Patt Morrison for February 15, 2011

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It would be almost comical in its brashness if it weren’t criminal: as the preliminary hearing of disgraced members of the Bell City Council unfolds this week (the preliminary hearing for the trial of Robert Rizzo, Bell’s chief administrative officer and mastermind of the scandal, starts next week) the stories of collusion among Bell’s city officials as they defrauded millions of dollars from the city paint a sordid tale of corruption. Email exchanges between the city assistant administrator and the eventual Bell chief of police talked about “taking all of Bell’s money” while Rizzo’s assistant testified to helping cover up the outrageous income he and his colleagues were earning. More emails were revealed that talked about shaping pay agreements between the city and its leaderships “carefully so we do not draw attention to our pay.” We take a look at the sad soap opera that unfolded in Bell and preview the coming trials.
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It’s long been conventional wisdom that breastfeeding is the single most important thing that mothers can do for their infants, in terms of disease and obesity prevention—but that wisdom is fraught with anxiety and debate over how vital breastfeeding is, how long it should be done and the magnitude of the promised health benefits. Perhaps with that in mind, first lady Michelle Obama is doing a delicate dance to increase US breastfeeding rates without expressly telling women to breastfeed but by making it easier for moms to breastfeed if they so choose. To do that, she’s launching a multi-pronged campaign, giving IRS tax breaks for breast pumps and lactation assisting supplies; targeting the workplace and economic factors that impede breastfeeding; and encouraging hospitals to become “baby friendly,” or promote breastfeeding rather than unnecessarily giving infants formula and separating them from their mothers at birth. For a topic as personal and sometimes controversial as breastfeeding, the national campaign seems to be about as sensitive as possible, but what are the real barriers to breastfeeding access in this country and how can they be dismantled?
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Whistle while you work on Wall Street

Last year President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act into law, a provision of which allows the U.S. Securities and Exchange Commission to pay out as much as 30 percent of the recovered money to people – employees, ex-wives, etc. - who provide evidence of fraudulent activity. The purpose of the Whistleblower Bounty Program is to reduce the risk of future Bernie Madoffs and prevent the likes of employees at the now defunct mortgage company, Ameriquest, who doctored mortgage applications. Largely unregulated, the business of subprime-mortgage-backed securities helped to inflate the housing bubble of the last decade, and excessive risk-taking by the Wall Street banks also contributed to the need for a taxpayer-funded bailout of $700 billion in September of 2008. The debate about how to regulate the financial services industry continues as we advance our economy past the Great Recession. Enforcement officers at the S.E.C. still have creases to iron out in the proposed whistleblower program, while securities-fraud lawyers, like Stuart Meissner, have already filed several pending law suits under the Dodd-Frank law. One side of the Whistleblower debate wants to make it easier for people to come forward with information, and reward those people with cash-in-hand for doing so. The other side wants to make sure that companies can maintain their “corporate integrity programs,” such as internal compliance measures. Today, we discuss the new meaning of “whistle while you work” on Wall Street.
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Ecuador to Chevron: pay up. Chevron to Ecuador: maaaaybe later

In what appears to be the largest judgment in an environmental case, an Ecuadorian judge has ordered Chevron Corp. to pay $8.6 billion to clean-up oil pollution and cover health care costs for residents of the area. The judge also threatened to double the fine if the company doesn’t publicly apologize within fifteen days. Chevron’s answer? No to all of the above. The American oil giant inherited the case, which has been bitterly fought for nearly two decades, when it purchased Texaco Inc. in 2001, and vows to appeal the ruling, refusing to pay the fine or apologize as the judge demanded. Chevron denies responsibility for any ecological harm stemming from Texaco’s operation in the oil-rich Amazon rainforest that spanned from 1965 to 1992. Plaintiffs in the case, mostly comprised of residents of the area, first sued Texaco in New York in 1993, but Texaco, and later Chevron, successfully argued that the case should be heard in Ecuador, which was then run by a government seen as pro-American business and trade. But in 2007, Rafael Correa, who publicly supported the plaintiffs during his campaign, was elected president in Ecuador. Chevron claims his government has interfered in the case, and has also accused the plaintiffs of foul play. The plaintiffs deny the fraud allegations and insist environmental evidence supports their claim. In this game of he said, she said, who will finally prevail? And if Chevron never has to pay, how damaging will the case be to their reputation, especially in light of BP’s Deepwater Horizon disaster? For now, the company’s shares seem unfettered by the ruling and rose 1.3% the same day the ruling was issued.
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Larger elementary school class sizes; starting kindergarten later for kids who don’t turn 5 before September; increased tuition for UC and CSU students, along with cutbacks to classes and programs; deep cuts to the state court system and law enforcement funding; elimination of many state-funded transportation projects. These are just some of the cuts that will have to come to balance the budget of California if voters reject proposed tax increases, or if they never have an opportunity to vote on those increases. Democratic State Sen. Mark Leno requested a workup on the numbers from the Legislative Analyst Office to illustrate the kind of choices that would have to be made in the absence of tax increases, part of Gov. Jerry Brown’s overall plan to balance the budget that is facing stiff opposition from Republicans in the legislature. Republicans argue that the LAO analysis doesn’t cut enough from state workers compensation and sets up false choices between tax increases and budget cuts. The choice will ultimately come down to California voters and it’s the same decision they’ve been putting off for years: what’s more important to you, state services or low taxes?
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Vice President Biden announced last week the Obama Administration’s plan to put $53 billion toward upgrading and building a national, high-speed rail network. The administration has already allocated $10.5 billion to passenger rail programs, with the majority of funding going to projects in the planning stage in California and Florida. In fact, California will benefit again with the largest chunk of the new rail budget going toward the Golden State’s $43 billion bullet train project plan. But that’s all assuming Congress loosens the purse strings enough to let the plan survive. Immediately after the announcement, House Republicans publicly decried the plan, questioning its merits. House Transportation Committee Chairman John Mica of Florida said previous administrations’ high-speed rail projects were failures, and Railroads Subcommittee Chairman Bill Shuster of Pennsylvania called the plan “insanity,” but did express support for a high-speed rail network in the Northeast where the population is dense. So will the new plan make it through the Republican controlled House of Representatives that is already hell-bent on cutting spending at every corner? And even if it does, how successful will a high-speed rail network be in a day and age during which technology advances leaps and bounds seemingly every day? If for no other reason, people might like the thought of saving the money that would normally have been spent on expensive gasoline.
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