Bush's Third Term

Updated December 1, 2008

Politics is a fishy business. Just ask John McCain's top economic policy adviser, Douglas Holtz-Eakin, who told a news anchor at PBS last summer that Sen. Barack Obama, if elected, would guarantee a Bush third term.

"It is Barack Obama's budget plan, not Senator McCain's, that resembles Bush's policies," Holtz-Eakin explained to Judy Woodruff.

While the inane budget reference may have come out of right field, nonetheless there's plenty of evidence to suggest Obama will do a far better Bush impersonation than McCain in the years ahead. In fact, the Illinois senator's proximity group and voting record paint a much different picture than the one portrayed to date by much of the American media. Here are few discrepancies worth noting:

1. More than any other presidential candidate, Obama's campaign was supported from the beginning by corporate lobbyists and investment banks tied to the market speculation of oil prices.

According to the Center for Responsive Politics, President Obama's top ten campaign contributors included the investment firms Goldman Sachs, Citigroup, J.P. Morgan Chase, Morgan Stanley, and UBS Securities. Most of these firms had been propping up the hope and change candidate since 2006, even when he was a relative unknown with no grassroots network or any real resume to run on. Other banks contributing to the $600 million warchest: Lehman Brothers, Credit Suisse and Citadel Investment Group.

Four of the big banks promoting Obama were players in the scheme to vault the cost of crude to over $140 per barrel last spring. By utilizing their tremendous purchasing power, massive quantities of oil futures were acquired via a company called ICE Futures. As in the case of grain and other food commodities, the hoarding of oil generated a shortage on paper, thereby driving up prices.

If the scenario sounds familiar, that's what Enron did to California in 2000. By ordering power plants offline to create rolling blackouts, Ken Lay's company could charge the state inflated rates to buy electricity from other plants. That same year, the Commodity Futures Modernization Act was slipped into an 11,000 page congressional appropriation bill to pave the way for the speculation and hoarding by big investment firms. Senator Richard Lugar sponsored the measure. (ICE Futures scheme)

To make the Illinois senator's oil slick even stickier, in March his handlers began running a massive ad campaign that claimed he didn't take money from the oil companies. According to, the TV and radio spots failed woefully in the accuracy department, although CNN incessantly repeated a clip of the candidate himself making the statement in the lead-up to the Pennsylvania, North Carolina and Indiana primaries. Obama received nearly a quarter million dollars from gas and oil industry executives, their employees and spouses this year. And those donations were rolling in through the course of the ad buy.

The Annenberg Public Policy Center (which maintains the Factcheck site) also noted in its analysis that "two oil industry executives are bundling money for Obama – drumming up contributions from individuals and turning them over to the campaign. George Kaiser, the chairman of Oklahoma-based Kaiser-Francis Oil Co., ranks 68th on the Forbes list of world billionaires. He's listed on Obama's Web site as raising between $50,000 and $100,000 for the candidate. Robert Cavnar is president and CEO of Milagro Exploration LLC, an oil exploration and production company. He's named as a bundler in the same category as Kaiser."

This behind-the-scenes gravy train may explain why Obama's response to the spring oil price spikes was lukewarm at best. While candidate Clinton demanded a Dept. of Justice inquiry into the speculation, pressed Congress to close the Enron loophole, and urged the release of oil from the country's strategic reserve, Obama was ridiculing a proposal by Clinton and McCain to make oil companies pay the gas tax this summer. He called it "a political stunt". (Clinton's bi-partisan bill was never even considered by the senate committee which had jurisdiction over it.) Obama was also absent for the 50-43 cloture vote on the Stop Excessive Speculation Act, which allowed Reublicans to effectively block its passage, and unlike the FISA/Telecom immunity measure (see below), he made no effort to promote the bill among his colleagues.

So what is Obama's solution to the oil crisis? He has argued for a second stimulus package, promoted conservation, and asked Detroit to build more fuel-efficient cars . Car and Driver has criticized him on this last score, pointing out that the Clintons and John McCain drive hybrids, while he opted to buy a gas-guzzling Chrysler 300C earlier this year. Writer Jared Gall bristled with mock derision at that choice, exclaiming "... every time he starts that V-8, he's choking dolphins and using the corpses to club baby seals."

As for Obama's long-range commitment to alternative energy, you might want to take another look at that donor list. Nuclear giant Exelon was his fourth biggest contributor in 2006 and remains in the top 15 this year. The firm got some good return on its investment a couple years back when Obama took the teeth out of a bill requiring public disclosure of radiation leaks. The year before, Obama supported the Cheney energy boondoggle, a measure that caused such heartburn for environmentalists, they sued the Veep over his secret meetings with coal, oil, and gas producers. (McCain, Clinton and most other Democrats opposed the legislation.) And in 2007, he co-sponsored a bill to direct $8 billion worth of subsidies for the conversion of coal to liquid fuel. The process generates twice the emissions as regular gasoline and was opposed by the enviromental movement.

2. Obama's economic advisers come from the University of Chicago, where the Milton Friedman/Alan Greenspan model of free markets run amuck is paving the way for an age of neo-feudalism. 

Regarding the candidate's position on economic policy, progressive journalist Naomi Klein published an article in the June 30th issue of The Nation. Klein, who is the author of The Shock Doctrine: The Rise of Disaster Capitalism, says Obama's choice of advisors suggests no real policy shift from the past eight years.

"Barack Obama waited just three days after Hillary Clinton pulled out of the race to declare, on CNBC, 'Look. I am a pro-growth, free-market guy. I love the market,'" the story opens. "Demonstrating that this is no mere spring fling, he has appointed 37-year-old Jason Furman to head his economic policy team. Furman is one of Wal-Mart's most prominent defenders..."

Klein continues: "Another of Obama's Chicago fans is 39-year-old billionaire Kenneth Griffin, CEO of the hedge fund Citadel Investment Group. Griffin, who gave the maximum allowable donation to Obama, is something of a poster boy for an unbalanced economy. He got married at Versailles and had the after-party at Marie Antoinette's vacation spot (Cirque du Soleil performed)--and he is one of the staunchest opponents of closing the hedge-fund tax loophole. While Obama talks about toughening trade rules with China, Griffin has been bending the few barriers that do exist. Despite sanctions prohibiting the sale of police equipment to China, Citadel has been pouring money into controversial China-based security companies that are putting the local population under unprecedented levels of surveillance." (Klein more recently characterized Griffin as a "Bush campaign pioneer" during a July 15th broadcast of the program Democracy Now!)

Those of us following the election are already familiar with Obama's former chief economic adviser Austan Goolsbee, another of the University of Chicago boys. Klein explains that Milton Friedman first set out some decades ago to reverse Roosevelt's New Deal from his perch at the university's school of economics.When he died in 2006, Goolsbee penned one of the few appreciations to this controversial free-market guru. And shortly before the Ohio/Texas primaries, a memo from a Canadian official surfaced about Goolsbee. It said the advisor had assured diplomats at that country's Chicago consulate that Obama's tough talk on the campaign stump about NAFTA was “more reflective of political maneuvering than policy.”

And the plot thickens. On March 27th, Obama delivered his historic address on the U.S. economy, carried live on three cable channels. (None of Hillary Clinton's economic speeches received anywhere near this level of coverage.) Introduced by billionaire media mogul and mayor of New York Michael Bloomberg, Obama's opus was "followed by a $1,000-a-plate fundraiser at the offices of Credit Suisse, which has been entangled with the sub prime loan issue," according to USA Today. For her part, Clinton interlaced her speeches with a series of roundtable discussions featuring homeowners recounting their foreclosure nightmares to the traveling press corps. m

To be sure, not every borrower was scammed by the banks. Obama himself got a cut rate on his own home mortgage from Northern Trust that saved him approximate $300 per month, on top of having other fees waived. And with the nation grappling with the worst foreclosure crisis since the Depression, our presumptive nominee tapped Jim Johnson, former CEO of Fannie Mae, to head his VP search team. Fannie Mae enjoyed a close fiduciary relationship with Countrywide Financial Corp., one of the top lenders implicated in the sub prime meltdown. The Los Angeles Times reported that Johnson obtained reduced rates from Countrywide on a mortgage of his own. "He also has been criticized for compensation and other perks he received as an official of mortgage giant Fannie Mae and for compensation decisions made while he was a board member of United HealthCare, one of the nation's biggest medical insurers." The VP vetter eventually relinquished his heavy assignment with the Obama campaign.,0,1290201.story

Then there's Obama's national campaign-finance chairwoman, billionaire Penny Pritzker. Her family business, Superior Bank, worked with Merrill Lynch a decade ago to develop the model for packaging sub-prime mortgages that set the stage for today's global economic crisis. In a taste of what was to come, Superior Bank collapsed in 2001. According to the Wall Street Journal, "Government investigators and consumer advocates have contended that Superior engaged in unsound financial activities and predatory lending practices. Ms. Pritzker, a longtime friend and supporter of Sen. Obama, served for a time as Superior's chairman, and later sat on the board of its holding company."

Five large corporate law firms registered as lobbyists on behalf of their clients also ranked among Obama's top 15 donors as of last February. They include Sidley Austin LLP; Skadden, Arps, et al; Jenner & Block; Kirkland & Ellis; Wilmerhale, aka Wilmer Cutler Pickering. What's interesting about them is that Obama regulary states in his stump speech that “Washington lobbyists haven’t funded my campaign, they won’t run my White House, and they will not drown out the voices of working Americans when I am president”.

To the contrary, the firms got a big payback his first year in office when Obama voted for a tort reform bill that made class action suits more expensive to pursue and harder to win. According to an article in Counterpunch, "This legislation, which dramatically impaired labor rights, consumer rights and civil rights, involved five years of pressure from 100 corporations, 475 lobbyists, tens of millions of corporate dollars buying influence in our government, and the active participation of the Wall Street firms now funding the Obama campaign." Called the Class Action Fairness Act of 2005, it was opposed by Senators Biden, Boxer, Clinton, Durbin, Feingold, Kerry, Leahy and most other Democrats.

3. Obama has interviewed two Republicans to serve as secretary of defense and secretary of state in his administration.

According to a March 2nd article in the London Times, Obama met with G.O.P. Senators Chuck Hagel of Nebraska and Richard Lugar of Indiana to discuss posts in a potential cabinet. Hagel said back in 2004 that he was interested in the presidency and has been distancing himself from the Bush Administration ever since. A former lobbyist for Firestone, he served in the Reagan Administration before moving to Nebraska in 1992 to run an investment banking firm. He's also the former CEO of Election Systems & Software, one of the country's top manufacturers of electronic voting machines. Incredibly, Hagel openly criticized John McCain and expressed support for Obama during the primaries, yet remains in good standing with his party.

Lugar, father of the Commodity Futures Modernization Act of 2000 (see article on ICE Futures above), was being considered as a possible secretary of state until Obama decided to nominate Clinton. This may be a ruse to get Clinton out of the U.S. Senate and preclude any future runs for the White House. As a cabinet official, she will serve at the pleasure of the President, which means he can give her the boot at any time. Given the mysoginist treatment she received by the Obama campaign throughout the primary season, it's hard to understand why she agreed to take the post.

Lugar, meanwhile, still hovers in the background, waiting for his quid pro quo. Since Obama first arrived in Washington in 2005, the Indiana senator went out of his way to maintain good relations him, although it's not exactly clear what, if anything, the two men have in common. In 2005, Lugar chaired the Senate Foreign Relations Committee, and in that capacity brought Obama with him on a trip to inspect nuclear facilities in Russia. He even added Obama's name to his non-proliferation measure that passed by acclimation and the President signed into law in January 2007. It's called the "Lugar-Obama bill". Normally a reliable vote for the Bush Administration, Lugar appeared to break ranks with Bush over the Iraq War in 2007 when he gave a speech criticizing its conduct. He later tempered his remarks, insisting that timetables and benchmarks don't belong in congressional legislation. (The Democratic leaders apparently took this sage wisdom to heart, because none were included in the last war funding bill.)

Of the two prospective cabinet picks, the London Times story added, "Larry Korb, a defence official under President Ronald Reagan who is backing Obama, said: 'By putting a Republican in the Pentagon and the State Department you send a signal to Congress and the American people that issues of national security are above politics.'"

Obama eventually decided to retain Robert Gates as defense secretary. Before being tapped by the current President Bush, Gates served as the top staffer to CIA Director William Casey in the Reagan/Bush Administration. In 1986, the Iran-Contra scandal was exposed, and Casey died of a brain tumor before Congress could question him about the affair. The Senate subsequently rejected Gates as his successor. However, time went by and two decades later, he was confirmed to replace Donald Rumsfeld as secretary of defense without anyone raising an eyebrow. Like Rumsfeld before him, Gates is accused of turning a blind eye to Iraq corruption scandals involving Halliburton/KBR and the security firm Blackwater.

4. Obama has been linked to war profiteering.

Speaking of Iraq, Obama may not be the unwavering anti-war candidate that he has led us to believe.  For one thing, there's no independent corroboration that the speech he claimed to have given in 2002 ever took place. (At least, not the one he later posted on his website.) Moreover, his long-time benefactor Tony Rezko is close friends with two Iraqi exiles tied to U.S. foreign policy. The website Rezko Watch has tracked the rap sheets for this triumvarite in great detail over the last several months. 

In particular, Aiham Alsammarae was appointed as Iraq's Minister of Electricity by the Coalition Provisional Authority in 2003 and soon afterward signed a contract with Rezko to build a power plant in Iraqi Kurdistan. Like many other exiles appointed by L. Paul Bremmer, Alsammarae is now accused of stealing several hundred million dollars reconstruction aid.  For a time, he was jailed in Iraq on corruption charges, but his kids contacted Sen. Obama's Chicago office and this plea was forwarded to the Bush State Department. A few months later, a Blackwater security contingent Alsammarae make an Al Capone-style escape from a Baghdad jail. Lucky thing,too, because the former minister and current fugitive got back to Ilinois in time to donate $2,300 online to the senator's presidential campaign, as well as spring Tony Rezko from jail by putting up a $2 million jail bond.

Incidentally, Obama's long-time benefactor Rezko himself raised $4 million for President Bush's re-election campaign in 2003.

5. Obama has promised to expand Bush's controversial "faith-based initiative", which funnels millions of tax dollars each year to religious organizations, some of whom oppose civil rights.

In an attempt to woo right-wing evangelical voters away from McCain, Obama has recently called for an expansion of the President's program to transfer funding for social programs away from traditional nonprofits and into the coffers of churches. A $500 million package involving a public/private "partnership" is already on the drawing board, no doubt keeping hope alive for convicted housing project developer Rezko and five other associates who are longtime Obama fundraisers.

"Every house of worship that wants to run an effective program and that's willing to abide by our constitution - from the largest mega-churches and synagogues to the smallest store-front churches and mosques - can and will have access to the information and support they need to run that program," Obama announced recently at a community ministry in Zanesville, Ohio, adding that the faith-based initiative would be "central" to his administration.

Since many church programs, including the Salvation Army, have a long-running antipathy towards lesbians and gays, as well as a low opinion of women's rights, civil liberties groups like the ACLU have frowned on the initiative ever since it was first introduced. The Bush Administration, however, took extra measures to implement it, establishing special oversight offices at many federal agencies to make sure the religious groups got their fair share of contracts.

John DiIulio, who served as the first director of Bush’s office on faith based initiatives, told the New York Times, “Senator Barack Obama has offered a principled, prudent, and problem-solving vision for the future of community-serving partnerships involving religious nonprofit organizations.”

6. Obama supports warrantless surveillance, including the FISA bill.

Setting aside an earlier commitment to filibuster revisions to the 1978 FISA Act, Obama reversed course right after the last primary election and supported the so-called compromise that strips many safeguards from the original legislation. The new measure grants immunity to Telecom companies and legalizes the eavesdropping activities conducted by the Bush Administration since 2001. Obama's spokespeople have erroneously stated that the 1978 Act was about to expire, forcing the candidate's hand.

Salon correspondent Glenn Greenwald exposed Obama's policy reversal for the sellout that it was when he wrote on June 21st, "What had been a vicious assault on our Constitution, and corrupt complicity to conceal Bush lawbreaking, magically and instantaneously transformed into a perfectly understandable position, even a shrewd and commendable decision, that we should not only accept, but be grateful for as undertaken by Obama for our Own Good."

- Rosemary Regello

Copyright 2008


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