What is Rodney Barreto Up To? By Geniusofdespair

The South Florida Business Journal reported in May: "Several lawsuits on behalf of minority shareholders allege that current and former directors of U.S. Century Bank mismanaged the bank and allowed excessive insider transactions that depleted its capital. They argue that the insider transactions contributed to the losses at the bank. The former directors and the bank are disputing the lawsuit, which is in mediation." Looks like it is not in mediation anymore - back to a lawsuit as of July 19th. There is a notice of hearing on motions 8/13/2013. On the docket, 7/3/2013 they called this a class action complaint.

According to the Business Journal:

The Doral-based bank paid $3.44 million in insider transactions in 2012, according to its annual financial statement distributed to shareholders. Most of that was for leases at branches and offices owned by former directors Sergio Pino, Armando Guerra and Agustin Herran. Of the $5.78 million the bank spent on leases in 2012, about 54 percent went to companies controlled by former directors.

And:

Guerra and Rodney Barreto, who led the failed effort to bring the Super Bowl to South Florida, had a combined $42.6 million in loans with the bank. Of that $21.5 million was impaired and had an associated loan loss reserve of $1.2 million set aside.

Shareholders Suing U.S. Century Bank. By Geniusofdespair

Interesting to note, the head of Shoma Homes (also a U.S. Century Bank Shareholder), Masoud Shojaee, is suing his fellow home builders/bank officers over at U.S. Century Bank.  I wonder if Juan J. Herran is suing relatives, Augustin and Manuel Herran.

Rodney Barreto, a director of the bank, modified his mortgage with U.S. Century on January 15th but unfortunately I cannot access the document to see what he did.  Sergio Pino, another director, also modified a mortgage held by U.S. Century Bank on January 28th. Why are direcrors/former directors modifying their mortgages?  The mortgage that Sergio Pino is modifying had an initial indebtedness secured by $500,000, maximum principal indebtedness $10,000,000. A third officer, Armando Guerra also modified a mortgage December 12th. His original mortgage was for $3,004,400. I didn't see modifications for the other officers.

The Miami Herald reported today that U.S. Century is close to recapitalizing the Bank. The shareholders have to agree to the deal with Jimmy Tate and Sergio Rok putting $50 million in to wipe out bad loans.  I wonder if Masoud Shojaee likes the deal? Personally, I like any deal that will help pay back the $50.2 million in Tarp funds this bank got.

Keeping An Eye on the Urban Development Boundary. By Geniusofdespair

Angel E. Torres and Gonzalo Munoz are Key Krome Partners and own 347 acres. Of course we all know that Krome Gold (465 acres, purchased in 2005 for $44,+ million) is owned/managed by Rodney Barreto and Armando Guerra, among many others.

Angel E. Torres and Gonzalo Munoz -- through a jumble of Miami Beach Corporations  -- own a big chunk of land -- 347 acres -- outside the UDB line a stone's throw from Rodney Barreto's mega land holding, Krome Gold. I always like to keep track of who owns the land outside the Urban Development Boundary. Both properties are West of Krome Avenue. How large are these tracts of land? The entire Village of Bal Harbour is 384 acres (of which only 192 acres is land the remaining acres are water). The population on those 192 acres in Bal Harbour is about 2,500. So in comparison, we are talking about major areas of land outside the UDB. If these tracts are developed they would impact the Everglades in a big way, maybe destroy it.

There are a few other mega-sized large parcels on the other side of the UDB: Horton Homes (about 1,000 acres), Lennar's Parkland (about 900 acres) and Shoma Homes' Santa Fe Haciendas, LLC (411 acres). Note all 5 of these parcels are owned/controlled by production home builders. Lennar's plans for Parkland includes 1,257 Single Family Homes, 2,436 Townhouses and 3,248 Condominiums (that translates to about 20,000 people) on the property.

Here are some of Torres' and Munoz's OTHER Corporations and partnerships. This information is provided so you know who might be putting future pressure on the County Commission to move the line. Knowledge is golden.

What's Doin' in Lobbyist Land. By Geniusofdespair

I found a Circuit Court filing by Chris Korge for a Final Default Judgment in the amount of $4,012,500. Korge is trying to recover the bucks from Claudio Osorio and others (filed March 3, 2011). Good luck with that, you can't get money from a stone. Also Chris consolidated a mortgage (10/27/2011) in the amount of $1,982,500 he has with partners Lee and Barry Goldmeier. I also ran across a Financing Statement Form from 2010. Chris Korge is the debtor but what made it interesting to me was that Rodney Barreto is the secured party. The lawyer is Machado & Herran. They certainly keep things in the family in lobbyist world.

Roman Gastesi

Rodney Barreto just bought a condo in Kendall. It sold for $495,000 in August of 2007. He paid $280,000 3/2012.

Inbred? Money makes strange bedfellows. Lobbyist Ron Book wrote a second balloon mortgage to Roman Gastesi for $25,000 (in 2004). The amount was increased to $35,000 in December
2011. I wonder if Gastesi had any job that Book benefited from? He worked for the County for a long time and he was the Monroe County Manager last I heard. I wonder if Book is lobbying for Monroe? Also wondering if Gastesi is paying interest to Book. The paper work said the principle is due "with interest, if any." The latest mortgage said it is due in 2013.

An Alexander Heckler bought a million dollar home on Miami Beach in 2011. He also got a mortgage for almost $800,000.  Erik Fresen satisfied a judgement May 9th for about $2,000.  Someone named Eston Melton is facing an internal revenue bill.  Appears to be a running problem since 2008.

Corruption, Florida, and the GOP ... by gimleteye

In 2010 Florida voters went to the polls and elected Republicans despite evidence of serious mismanagement of party finances by its state leaders. The GOP backers, mainly large corporations, seemed to shrug and plug the holes without comment. Now that the GOP controls the House, and in Florida-- the Governor's Mansion (occupied by a multi-centimillionaire who spent his equity to victory), it is possible that the most egregious of the corrupt may be held to account: Congressman David Rivera.

The GOP are masterful at exploiting visceral reactions of voters; having shown that the simple voter simply tunes out any effort to hear more than the highest notes and pitches. But trying to regain the perch and prerequisites of power the party held during the Bush years will require finesse. This week, we learned that state attorney general Pam Bondi hired a former Jeb! and Marco Rubio staffer, to be her chief of staff and that Rubio hired, to be his chief of staff, the former top domestic policy advisor of former vice president DIck Cheney. As the former GOP players and policies that created the biggest economic collapse since the depression rotate back into place, it will be necessary to throw at least a few sacrificial lambs to the crowd. The first could be David Rivera, who turns out to be as ethically challenged as his Democratic opponent, Joe Garcia, claimed him to be. Here's a post from earlier this week that was widely read and distributed. (for those who didn't catch it, click 'read more')
My ears perked up hearing House Majority Leader Rep. Eric Cantor (R-VA) on President Obama's State of the Union speech, "Actions speak louder than words." On that front, Cantor should also be judged by his actions on his "zero-tolerance policy" for GOP lawmakers caught up in corruption. It has been weeks since GOP Congressman David Rivera has been under investigation and months since The Miami Herald raised corruption allegations of Rivera. Not a word from GOP leader Cantor. Is the problem that Rivera leads to Rubio and Rubio leads to Jeb!?

Now the question arises, once you pull back the layers of the corruption "onion", where does it lead? And another: will Governor Rick Scott and the Florida legislature act to revise laws that make the state, the number 1 in political corruption? In December, " The 19th State Grand Jury Report on Public Corruption was released. The report illustrates how the rush to privatize government services lead to corruption in Florida. The Grand Jury then urges action. "In order for government to function, the people must have faith in their elected officials. Unfortunately, one only needs to read the newspaper headlines across the State of Florida realize that public corruption is pervasive at all levels of government."

The Florida Independent reports, "Miami Beach Democrat and former state Sen. Dan Gelber, who lost the attorney general’s race to Bondi last month and is a well-known advocate for tougher ethics rules, acknowledges that the grand jury recommendations may be well intentioned, but ultimately lie at the mercy of a legislature weary of reform. “The problem has not been the ideas. It’s been the unwillingness of the Legislature to really reform itself and public offices around the state,” [Gelber] said. “The Legislature refuses to seriously address public corruption."

According to the St. Pete Times, "The grand jury used the Fish and Wildlife Conservation Commission to underscore the depth of the problem. In that agency, supervisors flagrantly circumvented purchasing rules, a practice that become common knowledge and prompted other employees to act unethically, the panel says. "We were told employees would steal items such as flat screen televisions from the office. Depending upon the position of the employee, the supervisor often took no action," the report says. "Due to the unethical conduct at the supervisory level, a systemic acceptance of corruption was born." The report does not identify the leadership of the FWC, Rodney Barreto, who is a close confidante of Jeb!

In a 2004 report by AFCME, "Shady Deals in the Sunshine State: the Florida Model of Privatization sounded an alarm. In 2005 the Florida legislature passed SB 1146. Although the bill prohibited lobbyists from becoming members of the state's ethics commission and clamped down on former state employees who want to lobby state government, it was vetoed by then Governor Jeb Bush in June 2005. Jeb! claimed, "This legislation could have a Draconian impact on the ability of the state to recruit employees who eventually aspire to return to the private sector."

State attorney general Pam Bondi did not include public corruption among her top priorities. Bondi "Ideologically and philosophically ... stands with Florida's business community" according to Associated Industries' jackass-in-chief, Barney Bishop. One of Bondi's first hires was Chief of Staff Carlos Muniz, a protege of Senator Marco Rubio. Muniz was a deputy general counsel for former Governor Jeb Bush and later a partner for GrayRobinson. As to GrayRobinson, according to a St. Pete Times report, in 2006 GrayRobinson received a lucrative contract for legal services from the Tampa-Hillsborough Expressway Authority. Bondi was a county prosecutor in Hillsborough. The Authority's board ignored a selection committee recommendation to re-hire the authority's legal counsel. The contract was awarded to Gray Robinson, with all four of Bush's appointees voting to over-ride the selection committee's recommendation. "Gray Robinson ... has links to Bush. Karen Unger, who is married to Gray Robinson partner Jason Unger, served as Bush's campaign manager in 2004." ("Road Agency Under Fire Again", Sept. 2, 2006, St. Pete Times)

Florida led the nation in the number of public officials convicted in federal corruption cases from 1998 to 2007. Counting from 2000 forward, Florida still had more federal corruption convictions than any other state. "We're number 1", St. Pete Times columnist Howard Troxler crows.

If actions speak louder than words, the Gov. Rick Scott and the Florida legislature will quickly move to embrace the recommendations of the Florida Grand Jury Report on Public Corruption, including criminalizing offenses by public officials and eliminating loopholes. If actions speak louder than words, then Congressman David Rivera will be the shortest serving member of Congress in US history. Tea Partiers, hold your party leaders accountable?

Miami International Airport in The Miami Herald ... by gimleteye

Too bad The Miami Herald update on Miami International Airport briefly focuses on alternative schemes for raising money to fund airport debt-- like oil drilling or rock mining in the historic Everglades-- rather than taking space to note the incumbent county commissioners like Natacha Seijas who made decisions that led to the exorbitant costs of the airport renovation.

For decades, Miami airport contracts served to organize political order in Florida's most populous and politically influential county. That point is MIA in the Herald report. Thankfully, another point is captured in the Herald story: "The expansion morphed by fits and starts into a $6.3 billion overhaul that will attract perhaps 34 million passengers this year, 21 million fewer then envisioned." Only 21 million?

I became conversant with airport skullduggery during the Homestead Air Force Base fiasco. At the same time -- in the mid-1990's-- the same cast of characters, led by Seijas as the local political prod, tried to scam the US military into handing over the air base to insiders who fund political campaigns for a privatized commercial airport. A large part of the rationale for the no-bid deal to Ramon Rasco (chairman of US Century Bank) and his partners at HABDI/ Latin Builders Association was that Miami International Airport was about to be saturated with millions and millions of additional visitors. Remind me sometime and I'll put up the projections on the blog. They still make entertaining reading.

The county commissioners and Seijas approved MIA cost increases, entrusting the work-out to key political operatives. There has never been a complete, published accounting of how much money rained into the pockets of contractors, lobbyists and insiders from the Engineering Cartel. The Herald tried, with Dade Aviation Consultants and its key principals: Chris Korge and Rodney Barreto but only scratched the surface. Too bad because there is no understanding what the future holds, without knowing the past.

Any Miami International Airport update has to be punctuated by its infamous baggage handling delays. This much is true: the airport could not have found a better director than Jose Abreu. But Abreu wasn't there on my arrival recently after two domestic flights on American Airlines-- the lynchpin airport tenant at MIA. I try to never, ever to check bags for domestic flights into MIA. These occasions were unavoidable. Both times I waited nearly an hour for my baggage to be delivered after arriving at the carousel. When I complained, the American Airlines baggage specialist didn't change her expression, "They're coming soon." Along with 21 million visitors lost, from one Miami-Dade county commission campaign to the next.

Miami-Dade County slinks away from pushing off-road vehicles into middle of Everglades ... by gimleteye

You always want to hear the backstory, don't you, about the worst of the hair-brained schemes that either line the pockets or the political fortunes of local county commissioners in Florida. The only agency to support one such scheme-- to allow off-road vehicles in the Everglades-- was the Florida Fish and Wildlife Conservation Commission whose chairman is Rodney Barreto; a land speculator and board member of US Century Bank. Every other agency (including Collier County's own planning department, ignored by the county commissioners) had issued serious objections to the plan for putting rutting, mudding vehicles in the middle of the threatened Everglades.

Putting off road vehicles in the middle of the Everglades required a vote by county commissioners to change Collier County's comprehensive master plan. The application, leading to the vote, came from Pepe Diaz and the Miami-Dade county commission who were willing to convert the old Everglades jetport site in the middle of the Everglades into a park to spin and churn and blast the quiet. The Collier County Commission-- that initially approved the reckless scheme last spring-- was to make its final vote tomorrow. Last night the MIami-Dade county commission quietly withdrew its application. Why?

It would be interesting to know the entire answer. Is it possible the Miami-Dade and Collier County Commissions came to their senses? I attended the January county commission meeting in Collier where the scheme was first unveiled and made an impassioned plea. Do you think the county commissioners listened to me? (I wrote about that experience for Counterpunch. It was titled, "Fat Tires in the Everglades: A New Place to Ride". You can read it, here.)

No, as much as I would like to take credit on behalf of Sierra Club, or Friends of the Everglades where I am conservation chair, or Tropical Audubon Society, my guess is that the upcoming election was a greater influence on the county commissioners' tactical retreat than the gathering of environmental groups that were girding for a new battle over the jetport that Marjory Stoneman Douglas had fought over in the 1960's, engaging Congress and a president.

For one, the Collier County amendment to its master plan would have been poster child for Florida Hometown Democracy, Amendment 4, on the November ballot. The mutual hand washing by Miami-Dade and Collier county commissioners to exploit the threatened Everglades would eventually have been overturned in court. It would have been a costly diversion and exactly the kind of rabbit hole that lobbyists and insiders thrill to chase civic groups and activists down; an example of misdirection the late Wade Hopping -- Tallahassee lobbyist-- loved to promote. But it would also have highlighted exactly why voters need to take back control of outrageous, irresponsible land use decisions that county commissioners often rubber-stamp to accommodate land speculators whose power is rooted in campaign contributions. Handing Florida Hometown Democracy supporters a cause celebre could not have been judged, a good idea.

Then, under the main tent, there is the US Senate race between Gov. Charlie Crist and GOP challenger Marco Rubio. One of the clearest-- and least reported-- areas of conflict between Crist and the GOP, his former party, is the area of growth management. This issue is the perennial focus of GOP ire: how rules governing growth inhibit economic development, blah blah. Under Crist, the Miami-Dade county commission applications (often led by Pepe Diaz) to push development outside the Urban Development Boundary in Miami-Dade have drawn sharp criticism from the state agency, the Department of Community Affairs. The GOP legislature would love to find a way to decapitate the agency, and despite the worst housing crash in a century triggered by so much crappy, fetid overdevelopment in suburbs, the DCA under Gov. Crist has been a more reliable ally of taxpayers and citizens than county commissions.

Did the Collier County commission and Pepe Diaz in Miami-Dade suddenly wake one morning and realize that their plan to put gas guzzling, buzzing machines in the middle of the Everglades was bad policy, supported by Rodney Barreto, and bad politics, giving energy to Charlie Crist? Or, did they just do the right thing, because it was the right thing to do?

What is Rodney Barreto up to? By Geniusofdespair

This can't be good...

On July 14th at the Community Council 11 meeting, Rodney Barreto's Company, Krome Gold Ranches, that owns 466 acres outside the urban development boundary, is asking to "modify and delete conditions of a previous approved resolution to allow the applicant to sell the excavated lake materials and to delete the time frame for completion of the lake excavation, and to permit the lake materials to be used off-site and/or outside the current urban development boundary area, on this site."

Barreto owns this large parcel with Augustin Herran and Armando J. Guerra, that makes 3 of the 9 Board of Directors of the BauerFinancial-rated ONE STAR U.S. Century Bank. (One star is the lowest ranking by Bauer.) How did they get to one star? As Gimleteye reported yesterday, almost 10% of their loans were to insiders, a giant number when you consider comparable 'peer group' banks (There are 114 banks in peer group 1) were at less than 2 tenths of a percent. And, U.S. Century loans to insiders total net worth was at almost a whopping 74%. In comparison to banks in their class which were at less than 1%. Their commercial Real Estate/total loans are at 45.88% while the peer banks are at 14.31%. And, their Construction and Land Development/Total Loans are at 23%, whereas the peer group banks are at 3.59%. That all might account for some of their problems.

Yes we have a Krome Gold file. Rodney Barreto is also the Superbowl Host Committee chair and the Chairman of he Florida Fish and Wildlife Conservation Commission. He was put on Fish and Wildlife by Jeb and he was kept there by Charlie. One of Crist's dumber moves... apparently Rodney is raking in the dough for Crist.

This application sets a precedent for rock mining in a place where rock mining has been discouraged. If our memories serve us correctly, all this mined rock was supposed to provide fill pads for the new suburban sprawl that the county commission was poised to approve, until the housing markets crashed. What a joke it has been: using excavations to bail out speculators under the guise of providing benefits like water enhancements. These incidental rock miners are trying to save their skins, using up the aquifer that serves us all as a private benefit to them! Also, zoning changes that started with amendments to comprehensive land use plans, now being altered to serve another interest, are the best reason to support Florida Hometown Democracy: trust the voters to know what interests and who is gaming our zoning. Rock mined lakes are popping up all over, now that development is years and years away. In Palm Beach, the county commission slammed the door on new applications for rock mines. Maybe if a few of our own county commissioners were prosecuted like they have been in Palm Beach-- related to rock mining, we would do the same here.
US Century

James Kunstler reports from the Congress for New Urbanism: Out of Darkness

The following is reposted from Kunstler's popular blog: Clusterfuck Nation. It is particularly relevant to the debate on the future of suburban sprawl in Florida and Miami, the political and economic epicenter of the housing bubble boom and bust. The perpetrators are still in place, engines on idle and saving gas, hoping for the miracle to come: the revival of platted subdivisions in farmland and empty space all the way to the edge of the Everglades. The hucksters of Parkland, Florida City Commons, and Neighborhood Planning are all waiting to play.
Out of Darkness
By James Howard Kunstler
on May 24, 2010

If the Devil created an anti-city, a place where people would feel least human, Atlanta would surely be that place -- despite the prayerful babble of tongues emanating from the evangelical roller rinks at every freeway off-ramp. One might think: Los Angeles, but that city at least came up with the amenity of valet parking, mostly lacking in Atlanta, where the suffocating heat slows the journey of blood from heart to brain.
My homeys, the New Urbanists, held their annual meeting at the "downtown" Hilton there this past week -- a most mysterious selection, perhaps due to an x-treme discount on room rates in a time of austerity. The New Urbanists first came together about twenty years ago as a campaign to reform the tragic fiasco of suburbia. By taking this on they were often labeled as enemies of the American Way Of Life and Christian Decency, but they are a valiant band. I'd guess that architects composed about two-thirds of the org and the rest included developers, planning officials, a few college professors and journalists. They were all out of the mainstream, especially of architecture, whose stock-in-trade had become the emperors new clothes.
The basic idea behind the New Urbanism was that the quality and character of the places where we spend our lives matters, and that the surrender of the entire American landscape to Happy Motoring was an historic aberration that had to be corrected if the USA was going to continue as a viable project. Among other things, they noticed that if people live in places that aren't worth caring about, sooner or later they end up being a nation not worth defending -- and this is on top of the daily personal punishments suffered by hundreds of millions of people dwelling in a geography of nowhere.
At the time they first got going, the idea of peak oil barely existed outside a small circle of geologists, so the battles were fought mostly on other grounds. They were up against a lot. The collective American identity was invested in the idea of the suburban utopia, and the sheer dollar investments in the infrastructure of it all -- everything from the interstate highways to the housing subdivisions to the strip malls -- was so massive that nobody wanted to think about changing it. What's more, a massive system had evolved for delivering what came to be labeled as suburban sprawl, especially the laws that regulated land-use, so that in most places in the USA it was illegal to build anything else but sprawl.
The New Urbanists were fiercely opposed, usually for stupid reasons by stupid people, but also by the mandarin architecture establishment, especially in the grad schools, where mysticism supported a set of theological rackets in the service of celebrity cults divorced from the public nature of things that get built. In the local planning boards, the New Urbanists were accused of being communists; in the ivory towers they were accused of being slaves to worn-out traditions -- like walking from home to work. They certainly proved one principle of the human condition: that even the best ideas will generate opposition.
The New Urbanists had to work within this system. They had to find allies among developers who aspired to create better places, and they had to get under the hood of regulatory system to rewrite the laws in thousands of municipalities. They got a lot of projects built, new neighborhoods and even whole new towns. Many of these places came out beautifully. Some of them were badly compromised in the fight to get them built. Some of them were rip-offs that amounted to little more than the usual suburban schlock with a little window-dressing.
It's a bitter irony that the most ambitious New Urbanist projects were made possible within the context of the housing bubble economy. For about a decade money seemed to grow on trees. Most of that money went into conventional suburban crapola and a small percentage of it went into New Urbanist projects, but when the bubble burst, it crushed all the players, regardless of the ultimate social value of what they produced.
I heard a lot of stories during the meeting in Atlanta last week but one really stood out. It was about the money and revealed a lot about what is going on in our banking system these days. A New Urbanist developer had gotten a small project going for a traditional neighborhood. Despite the global financial clusterfuck, the developer was able to meet the payments of his commercial loan. But the FDIC sent bank examiners around America and they told the small regional banks that if they had more than twenty percent of their loans in commercial real estate (CRE) they would be put out of business. The banks were ordered to reduce their loads of CRE by calling in the loans and liquidating the assets. Ironically, the banks only called in their "performing" loans, the ones that were being regularly paid off, because they were ignoring and even concealing the ones that weren't being paid.
The developer in question had his loan called in when the FDIC descended on his bank. He couldn't pay off the $3 million in one lump, of course. The FDIC's agents are going to seize and sell off his project if he can't get it refinanced in short order. He can't get it refinanced because there is now such a shortage of capital in the banking system that no one can get a loan for anything. Also, since it is now well-known that the bank failed, the vultures are circling above his project hoping to buy it for a discount, so even the few private investors who have money won't throw him a lifeline. By the way, the FDIC agents told him they are doing this because they now expect that virtually all commercial real estate loans in the USA will fail in the months ahead. Pretty scary story, huh? And he was one of the good guys.
I suppose it was a tragic thing that the New Urbanists made themselves hostage to the same banking system that was behind suburban sprawl. Apart from the personal stories of misfortune among them, the movement is still alive. In fact, they have emerged the victors in the long contest over how America will build itself, because it is now self-evident that suburban sprawl is an epic failure. Whether Americans like it or not, whether their identity is tied up in the suburban fantasy or not, we are faced with circumstances that now compel us to live differently.
Among other things, the most forward-looking leaders in the New Urbanist movement now recognize that we have to reorganize the landscape for local food production, because industrial agriculture will be one of the prime victims of our oil predicament. The successful places in the future will be places that have a meaningful relationship with growing food close to home. The crisis in agriculture is looming right now -- with world grain reserves at their lowest level ever recorded in modern times -- and when it really does hit, the harvestmen of famine and death will be in the front ranks of it.
This eighteenth Congress of the New Urbanism was held in the shadow of a banking system in extreme crisis and an epic ecological catastrophe brewing in the Gulf of Mexico. The three crisis of capital, energy, and global ecology will now determine what we do, not the polls or the marketing analyses or the whims of "consumers." The great achievement of the New Urbanists was not the projects they built during the final orgasm of the cheap energy orgy. It was the knowledge they retrieved from the dumpster of history. We really do know where to go from here. Whether the people of the USA have the will to take themselves there now is another issue.
Also in the background of this Congress was the bizarre organism of Atlanta, which represents in so many ways the behavior that can't continue in this country if we are going to remain civilized. A prankish destiny put us in the worst place at the worst time and the next time we meet America is going to be a different country.

Rodney Barreto: This one is for you. By Geniusofdespair

Lampooning Miami’s Super Bowl, acting as a guide for tourists, Humorist Dave Barry wrote:

The Super Bowl will bring a $500 million windfall to South Florida, according to Super Bowl Host Committee officials who clearly have been smoking crack.

Barreto is Chairman of the Host Committee and the one most responsible for bandying about inflated returns, I wrote a post about the Super Bowl Host Committee. Also, the whole Barry article is a hoot, the link is above.

The Super Bowl Host Committee Sucks. By Geniusofdespair

The Host Committee for the Super Bowl is: Rodney Barreto, Chairman; Bruce Jay Colan, Nicki E. Grossman, Nat Moore, William D. Talbert, III and Bryan J. Wiedmeier. Why do they suck? because they let Rodney Barreto be their leader for starters.

Who are they? Bruce Jay Colan is a Holland & Knight attorneys who helped draft the negotiating development, management, operating and financing agreements for The Miami Heat with Miami-Dade County for the American Airlines Arena. Nat Moore and Bryan Wiedmeir are with the Dolphins, we know why they are on the Host Committee.

Frankly William D. Talbert and Nicki Grossman should be ashamed, with their chairman pushing for increases to the hotel tax. Grossman is president of the Greater Fort Lauderdale Convention & Visitors Bureau and Talbert is President & CEO of the Greater Miami Convention & Visitors Bureau. They both know pushing for an increase in the hotel tax is just plain wrong for tourism. And Talbert knows Miami Beach needs the upgraded Convention Center. They both should put a muzzle on Barreto and his cronies. Talbert and Grossman have to stop this freight train and declare in public that no more tourist money is to go towards stadiums. Enough is enough. You hotel owners: Call Talbert and Grossman...NOW!

A Wednesday Do-over? By Geniusofdespair

With the Supreme Court decision still lingering and condition in Haiti a nightmare, I read the Miami Herald this morning. They reported that coral in the Keys takes a lethal hit. Rubio is leading Crist in the polls. FP&L projects raise their ugly head...again. Public money for privately owned Land Shark Stadium upgrades is gaining traction at the State Level and County Commission. Ron Book, as lobbyist for the Dolphins, wants to raise taxes on tourists. Mayor Alvarez says no but he is not beholden to Book and Barreto like most of the County Commissioners and State Legislators.

I am going back to bed.

What is Rodney Barreto Up To This December? By Geniusofdespair

Keeping tabs on lobbyist Rodney is a good filler for this blog. The Miami Herald reported yesterday that he is paving the way for getting public funds for Land Shark Stadium:

But, for the changes the NFL wants in Land Shark Stadium before putting more Super Bowls in it, there could be some crying for public funds. On Monday at the South Florida Super Bowl Kickoff Luncheon, South Florida Super Bowl Host Committee chairman Rodney Barreto certainly didn't rule it out when discussing stadium improvements the NFL has requested.

Rodney: Keep your hands off our dough! Joe Robbie paid, even that cheap SOB Wayne Huizenga paid. So let majority owner Ross raise the money for improvements. After all, they get the profits. Read our lips: No more tax dollars to stadiums.

What a Century so far: tangled up in blue ... by gimleteye

Bloomberg reports: "Federal Deposit Insurance Corp. Chairman Sheila Bair said using the Troubled Asset Relief Program to pump capital into banks was “not a good idea” and helped erode confidence in the regulatory system. “I just see all the problems it’s created now, the horrible public outcry,” Bair said on PBS’s “The NewsHour with Jim Lehrer” yesterday. “It’s had a terrible, terrible impact on public attitudes toward the financial systems, toward the regulatory community.”

It is not just the regulatory community. The public is experiencing the jobless "recovery" as suspended animation; a national economy papered over by trillions of debt meant to stave off a second Great Depression. But there is also deep unease that the catalysts of economic calamity have not only gotten off scott-free for their roles in creating serial asset bubbles, built on unsustainable foundations of debt; they are doing just fine. They got rich on the way up, and, on the way down.

Grass roots independents and angry Republicans, shaped into a politically volatile push back by "conservatives", are energized by inequities; but the politics are all scrambled. In the December issue of Harper's Magazine, Luke Mitchell writes: "The real battle in Washington is seldom between conservatives and liberals or the right and the left or “red America” and “blue America.” It is nearly always a more local contest, over which politicians will enjoy the privilege of representing the interests of the rich." How this works is illustrated in Florida by the closely named US Century Bank and Century Home Builders.

Century Home Builders came first: a production home builder in Miami-Dade founded by entrepreneur Sergio Pino that grew blazingly fast during the run-up to the housing boom as a consequence of its influence at County Hall. Pino is a top lobbyist and campaign contributor to the unreformable majority of the county commission in Florida's most populous county, Miami-Dade. One of the key master strokes of production home builders is knowing how to turn government to the purposes of rezoning land for development; cheap land categorized as farmland or wetlands. Another key: how to use public dollars to fund infrastructure necessary to bring low costs to buyers motivated by price.

The economic engine of Florida is suburban sprawl. Long before the Federal Reserve lowered interest rates to stimulate the economy, beginning in 2001 in response to the twin shocks of the collapsed dot.com boom and 9/11, the Florida Growth Machine had organized to put as many new owners in homes, platted subdivisions and condos, as quickly as possible. These interests were not exclusively Republican but mainly supported the "laissez faire", "free market" adoration that formed a perfect marriage with hostility to government regulations of any kind. They organized to support Jeb Bush for governor of Florida in 1998 and George W. Bush in 2000.

Pino's fortune grew out of a plumbing supply business, Century Plumbing, and as a minority business partner at Miami International Airport concessions. He was a very quick study in the matter of using the power of the supply chain fueling home construction in local politics. For production home builders and lobbyists, the economic imperative was uncomplicated: do whatever it takes to sell as many units, during the boom in low cost credit supply, as fast as possible. If you could fog a mirror, you qualified for a loan. Pino was not, of course, the only production home builder in Miami who first pushed and then took advantage of "The Ownership Society". It was, however, a game of "everyone doing it": from the Latin Builders Association to the South Florida Builders to the National Association of Home Builders. Mostly, loyal to the GOP.

Last week, President Obama signed the Worker, Homeownership, and Business Assistance Act of 2009 into law, extending unemployment benefits by 20 weeks and renewing the first time homebuyer tax credit. Buried in the bill, a gift to the central players who lead to the credit bubble in the first place: the home builders. The new law allows home builders to offset losses in 2008 and 2009 against profits book as far back as 2004. In other words, they will pay no taxes at all on a big part of the profits from a model of economic growth that was built, substantially, on a foundation of fraud.

This result is not what those Obama college kids fought for in the Iowa caucuses scarcely two years ago. That's just the home builder side of the equation. With the bankers, it is hard to claim any better for taxpayers. At Century Bank, founded in 2002, Pino gathered a board of directors from a group-- prominent political donors and lobbyists for GOP candidates and causes: including Ramon Rasco, Armando Guerra, Augustin Herran, Rodney Barreto and Jose Cancela.

On August 7, 2009 the US Treasury invested $50,236,000 in U.S. Century Bank, whose founders include The board of directors of US Century Bank is virtually the engine for moving the Urban Development Boundary in Miami-Dade, closer to the Everglades. Rodney Barreto, just one example, is the Bush appointed chairman of the Florida Wildlife Commission. He is a land speculator of property at and beyond Krome Avenue, the fringe of the urban service area. (Check out our archive feature, "Parkland".)

Century Bank started in October 2002 with $22 million gathered mainly from the boom of Miami-Dade suburbs, built mainly in wetlands. One local Hollywood, Florida PR journal says, "US Century Bank is one of the fastest-growing and best capitalized banks in South Florida." On Sept 23, 2009, Time Magazine reported, "... many of the banks getting money now appear to be in fine financial shape. U.S. Century Bank, for example, boosted its net interest earnings, a key measure of profitability for banks, nearly 20%, to $12.6 million, in the second quarter of this year. Yet in early August the government decided to send the bank $50.2 million in TARP funds. U.S. Century executives say they plan to use the money to increase lending and boost profits. "The banks that are getting the TARP money now really don't need it," says Steve Verdier, who heads government affairs for the trade group Independent Community Bankers of America."

In public pronouncements, US Century Bank attributes its success to a low volume of problem loans and a conservative approach to lending. You have to wonder if the business of building and marketing homes to buyers who could scarcely fog a mirror had informed the other side of its business, banking, to use a tighter set of standards. No law was broken, at least none we know of. (Pino was involved in a federal investigation including a Miami-Dade county commissioner, Pepe Diaz, that resulted in no charges. Check our archives for more.)

As president, the Obama Capital Purchase Program is bailing out the predators and perpetrators of the credit bubble: in Florida they are mostly Republicans; those champions of limited government who were at the control deck during the largest intervention of the federal government in US history. They organized their pressure campaign, flush with the success of the Jeb Bush administration in Tallahassee and with W. in Washington, just as US Century Bank was in its initial stages in 2002: it was called "The Ownership Society". These board of Century Bank are mostly supporters of Gov. Charlie Crist. The "equitable" distribution of TARP funds to banks controlled by Republican insiders may have something to do with why Gov. Crist thought it was a good deal to embrace President Obama and his stimulus plan earlier in the year. What's good for the goose is good for the gander. But these political allegiances have gotten all tangled. Gov. Jeb Bush, their former champion, is supporting the insurgent campaign of former state house majority leader Marco Rubio, in the GOP primary against Crist.

It would be one thing, if the Obama White House had orchestrated a new regulatory regime to reign in the worst excesses of Wall Street and of the Growth Machine as represented by Miami home builders, the engineering cartel, community bankers and lobbyists. But there is not a single new regulation to restrain the actors in the worst economic collapse since the Great Depression: trillions have been spent. Unemployment shows no signs of abating. In Miami, the home builders, the engineering cartel, bankers and their lobbyists have accepted no responsibility, nor offered any remorse, for the massive deformation of the public interest in order to re-zone farmland and wetlands as platted subdivisions and condo canyons. They continue to hold thousands of acres-- and mortgages for that property-- in banks that are inclined to suspend contractual obligations and favor insiders with huge debt loads.

President Barack Obama is the first modern American president who worked as a community organizer. He should know exactly what efforts are required to protect the public against a predatory status quo: isn't that one of the main reasons he decided to run for president? Isn't that the reason so many 20-somethings sacrificed months of their lives in the cold of Iowa, New Hampshire, and in Pennsylvania, Ohio, and other states? "I had a normal life not so long ago," is what then candidate Obama said to the camera, filming the HBO documentary: "By the People: The Election of Barack Obama".

He also said, "We are the ones we have been waiting for." Where, then, are we?



Understanding Obamacare
By Luke Mitchell
Harpers Magazine, December 2009

Luke Mitchell is a senior editor of Harper’s Magazine.

The idea that there is a competitive “private sector” in America is appealing, but generally false. No one hates competition more than the managers of corporations. Competition does not enhance shareholder value, and smart managers know they must forsake whatever personal beliefs they may hold about the redemptive power of creative destruction for the more immediate balm of government intervention. This wisdom is expressed most precisely in an underutilized phrase from economics: regulatory capture.

When Congress created the first U.S. regulatory agency, the Interstate Commerce Commission, in 1887, the railroad barons it was meant to subdue quickly recognized an opportunity. “It satisfies the popular clamor for a government supervision of railroads at the same time that that supervision is almost entirely nominal,” observed the railroad lawyer Richard Olney. “Further, the older such a commission gets to be, the more inclined it will be found to take the business and railroad view of things. It thus becomes a sort of barrier between the railroad corporations and the people and a sort of protection against hasty and crude legislation hostile to railroad interests.” As if to underscore this claim, Olney soon after got himself appointed to run the U.S. Justice Department, where he spent his days busting railroad unions.

The story of capture is repeated again and again, in industry after industry, whether it is the agricultural combinations creating an impenetrable system of subsidies, or television and radio broadcasters monopolizing public airwaves for private profit, or the entire financial sector conjuring perilous fortunes from the legislative void. The real battle in Washington is seldom between conservatives and liberals or the right and the left or “red America” and “blue America.” It is nearly always a more local contest, over which politicians will enjoy the privilege of representing the interests of the rich.

And so it is with health-care reform. The debate in Washington this fall ought to have been about why the United States has the worst health-care system in the developed world, why Americans pay twice the Western average to maintain that system, and what fundamental changes are needed to make the system better serve us. But Democrats rendered those questions academic when they decided the first principle of reform would be, as Barack Obama has so often explained, that “nothing in our plan requires you to change what you have.”

This claim reassured not just the people who like their current employment benefits but also the companies that receive some part of the more than $2 trillion Americans spend every year on health care and that can expect to continue receiving their share when the current round of legislation has come to an end. The health-care industry has captured the regulatory process, and it has used that capture to eliminate any real competition, whether from the government, in the form of a single-payer system, or from new and more efficient competitors in the private sector who might have the audacity to offer a better product at a better price.

The polite word for regulatory capture in Washington is “moderation.” Normally we understand moderation to be a process whereby we balance the conservative-right-red preference for “free markets” with the liberal-left-blue preference for “big government.” Determining the correct level of market intervention means splitting the difference. Some people (David Broder, members of the Concord Coalition) believe such an approach will lead to the wisest policies. Others (James Madison) see it only as the least undemocratic approach to resolving disputes between opposing interest groups. The contemporary form of moderation, however, simply assumes government growth (i.e., intervention), which occurs under both parties, and instead concerns itself with balancing the regulatory interests of various campaign contributors. The interests of the insurance companies are moderated by the interests of the drug manufacturers, which in turn are moderated by the interests of the trial lawyers and perhaps even by the interests of organized labor, and in this way the locus of competition is transported from the marketplace to the legislature. The result is that mediocre trusts secure the blessing of government sanction even as they avoid any obligation to serve the public good. Prices stay high, producers fail to innovate, and social inequities remain in place.

No one today is more moderate than the Democrats. Indeed, the triangulating work that began two decades ago under Bill Clinton is reaching its apogee under the politically astute guidance of Barack Obama. “There are those on the left who believe that the only way to fix the system is through a single-payer system like Canada’s,” Obama noted (correctly) last September. “On the right, there are those who argue that we should end employer-based systems and leave individuals to buy health insurance on their own.” The president, as is his habit, proposed that the appropriate solution lay somewhere in between. “There are arguments to be made for both these approaches. But either one would represent a radical shift that would disrupt the health care most people currently have. Since health care represents one-sixth of our economy, I believe it makes more sense to build on what works and fix what doesn’t, rather than try to build an entirely new system from scratch.”

With such soothing words, the Democrats have easily surpassed the Republicans in fund-raising from the health-care industry and are even pulling ahead in the overall insurance sector, where Republicans once had a two-to-one fund-raising advantage. The deal Obama presented last year, the deal he was elected on, and the deal that likely will pass in the end is a deal the insurance companies like, because it will save their industry from the scrap heap even as it satisfies the “popular clamor for a government supervision.”

The private insurance industry, as currently constituted, would collapse if the government allowed real competition. The companies offer no real value and so instead must create a regulatory system that virtually mandates their existence and will soon actually do so.

A study by the McKinsey Global Institute found that health insurance cost the United States $145 billion in 2006, which was $91 billion more than what would be expected in a comparably wealthy country. This very large disparity may be explained by another study, by the American Medical Association, which shows that the vast majority of U.S. health-insurance markets are dominated by one or two health insurers. In California, the most competitive state, the top two insurance companies shared 58 percent of the market. In Hawaii, the top two companies shared the entire market. In some individual towns there was even less competition—Wellmark, for instance, owns 96 percent of the market in Decatur, Alabama. “Meanwhile, there has been year-to-year growth in the largest health insurers’ profitability,” the AMA reports, even as “consumers have been facing higher premiums, deductibles, copayments and coinsurance, effectively reducing the scope of their coverage.” And yet no innovating entrepreneurs have emerged to compete with these profitable enterprises. The AMA suggests this is because various “regulatory requirements” provide “significant barriers to entry.” Chief among those barriers, it should be noted, is an actual congressional exemption from antitrust laws, in the form of the McCarran–Ferguson Act of 1945.

Insurance companies aren’t quite buggy-whip manufacturers. But they are close. In the past, one could have made an argument that in their bureaucratic capacities—particularly, assessing risk and apportioning payments—insurance companies did offer some expertise that was worth paying for. But all of the trends in politics and in information technology are against insurance companies’ offering even that level of value. Insurance is an information business, and as technology makes information-management cheaper, technological barriers to entry will fall, and competition will increase. (People who relied on the cost of printing presses to maintain a monopoly should be able to relate.)

At the same time, the very idea of assessing health risk is beginning to be understood as undemocratic, as was revealed by the overwhelming support for the 2008 Genetic Information Non-Discrimination Act, which bars insurers from assessing risk based on genetic information. Over time, more and more information will be off-limits to underwriters, so that insurance ultimately will be commoditized—every unit of insurance will cost about the same as every other unit of insurance. Managers know that one must never allow one’s product to become a mere commodity. When every product is like every other product, brand loyalty disappears and prices plummet.

Which perhaps is one reason why the insurers themselves have always favored the central elements of the Democratic plan. As long ago as 1992, when Hillary Clinton was formulating her own approach to reform, the Health Insurance Association of America (now America’s Health Insurance Plans, or AHIP) announced that insurers would agree to sell insurance to everyone, regardless of medical condition (guaranteed issue) if the government required every American to buy that insurance, and used tax dollars to subsidize those who could not afford to do so (universal mandate). Carl Schramm, the president of the association, said this was the “only way you preserve the private health-insurance industry. It’s plain-out enlightened self–interest.” The deal collapsed nonetheless, in part because Congress wanted to introduce a “community rating” system that would have put an end to underwriting by making insurers sell insurance to everybody in a given community for the same price. Insurers wanted to maintain the profitable ability to charge different prices to different people.

Last December, though, AHIP said it would support community rating as well, and since then the real negotiation has been all about details. The insurance companies would agree to sell their undifferentiated commodity to all people, no matter how sick, if the government agreed to require all people, no matter how healthy, to buy their undifferentiated commodity. Sick people who need insurance get insurance and healthy people who don’t need insurance cover the cost. A universal mandate would include the 47 million uninsured—47 million new customers.

The Democratic plan looks to be a huge windfall for the insurance companies. How big is not known, but as BusinessWeek reported in August, “No matter what specifics emerge in the voluminous bill Congress may send to President Obama this fall, the insurance industry will emerge more profitable.” The magazine quoted an unnamed aide to the Senate Finance Committee who said, “The bottom line is that health reform would lead to increased revenues and profits.”

Democrats have crafted a plan full of ideas that almost certainly will help a lot of people who can’t afford insurance now. It also happens to be the case that some of those ideas will significantly benefit the corporations that at one time or another have paid Democrats a lot of money.

The framework for reform, for instance, was authored not by Max Baucus, the Democratic senator who chairs the Finance Committee, but by his senior aide, Liz Fowler, who also directs the committee’s health-care staff. She worked for Baucus from 2001 to 2005 but then left for the private sector. In 2008, reports the Washington gossip paper Politico, “sensing that a Democratic-controlled Congress would make progress on overhauling the health care system,” she returned to Baucus’s side. Where had she retreated to recover from her Washington labors? Politico does not say. In fact, she had become the vice president for public policy and external affairs at WellPoint, one of the nation’s largest health-insurance corporations.

Pretty much everyone involved in health-care reform has been on the payroll of one health-care firm or another. Howard Dean, the former head of the Democratic National Committee and, heroically, a longtime proponent of a single-payer system, nonetheless recently joined McKenna Long & Aldrich, a lobbying firm with many clients in the industry. Nancy-Ann DeParle, the so-called health czar who is overseeing reform at the White House, is reported to have made as much as $6 million serving on the boards of several major medical firms. Tom Daschle, who was set to be Obama’s secretary of health and human services until it emerged that he had failed to pay taxes on his limousine and driver, now earns a $2 million salary as a “special public policy advisor” for the lobbying firm of Alston & Bird, which represents, among many other clients, HealthSouth and Aetna. Asked to describe his current role, Daschle said, “I am most comfortable with the word resource.”

Most illustrative of the clever efficiency with which the Democrats have allowed themselves to be captured, though, is the strange journey of Billy Tauzin. He spent his first fifteen years in Congress as a “conservative” Democrat, struggling mightily to make his fellow party members more amenable to the needs of the health-care industry. In 1994 he founded the “moderate” Blue Dog coalition, whose members continue to deliver the most reliably pro–business vote in the Democratic caucus. But the Blue Dogs of 1994 did not go far enough for Tauzin, so in 1995 he became a Republican, and by 2003 he finally had mastered the system to the degree that he could personally craft one of the largest corporate giveaways in American history: Medicare Part D. After that bill was made into law, he took the natural next step—he became president of the Pharmaceutical Research and Manufacturers of America, the lobbying arm of the drug industry.

Now the circle is complete. The Democratic president of the United States, the candidate of change, the leader of the party Billy Tauzin deserted so long ago for failing to meet the needs of business, must “negotiate” directly with this Republican lobbyist, and rather than repeat this entire tortured journey himself, all Obama has to do is agree to Tauzin’s demands—which he has. The Democratic deal for the drug companies is, if anything, even sweeter than the Democratic deal for the insurance companies. After one of Tauzin’s many visits to the White House, he told the Los Angeles Times that the president had decided Medicare Part D would not be touched. “The White House blessed it,” Tauzin said, assuring his clients that billions of government dollars would continue to flow their way. Democrats, meanwhile, must have been almost equally assured by the subsequent headline in Ad Age: “Pharma Backs Obama Health Reform with $150 Million Campaign.”

What can Republicans do against opponents like that? They are trying to win back their friends in industry, but the effort is a bit sad. In September, for instance, Senator Jim Bunning of Kentucky proposed an amendment that would, among other things, require a “cooling-off period” of seventy-two hours once the bill was completed. His colleague, Pat Roberts of Kansas, said such a pause would provide “the people that the providers have hired to keep up with all of the legislation that we pass around here” the opportunity to say, “‘Hey, wait a minute. Have you considered this?’”

But of course “the people that the providers have hired”—having actually already written the legislation—are quite familiar with the details. The only hope for Republicans right now is if the insurers themselves decide they can get an even better deal by turning on the Democrats, which no doubt they eventually will. Just because competition has moved from the marketplace to the legislature does not mean it is any less intense. Even as various cartels and trusts compete for the favor of the parties, so too must the parties continue to compete for the favor of the cartels and the trusts. In October, for instance, the insurers appeared to turn against the Democrats when AHIP released a study that claimed the Democratic approach to reform would radically increase the cost of insurance. Obama, meanwhile, hit right back. In his weekly radio address, he said the study was “bogus,” noted that the insurance companies had long resisted attempts at reform, and even called into question the validity of the industry’s antitrust exemption. The New York Times reported that such attacks indicated a “sharp break between the White House and the insurance industry,” but this was better understood as a negotiating gambit—perhaps insurers believed drug manufacturers were getting a better deal and saw an opening, or perhaps they simply wanted to revise a specific term of the bill, which at the time, according to the Wall Street Journal, would have increased their industry’s tax burden by $6.7 billion a year.

As Democrats negotiate such impasses, the Republicans, no longer the favored party of corporate America, are left to represent nothing and no one but themselves. They are opposing reform not for ideological reasons but simply because no other play is available. They have lost the business vote, and even their call for “fiscal responsibility” is gestural at best. The “public plan” so hated by Republicans, for instance, would have reduced the cost of reform by as much as $250 billion over the next decade, yet the party universally opposed it because, as Senator Charles Grassley of Iowa explained, “Government is not a fair competitor. It’s a predator.”

Such non sequiturs have opened the way to the darker dream logic that of late has come to dominate G.O.P. rhetoric. Nothing remains but primordial emotion—the fear, rage, and jealousy that have always animated a significant minority of American voters—so Republican congressmen are left to take up concerns about “death panels” and “Soviet-style gulag health care” that will “absolutely kill seniors.” Republicans, having lost their status as the party of business, have become the party of incoherent rage. It is difficult to imagine anything good coming from a system that moderates the will of corporations with the fantasies of hysterics.



Bair Says Using TARP for Bank Capital Helped Fuel Public Outcry
By Alison Vekshin and Joshua Gallu


Nov. 14 (Bloomberg) -- Federal Deposit Insurance Corp. Chairman Sheila Bair said using the Troubled Asset Relief Program to pump capital into banks was “not a good idea” and helped erode confidence in the regulatory system.

“I just see all the problems it’s created now, the horrible public outcry,” Bair said on PBS’s “The NewsHour with Jim Lehrer” yesterday. “It’s had a terrible, terrible impact on public attitudes toward the financial systems, toward the regulatory community.”

The U.S. created TARP last year to remove souring assets such as subprime mortgages weighing down balance sheets and leading banks to stop lending, among steps Bair said were needed to contain the crisis. Former Treasury Secretary Henry Paulson was forced to drop the strategy and use the $700 billion fund to inject capital into banks when the plan prompted lenders to hoard cash and failed to halt a slide in the stock market.

“We would have tried to dissuade Treasury from making these capital investments,” Bair said. “In retrospect, that was probably not a good thing. At the time it sounded like the right thing to do.”

TARP capital gave the U.S. stakes in the institutions, raising questions about additional steps if the firms needed further help, and put the government in the role of containing compensation at the firms getting taxpayer aid, Bair said.

Given the urgency at the time, no one should be held accountable “for not thinking all this through,” Bair said. “I think it was not a good idea.”

AIG Outrage

A decision by New York-based insurer American International Group Inc. to pay $165 million in bonuses after a bailout valued at $182.3 billion sparked public outrage and legislation in Congress to limit compensation at taxpayer-funded firms.

“We share her view that government capital should be replaced by private capital so that taxpayers are repaid as soon as possible,” Treasury spokesman Andrew Williams said. “We are working with the regulators toward that end.”

Bair said she supported having the government seize and break up failing financial firms.

“If any individual institution gets into trouble again and a conventional bankruptcy process would pose collateral damage to us, the rest of us, it should be put into a special resolution process just as we do with banks now,” Bair said. “It should be broken up and sold off.”

House Financial Services Committee Chairman Barney Frank and Senate Banking Committee Chairman Christopher Dodd have proposed legislation that would give the FDIC the power to dissolve failing large firms whose collapse would destabilize the financial system. The FDIC already has that authority over commercial banks and thrifts.

To contact the reporters on this story: Alison Vekshin in Washington at avekshin@bloomberg.net; Joshua Gallu in Washington at jgallu@bloomberg.net.

Last Updated: November 14, 2009 00:00 EST

Miscalculating financial and environmental risk and Miami International Airport... by gimleteye

The Miami Herald noted our blog and post on the Everglades Jetport controversy in today's front page, top of the fold story by Curtis Morgan:

The county commission was scheduled to take up the question of rock mining, oil drilling, or otherwise exploiting property owned by the county in the middle of Big Cypress National Preserve in order to pay down debt incurred by the expansion of Miami International Airport.

A decade ago, I lead the campaign to stop the conversion of the Homestead Air Force Base into a major "reliever" airport for Miami International; a deal memorialized as another scheme gone awry by the same unreformable majority of the county commission whose principals sit on the dais today. The public was told-- hyped by the misinformation generated by economists and forecasters and the engineering cartel hired by political insiders who had reconstituted from the board of directors of the Latin Builders Association--that even with the expansion of Miami International, that our economy could not survive without more capacity from a new airport at Homestead.

It is exactly the kind of miscalculation of risk that motivated the citizens of Florida and Miami-Dade, forty years ago, to stop the expansion of suburbia into the Everglades through a nonsensical scheme to put the world's largest airport in the middle of the Everglades. Stopping the Everglades Jetport motivated Marjory Stoneman Douglas-- author of "River of Grass"-- to join other civic leaders in founding Friends of the Everglades (I am conservation chair of that organization). The Everglades Jetport controversy engaged politics in the United States, and the mainstream media, all the way to the White House. It seems incredible to me that the Miami Dade County Commission could send us back to plow over all that old history.

One thing that environmentalists have learned: when it comes to money and the law and the environment, the imperative of money usually wins, no matter the risk. The waste of resources-- both human and financial and of natural resources, too-- is nothing short of amazing. Yet, some profit. The lobbyists cheer another cause to gin fees from. The engineers fill the hours of planners emptied by the housing market bust. The county commissioners see opportunities "expanding the tax base". This is how the game is played.

Maybe I will go back and retrieve the statistics used by Miami Dade Aviation on passenger landings to plead for the Homestead Air Force Base with the county commission. Or, maybe, the media will go back and review just how did the cost-overruns of the MIA expansion mushroom into the billions, and what were the precise terms that benefited the group of lobbyists who incorporated in order to "consult" the billion dollar expansion. One might also ask if any of those lobbyists are also land speculators at the edge of the Everglades and would any of them stand to profit through any expansion of commercial or recreational uses into the lands of the Everglades Jetport. Honestly, you couldn't make this stuff up.

How Far is Juno Beach? It is Only a Helicopter Ride Away for FP&L CEO! By Geniusofdespair

I made a mistake on this blog that has been rectified.
Juno Beach is 77 miles North of Miami. That is a an hour and a half commute by car. Big deal. Many people do it or they move. They don't keep a helicopter and pilot for a 77 mile journey.

Our money, held hostage by this utility/monopoly, is being used to buy FP&L a new Corporate jet at $31 Million at the same time they want a rate hike. Armando Olivera, CEO who is out of touch with the common folks, said he uses the Jet for Tallahassee trips "generally" using the additional Corporate helicopter get to work in Juno, but not always. Generally is a lot of the time in my book. So the helicopter has to be kept available for these trips to Juno Beach from Olivera's home in Miami...a helicopter and a pilot to go 77 miles. The pilot has to be a full-time employee ($90,000 a year?). And the jet also has to have a pilot (another $90,000?)!

A year 2,000 estimate on operating cost for helicopters per hour ranges from $143 to $320, hence, these daily commuting trips to Juno Beach are costing a lot of money ($500 at least with pilot costs -- more than most Miami rate-payers make in a week). I say: Ditch the copter and get this CEO to move. But definitely, get rid of the copter, jet and the 2 pilots! Charter a plane if you have to FP&L. Maybe Rodney Barreto can fly you around, Armando, to save some bucks.

What is Rodney Barreto Up To This April? By Geniusofdespair

Everything has been pretty quiet on the Rodney Barreto front but he did take time away from Spring cleaning to form a new Corporation, Floridian IT, LLC., or at least he is listed as the “Manager” of this member-managed company. The Registering Agent was Jose Machado. Wonder what this corporation is about? It sounds tropical. Maybe Lobbyist Barreto is buying property in the Bahamas or bananas. It was only formed a week ago, I suppose time will tell.

April might also be a time for Barreto to help out a friend. Gonzalo Sanabria has two corporations with Rodney, so I wouldn't be surprised to see Rodney lending a hand, or supplying some bucks, in the Coral Gables election.

Tallahassee and the Florida legislature on gutting growth management: DUI ... by gimleteye

It is a very poorly kept secret: how Miami-Dade state legislators vanish like smoke, once a year, to a place called Tallahassee. No one knows what goes on there, except for a few journalists given insufficient space to detail the rape and pillage that passes for governance. (please click, 'read more')

That suits the lobbyists and deal-makers just fine. Its part of the grand charade and persuasion game that perpetuates government by special interest.

The most cynical and worst bills making their way through the Republican Legislature-- unmarred by a Democratic minority-- is the effort to neuter the Florida Department of Community Affairs, including eliminating the state review process that has halted the movement of the county Urban Development Boundary for major developments.

SB 360 is headed to the Senate Ways and Means Committee today. If you have a moment, pick up the phone and call a few Senators: tell them what a disaster SB 360 is for Florida and for Miami-Dade.

I wonder what Governor Charlie Crist makes of this fiasco, in light of his stated opposition to Florida Hometown Democracy. In 2007, Crist said, "the hometown democracy amendment would limit the ability of local officials to make important decisions for their communities, and would lead to unnecessary delays in permitting for new business opportunities." But clearly, picking up where it left off in the last session of the legislature, Miami-Dade state legislators are urging those decisions to go directly to local elected officials. Anyone reading this blog or paying even the slightest attention knows that the worst thievery of the public interest, in respect to zoning and development, occurs right under the blissful gaze of city and county commissioners.

It doesn't make it any happier, that the Florida legislature is making the best case for Florida Hometown Democracy, that would give voters the choice whether comprehensive development plans should be amended or not. Here's an OPED from the Orlando Sentinel, that has consistently shown far more backbone that the Miami Herald on matters related to unsustainable growth. Its point could be equally said of Miami-Dade, where the only conceivable support for eliminating the Florida DCA are the supporters of Parkland. (Sergio Pino, Rodney Barreto, Ramon Rasco, Miguel De Grandy, et al. Read our archive feature, under "Parkland" and "Krome Gold", for more information.)


We're dying from plague of vacant buildings, homes

Mike Thomas
COMMENTARY
March 17, 2009
This is like watching an emphysema patient try to cure himself by smoking more.

Florida is dying from a spreading plague of vacant homes, vacant stores and vacant offices. And up in Tallahassee, the solution offered by legislators is more vacant homes, more vacant stores and more vacant offices.

Their cure for the economy is another whopping dose of everything that got us into this mess.

I don't know whether they're corrupt, stupid or simply so embedded in the Culture of Concrete they can't think outside that tiny box.

The pressure to pave permeates the Florida Capitol like skunk stink.

I once supported the Hometown Democracy referendum — which would allow citizens to vote on changes in growth plans — to protect the environment.
Now I support it to protect the economy.

Florida has 300,000 empty homes and condos, enough to put a roof over the head of everybody in Orange County.

This resulted from developers throwing them up nonstop, feeding a speculative market that had careened out of control.

The number of empty homes only will rise. Florida set another foreclosure record in February — more than 46,000 houses are now going through the process.

This spills over into the rest of the economy. It is why you see all those closed storefronts. Strip malls are vacant. Across the street from the Sentinel in downtown Orlando, an entire row of new retail space is empty. Office-vacancy rates nearby are shooting up.

Florida faces a massive and growing glut of empty space of all kinds.

And yet our state leaders say we need more concrete shells. They say the Department of Community Affairs has to go because it's just too burdensome on developers. They say growth laws are too restrictive, an amusing claim if you've ever driven around the region on the beltway. Development feeds an army of lobbyists, law firms, home builders, speculators, lenders, brokers, real-estate agents and so on. Florida is a state that grows for a living. And now that it isn't growing, the special interests in Tallahassee aren't making a living. Desperation is the result.

Making this all the more egregious is that for the first time in the history of counting people in Florida, we did not grow last year.

Florida has stagnated — an idea once as unthinkable as snowstorms in Miami. And according to the state demographers who track the data, we are going to stay stagnant for at least three more years.

So, pray tell, where are the people to live in the new homes, shop in the new stores, work in the new offices? We will need years of growth just to fill what we have.

And so every new building adds to the glut. Every home they build lowers the value of your house.

But give us more.

At the current sales pace, it would take 18months to sell all the homes on the market in the Orlando area.

But give us more.

Compared with January 2008, the median home sale price in January of this year fell 59 percent in Fort Myers, 39 percent in Fort Lauderdale, 39 percent in Miami, 41 percent in Sarasota, 33 percent in Metro Orlando and 33 percent in Tampa Bay.

But give us more.

Code-enforcement departments across Florida are swamped with complaints about overgrown yards, green pools, vagrants and vandals. Empty homes are dragging down neighborhoods and becoming crime magnets, destroying lifetime investments.

But give us more.

The same people who would give you more will say — with a straight face — that Hometown Democracy will destroy the state's economy by limiting growth. They say you aren't capable of managing growth, so leave it to the professionals. Leave it to them.

Well, we can see where that has gotten us. Do you really think that people who are put in political office by the hand of growth are going to bite it?

Is This Lobbyist Dream Team Florida Keys' Worst Nightmare? By Guest Blogger YouBetcha'

Look-out Florida Keys! Here comes your worst nightmare!

"Keynoter" reporter Ryan McCarthy in the February 14th edition writes a story that should freak out Keys residents. If the gaggle of lobbyists Monroe County Administrator Roman Gastesi wants are hired, will the developers they represent in Dade County soon follow? Scary thought. Watch your back, Conchs!

Roman, as we all know in Miami Dade County, is a good example of the Peter Principle at work having been our water-boy, oops I mean Water Czar. You should have asked us about him Monroe County! Can you imagine he wants to hire Ron Book, Rodney Barreto, Brian May, Al Lorenzo and Alberto Cardenas among others? As G.o.D. would say: "Ick" to that crew.

Gastesi's dream of superstar lobbyists gets cool reception. by Ryan McCarthy

Monroe County Administrator Roman Gastesi's proposed "dream team" of state and federal lobbyists didn't come off so dreamy to a few Keys stakeholders on Friday.

Gastesi invited the lobbyists to the Marathon Government Center to make their pitch to representatives from six county municipalities and government bodies. Some, including the city of Marathon and the Key Largo Wastewater Treatment District, seemed less than impressed:

Gastesi hammered home the idea that a new administration is in place in Washington and that a unified voice will be the most effective way to secure sewer funding from the state and through President Obama's federal stimulus package.

"In partnering up we get more bang for our buck," Gastesi, a former Miami-Dade lobbyist, said. "Our pain as far as paying for these guys is less. It shows a united front; we're the Florida Keys, not Key Largo, Islamorada or Marathon."

Key Largo sewer district member Charles Brooks said the board recently voted unanimously to defer, while Marathon City Manager Clyde Burnett indicated the City Council is pleased with its team of lobbyists.

"I don't know who coined the term 'dream team,' but we thought we already had a dream team working for us," he said.

County Mayor George Neugent told the group at the outset of the meeting he'd informed Gastesi "that Monroe County has an aversion to economies of scale."

"We find ourselves in a very tight spot and I'm speaking for the municipalities and those who have not been funded with subsidy money for their wastewater projects," Neugent said. "Because of this unfunded mandate we're facing, it could cost us hundreds if not thousands of people trying to hang on in Monroe County."

Islamorada Village Manager Ken Fields indicated his council has expressed interest in a partnership, while a Florida Keys Aqueduct Authority representative said it has interests outside of sewers its lobbyists are pursuing. But Key West Mayor Morgan McPherson agreed with Gastesi that a new administration requires a new voice in Washington, D.C.

"This is something we should have done a long time ago," he said. "I know a lot of work has been done in the past, but the bottom line is in Washington and Tallahassee, it's about relationships."

Among the best known in the state that Gastesi wants: South Florida lobbyist Ron Book, whose task will be to go after the $200 million in state funding.

The other six lobbyists on Gastesi's dream team: Rodney Barreto and Brian May of Floridian Partners LLC, Al Lorenzo of Quantum Results, and Carl Chidlow, Alberto Cardenas -- a former state GOP chairman -- and Colin Mueller of Tew Cardenas LLP. Gastesi is a former employee of Tew Cardenas.

Barreto also is chairman of the Florida Fish and Wildlife Conservation Commission, and spent much of his childhood growing up in Tavernier. Chidlow served as finance director for the Democratic National Committee from early 2006 through the 2008 presidential election.

The total cost for the lobbyists would be $20,000 per month. That full-court press would cost each stakeholder -- if all six were in -- $3,333 a month.

Several participants, including Chidlow, mentioned that just $10 billion of the more than $800 billion stimulus package is dedicated to wastewater projects nationwide. It's a small pie to fight over, he said.

The next step is for the stakeholders to take Gastesi's proposal back to their respective board, council or commission for approval -- or rejection.

Miami-Dade County Commissioner Natacha Seijas: echoes of former House Speaker Ray Sansom ... by gimleteye

What do disgraced former House Speaker Ray Sansom and still powerful county commissioner Natacha Seijas have in common? Click, 'read more', to find out.

Frank Alvarado, for the New Times blog, Riptide 2.0, reports on the political influence peddling of Odebrecht Construction, likely the largest recipient of county construction contract awards over the past decade. Since Miami-Dade grand jury investigations have proven so ineffective in stopping corruption, closer scrutiny is warranted by federal law enforcement.

The comparison to the recent ethical scandal that forced the resignation of state representative Ray Sansom (R-Destin) from House Speaker is instructive. Sansom took a job for $110,000 from Northwest Florida State College after steering more than $30 million in construction funds to the school in the past two years. Sansom also faced withering criticism for allocating $6 million to a top Republican contributor and friend for the purposes of an aircraft hanger.

In consideration of contract values originating from the Miami-Dade county commission, the $36 million that forced Sansom from his House speakership is chump change.

For Odebrecht, the construction firm that supervised much of the work at Miami International Airport and other big ticket projects like the Performing Arsht Center, $36 million is nearly a rounding error or a cost overrun. Its projects in Miami-Dade total hundreds of millions, if not more than a billion.

New Times reports, between 2003 and 2008 Odebrecht gave $130,000 to the YMCA; that's the charity employing the most powerful county commissioner in Miami-Dade in a no-show job. According to a court deposition: "(Seijas) said she goes to the YMCA as "frequently as I'm needed." Seijas could not recall if that meant more than once a month. She affirmed that her salary is unrelated to time spent at work. She said she does not keep a calendar of her appointments or meetings related to the YMCA."

In addition, "Since 1996, the YMCA has received $1,706,028 through the county's federally funded community-based grant program... The YMCA also relies on the generosity of some of Miami-Dade's most prominent citizens. Among them: real estate moguls Masoud Shojaee and Pedro Adrian. The pair gave $40,000 to the YMCA for its 2006 annual gala. The builders also gave $19,000 to Seijas-sponsored political action committees. Neither man returned calls seeking comment. Developer Sergio Pino put up $26,000 for two pro-Seijas PACs and contributed $15,000 to the YMCA in 2005. He also didn't return New Times's calls seeking comment." All are connected to the Latin Builders Association and the heavily influence of its lobbying for platted subdivisions that have caused such carnage in the foreclosure crisis.

Only Odebrecht Construction CEO Gilberto Neves defended his personal and professional contributions to Seijas and her employer. Neves was chairman of the 2006 gala and has twice donated $500 to Seijas's re-election campaigns. In 2005 and 2006, his firm — which built the overbudget Carnival Center for the Performing Arts and has contributed to problematic airport construction — donated $80,000 for the galas.

Sansom resigned from his powerful Speaker role, under pressure of disclosure of unethical transactions on behalf of his employer. Apparently in Miami-Dade, county commissioners can get away with just about anything. Recall, too, that Dade Aviation Consultants received more than $250 million to "manage" construction activity of airport contractors, including Odebrecht. "The firm's contract has been fraught with questions regarding political maneuvering, high costs and minority participation by partners whose contributions were murky." (Dade Aviation Consultants' job nears an end, Miami Herald, November 17, 2008) Lobbyists who held the key to Seijas' favor, like Chris Korge and Rodney Barreto, were well compensated through airport contracts like DAC.

New Times reported, "Dade Aviation Consultants, a consortium of engineering firms overseeing Miami International Airport's maligned and oft-delayed $6.2-billion expansion, paid Korge, Barreto, and a third lobbyist each $16,000 a month. A 2002 investigation by the OIG claimed the trio received $1.3 million over nine years whether they worked or not. The OIG report terms the county relationship with Dade Aviation "unhealthy for the long term." Though a county study in 1994 showed airport passengers would spend millions more if gift shops offered better merchandise, two years later Korge persuaded airport officials to block opening a Disney retail store that would compete with Sirgany's gift shops. But perhaps most controversial was the airport's $40-million food and beverage concessions contract, which county commissioners in 1998 awarded to Host Marriott Services Corp. and a minority joint venture known as World Wide Concessions, which were represented by Korge and Barreto, respectively. Four years later a federal grand jury began to probe allegations the deal was rigged to circumvent minority participation rules. County and federal public corruption investigators discovered both Host Marriott and the minority firm had privately agreed to give Korge and Barreto 10 percent of their profits, according to grand jury information reported by the Miami Herald and New Times in 2004. In addition, World Wide Concessions received $33,225 per month to do virtually nothing."

Doing virtually nothing described the serial grand jury investigations of corruption in Miami-Dade. On the other hand, the US Attorney in Miami recently showed in Palm Beach County, there is a limit to what is tolerated. Today, the number of Palm Beach county commissioners who are in jail or headed there could form a quorum.

It's time for federal law enforcement to apply the same scrutiny in Miami-Dade.



Odebrecht is Portuguese for "Big Money Donor"
By Francisco Alvarado in Banana Republican

Wednesday, Feb. 18 2009 @ 2:55PM

For more than 10 years, Brazilian-based construction firm Odebrecht has made tons of money from Miami-Dade County public works projects. If anything, the company is consistent...at completing jobs behind schedule and charging the county more money to finish.

For example, Odebrecht accepted responsibility for having to repair 96 massive concrete beams that cracked during construction of a parking garage in the late Nineties. The project came in $4 million over budget.

In a joint venture with two other contractors, Odebrecht was awarded the task of building the Adrienne Arsht Center for the Performing Arts in 2001. Two years into construction, the project was saddled with problems that resulted in disputes between the county, the architect and the construction firms.

The cultural facility opened in 2006, more than 800 days behind schedule and nearly $100 million over the original construction estimate. Odebrecht collected an additional $4.2 million on its original contract.

Then there was the south terminal fiasco at Miami International Airport. Odebrecht partnered with another firm, Parsons Corp., to build the new terminal which ended up hundreds of millions of dollars over budget and was delivered two years behind schedule. Odebrecht and Parsons sought to collect an additional $65 million.

Yet Odebrecht has continued to get more work from the county. The partnership with Parsons is building the $2.8 billion, 48-gate North Terminal project, as well as a $259 million, automated people mover system to run between Miami International Airport and the Miami Intermodal Center, a consolidated rental car facility and transportation hub. So far, according to Aviation Department spokesman Greg Chin, those projects are on schedule.

Chin also noted that airport construction projects are paid with airport revenues and landing fees generated at Miami International Airport. "The only time a taxpayer contributes to construction at the airport is when they fly here, pay for parking or buy merchandise," he said.

In other words, property taxes are not used to finance airport boondoggles. So taxpayer, the next time the Aviation Department comes to the County Commission requesting millions of dollars more to pay for Odebrect's construction screw-ups, quit your bellyachin'.

Tomorrow, we dissect how Odebrecht's man in Miami showers county commissioners with campaign contributions and more.

Thursday, Feb. 19 2009 @ 12:42PM

For the past two days, I've noted all the work Miami-Dade County awards Brazilian engineering and construction firm Odebrecht. Despite a history of completing jobs behind schedule and over budget, the company continues to get the nod to build county funded projects worth hundreds of millions of dollars.

Part of the firm's success has hinged on the ability of Odebrecht's man in Miami to navigate the county's political heirarchy, which usually means ponying up for campaign contributions every election cycle. And Chief Executive Gilberto Neves does it well. During the 2008 primary election, Neves donated $500 a piece to incumbent commissioners Carlos Gimenez, Barbara Jordan, Joe Martinez, Dennis Moss and Natacha Seijas. He also gave $250 to Audrey Edmonson.

What's more, Neves is a big supporter of the YMCA of Greater Miami, which coincidently employs Seijas as a vice-president. Odebrecht's top exec is the Y board's chairman and has also chaired the committee in charge of the non-profit's annual fundraising gala. Neves' company has donated more than $130,000 to the YMCA between 2005 and 2008. On previous occcassions, Neves has told New Times and the Miami Herald that his support of the Y has nothing to do with Seijas. Nevertheless, his involvement creates the perception that he is currying favor with his favorite commissioner.