Tuesday, February 14, 2006

The Incompetence, The Corruption, and The Cronyism, Valentine's Day edition, 2006

The Incompetence:

I believe giving $7 billion dollars from American taxpayers to the obscenely rich oil and gas companies qualifies for all three categories, but it's certainly monumental incompetence:

U.S. Royalty Plan to Give Windfall to Oil Companies

WASHINGTON, Feb. 13 — The federal government is on the verge of one of the biggest giveaways of oil and gas in American history, worth an estimated $7 billion over five years.

New projections, buried in the Interior Department's just-published budget plan, anticipate that the government will let companies pump about $65 billion worth of oil and natural gas from federal territory over the next five years without paying any royalties to the government.

Based on the administration figures, the government will give up more than $7 billion in payments between now and 2011. The companies are expected to get the largess, known as royalty relief, even though the administration assumes that oil prices will remain above $50 a barrel throughout that period.

Administration officials say that the benefits are dictated by laws and regulations that date back to 1996, when energy prices were relatively low and Congress wanted to encourage more exploration and drilling in the high-cost, high-risk deep waters of the Gulf of Mexico.

The Corruption:

Ohio Coin Dealer, Fundraiser Charged

TOLEDO, Ohio -- A coin dealer and GOP fundraiser hired to manage an unorthodox state investment in rare coins was charged Monday with embezzling at least $1 million in an election-year scandal that has sent Ohio Republicans running for cover.

Tom Noe, 51, pleaded not guilty and was released on $500,000 bail. He was arrested over his handling of a $50 million investment fund set up by the state workers' compensation bureau in an unusual attempt to make money by buying and selling rare coins.


Lucas County Prosecutor Julia Bates would not say how much money Noe is alleged to have stolen, but one of the charges accuses him of embezzling at least $1 million. The Ohio attorney general has said he believes Noe stole up to $6 million.

Ohio Inspector General Tom Charles said investigators know where the money went, but he would not say where. Investigators were looking into whether any of the stolen money was donated to political candidates.

Noe already faces charges of illegally funneling $45,000 to Bush's re-election campaign. The 53 new counts include racketeering, forgery, theft, money laundering and tampering with records, with the most serious charge carrying up to 10 years in prison.

The Cronyism:

Bush's Nomination of Warsh to Fed Draws Criticism

Feb. 10 (Bloomberg) -- Most of President George W. Bush's nominees to the Federal Reserve have earned accolades from across the economic and political spectrums.

And then there's Kevin Warsh.

Bush's nomination of the 35-year-old White House aide -- a lawyer by training who would become one of only two members of the Fed's seven-member board of governors without a Ph.D. in economics -- has been greeted by criticism and bewilderment by some former Fed officials and economists. They point to his political connections and inexperience, and say the White House could have found a better-known, more qualified choice.

``Kevin Warsh is not a good idea,'' said former Fed Vice Chairman Preston Martin, who was appointed by Republican President Ronald Reagan in 1982. ``If I were on the Senate Banking Committee,'' which must approve Fed nominees, ``I would vote against him.''

``The Warsh nomination came out of left field,'' said Tom Schlesinger, executive director of the Financial Markets Center, a Howardsville, Virginia-based group that monitors the Fed.

In this world of sin and sorrow there is always something to be thankful for; as for me, I rejoice that I am not a Republican.
-- H. L. Mencken

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