Is Oil Worth More Than Blood In Nigeria?

By David A. Love, BlackCommentator.com

Listen to David's radio interview with Mark Thompson and Dick Gregory here.

On May 26, 2009, a potentially historic human rights trial will take place in a federal court in New York. At issue: What did Royal Dutch/Shell, the multinational oil giant, do in Nigeria?

The case is over a decade in the making. The suit, filed by the Center for Constitutional Rights (CCR) and EarthRights International, claims that Shell Oil and Brian Anderson—who was the managing director of Shell Nigeria—were complicit in the commission of human rights violations in that country. Specifically, the suit seeks to hold Shell accountable for summary executions, crimes against humanity, torture, inhuman treatment and the arbitrary arrest and detention of Nigerians. The plaintiffs in the case allege that the corporation had a hand in the November 1995 hangings of Ken Saro-Wiwa and eight other human rights activists by Nigeria’s then-ruling military junta. These leaders were non-violently protesting against Shell’s abusive practices in the Ogoni region in the Niger River Delta, including the trail of environmental devastation the corporation has left in its wake. They are known collectively as the Ogoni Nine.

Saro-Wiwa, who with the other activists was convicted and hanged on trumped-up murder charges, demanded a cleanup of Shell’s hundreds of oil spills throughout the region. In addition, and perhaps more poignantly—because wherever there is oil there are monied interests to protect and poor people to potentially exploit—they were pushing for a greater share of oil revenues to the Ogoni people. Presently, nearly 85% of the oil revenues are in the hands of a mere 1% of the Nigerian population, in a country where, according to the African Development Bank, over 70% of people live on less than US$1 a day.

Environmental devastation

The once-fertile Niger Delta region was known as the breadbasket of Nigeria. According to an independent team of Nigerian, American and British scientists, the region is “one of the world’s most severely impacted ecosystems,” and “one of the 10 most important wetlands and marine ecosystems in the world. Millions of people depend on the Delta’s natural resources for survival, including the poor in many other West African countries who rely on the migratory fish from the Delta.” For the people in the region, who rely on subsistence farming and fishing, Shell’s drilling, deforestation and other activities have created poverty.

Further, the World Bank says that gas-flaring in Nigeria—the process by which an oil company burns off the excess natural gas caused by oil drilling—has created more greenhouse gas emissions than in the rest of sub-Saharan Africa combined. And an estimated 1.5 million tons of oil have spilled into the Niger Delta over the past 50 years—the equivalent of one Exxon Valdez spill every year. The environmental degradation has created health problems in the region. Dr. Owens Wiwa, brother of Ken Saro-Wiwa who was detained and beaten by the Nigerian military, said that the people in the area have a high incidence of asthma, cancer and bronchitis. He also made note of “some bizarre skin diseases and a high level of miscarriages, which is quite different from other areas in Nigeria that are not producing oil.”

Shell and the military

Forty percent of Nigeria’s oil goes to the U.S., and Shell is a major player in Nigeria. For the more than 50 years Shell has engaged in oil production in Nigeria, human rights groups note, the corporation has worked closely with the Nigerian government to suppress local opposition to its presence there. In the early 1990s, when Saro-Wiwa’s human rights group MOSOP (The Movement for the Survival of the Ogoni People) was formed, Shell asked for armed assistance against local protestors, and armed and financed Nigerian soldiers. There was a reign of terror, in which the Nigerian military, with help from Shell according to human rights groups, falsely arrested, beat, raped and tortured people. After Shell requested military backup to build an oil pipeline in Ogoni, one woman who protested the bulldozing of her crops was shot by Nigerian soldiers and lost her arm.

In 1994, the military blocked Saro-Wiwa and other Ogoni leaders from attending a gathering. Four Ogoni chiefs were subsequently killed at the gathering, and the military blamed Saro-Wiwa and MOSOP for the killings. The Ogoni Nine were arrested, and, the military raided 60 Ogoni towns, beating and arresting hundreds of suspected MOSOP members.

As one Nigerian military official wrote in a memorandum: “Shell operations still impossible unless ruthless military operations are undertaken for smooth economic activities to commence.” The Ogoni Nine bore the full brunt of that ruthlessness— with a sham, kangaroo trial, presided over by a shady, ruthless military regime, and with Shell attempting to bribe two men to testify against Saro-Wiwa, as the plaintiffs allege. Saro-Wiwa said the following in his closing statement at trial:

The military dictatorship holds down oil producing areas such as Ogoni by military decrees and the threat or actual use of physical violence so that Shell can wage its ecological war without hindrance… This cozy, if criminal, relationship was perceived to be rudely disrupted by the non-violent struggle of the Ogoni people under MOSOP. The allies decided to bloody the Ogoni in order to stop their example from spreading through the oil-rich Niger Delta.

Ken Saro-Wiwa, Jr. speaks out

Nearly 14 years after his father’s hanging execution, Ken Saro-Wiwa, Jr., a plaintiff in the lawsuit, recently reflected on his father’s death and the struggle for justice in Nigeria:

It was a pretty dark time, and you felt as if the world had collapsed. We put all pressure on the Nigerian government, and Shell was washing its hands. It felt that no one was willing to take responsibility for the horrendous injustice. My father was hanged for a crime he didn’t commit. The company was complicit in my father’s execution, and they washed their hands. It seemed like a shot in the dark. It is painful that no one wants to face up to what they did.

Mr. Saro-Wiwa, Jr. noted that Nigeria is an oil rich country whose people feel they are not benefitting from all of these rich resources, that everything the government does is for the benefit of transnational corporations and in the interests of Big Oil. As a result, people on the ground are protesting these conditions:

There is a lack of democracy in their country, and people are taking things into their own hands. As people take things into their own hands, it will create more instability, things will become more difficult. We must create a system that is fair.

Shell responds to the allegations

It is true that Nigerian Gen. Sani Abacha, the brutal and corrupt military dictator at the time, died in 1998. But the people of Nigeria’s Ogoni region still suffer. And observers would suggest that Shell, still an oil powerhouse in that country, cannot shake off the executions of the Ogoni Nine, despite all of the best greenwashing and public relations strategies that money can buy. In response to the suit filed against the corporation, Shell spokesman Stan Mays provided me with the following written statement:

• The allegations made in the complaints against Royal Dutch/Shell concerning the 1995 executions of Ken Saro-Wiwa and his eight fellow Ogonis are false and without merit. Shell in no way encouraged or advocated any act of violence against them or their fellow Ogonis. We believe that the evidence will show clearly that Shell was not responsible for these tragic events.

• The executions in 1995 of Ken Saro-Wiwa and his eight fellow Ogonis were tragic events that were carried out by the Nigerian government in power at the time.

• Shell attempted to persuade that government to grant clemency; to our deep regret, that appeal – and the appeals of many others – went unheard, and we were shocked and saddened when we heard the news.

• Shell remains committed to reconciliation, peace and return to normality in Ogoni land.

Corporations on notice

So, the question that arises is, why bring the current lawsuit in a U.S. court? Well, although the alleged crimes did not take place on U.S. soil, Shell does substantial business in the U.S. Moreover, the plaintiffs filed the case under the Alien Tort Statute, a 1789 law which allows lawsuits in U.S. courts for international violations of human rights. In addition, the Torture Victim Prevention Act allows a plaintiff to seek damages for extrajudicial killing or torture, regardless of where it occurs in the world. The suit was also brought under the laws of New York, and international laws. “The case is significant because people doing business in the U.S. have to follow U.S. law, which includes human rights violations,” says Jennie Green of the Center for Constitutional Rights (CCR), attorney for the plaintiffs. “These are universally recognized laws. This is more than a mere tort, it is something that is universally recognized. Shell should have known better.”

In what appears to be a “shell game,” Green noted that Shell has spent years dragging its feet; fighting the case on the grounds that it did not belong in the U.S.; attempting, without success, to petition the Supreme Court, and claiming that the Netherlands-based parent company Royal Dutch/Shell had nothing to do with the case, but rather that Shell Nigeria was the proper defendant.

During these troubled times in America— when the nation’s underbelly is exposed for all the world to see—matters of corporate corruption and malfeasance, and environmental devastation are on the minds of many. If the plaintiffs in Wiwa v. Shell are victorious, this would be the first time that a multinational corporation is held liable in a U.S. court for human rights violations overseas. CCR’s Green believes that these days, a U.S. jury is more likely to believe that a corporation and its officers are capable of such corruption that they would harm individuals in this manner. “Here in the U.S. the message has been brought home,” said Ken Saro-Wiwa, Jr. “Corporations have to be held accountable, and it is difficult for sovereign nations to hold them accountable because of the fluidity of capital. There is a gap between global capital and systems of law.”

And this is a time when transnational corporations are being put on notice. A clear signal is being sent to them that the world is no longer their oyster. Neocolonialism is over. They cannot run roughshod over the world for the sake of the almighty profit, conducting business around the globe without regard for U.S. law and the law of nations. The U.S. Securities and Exchange Commission is presently investigating Shell for engaging in graft in Nigeria, a violation the U.S. Foreign Corrupt Practices Act. In February, the Halliburton spinoff KBR admitted to paying bribes to secure contracts related to the construction of a liquefied natural gas facility in Nigeria. Halliburton and KBR agreed to pay fines of over $579 million, the largest fine ever in a U.S. corruption case. And the notorious U.S. military contractor Blackwater (now called Xe), has been sued in the U.S., and some of its employee-mercenaries federally indicted for firing upon and killing unarmed civilians in Baghdad in 2007.

And a federal judge in New York has paved the way for South African plaintiffs to pursue lawsuits against GM, Ford, Daimler, and IBM “for aiding and abetting torture ... extrajudicial killing, and apartheid.”

When I asked him about his thoughts regarding Shell, the struggles of the Niger Delta and the upcoming trial, Ken Saro-Wiwa, Jr. said that “When you look at what is happening in the world, there is no justice.” At the same time, he emphasized that “Gandhi said that good always triumphs over evil in the end.” Indeed, these words will be put to the test again very soon.

Lobbyist Money + Right-Wing Extremists = Tea Party

By David A. Love, BlackCommentator.com

The tea parties that recently took place around the country were billed as a grassroots, bottom-up groundswell against taxes, big government and bailouts. Fox News, apparently promoting itself as the official teabag network, hopes to grab ratings by embracing the pseudo-populist protests as their own.

Republican politicians tried to hitch onto the mean-spirited tea party bandwagon, replete with anti-Obama and racist protest signs. That the GOP wants to associate itself with extremist groups tells you the political party has officially fallen off the deep end. White supremacists, militias, secessionists, conspiracy theorists and wingnuts—the subjects of a new Department of Homeland Security report— apparently have a seat at the table of the Republican Party. With the moderates and even the reasonable, book learning-oriented conservatives driven from the GOP, the extremists are now the base, the mainstream conservatives. They are all that is left of a party in tatters, of what is now a regional political organization— Southern, Christian and almost exclusively white.

No more of this going through the motions about diversity, about the big tent. And I think that is fine, because there is no love lost. Many political observers always looked at their overtures to people of color with a jaundiced eye. But the Republicans are playing with fire now as they court the angry lynch mob. And we have been down this road before.

I speak of a time, during Jim Crow segregation, when opportunistic politicians— the White Citizens Council, or the white-collar Klan— appealed to their unwashed racist brethren by standing against desegregation and voting against civil rights. The white-collar Klan gave a good talk. They stood in front of the schoolhouse door to block the Black students from attending class, but they kept their hands clean. Meanwhile, the angry mob, Klansmen and other domestic terrorists, did the dirty work. They acted with a wink and a nod from the respectable White-collar Klan, and took matters into their own hands by burning crosses, lynching civil rights workers, and bombing Black churches. And this is the arrangement that the GOP appears to be establishing with their base today.

From an organizational point of view, the tea parties are a prime example of “astroturfing”, top-down machinations operating under the guise of a faux grassroots movement—like a phony, conservative version of MoveOn.org, but operated by a corporate puppetmaster. In this case, as was reported in The Atlantic and ThinkProgress, they are being led by corporate lobbyist-run, Republican-affiliated front groups and think-tanks: FreedomWorks, a conservative action group led by former U.S. House Majority Leader Dick Armey; the free-market group Americans For Prosperity, and the online-oriented, free-market group DontGo Movement, which was born out of last year’s offshore drilling debate in Congress. These organizations are writing the press releases and talking points, thinking up the ideas for the signs, setting up the conference calls, you name it.

Americans For Prosperity operates through the generosity of philanthropies such as the ultra-conservative Lynde and Harry Bradley Foundation (which bankrolled Ward Connerly’s anti-affirmative action ballot initiatives, and The Bell Curve author Charles Murray), and the pro-oil drilling Koch Family foundations.

In accordance with the interests of Armey’s client base, FreedomWorks has lobbied for the privatization of Social Security, and the deregulation of the life insurance industry. It supports the status quo in America’s use of fossil fuels, and has lobbied against healthcare reform. Further, FreedomWorks has received funding from telephone giants Verizon and AT&T, and has opposed net neutrality legislation that would keep the Internet democratic and open. One FreedomWorks funder is the Scaife Foundation, from Richard Mellon Scaife, key patron of the American Right.

So, these are the White-collar interests behind the tea parties. But what of the angry, disgruntled masses, the violent ones that’ll “git ‘er done”? Well, the Department of Homeland Security (DHS) just issued a report called “Rightwing Extremism: Current Economic and Political Climate Fueling Resurgence in Radicalization and Recruitment.” According to the report, the current economic downturn and the election of an African American president have provided recruitment opportunities for White supremacist and radical right-wing groups. As the report warns, “the consequences of a prolonged economic downturn—including real estate foreclosures, unemployment, and an inability to obtain credit—could create a fertile recruiting environment for rightwing extremists and even result in confrontations between such groups and government authorities similar to those in the past.”

The current situation is not unlike the 1990s, when angst over a recession fed paranoia, and conspiracy theories about the end times, martial law and the suspension of the U.S. Constitution. The environment led to the targeting of government buildings and law enforcement, and resulted in the 1995 Oklahoma City bombing. It was the largest terrorist attack on U.S. soil before September 11, 2001, in which a bombing of the Alfred P. Murrah Federal Building claimed 168 lives and left over 800 people injured.

According to the Southern Poverty Law Center, in 2008 there were 926 hate groups in the U.S.— more than a 4 percent increase from 888 groups in 2007, and an over 50 percent increase since 2000, when 602 groups were active.

The DHS report notes that disgruntled veterans from the current wars in Iraq and Afghanistan are recruited by white supremacist groups, exploited for the training and skills they acquire in the military. Let’s not forget that Oklahoma City bomber Timothy McVeigh was a veteran of Operation Desert Storm in 1990-1991.

These right-wing groups are united by their hatred of immigration and a frustration over perceived government inaction on the issue, and they perpetrate hate crimes against Latinos. And in their hostility towards gun control legislation—such as assault weapons bans and proposed universal handgun registration—they stockpile weapons and ammunition, and engage in paramilitary training.

These extremist organizations are also united by their concern over the election of President Obama, which has translated into new recruits. Can we forget the blood-lust at the McCain-Palin rallies, in which crowd participants called Obama a terrorist and a traitor, carried around Obama monkey dolls and called for his death? During the 2008 presidential campaign, then-candidate Obama received more threats than any other candidate in recent memory, according to the Southern Poverty Law Center. Moreover, several white supremacists were arrested for plotting to assassinate him or threatening to do so.

And the tea parties represent another venue, another outlet for racist and extremist sentiment, all funded by right-wing corporate interests. Consider some of the signs that were held by teabag protestors:

• At a Madison, Wisconsin teabag rally: “Obama is the anti-Christ!” “Obama’s Plan – White Slavery.”

• In Chicago: “The American Taxpayers Are The Jews For Obama’s Ovens.”

• Philadelphia: “Barack Hussein Obama – The New Face of Hitler.”

• Fresno, California: “Impeach Osama Obama a.k.a. Hussein.”

• In Columbia, S.C., an elderly man held a large sign which read “Barack Obama supports Abortion, Sodomy, Socialism and The New World Order.”

• At a Washington, DC protest, one man held a sign which read “Stand idly by while some Kenyan tries to destroy America? WAP!! I don’t think so!!! Homey don’t play dat!!!”

Sadly, under this economic and political climate, some elected officials try to tap into this extremist and racist anger with calls for secession and states’ rights, time-tested racist code words for the suppression of civil rights of African Americans. And the half-baked rejection of the stimulus money by some Republican governors, particularly in Southern states with considerable poverty and large populations of color, smacks of traditional conservative opposition to social programs on the grounds that they’ll help Black and Brown people. It’s funny until somebody gets hurt, as they always say.

So, the white-collar Klan and the regular Klan have entered the 21st century, and what the government intends to do about it this time around remains to be seen. But it is certain that we can’t sleep on this one.

Our House Is On Fire, Part 6: Who Stopped the Presses?

By David A. Love, BlackCommentator.com

The following is the sixth part of an ongoing Color of Law series.
Click here to read any of the commentaries in this series.

Who stopped the presses? Obviously, it is a question that many are asking these days.  

It is a bit sobering to witness the apparent demise of the newspaper industry. Not unlike dominoes, newspapers around the U.S. are toppling, closing their doors, filing for bankruptcy, or ceasing their print operations and only remaining online. As someone who has written op-eds for newspapers throughout the nation over the past decade, I can appreciate the importance of having a vigorous and viable press in this country. In order for true democracy to work, we need news media that will speak truth to power, that will expose, without apology, government misconduct, corporate corruption and official wrongdoing. That was the original purpose of the press, after all.  

But as someone who has always had one foot firmly planted in the independent media camp—as a former producer for Democracy Now!, former video documentary producer, a writer for a number of independent publications, and a political blogger—I understand two things: First, independent media came into being to fill a void because the mainstream media was flat on its behind. Fast asleep. Second, mainstream media have failed their mission by becoming too cozy with the powerful forces they were supposed to police.

Independent media have come to the rescue to save the public from a news industry which historically may not have reflected their reality, their perspective. For example, the Black, Latino and other ethnic press provide a crucial alternative to a media establishment which often ignores these communities, or seeks to depict them as criminals or buffoons. Progressive media provide an alternative to a mainstream press which is too often White, conservative and male centered. It is worth noting that although the nation has an African American president, the White House press corps, lacking in diversity, does not reflect this reality. But as newsrooms shrink, the diversity problem only gets worse.

To be sure, there are many good newspapers which are struggling, and unfortunately many invaluable publications which are falling or have fallen by the wayside. The reasons for their demise are various: the Internet, blogs, an unsustainable business model of providing free online content, etc.

I would suggest some additional reasons that some newspapers have failed. Too often, they simply have not served their readers, and the product, like a GM car, has lost its appeal. Many news companies— not just papers, but TV as well—are owned by corporate conglomerates and entertainment companies. This reality is reflected in the softball, celebrity gossip orientation of many so-called news outlets. Governed by the bottom line and cost-cutting measures, these papers have eliminated their City Hall beat reporters, and other reporters who are in tune with the pulse of a given city. In the absence of seasoned journalists who can actually report on anything, because those people were already laid off, these newspapers become a collection of news wires and press releases, in a pamphlet. And who is paying for that when you can read it online?

The damage has been done in terms of the giant pass that the news media have taken on the important issues of the day. During the Iraq War, the mainstream media took the opportunity to act as nationalistic cheerleaders, the propaganda arm of the Bush White House— beating the drums of war and almost celebrating the thousands upon thousands of deaths that would inevitably occur.

As cheerleaders for corporate America, the mainstream press fell asleep on the Wall Street crisis. Over-caffeinated blowhard snake-oil salesmen posing as business journalists were in abundance during the heyday of the financial sector. But where were the probing exposés on the problems of deregulation, and the thoughtful analyses on the consequences of gluttony on Wall Street?

Even as we speak, what about coverage on the thwarted assassination plots against President Obama? Or a meaningful discussion on the malicious and deleterious effects of U.S. drug policy? How about a substantive debate in the mainstream news about the madness that represents America’s gun policy, and the lethal combination of gun proliferation, economic recession and untreated mental illness—of individuals and of the society— that plays itself out in communities throughout the country?

Well, many newspapers and other corporate news venues will not offer and have not offered such valuable content. Their game is trifling and sloppy. So if they die, it wouldn’t be too soon, as they provided us little benefit in the first place. That is why people increasingly turn to independent news sources, sources such as the one you are currently reading.

The winds of change are blowing, and there is about to be a transformation in the press. We do not yet know what the world will look like when all is said and done. Perhaps mainstream and independent newspapers, and other publications will increasingly become nonprofit entities, seeking a business model that makes them truly accountable to the public. And the blogosphere has been picking up the slack, having emerged as a legitimate source for quality information that often is unavailable elsewhere. One thing is certain: independent muckraking news media with paid professional journalists, fact-gatherers and commentators must be supported if the press is to survive. 

In crisis there is opportunity. Journalists, columnists, media practitioners, bloggers, you name it, need to start conversations around the nation, if they have not already done so, on the future of the news. We have the power to start the presses again—they’ll just look a little different the next time around.

Click here to read any of the commentaries in this series. 

Obama Administration Must Not Boycott World Racism Conference

The following has been cross-posted on Daily Kos and Open Salon.

On April 20, a world conference on racism is taking place, and the Obama administration hasn’t decided if it will attend.

The Durban Review Conference is being held in Geneva, Switzerland, and NGO’s and representatives from around the world will be in attendance. The purpose of the meeting is to follow up on the 2001 World Conference Against Racism (which was held in Durban, South Africa), and to promote full ratification and implementation of the International Convention on the Elimination of All Forms of Racial Discrimination (ICERD), of which the U.S. is a signatory.

What ICERD really represents is the legal foundation for the Durban process. Article 1 of the convention says the following:

In this Convention, the term "racial discrimination" shall mean any distinction, exclusion, restriction or preference based on race, colour, descent, or national or ethnic origin which has the purpose or effect of nullifying or impairing the recognition, enjoyment or exercise, on an equal footing, of human rights and fundamental freedoms in the political, economic, social, cultural or any other field of public life.

The Obama administration originally expressed opposition to the Geneva meeting, based on draft resolutions which called for reparations for slavery, and stated that Israel’s treatment of the Palestinians is based on racism. That language was deleted, yet, no final decision from the White House on whether they will participate in the most significant global effort to fight racial discrimination. Israel has decided not to participate, for fear of being singled out over the Palestinian issue.

If you read the Washington Post, you’re given the impression that the U.S. will boycott the conference. And in an official press release, the State Department expresses some continued reservations with the draft text. However, the newspaper Haaretz reported that senior U.S. officials are leaning towards attending the summit in Geneva. There seems to be some uncertainty, some confusion about what really will happen. And there really is no time for equivocation on the issue of racism.

Human rights groups look forward to U.S. participation, as it would further legitimize the conference, and help to increase the visibility of U.S.-based human rights groups that are committed to fighting against racism. These organizations are working on issues such as diverse as juvenile justice, immigrant rights, labor, the death penalty, prisoner’s rights and prison reentry, racial profiling, domestic violence, housing discrimination and voting rights. A group of 40 organizations and 92 individual signatories wrote an open letter to the President, urging him to participate in the conference.

"If the Obama Administration is willing to engage in dialogue with avowed enemies such as Iran then surely it should be willing to engage the international community in a dialogue on methods and principles to end racism and xenophobia," said Ajamu Baraka, Executive Director of the US Human Rights Network (USHRN). Baraka added that "as we all know, at time of global and economic crisis, we must make a special effort to protect the human rights of groups most vulnerable to racial discrimination and intolerance."

For human rights advocates, this is about far more than attending a single conference in Geneva. Rather, it is about what happens beyond the meeting. America needs to stop playing games and start to show a commitment to human rights. USHRN’s Baraka—who fears that the administration has "Reverend Wrighted" the Durban Review Conference—believes that an administration that is committed to eliminating racism and white supremacy "would be truly revolutionary."

And racism and racial discrimination certainly are issues that many societies refuse to confront and tackle head on. It speaks to that "drum major instinct" that Dr. Martin Luther King, the great human rights champion, so poignantly described:

A need that some people have to feel superior. A need that some people have to feel that they are first, and to feel that their white skin ordained them to be first.... And think of what has happened in history as a result of this perverted use of the drum major instinct. It has led to the most tragic prejudice, the most tragic expressions of man’s inhumanity to man.

Dr. King was a man of action, direct action. In his Letter From Birmingham Jail, he criticized the moderate clergy who felt that his activities—that is, fighting against racial injustice through nonviolence— were "unwise and untimely." Well, today, there are some who would rather sweep the world’s racism problem under the rug. They believe that now is not the time to deal with it, on the grounds that we might embarrass this or that person, this or that nation. As for the U.S., a nation which has embarrassingly turned its back on civil rights, human rights, the rule of law and international standards during the Bush administration—there is a need to exert some global leadership on human rights. What better place to start than the Durban Review Conference? And as they say, there’s no better time than the present.

Our House is on Fire, Part 5: How About a Student Loan Bailout?

By David A. Love, BlackCommentator.com

The following is the fifth part of an ongoing Color of Law series.

Click here to read any of the commentaries in this series.

The education bubble is going to burst. It has to happen. On a daily basis, we hear about the bursting of the housing bubble. Housing values were over inflated. Millions of people found themselves with mortgages they could not afford to pay—whether through hard times and job loss, racial profiling and predatory lending by unscrupulous, avaricious banking institutions, or other reasons.

But neither can many Americans pay their college loans. Few people really talk about the unholy alliance made between institutions of higher learning and educational lenders to create a travesty in American education—that hot mess known as the student loan hustle.

Here is yet another reason why American capitalism is the scourge of the global community.

Colleges, grad schools and professional schools have become profit centers, cash cows and vocational processing plants, rather than places to expand one’s mind and understanding of the world.

And each year, the cost of a college education increases far in excess of the rate of inflation, twice the rate of inflation to be exact. Private law school tuition increased nearly three times the rate of consumer prices between 1990 and 2003. In this time of economic gloom, parents—financially straightjacketed, perhaps unemployed or underemployed, no savings, or their investment portfolios eviscerated— cannot afford to send their children to school.

According to the College Board, the average cost of four years at a private college is $136,000, $57,000 at a public university. Meanwhile, the student loan industry makes $85 billion a year. Federal loans are at $544 billion, up $42 billion from 2008. And students borrowed a record $17.3 billion in private student loans in 2005-6, a 913% increase from a decade earlier. In 2008, according to FinAid.org, there was nearly $131 billion in outstanding private student loans. These private loans, the fastest segment of the student loan market, often have exorbitant and variable interest rates, highly punitive late fees and charges, and are based on the borrower’s credit rating rather than his or her need. Thanks to the power of the student loan industry— and hack politicians who believe we must leave no corporation behind—these loans, unlike mortgage foreclosures, are not covered by bankruptcy protection.

And then there are those unscrupulous and unduly influenced university officials who accept kickbacks, gifts, trips, revenue sharing agreements and other goodies from the lenders (who are eager to earn even more profits on the backs of students), in exchange for access to students. Andrew Cuomo, New York State attorney general, uncovered much of this scandal in a 2007 investigation. For example, the financial aid director at the University of Southern California owned 1,500 shares of Education Lending Group, parent company of the university’s preferred lender, Student Loan Xpress. In addition, the financial aid directors at Columbia University and University of Texas owned stock in that company, with the former selling his shares at a $100,000 profit. All three officers were terminated by their respective universities. The director of student financial services at Johns Hopkins University resigned after Cuomo’s probe revealed that she had received $65,000 from Student Loan Xpress, giving the impression that she was an employee of the lending company rather than of the university. And Matteo Montana, a Bush Department of Education official, held at least 10,500 shares (at least $100,000) of the company’s stock, and he was supposed to be overseeing that lender, as well as others who participated in the Federal Family Education Loan Program (FFELP).

When greed rules the student loan process—not unlike financial deregulation and the Wall Street meltdown, the Madoff scandal, and the subprime mortgage mess— no one is looking out for the interests of ordinary students. The result is that students get shafted, and the banks and their enablers get rich. People of meager or modest means, just hoping for education as a way up and a way out, are crushed under the weight of loans they cannot afford to pay when they graduate. They emerge no better, or even worse off, than the previous generation, with six-figure, mortgage-sized indebtedness, and monthly payments that exceed all other expenses, if not their entire paycheck. Some young people must forego homeownership because they cannot afford a mortgage, or must live with their parents until things get better, if they ever get better.

But in this system of American capitalism, where education provides false and empty promises of hefty rewards, not everyone is even supposed to have a job. The proliferation of prisons for the surplus population—in Dickensian fashion—and the doling out of tax breaks for corporations that move jobs overseas, provide more than ample proof of that proposition. High college debt levels drive people into corporate jobs they might not want, but there are not nearly enough of those jobs available for those who want them, in any case. For evidence, look at the legions of thousands who are being shown the door in corporations and law firms throughout the country right now. Often, those who prefer a public interest job must forego a career of community service, dismiss it as financially unsustainable, or choose that potentially perilous path only through extreme personal sacrifice and a commitment to a life of near impoverishment—that is, just a stone’s throw away from the plight of some of their clients.

What is missing here is that education can and should be an enriching experience, to build character and knowledge, and create productive members of society. But for many, it appears that is not worth the cost. And yet, why isn’t education considered a civil right, a human right? Why isn’t it free, or at least close to it? And if AIG, Citibank, General Motors and other corporations deserve a financial bailout, what about the debilitated student loan debtors? What about a national student loan forgiveness program? Let’s wipe the slate clean and start anew. A Facebook group was created to call for just that, to petition Congress to eliminate the estimated $600 billion or more in U.S. student debt, on the grounds that doing so would stimulate the economy. The Facebook group has nearly 167,000 members.

Is there hope on the horizon? Well, as a start, President Obama wants to eliminate the role of private industry in the federally guaranteed student loan program. This step would eliminate the $4 billion in annual government subsidies to these private companies, which include such big names as Citigroup, SallieMae, Bank of America and JPMorgan Chase.

Also, under The College Cost Reduction and Access Act of 2007, monthly federal student loan payments are capped at 10% of a debtor’s gross income for 25 years. The rest of the debt is forgiven.

In addition, Rev. Jesse Jackson is leading a campaign called Reduce The Rate. The movement is calling for Congress to do the following:

1) Reduce the interest rate on all student loans to 1%, the same rate the banks enjoy;

2) Extend the grace period before loan repayment begins from 6 months after graduation to 18 months;

3) End the penalties assessed to schools for student loan defaults, and

4) Increase Pell Grants to cover the average yearly cost of a public 4 year institution, rather than the amounts in the current stimulus package (which are $5,350 starting July 1, 2009, and $5,550 in 2010-2011).

What happens next will depend on public pressure, and the power of youth and others whose voices were heard in the 2008 election. To be sure, the influence of Wall Street insiders in the Obama administration, individuals such as Treasury secretary Timothy Geithner and Lawrence Summers, is by no means encouraging. And the pimps and prostitutes for the student loan industry who double as members of Congress will do what they can to stop any further pushes toward that ever-dreaded “European-style socialism”. We shall see. If nothing else, it will be interesting to watch.

Our House is on Fire, Part 4: U.S. Drug Policy has Gone to Pot

By David A. Love, BlackCommentator.com

The following is the fourth part of an ongoing Color of Law series. Click here to read any of the commentaries in this series.

In a recent online town hall meeting at the White House, President Obama was asked by the online audience whether he thought legalizing marijuana would create jobs and help the economy. It was the most popular question asked at the meeting. “I don’t know what this says about the online audience,” Obama remarked, then adding, “No, I don’t think this would be a good strategy.” He seemed to give a little chuckle, as did the extras who were cast as audience members in the background behind the president.

But this is no laughing matter, and America’s failed war on drugs is serious business. Dead serious, in a literal sense. The United States has a voracious appetite for drugs, this is without question. Over the years - in a move tinged partly with greed, partly with boneheadedness and shortsightedness, and partly with racism - the nation has treated drugs as an issue of morality and criminal justice. As a result of this war on drugs, poor communities and communities of color have been decimated. Rather than target the places where most of the drugs are consumed - in the White suburbs, middle-class areas and wealthy enclaves - law enforcement targets the areas where drug sales and drug use are most conspicuous: the inner city. As a result, 1 in 99 adults is behind bars, including 1 in 36 Latino adults, 1 in 15 Black adults, and 1 in 9 African Americans between the ages of 20 and 34. Yes, I said 1 in 9. Generations are spending their most formidable years in prison over drugs, sometimes most of their lives, when they should be raising their families, contributing to society, getting an education, what have you. Like the effects of the Vietnam War, the damage visited upon these communities by the drug war is irreparable. America has become the most incarcerated nation, with a rate of imprisonment five times higher than the rest of the world.

The effects of these harsh punitive policies, and the criminalization of drugs, have implications beyond the borders of this country. Mexican drug cartels, meeting America’s drug demand, are wreaking havoc on Mexico. That country is in trouble, big trouble. Over 1,100 people have been killed in drug-related violence in Mexico so far this year (6,200 in 2008), due in no small measure to the use of American firearms. Decapitations, kidnappings, torture, the use of hand grenades, and murders with military-style assault weapons are standard fare. And this crisis is spilling over into the United States.

Although America’s weapons policy has created the carnage in Mexico, the Obama administration will face formidable opposition from the gun lobby if it tries to ban assault weapons. Don’t get me started with the Second Amendment and the so-called right to bear arms. This farce represents a vehicle by which arms manufacturers hide behind bogus and dishonest interpretations of the U.S. Constitution, and get rich by profiting from human bloodshed. No good comes from the proliferation of these weapons of mass destruction.

Poverty in Mexico is the context by which drug cartels gain their recruitment foothold. I suppose that NAFTA, with its empty hopes of prosperity, did not work out as well as some people envisioned it. With poverty fueling the drug trade in Mexico, and America’s appetite for drugs creating the demand, is it really any different from poor people in the U.S. who are lured to the drug trade? I speak of people in this country who lack economic and educational opportunities and are lured by a materialistic culture that tells them to obtain money by any means, without regard for the consequences and who is harmed. You know, kind of like Wall Street executives.

These days, the economic crisis, failed drug policy and failed criminal justice policy threaten to intersect in the form of demands for drug decriminalization, particularly the legalization and regulation of marijuana. I wonder what took so long. Already, legislation has been introduced in the California state assembly to legalize the cultivation, possession and sale of marijuana and tax the $14 billion annual crop. Such a move could allow California - a state that cannot afford to pay its state employees amid a budget crisis, spends more on prisons than on public universities, and has been ordered to set one-third of its prisoners free due to overcrowding - to potentially rake in billions of dollars in desperately needed revenue. Prohibition did not work, and fuelled gangsterism in the U.S. Now, alcohol is legal, and some states regulate alcohol through taxation or by selling through state controlled stores.

The time seems ripe to change America’s attitudes towards the criminalization of drugs, and the behemoth prison system which grows from current drug policy and feeds on society. The failed war on drugs has created a 1200% increase in drug incarceration rates since 1980 (from 41,000 people incarcerated to over 500,000), and has disproportionately hurt African Americans. Further, a significant percentage of those who are locked up have no history of violence or high-level drug activity.

In light of this reality, Senator William Webb (D-VA) has introduced a bill called the National Criminal Justice Commission Act of 2009. The legislation provides for a commission to review the entire criminal justice system (state and federal), and make recommendations regarding the reform of incarceration policy and drug policy, among other things. We do not know what will become of the senator’s legislation, but we do know that the current ways are unsustainable. And the definition of insanity is doing the same thing over and over and expecting different results.

Click here to read any of the commentaries in this series.