Cuomo Fracks New York State with Irony and Disassociative Policy Disease

(BREAKING NEWS: With so many promising initiatives outlined by the Governor in his State of the State Address, it may seem like base cavilling to focus on a single issue like “fracking,” but my underlying assumption is that high-volume, high-pressure hydraulic fracturing is not the “problem.” It is a symptom of the problem and it serves quite nicely to illustrate a corollary: “If you partner with industry (especially the gas extraction industry) you will be forced to engage in tortured reasoning, mad dashes left and right and a convoluted persecution of the laws that govern public Agencies. (The State Administrative Procedures Act ((SAPA), for instance, figures heavily in an intent to sue notice prepared by David and Helen Slottje, founding attorneys at Community Environmental Defense Council, Inc. Last night, as this Breathing article was getting final edits, the Slottjes wrote, “…we will turn a version of this [notice] into a formal petition to the State detailing why the regs and the draft SGEIS are illegal, demanding that the regs and the draft SGEIS be withdrawn, and placing the State on notice that suit will be brought if the demand is not honored.”)


 

(BREAKING NEWS:  With so many promising initiatives outlined by the Governor in his State of the State Address,  it may seem like base cavilling to focus on a single issue like “fracking,” but my underlying assumption is that high-volume, high-pressure hydraulic fracturing is not the “problem.”   It is a symptom of the problem and it serves quite nicely to illustrate a corollary:  “If you partner with industry (especially the gas extraction industry) you will be forced to engage in tortured reasoning,  mad dashes left and right and a convoluted persecution of the laws that govern public Agencies.  (The  State Administrative Procedures Act ((SAPA), for instance,  figures heavily in an intent to sue notice prepared by David and Helen Slottje,  founding attorneys at Community Environmental Defense Council, Inc.  Last night, as this Breathing article was getting final edits,  the Slottjes wrote,  “…we will turn a version of this  [notice] into a formal petition to the State detailing why the regs and the draft SGEIS are illegal, demanding that the regs and the draft SGEIS be withdrawn, and placing the State on notice that suit will be brought if the demand is not honored.”)

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First, whether you are a pro-fracking or pro-Moratorium New Yorker,  when you searched the text of Governor Cuomo’s  State of the State Address for some variation of “frac,”  “fractured,”  “frack,”  or “frackturing,”  you were immediately rewarded with several instances of  “FRAC.”   Armed with a fresh cup of coffee or some sedative,  you prepared to delve into the convoluted shoals that are Cuomo’s  gas extraction policy.

And that’s where you encountered the first multi-layered irony.  During the past month, activists sent New York’s Department of Environmental Conservation (DEC)  more than 200,000 comments about the Agency’s  regs,   draft SGEIS,  its review process and lack of adherence to State law.  Many of those comments were submitted “under protest” and came on the heels of more than 60,000 submitted during the last round of dSGEIS comments.  But the “FRAC” in the Governor’s speech didn’t refer to gas, extraction or hydraulics.  It’s the Food Research and Action Center which studies accessibility to “affordable fresh fruits and vegetables” and the impact of that accessibility on health.  It is a notable initiative but kind of moot if New York’s  fertile foodsheds are fracked.

You settled in a little deeper and began to review the State of the State Address category-by-category.

Under the broad heading of “Economic Development,” Governor Cuomo  touted Tax-Free Hot Spots, Academics and Unemployment Insurance.  He announced, “The Adirondack Challenge, a national rafting and paddling competition…[that] will  focus the world’s attention on the unparalleled natural beauty and recreational opportunities of the Adirondacks to attract tourists to Upstate New York.”

That’s lovely for the Adirondack and Catskill Parks which are protected from fracking by the NYS Constitution, but how will tourists reach those oases if not via a scenic gas drilling byway?   Additionally, as Cuomo  plots to protect some areas of New York State as more worthy of conservation than others, the Adirondack Mountain Club has reminded him, “It is clear from Article XIV, section (3)(1) of the Constitution that the state cannot enter into a lease with any private corporation for the extraction of natural gas from any state forest or reforestation area located in the counties of Greene, Ulster, Sullivan, or Delaware counties.”

Uh oh.

The Governor spoke to the Economy of Tomorrow and laid out a plan to Make New York the Leader in the Clean Tech Economy. He pledged himself to the creation of a workforce capable of meeting the new demands of his 21st century model.

And he drew a special bead on Upstate Economic Development.  He connected the dots between poverty, food deprivation and a failure to thrive. He outlined a plan to bolster our farms and families by strengthening Farm to School Programs. (This is of especial importance to Sullivan County, NY which a recent Robert Woods Johnson Foundation report placed next to last for health factors of all New York State counties.)

The particular attention Cuomo paid to Upstate Economic Development may have set some heads to shaking. On one hand, he lauded the value of Upstate water and  soil resources – citing to them and our foodsheds as indispensable pieces of NY’s economic engine — while,  on the other,  his  SGEIS proposes to protect the NYC and Syracuse watersheds  and leave the Upper Delaware River Basin (and its organic farmers) to the mercy of inadequate setbacks. (Sec.  7.1.5:  Revised Draft SGEIS 2011,  page 7-55.)

For instance,

… as stated in sub-section 7.1.3, the Department proposes that for at least two years the surface disturbance associated with high-volume hydraulic fracturing, including well pad and associated road construction and operation, be prohibited within 500 feet of primary aquifers.

And,

… uncovered pits or open surface impoundments that could contain flowback water … are subject to a 300-foot separation distance from water wells under Appendix 5-B of the State Sanitary Code.  Flowback water tanks and additive containers … which require a 100-foot setback from water wells.  Handling and mixing of hydraulic fracturing additives onsite…requires a 150-foot distance from water wells.  The Department proposes that it will not issue well permits for high-volume hydraulic fracturing within 500 feet of a private water well or domestic-supply spring, unless waived by the landowner.

If those  “set-back mitigations” strike you as inadequate, then add this nugget to the sludge on your plate:  gas wells in New York State will be permitted within 150 feet of schools.

That’s right.  As Cuomo  outlined a broad range of education improvements with optimistic headings like,  more learning time,  full-time pre-k programs for highest needs students, better teachers, principals and evaluation systems — all excellent proposals —  his SGEIS will allow gas wells to be drilled within 150 feet of those excellent teachers, students, playgrounds, programs and classrooms.

No doubt,  Disassociative Policy Disorder strikes again.

Fighting Hunger in New York

Governor Cuomo has good reasons for envisioning a future-New York where our families are well-nourished by the bounty of our own organic farms. (New York farmers regularly lead the nation in produce donated to food banks and food pantries.  Just sayin’.)

In 2006,  NYS was home to “580 certified organic farms  with 68,864 acres in production.  In addition, there were more than 100 organic processors doing business in the State…”

Only two years later, the US Department of Agriculture reported that  NYS had grown to  827 organic farms and was ranked fourth in the nation as a result.   More,   NYS was second in the country with  319  organic dairy farms;  second to Wisconsin with 99 organic beef farms  and fifth for organic vegetable and melon farms with 190.  (Our $60.2 million dollars in organic milk sales for 2008 placed us fifth in the nation.)

The Governor even cited to  Bay Shore’s Farm to School Project, “Edible EastEnd, an innovative collaboration between Long Island’s Bay Shore Union Free School District, the New York State Department of Agriculture and Markets and Office of General Services, and Long Island potato farmers to increase service of Long Island potatoes in Long Island Schools)…”

And he pledged to create a Statewide Anti-Hunger Task Force with one goal being to increase “the use of New York farm products and healthy foods in anti-hunger programs.”

Yes, while painting a rosy picture of New York State’s schoolchildren being educated for the 21st century in a state fueled by sustainable industries and locally-grown food,  Cuomo’s SGEIS has determined that  many New York  schools and much of our vast foodshed will be left vulnerable to the dangers of crazily inadequate setbacks.

Worse, even if the setbacks seem a dandy solution to you, consider that you and the Governor have overlooked another threat to foodsheds in Upstate New York and the Upper Delaware River Basin:  migrating air pollution from the Hancock compressor,  the Millennium Pipeline and other components of the extraction industry.

Fingers crossed that if airborne contaminants endanger the Organic status of local Upstate NY farms, Vermont won’t charge much to  stock NY’s  school lunch programs.

Human Health

In addition to educating our children and feeding them more and healthier local food,  the Gov is determined that New York will Set the “Gold Standard” for Patient Care.

  • “The best way to improve the health of New Yorkers and to lower health care cost is to avoid preventable illness and the health care interventions they require,” he said.

He even devoted 7.5 typewritten pages to sepsis, “An overwhelming immune and inflammatory response to infection.”  He laid out an entire plan of attack to improve preventative care and to combat nosocomial infections. He was inventive and passionate.

He skipped over the fact that his SGEIS has been roundly decried by doctors, medical societies, nurses and epidemiologists for ignoring the cumulative impacts of gas extraction on human health.

He forgot to mention the plethora of reports coming in from the frontlines of Gasland about endocrine disruptions, immune system dysfunction and leukemia.

He ignored that gas extraction and production companies are exempt from revealing the toxins they use in their processes and that doctors are prohibited from telling injured patients the nature of the gas production toxins that have harmed them.

However, our governor made it clear that he intends to be a juggernaut when it comes to ensuring a fair Public Safety Policy that will open like a protective umbrella over all our heads.  He spoke about gun violence and ended with this,  “Some weapons are so dangerous and some ammunition devices so lethal that we simply cannot afford to continue selling them in our state.”

Yes, Governor Cuomo,  but perhaps there are industries and devices “so lethal that we simply cannot afford”  to welcome them into our communities, either.

I won’t belabor the Governor’s insistence that New York State must improve its reputation for cloaked dealings with lobbyists because one sentence drove all his remonstrations from my head,  “A public database will provide the fullest disclosure of lobbyist and other meetings with state officials in the country.”

Then why, oh why,  Governor Cuomo, did activists have to labor so hard to expose the fact that  Independent Oil and Gas Association  (industry lobbyist) worked hand-in-hand with  NY’s Department of Environmental Conservation to write our State’s gas extraction regulations?

The Governor also outlined a number of new Public Safety initiatives in response to the devastation wrought in New York State by Hurricane Sandy.  He described the NYS 2100 Commission and the importance of building “resiliency” into our “planning, protection and development approaches…”  He vowed to “reduce the emissions that contribute to our changing climate,”  to “increase alternative local renewable power sources,”  and to “provide assistance to property owners to mitigate or sell properties in vulnerable areas.”

Although the Gov is referring to homes damaged or obliterated by Hurricane Sandy,  the door he opens is intriguing.  Will those whose properties are damaged or destroyed by their neighbors’ fracking also be considered “vulnerable?”  Will those property owners also be helped to relocate?  Will they be helped to find a new and better quality of life? Will our organic farmers be rewarded with new  sources of clean water and soil?

And when Cuomo says that,  “Much of New York’s infrastructure is aging and susceptible to damage from extreme weather events or seismic threats,”  is he planning to replace bridges,  roads, and neighborhoods impacted by frack-created earthquakes?

Or when he admits that, “there are miles of aging [ gas] pipeline[s] that are prone to leakage and vulnerable to storm damage (and ground movement) [in New York State],”   does he intend to hire hundreds of new DEC field agents to police, test and enforce remediation of those leaks?  Or will citizens be detailed to stand on either side of the pipes to hold them in place as they rock to the beat of seismic drums?

And when he says we need to “strengthen our wastewater infrastructure” because, “Flooding and storm surges from Lee, Irene, and Sandy resulted in hundreds of millions of dollars of damage to waste water treatment plants and the release of hundreds of millions of gallons of raw and undertreated sewage,”  is he considering just how toxic the stew would be with Marcellus Shale’s radioactive materials added to the mix?

Or does he believe that his newly-minted  World-Class Emergency Response Network —  like All the King’s Horses and All the King’s Men —   will simply put New York  back together again after the extraction industry has bedded, fracked us, and moved on?

 

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Additional Links, Resources and Citations:

“Ecosystem resilience is the capacity of an ecosystem to tolerate disturbance without collapsing into a qualitatively different state that is controlled by a different set of processes. A resilient ecosystem can withstand shocks and rebuild itself when necessary. Resilience in social systems has the added capacity of humans to anticipate and plan for the future. Humans are part of the natural world. We depend on ecological systems for our survival and we continuously impact the ecosystems in which we live from the local to global scale. Resilience is a property of these linked social-ecological systems (SES). “Resilience” as applied to ecosystems, or to integrated systems of people and the natural environment, has three defining characteristics:

• The amount of change the system can undergo and still retain the same controls on function and structure
• The degree to which the system is capable of self-organization
• The ability to build and increase the capacity for learning and adaptation”

Source: The Resilience Alliance Website

 

As part of  Governor Cuomo’s  plan to “Harden Our Utilities,”  he wants the following NYS Public Service Commission (PSC) recommendations adopted as soon as possible.  It sounds dandy, actually.  Too bad  these initiatives don’t extend to the Department of Environmental Conservation or the gas extractors that Agency is mandated  to regulate.

  • The PSC will be statutorily authorized to levy administrative penalties against each utility for violations of PSC orders and regulations or upon a finding that such utility has failed to provide safe and adequate service under a “reasonable business” standard (comparable to the prudence standard). The size of the potential penalties will be increased, and provisions will be adopted to ensure that the penalties are paid out of shareholder capital and not passed on to ratepayers.
  • The PSC will be authorized to issue an order that directs a utility to comply with recommendations made pursuant to management and operations audits.
  • The PSC will recommence operational audits at least every five years as currently required under the Public Service Law.
  • To implement the strengthened auditing functions of the PSC, consideration will be given to having a dedicated auditing unit to help ensure that the PSC is well-situated to fully exercise its statutory authority and perform both management and operational audits.
  • Consideration will also be given to creating a dedicated unit for investigating and enforcing utility compliance with PSC orders and recommendations and with utility tariffs.
  • Statutory changes should be considered to explicitly authorize the PSC to formally review the performance of each of the Investor-Owned Utilities to provide safe and adequate service, and order appropriate relief including divestiture of some or all of a utility’s assets, subject to both due process standards and the need for continuity of service. To ensure compliance with the recommendations put forth by the PSC after a review, the Commission also recommends the clear establishment of the PSC’s authority to revoke the Certificate of Public Convenience and Necessity.
  • DPS staffing and budgetary levels will be reviewed to ensure they are sufficient to carry out the newly-designed core functions of the PSC, and procedures should be reviewed to ensure cross-training of the existing workforce, implementation of performance management standards and technology upgrades. Given the substantial retirements at DPS in recent years, the agency currently is not staffed to the level authorized in the FY 2012-13 budget of 524 full-time employees (FTE). Based upon the additional mandates that the Commission recommends, the DPS staffing authorization will be maintained in the FY 2013-14 budget and DPS will recruit and hire up to the 524 FTE allotment to assist in implementation and enforcement of the new mandates.
  • Similar to Sarbanes Oxley where CEOs need to certify the validity of their financial statements, consideration will be given to requiring senior officers of each utility to annually certify to the PSC that the utility is acting in compliance with all applicable State laws, rules, regulations, orders, and procedures, including the statutory requirement to provide safe and adequate service.
  • All appointees to the PSC will have demonstrated competence in some aspect of utility regulation as well as a concern for the public well-being.

The View Outside My Window: E.L. Fairchild


(“The View Outside My Window”  is a new feature at  Breathing Is Political.  As our lives in the Delaware River Basin meet the inexorable  forces of  the economy, health issues, resource degradation, etc. I’ve asked people whose perspectives are outside our ordinary to tell us what they see.  Today,  Breathing is  pleased  to present the view outside E. L. Fairchild’s window.  Don’t forget to view    Ms. Fairchild’s  work request at  CottageWorks’ Swaps, Barters & Freebies page as well as  the reference posted on her behalf at  the Refer-A-Worker page. )

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I’m not what one might call a ‘News Person.’ I don’t like hearing about the horrible ways people treat each other – it makes me sad about being human. I am aware of the important things and will listen in when the news is on where I happen to be, but I prefer it most in comic forms – The Daily Show, The Colbert Report, and mostly Wait, Wait, Don’t Tell Me on NPR. Therefore, when it comes to The Recession, my experiences are strictly personal.

What exactly is a recession? Dictionary.com defines it as: Economics. a period of an economic contraction, sometimes limited in scope or duration. To me it means everyone else is panicking about the cost of living. Living costs. That’s a truth I’ve come to accept and I don’t let it bother me. Why worry if it doesn’t get you anything but worry lines? I know that I am blessed with an abundance of friends and family that are willing to help me when I’m down, but even without such a support network in place, I’ve found that by being nice and offering to help in exchange, there are more than enough people in the world that will extend a helping hand. Moreover, it seems to have doubled or tripled in the current ‘economic crisis.’

The Recession seems to be making a positive impact in the world as far as I am concerned. People are buying less in a society that has thus far been consumer driven. People are becoming more aware of ‘living Green,’ even if it’s just because of the money they save. Because gas prices keep going up, alternative fuels and smaller cars are surfacing, also something that will help the planet. Therefore, I think The Recession has been a good thing for Mother Nature.

I am a live-in nanny and have been for the past 3 years. In my spare time, I like to travel and experience the world, and for a Gypsy like me The Recession has been kind in many ways. The cost of airfare keeps going down. Although the ‘checked bag fees’ are new and quite annoying, most of the time I travel with a carry-on sized backpack, so it doesn’t affect me. It’s also inspiring others to do the same, thus the need for so many things is fading away. Simplicity is the order of the day.

Currently, I am looking for a place to live and a new job. According to the News and the gossip around the world, it’s not a good time for such things. In my experience, I’m finding the opposite. Many people are looking to rent rooms in houses or apartments in order to cut back on expenses. Car-pooling (another wonderfully Green thing) is more and more accessible with web sites like ZimRide.com. Jobs are most definitely there to be had, you may just need to dig a little deeper than you did before. I’ve found that communities are banding together to help each other out. Things like the Upper Delaware Community Network, a local group ‘bulletin board’ of sorts, are being started via the internet and are wonderful tools to advertise someone looking for help or looking for work. Craigslist.com is another tool that I’ve found invaluable in helping to sell unwanted ‘stuff’ and find someone else’s unwanted ‘stuff.’ One person’s trash is another person’s treasure!

One of the few complaints I do have about The Recession is the cost of healthy and organic food. When money is tight, it can be so hard to eat well. The tasty organic plums that are grown locally are now $3.50/lb. The organic milk is sometimes double the price of non-organic milk. When I have less than $40 to feed myself for the week it’s hard justify the cost. And, in the back of my mind I know that I could fill my belly at McDonalds for about $5 (I wouldn’t, but I know I could). Luckily for me I don’t have the bills that most people do (such as rent, car payments and insurance), so I can justify the cost of my organic food, but I see how it is such a problem for so many.

Another issue that is on the tip of everyone’s tongues seems to be healthcare. Fortunately, I was injured in the Army (during Basic Combat Training, so I only served a total of 7 months) and now have free healthcare thru the VA. This issue doesn’t affect me, but it does affect my family, many of whom are self-employed. *Disclaimer* This is something I really don’t have a clue about. When I was in Ireland recently, I was discussing medical coverage with some friends. Every one of them was on ‘the dole’ (our welfare) but everyone had a medical card and free or almost free health care. “Ireland takes care of its people so the people will take care of Ireland,” one person told me. So, why is it so much harder for America? When so many countries have such a system in place, why is coming up with one for the USA so controversial? I haven’t figured it out yet. I’m sure there is any number of excuses out there, but like they told us in grade school, No Excuses – No Exceptions!

That is The Recession as seen through the eyes of a self-proclaimed Gypsy. It is not a complete picture in many ways, but broad enough I think. It gives me hope. I believe everything happens for a reason, and as far as I can tell, The Recession may just save our existence on this planet. So I encourage you all to Cut Back, Live Simply, Buy Locally, and Think Green. And when a Wanderer crosses your path, extend a hand – you may just get more than you give!

Drilling, Hydro-Fracking, Journalism & Bias


(This column was sparked by  “elb’s”  comments below and invites either “elb” or  the commentator of his/her choice to respond as a guest columnist. Although  I disagree that the available science urges us to give  drilling and hydraulic fracturing  a chance,  the point of Breathing is to offer a forum for intellectually-honest discussion.  “elb’s”  full comments can be reached by clicking the comment link to the right of this column under  “recent comments.”)

Dear “elb,”

I wish you’d cited to examples when you wrote, “Those thousands in upstate NY who rallied for gas drilling see more benefits than negatives, yet you have not even made the first attempt to understand their point of view or why they reached it.  Instead, you’ve inferred that they’re insane idiots who care nothing for the land, just their wallets.”

I’d be interested to know how my  statement, “People are moved by  threats they perceive  as  intimate and immediate.  Unfortunately  for pro-water advocates,  residents of New York and Pennsylvania face many threats — many of which seem more ‘immediate’  than the potential loss of their drinking water.   How will they pay their mortgages?  How will they pay their student loans?  Where’s their next paycheck coming from?”  infers that drilling proponents are “insane idiots who care nothing  for the land, just their wallets.”

In fact, I’ve written angrily as a  former farm laborer and construction worker that many  landholders have been forced by  economic circumstances to even consider leasing their  gas rights and I’ve  exhorted  Basin communities to take specific steps in defense of our Basin’s economy and local producers.)

When you say, “Yet I hear very little insulting, denigrating comments directed at the ‘other side’  from them, despite a passion equal to yours…,”  does that include your statement,  “Instead, you’ve taken the blindly narcissistic stance that ‘it’s not possible’  that you and your fellow supporters might be guilty — or even capable — of exaggerating risks?”

Does it account for  Mr. Noel  Van Swol calling pro-water advocates “dilettantes”  at the July 15th DRBC Hearing?

Your statement provides no substantiation that I’ve exaggerated my claims  so  there’s little I can say in response.

However, it seems to me that certain facts must be accepted before we proceed:

  • hydraulic fracturing fluid contains toxic chemicals capable of rendering a water supply worthless;
  • the only scientific investigative  study currently in existence is the one recently released by the Environmental Protection Agency;
  • polluted water  wells must be reported within six months of  the suspect gas well being drilled and fracked;
  • when screwing anything on the horizontal,  the object will remain stable… until it doesn’t;
  • The Texas Supreme Court recently stated, “The [drilling] design projects the length of the fractures from the well measured three ways…. Estimates of these distances are…at best imprecise. Clues about the direction in which fractures are likely to run horizontally from the well may be derived from seismic and other data, but virtually nothing can be done to control that direction; the fractures will follow Mother Nature’s fault lines in the formation.”
  • no governmental or ad hoc agency has the budget or staff   to oversee any aspect of drilling and fracking:  not the drilling and water withdrawals nor the actual  fracking and disposal of the resultant toxic waste water — a crucial gap that has been  recognized by the Delaware River Basin Commission;

Despite your assessment of my position  (“I see one thing over and over again on this blog — a true lack of an open mind. You’ve made up your mind about gas drilling, despite much evidence ((especially in western NYS and other areas inside and certainly outside the West) that it can live in harmony with the environment and local communities.”))  I am not opposed to drilling and hydraulic fracturing;  I am opposed to slipshod processes.

And most assuredly,  I am opposed to approving an  activity or technology just  because there are locations where it’s operated safely even though  a wealth of circumstantial evidence points to very specific harms elsewhere.   (Not all smokers die of  smoking-related diseases.  Does that mean smoking is harmless?)

To further  explain my objection to shoddy process,  I  opposed  invading Iraq without well-articulated reasons, proof and adherence to Constitutional law.  I was especially opposed to our  policy makers relying  on  Ahmad Chalabi’s vested-interest “clarifications”  since he was angling to  be  Saddam’s  replacement.

A reasonable person would have questioned the value of  Chalabi’s  “evidence” as I  now question the value of  drilling company vested-interest   “evidence” and “assurances.”

More personally,   having been a teenager myself,   when my kids  told me  the party they were attending was safe, I automatically checked with the chaperones.  Loving our children or liking corporations doesn’t absolve us of using  common sense.   If people behaved rationally and  with the “common weal”  firmly in mind,  we’d have no need of laws or oversight  or even newspapers and discussion fora.

Which leads rather nicely to the issue of the  report released by the Environmental Protection Agency concerning  water contamination in  Wyoming about which you say, “Instead, you’ve decried the gas drilling industry’s propaganda (of which there is plenty) in favor of Earthworks’ propaganda: a press release that only hints at the fact that the EPA (1) has not yet determined the cause and source of the contaminated wells, and (2) only THREE of the 11 contaminated wells — out of 39 tested — had a toxin specific to fracking. How does that qualify for sounding a nationwide alarm, let alone the environmental catastrophe you’re constantly trying to whip your readers into a frenzy about?”)

What follows here are

“In interviews with ProPublica and at a public meeting this month in Pavillion’s community hall, officials spoke cautiously about their preliminary findings. They were careful to say they’re investigating a broad array of sources for the contamination, including agricultural activity. They said the contaminant causing the most concern – a compound called 2-butoxyethanol, known as 2-BE  – can be found in some common household cleaners, not just in fracturing fluids.

“But those same EPA officials also said they had found no pesticides – a signature of agricultural contamination – and no indication that any industry or activity besides drilling could be to blame. Other than farming, there is no industry in the immediate area.

“…according to EPA investigation documents, most of the water wells were flushed three times before they were tested in order to rid them of anything that wasn’t flowing through the aquifer itself.

“‘It starts to finger-point stronger and stronger to the source being somehow related to the gas development, including, but not necessarily conclusively, hydraulic fracturing itself,” said Nathan Wiser, an EPA scientist and hydraulic fracturing expert who oversees enforcement for the underground injection control program under the Safe Drinking Water Act in the Rocky Mountain region. The investigation “could certainly have a focusing effect on a lot of folks in the Pavillion area as a nexus between hydraulic fracturing and water contamination.'”

(Conclusive, “elb?”  No,  but certainly worthy of  a moratorium until full explanations are available.)

  • a link to an earlier introductory article  and
  • a link to the EPA’s actual report (which I was unable to locate despite searching for over an hour)

We don’t have to argue the content; readers can decide whether or not I am attempting to  “whip [them] into a frenzy”  or whether I’m reasonably  concerned by the consequences  we see in Wyoming, Fort Worth,  Dimock (PA) and elsewhere of  “rushing to judgment”  as we did in Iraq.

Isn’t it rational to wonder why  those with the least are risking the most and  well-heeled energy corporations are poised to make out like bandits yet again?

Is it whipping readers “into a frenzy”  to remind them that corporations aren’t always honest and government  overseers are not always  concerned for the well-being of the “People.” (We have ample evidence of this given the recent economic meltdown and the collusive actions  of the Securities & Exchange Commission, ratings agencies and other financial pirates who  secured obscene profits for a few  while huge numbers of us lost our life savings and homes.)

Is it particularly onerous that I would raise those issues when our very water supply depends on drilling companies caring more for the water and our welfare  than they do their profits?  Is that me falling prey to “Earthworks’ propaganda” or is it a reasonable caution given  the times  in which we live and the fundamental nature of corporations which is to increase profits for their shareholders?

“Unlike the people you reached out to farther down the Delaware Valley, where gas drilling is likely never to come,”  you write, “most landowners in this area have done their homework and — untainted by the desire to hear only the facts that support a pre-set point of view — have come to a different, far less extreme conclusion.”

I’m left to assume  that their “far less extreme conclusion” is to  lease their gas rights…?     How is jumping in with both feet, no matter their reasons,  “far less extreme”  than  my position which I reiterate here for the umpteenth time:

“I want  the DRBC to table all drilling and fracking applications until after an  Environmental Impact Statement has been issued and independent, scientific studies have evaluated  the cumulative impacts of drilling, fracking and waste water disposal on the Delaware River Basin.”

Rather than being  part of a frenzied rush to drill,  I’m trying to  set the brake on  a run-away train.  (Imagine how much better we’d be sitting if   caution and science had informed  President Bush’s Iraq War strategy before he launched  “Shock and Awe.”)

You also state, “We are all actively working to avoid the kind of environmental holocaust you relish describing, even though the fact remains that no catastrophe on the scale you fear here has ever been seen in the U.S.”

I’m sure that your  reasoning will provide  comfort  to the residents of Chernobyl and Three Mile Island which were, I’m sure you’ll agree,   ground breaking events in their own right.

(I would appreciate you forwarding to me copies of   gas leases  which “avoid the kind of environmental holocaust”  you believe I “relish describing….”  Or perhaps you could include them in your rebuttal as evidence of  lessors’ efforts to protect our Basin.)

As to your insistence that information printed by ProPublica is propaganda, please consider Mr. Lustgarten’s  credentials  (“Abrahm Lustgarten is a former staff writer and contributor for Fortune, and has written for Salon, Esquire, the Washington Post and the New York Times since receiving his master’s in journalism from Columbia University in 2003. He is the author of the book China’s Great Train: Beijing’s Drive West and the Campaign to Remake Tibet, a project that was funded in part by a grant from the John D. and Catherine T. MacArthur Foundation.”) and the fact that he has chosen to work for ProPublica as a respected news source.

Then, please,  provide evidence of your assertion that ProPublica spews propaganda as well as  examples of  gas industry propaganda.

So you see, I completely agree, whether or not it’s my ” blog to do with as [I]  please,”  readers should demand  that we  provide  well-researched and balanced information for them to chew over in a civil venue.

In return, I ask the same of you and whomever you choose to write your rebuttal which I will be pleased to publish here.

Rally Asks NY State to Rescind Gas Drilling Moratorium

The 9-6-09 “Light Up The Delaware River Party” is one of the last chances you’ll have to be heard before the DRBC decides an issue that will impact your lives for as long as you live in The Basin. For those of us who remain, the future looks bleak.


According to  The Daily Star in Oneonta, NY, “A rally Sunday sponsored by supporters of natural-gas drilling in the area attracted hundreds of people to General Clinton Park in Bainbridge, according to organizers.”    An official attendance figure  was not available  “but…organizers parked about 400 cars.”

According to The Star Gazette,    “Dan Fitzsimmons, an organizer, said 871 vehicles parked for the event, many with two or more occupants.”

Uh oh.   Fifth grade angst is stopping my heart.

The  future health of the Delaware River Basin will  probably be  decided in a few short weeks.  The financial futures of our local producers hang in the balance.  The clean drinking water source for 15 million+  people is on the chopping block.  Our  neighbors in Dimock, PA and Pavilion, Wyoming are pleading  with us to wake up — to join hands with them.

But, as an organizer of   “The Light Up The Delaware River Party,”  my fifth grade refrain is,  “Will as many people come to my 9-6-09  party as showed up  at the Landowners’ shindig.”

I’m so pathetic I almost didn’t  publish The Star Gazette’s more flattering crowd assessment of the pro-drilling rally.

So what’s a grassroots  organizer to do?   What variety of factors motivated 1000-2000 people to rally for drilling and hydro fracking in  New York State when the EPA just reported, “… that initial investigations found 11 of 39 tested drinking water wells [Pavilion, Wyoming] were contaminated. Among the contaminants are toxics used in oil and gas production.”?

I’m flummoxed beyond words.  As Leni Santoro and I hand-delivered  Light Up The Delaware River Party invitations throughout the Delaware River Basin, we encountered two scenarios  over and over again:   (1)  most people in the Basin had not heard of gas drilling or hydraulic fracturing; and (2)  every single person  who heard about it from us for the first time was outraged and dumbstruck that drilling and hydro fracking are being seriously considered in The Basin.

People are moved by  threats they perceive  as  intimate and immediate.  Unfortunately  for pro-water advocates,  residents of New York and Pennsylvania face many threats — many of which seem more “immediate”  than the potential loss of their drinking water.   How will they pay their mortgages?  How will they pay their student loans?  Where’s their next paycheck coming from?

A while back, I wrote,  “Faced with famine, dwindling resources and invaders who carried contagious diseases, the inhabitants of  “Easter Island”  (Rapa Nui)  turned on one another and plundered the lands of those who were killed.   Their cultural totems were destroyed by civil wars and the people were reduced and enslaved….  In times of threat, we all reach for familiar comforts, tending to  turn our backs to the storm and cast worried glances at strangers.  So I ask myself, have our fears so crippled us that we can’t learn  the lessons of history?”

If gas drilling and hydraulic fracturing come to The Delaware River Basin as they have to Fort Worth, Texas,  Pavilion, Wyoming and  Dimock, Pennsylvania,  what power will we have   to stop them in New York State?  New York City has registered its  opposition to any threat against its water supply, but what  about those of us who live in the Upper Basin?   The same economic forces at work in Pennsylvania (the loss of 220,000 + industrial  jobs in five years and the destruction of small local  farms)  will  carry the  “Drill, baby, drill” anthem across  the Delaware River and into New York State.

Where will we plant our feet to stop them?

“The Delaware River Basin Commission (DRBC) has scheduled a public hearing on Wednesday, September 23, 2009 to take testimony on its proposed revisions to the draft docket for the application by Chesapeake Appalachia, LLC.  The hearing will begin at 10 a.m. at PPL’s Wallenpaupack Environmental Learning Center in Hawley, Pa. The revised draft docket will be available for public review about 10 business days prior to the September 23 hearing. As before, there will also be an opportunity to submit comments in writing.  The earliest occasion on which the commission may act on the docket is at its next public meeting, scheduled for October 22, 2009.”

The 9-6-09  “Light Up The Delaware River Party”  is  one of  the  last chances you’ll have to be heard before the DRBC  decides an issue that will impact your lives for as long as you live in The Basin.  For those of us who remain, the future looks bleak.

Don’t pretend it isn’t happening.  It is.

Don’t  think sanity will prevail without your  voice.  It won’t.

Don’t think  pro-water advocates are exaggerating  the threat from drilling and hydro fracking.  It isn’t possible.

Don’t miss this chance to celebrate the works of the river and its people.  There won’t be many others.

Don’t leave  gas drilling policies  in the hands of drilling companies as the residents of  Wyoming and Texas and Dimock  did or you’ll be  left with the same  contaminated waters and worthless land as is their portion.

Stand up now.  Demand  that the DRBC  require an Environmental Impact  Statement and scientific studies of the cumulative impact of drilling and hydraulic fracturing on The Delaware River Basin.  Require a detailed explanation of which agencies will oversee contaminated waste water disposal.

Light up your portion of the  Delaware River.  Find out how to plan an event in your area.  Tell us what you’re planning and  invite others.  (Post your events at the “party location”  page even if it’s a “closed” family event.   The DRBC needs to know we’re alive and active.)  Don’t forget to email  photos of your event to  ljbucar@earthlink.net or  leni5s@yahoo.com.  They’ll be posted  on a map of The Basin and presented as a collage to the DRBC.

Come to the table before it’s barren.

Opinion: Defend Local Food AND Water

Perhaps the following ideas for a more unified community plan will encourage others to add more pieces. Without a plan, I fear our region will end up divided against itself:

1. Listen to local producers and work cooperatively with them to build the Buy Local movement in our communities;
2. Create a Delaware River Basin Buy Fresh Network or similar cooperative union of local producers and local consumers;


On July 19, 2009, Eileen Cear posted a comment to Breathing Is Political which I’ve excerpted here:

“What about the poor people living here for generations. We NYC people(I’m actually on Long island), but own property in the watershed, take such advantage of this area, and take away all future developement for people [who] have been here first. Remember what we all did to the Indians. We need to do something for upstate, not only take-and direct ALL future activites in the name of being our Playground.”

In re-reading my response to her comment, I have to say that I blew  by Ms. Cear’s very real concerns about the future of farmers and long-time property holders in the Delaware River Basin.

On July 11, 2009, I’d written,  “If I thought a line of  Neo-Gandhis standing in front of the [natural gas] drilling equipment would  turn the tide, I’d do it in a heartbeat but I still wouldn’t know how to convince the grocery clerk, the farmer or the graduate to join me.”

Perhaps the following ideas for a more unified community plan will encourage others to add more pieces.  Without a plan, I fear  our region will end up divided against itself:

1.   Listen to local producers and work cooperatively with them to build the Buy Local movement in our communities;
2.   Create a Delaware River Basin Buy Fresh Network or  similar  cooperative union of local producers and local consumers;

3.   Create a local coalition of  producers, retailers/wholesalers, lenders, consumers and government entities to:

Support distribution of local goods through local outlets.

Support retail and wholesale markets whose inventory is comprised of         60-75% local goods.  Encourage them to build cooperative purchasing         models that can reduce the cost of goods;

Support  politicians and candidates who work with local producers,               retailers,  wholesalers, lenders and local consumers to make local                   distribution economically viable and to promote the cooperative
distribution of local goods to local outlets;

Support local banks with a track record of lending to local producers            for capital improvements and expansion which result in greater                   production and availability of local goods;

Support new tax structures that encourage local production,                   distribution and sales of local products.

Encourage local schools and restaurants to buy/serve locally-produced         foods.

The day we stand beside the Delaware River to pour in our cups of water and to celebrate our roles as caretakers,  we must also pledge to join our farmers in creating vibrant, dependable markets for their goods. Our communities are actively harmed when we buy fruits, veggies, grains, dairy and meat products that originate a thousand miles from our tables. Without local control of our community resources, it’s difficult to understand how our communities will survive.

*   *   *   *
Here are more links with good information for those of us who are  as committed to preserving our local food resources as we are to rescuing our River and water:

Community Alliance with Family Farmers (CAFF)
Transition US
Go Green NOLA
Food Routes

There are also a bunch of local  “Green Beings”  and Community Resource links here.

Locally, Sullivan Transition is meeting Monday, July 27, 2009 from 6 to 8 PM at Cornell Cooperative Extension. The group is dedicated to planning “…our LOCAL future in regard to food, green building and energy, education/awareness raising, local currency and economy, transportation, water and other resources…” Please see the CottageWorks Community Calendar for contact information and additional details.

Buy local. Read local. Eat local.

Events over the last few weeks have demonstrated that a news renaissance might be in the offing. Leni Santoro (former award-winning journalist-editor-photographer for The Crier) and Beth Quinn are back in the saddle. Check out Leni’s Catskill Chronicle and Beth and Friends’ Zest of Orange. CottageWorks is up and running with pages for referring local workers, freely advertising local events, Swaps & Barters, a Second Hand Shop and for selling and buying locally-produced goods. The Mamakating Messenger is another source for local news as is Ellenville’s Shawangunk Journal.


Every few years,  a new movement springs up.  In the sixties, housewives were freed to be all they could be.  Our  political conscience then  hop scotched  through Columbus’ treatment of Native Americans  and our systemic subjugation of African Americans.  Each group — whether they be  Latino, Irish or tree huggers — gets its day in the sunshine of national consciousness.   One can argue that a piecemeal approach to  human and Earth rights doesn’t work, but it’s how we’ve limited ourselves in the past.

Today, it’s all about  raising a Green Standard in Defense of  Local Communities.  Buy local, save gas.  Eat local, save the micro-ecology. Save the micro-ecology and we’ll preserve a healthy-world-diversity.

Everywhere we look,  hard copy newspapers are dying  slow strangling deaths.  Recently,  after years of cuts and accommodations,  The Rocky Mountain News and The Seattle  Post-Intelligencer stopped arriving  on doorsteps.

Until recently, our Sullivan County backyards have been blessed with a  bevy of local news sources.

Perhaps we took them for granted because  The Times Herald Record was sold to Rupert Murdoch’s  News Corps and presto-change-o, Beth Quinn was canned.  Predictably,  readers in Orange and Sullivan Counties cried out.  We sent a flurry of letters supporting her.  The Orange County Legislature declared August 9, 2008  “Beth Quinn Day”  and hundreds turned out to commemorate her thirty years of community service.  (While some elected officials acknowledged her role in keeping our local ecology vibrant, to my knowledge,  The Times Herald Record neither published our letters nor covered our day with Beth.)

In 2006,  Catskill-Delaware Publications purchased The Towne Crier and its loyal readers held their collective breath in dismay.  Publisher, Fred Stabbert,  did not increase the Crier’s online presence.  In fact,  few articles appear in the online version of  Mr. Stabbert’s flagship paper, The Sullivan County Democrat. Local activists were not surprised when Mr. Stabbert  merged the two papers and The Crier breathed its (probably) last independent breath in May 2009.

Members of a local community need information about local happenings.  How else do we know where to volunteer?  Without local advertising,  how do we know where to buy local products and services?  Where will we learn about the latest School Board fracas or Town Board tumult?  How will we know that our neighbors are descending en masse on Town Hall to protest tax assessments?  How will we know when gambling interests, power line advocates  and natural gas “frackers”  have drawn a bead on our green mountains and fresh waters?

Citizen journalists,  local advocates and volunteer-run public radio (WJFF-90.5) that’s how.  Sustainable Sullivan, Coalition for a Casino-Free Sullivan,  The Riverkeeper, members of  the Upper Delaware Community, The Towne Crier,  The River Reporter and many others investigated and reported what they believed were threats to our “way of life.”   WJFF ensures we have  multiple community fora for airwave discussions.  (The River Reporter’s current online front page is devoted to  natural gas extraction from shale beds and the resultant designation of the Delaware River as endangered.)

Events over the last few weeks have demonstrated that a news renaissance might be in the offing.   Leni Santoro (former award-winning journalist-editor-photographer  for The Crier) and Beth Quinn are back in the saddle.  Check out Leni’s  Catskill Chronicle and Beth and Friends’  Zest of Orange. CottageWorks is up and running with pages for  referring local workers, freely advertising local events, Swaps & Barters, a Second Hand Shop and for selling and buying locally-produced goods.   The Mamakating Messenger is another source for  local news as is Ellenville’s  Shawangunk Journal.

Most of these  efforts are in their infancy and though we might not agree with  their points of view,  our communities need and deserve a wide-ranging discussion of the forces brought to bear on us whether they originate in China, Washington, D.C., our State Capitols or our Town Boards.

*    *   *   *

Disclaimer:  Liz Bucar is the proprietor  of CottageWorks and holds a longtime bias in favor of the community servants & groups mentioned in this article.  She offers heartfelt apologies to any groups not mentioned.  Hopefully, you’ll contact her so your group, local business and events will be posted in a future article or at one of CottageWorks pages.

Grandparents, The Old Arts and New Ways


Wherever they  lived,  Grandma Marje and Grandpa Amos cultivated the land.  Their organic vegetables, chickens and eggs  sustained their family and neighborhood through the Great Depression. In the 1950s, they came to live with my parents, brother, sister and me.  Soon after, the whole kit and kaboodle packed up and moved to a place with more tillable land.

Together, we grew  enough  organic veggies to feed the east side of Cleveland year-round, re-built the chicken coops, re-wired the farmhouse, dug a new well and harvested  apples, strawberries, cherries and big sweet black caps.

While Mom and Dad worked “real jobs” for money, Grandpa built our beds, wardrobes and china cabinets, ran new electric wiring and plumbed the water pipes running from the well to the faucets.  We ate fish out of the creek and eggs from the hens.  Grandma  baked our bread, crocheted our rag rugs, sewed our clothes and preserved the harvest.  When her fingers were too gnarled with arthritis for needlework,  she spent most Wednesday’s at The Goodwill Store, combing through the bargain bins.

*   *   *

In the spring, with her neck bent far back,  Grandma  stared long and hard at the  black walnut tree.  She was hatching a plan that would harvest every nut the tree could yield.

When  the first frosts of autumn turned their husks green-yellow, I gathered the “tree-fall” nuts in a red wagon and dumped them on drying screens in the garage.  Night after night, the family  crushed and peeled the leathery husks so the shells inside could be dried, cracked and the meat dug out. Our fingers were stained black-green till the New Year.

*   *   *

The snowdrifts were up to Grandpa’s  knees and I was perched on his shoulders as he tramped from the kitchen to the south-facing hill where our cold-frames nested. The frames were constructed of old windows and lumber  rescued from a barn we’d torn down.  Through long afternoons, Grandpa had shown me how to putty the battered  sashes and glaze the old panes.  When finished, the cold-frames were large and tight enough that we  had leafy greens all winter to supplement the carrots, yams, potatoes and onions stored in the root cellar.

It was Gramps’ and my job to clear the cold-frames of snow after a storm  so the sun’s warmth reached through the glass to the lettuce and spinach.  In a few weeks, we’d transplant  seedlings grown indoors, but that morning, as he  tramped through the drifts with me on his shoulders, we were cold and ready for one of Grandma’s breakfasts: fresh bread, eggs  collected before sunrise and strawberry preserves that tasted of the day we’d picked the fruit.

*   *   *

When I (and years later, my children)  jumped off the school bus and ran toward the house,  grandparents waited in the yard. Always, while parents worked at jobs that took them from home, we were greeted by grandparents tilling gardens, planting trees, laying stone, hauling wood, canning vegetables and baking bread.   There was a center to our lives that we could trust, no matter what.

*   *   *

My memories of a family that didn’t make a million dollars but provided itself with much of what it needed from what it  had at hand are at the root of CottageWorks.

As a child, I yearned for store-bought clothes and toys.  Even Grandma, for all her living and baking from scratch, lusted after   Miracle Mix White Bread and chewy Archway cookies.

Today, I want a world where we value our shared labor and take no more than we need. Where money isn’t the only currency and barter is encouraged.  CottageWorks is young but I hope  it becomes a place where we preserve  the old arts and the fruits of our unique labors.

In that spirit, when you have a chance to stop by  CottageWorks,  think  of a skill or trade you can share.  Email me your idea and I’ll bet we can make it happen.  I’m interested in most everything  from jewelry- making to dowsing for water so you’ve got no excuses.

Then,  skip  over to Domesticities & The Cutting Garden.  Email or call Anne and Fritz about the “Story Booth” they’re putting together. Help them build a future that doesn’t neglect the past by recording your memories of the good ole days.

House Financial Services Subcommittee Hearing


Here are high points of the Hearing I found interesting and some of my own thoughts. (Quotation marks are included where statements are actual quotes rather than the “sense” of what was said.)

BARNEY FRANK, Democrat & Financial Services Committee Chairman.   As major stockholders, the US Government should try to recoup $165 million in bonuses by filing  a lawsuit alleging “poor performance” on the part of  bonus recipients.  He also demanded the names of bonus recipients and updates when bonus recipients either return or refuse to return  bonus money. (Although New York’s Attorney General Andrew Cuomo is in receipt of these names, Liddy expressed a need to protect bonus recipients because of  deadly threats made against them and their families.)  (According to  the Center for Responsive Politics,  Frank received $202,548 in contributions from the Insurance Industry.)

OLYMPIA SNOW, (R) Maine.   Offered AIG bailout provisions which would have disallowed most of the oversized bonuses.  (Received $5,000, according to the Center for Responsive Politics.)

CHRISTOPHER  DODD, (D) Connecticut.  Snow’s amendment was (allegedly) struck by  Connecticut’s  Chris Dodd.  How he did it is unclear.  At first, he denied the act.  Subsequently,  he said  he received instructions from Treasury and/or The White House.  Regardless, striking the provision resulted in Congressional approval of bonus contracts entered into before February 11, 2009.  As a result,  165 million taxpayer dollars have been paid to architects of the debacle. Reportedly, Dodd received $852,556 from insurance lobbyists.  (Center for Responsive Politics)

STEPHEN LYNCH, Massachusetts:  “We amend  contracts all the time.  My auto workers were badgered and badgered….  These [AIG] guys lost billions of dollars  and still believe they’re entitled to these bonuses.” (Lynch  received $35,299 according to the Center for Responsive Politics)

PAUL KANJORSKI, Chairman, Financial Services Subcommittee on Capital Markets (D-PA).   Admitted to knowing about the incipient bonus payments  two months  ago and  “warned Liddy that  paying the bonuses would be a  big mistake.”  “You [CEO Edward Liddy] should have told the bonus recipients to ‘sue us.'”  (Kanjorksi did not mention warning anyone else and according to the Center for Responsive Politics, received $345,548 in donations from the insurance industry.)

Joel Ario,  State of Pennsylvania Insurance Commissioner and  Chairperson of the National Association of Insurance Commissioners.  Ario believes that AIG’s toxic holdings could be walled off from its healthy funds-at-large.   (NB:  Therefore, the company at-large could survive if its sick subsidiaries were permitted to fail.) (Also see: [Funny] Side of the [Wall] Street:  Obamanomics.)

Neither the Government Accountability Office (GAO) nor the federal Office of Thrift Supervision (OTS)  have investigated whether AIG fraudulently misrepresented its health and wealth at the time it was creating “retention” and other bonus contracts  “to the tune of $400 + million  with the division that was bleeding to the tune of $40 billion.”

Another committee member asserted, [“The distribution of these bonuses] borders on fraud and criminality.”

According to Scott Polakoff of OTS, his agency knew the risk of the credit default swaps  in 2004 and did nothing to avert the collapse.  OTS did not close AIG’s toxic financial products division even though “the agency had a complete picture and oversight authority” to do so.  Polakoff further stated that “OTS had sufficient  expertise and personnel” but in effect, since Congress didn’t instruct OTS to review the  bonus contracts before AIG’s bailout was approved, the agency didn’t do the research.

Rodney  Clark of Standard & Poor’s (S & P) rating agency was asked,  “How can we depend on you and were mistakes made?”  Clark answered, “Hindsight being 20-20…, our conclusions [of AIG’s solvent value]  changed rapidly once the market started to collapse.  Market values are important as a guideline.  We could not understand  how quickly the value of mortgage backed securities would decline….  (NB:  On what basis, then,  did S & P  justify its AA-  rating until  September 15, 2008 if ?)  S & P hedged its bets. Ratings are based on current value and  give prospective investors a factual basis for predicting future performance.)  Clark  went on to say,   “In 2008, excluding  investment losses,  AIG would’ve been profitable.”

Really?  Does that mean S&P didn’t see the looming  losses or didn’t consider them relevant to the total value of the company?  (See: Ratings Agencies falsify reports or search CSPAN’s  archives for quotes from ratings agents who knew full-well that the mortgage-backed securities were toxic but provided healthy ratings because…that was the outcome corporations paid them to obtain.  (See:  previously-cited statement from Joel Ario.)

Edward LIDDY,  AIG insurance Chairman & CEO (temporarily appointed  in 2008 to detoxify AIG).   Prior to Mr. Liddy  taking his witness  seat,  he was stopped by  “pink lady demonstrators” who questioned him (in part) about  consequences to returning war veterans whose savings were invested  with AIG.  If he answered, it wasn’t televised.

He did tell us that the risk to AIG was unacceptably high if we did not pay the $165 million in bonuses. “It was my determination,” he said, “that AIG-FP would unravel if employees weren’t retained to wind down the projects they were working on.  Which they did.  They’ve reduced $2.7 trillion in toxic assets to $1.6 trillion.  It’s my intention to reduce those debts, sell AIG’s insurance companies and strengthen the healthy portions of our business.  If we don’t pay our debts, that triggers bankruptcy. I’ve asked AIG-FP (financial product) employees to return a portion  of the bonuses.   Believe me, I wouldn’t have approved the contracts if I’d been CEO  at the time they were  created.”

Liddy further asserted that Federal Reserve Chairman Ben Bernanke acquiesced to the  payment of retention bonuses.

“We didn’t tell Congress because nobody told us to,” Liddy explained.  “We’re partners with the Federal Reserve. They participate in  activities leading up to board meetings and they attend board meetings. I asked if they had comments  or different points of view as far as bonuses and everything else.  The Federal Reserve  did  not  disagree with our assessment that AIG-FN was at risk of jeopardizing the monies already given if we didn’t pay the bonuses. We were told by our attorneys that the contracts were unbreakable.  I assumed they shared  with Treasury and Congress information they gained from us.  The Secretary of the treasury did not know we were going to make the [bonus] payments though the Federal Reserve did.  It’s  up to the Federal Reserve to  discuss”  salient issues with the Secretary of the Treasury.

Later,  Treasury Secretary Timothy Geithner said he didn’t know about the bonus contracts until two weeks ago.

Countering assertions of possible fraud, Liddy said he believes,  “AIG was solvent when the retention contracts were drawn.”   (On what factual basis did he develop this assessment?  Or,  is he just repeating assessments  from ratings agencies which regurgitated AIG’s own corporate projections?  Isn’t that the same self-quoting claptrap that got us into Iraq?)

Liddy  continued,  “AIG has problems besides the mortgage-backed securities. There’s oil accounts and other  utilities in trouble.” (This appears to contradict his assertions of fundamental solvency.)

ED PERLMUTTER, Committee Member.  “There’s a whole fraud concept that says ya’ can’t be handing out bonuses when you’re insolvent.  I don’t think these bonuses should have been paid.”

Some legal issues, AIG’s Employee Retention Plan and relevant case and statutory findings.

Currently, some members of Congress are promoting tax legislation which would target bonuses paid by corporations that received stipulated bailout funds. Their idea is to re-appropriate the funds already disbursed. (There is every reason to believe such targeting is unconstitutional.  Seeing as how Congress writes the laws and  has more than its fair share of attorneys,  you’d think they’d know that.)

AIG-FP 2008  Employee Retention Plan, effective December 1, 2007

(Importantly, there is no signing date on the Retention Plan although it specifically covers 2008 and 2009.)  According to CEO Liddy’s Executive Summary of the retention plan in which he discusses the bonuses,  “The plan was implemented because there was a significant risk  of departures among employees at AIGFP, and given the $2.7 trillion of derivative positions at AIGFP at that time, retention incentives appeared to be in the best interest of all of AIG’s stakeholders…. This resulted in a $313 million total for 2008 and a $327 million total for 2009… The 2008 awards range from $1,000 to slightly less that $6.5 million.  Only seven employees will receive more than $3 million…. The retention plan is governed by Connecticut Wage Act.  (Section 4.04)”   (NB:  The law provides for the recovery of double damages and attorneys’ fees when wages are improperly withheld and the employer’s refusal to pay wages lack a good faith basis. Conn. Gen. Stat  sections 31-72.)  “In addition,”  states Liddy, “individual managers who decide to withhold wages that are due are individually liable for violation of the Wage Act…We have been advised that the bonus provisions of the American Recovery  and Reinvestment Act of 2009 prohibiting certain bonuses specifically exclude bonuses paid pursuant to pre-February 11, 2009 employment contracts.”  (Apparently, this is the  alleged  “Dodd Provision.”)

NB: The definition of “executive employee”  rests largely on whether an employee is salaried, is required to exercise personal discretion in performance of duties,  earns in excess of certain dollar amounts and has (usually) some supervisory responsibilities.

According to the Connecticut Wage Statute (sec. 31-71(e).  “No employer may withhold or divert any portion of an employee’s wages unless (1) the employer is required or empowered to do so by state or federal law and  (i) “Wage” means compensation due to an employee by reason of his employment.  (Italics added for emphasis.)

Liddy’s  Executive Summary referenced Schoonmaker v Lawrence Brunoli, Inc. 828 A.2d64 (Conn.2003). Schoonmaker established that double damages could be paid when salaries are withheld for reasons of  “bad faith, arbitrariness or unreasonableness.”

The courts have also established that, “Punitive damages may be awarded in suits in which it is proven by clear and convincing evidence that the defendant’s [employer’s] actions showed willful misconduct, malice, fraud, wantonness, oppression or [lack of care] which would raise the presumption of conscious indifference to consequences. Under O.C.G.A. 51-12-5.1(b), it remains the rule that something more than the mere commission of a tort is always required for punitive damages. There must be certain circumstances of aggravation or of outrage.”

New York’s Attorney General Andrew Cuomo may attempt to use the Fraudulent Conveyance Act to recover the bonuses.

In order to pursue Fraud charges, “… the misrepresentation [or omission] must be made knowingly and intentionally, not as a result of mistake or accident; that is, that the person either knew or should have known of the falsity of the misrepresentation [or the false effect of the omission], or that he made the misrepresentation [or omission] in negligent disregard of its truth or falsity.

NB:  Under the Bankruptcy Code, insolvency exists when the sum of the debtor’s debts exceeds the fair value of the debtor’s property, with some exceptions. It is a balance sheet test. 11 USC § 101(32)

18 USC CHAPTER 47 § 1031 concerns  “major fraud against the United States”  and  is another  statute being considered by  New York State’s Attorney General Cuomo. It  provides  the following:

(a) Whoever knowingly executes, or attempts to execute, any scheme or artifice with the intent-

(1) to defraud the United States; or

(2) to obtain money or property by means of false or fraudulent pretenses, representations, or promises.

Therefore, the two most important facts to ascertain  are,  “What was AIG’s actual state of solvency when the bonuses were contracted and did its officers misrepresent that state?”

More Answers Needed:

Which Congress people  received campaign finances from AIG and other financial corporations?  How much did they receive? How did those congress people vote or speak on salient congressional  actions?  (You can find some of the answers at  the Center for Responsive Politics and RollCall.  Feel free to vote accordingly in upcoming elections.)

At the time of AIG’s bailout or request for a bailout, what was the corporation’s actual worth?

Was the United States coerced by fear and intimidation into awarding bailout funds?

Besides Christopher Dodd, who was involved in exempting bonuses agreed to before February 11, 2009?   To  what extent were Treasury and The White House involved?

As always, you can view the hearings at CSPAN.

[F]unny side of the [Wall] Street: Obamanomics

In the spirit of Jon Stewart, “Let’s just cut out the middle man.” If President Obama is serious about “changing how we do business,” then he needs to roll out something better than his new version of Reaganomics.


Imagine  you’re the on-duty emergency room (ER) nurse in a small country hospital.  Your resources are severely limited by high unemployment and a health insurance crisis.

A healthy snowboarder hobbles in with a broken leg and dislocated shoulder.

You start a prophylactic IV drip of normal saline, pain killers  and antibiotics to protect the snowboarder from dehydration, pain and infection.

In a corner of the emergency room is a bloated near-corpse in systemic organ failure. His liver’s shot.  His heart’s all but stopped.  The smell of his rot and disease are spreading out of the ER, down the corridors and into the rooms of recuperating patients.

Emergency room protocol requires you to infuse the snowboarder’s  IV solution through the bloated near-corpse middle man first, rather than  into the snowboarder’s arm directly.

Proponents of this bassackward policy say that if the gas in the bloated guy explodes, it’ll jeopardize everyone in the hospital so we have to treat him with the best of the drugs and hope enough benefit reaches the snowboarder to prevent her relatively minor injuries from becoming a systemic threat.  If you’re the cynical type, you might think  the nearly-dead guy’s membership on the hospital’s Board of Directors is significant, too.

Whatever the reason for  the policy, the outcome is assured:  the bloated near-corpse will drain  your few precious resources on its way to the morgue and the healthy patient will die of preventable consequences.

In the spirit of Jon Stewart,  “Let’s just cut out the middle man.”  Break with protocol and centuries of obsolete thinking. Infuse the snowboarder directly. She’s going into shock.  Microbes are chewing on her broken, exposed bone. It’s a matter of basic triage:  apply your resources where they will do the most good as you asses each situation  uniquely, dispassionately and quickly.

The snowboarder (like most of our  neighbors) will heal quickly and be ready to continue her education,  develop new products, create new markets  and in general, become the new economic engine.  She’ll be rebuilding our nation while the rotting AIG-Goldman Sachs-Citi-Bank of America-corpse that’s poisoning us all is buried quietly in the background.

Stimulate acutely-ill  borrowers with a direct infusion of debt-cancelling cash that can be paid by them  to their ORIGINATING lenders.   The funds will or won’t trickle UP to the bloated entities who bought and bundled the  stinky credit card and mortgage loans.  Those who are too-big-to-fail will collapse if the funds can’t  find their way through the maze of intermediaries.  But, by  excising the corpse and caring directly for our fundamentally healthy neighbors, we can mitigate the effects of this new shift in focus and purpose.

The “mortgage-crisis” isn’t the root of our problems.  And our continued reliance on a rotting corpse to rescue the future may not be the cause of our problems, but it’s certainly proximate.  If President Obama is serious about “changing how we do business,”  then he needs to roll out something better than his new version of  Reaganomics.

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NEXT:  Tell-tale quotes from this week’s House Financial Services Subcommittee Hearing.