Banks

A bailout for the middle class

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OPINION I don’t need to remind you that our economy is in trouble. The current banking crisis has demonstrated to all of us just how fragile and susceptible to manipulation our current system is. President Obama has spent billions of dollars and untold hours trying to bail out our failing banks and financial institutions. Whatever your opinions about his efforts, I think we can all agree we should also be helping out American workers — the real engine of the economy. The Employee Free Choice Act, currently being debated in Congress, offers needed help.

In 1979, 23 percent of the American workforce earned the inflation-adjusted equivalent of $20 an hour. This level of pay, about $41,000 per year, is generally considered the minimum necessary for a family of four to live something like a middle-class lifestyle. I wish I could say that progress marched on, that every year after 1979 the percentage of workers earning the minimum to support a middle-class family grew. In fact, the opposite happened — today only 18 percent of American workers earn enough to support a family of four.

What happened to the other end of the spectrum during that time? In 1978, American CEOs earned 35 times what the average worker earned. Over the next 10 years, this ratio grew, so that in 1989 the average CEO was earning 71 times what the average worker was earning. By 2007, the ratio had grown to an unbelievable 275.

The causes of this imbalance are many, but one is declining labor union membership. In 1983, 17.7 million workers were members of unions, accounting for 20.1 percent of America’s workers. In 2008, only 16.1 million workers were unionized, accounting for 12.4 percent of our nation’s workforce. These numbers are critically important because union membership makes a large difference in the well-being of America’s workers. In 2008, the average union worker earned $886 a week, while the average nonunion worker was paid only $691.

With all the effort we’re putting in to a bailout of the banks, we need to be discussing a bailout of the middle class. We don’t have to wait for the Treasury Department to come up with the plan — it’s sitting there in Congress and is called the Employee Free Choice Act. The bill would give workers a fair, direct route to forming a union without illegal interference from corporations.

Unfortunately, the middle-class bailout is stuck in Congress. The U.S. Chamber of Commerce and the other shills for mega-corporations have turned up the pressure and succeeded in preventing the Employee Free Choice Act from moving forward in the Senate. Our own Sen. Feinstein recently said she wouldn’t vote for the bill because of the economic downturn, even though she cosponsored the legislation last year.

With the current state of our economy, we need a middle-class bailout — and we need it soon. Feinstein has the ability to make that happen. She should deliver the one bailout we all really need. *

Debra Walker is a San Francisco artist and progressive activist.

FOR THE RECORD


The caption for last week’s dine review should have referred to Fly, not Terzo.

Stiglitz: America’s Socialism for the Rich

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Here is our monthly installment of Joseph E. Stiglitz’s Unconventional Economic Wisdom column from the Project Syndicate news series. Stiglitz is a professor of economics at Columbia University, and recipient of the 2001 Nobel Prize in Economics, is co-author, with Linda Bilmes, of The Three Trillion Dollar War: The True Costs of the Iraq Conflict.

America’s Socialism for the Rich

By Joseph E. Stiglitz

With all the talk of “green shoots” of economic recovery, America’s banks are pushing back on efforts to regulate them. While politicians talk about their commitment to regulatory reform to prevent a recurrence of the crisis, this is one area where the devil really is in the details – and the banks will muster what muscle they have left to ensure that they have ample room to continue as they have in the past.

The old system worked well for the banks (if not for their shareholders), so why should they embrace change? Indeed, the efforts to rescue them devoted so little thought to the kind of post-crisis financial system we want that we will end up with a banking system that is less competitive, with the large banks that were too big too fail even larger.

Film: The disturbed harmony of “Revanche”

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By Erik Morse

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Revanche was a 2009 Best Foreign Language Film Oscar nominee.

In the brief overture to Revanche, Austrian director Götz Spielmann includes an orchestra of chirping crickets and the mellifluous hum of a lawnmower laboring through viridescent patches of Viennese countryside. A plump housewife Susanne (Ursula Strauss), possibly with child, stares silently at this painterly expanse of beauty from the comfort of her modern kitchen. Somewhere nearby a limpid brook babbles quietly, its stunning combination of color and repose rivaling those placid marshes of Giverny. A large rock suddenly falls through the glassy surface of the pond, shattering the bucolic idyll and sending a discordant wave of water toward its banks. Something or someone has disturbed the harmony of this peaceful retreat and the resulting ripple might well threaten everyone in its path.

How to recapture foreclosed homes

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Text by Sarah Phelan

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Courtesy of the San Francisco Housing Development Corporation.

As the Guardian’s report about foreclosures in San Francisco reveals, they are concentrated in the southeast, where working people and communities of color live, making efforts to recapture these properties and resell them as affordable housing units a worthy endeavor.

But for those who believe buying these properties isn’t the best use of city money in stringent budgetary times, it’s worth looking at what’s happening policy-wise elsewhere in the Bay Area.

Last month, a dozen Democratic U.S senators joined their Republican colleagues to defeat a bill that would have allowed judges to reduce mortgages in bankruptcy courts. President Obama, facing strong opposition from the nation’s surviving banks, did not pressure lawmakers to support the measure, and the Senate killed a plan to spare thousands of homeowners from foreclosure through bankruptcy.

Steven Zuckerman, managing director of the California branch of Self-Help, one of the largest community development financial institutions (CDFI) in the United States, says his organization was deeply involved in supporting that legislation. And he doesn’t buy detractors arguments that lowering mortgages in bankruptcy courts would cause banks to raise other people’s mortgage rates.”

‘The bill only included mortgages that already exist,” Zuckerman, who blames the bill’s failure on the “lobbying of bankers’ associations,” told me.

According to information posted at its website, the North Carolina-based Self-Help has already provided billions in financing to small business owners and nonprofits nationwide in an effort to create and protect ownership and economic opportunities for minorities, women, rural residents, and low-wealth families and communities.

And locally, Self-Help is one of several CDFIs trying to help communities like San Francisco’s southeast sector and North Richmond in the East Bay, which have been hard hit by the recent wave of foreclosures sweeping the area.

”We do have a program and a product that we are trying to make available to groups that work in areas with high foreclosures,” Zuckerman said.

Saving the southeast

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sarah@sfbg.com

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This map of all foreclosures in San Francisco shows a heavy concentration in the southern part of the city, home to many low-income communities of color.

When Mayor Gavin Newsom and Sup. Sophie Maxwell convened a task force in July 2007 to figure out why African Americans are leaving San Francisco and how to reverse this trend, the subprime loan market crisis was about to send a shock wave of home foreclosures sweeping through southeast San Francisco.

Hope SF, the promised rebuild of the city’s public housing projects, is underway at a cost of $95 million. The city’s certificates of preference program, giving housing priority to black residents displaced by redevelopment, has been expanded and extended. But little has been done to address the immediate problem.

Instead political leaders have focused on a plan to subsidize Lennar Corp.’s construction of thousands of new condos in the southeast section of the city — the heart of the San Francisco’s remaining African American community — and have done nothing to promote a plan that could convert hundreds of foreclosed homes into affordable for-sale or rental units there, right here, right now.

African American Out Migration Task Force (AAOMTF) members recall warning that the crisis would likely hit San Francisco’s already dwindling black population extra hard. And Sup. John Avalos, who was running for election in District 11, remembers seeing impacts in the Excelsior District as early as 2007.

"I was telling people in early 2007 that this was a problem in District 11, and even real estate people didn’t believe me," recalled Avalos, who is exploring legislation to hold banks accountable and spoke at an ACORN protest in support of Excelsior homeowner Genaro Paed, a Filipino native who just staved off eviction orders pending the outcome of his lawsuit against Washington Mutual concerning what Paed describes as "a predatory loan" secured in 2006.

Avalos also planned to introduce legislation on May 12 that would expand protection of renters, including those in foreclosed homes who are now being evicted by banks.

This isn’t the first time city leaders have studied the African American exodus or ways to prevent low-income and minority households from being preyed upon or displaced. Indeed, this task force’s initial findings, (released last summer after Lennar spent millions to persuade voters to support building 10,000 condos in the city’s southeast) suggests San Francisco’s entire black community is at risk unless proactive and immediate steps are taken.

According to U.S. Census data, the city’s African American population shrank to 6.6 percent of the city’s total population by 2005 (a 40 percent decline since 1990) and will likely slip to 4.6 percent by 2050, according to the California Department of Finance. And these findings were made before the foreclosure crisis heated up.

In 2008 Maxwell and other elected officials convened a Fair Lending Working Group (FLWG) to figure out how to respond to the wave of foreclosures. By year’s end, there were 667 home foreclosures in San Francisco, almost all in the city’s southeast sector.

These numbers sound small compared to Contra Costa County or Oakland, where thousands of foreclosures occurred. And they aren’t big enough to qualify for the first round of President Barack Obama’s National Stabilization Program grants, which were released earlier this year. Based on a census-driven formula, the grants sent $8 million to Oakland and no money to San Francisco.

But with half the city’s foreclosures in the Bayview, home to most of the city’s remaining African Americans, the fact that little has been done to save these homes — or to follow early recommendations to do so — is a gentrification crisis in the making.

Ed Donaldson, housing counseling director at the San Francisco Housing Development Corporation in the Bayview District, served on the FLWG and remembers suggesting a two-tier track. First, take steps to protect renters in places that have been foreclosed and second, buy as many foreclosed properties as possible with the aim of reselling or leasing them as affordable units. While the FLWG liked the renter protection angle, it did not support the foreclosure acquisition program.

"The idea fell on deaf ears," recalls Donaldson, who was disappointed his foreclosure purchase plan didn’t make it onto FLWG’s recent recommendation list. FLWG members include financial institutions such as Wells Fargo, Washington Mutual, and Patelco Credit Union; community-based organizations such as Housing and Economic Rights Advocates, SFHDC, Mission Economic Development Agency; and city agencies. The agency also has received staff support from Assessor-Recorder Phil Ting, the Mayor’s Office of Housing, Treasurer Jose Cisneros and the Office of the Legislative Analyst.

"We’d already seen the spike in foreclosure numbers, so how did these recommendations get pushed out? We need something with teeth," Donaldson said.

SFHDC executive director Regina Davis says she suggested a foreclosure purchase and resale plan as an AAOMTF member and was concerned when she noticed that her recommendation was not included on the list discussed at the April 23 meeting. Billed as a closing-out session, that meeting took place at the San Francisco Redevelopment Agency and was attended by Davis, chair Aileen Hernandez, Redevelopment director Fred Blackwell, the Rev. Amos Brown, Barbara Cohen of the African American Action Network, Tinisch Hollins of the Mayor’s Office of Criminal Justice, and former supervisor and assessor Doris Ward, among others. The AAOMTF is finishing up its work this week.

"I got involved because I believed that in exchange for participation, we would see things done and/or funded. Part of what we want to see are real action items that keep African Americans in San Francisco or bring them back. So we really want this issue to move forward with substance," Davis told the Guardian.

Recognizing that San Francisco is facing massive budget constraints, SFHDC is proposing to borrow $1.5 million from Clearinghouse CDFI, a Los Angeles community development financial agency, to acquire and rehabilitate these foreclosed properties.

Davis’ group would then turn it around and offer residents several options: buy (if the prospective buyer qualifies for the city’s $150,000 downpayment assistance and a $50,000 loan from the California Housing Financing Agency); lease (in which SFHDC sells the home to the buyer but leases the land, making the price affordable), lease-to-own. Or, Davis adds, people could rent the units at affordable rates.

But to make the plan work, SFHDC need the banks to sell the properties AT below market rates. Noting that foreclosed properties are still selling in the Bayview for $400,000, Davis says her nonprofit intends to purchase 100 to 200 homes during a 24-month period at less than $200,000 mark.

Yet Davis remains optimistic about the plan’s chances as SFHDC negotiates with major banks for a 50 percent discount, noting that there is a monthly average of 50 foreclosures in the Bayview-Hunter’s Point, and SFHDC has access to 100 qualified buyers.

Blackwell said the Redevelopment Agency hasn’t developed an initiative or a funding pool to respond to the foreclosures in the city’s southeast sector. But, he said, the agency is looking at ways to apply for National Stabilization Program funds even though "federal guidelines mostly don’t apply well in expensive markets like San Francisco.

"We are engaged in advocacy so San Francisco can take advantage of any federal stabilization funds, but we don’t have an agency-specific proposal," he continued.

"Frankly, I think community-based organizations are the best to do programs like that, especially since there is so much anxiety about the Redevelopment Agency and property acquisition in the southeast," Blackwell added.

He believes that given the city’s current budgetary constraints, the AAOMTF "will likely look for leadership from the Mayor and the Board of Supervisors in cases where members have made recommendations and there is an opportunity to bring in public money."

Blackwell feels the city is still getting its mind around its foreclosure problem. "We’ve been spared the wholesale neighborhood-by-neighborhood devastation that places like Antioch faced," Blackwell said. "So, there wasn’t the same sense of urgency. And there’s a need to look more closely at the data. A lot of the information is based on anecdotes."

Yet the feds seem willing to help if city officials take the initiative. Larry Bush, spokesperson for the U.S. Department of Housing and Urban Development’s regional office, says San Francisco and Oakland could file a joint foreclosure plan application.

"If they can identify 100 homes, they’d be eligible for $5 million," Bush said, noting one snag that could unravel the plan locally. "Foreclosed properties must be vacant for at least six months. And as you know, in San Francisco, foreclosed homes still sell."

Maxwell says the city could do more to confront predatory lenders and enforce tenant rights, as well as developing a plan to buy foreclosed properties. "But in San Francisco it’s an issue because of relatively high prices," she told us.

Yet the city’s high prices are the very problem pushing out low-income residents. African American home ownership actually increased after 1990, even as out-migration among black renters increased. But now, if the foreclosures stand, that exodus will likely accelerate.

Asked if she supports SFHDC’s current foreclosure plan, Maxwell said, "It makes sense to me. If that could be done, it would be optimal."

Myrna Melgar of the Mayor’s Office of Housing says she’s not sure that a foreclosure resale plan would work in San Francisco for folks who bought a couple of years ago, when house prices hit $700,000, only to see house prices fall to around $400,000.

"San Francisco is a very different universe from Detroit," Melgar said. "Properties don’t sit around empty and vacant. They are bought by speculators who are betting that in two or three years, their values will go up. So if we had money to buy these properties, which we don’t, we’d be in competition with the speculators, who have lots of money with no strings attached, and who drive the prices up."

Another difference, Melgar said, is that San Francisco banks are holding onto 50 percent of their foreclosed properties, whereas Antioch banks are only holding onto 22 percent. "We’d like to keep folks in the homes," Melgar said. "But it’s a policy issue related to the reality that we have such limited funds."

TICed off

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news@sfbg.com

San Francisco tenants who are supposed to be protected by city and state laws are now facing eviction as a result of real estate speculators working hand-in-hand with banks in a scheme that has been implicitly endorsed by federal regulators and the courts.

Kaushik Dattani, whose company owns multiple properties throughout San Francisco, won a summary judgment to use the Ellis Act to evict four families from their rent-controlled apartment. Judge Charlotte Woolard’s April 21 ruling, denying the low-income Mission District families a jury trial, could leave the 12 longtime residents — seniors, disabled, single mothers, and children — homeless within a couple of weeks.

In August 2007, court records show Dattani secured an 18-month, interest-only $1.3 million loan from Circle Bank of Marin to buy the Victorian building at 19th and Lexington streets. The loan included an agreement that he would pull the units from the rental market using the Ellis Act, renovate the building, and sell the five Victorian units as tenants-in-common (TICs).

Traditionally banks haven’t offered loans to individual TIC owners, but Circle Bank of Marin was one of the first banks to start offering such "fractional" loans in 2005, a practice that created a strong market for TICs, loan officer Mark Skolnick (who says he’s an independent contractor and not a bank employee) told the Guardian.

In making the loan to Dattani, court documents show Skolnick predicted a 42 percent profit, which would require all five TIC units to be sold for $3.3 million. But according to Tenderloin Housing Clinic attorney Steve Collier, Dattani has not yet paid off the balloon payment — due April 1 — putting the building at risk of getting handed over to the bank, emptied of residents.

Kevin Stein, associate director of the California Reinvestment Coalition, said the lending scheme is contrary to the federal Community Reinvestment Act, which encourages banks to meet the credit needs of the low-income communities. "It’s within the Federal Deposit Insurance Corp.’s power to say these kinds of loans that result in the displacement of low and moderate income tenants are not helping to meet the community’s credit needs," he said, noting that the FDIC has refused to get involved.

Others argue the importance of creating home ownership opportunities in a city where about two-thirds of residents rent.

"Here we have what looks like a condo, feels like a condo, but it’s a TIC. It’s a way of creating affordable housing," Skolnick said. "Some people lose their home, some people gain a home. The TIC platform is proving to be a very affordable option for this different subset of people."

But for the subset of people being displaced using the Ellis Act — a state law intended to allow existing landlords to get out of the rental business, not to encourage real estate speculation — the affect can be devastating in a city where little new rental or affordable housing is being built.

"They just come in out of nowhere and they see this place, buy it and kick everyone out. There’s no soul there," said Luise Vorsatz, who lived in the house for 30 years before being evicted.

This is not Dattani’s first Ellis Act eviction (when the Guardian contacted Dattani for comment, he hung up on us). In 2000, he hired infamous antitenant lawyers Wiegel & Fried to evict senior Alma Augueles from her flower shop in the Mission. In 2007, he evicted a group of tenants living above Revolution Café on 22nd and Bartlett streets. That building has sat empty for over a year, something that could also happen with his new property given the slumping real estate market.

Under the Ellis Act, if the unit go back on the rental market within five years, the evicted tenants have first priority at their old rent level, but that’s up to the tenants to enforce. "It’s possible the landlord won’t be able to sell and will end up renting it at higher rents," Ted Gullicksen, executive director of the San Francisco Tenants Union, told us.

"They don’t look at the fact that we have pride of tenancy—that we have lived here all these years," said 23-year resident Ronny Ruddrich, who raised her children here and walks to her job as a Noe Valley shoe store manager for the past 22 years. "He drives up in his Mercedes and shows no respect whatsoever."

SF Weekly’s deadbeat dad

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The company that owns SF Weekly is positioning itself to become the greatest deadbeat in the history of the alternative press.

Village Voice Media, the 16-paper chain, owes the Bay Guardian close to $20 million as the result of a year-old jury verdict in a predatory-pricing lawsuit.

After a six-week trial in the spring of 2008, the jury found that the Weekly had intentionally sold ads below cost over a period of years, losing millions in the process, in an effort to put the locally owned competitor out of business.

But while the case is on appeal, VVM hasn’t posted an appeal bond — that is, a guarantee that the defendant will pay up after the appeals are over. That’s highly unusual for a business that isn’t claiming insolvency – and since there’s no bond, the Guardian is free to start collecting the money.

However, the Guardian lawyers have gotten a clear message from VVM’s legal team in a variety of communications over the past months. In a July 18, 2008 legal filings and subsequent disclosures, VVM claims that it owes a consortium of banks, led by the Bank of Montreal, $92 million — and that those banks have a prior claim on all of the company’s assets.

That suggests that the entire chain is worth less than $92 million — something that stretches credibility even in these difficult economic times. In 2007, the company listed assets of $191 million, documents presented during the trial showed.

If the current claim is true, then VVM has lost more than half its value in just two years and is technically underwater, much like the homeowners whose mortgages exceed the value of their property.

The VVM lawyers are also claiming that the company’s assets are set up in such a way that the Guardian will never be able to reach the money.

That leaves the largest alternative newspaper publisher in America in the remarkable position of saying that it’s prepared to duck a legitimate debt, to defy a jury and court order and hide its assets — like a media version of Bernard Madoff.

Asset-protection is a booming area of law, and in some cases, it’s considered entirely appropriate and ethical. Plenty of businesses — and increasingly, surgeons, dentists and others subject to a high risk of lawsuits — set up subsidiary companies, limited liability companies and other corporate structures to protect them from potential creditors.

But creating such a scheme to avoid paying a valid debt, particularly a court judgment, is frowned on both by legal experts and courts.

“It is never ethical to devise or implement a scheme to deprive a legitimate creditor of access to your assets,” Marjorie Jobe, an El Paso, Texas business litigation attorney and an expert on asset protection, told us by email. “It is never ethical not to pay or satisfy a legitimate debt.”

Adds Jay Adkisson, a Newport Beach lawyer and the author of a leading book on asset-protection: “Typically, it is considered unethical to transfer assets to harm a legitimate creditor.”

There are, experts point out, asset-protection programs that are both legal and ethical — and while Jacob Stein, a Los Angeles attorney who lectures regularly on the topic, told us there’s no “bright line,” it typically depends on the timing.

“If a business has a legitimate reason for setting up an asset-protection plan, that’s entirely proper,” Stein told us. “But if it’s done after a judgment is in place, it’s not a good idea.”

Added Jobe: “the asset protection plan needs to be deliberate and not aimed at only one creditor.”

At this point, only VVM executives and their lawyers and bankers know for sure when the asset-protection scheme was devised. The Guardian‘s legal action began in 2002; if the program had been in place prior to that, it would be easier to defend. But if money is moved out of a company to frustrate a creditor, that can run afoul of laws that govern improper transfers.

“If you do something to stiff your creditors, the fraudulent transfer laws come into play,” Adkisson said.

When companies have debt that exceeds their ability to pay, a typical option is bankruptcy – that’s what more than 70 asbestos companies have done in the United States. Bankruptcy isn’t perfect for creditors, and there’s a lot of controversy over the practice, but at least it allows a court to supervise a plan to pay some of the debt. And in a bankruptcy, the shareholders of a corporation are wiped out.

In this case, VVM is placing itself in a strange and potentially perilous situation. The company is saying that it’s protected from any judgments, and thus from any creditors — meaning that any vendors, suppliers, contractors or other creditors that VVM decides to stiff would have no easy legal recourse.

But there’s no bankruptcy and as far as we know, the company is paying its other debts. So VVM is apparently seeking to stiff a single creditor – which in itself is a legal issue — and is doing so while the shareholders, including those who participated in an illegal predatory pricing scheme, pay no penalty at all.

The ultimate problem with these schemes is that, in the long run, they don’t always work. “There are very few ways to do this that are bulletproof,” Stein, who creates asset-protection programs for a living, explained. Instead, the experts tend to agree, asset-protection is mostly about delaying justice — it’s a way to make it expensive and time-consuming for a creditor to get to the money. It’s a legal game, a tactic to frustrate a less-well-funded individual or company by dragging the legal issues out even further.

“It’s my perspective that if a debtor has money, there’s a way to get to it,” Richard Goldstein, a lawyer and expert in collections, told us. And, of course, the Guardian is mounting an aggressive collection effort.

It’s quite a length to go to in an effort to avoid paying a competitor who was harmed by illegal pricing and predatory competition. “In the end,” Goldstein said, “there are only two ways to avoid a judgment. You can have no assets at all, or you can undermine your own business and your own company to make it hard for someone to collect a debt.”

Calls to the Bank of Bank of Montreal, were not returned by press time. However, VVM Executive Editor Mike Lacey posted a long response to our written questions on SF Weeky’s blog.

In between insults, he responded — sort of — to a few points we raised.

He said, for example:

“The case is on appeal. You are not entitled to a penny.”

That’s wrong. By law, if VVM had posted an appeal bond, The Guardian would be unable to collect until the appeals had run their course. Of course, a bond would guarantee that the Guardian ultimately would get the money if the verdict were upheld.

With no bond posted, the Guardian has every legal right to begin collecting the judgment.

Lacey states that “I’m not going to discuss our banking relationship with a miscreant who makes up slander. Perhaps your lawyers can enlighten you. (But if your lawyers have led you into a blind alley, do you really trust their insight?)”

Interesting comment, considering that our lawyers — Ralph Alldredge, Richard Hill and E. Craig Moody — not only won the case, in front of a jury, but won a California Lawyers of the Year award from California Lawyer magazine for the case, which the magazine called one of the most important lawsuits of the year.

Most of the rest of his statement is a rehash of the claims VVM threw out in court — all of which were proven false. The final word on those claims came from a jury of 12 San Franciscans, who agreed unanimously that Lacey’s company had engaged in illegal predatory pricing and awarded the Guardian damages.

PS: The other banks in the consortium led by Bank of Montreal are BNP Paribus, Brown Brothers Harriman & Co., Rabobank, U.S. Bank, Wells Fargo, and Westlb AG. If we hear from any of them we’ll let you know.

FAIR: What the Dow isn’t

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Media Advisory from the media advocacy organization called the Fairness and Accuracy in Reporting (FAIR)

The media is misusing the Dow as a ‘scorecard’ of White House policy

3/5/09
To hear some in the corporate media tell it, you judge a president by how the Dow Jones Industrial Average is performing–and, thus, Barack Obama is not doing a very good job.

As NBC’s Meet the Press host David Gregory said (3/1/09):
The Obama stimulus package, $787 billion. The housing plan, $75 billion. That’s $2.3 trillion. Seven hundred and fifty billion dollars additional in this document for additional bailout money for the banks. Meantime, what metric do we have to see how people–what people think of that government intervention? The Dow is one metric. It closed on Friday at its lowest level since 1997, just over 7,000.

Will Durst: Bye American

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The dastardly bums that created the worldwide financial crisis is…us. That’s right. You and me. And I hope we’re happy.

By Will Durst

(Will Durst is the political comic who writes sometimes. This is one of them.)

Can we stop with the waving of the sharp instruments for a minute and speak rationally to this whole ugly recession mess we find ourselves currently mired in? C’mon. You know what recession mess I’m talking about. You’re packing a bag lunch and taking mass transit to visit the public library to use their ancient computer to check out the job classifieds on Craigslist for crum’s sake. Yeah, THAT recession mess.. Well, you’ll be glad to hear we’ve positively identified the bad guys responsible for this meltdown and they end up having awfully familiar faces.

Go ahead. Guess who’s to blame? No, not the subprime mortgage brokers or Bernie Madoff and his ilk or those reverse Robin Hood hedgefund speculators throwing trillions of dollars worth of derivatives around like paper towels at a chili cheese dog eating competition. Nope. The dastardly bums that created the world wide financial crisis is… us. That’s right. You and me. And I hope we’re happy.

For making former Silicon Valley start up CFOs toil as Indian casino valets. For driving down the price of 2 year old Porsche Boxters to the level of a 96 Taurus with a blown head gasket. For forcing casseroles and meatloaf onto the menus of 3 star Michelin chefs. It’s all our fault. And how are we doing it? By not buying enough stuff. Damn us anyway. How dare we?

Who cares whether we’re employed or not? Don’t we realize we are the pistons that drive the free market engine? It’s our God- given patriotic duty to go out there and buy stuff we don’t need with money we don’t have to impress people we don’t like. We don’t do easy. We do compulsory.

Remember how good it felt to buy that brand new DVD we had no intention of ever watching? Aren’t you just itching to tear the shrink- wrap off of something with your teeth right now? Anybody can conspicuously consume when things are going well and money geysers from the ground like it did between the Bushes. It takes a true retail soldier to run up credit card bills when banks are raising interest rates so high, it would not be too far off the mark for them to utilize a dorsal fin as a logo.

I wouldn’t get this squishy if I wasn’t seeing pubescent girls get punched in the gut with our selfish frugality. Girl Scout Cookie sales have sunk to levels not seen since Jimmy Carter was scolding us while wearing cardigans. The Girl Scouts! Okay, that’s it.. I don’t know which of you commie pinko yellow rat cretinous toads managed to hypnotize the rest of us into believing we’re so broke we can’t afford a couple of measly packages of Thin Mints, but you’ve gone too far. You fiend. How soon before we take out our parsimonious wrath on the innocent producers of Sham- Wow and Snuggie?

Ladies and gentlemen, I implore you; open your wallets. Ask yourself, “what would Paris Hilton do?” It doesn’t matter what you buy. A Jonas Brothers lunch box. A $75 grass fed, hand massaged, Kobe beef porterhouse steak, bathed in boysenberry infused truffle butter. A 96 piece Limited Edition Pewter Napkin Ring Set in the shape of the characters from the Lord of the Rings. Ford. Besides, this isn’t about you and me people. This isn’t about America. This isn’t about Detroit. This is about the Girl Scouts.

Will Durst is the political comic who writes sometimes. This is one of them.
Catch Durst blogging live from the Masters Tournament in Augusta Ga, April 6th- 12th. Masters.org.
And the book: “The All American Sport of Bipartisan Bashing,” available from Amazon.

will durst
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‘The end of the goddamn family dog’

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› news@sfbg.com

Former Bottom of the Hill and DNA Lounge doorperson Greg Slugocki wakes up every morning at 4 a.m. to feed and care for 75 rescued dogs at Milo Sanctuary, one of the largest dog and cat rescue sanctuaries in the country. It’s one-third the size of Golden Gate Park and tucked in the mountains of Mendocino County, north of Ukiah.

Slugocki has worked like a dog since he was hired last November, part of a crew of two who cover 283 acres of mountainous terrain. But it’s something else that has recently made his head spin.

"The rate of animals we’ve had to take because of foreclosures is astronomical," Slugocki said. "I’ve taken more dogs in the last three months than in the last two years."

Milo Sanctuary holds adoptions in Berkeley, Oakland, and San Rafael, and he communicates daily with Bay Area shelters and rescues, which also have reported unprecedented increases in animals reluctantly turned over by their desperate owners.

Slugocki may be in the backwoods of Mendocino County, but he’s not alone in this dilemma. Shelters all over the country are reporting rising numbers of dogs, cats, horses, and all kinds of family pets made homeless by the home foreclosure crisis.

In January, San Francisco Animal Care and Control — the municipal shelter and adoption department obligated to take all animals — documented, for the first time, an unprecedented increase in owner-surrendered animals. The report found that since August 2008, there’s been steady monthly increase in such animals, amounting to a 13 percent average rise since last year. Last month saw the highest number of owner-surrendered animals, with an increase of 35 percent.

Though there may not be a clear, quantifiable way of determining whether those owner-surrendered animals are in fact casualties of the foreclosure crisis, animal rescue folks say there is overwhelming anecdotal evidence that this is the case. "Our rescue partners are stretched," SFACC director Rebecca Katz told the Guardian. "We’re stretched."

Indeed, almost every kennel contains a dog with a tag reading "owner- surrender." Animal Care and Control runs a "no kill" shelter — which means animals are euthanized only if they are too sick to be treated or too aggressive to qualify for adoption — has had to spill some of its new arrivals over into its adoption kennels rather than give all the new arrivals a chance for the owners to reclaim them.

"I’ve been dealing with this shelter for 15 years," said Paley Boucher, founder of volunteer-run Rocket Dog rescue, which saves almost 200 dogs from lethal injection each year. "It used to stand out when you saw a dog that was owner-surrendered. But now almost all of them are." Linda Pope with Nike Animal Rescue Foundation says dogs adopted and returned due to foreclosures is an entirely new phenomenon to the center.

Cat Brown, deputy director of the San Francisco SPCA, reported a rise in owner-surrendered animals. "We feel it’s directly related to the economy," she added. "It’s about people losing their jobs and thinking about what they can give up."

Gary Tiscornia, executive director of Monterey County’s SPCA, says there have been a high number of foreclosure animals and a lack of communication between the shelters and the banks, real estate agents, property inspectors, and other entities that find abandoned animals in vacated homes.

Tiscornia said that Realtors in California have found animals in all kinds of conditions in vacated homes, including rottweillers abandoned with a few bags of food and a tub of water, and a dog left for dead in an empty house. It hasn’t always been the case that such incidents were reported to animal shelters.

The disconnect between corporate entities and shelters has been exacerbated by California laws requiring that inspected property, including animals, be left untouched. A new law that went into effect last month addresses the problem. Assembly Bill 2949 requires anyone who encounters an abandoned animal in a property that has been vacated through lease termination or foreclosure to immediately contact a local animal control agency.

The American Society for the Prevention of Cruelty to Animals (ASPCA) issued a statement on foreclosure animals Jan. 29, offering the following advice to those facing foreclosure or eviction: Check with friends, family and neighbors to see if someone can provide temporary foster care for your pet until you get back on your feet. Make sure pets are allowed — and get permission in writing — if you are moving into a rental property. Contact your local shelter, humane society, or rescue group in advance of moving, and provide your animal’s records to help it get placed in an appropriate home.

To love and lose a home is a hard thing, but to love and lose a home and a furry family member is worse, especially when people don’t know where their pet will end up. "People don’t know what to do," said Boucher, citing an example of a Bay Area woman who kept her dog in the backyard of her foreclosed home long after she had moved, and another of a family that asked the subsequent owners of their foreclosed home to care for their dog.

"We’re perceived as a no-kill city, but that’s just not true," said Boucher, who rescues pit pulls, the most frequently euthanized of all dogs. Like many rescue agents, Boucher disagrees with the standards set by the temperament tests that determine whether a dog is suitable for adoption, arguing that many perfect dogs would not pass the test.

Slugocki also takes issue with temperament tests. "Let’s say I’m a dog that hasn’t eaten for weeks and I get picked up and taken to a shelter and they put down a bowl of food as part of the temperament test. Take it away and see what I’ll do."

"This is a huge disaster, a quiet emergency," Boucher said. "I hope people can open their minds to fostering an animal."

Despite the spike in economy-related homeless animals, Katz says SFACC is still under control, at least for the time being. "We have not seen an increase in euthanasia and we hope not to." About 84 percent of animals that end up at the SF shelter are saved, compared to the depressing national average of 30 percent.

"We do everything we can to save animals’ lives. We reach out to every rescue we know of," Katz said.

But with shelters, rescues, and sanctuaries swamped with a growing wave of owner-surrendered pets, caring for the displaced animals is bound to get tougher, particularly if foreclosure crisis gets worse, as many economists predict. And with budget cuts in the offing in the city, SFACC staff fear cutbacks could drive up euthanasia rates.

Slugocki says his sanctuary has something other shelters don’t: space. He has 283 redwood-adorned majestic acres of it, and he’s willing to take every dog, no matter how many have failed the temperament tests that would guarantee a swift lethal injection at the pound.

"I can take dogs that don’t stand a chance. I can take them crippled, heart worm positive, deaf, blind, you name it," Slugocki said. Half of the 75 dogs at Milo are unadoptable and will live peacefully among the redwoods for the rest of their days. He says he can take up to 1,000 dogs but he’s missing one thing: sufficient staff to build enough dog pens and feed and care for a small city of dogs every day.

"I desperately need volunteers," Slugocki said. "I know there is a crowd of people, that 30 to 60 tattooed, pierced, old rock ‘n’rollers, new Buddhists, lifelong punks who are older and maybe have kids now." For now he’s taking as many dogs as he has pens for and is working 14-hour days to help save the discarded critters of the economic crisis.

"It’s the end of the goddamn family dog," Slugocki lamented. "Nobody who has a dog and has lost a home will ever think about having a dog again."

To contact Greg Slugocki, call (707) 459-0930 or email milo.sanctuary@yahoo.com.

What if Paul Krugman’s right?

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Mr. Obama’s victory feels more than a bit like defeat. The stimulus bill looks helpful but inadequate, especially when combined with a disappointing plan for rescuing the banks. And the politics of the stimulus fight have made nonsense of Mr. Obama’s postpartisan dreams.

By Bruce B. Brugmann

Paul Krugman ended his column in his Friday New York Times column with this warning and a bit of paraphrase from a W.B. Yeats poem:

“And I don’t know about you, but I’ve got a sick feeling in the pit of my stomach–a feeling that America just isn’t rising to the greatest economic catastrope in 70 years. The best may not lack all conviction, but they seem alarmingly willing to settle for half-measures. And the worst are, as ever, full of passionate intensity, obliviious to the grotesque failure of their doctrine in practice.

“There’s still time to turn this around. But Mr. Obama hs to be stronger looking forward. Otherwise, the verdict on this crisis might be that no, we can’t.”

Click here to read Paul Krugman’s full column in the Friday, February 13 New York Times titled, Failure to Rise.

Attention: New Mexican revolution scheduled

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MEXICO CITY — Never before has the contrast between the World Economic Forum (WEF), the annual clambake of the capitalist class in Davos Switzerland, and the World Social Forum (WSF), created a decade ago to beat back the corporate globalization of the Planet Earth, been quite so stark.

While the moribund masters of the universe met on their ice mountain in the midst of the most chilling world-wide depression in a century, largely triggered by the overweening greed of those in attendance, tens of thousands samba’ed in the tropical heat of the Amazon city of Belem to celebrate the demise of capitalism. Among those on hand at the WSF dance party were presidents Chavez of the Bolivarian Republic of Venezuela, Bolivia’s Evo Morales, Ecuador’s Rafael Correa, Paraguay’s Fernando Lugo, and Brazil’s Lula da Silva. Lula, who is usually a devoted Davos-goer, eschewed this year’s funerary event to avoid the stench that inevitably results from rubbing shoulders with mummies.

“The God of the Market has been broken,” the one-time Sao Paolo metalworker proclaimed to tens of thousands in Belem. Writing in the Mexican daily La Jornada, Luis Hernandez Navarro pointed out that it was precisely the social forces represented by the WSF that propelled Latin America’s social democratic presidents into power.

Indeed, the only two Latin heads of state to attend the caviar and champagne-laced charade in Davos were Colombia’s widely-disparaged Alvaro Uribe and Mexico’s questionably-elected president Felipe Calderon, both of them Washington’s darlings. Not even freshman U.S. president Obama, who recently lambasted the machinations of the same breed of bankers who gather each year on the ice mountain as “shameful,” showed up in Switzerland, an event that his predecessor in power George Bush never missed.

Felipe Calderon’s trip to Davos got off on an inauspicious foot. On the very day he flew out to the WEF, Bank of Mexico president Guillermo Ortiz confirmed that his country was in full-blown recession. For months, Calderon and his obscenely obese Secretary of Finance Augustin Carstens have characterized Mexico’s economic health as only suffering from “a little cough” (“catarrito.”) According to Bank of Mexico prognostications, the Aztec Nation will suffer negative growth in 2009 (-0.8% to -1.8%.)

The news hit Felipe like an ice ball from hell.

Seeking to put a happy face on his country’s dismal future, Calderon championed Mexico’s 1.5% 2008 growth rate but fooled few – Mexico’s anemic performance last year put it in 24th place out of 24 Latin American economies in the International Monetary Fund’s rankings, even behind Haiti, the basket case of the Americas. The IMF is predicting 1.1% growth for Latin America in 2009 and, like Ortiz, calculates that Mexico will fall into negative numbers.

The Mexican president’s delusional optimism in the face of so bleak an outlook played to incredulous audiences at Davos. Calderon also sought to blunt the recent blockbuster report of the U.S. Joint Chiefs of Staff that Mexico is a potentially “failed” state by handing out trinkets like baseball caps bearing the ambiguous legend “It’s All In The Trust.” The giveaway (“magic spikes” to keep the mummies from slipping on Davos’s icy streets were also distributed) came during a session at which Calderon flogged Mexico’s chances of weathering the current economic turmoil – the Mexican president’s talk was slugged “Riders On The Storm,” a title plagiarized from the Doors’ 1971 apocalyptical anthem about a cowboy spree killer. Lead singer Jim Morrison was reportedly heard thrashing about wildly in his Paris grave.

As a bonus attraction, Calderon teamed with former Mexican president Ernesto Zedillo, now head of Yale University’s Institute for Globalization Studies, in an act conducted entirely in broken English that verged on tragicomedy. Zedillo, who coined the term “globalphobics” in reference to WSF types at the 1996 Davos get-down, revealed that the bank bail-out he sponsored during Mexico’s mid-1990s meltdown and dubbed FOBAPROA, has drained 20% of his country’s gross domestic product (PIB), bragging that the 400 trillion peso outlay was triple that of what the Bush-Obama bail-out has cost U.S. taxpayers.

As might be anticipated, the Calderon-Zedillo act did not play well on the homefront. While the Mexican presidents cavorted with the living dead in Davos, a half million of their compatriots were marching through the streets of Mexico City to protest the economic wreckage the neo-liberal ethos has wrought here. On January 25th, former left presidential candidate Andres Manuel Lopez Obrador, from whom Calderon stole the 2006 election, and his Movement to Defend Mexico’s Oil & The Popular Economy assembled upwards of 200,000 in the great central Zocalo plaza. Five days later, farmers and trade unionists matched that outpouring to denounce the damage done by the current crisis.

Among the crisis indicators: 6% inflation, the highest in ten years, and 340,000 jobs lost on Calderon’s watch. (Calderon campaigned as “the president of employment.”)

Just what Mexico’s unemployment numbers are is deeply obfuscated. Government bean-counters at the National Statistical and Geographic Institute (INEGI) claim it is no more than 4% – but under INEGI parameters, anyone who worked for more than an hour in the informal economy during the previous week is considered employed.

Utilizing such criteria, the emblematic apple sellers of the 1930’s Great Depression would not be determined to be jobless.

On the other side of the ledger, Enrique Galvan, who authors La Jornada’s “Money” column, calculates that 70% of the nation’s 45 million-strong workforce does not have a steady job. A maquiladora industry that assembles consumer goods for the ravished U.S. market and which generated a million jobs in the best of times has gone kaplooy and the Big Seven automakers (including Toyota, Nissan, Honda, and Volkswagen) have shut down their plants for the duration of the downturn.

Meanwhile, workers’ pensions, privatized under Zedillo, have gone up in smoke, with those paying in losing up to 30% of their retirement funds in the past six months. To compound the devastation, the peso has sunk to record lows, having been devalued by 32% since last August 4th when it weighed in at 9.87 against the dollar. At this writing, 14.78 pesos will buy you one dollar Americano and the exchange rate is climbing toward 15.

Nonetheless. Mexico’s banks, rescued by Zedillo’s 15-cypher bailout and subsequently sold to transnational financial conglomerates, registered a 38% profit increase in 2008.

The current blasted economic landscape here bears striking similarities to another period of devastating downturn a hundred years ago. The 1907-08 depression was trip-wired when commodity prices collapsed and money dried up, casting tens of thousands of Mexican workers into the streets and accentuating the monstrous divide between rich and poor. To counter working class rage, dictator Porfirio Diaz cranked up repression, massacring hundreds of striking textile workers in Rio Blanco Veracruz and miners in Cananea Sonora. Synchronistically, workers at Cananea, the eighth largest copper pit in the world, have been on strike for the past 18 months in spite of Calderon’s efforts to break the walkout.

Despite the shattered economy and his deep-rooted unpopularity after 34 years in power, Diaz decided to run for re-election in 1910, stealing the vote that June and jailing opposition leader Francisco Madero, a role model for Lopez Obrador. To celebrate his “victory,” Porfirio Diaz threw a huge party to mark Mexico’s first 100 years of independence from Spain, expending the nation’s entire social budget on useless monuments, many of them lined up along Mexico City’s Champs D’Elysie, the Paseo de la Reforma.

The pageantry culminated on Independence Day, September 16th with the installation of a gilded Angel of Independence on that glittering boulevard. Two months later, the Mexican revolution, led by Madero, exploded, and Diaz was forced to flee the country.

Just before Felipe Calderon took off to tete-a-tete with the dead in Davos, amidst patriotic bombast and flowery fireworks, the Mexican president announced the construction of the Arc of the Bicentennial to be inaugurated September 16th 2010, commemorating both the 200th year of Mexican independence and the 100-year anniversary of the beginning of the Mexican revolution. Following the Porfirian model, the Arc of the Bi-Centennial, whose cost was unannounced, will be built at the foot of the Paseo de la Reforma.

Mexico’s political metabolism seems to break out in insurgencies every 100 years on the 10th year of the century. In 1810, the country priest Miguel Hidalgo launched the struggle for independence from the Crown. In 1910, Francisco Madero ignited the fuse of the epoch Mexican revolution.

At this writing, there are less than 330 days until 2010.

Super Ego: Bear attacks, roller skates, dry humps

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By Marke B.

Wait a minute, it’s February? Sheesh. In the spirit, perhaps, of our recently bipolar weather systems and my on-again off-again memory banks, I’ve been raving in my cubicle to two disparate tracks all week — one a tingly, moody laptop dubstep (lapstep?) zonker by Mount Kimbie:

Mount Kimbie, “Maybes”

And the other some good ol-fashioned achingly lovely wronged-woman house by Teddy Douglas of the Basement Boys, with his frequent collaborator, the immaculately voiced Margaret Grace. I’ve never really been a fan of Teddy’s basic-seeming beats, but this one really comes together around the three-minute mark, and grows and flows like a classic track by Quentin Harris (who actually cribbed quite a bit off the old Teddy, melody-wise):

God Created Woman (Vocal 12″) – Teddy Douglas feat. Margaret Grace

Neither of which will probably be played at any of the choice upcoming parties below, but hey — a miracle mashup in my wobbly head can be dreamed and deemed righteous, no? Check these out, and also more in my latest Super Ego clubs column. Do whatcha like!

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ROLLER DISCO PARTY
In absence of a nearby rink, rollerskating parties have found a new home in nightclubs and galleries. Just watch out for those warped floors! Do the bump, indeed. SF Indie Fest is throwing a Big Lebowski-themed shindig on wheels at CellSpace, with tunes by the Black Rock Roller Disco camp. Rentals provided – snowball and bromance optional.
Fri/13, 9 p.m., $10, $5 with costume. CellSpace, 2050 Bryant, SF. www.cellspace.org

The future of a giant landlord

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OPINION The business model of CitiApartments is in crisis. The local landlord giant faces an avalanche of foreclosures, with almost 20 percent of its units being returned to lenders and dozens more properties in danger. A recent article in The Wall Street Journal blamed the credit market for the losses — but tenants standing up for their rights were a factor, too.

San Francisco renters have complained for years about the company’s practice of buying rent-controlled buildings then driving out tenants in order to re-rent their units at higher rates. In the past few years, tenant organizing has brought attention to CitiApartments’ aggressive tactics and put a kink in the company’s plans.

For years, CitiApartments has been accused of harassing tenants, with tactics ranging from illegal buyout offers to physical intimidation to intrusive surveillance. Tenants report living for months without walls and elevators, struggling with leaks and health hazards, with CitiApartments refusing to make repairs. Such problems are no accident: CitiApartments success depends on getting long-term tenants to move out.

Yet tenants are not sitting idly by. A campaign of tenants and advocates, CitiStop, has been educating new CitiApartments tenants about their rights. Over time, tenants have become less afraid and increasingly in touch with tenant advocates and lawyers. Tenants have pursued hefty private lawsuits and are also working with City Attorney Dennis Herrera, who is suing the company for numerous violations.

This campaign has had real results. Tenants are refusing to let CitiApartments force them out. And the organizing effort has helped defend rent control for all San Francisco tenants — CitiApartments owns such a large share of the apartment rental market that it is able to artificially raise rents citywide.

Normally foreclosures are bad news for tenants who have to deal with large banks unfamiliar with San Francisco tenant law. But in the case of CitiApartments, even bank ownership is an improvement. However, UBS, CitiApartments’ lender, has already made its first serious blunder by allowing CitiApartments to continue managing the buildings the bank now owns. UBS should seriously reconsider this decision, given CitiApartments’ track record.

The long-term fate of the buildings is an open question. An ideal solution would be for the city or a nonprofit to take over ownership of the buildings with the goal of providing permanent, affordable housing.

Though CitiApartments’ distressed mortgages are ideal candidates for federal aid, this option must be pursued carefully. It would not be helpful for the government to invest in these buildings based on CitiApartments’ claims that the company can recoup the money using the same flawed model that caused the problems in the first place. But as long as we avoid that trap, we have a great opportunity to meet the city’s pressing need for affordable rental housing.

CitiApartments’ business model has not been working for tenants for a long time, and now it is not working for CitiApartments. It is time to abandon speculative rental schemes and start prioritizing fair, equitable housing. *

Jane Martin is vice chair of SF Pride At Work and an organizer with the CitiStop Campaign.

Concrete plans

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› sarah@sfbg.com

In the fractious atmosphere that dominates meetings concerned with Lennar’s plan to redevelop the economically depressed southeast sector of San Francisco, reality is relative to one’s perspective on this ambitious project.

At these meetings, competing factions within the Bayview’s predominantly African American community typically accuse each other — as well as the mostly white engineers, planners, and scientists that Lennar and the city hired to flesh out the details of their vaguely worded but voter-approved conceptual framework — of being sellouts and traitors.

The Jan. 28 meeting, where two local advisory committees endorsed Lennar’s draft urban design plan for a 770-acre Candlestick Point/Hunters Point Shipyard development, was typical. It was held at the Southeast Community Facility, within sniffing distance of a seismically suspect sewage treatment plant.

The committee’s endorsement came at the end of a meeting that was full of what critics labeled "disingenuous claims" by representatives from Lennar, the Mayor’s Office, the San Francisco Redevelopment Agency, and the city’s Planning Department; recriminatory accusations by community members; and disruptive chants of "A-B-Uuuu!" by a female member of Aboriginal Blackmen United, who claimed that ABU members have been starved for work at Lennar’s development. Records show Lennar paid ABU trainees $11,300 in fiscal year 2005–06 for work at the Shipyard’s Parcel A.

Fanning the flames was a report that local environmental nonprofit Arc Ecology released last month. Arc’s report faults Lennar’s urban design plan for not including comparisons with realistic alternatives and for failing to study the cumulative impact of the 15 developments, covering 1,500-2,000 acres, currently underway on the eastern waterfront.

"The practice of ‘island’ development prevents the city from conceiving a cohesive vision for the east waterfront," Arc Ecology’s January 15 report states. "Moreover, the piecemeal approach cannot adequately address the practical consequences of the addition of 50,000 new residences to the area."

Noting that Lennar’s proposal calls for a 60 percent increase in the neighborhood’s population as more than 20,000 new residents join the 33,000 people who already live in the neighborhood, Arc’s report lists alternatives that "would strengthen the economic, social and environmental benefits, while avoiding and reducing some significant impacts."

Financed by a California Wellness Foundation grant, Arc’s report stressed that it does not disagree with the stated objectives of Lennar’s development plan as laid out in Proposition G, which voters approved in June. In fact, the organization did little to voice its concerns before the election.

But the report has ruffled the feathers of city leaders, who seem hell-bent on moving the project forward and applying for funding from the federal economic stimulus package. The report calls for a focus on doing "bottom-up" ecological planning, creating real economic opportunities for the Bayview community, relocating the proposed football stadium, and removing the shipyard’s highly contaminated Parcel E2 from the project.

Noting that Lennar’s environmental impact report has yet to be completed, and that there has been no time to study Arc’s report, Citizens Advisory Committee member Scott Madison argued that delaying the endorsement would have no impact on Lennar’s home building or job creation schedule. "It’s not going to slow down anyone getting a job by even one day if we take a few days," Madison said. "But once we approve this — even a draft, even if folks are amenable to some changes — it has a certain kind of semi-concrete to it that’s difficult to chip away."

CAC member Diana Oertel voiced her objections to Lennar’s plan to divide the 170-acre Candlestick Point State Recreation Area, the Bayview’s only large open space that provides a place for recreation and an escape from urban living. "It’s not acceptable to me to see that area cut in half, gentrified, prettified, with housing going to edge of the park," Oertel said.

Project Area Committee member Leon Muhammad said there was no way the urban design plan should be endorsed "until we have addressed all the issues, until they come up with a complete plan that makes sense, not a half-baked plan."

But then PAC member Cedric Jackson asked to hear from folks in the audience who were hungry for jobs — at which point ABU folks yelled and raised hands. "I saw 80 percent of the community stand up and say, move this process forward," Jackson then asserted. "In 2000, we were 70 percent of the community, now we’re less than 50 percent. There is an out-migration and it’s not because we don’t like San Francisco, but we’re being forced out economically. So the longer you delay, the less of us will be there, especially with the economic conditions we’re facing."

Seconded by PAC member Gary Banks, Jackson moved to endorse Lennar’s draft design plan as-is, with only PAC members Muhammad and Kristine Enea, and CAC members Oertel, Madison, and Carmen Kelley dissenting.

Reached after the meeting, ARC Ecology’s Saul Bloom acknowledged that many of the problems people face in the Bayview are related to "tension over jobs." Yet he was surprised by the strong-arm tactics by proponents of a project that won’t generate jobs for at least another year.

"There’s this blind panic, this belief that if you hold up anything, you are going to stop the whole plan," Bloom told the Guardian. He hopes that now that the vote has passed, the city and Lennar will make good on verbal promises, made before and during the Jan. 28 meeting, to review Arc Ecology’s report.

"As Scott Madison pointed out, if we’d listened to these same we-have-to-vote-yes-now voices the last time around, when we were asked to endorse Phase A, we’d never have gotten the community-benefits program," Bloom said, adding that many of the current committee members are new and inexperienced. "So it’s hard for them to see through the rhetoric and pain."

"None of us want to derail the plan," continued Bloom, whose group also receives funding from the SFRA, which is overseeing the project. "What incentive do we have? Do we want to piss off the developers, contractors, and commissioners when our contract is up?"

"The city is under the impression that there is a broad base of support for this project, by virtue of Prop. G," Bloom said. "But they are unaware of the depth of dissatisfaction citywide with this project. People are saying, ‘this is insane.’<0x2009>"

Bloom believes ARC’s report raised the ire of city leaders because they feared it would fall into the wrong hands and be used in a political campaign. "But I believe the city has let the community down by not facilitating a dialogue," Bloom observed.

In addition to questions about location of the stadium, the design of the park, the bridge over Yosemite Slough, and plans to cap a radiologically impacted landfill on Parcel E2, Bloom says the hidden story in all of this is the "unstudied cumulative impacts of the all the city’s development projects on the eastern waterfront."

Together, these projects will create 30,000 new units and attract 50,000 new residents, with Lennar’s CP/HPS development creating 10,500 units, 75 percent of which are slated to sell at market-rate prices, with condos beginning at the $500,000 mark.

"Lennar can’t possibly think they can build this number of houses and sell them at these prices, at least not for the next four years," Bloom said. "The city should have had a public dialogue about the stadium options instead of pulling a plan directly off the shelf that a reliable stadium development firm did. They say they’ve studied all these other options, but where are the studies?"

Bloom notes that Prop. G was not a mandate to build a bridge over Yosemite Slough, and that the city is currently miscounting the parks and open space acreage.

"You wonder why people have no faith," Bloom said. "To whom did the city make the overwhelming case about the park, or about putting a bridge over the slough? It seems their attitude was, ‘Bayview is a crummy neighborhood, so let’s bulldoze and rebuild it,’ whereas we look at the park and say it’s a promise unfulfilled."

He believes that Arc’s recommendation to remove Parcel E2 is a no-brainer: "You are protecting public health and the environment, creating jobs that help people pay their mortgages, and you are making the property more marketable, so value increases."

With the city having publicly committed to reviewing Arc’s material, Bloom is hopeful that the city will put the results of that study into the EIR. "We are not promoting any particular outcome," Bloom said, observing that if Lennar builds 10,000 units, BVHP will no longer be a predominantly African American neighborhood. "We are trying to be the entity that raises the difficult questions that people in city have felt, but [have] been afraid to voice, because they fear those questions will be used to stop the project in its entirety."

Reached by phone, Michael Cohen of the Mayor’s Office of Economic and Workforce Development noted that Lennar’s draft urban-design plan was completed five months ago, has been vetted extensively, and now includes 32 specific modifications based on those hearings.

"These are issues that will be addressed further," Cohen said of Arc’s report. "Some are infeasible, based on extensive technical studies. But we believe that if there is a stadium, it’s in absolutely the right position and that ARC doesn’t have an alternative plan. They haven’t done the necessary studies and they haven’t presented alternative plans that actually work."

As for Arc’s contention that Parcel E2 could be dug up and hauled out, Cohen notes that the city is in a legally binding agreement with the United States Navy, which is obligated to clean up the shipyard to a standard consistent with the city’s intended use. "We don’t control what the remedy is…. [If state and federal environment regulators] say the Navy has got to dig and haul so we can safely use it as a waterfront park, then that’s what they’ll do."

Cohen insisted that the Alice Griffith public housing project will be rebuilt, whether the 49ers stay or not, and that Lennar’s project will invest $10 million to turn "a grossly underused state park into a site comparable to Crissy Field."

Isn’t it ironic?

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› culture@sfbg.com

Under harsh, clinical lighting, with a background cloaked in darkness, a zaftig, heavily tattooed woman fellates an enormous and alarmingly hairless penis. The hairless penis ejaculates, and a ominous computer voice intones that dribbling cum stains resemble "writing in Arabic, or sometimes Sanskrit." As the woman stares at the cum, the voice dramatically pronounces that "if she could learn to read that writing, she would know her … entire … future." The penis writes a tiny bit more Sanskrit, and the scene fades to black.

What is this? It’s not Andy Warhol’s Blow Job (1963). It’s the opening blow-job scene from a movie called Hospital, produced by Vivid Alt, an imprint of the mainstream porn production studio Vivid. Vivid Alt produces alternative pornography, or "subcultural erotica." Altporn is, on a basic level, porn that features models who are representatives of real-life subcultures like goth, punk, rave, emo, rockabilly, and hipster. Instead of buxom blondes who appear to have traipsed out of the Playboy Mansion on a cloud of pink boas, altporn features models who are often tattooed, pierced, and generous with the DIY Manic Panic hair dye. In a weird porn-imitating-life-imitating-porn switch, two big stars of altporn, Sasha Grey and Charlotte Stokely, currently star in campaigns for American Apparel.

Alternative porn is nothing new, at least not since the advent of the Internet. While magazines like Hustler and Playboy have formulated the aesthetic of mainstream print pornography, the Internet created a democratic space inside which divergent interpretations of sexuality could be easily presented. Blue Blood is generally credited as launching counterculture erotica in 1992 with the glossy, erotic zine that featured punks, goths, and erotic fiction. But Altporn did not take hold on a large scale until the late 1990s with Web sites like GothicSluts and EroticBPM. By the time alt-erotica site SuicideGirls appeared in 2001 (not quite full-blown porn, but a contributor to the altporn genre just the same), altporn was a full-fledged subset of porn. Today there are hundreds of altporn Web sites, with names like Crazybabes, Burning Angel, Broken Dollz, Razor Dolls, Supercult, and DeviantNation.

For Eon McKai, founder of Vivid Alt, porn is an intensely personal form of expression. "I’d say at no time — especially at Vivid Alt — no one is told to make a certain type of movie that isn’t coming from some place inside of them." McKai states that he and other altporn directors are merely "expressing the aesthetic that they find in their life, that they live in their life." In fact, many people involved in the altporn industry believe that what they are creating is a meaningful form of personal expression. Most people involved in altporn view their work as fundamentally different than mainstream pornography. Cutter, of AltPorn.net, explains, "AltPorn makes the trends and porn-porn tends to follow them. Traditional porn is conservative in a weird insular way. It tends to copy outside things." Cutter doesn’t think that altporn appropriates or copies from existing subcultures. He and others view altporn as being organic, DIY, independent, and fundamentally authentic.

All alternative subcultures are inherently interested in the notion of authenticity, and particularly in determining that which constitutes genuine membership into the group. Maintaining authenticity is a crucial part of how subcultures survive. Because subcultures are groups that are in part defined by their opposition to the mainstream, they are innately concerned with the "authentic" or original moment of resistance. Members of the altporn community are just as interested in the notion of genuine membership as the subcultures they depict. Eon McKai vehemently appeals, "We are a part of the subcultures that we represent, so if you look at the people who are behind it, I think you’ll find that they are pure to the street, and everything is authentic and this is who we are. We are just making porn about it, and this happens to be who we are. It’s really artist and filmmakers who make porn who are really expressing the aesthetic that they find in their life, that they live in their life." But what, really, is authentic porn? Isn’t a bona fide cumshot enough to prove authenticity? Eon McKai’s own name is a point toward the absurd, as his moniker is a play on the name Ian McKaye, the Fugazi and Minor Threat frontman who was a leader of the straight-edge movement that rejects alcohol, drugs, and casual sex.

From what I gathered from those in the altporn community, authenticity necessitates that creators of altporn be actual members of the subcultures they represent on camera. Smith elaborates, "All the originators in this genre were driven to create sexual media that appealed to their own community and their own communities’ aesthetics. So, the goths created goth erotica and the punks created punk erotica and the ravers created raver erotica. So, on an aesthetic level, altporn offers an alternative look, as well as the community interactivity, to prove it’s authenticity." Whether they are "true" punks, goths, or hipsters, shouldn’t really matter if the work speaks for itself, right?

It wasn’t until after I watched hipster porn videos like Sugar Town and Honey Bunny that I realized why altporn needs to paint itself as authentic. Smith puts it best when he says, "Without genuine subcultural attributes, it quickly becomes self parody." For porn that banks on its subcultural attributes, being perceived as inauthentic means dismissed as a joke. Of all forms of cinema, porn — with its skeletally thin plots, poverty of character development, and cheap production values — is most vulnerable to lampoon. For those who have ever watched porn, I am sure you know that embarrassed, cringey, oh-my-god-ew feeling of watching a particularly ludicrous moment in any scene. That feeling is magnified tenfold when watching a hipster porno that features stars discussing Sartre while wearing nothing but tube socks, such as in Honey Bunny.

While altporn might have originated under the auspice of DIY amateurism, it has proven to be lucrative and, as a result, has carved a niche for itself in the porn market. Because of the push to earn money, altporn has become less concerned with representing certain aesthetics than it is with latching on to new trends and then marketing them to get more customers. Annaliese of Gods Girls reflects, "I think that altporn will always be a representation of what is in-the-now for the customer that it is appealing to, the models that it features and the culture that it represents. The Y generation are furious followers of now trends in fashion, art, music, film, etc., and our site is a reflective of those nuances. Altporn will go where ever the models go and will evolve as the culture evolves. I personally see fewer and fewer applications from stereotypically ‘goth’ models, so perhaps that look has become less trendy." What’s the next big thing in altporn? Hipsters.

It seems like everything is getting hipstered out these days. From clothing to music to even the rebranding of the Pepsi logo, everything is getting a hipster makeover. Porn is no exception. If you look at the logo for Vivid Alt, you’ll notice that it’s tricked out to resemble an Urban Outfitters catalog. In the videos, the actresses are decked out in American Apparel. Hipster culture subsumes and dismantles the aesthetics of popular culture, appropriates its sincerity, and transforms it into a pastiche of irony. Likewise, hipster porn subsumes and dismantles the aesthetics of hipster culture, appropriates its irony, and transforms it into something utterly sincere: porn. For what can be more sincere than a cumshot? Is it possible to get ironic oral? Hipsters belong to a subculture that is incredibly concerned with image — and with defining, controlling, and protecting that image. They can now watch as their vaingloriously crafted personae are subsumed by the porn industry and transformed into fetish. How ironic.


Photos, video, and a full interview with altporn director Eon McKai on our new SEX SF blog

>>More G-Spot: The Guardian Guide to love and lust

Where federal banking money should go

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OPINION The federal government is shelling out hundreds of billions of dollars to prop up failing financial institutions, with no end in sight. Taxpayer money is going to commercial banks and insurance companies that took outsized risks and participated in extraordinarily complex financial transactions, motivated by no purpose beyond the hunger for profits. They were allowed to engage in this destructive behavior despite being among the most heavily regulated companies on earth. This is a terrible mess, and we’re all paying for it.

Yet there is one type of financial institution that remains unsullied by the current crisis – community development financial institutions, or CDFIs. CDFI is an official federal designation given to community loan funds, credit unions, and community development banks that have a mission first and foremost to address the financial needs of working people and low-income communities.

To be designated a CDFI, a financial institution must go through a rigorous screening process administered by the Treasury Department and prove that its core mission is to bring about economic benefits for the underserved and that it’s accountable to the communities it serves. In the Bay Area, active CDFIs include the Northern California Community Loan Fund, One California Bank in Oakland, and my own organization, Opportunity Fund.

CDFIs make microloans to new and emerging small businesses. They offer fair and non-predatory mortgage loans to first-time homebuyers, often combining their loans with homebuyer counseling. And they finance the construction of new affordable rental housing, health clinics, and social service facilities. Opportunity Fund, for instance, has invested more than $120 million into some of the most troubled neighborhoods in the Bay Area, with a loan loss rate of less than 1 percent. And we have somehow managed to do this without the use of complex derivatives, credit default swaps, or exotic mortgage products. We have done it by taking prudent risks on hardworking people who deserve a chance.

Unlike lenders motivated by greed and empowered by questionable financial "innovations," CDFIs are generally in much healthier financial condition than their mainstream counterparts. Despite being regulated by nothing more than our mission to make our communities better, we are not in need of a bailout.

We are, however, forcefully and unapologetically asking for a major share of any economic stimulus that Congress approves.

If the treasury can pour $700 billion (and counting) into corporations that pushed the envelope way too far in pursuit of profits, surely it can and should inject $5 billion or $10 billion into CDFIs, which will invest that money in our neighborhoods and into a better life for those who are struggling most right now.

The Treasury Department invests in CDFIs through its CDFI Fund, so this stimulus can be administered with no new bureaucracy. Furthermore, we are ready to put the money to work right away instead of salting it away like many banks did with the first round of bailout money. Opportunity Fund has identified $50 million in shovel-ready affordable housing developments that we could finance immediately if we had the capital, and our sister organizations also have real deals in their pipelines.

Let’s work together to make sure that this time around some of the money in Bedford Falls goes to Jimmy Stewart, and not all to Mr. Potter.

Eric Weaver is CEO of Opportunity Fund (www.opportunityfund.org).

Don’t privatize cab permits

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EDITORIAL In tough times, political leaders with no backbone for making hard decisions tend to look for easy, short-term fixes. And Mayor Gavin Newsom’s proposal to auction off taxicab permits to the highest bidder is just that — a quick fix with serious long-term problems. In fact, it amounts to the privatization of a lucrative public asset.

A bit of background: since 1978, when then-Sup. Quentin Kopp authored a measure called Proposition K, San Francisco has issued some 1,500 taxi permits, known as medallions, to working cab drivers. Under Prop. K, the medallions can’t be owned by corporations, and they can’t be bought and sold as speculative commodities. They’re owned by the city, and only people who actually drive cabs for a living can use them.

There’s a logic to that. The permits are valuable — a medallion holder not only has the right to drive a cab, he or she can lease that permit to other drivers for additional shifts. Since a taxi can be on the road 24 hours a day, the lease income is substantial, roughly $30,000 a year. But only active drivers get that benefit; nobody can hold a permit, sit at home (or work another job), and just collect that cash.

The process isn’t perfect. The waiting list for a medallion takes more than 10 years. Some medallion holders cling to their permits long after they should have retired (and thus keep driving when they should no longer be on the road). There’s no process for compensating a permit holder who becomes disabled.

But those are issues that can be addressed. The basic fact is that San Francisco has taken the position that the public benefit — a license to drive a cab for hire — should be given only to those who are using it. Prop. K prevents consolidation of ownership in the industry, prevents speculators from turning medallions into a new form of securities (which worked out so well with mortgages), and gives people who have spent 10 years or more driving a cab a chance to reap the full benefits of their work.

Newsom, however, sees those permits as a gold mine. If the city auctioned them off, they might bring $100,000 apiece. Under Newsom’s plan, much of that money would go to the city, although some would go to current medallion holders.

The plan is full of problems.

For one, it could completely change the cab business in San Francisco, shifting control of the industry away from drivers and giving it to big businesses and investors. Very few working drivers (who are lucky to clear $30,000 a year) could afford to buy permits, particularly at auction. So the first people in the market would be the cab companies, which for years have wanted the right to own and control the medallions. Private investors — wealthy individuals and institutions — would see the permits as an asset likely to appreciate, and would buy up medallions, then seek to raise the lease fees for drivers. The only way drivers could buy permits would be to seek the equivalent of mortgage loans — but the banks that handle that sort of loans typically require 20 percent down, putting many drivers out of the running. Unless, that is, some shadowy characters come along with cash loans — or unless the cab companies handle that payment, thereby getting further control).

Unless medallion ownership is limited to drivers, the entire process will get corrupted. People will drive for a minimal period of time, bid on medallions, then go into another line of work — and keep the medallion. Newsom’s office says he’s going to do that, but there are no details on the plan yet.

Cab drivers in the city talk about the need for security and retirement income. After years of driving with a medallion, they want the right to sell it for a chunk of cash. But under the current system, drivers are — and most of them like being — independent contractors.

Freelance writers, consultants, small business owners, and many others who are self-employed are responsible for their own retirement planning. Why should cab drivers get a special deal from the city?

Privatizing the permits is just a bad idea. Newsom promised last year — in writing — that he wouldn’t seek to change Prop. K. It’s infuriating to see him so quickly break that promise.

The supervisors should reject this proposal.

Editorial: Don’t privatize taxicab permits

0

Mayor Newsom promised last year in writing that he wouldn’t privatize taxicab permits. It’s infuriating to see him so quickly break that promise.

EDITORIAL In tough times, political leaders with no backbone for making hard decisions tend to look for easy, short-term fixes. And Mayor Gavin Newsom’s proposal to auction off taxicab permits to the highest bidder is just that – a quick fix with serious long-term problems. In fact, it amounts to the privatization of a lucrative public asset.

A bit of background: since 1978, when then-Sup. Quentin Kopp authored a measure called Proposition K, San Francisco has issued some 1,500 taxi permits, known as medallions, to working cab drivers. Under Prop. K, the medallions can’t be owned by corporations, and they can’t be bought and sold as speculative commodities. They’re owned by the city, and only people who actually drive cabs for a living can use them.

There’s a logic to that. The permits are valuable – a medallion holder not only has the right to drive a cab, he or she can lease that permit to other drivers for additional shifts. Since a taxi can be on the road 24 hours a day, the lease income is substantial, roughly $30,000 a year. But only active drivers get that benefit; nobody can hold a permit, sit at home (or work another job), and just collect that cash.
The process isn’t perfect. The waiting list for a medallion takes more than 10 years. Some medallion holders cling to their permits long after they should have retired (and thus keep driving when they should no longer be on the road).

There’s no process for compensating a permit holder who becomes disabled.
But those are issues that can be addressed. The basic fact is that San Francisco has taken the position that the public benefit – a license to drive a cab for hire – should be given only to those who are using it. Prop. K prevents consolidation of ownership in the industry, prevents speculators from turning medallions into a new form of securities (which worked out so well with mortgages), and gives people who have spent 10 years or more driving a cab a chance to reap the full benefits of their work.

Newsom, however, sees those permits as a gold mine. If the city auctioned them off, they might bring $100,000 apiece. Under Newsom’s plan, much of that money would go to the city, although some would go to current medallion holders.

The plan is full of problems. For one, it could completely change the cab business in San Francisco, shifting control of the industry away from drivers and giving it to big businesses and investors. Very few working drivers (who are lucky to clear $30,000 a year) could afford to buy permits, particularly at auction. So the first people in the market would be the cab companies, which for years have wanted the right to own and control the medallions. Private investors – wealthy individuals and institutions – would see the permits as an asset likely to appreciate, and would buy up medallions, then seek to raise the lease fees for drivers.

The only way drivers could buy permits would be to seek the equivalent of mortgage loans – but the banks that handle that sort of loans typically require 20 percent down, putting many drivers out of the running. Unless, that is, some shadowy characters come along with cash loans – or unless the cab companies handle that payment, thereby getting further control).
Unless medallion ownership is limited to drivers, the entire process will get corrupted. People will drive for a minimal period of time, bid on medallions, then go into another line of work – and keep the medallion. Newsom’s office says he’s going to do that, but there are no details on the plan yet.

Cab drivers in the city talk about the need for security and retirement income. After years of driving with a medallion, they want the right to sell it for a chunk of cash. But under the current system, drivers are – and most of them like being – independent contractors.

Freelance writers, consultants, small business owners, and many others who are self-employed are responsible for their own retirement planning. Why should cab drivers get a special deal from the city?
Privatizing the permits is just a bad idea. Newsom promised last year – in writing – that he wouldn’t seek to change Prop. K. It’s infuriating to see him so quickly break that promise.
The supervisors should reject this proposal.<0x00A0>2

Municipal ID program takes off

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It took more time than it should have, but San Francisco’s long anticipated ID Card program took off today. Assemblymember Tom Ammiano, who authored the ID card legislation, helped debut the program by receiving his own card at City Hall today.

The card is all-in-one photo identification card that streamlines access to City services and offers discounts at local businesses. The card allows folks to establish borrowing privileges at the library and a family account with Recreation and Parks. Nine banks and credit unions have also stated that they will accept the card to open a financial account.

“The card will help a wide breadth of San Franciscans – children that don’t have a school ID, immigrant workers that want to open a bank account, and seniors that no longer have a need for a driver’s license,” Ammiano stated in a press release.”The transgender people will also benefit from an ID that accurately represents their identities.”

Kucinich: How a utility blackmailed Cleveland

1

Rep. Dennis Kucinich reports on how a big private utility and the banks in Cleveland tried to force him as then mayor of Cleveland 30 years ago to sell the city’s electric system, Muny Light, to the utility for what Kucinich calls a $50 million bribe. The Guardian was one of the few papers inside or outside of Ohio that at the time covered the scandal from a public power point of view.

I encourage you to read Kucinich’s account because it shows for San Franciscans, living in a city poisoned for decades by the ever more costly PG&E/Raker Act scandal, the lengths to which another private utility in a big metropolitan city will go to try to snuff out a public power system. Note also Kucinich’s point about how the private utility subverted the Cleveland media to back the utility in its brutal power play. It’s tough to go up against the private utility, their banking allies and the media, but Kucinich did it and ultimately won in Cleveland. B3

Truthdig.com Report: Rep. Dennis Kucinich on His Battle With the Banks

By Rep. Dennis Kucinich

Once they were as gods, but the deities of the American banking system are now in ruins, plunged from their pedestals into the maw of taxpayer largesse. Congress voted to give the banks $700 billion, lifting them temporarily out of their sepulcher of debt, while revealing a deep truth about the condition of America’s financial powers:

They never had the money they said they had as they constructed their debt-based monetary system which now lies in ruins. Their decisions on behalf of depositors, shareholders and investors were lacking in basic integrity and common sense. Green gods bailing out with their golden parachutes.

There was a time when their power was real. Come with me to Cleveland three decades ago.

Click here
to read the full article on Truthdig.com, where Kucinich is a contributing writer.

Don’t leave your home

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› news@sfbg.com

On Oct. 4, 2008, Genevieve Hilpert came home to her apartment in the Outer Mission to find her gas shut off. The 35-year-old, who lives alone, hasn’t had gas service since then. Her landlord moved to the Philippines, the bank foreclosed on the property, and a real-estate broker assumed control.

Hilpert, an international student, was told by the broker to continue paying her rent, but she isn’t even sure who gets the check.

Hilpert is facing a problem all too common these days: she’s a tenant in a building that — through no fault of her own — is in the legal limbo of foreclosure. Hilpert is relatively lucky — she hasn’t been evicted. But necessary repairs, like the broken gas service, aren’t getting made.

The property manager, she told us, "hasn’t done anything. He hasn’t turned on the gas. [I] don’t know who is who."

Hilpert’s case demonstrates a less-publicized part of the nation’s housing crisis. In many instances, rent-paying, law-abiding tenants have come home to find padlocks on their doors and notes telling them to find other places.

The renters may have kept up with their bills — but the owners have not. And when a bank forecloses on a building, the tenants can be forced out. "The renters we’ve seen have been displaced," Sara Shortt, executive director of the Housing Rights Committee, told the Guardian. She mentioned that in many instances their utilities have been shut off, and renters have been left in a bind between brokers and banks. She said, "[Renters] are completely innocent victims of [the] financial crisis."

In San Francisco, it’s illegal for a bank or broker or anyone else to evict a tenant just because the ownership of a building changed hands. But many tenants don’t realize that.

In an effort to promote tenant-rights awareness, the Assessor-Recorder’s Office will be circuutf8g letters to inform tenants when a landlord has received a ‘Notice of Default’ — the precursor to a foreclosure. "According to San Francisco law," the letter says, "it is illegal for the new owner to ask you to leave without just cause or shut off your utilities." Since most of the renters who have been evicted by this latest ruse don’t speak English, the letter is being circulated in English, Spanish, and Chinese.

The letter advises tenants to contact housing organizations that can help, including the Housing Rights Committee of San Francisco, Comite De Vivienda San Pedro, and the Asian Law Caucus.

"Do not leave your home," said Assessor-Recorder Phil Ting, addressing tenants at a recent press conference.

The Assessor-Recorder’s Office estimates that 25 percent of all buildings that received a Notice of Default in San Francisco are occupied by tenants. And that’s a lot of tenants: according to the Housing Rights Committee, Notices of Default recorded with the city rose 94 percent between the 3rd quarter of 2006 and the 3rd quarter of 2008.

The Housing Rights Committee of San Francisco reported 75 cases in the past year involving tenants facing displacement after a foreclosure. In the month of September alone, there were 17 cases. The most common problems renters face include utility shut-offs, illegal eviction attempts, not knowing where to send rent, and illegal entry and harassment by brokers and landlords.

The law may seem confusing, and in some cities, a foreclosure may mean the tenants have to go. But that’s not the case in San Francisco. The city’s rent ordinance requires "just cause" for eviction — and a change of ownership, no matter the cause, is not in itself a just cause.

The San Francisco Rent Board’s literature makes that clear: "The Court of Appeal held in Gross v. Superior Court (1985) … that foreclosure, like any other sale, is not a just cause for eviction under the Rent Ordinance and provides no basis to force the tenant to leave."

As Shortt told us, "We’re worried about the folks out there that haven’t come to us…. We hope through this program people will be educated and know their rights, and not be displaced."

Furor in the sheriff’s union

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› news@sfbg.com

The president of the San Francisco Deputy Sheriffs’ Association, who has made no secret of his larger political ambitions, is fighting a lawsuit by union members who allege that he embezzled money and improperly donated union funds to local campaigns.

The suit seeks to oust David Wong as president and force an audit of the union’s financial records.

Captain Johna Pecot, Chief Deputy Thomas Arata, senior deputy Rick Owyang, Lieutenant Stephen Tilton, and deputy Joseph Leake allege in the lawsuit that Wong collected a double salary, used union money to pay his personal mortgage, made numerous unauthorized political contributions, began an outside foundation using the SFDSA’s name, and ended an important union affiliation, all in violation of the SFDSA bylaws.

On top of that, they say he led a campaign to kick Pecot and Arata out of the union after the two began requesting to look into the SFDSA finances.

The lawsuit has obvious political implications. Wong is an elected member of the San Francisco Democratic County Central Committee. He challenged incumbent Sheriff Mike Hennessey for the elected post in 2007, and has said that he would consider running again in 2011. Some observers say that Hennessey, who has been in office 28 years, may be ready to retire at the end of this term.

Pecot and Arata are senior officers and close to Hennessey.

Wong’s attorney, Larry Murray, says the complaint, filed in federal court Nov. 10th, has "no specific information" about the alleged fraud. He’s asked that the case be dismissed. "The Complaint reveals nothing more than a round of an ongoing local dispute between union management and a few disgruntled members whose allegations long ago have been independently investigated and proven without merit," according to Wong’s motion.

Wong wouldn’t comment to us about the case, although he told Vic Lee of KGO-TV that "This is purely politics, political." But if any of the serious charges stand up in court, it could complicate any future run for office.

"We have not asked for any money in our lawsuit, we have asked that there be accountability and the books be opened," Tilton told us.

WHO PAID WHOM — AND HOW MUCH?


In 2002, the union board approved a plan to pay the salary of a full-time union president, the suit states, and between 2003 and 2005, funds totaling $285,367 were appropriated to pay Wong. However, it states, "in 2003 SFDSA members learned that the sheriff’s department was continuing to pay David Wong his regular … salary." Upon the discovery the board cut his union pay to $24,000 a year, but "the excess funds … have never been restored to SFDSA," the suit charges.

The exact financial figures would come out in a trial, but at this point, the picture is murky. Susan Fahey, a spokeswoman from the sheriff’s department, said that Wong is considered a permanent civil servant and that under the collective bargaining agreement between the city and the DSA, 40 percent of his $86,538.92 salary is paid by the sheriff’s department and 60 percent is paid by the SFDSA.

"It’s not double salary," Murray said. "There’s two employers: one hires him for 40 percent of the time, the other 60 percent."

The lawsuit claims that the union used a rather unusual procedure to compensate Wong. Instead of paying his salary directly to him, it alleges, the union paid the money to the banks that held Wong’s mortgage.

A 2004 report on an internal union investigation of the practice, a copy of which was filed with the suit, notes that the plan was a "Creative way to compensate the President of the DSA for the salary difference … in a manner that did not create liabilities to the Association as an employer." The investigation found that Wong "has not committed any violation of law" but stated that the judgment used to devise this compensation method was "extremely poor."

Eileen Hirst, the San Francisco Sheriff’s Department chief of staff, wouldn’t comment on the case, calling it "entirely internal" to the SFDSA.

THE GENDER LAWSUIT


This isn’t the only lawsuit involving the union, Arata, Pecot, and Tilton. The three senior staffers are named defendants in a gender-discrimination lawsuit filed last year against the sheriff’s department.

Murray — Wong’s lawyer — also represents the plaintiffs, 35 male and female deputies, in the 2007 case that alleges that the sheriff’s department practice of allowing only female deputies to enter women’s jail pods exposes those deputies to greater harm and amounts to gender discrimination. Wong isn’t mentioned in the suit by name, but his response to the more recent case refers to it as "round one of this dispute."

In the fall of 2007, shortly after the gender discrimination case was filed, Pecot and Arata began looking into the SFDSA books. Pecot, who is a sheriff’s captain, told the Guardian that after she requested access to the records, Wong began a campaign to have the SFDSA bylaws amended by vote so that captains and chiefs — who are senior managers in the department — could no longer be SFDSA members.

The union membership approved the change in April, Pecot told us. According to the 2008 complaint, Wong had been "disseminating false and misleading information regarding Plaintiffs in attempt to wrongfully expel them from membership in the SFDSA."

The lawsuit also alleges that Wong and SFDSA’s treasurers have "divest[ed] the SFDSA of more than $500,000 of its funds" since 2002. That money, the suit claims, may have gone to the SFDSA Foundation — an organization that, according to the complaint, has no affiliation with the SFDSA.

The complaint states that Wong "deliberately chose the name for his sham organization to deliberately confuse and mislead the public" and "used the income derived from his racketeering activities to establish or operate the SFDSA Foundation."

The suit charges that Wong made $65,000 in political contributions that weren’t approved by the union board. Since 2002, the SFDSA has made contributions to candidates such as Assemblymember Fiona Ma, former state treasurer Phil Angelides, state senator Leland Yee, former secretary of state Kevin Shelley, and other state politicians.

Another point of contention revolves around a building fund that Pecot said was created by the SFDSA to purchase a headquarters building. The union’s been doing business at 444 Sixth Street for the past six years. Pecot says that until recently, she thought the property was owned by the SFDSA. She found out that in fact Wong was leasing it with nearly $200,000 from the building fund, and the complaint specifies that Wong and the treasurer at the time "falsely represented to the SFDSA membership that the SFDSA had purchased a building and was paying a mortgage."

Another money issue that the plaintiffs say they tried to resolve before going to court concerns funds that allegedly have been missing since the termination of the SFDSA’s affiliation with Operating Engineers Local 3. When Wong became SFDSA president in 2002, the SFDSA was affiliated with OE Local 3, another union that handled some legal work for deputies, a service for which each SFDSA member paid $27 per month. But Wong ended the affiliation in May of this year — a move plaintiffs say was not approved by the board.

Wong sent out a memo at the end of May that explained why he ended the affiliation. The document states that the Operating Engineers wanted SFDSA members to pay twice the amount for the same legal defense and since that wasn’t "fair to the membership," he reached a new agreement with a private law firm for legal representation.

After ending the affiliation, however, the SFDSA continued to collect $27 a month from each member, totaling more than $67,500, according to the complaint.

During a Nov. 21 press conference, plaintiff Leake read from a statement that said, "Because of President Wong’s concealment and refusal to provide access to DSA records, we are not able to determine the exact amount of missing funds, nor are we able to identify all the recipients of the misappropriated funds."

"President Wong has thus far avoided accountability for these missing funds by conducting a practice of concealing and refusing to provide access to SFDSA records," said Leake.

Even though SFDSA bylaws say that "all members in good standing shall have the right to examine the books," Owyang said the union members found it necessary to file a lawsuit to get internal financial information. "It’s a sad situation," Tilton said, "when we have to get books opened up in federal court."

Murray said that he’s provided the plaintiffs’ attorneys with all of the information they need. "Some financial information was provided to us," said Louis Garcia, attorney for the plaintiffs. "But we have no confirmation or information regarding its authenticity. Also, the information is only a small portion of the total records that we’re entitled to inspect."

Editor’s Notes

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› Tredmond@sfbg.com

Muni is heading for a hiring freeze and delaying system improvements at the same time that Mayor Gavin Newsom says this is "not a time to raise fees and taxes on business." The head of the California High-Speed Rail Authority is fighting with the head of the Transbay Terminal project over money to extend train tracks downtown. The United States of America is bailing out car companies that have been fighting for years against tougher emissions standards and still can’t seem to make fuel-efficient vehicles. And we’re all worried about global warming and a deepening recession.

I’m not getting this.

Historians and economists can argue forever about the causes of the Great Depression, but most people agree about what brought it to an end: massive, over-the-top levels of public spending. Huge investments in infrastructure. Huge investments in employment programs.

Tax cuts didn’t end the Depression. Government layoffs and belt-tightening didn’t end the Depression. Under President Roosevelt, the government taxed and spent, borrowed and spent — and spent and spent and spent — starting with the New Deal and continuing through the gigantic reindustrialization of America known as World War II. And money went into things that actually created jobs — in many cases, public-sector jobs.

So now we’re in a period where San Francisco, California, and the nation desperately need new infrastructure . We need to shift, fairly radically, away from a car-based transportation system to one based on energy-efficient transit, particularly trains. We need to profoundly shift the electricity grid, away from nuclear and fossil fuels (and away from private control). All these things create jobs. It’s kind of a no-brainer.

California just approved $9.9 billion in bonds for a high-speed rail system between San Francisco and Los Angeles. But even that money isn’t going to be enough, and progress is going to be slow. Take 1/10th of the $800 billion the federal government is putting into propping up big banks and spend it on an emergency plan to build high-speed rail all the way from Seattle to San Diego, and imagine how many jobs that would produce. Jobs for planners, engineers, accountants, office-support people, steel fabrication, construction work, heavy equipment operators … jobs for college grads, jobs for high school grads, union jobs, steady jobs, jobs that train people for other jobs –tens of thousands of them.

Take another 10 percent of that and spend it building solar panels on every public building on the West Coast. Again: jobs of every sort, at every level. Mandate that all the work gets done in America, and you’ll develop an entire new industry or two (we don’t build trains in this country much, but we could, and we already have auto workers and factories that are about to be idled).

I hear some talk about this from the Obama administration, but I also hear some caution and some discussion about budget deficits and keeping the financial sector happy. Fact: the financial sector will be happy when a few million more people are working and spending money. That’s where the economy starts.

I just watched all 34 minutes of the economic segment of Newsom’s state-of-the-city YouTube extravaganza. In and around the rhetoric, he devoted a few moments to the city’s budget deficit and how he was going to institute a hiring freeze, lay off workers and consolidate departments. All wrong.

In fact, this is an excellent time to raise taxes and fees — on the rich, the well-off commuters, the big businesses, the billionaires … Shifting wealth from the top to the bottom, creating public sector jobs in the process, is an fine recipe for economic stimulus. At every level of government.