the Treasury an estimated $5 billion in back taxes and penalties.
Another result of the UBS affair was that in 2010 Congress enacted the Foreign Account Tax Compliance Act (FATCA), which requires foreign banks to notify the IRS about accounts held by US taxpayers or face stiff penalties.
One section of FATCA that has elicited particularly intense hostility is its provisions for reciprocity, meaning that American banks would have to provide foreign governments with the same information about their nationals who hold US accounts. FATCA was opposed by investment banks like JPMorgan and Bank of America and foreign financial institutions like the Zurich Insurance Group and the Hong Kong Securities Association. But no one fought harder against the rule than Florida bankers, real estate developers, politicians and regulators, who feared it would slow the flow of foreign money into the state’s economy, especially in Miami.
The Florida Bankers Association sued to block the measure for allegedly failing to comply with federal rule-making procedures. The lawsuit said that the measure would impose too high a regulatory burden on banks and that the federal tax code already had sufficient provisions in place to prevent tax evasion. Leading FATCA opponents also included the Florida International Bankers Association, a trade group representing foreign banks from eighteen countries, and the Florida Office of Financial Regulation, which said it would require the “blanket collection” of information on foreign account holders and that the IRS should instead negotiate with foreign governments for “the reciprocal exchange of information” as required in individual cases.
Florida Republican Congressman Bill Posey, a member of the House Financial Services Committee, wrote a letter to President Obama saying that FATCA would “result in the flight of hundreds of billions of dollars from US financial institutions” and the leaking of personal information that might lead to “kidnappings or other terrorist actions” against foreign account holders in their home countries. In reply, Treasury Department official Michael Mundaca said that the IRS does not share information with foreign governments “unless and until several conditions are met, including a review of the protections against the misuse of information.” He also denied the new rules would cause massive capital flight from American banks, and noted that US banks had made similar arguments in the mid-1990s when new regulations required the reporting of bank-deposit interest paid to Canadian account holders. In fact, the amount of money held by Canadians in American banks rose from $1.9 billion in March 1996, just before the final regulations were issued, to $4 billion one year later.
The anti-FATCA lobby was able to delay enactment of the rule and water down some of its provisions, but as of midyear the United States had signed reciprocal agreements under FATCA with nine countries and was negotiating with eighteen more. Charles Intriago, president of the Association of Certified Financial Crime Specialists in Miami, predicted that FATCA would “smoke out” the true owners of a lot of front companies for criminals, including politicians. “The IRS is going to get the names of their girlfriends and aunts and uncles who are serving as directors of companies set up offshore,” he said.
That remains to be seen, as opponents are already campaigning to repeal the rule and the IRS recently announced that it is giving foreign financial institutions an additional six months, until July of next year, to comply. Senator Rand Paul, the Kentucky Republican, has introduced a bill to repeal FATCA, saying it is a “violation of sovereign nations’ laws and privacy matters.” Congressman Posey is leading the repeal effort in the House. On July 1, he wrote a letter to Treasury Secretary Jack Lew saying that FATCA measures “themselves would not bring one penny into the US treasury, they would discourage investment in the United States.”
A number of conservative activists are also involved in the FATCA repeal campaign, including Grover Norquist of Americans for Tax Reform and Andrew Quinlan of the Center for Freedom and Prosperity (CF&P). A Washington Post story in April said that the latter group’s “fundraising pleas have been circulated to offshore entities that make millions by providing anonymity for wealthy clients,” and that the director of a Hong Kong company that creates offshore trusts had sent a CF&P solicitation “to contacts in the Cook Islands, pointing out that CF&P was trying to raise $250,000 for a lobbying campaign to ‘stop the bleeding, build allies and go on the offensive’ against efforts in Washington to regulate the industry.”
No matter what happens with FATCA, cleaning up Florida financial institutions will not be easy, says Brian Kindle, who works for Intriago’s association. “I read a lot of court records about financial crimes, and whether it’s a Midwestern Ponzi scheme or a Caribbean bank fraud, at some point I always come across the phrase, ‘The money moved through a bank in South Florida.’ We have a big banking community, but New York and California are even bigger, and the money doesn’t always move through their banks. Our banking and real estate industries grew up during the cocaine era, and the attitude here has always been to make a quick deal and don’t ask any questions. That’s the whole culture, and it’s pretty antithetical to a rules-and-regulation-based compliance system. Changing that is going to be hard.”
During my last few days in Miami, I visited a few more properties for sale in Sunny Isles and waded through real estate listings. There were dozens of oceanfront properties with all the trimmings: marble floors, custom white Italian doors, built-in bars, multimedia systems, ceiling windows with electric shades, his-and-hers baths and walk-in closets, Jacuzzis, swimming pools and beachfront cabanas. At Ocean Three, a condominium toward the northern end of Sunny Isles, an in-house restaurant, Bistro, delivers to the units, the pool and the beach and offers a seven-course tasting menu that includes options such as foie gras, oysters Rockefeller, lobster, black winter truffles and baby rack of lamb.
And so it goes in Miami, where the welcome mat for the globe’s most pampered people is always out. Today, even as much of Florida has yet to pull out of the last real estate quagmire, at least 170 new condo towers are planned for Miami, many by the same developers behind projects that went bust during the last bubble. The Real Deal, a South Florida real estate publication, recently reported that a new influx of money from the Far East was further buoying the market and that the Ritz-Carlton Residences Palm Beach had already completed several deals with Chinese buyers.
Earlier this year, Flagstone Development announced it would build a mega-yacht resort called Island Garden that will feature high-rise towers, a hotel, shopping and a marina. The project was originally planned five years ago but fell apart when the real estate bubble brought down the global economy. Flagstone promises it will be open for business in 2019.
Jack Blum, the money-laundering investigator, recounted to me a work trip to Miami two years ago, when he was stunned to see condominiums going up in the poor Liberty City neighborhood. “I was in a cab and asked the driver what was going on,” he said. “He didn’t miss a beat—he said, ‘That’s from money laundering.’ When it’s that obvious to cabdrivers, you know the situation is bad. But that’s what the city’s economy is built on, and it is a monumental challenge to fix it.”
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This is where our right wing Republicans are being fooled------Republicans hate eminent domain---which all this development abuses openly----but they love Trans Pacific Trade Pact ----now Congressional Republicans who are simply all Bush neo-cons love TPP=====not rank and file Republican voters.
Trans Pacific Trade Pact tied to US Foreign Economic Zones will allow global corporations to come into US cities and take whatever real estate they want-----no matter who owns it. That is what we are seeing today when city council gives PLANK AND UNDERARMOUR or Larry Hogan gives A CORE OF community real estate to global corporate campus development ---but this will soon be done flagrantly and will take any real estate now being handed to that 5% to the 1% as PAY-TO-PLAY.
TRUMP HAS NOT STOPPED TRANS PACIFIC TRADE PACT no matter how much they pretend----they are simply silencing people protesting as they MOVE FORWARD.
'Republicans hate eminent domain (the taking of private property by the government) and love the Trans-Pacific Partnership (the TPP trade deal), but he .... But conservative real estate developers like Trump depend on eminent domain so that '.
Trump's real estate empire moved overseas with all of global Wall Street so this is simply conservative posing. It is why the KINGS OF REAL ESTATE as in Chicago and Baltimore will lose it all as global corporate campus expansion continues.
Please glance through to see how right wing conservatives are fooled as too left social Democrats with Clinton neo-liberals-----IT IS ALL POSING---
No One Knows Why Trump Is Winning. Here’s What Cognitive Science Says.
The cognitive linguistic psychology behind Trump’s success
By George Lakoff
Editor’s note: the author’s piece below was written during the primaries but it is just as relevant today.
Donald Trump is winning Republican presidential primaries at such a great rate that he seems likely to become the next Republican presidential nominee and perhaps the next president. Democrats have little understanding of why he is winning — and winning handily, and even many Republicans don’t see him as a Republican and are trying to stop him, but don’t know how. There are various theories: People are angry and he speaks to their anger. People don’t think much of Congress and want a non-politician. Both may be true. But why? What are the details? And Why Trump?
Many people are mystified. He seems to have come out of nowhere. His positions on issues don’t fit a common mold.
He likes Planned Parenthood, Social Security, and Medicare, which are not standard Republican positions. Republicans hate eminent domain (the taking of private property by the government) and love the Trans-Pacific Partnership (the TPP trade deal), but he has the opposite views on both. He is not religious and scorns religious practices, yet the Evangelicals (that is, the white Evangelicals) love him. He thinks health insurance and pharmaceutical companies, as well as military contractors, are making too much profit and wants to change that. He insults major voting groups, e.g., Latinos, when most Republicans are trying to court them. He wants to deport 11 million immigrants without papers and thinks he can. He wants to stop all Muslims from entering the country. What is going on?
Some Background
I work in the cognitive and brain sciences. In the 1990’s, I undertook to answer a question in my field: How do the various policy positions of conservatives and progressives hang together? Take conservatism: What does being against abortion have to do with being for owning guns? What does owning guns have to do with denying the reality of global warming? How does being anti-government fit with wanting a stronger military? How can you be pro-life and for the death penalty? Progressives have the opposite views. How do their views hang together?
The answer came from a realization that we tend to understand the nation metaphorically in family terms: We have founding fathers. We send our sons and daughters to war. We have homeland security. The conservative and progressive worldviews dividing our country can most readily be understood in terms of moral worldviews that are encapsulated in two very different common forms of family life: The Nurturant Parent family (progressive) and the Strict Father family (conservative).
What do social issues and the politics have to do with the family? We are first governed in our families, and so we grow up understanding governing institutions in terms of the governing systems of families.
In the strict father family, father knows best. He knows right from wrong and has the ultimate authority to make sure his children and his spouse do what he says, which is taken to be what is right. Many conservative spouses accept this worldview, uphold the father’s authority, and are strict in those realms of family life that they are in charge of. When his children disobey, it is his moral duty to punish them painfully enough so that, to avoid punishment, they will obey him (do what is right) and not just do what feels good. Through physical discipline they are supposed to become disciplined, internally strong, and able to prosper in the external world. What if they don’t prosper? That means they are not disciplined, and therefore cannot be moral, and so deserve their poverty. This reasoning shows up in conservative politics in which the poor are seen as lazy and undeserving, and the rich as deserving their wealth. Responsibility is thus taken to be personal responsibility not social responsibility. What you become is only up to you; society has nothing to do with it. You are responsible for yourself, not for others — who are responsible for themselves.
Winning and Insulting
As the legendary Green Bay Packers coach, Vince Lombardi, said,“Winning isn’t everything. It’s the only thing.”
In a world governed by personal responsibility and discipline, those who win deserve to win. Why does Donald Trump publicly insult other candidates and political leaders mercilessly? Quite simply, because he knows he can win an onstage TV insult game. In strict conservative eyes, that makes him a formidable winning candidate who deserves to be a winning candidate. Electoral competition is seen as a battle. Insults that stick are seen as victories — deserved victories.
Consider Trump’s statement that John McCain is not a war hero. The reasoning: McCain got shot down. Heroes are winners. They defeat big bad guys. They don’t get shot down. People who get shot down, beaten up, and stuck in a cage are losers, not winners.
The Moral Hierarchy
The strict father logic extends further. The basic idea is that authority is justified by morality (the strict father version), and that, in a well-ordered world, there should be (and traditionally has been) a moral hierarchy in which those who have traditionally dominated should dominate. The hierarchy is: God above Man, Man above Nature, The Disciplined (Strong) above the Undisciplined (Weak), The Rich above the Poor, Employers above Employees, Adults above Children, Western culture above other cultures, Our Country above other countries. The hierarchy extends to: Men above women, Whites above Nonwhites, Christians above nonChristians, Straights above Gays.
We see these tendencies in most of the Republican presidential candidates, as well as in Trump, and on the whole, conservative policies flow from the strict father worldview and this hierarchy Family-based moral worldviews run deep. Since people want to see themselves as doing right not wrong, moral worldviews tend to be part of self-definition — who you most deeply are. And thus your moral worldview defines for you what the world should be like. When it isn’t that way, one can become frustrated and angry.
There is a certain amount of wiggle room in the strict father worldview and there are important variations. A major split is among (1) white Evangelical Christians, (2) laissez-fair free market conservatives, and (3) pragmatic conservatives who are not bound by evangelical beliefs.
White Evangelicals
Those whites who have a strict father personal worldview and who are religious tend toward Evangelical Christianity, since God, in Evangelical Christianity, is the Ultimate Strict Father: You follow His commandments and you go to heaven; you defy His commandments and you burn in hell for all eternity. If you are a sinner and want to go to heaven, you can be ‘born again” by declaring your fealty by choosing His son, Jesus Christ, as your personal Savior.
Such a version of religion is natural for those with strict father morality. Evangelical Christians join the church because they are conservative; they are not conservative because they happen to be in an evangelical church, though they may grow up with both together.
Evangelical Christianity is centered around family life. Hence, there are organizations like Focus on the Family and constant reference to “family values,” which are to take to be evangelical strict father values. In strict father morality, it is the father who controls sexuality and reproduction. Where the church has political control, there are laws that require parental and spousal notification in the case of proposed abortions.
Evangelicals are highly organized politically and exert control over a great many local political races. Thus Republican candidates mostly have to go along with the evangelicals if they want to be nominated and win local elections.
Pragmatic Conservatives
Pragmatic conservatives, on the other hand, may not have a religious orientation at all. Instead, they may care primarily about their own personal authority, not the authority of the church or Christ, or God. They want to be strict fathers in their own domains, with authority primarily over their own lives. Thus, a young, unmarried conservative — male or female —may want to have sex without worrying about marriage. They may need access to contraception, advice about sexually transmitted diseases, information about cervical cancer, and so on. And if a girl or woman becomes pregnant and there is no possibility or desire for marriage, abortion may be necessary.
Trump is a pragmatic conservative, par excellence. And he knows that there are a lot of Republican voters who are like him in their pragmatism. There is a reason that he likes Planned Parenthood. There are plenty of young, unmarried (or even married) pragmatic conservatives, who may need what Planned Parenthood has to offer — cheaply and confidentially.
Similarly, young or middle-aged pragmatic conservatives want to maximize their own wealth. They don’t want to be saddled with the financial burden of caring for their parents. Social Security and Medicare relieve them of most of those responsibilities. That is why Trump wants to keep Social Security and Medicare.
Laissez-faire Free Marketeers
Establishment conservative policies have not only been shaped by the political power of white evangelical churches, but also by the political power of those who seek maximally laissez-faire free markets, where wealthy people and corporations set market rules in their favor with minimal government regulation and enforcement. They see taxation not as investment in publicly provided resources for all citizens, but as government taking their earnings (their private property) and giving the money through government programs to those who don’t deserve it. This is the source of establishment Republicans’ anti-tax and shrinking government views. This version of conservatism is quite happy with outsourcing to increase profits by sending manufacturing and many services abroad where labor is cheap, with the consequence that well-paying jobs leave America and wages are driven down here. Since they depend on cheap imports, they would not be in favor of imposing high tariffs.
But Donald Trump is not in a business that makes products abroad to import here and mark up at a profit. As a developer, he builds hotels, casinos, office buildings, golf courses. He may build them abroad with cheap labor but he doesn’t import them. Moreover, he recognizes that most small business owners in America are more like him — American businesses like dry cleaners, pizzerias, diners, plumbers, hardware stores, gardeners, contractors, car washers, and professionals like architects, lawyers, doctors, and nurses. High tariffs don’t look like a problem.
Many business people are pragmatic conservatives. They like government power when it works for them. Take eminent domain. Establishment Republicans see it as an abuse by government — government taking of private property. But conservative real estate developers like Trump depend on eminent domain so that homes and small businesses in areas they want to develop can be taken by eminent domain for the sake of their development plans. All they have to do is get local government officials to go along, with campaign contributions and the promise of an increase in local tax dollars helping to acquire eminent domain rights. Trump points to Atlantic City, where he build his casino using eminent domain to get the property.
If businesses have to pay for their employees’ health care benefits, Trump would want them to have to pay as little as possible to maximize profits for businesses in general. He would therefore want health insurance and pharmaceutical companies to charge as little as possible. To increase competition, he would want insurance companies to offer plans nationally, avoiding the state-run exchanges under the Affordable Care Act. The exchanges are there to maximize citizen health coverage, and help low-income people get coverage, rather than to increase business profits. Trump does however want to keep the mandatory feature of ACA, which establishment conservatives hate since they see it as government overreach, forcing people to buy a product. For Trump, however, the mandatory feature for individuals increases the insurance pool and brings down costs for businesses.
Direct vs. Systemic Causation
Direct causation is dealing with a problem via direct action. Systemic causation recognizes that many problems arise from the system they are in and must be dealt with via systemic causation. Systemic causation has four versions: A chain of direct causes. Interacting direct causes (or chains of direct causes). Feedback loops. And probabilistic causes. Systemic causation in global warming explains why global warming over the Pacific can produce huge snowstorms in Washington DC: masses of highly energized water molecules evaporate over the Pacific, blow to the Northeast and over the North Pole and come down in winter over the East coast and parts of the Midwest as masses of snow. Systemic causation has chains of direct causes, interacting causes, feedback loops, and probabilistic causes — often combined.
Direct causation is easy to understand, and appears to be represented in the grammars of all languages around the world. Systemic causation is more complex and is not represented in the grammar of any language. It just has to be learned.
Empirical research has shown that conservatives tend to reason with direct causation and that progressives have a much easier time reasoning with systemic causation. The reason is thought to be that, in the strict father model, the father expects the child or spouse to respond directly to an order and that refusal should be punished as swiftly and directly as possible.
Many of Trump’s policy proposals are framed in terms of direct causation.
Immigrants are flooding in from Mexico — build a wall to stop them. For all the immigrants who have entered illegally, just deport them — even if there are 11 million of them working throughout the economy and living throughout the country. The cure for gun violence is to have a gun ready to directly shoot the shooter. To stop jobs from going to Asia where labor costs are lower and cheaper goods flood the market here, the solution is direct: put a huge tariff on those goods so they are more expensive than goods made here. To save money on pharmaceuticals, have the largest consumer — the government — take bids for the lowest prices. If Isis is making money on Iraqi oil, send US troops to Iraq to take control of the oil. Threaten Isis leaders by assassinating their family members (even if this is a war crime). To get information from terrorist suspects, use water-boarding, or even worse torture methods. If a few terrorists might be coming with Muslim refugees, just stop allowing all Muslims into the country. All this makes sense to direct causation thinkers, but not those who see the immense difficulties and dire consequences of such actions due to the complexities of systemic causation.
Political Correctness
There are at least tens of millions of conservatives in America who share strict father morality and its moral hierarchy. Many of them are poor or middle class and many are white men who see themselves as superior to immigrants, nonwhites, women, non-Christians, gays — and people who rely on public assistance. In other words, they are what liberals would call “bigots.” For many years, such bigotry has not been publicly acceptable, especially as more immigrants have arrived, as the country has become less white, as more women have become educated and moved into the workplace, and as gays have become more visible and gay marriage acceptable. As liberal anti-bigotry organizations have loudly pointed out and made a public issue of the unAmerican nature of such bigotry, those conservatives have felt more and more oppressed by what they call “political correctness” — public pressure against their views and against what they see as “free speech.” This has become exaggerated since 911, when anti-Muslim feelings became strong. The election of President Barack Hussein Obama created outrage among those conservatives, and they refused to see him as a legitimate American (as in the birther movement), much less as a legitimate authority, especially as his liberal views contradicted almost everything else they believe as conservatives.
Donald Trump expresses out loud everything they feel — with force, aggression, anger, and no shame. All they have to do is support and vote for Trump and they don’t even have to express their ‘politically incorrect’ views, since he does it for them and his victories make those views respectable. He is their champion. He gives them a sense of self-respect, authority, and the possibility of power.
Whenever you hear the words “political correctness” remember this.
Biconceptuals
There is no middle in American politics. There are moderates, but there is no ideology of the moderate, no single ideology that all moderates agree on. A moderate conservative has some progressive positions on issues, though they vary from person to person. Similarly, a moderate progressive has some conservative positions on issues, again varying from person to person. In short, moderates have both political moral worldviews, but mostly use one of them. Those two moral worldviews in general contradict each other. How can they reside in the same brain at the same time?
Both are characterized in the brain by neural circuitry. They are linked by a commonplace circuit: mutual inhibition. When one is turned on the other is turned off; when one is strengthened, the other is weakened. What turns them on or off? Language that fits that worldview activates that worldview, strengthening it, while turning off the other worldview and weakening it. The more Trump’s views are discussed in the media, the more they are activated and the stronger they get, both in the minds of hardcore conservatives and in the minds of moderate progressives.
This is true even if you are attacking Trump’s views. The reason is that negating a frame activates that frame, as I pointed out in the book Don’t Think of an Elephant! It doesn’t matter if you are promoting Trump or attacking Trump, you are helping Trump.
A good example of Trump winning with progressive biconceptuals includes certain unionized workers. Many union members are strict fathers at home or in their private life. They believe in “traditional family values” — a conservative code word — and they may identify with winners.
Why Has Trump been Winning in the Republican Primaries?
Look at all the conservatives groups he appeals to!
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