Right-Wing Lobbying Group Designated a Church by IRS

The Daily Escape:

Sunrise, high tide, Sea Street beach, East Dennis, MA – July 2022 photo by Bob Amaral Photography

The fallout from the Trump years continues. On Monday, ProPublica reported that the IRS had decided that the Family Research Council (FRC), a Right-Wing political lobbying group, qualifies as a church for tax purposes:

“The Family Research Council’s multimillion-dollar headquarters sit on G Street in Washington, DC, just steps from the US Capitol and the White House, a spot ideally situated for its work as a right-wing policy think tank and political pressure group.”

The FRC is now a church, thanks to the IRS and its Commissioner, Charles Rettig. You can be forgiven for not remembering that Trump appointed Rettig to be Commissioner of the IRS in 2018. He got the job by writing a 2016 op-ed saying Trump didn’t have to release his tax returns, despite every major presidential candidate having done so since Nixon.

ProPublica noted that the FRC says on its website that it is a:

“…nonprofit research and educational organization dedicated to articulating and advancing a family-centered philosophy of public life. In addition to providing policy research and analysis….[the] FRC seeks to inform the news media, the academic community, business leaders, and the general public about family issues that affect the nation from a biblical worldview.”

Now that the IRS has blessed FRC as a church, it is no longer required to file a public tax return, (known as a Form 990), which reveals key salaries, the names of board members and related organizations, large payments and/or grants by the organization.

And unlike with charities, IRS investigators can’t initiate an audit on a church unless a high-level Treasury Department official has approved the investigation.

Right Wing Watch, an organization that monitors the activities and rhetoric of right-wing activists and organizations reported on the ties between FRC and Trump’s Jan. 6 effort to overturn the presidential election:

“The Family Research Council…was deeply involved in…Trump’s efforts to overturn the results of the 2020 election—a fact made all the more apparent by revelations during the June 23 public hearing of the House select committee investigating the conspiracy that led to the Jan. 6, 2021, insurrection at the US Capitol.”

You probably remember the head of the FRC, Tony Perkins (not the deceased actor) by some of his grandstanding in the culture wars:

  • In 2005, Perkins was against disconnecting life support for Terri Schiavo, a woman who had been in a “persistent vegetative state” for a number of years.
  • In 2008, Perkins called the passage of California Proposition 8 (which prohibited same sex marriage in the state) “more important than the presidential election”.
  • In 2018, Perkins said, regarding Trump’s adulterous past, he should be given a “Mulligan“, because Trump was “providing the leadership we need at this time…”

In 2010, The Southern Poverty Law Center (SPLC) designated the FRC as a hate group. From the SPLC:

“Part of FRC’s strategy is to pound home the false claim that LGBTQ people are more likely to sexually abuse children than heterosexual people. The American Psychological Association, among others, however, has concluded that “homosexual men are not more likely to sexually abuse children than heterosexual men are.”

Designating the FRC as a church for tax purposes is part of a disturbing trend. The WaPo reported in 2020 about the growing list of religious groups seeking church status from the IRS.

The potential cost of becoming a church is that the organization can no longer conduct political operations on behalf of politicians or lobby on legislation. In practice, that is simple to get around. The FRC now has its church arm alongside a separate lobbying arm called Family Research Council Action.

The arms separate their messaging on two websites, with the FRC hosting issues-based content supporting its Christian worldview while the Family Research Council Action explicitly endorses candidates. Both arms are registered at the same address and both share all five of the part-time employees the FRC lists on its tax form, including Tony Perkins.

These “churches” sure have figured out how to run a scam on the US government.

It’s past time for the IRS to end this charade and tax churches. Biden should fire IRS Commissioner Rettig, who was also the guy in charge when the IRS politically targeted Trump “enemies” James Comey and Andrew McCabe for invasive tax audits.

These people and their “churches” are simply Republicans with a talent for abusing the bible and raising obscene amounts of money. Thomas Jefferson said it best:

“In every country and in every age, the priest has been hostile to liberty. He is always in alliance with the despot, abetting his abuses in return for protection to his own.”

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Sunday Cartoon Blogging – June 26, 2022

(New columns will be light and variable for the next week, since Wrongo and Ms. Right are attending grandson Conor’s wedding in NC. Regular programming will resume on July 6.)

We’re not talking about the Supreme Court or the J6 news this morning. We’ll leave that for the cartoons below. Instead, let’s focus on an enlightening article from Curbed: “Hoboken Hasn’t Had a Traffic Death in Four Years. What’s It Doing Right?”:

“Hoboken feels downright roomy. Wander down the wide, busy sidewalks of Washington Street, the city’s main strip…and one thing becomes clear….A pedestrian doesn’t have to play the…perilous game of New York City crosswalk chicken, where you squint through the windows of a massive metal box to catch a glimpse of another speeding metal box whose driver doesn’t see you.”

More:

“Few drivers park next to crosswalks in Hoboken because they can’t. Those spots are blocked off with bike racks or planters or storm drains or extra sidewalk space for pedestrians or vertical plastic pylons that deter all but the boldest delivery-truck drivers. Stand at a corner, and you can see what is coming toward you, and drivers can see you too, and you don’t have to step out into the road and risk your life to do it.”

This concept is called Vision Zero, a strategy that municipalities across the US and abroad have adopted that seeks to alter traffic and engage pedestrians to lessen the severity of accidents. In total, Hoboken has had three traffic fatalities since 2015.

As Hoboken’s streets get safer, the rest of America is getting less safe. Traffic fatalities in NYC were up 44% percent in the first quarter of 2022. Hoboken has empowered it’s pedestrians and every corner makes it clear they have the right of way. Hoboken’s streak of zero fatalities could end at any time, and eventually will, but that’s no reason for other cities and towns not to enable similar change. On to cartoons.

Somebody should remind the Conservative ideologue Justices that America is a multi-belief country:

It’s on the ballot in November:

Clarence rewrites the 2nd Amendment:

Now concealed carry has multiple meanings:

The scales of justice get a Conservative makeover:

The J6 hearings have inspired criticism from Texas. The late Molly Ivins referred to Texas as the “national laboratory for bad government”:

Uvalde ,TX failures give new meaning to an old idea:

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Normalizing Violence Will End Democracy

The Daily Escape:

Bodie Island Lighthouse, Nags Head, NC – June 2022 photo by Jordan Hill Photography

America’s in a dark period, and it’s becoming increasingly difficult to see how we can come out of it.

Writing in Foreign Affairs, Steven Levitsky and Lucan Way say:

“The Republican Party…has radicalized into an extremist, antidemocratic force that imperils the US constitutional order. The United States isn’t headed toward Russian – or Hungarian-style autocracy…but something else: a period of protracted regime instability, marked by repeated constitutional crises, heightened political violence, and possibly, periods of authoritarian rule.”

They say we’re heading into a period of protracted instability. They aren’t saying we face a civil war. It’s more subtle: a future of intermittent armed conflict, something like “The Troubles” in Ireland.

You’ve probably seen the campaign ad by Missouri Republican Senate candidate Eric Greitens, where he struts into a home after some camo-clad associates have broken in, saying their purpose is “RINO hunting”. After the team busts into the house, Greitens walks in through a cloud of smoke and says:

“Join the MAGA crew. Get a RINO hunting permit. There’s no bagging limit, no tagging limit, and it doesn’t expire until we save our country.”

Hunting down one’s political enemies with guns hasn’t been the American way, but it sure is becoming so now. It’s only a matter of time before racial, sexuality and politically-based violence occurs at scale in America. The Brennan Center found that 17% of America’s local election officials have been threatened during the 2020 election cycle. There’s a growing domestic terror threat to civil servants.

But it was only two weeks ago that Republicans found it easy to have moral clarity when authorities arrested a man and charged him with the attempted murder of Supreme Court Justice Brett Kavanaugh. The suspect turned himself in before anything happened. However, Republicans were outraged and questioned why Biden and other Democrats did not condemn what happened.

Candidates say outrageous things all the time in the heat of the moment and lately, hitting below the belt is often rewarded. But that is a far cry from a call to hunt down your political enemies in order to “save the country.”

The GOP is normalizing violence, and it became clear after the Republican response to J6. From Robert Hubbell:

“The Republican National Committee described the events of January 6th as ‘legitimate political discourse.’ Georgia Rep. Andrew Clyde said that video of the attack on the Capitol looked like ‘a normal tourist visit.’ Mike Pence, whom rioters wanted to hang, said on Monday that Democrats were using the January 6th hearings ‘to distract attention.’”

Republicans try pretending that they have no idea what’s happening (“I haven’t seen the ad, so I cannot comment”). But the right thing is to take the risk that someone will yell at them on Facebook and Twitter and condemn it by saying loud and clear, “This isn’t the way for a candidate to conduct himself.”

Unless Republicans change their act, the normalization of violence will move toward its logical conclusion — election officials and politicians will be wounded or killed by someone who believes that violence is a legitimate political tool.

GOP candidates are posting ads about killing us in our homes. The Texas state GOP party wrote a campaign platform calling for the repeal the Voting Rights Act of 1965, and seceding from the US, while saying that gay people should get back in the closet. They passed a resolution declaring that Biden’s election was illegitimate.

This is the platform of the governing party of the nation’s second largest state, and no non-Texas Republican has complained.

Pundits keep saying that Democrats have no chance in the 2022 mid-terms because of Biden’s low approval ratings. Wrongo has repeatedly said that there are “persuadable” voters who can be reached before the Fall. Proof of that is in the 6-point increase in public support for indicting Trump since the start of the J6 hearings.

If pundits argue that Biden’s unpopularity will affect the 2022 races despite Biden’s absence from the ballot, they must also agree that other issues not on the ballot— the J6 conspiracy, the Supreme Court abortion decision, Texas secession, and yes inflation, will also affect the 2022 races.

The 2022 election (not the 2024) will determine our future. Will people vote this Fall based on the price of gas? Or the threat of a recession? Or, will they understand that there’s a real possibility that democracy as we know it in the US could vanish?

Democracy is what’s on the ballot in 2022. Inflation comes and goes. Recessions come and go. If we lose our democracy, it won’t be returning any time soon.

Americans understand democracy. They’ve fought and died for it. Dems can make voters see that democracy is on the ballot this year, while inflation and other issues sadly need to take a back seat.

Let’s not make the mistake of selling Americans short. Democracy is more important than our pocketbooks. People will vote for democracy.

The slogan should be “Vote Democratic And Save Democracy”.

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Sunday Cartoon Blogging – June 19, 2022

Today is Juneteenth. It’s now a federal holiday. Here in the most Conservative corner of Connecticut, the town hall will be closed on Monday, even though Juneteenth doesn’t become an official state holiday in Connecticut until next year.

Data from Google Trends about Connecticut’s interest in searching for the word “Juneteenth” shows the holiday barely registered as a search term before 2020. In 2019, Google Trends rated “Juneteenth” only a 9 out of 100 on the interest scale in Connecticut. During the same period in 2020, the value grew to 72. In 2021, it reached 100, meaning “peak popularity” for the term. On to cartoons.

It will be years before most people observe Juneteenth:

What do we care about?

Gas prices are cutting into Trump’s profits:

The J6 hearings provided insight into Trump’s amorality:

So, why do Republicans stay with him?

While Ginni’s giving Clarence some of her Kool-Aid every day:

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Thoughts On The Select Committee Hearings

The Daily Escape:

Sunset, Scripps Pier, La Jolla, CA – June 2022 photo by Paul Folk

Wrongo and Ms. Right watched all of the J6 Committee’s Public Hearing on Monday, and the final few minutes of the first hearing last Thursday.

These aren’t hearings so much as they are public presentations of the Committee’s investigation to date.

And for that we should be thankful, since there are no long opening statements designed to fluff up a Congress critter’s Twitter account. These “hearings” are designed to reach Americans who no longer watch network news, read newspapers, or otherwise spend more than a few moments to learn about what is going on politically.

We’re seeing a fast-paced and compelling prosecutorial case being made, almost exclusively by Republicans, many of whom were close to Trump’s White House. But, as Tom Sullivan points out: (emphasis by Wrongo)

“As refreshing as it is to see Democrats assembling a public accounting of the events surrounding the Jan. 6 insurrection, an accounting is not the same as holding people accountable.”

We’ve seen sworn statements by senior Trump associates who back in 2020, were in a position to have blown the whistle on the coup plot. Now, they’re attempting to wash their hands of responsibility for the Big Lie. They’re finally willing to speak under oath, in order to launder their reputations. For example, Bill Barr’s hand-washing is rich. Don’t forget that for months he carried Trump’s water by peddling the lie that mail-in balloting was rife with corruption.

Two thoughts:

First, the Select Committee may be the public face, but the DOJ has the final word on whether what we’re seeing is high-level criminality by Trump or his White House enablers. What the House Select Committee CAN do is to create a political environment where it’s possible for the DOJ to indict, prosecute, and win convictions against Trump and his key allies.

And even if the DOJ accomplishes all of that, it won’t wipe away the fact that a significant minority of US voters are just fine with an authoritarian dictatorship, as long as it’s the dictator who they believe will act against their political and cultural enemies. An analysis by WaPo reveals just how pervasive Trump’s Big Lie has become within the GOP: More than 100 GOP primary winners back Trump’s stolen election claim.

Second, Democrats seem to think that they will turn back the tide of Trumpian fascism simply by exposing the truth. The NYT’s Jamelle Bouie calls out the Dem’s leadership gerontocracy that seemingly are no longer able to meet this moment. Bouie argues that they don’t even see the moment:

“What’s missing from party leaders, an absence that is endlessly frustrating to younger liberals, is any sense of urgency and crisis — any sense that our system is on the brink. Despite mounting threats to the right to vote, the right to an abortion and the ability of the federal government to act proactively in the public interest, senior Democrats continue to act as if American politics is back to business as usual.”

Most of the senior Democratic leadership are, like Wrongo, members of the Silent Generation. Most of them are financially secure. They all have the same corporate relationships as do the Republicans. Most will die before they have to face the consequences of their feeble opposition to Republican extremism.

It’s been clear at least since Obama’s second term that the Dem’s leadership has lost the will to stand up and/or fight. And after years of Americans facing one crisis after another with little progress, they need to be replaced by younger leaders with stiffer spines, with a passion for social justice and democracy.

From Martin Longman:

“One reason this is important is because there’s no guarantee that the Establishment will prove more popular at the ballot box than fascism.”

These Democratic Party elders came into national politics in a time of bipartisan consensus and centrist policymaking, a time when the Parties were less ideological and more geographically varied.

American politics since then has returned to what was an earlier state of division, partisanship, and fierce electoral competition. The authoritarianism on display in the Republican Party has antecedents in the behavior of Southern political elites in the 19th century. It has been a part of the GOP since the New Deal.

Millions of Democrats see that American politics has changed in profound ways since the 1990s. They want their leaders to act, (and react) decisively to the gridlock and growing lack of social cohesion, and how both threaten our country.

In a democracy, the voters get what they ask for. If they want candidates who will take away their freedom to choose their leaders, then it will be up to courts to try to save democracy. But we shouldn’t let it get to that.

We must prosecute people who have attempted insurrection and/or sedition. That includes the Trump administration’s crimes against the US government and the Constitution.

This is our only available remedy, and even if it it’s pursued, it may not be enough.

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Monday Wake Up Call – June 13, 2022

The Daily Escape:

Sunset, Safety Harbor, FL – June 2022 photo by Jacqueline Faust Photography

A new study by the Institute for Research and Education on Human Rights (IREHR) shows that 875 state lawmakers (11.85% of all state lawmakers in the USA) representing all 50 states, have been engaging with far-right Facebook groups:

“After insurrectionists tried to overthrow the presidential election on January 6, 2021….Several state legislators took part in state-level efforts to undermine the results of the 2020 election.…Forty-eight state and local officials, including ten sitting state lawmakers, were outed as members of the far-right paramilitary group, the Oath Keepers.…”

IREHR has identified 789 different far-right Facebook groups, ranging from militia and sovereign citizen groups, antisemitic conspiracy groups, militant COVID Denial groups, Stop the Steal groups, and others:

“These 789 groups were joined 2,115 times by the 875 legislators identified in this report, an average of 2.4 groups per legislator. Some legislators are members of as many as 24 different groups.”

When will we decide that Facebook must be reined in? This is a clear sign that extremism is making its way into elected office everywhere in the country. And that extremism is thriving due to the role played by the internet and social media.

But this didn’t all begin with Jan. 6. We’re dealing with a challenge that began 60+ years ago with a group we rarely hear about, the John Birch Society (JBS). From James Mann in the NY Review of Books:

“The John Birch Society may be little remembered today, but in its time it had a dues-paying membership of at least 30,000, a staff of 240 people, and more than 400 bookstores across the US.”

The JBS was founded by Robert Welch in 1958, along with a group of 11 conservative business leaders. They had been complaining that America was moving toward socialism and that President Eisenhower, the first Republican president in a quarter-century, was doing little to reverse the drift. But the JBS went further than earlier anti-New Deal activists. They portrayed them as the result of foreign conspiracies.

Mann, reviewing Edward H. Miller’s new biography of Welch, A Conspiratorial Life, says that many of the issues, themes, and causes the Birchers seized upon six decades ago are still alive and well on America’s political right today.

Welch complained that department stores didn’t have enough “Merry Christmas” decorations, saying that they were trying to take Christ out of the holiday. The Birch Society called for defending the police against charges of brutality. They opposed water fluoridation with the same fervor as today’s anti-vaxxers. They vigorously fought efforts at gun control, which they said was a preliminary step for confiscation of guns and a Communist takeover of the US.

Sound familiar?

Birchers opposed FDR’s New Deal reforms. Mann says that when Nixon signed into law the Occupational Safety and Health Administration, Welch called it “the worst piece of tyranny ever imposed on any people by any government.”

Maybe a bit over the top? They opposed the Brown v. Board of Education decision integrating US public schools. Welch wrote about Brown:

“The storm over integration….has been brought on by the Communists.”

Welch also enlisted doctors who were opposed to the establishment of Medicare and Medicaid in 1965. His conspiracy theories suggested either that Communists had orchestrated these changes in American society, or that the changes were themselves a form of creeping communism.

For the Birchers, “communism” became a term used to smear liberalism and Democrats. Doesn’t this sound familiar 64 years later? For example, Trump spokesperson Liz Harrington said this on Friday about the J6 Committee:

“This is a communist committee that has shown that there’s nothing they won’t do.”

Much like Trump’s base, the Birchers refused to acknowledge the legitimacy of political opposition, suggesting that those who disagreed with them were acting in bad faith, or were part of a conspiracy. And like Trumpists, Birchers had considerable influence upon Republican politics. Republican politicians worried about alienating the Birchers in much the same way that Republicans today worry about running afoul of Trump.

Back then, Republicans used the same type of evasion as do today’s Republicans. Barry Goldwater called the Birchers “the finest people in my community” and said they were “the kind [of people] we need in politics”, something very much like when Trump said that there were “very fine people on both sides” after the 2017 riots by neo-Nazis and white supremacists in Charlottesville, Virginia.

Time to wake up America! In many ways, J6 was the coming-out party for a new coalition of far-right groups, aimed, as was the John Birch Society, at undermining our democracy.

To help you wake up, listen to U2 and Mary J. Blige perform “One”, their song about the search for unity. We featured a 1997 version of this tune in 2021, and this one is from 2009:

Bono told the BBC:

“The concept of oneness is of course an impossible ask….Maybe the song works because it doesn’t call for unity. It presents us as being bound to others whether we like it or not. ‘We get to carry each other’ – not ‘We’ve got to carry each other’.“

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How Democrats Should Message The Midterms

The Daily Escape:

Sunset along the Last Dollar Road (from Telluride to Ouray), CO – photo by Rich Briggs Photography

Democrats are messaging like mad about the Jan. 6 attempted coup public hearings that start tomorrow. The NYT is asking whether the “Jan. 6 Hearings Give Democrats a Chance to Recast Midterm Message.”

The NYT thinks the real question is whether the “message” of the Jan. 6 hearings will “resonate” with voters. We know that the Republicans now deny that Jan.6 was an attempted coup. We know that the Big Lie, the Great Replacement Theory, and the idea of the Second Amendment uber alles, are mainstream views of the GOP. The Times shouldn’t be covering the mid-terms and the hearings as if they are sporting events – the future of the American experiment is on the line.

Along the way to becoming a Party that totally supports violence, for years, Republicans have been a Party of Senators who do nothing to solve America’s problems.

And it isn’t simply their position on government spending. Once upon a time, Wrongo considered Republican concerns about government spending and budget deficits a serious viewpoint. But since they give tax cuts to the wealthy and to corporations whenever they’re in power, they have lost all credibility on spending.

Under Republican rule, the US left the international consortium to blunt climate change. They walked away from an Iran nuclear deal that leaves the world in a much less safe place. They politicized the pandemic and mocked efforts by public health officials to prevent Covid from becoming the endemic disease it is today.

Going back five decades, they steadfastly opposed national health insurance for the millions of Americans who had none. Their opposition continued by causing the Clinton plan for health insurance to crash on takeoff. Republicans fought the ACA during the Obama administration, although it passed without a single Republican vote in 2010. They fought to overturn it throughout the Trump years.

Today, the Senate is in a position to act on multiple measures, including gun control, that would improve the lives of millions of Americans. They could vote tomorrow. But they won’t because neither Party can muster a filibuster-proof majority in the Senate.

The 2022 mid-terms provide a moment for all Americans, including Democrats, Independents, and a few Republicans to do some serious soul searching. They need to answer the question: Do you want a government that does nothing or a government that tries to solve problems?

Do you want to elect representatives who despise government, or do you want men and women who bring informed views and respect for our Constitutional democracy to the House and Senate?

Wrongo was in high school when the book “Profiles in Courage” came out. It was ghost-written for then-Senator John Kennedy (the original JFK, not the current empty suit from Louisiana). The book profiles Senators who defied the opinions of their Party (and constituents) to do what they felt was right. Most of them suffered severe criticism and losses in popularity because of their actions.

Today, no one expects to see a Senator of either Party act solely on the basis of moral courage. It is a terrible shame that it takes more courage for a politician to say or do the right thing than they can muster.

But there’s no public mandate for do-nothingism. And the structure of the Senate empowers a minority who doesn’t want anything to get done. When legislators refuse to legislate, they’re telling the American people that they couldn’t care less about urgent issues like gun violence, fair wages or voting rights.

They’re happy to sit on their hands despite Americans needing their help.

This is anti-democratic. If there was strong public support for do-nothingism, at least our governing institutions would reflect public opinion. But the Senate doesn’t reflect what the public wants.

The Senate has changed drastically since its “Profiles in Courage” days. It was conceived as the body that would cool the passions of the House and consider legislation with a national perspective. But today, the Senate has become a body that shuns debate, avoids legislative give-and-take, proceeds glacially, producing next to nothing.

Wrongo worries that in the mid-terms, Democrats will run mainly against the Big Lie, and their sparse record of legislative achievements. They should run against the “Do Nothing Republicans” in the Senate.

The Democratic Party is more diverse ideologically than the Republicans. This is a messaging challenge for them. The Republican’s coalition is narrower. It’s more ideologically homogenous. Given the Senate’s skewed geography, Republicans need only appeal to their base and little else, to succeed. That allows them to use simpler messages.

In “The Cause, The American Revolution and its Discontents, 1773-1783” by Joseph Ellis, he says that before the revolution, colonists didn’t think of themselves as Americans. They described their fight for independence as “The Cause”, an ambiguous term that covered diverse ideas and multiple viewpoints. It succeeded in unifying them against the British.

Running against “Do Nothing” Republicans would also use an ambiguous term covering multiple viewpoints. It would allow Democrats to move away from the idea that they have to sell a wider array of ideas to a wider group of voters.

It might also energize both Dems and Independents at a time when they are dispirited.

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J&J’s Texas Two-Step

The Daily Escape:

Wallowa Lake near Joseph, OR – May 2022 photo by Danny J Goff

From Judd Legum:

“Nearly 40,000 lawsuits have been filed against Johnson & Johnson (J&J), alleging that the company’s baby powder causes cancer. The lawsuits claim that customers became sick with mesothelioma or ovarian cancer after being exposed to asbestos contained in talcum powder.”

In July 2018, a Missouri jury awarded $4.7 billion in damages to 22 women who said they contracted ovarian cancer from J&J baby powder. According to judge Rex Burlison, J&J:

“…knew of the presence of asbestos in products that they knowingly targeted for sale to mothers and babies, knew of the damage their products caused, and misrepresented the safety of these products for decades.”

Obviously J&J appealed, and an appeals court reduced the verdict to $2 billion. J&J wasn’t satisfied and further appealed the verdict, ultimately to the US Supreme Court. In June 2021, however, the Supremes refused to hear the case, letting the $2 billion award stand.

J&J had no interest in bankruptcy, but came up with another strategy to protect most of its assets from the current and any future judgements. In July 2021, the company launched “Project Pluto,” in which J&J would create a new subsidiary, LTL Management, which would “own” the liability for the baby powder litigation. It also would receive about $2 billion in cash. LTL would then declare bankruptcy.

More from Judd Legum:

“J&J is attempting to exploit a 1989 Texas law, deploying a legal maneuver known as the “Texas two-step.” J&J temporarily became a Texas company and then executed a “divisive” merger. The move split J&J into two new companies: one with almost all of the assets and no baby powder liability and another with all of the baby powder liability and few assets.” The latter almost immediately filed for Chapter 11 bankruptcy.

More:

“By filing for bankruptcy, all civil litigation against LTL Management is immediately halted. The claimants no longer have the ability to have their claims heard in court. Instead, if the scheme is successful, all claimants have to split up a limited pool of assets defined by J&J.”

That’s the “Texas Two-Step.” You may remember that in 2021, the NRA had requested to be reincorporated in Texas when it filed for bankruptcy, a move hailed by Texas governor Gregg Abbott. It would also have led to splitting the NRA into two companies, with the liability in the new firm. That effort failed when a Texas judge wouldn’t allow the move without the approval of New York State, something NYS wouldn’t do.

It’s possible in every state to split a company’s assets and liabilities through a spin-off, and spin-offs have often been used to fraudulently transfer assets that might be part of a bankruptcy. The Two-Step exploits a quirk of Texas law, which defines “merger” as including not just two companies merging into one, but also the exact opposite, when a company divides into two or more entities.

Texas and Delaware are the two states that allow for such “divisive” mergers. This type of “merger” avoids what in bankruptcy circles is called a “fraudulent transfer” of assets, assets that should by rights be considered a part of the bankruptcy estate to be divided among the firm’s creditors.

The deemed lack of an asset transfer is what makes the Texas Two-Step unique and interesting to J&J.

The Senate Judiciary Subcommittee on Federal Courts, Oversight, Agency Action, and Federal Rights, led by Sen. Sheldon Whitehouse (D-RI), is looking into the legality of the Texas Two-step:

“It does not make sense for a $450 billion corporation with 38,000 people with potentially lethal injuries to be able to carve off $2 billion…and walk away from the responsibility for what it did.”

We’ll see what becomes of the lawsuits against J&J and the LTL Management company.

More broadly, this shows we need to substantially strengthen the US bankruptcy fraudulent transfer laws. Unfortunately, that’s a political fight between the capitalist wolves and the consumer lambs, with all the best lawyers on the side of the wolves. For example, J&J has retained Neal Katyal, former Acting US Solicitor General under Obama to help with their liability carve-out. Katyal is earning $2,465/hour while working for J&J. Seems reasonable, no?

The wolves know that the legal positioning really matters. They will fight tooth and nail to keep the firm’s money in the firm and out of the hands of the plaintiffs. Even though there are substantially more lambs than wolves, the lambs have neither the resources nor the smarts to protect themselves.

These greedy schemes by America’s biggest firms are designed to dodge financial responsibility. J&J is attempting to cheat cancer patients from getting what the courts have already awarded them.

The management and their attorneys should face prison time for depriving justice to these consumers who won in court.

If we can’t bring Capitalism to heel, it must go.

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Saturday Soother – May 28, 2022

The Daily Escape:

Memorial Day, Arlington National Cemetery – May 2013 photo by William Coyle

Welcome to America’s Memorial Day weekend, when we remember those in the military who died in service to the country. But this year, we must also honor those who have died from mass murder by gun right here at home.

We need a three-day weekend. We need a break from the slowly unveiling and depressing news out about how shamefully the police of Uvalde, TX reacted to the killer. We also need a break from listening to the tepid responses by both political Parties.

The Republicans are saying the same as always: The country should not have stricter gun control. Why do Republicans refuse to act? Beyond the fact that many believe stricter gun control would not prevent such mass shootings, recent polling data reveal that there’s less political pressure on them than you might have thought.

Let’s examine the public mindset on the gun control debate as shown in Gallup’s polling conducted in October 2021 and January 2022. Both polls found a slight decrease in support for stricter gun laws compared with the prior year’s measures. Here are the top line results:

Last October, 52% of Americans indicated they wanted stricter gun control, while 46% either thought laws should be kept the same (35%) or made less strict (11%). The headline is that Americans’ support for stricter gun control fell five percentage points from October 2020 to the lowest since 2014.

That decline was driven by a 15-point plunge among independents, while Democrats’ desire for more restrictive gun laws ticked up six points to 91%. Republicans’ views were essentially unchanged, at 24%, (after dropping 14 points in 2020).

Of course, these numbers can be hard to understand when polls also indicate that north of 80% of Americans want universal background checks for guns, which Democrats have been pushing for in Congress and which most Republicans won’t go along with.

Why? There’s no sign that the polling on background checks holds up when its on the ballot. CNN’s report (March 2021) showed that ballot measures for background checks have appeared on ballots in California, Maine, Nevada, and Washington.

In all four, the pro-gun control side’s vote margin was worse than the Democrats’ baseline in the same state. In 2016, Clinton won California by 30 points, while gun control won by 27 points. In Maine, Clinton won by 3 points, while gun control lost by 4 points. In Nevada, Clinton won by 2 points, while gun control passed by a single point. Lastly, Washington passed its gun control law by a little less than 19 points in 2018, while Washington state’s House Democratic candidates won by a bigger margin in the same year.

The question is: Why would Republicans feel political pressure to support more gun control, when something that polls as well as universal background checks doesn’t draw as much support as the Democratic presidential candidate?

And here are a few more depressing thoughts. First, before the assault weapons ban went into effect in 1994, there were about 400,000 AR-15 style rifles in America. Today, there are 20 million.

Second, it’s doubtful that you were aware that there is an active group of school principals who have survived a school shooting. It’s called the Principal Recovery Network, a support group of sorts that mobilizes to help principals in the immediate aftermath of a school shooting. Frank DeAngelis, the former principal of Columbine High School says:

“It’s like that club that no one wants to belong to,”

They provide support for a principal who’s having his/her worst professional day. In every scenario, the goal is to help a principal in crisis. This is America: We put all this energy into dealing with the aftermath of a preventable trauma, and that now includes therapy for principals. We’re in this dark place because we will not open our eyes.

And for the 21st time since a mass shooting in Isla Vista, Calif. in 2014, the satirical site The Onion republished its saddest headline:

“No Way To Prevent This,” Says Only Nation Where This Regularly Happens

The best way to stop a bad guy from getting a gun is prevention.

Time for our long weekend Saturday Soother. The blog may be taking some time off, so don’t expect to see another column before Tuesday.

In view of the Memorial Day observance, and to remember those who died in Texas, listen to Samuel Barber’s “Adagio for Strings”, played in the original version by the Dover Quartet. Barber finished the arrangement in 1936. In January 1938, Barber sent an orchestrated version of the Adagio for Strings to Arturo Toscanini. The conductor returned the score without comment, which annoyed Barber.

Toscanini later sent word that he was planning to perform the piece and had returned it simply because he had already memorized it! It was performed for the first time by Toscanini in November, 1938. Here, for the third time on the blog, is the quartet version of “Adagio for Strings”:

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