As a major agricultural state, Florida is home territory for some of the industry’s sleaziest and most brutal crew chiefs. More than 200 have been barred for offenses such as cheating workers, while a dozen bosses and migrant smugglers have been imprisoned for slavery, assault, sexual exploitation, and other crimes against farmworkers.
Naturally, the people on the high end of the profit chain claim to deplore the predatory treatment of laborers. They will also hastily add that the problem is out of their hands, since many deal strictly with the independent contractors supplying the crews.
The immorality of that dodge did not escape U.S. District Judge K. Michael Moore, who, during the recent trial of several crew bosses, suggested that the blanket of guilt and shame also belongs upon those at the top of the corporate ladder.
Efforts to improve working conditions for farmworkers are regularly thwarted.
Every executive at Lykes Bros. or Consolidated Citrus is well aware of what life is like for the farm crews who make those companies rich. The big shots know all about the rip-offs, the slum housing, the loan sharking, the beatings and rapes—yet they continue to do business with the same thug bosses.
Why? Because the system works fabulously. The crops get picked, the money rolls in, and if anybody gets in trouble, it’s the crew chief. The rich white guys running the farm are safe.
Hefty campaign donations guarantee a smooth ride in the Legislature, where two bills that would have helped Florida farmworkers in a modest way were dead on arrival this year. One bill would have enabled those who get cheated on their pay to sue the growers. The other measure would have provided laborers with information about the pesticides being sprayed on the crops. Both measures were deemed too burdensome for farmers, proving once again that the lawmakers’ regard for those who work the fields is really no different from that of Thomas R. Lee.
It’s easier on the conscience to think of them as animals when you treat them that way.
January 23, 2005
Getting Rich in the Newspaper Business
As President Bush took the oath of office Thursday, it was hard not to be swept along in the tide of hope and optimism.
That’s because this administration is obviously working to forge a new, more mutually beneficial relationship with the press. The next four years could be lucrative indeed for those of us in the Fourth Estate.
Look at Armstrong Williams, the conservative talk-show commentator and newspaper columnist. During the 2004 election campaign, the U.S. government paid Williams $240,000 to say and write wonderful things about the president’s No Child Left Behind education program. This arrangement, exposed by USA Today, was a revelation to many working stiffs in the media. While every administration attempts to manipulate the news, the outright purchase of journalists is an audacious and clever approach—using taxpayer dollars, to boot!
If Bill Clinton had tried something like that, they would have impeached him again.
Bush’s fixers simply shrugged and said that the Williams payola, funneled through the Department of Education, was a straight “public relations” contract. Williams himself insists that he didn’t realize it was wrong to cash the government’s check and not tell his readers or viewers that he was being paid to praise the president’s policies.
Most reporters don’t make a lot of money, and $240,000 is a windfall. It’s impossible to believe that Williams was the first journalist to have been bought by the Bush administration or that he’ll be the last.
Therefore, in the spirit of the administration’s new No Scum Left Behind initiative, I humbly offer my services.
In exchange for a modest fee (a bargain compared to Williams), I promise to write glowing commentary about any policy, no matter how radical or half-baked, that Bush’s gang cooks up.
But, unlike Williams, I promise to dutifully inform my readers (by a small footnote or perhaps a secret code) on those occasions when I’m being bribed.
For starters, I could do a bang-up job helping to convince Americans that the Social Security system is shot, and that they’d be better off handing over their hard-earned retirement savings to Dick Cheney’s pals on Wall Street.
For the right sum, I’d be happy to overlook the fact that there’s currently a humongous surplus in the Social Security trust fund, and that a true budget shortfall is almost 40 years away (and possibly much longer).
Bush and Cheney have been trying their best to scare people into believing that Social Security is verging on flat broke, the same way they successfully scared people into believing that Saddam Hussein actually had weapons of mass destruction. This time around, though, Americans seem more skeptical. That’s why the president needs columnists like me, to sway public opinion.
Admittedly, the last time I swayed public opinion was … well, I can’t recall the last time. Anyway, here’s my fee schedule, which is based on an escalating level of fake enthusiasm:
For a mere $25, I’ll drop a line into my next column that says: “Privatizing Social Security isn’t nearly as reckless or goofy as the president’s critics would have you believe.”
For $50, the line would be: “Privatizing Social Security is an intriguing concept and one that should be seriously explored.”
For $99, I’d do two sentences, including a bonus exclamation mark: “Privatizing Social Security is a bold idea whose time has come. Kudos to President Bush!”
For $199.99, a fully punctuated paragraph:
“Here’s food for thought. If, instead of dull old Treasury bonds, you’d been allowed to invest your Social Security deductions in Enron stock (and then dumped it when Kenny Lay dumped his, before the company turned turtle), you might have doubled your earnings. Hey, if privatization is such a ‘risky gamble,’ then deal me in!”
For a flat $500, I’d give them a whole scary column, beginning with:
“If Congress doesn’t get behind our president and privatize Social Security, we hardworking ‘baby boomers’ are doomed to a hellhole retirement straight out of a Dickens novel—impoverished, miserable, bleak. Those puny monthly checks from Uncle Sam (assuming they don’t bounce!) won’t be enough to fill our cupboards with stale cat food and Sterno.…”
And finally, for $999, the big enchilada—the screamer to end all screamers:
“If those wimps in Congress don’t wake up and privatize Social Security now—I mean this week!—President Bush will be forced to invade Nassau, the Caymans, and possibly Liechtenstein in search of tax-sheltered assets to replenish the soon-to-be-bankrupt Social Security coffers.
“My own mother has burned her AARP card and rushed off to Washington, D.C., to demonstrate in support of the president’s innovative private-investment plan. She can’t wait to cash out her T-bills and sink her retirement savings into Halliburton.…”
That’s baloney, of course, and if Mom gives me any grief, I’ll offer to cut her in on the action—but no more than 10 percent, tops.
Who said you can’t get rich in the newspaper business?
July 27, 2008
Loan Scandal: Maybe It Was Just Job Rehab
The revelation that more than 10,000 convicted criminals have been welcomed with open arms into Florida’s mortgage industry is shocking, even in light of the state’s sleazy anything-goes history.
At first blush, things look bad for the Office of Financial Regulation and its commissioner, Don Saxon, whose long nap was harshly interrupted by last week’s headlines. And although it’s tempting to view this story as just another embarrassing validation of Florida’s reputation as the most crooked, screwed-up place in America, there might be an upside to the scandal.
Granted, a Miami Herald investigation revealed that just about any scumbag with an arm’s-length rap sheet can get work as a mortgage broker or so-called loan originator.
From 2000 to 2007, the OFR allowed at least 10,529 persons with criminal records to begin arranging and selling Florida mortgages. Of that motley throng, 4,065 somehow cleared background checks, eve
n though most had previously committed serious crimes—including bank robbery, racketeering, extortion, and fraud—that by law should have kept them out of the mortgage business. Other crimes of “moral turpitude” found on the records of newly approved mortgage peddlers: assaults, dope deals, sex offenses, and at least 15 homicides.
As it turned out, some of those felons failed to become model citizens upon entering Florida’s then-booming real-estate market. They went on to commit at least $85 million in mortgage frauds, fleecing both lenders and borrowers, according to the newspaper’s findings. Some people might look at such alarming facts and see a colossal failure by regulators to protect home buyers from known scammers and thieves. No wonder Florida has the highest rate of mortgage fraud in the country, you might say.
But let’s look at it another way—not as horrendous bureaucratic incompetence but, rather, as a daring, innovative way of diverting and retraining Florida’s inexhaustible supply of felons.
Take Donald Lewis Smith, for example. In 2003 he was licensed to sell mortgages in Kissimmee despite lying about his criminal record—a 17-year sentence for strangling his wife and dumping her body into Tampa Bay. It should be noted, however, that in five years as a broker, Smith hasn’t murdered a single customer.
Then there’s Scott Almeida, who forthrightly informed mortgage regulators about his federal drug-trafficking conviction. In 1998 he’d been busted with two kilos of coke, two assault rifles, a stolen pistol, and a drug-packaging device. Not long after Almeida got out of prison, the state gave him a broker’s license and told him to behave. He promptly went out and racked up $3 million in fraudulent loans, choosing as his victims disabled and elderly persons.
What Almeida did was truly rotten, but on the bright side, at least he gave up the cocaine trade.
Consider also the case of Anthony Hollis, an Orlando felon who was given a license to own a mortgage brokerage despite having been convicted of passing bad checks and auto theft. Hollis used his new access to private credit histories to steal more than $200,000 from customers before he was nailed for racketeering.
Sure, it was a slimy scam, but give Hollis credit for showing ambition. Some car thieves are content to stay car thieves their whole lives. Thanks to the great state of Florida, Hollis got an opportunity to advance up the felonious ladder from street crime to white-collar crime.
Same for Richard Crowder of Miami Beach, one of 23 convicted burglars who successfully transitioned into the mortgage field. Eventually, Crowder masterminded one of the state’s worst frauds, setting up $37 million in bad loans by falsifying documents, lying on applications, and staging phony property appraisals.
Crowder, of course, is a lowlife who richly deserves the nine-year prison hitch that awaits him. Yet, without our forgiving state regulators, he’d never have graduated from burglar to swindler. And wouldn’t you rather have a creep like that tricking your grandmother out of her life savings than breaking into her house in the dead of night?
Likewise, the OFR might have been doing us a favor by not screening aspiring loan originators such as Ronald D. Collins. He was convicted 37 times between 1983 and 2000 of assorted low-rent money crimes, including forgery and grand theft.
Yet had Collins been banned from the lucrative world of mortgages, he might have turned to more dangerous endeavors such as bank robbery or carjacking.
See, after you live in Florida long enough, you learn to look philosophically for the silver lining in every storm cloud.
That will be Don Saxon’s mission as he tries to explain his agency’s chronic inattentiveness to Gov. Charlie Crist and other members of the Financial Services Commission, which is scheduled to meet this week.
Maybe Saxon’s been asleep at the switch, or maybe he was simply trying to keep known criminals off the streets by putting them behind desks instead.
Isn’t it better to be robbed over the phone than at gunpoint?
October 5, 2008
Cindy to Blame for Woes on Wall Street
The collapse of Wall Street and the freeze of credit markets can be traced to one unlikely culprit: Cindy Crawford.
I’m sure she didn’t mean to cripple the economy. Most supermodels avoid meddling in global monetary markets, and it’s unlikely that Cindy realized how much influence she commanded.
Tragically, however, the crash of 2008 can be connected to that fateful day, a few short years ago, when Cindy got into the business of designing furniture for a popular retail firm.
It wasn’t long before the Crawford brand caught fire. Every time you turned on the television, there she was, languidly sprawling across one of her microfiber plush sofas, or carefully arranging the pastel placemats on one of her cherry-veneer dining tables. She looked great. She had style. She was also much taller than most interior designers.
And, amazingly, you could buy a whole roomful of Cindy’s furniture with no down payment. Unbelievable!
More amazingly, you didn’t have to start paying off the stuff for a whole year or even longer. As a result, thousands of Americans who could barely afford their car payments eagerly started purchasing Cindy’s terrific furniture—although it wasn’t technically purchasing, because not much actual money was involved.
As bankers watched the Cindy phenomenon grow, they realized that the customers who were snapping up all this accessible furniture might want larger homes to put it in. The bankers also understood that special mortgages would be necessary when dealing with folks who already needed at least a year to pay for a headboard and a nightstand. Thus was born the concept of subprime loans, a financing ploy very similar to the one used so successfully by Cindy Crawford’s furniture company.
Subprimes allowed Americans to get homes with a minimal down payment. Interest rates were extremely low and extremely temporary. The mortgages were structured so that those rates—and the customers’ monthly nut—would shoot up radically after a few years, yet nobody seemed worried about that.
Bankers were just tickled to be selling so many loans, real-estate agents were thrilled to be selling so many houses, and home buyers were elated to have more rooms in which to arrange all their new (and still-unpaid-for) Cindy Crawford furnishings.
The economy was booming, or so we were told. Unfortunately, at no point in this brainless orgy of lending was it required for the folks who were borrowing all that easy money to show they had the means to repay it.
Inevitably, Wall Street was smitten by the Cindy factor. Venerable institutions like Lehman Brothers bought up billions of dollars’ worth of bundled subprime mortgages, on the theory that the price of real estate would keep rising insanely until the end of time. If some poor sucker had to default, so what? Repossess his house and sell it for a profit to some other sucker, who could then fill it with more unpaid-for furniture by Cindy Crawford.
But the Wall Street wizards who control the credit flow made a disastrous blunder. The Cindy Model of friendly finance doesn’t work very well when the stakes are high.
Selling a roomful of furniture to a family that can’t afford to put any cash on the table is different from selling them a house. Thousands of subprime and adjustable-rate mortgages went plummeting into default, and the rest is history.
As Congress and the White House scramble to stanch the bleeding, investor confidence remains shaky. It might be helpful if Cindy stepped forward in some dramatic way, as fellow icon Warren Buffett has done. Here’s what she should say to reassure worried Americans: “Please don’t buy any more of my elegant yet comfortable furniture unless you actually have the money to pay for it. Before coming to the store, take a close look at your bank statements to make sure you’re not making an incredibly foolish mistake.
“Hey, if you can’t write a personal check for that five-piece king bedroom set, then you probably shouldn’t buy it. Be stylish, America, but be smart. Tomorrow will be a brighter day.”
Who knows what impact such a bold speech would have on the stock markets, but I wouldn’t be surprised to see a
n instant rebound. The financial titans who followed Cindy Crawford down the path of carefree lending will just as faithfully follow her back to the realm of fiscal prudence.
There are encouraging signs from the furniture empire for which Cindy is the marquee draw. If you ordered that five-piece king bedroom set today, you wouldn’t get to wait years before making the first payment. You’d only get six months.
It looks like Cindy’s getting tough.
Take heed, Mr. Treasury Secretary. The handwriting is on the wallpaper.
November 23, 2008
The Beggars in Their Corporate Jets
If you’re like most Americans, you probably weren’t dabbing tears from your eyes while listening to the woeful pleas of Richard Wagoner, Alan Mulally, and Robert Nardelli.
They are the chiefs of the Big Three automakers, who last week traveled in high style to our nation’s capital and begged for $25 billion to save their companies—and, by dire inference, the whole American economy—from ruin.
Interestingly, none of these gentlemen took much blame for leading the U.S. car industry into this terrible abyss, citing instead the global credit crunch, unfavorable trade policies, and other factors out of their control. And while it’s probably true that the automobiles being made today by GM, Ford, and Chrysler are safer, more reliable, and more fuel-efficient than ever, that’s only because they’re scrambling to catch up with Japanese competitors, who’ve been kicking their butts for the last 30 years.
Toyota and Honda aren’t asking Congress to bail them out, because they don’t need it. But if they ever do, they probably won’t be so foolish as to send their top executives on a public money-grubbing mission in a private luxury aircraft. Wagoner, Mulally, and Nardelli all flew to Washington on separate corporate jets, which provoked lacerating commentary from the legislators whose sympathy they sought.