With the melt down of the global economy over the past 2 years, multi-national brokerage firms and trusted financial institutions bore the brunt of accusations of gambling away the financial health and futures of investors, primarily through the sale of toxic mortgages with credit default swaps as the vehicle in doing so.

Yet, it is the mainstreaming of gambling on many levels that has created a culture whereby it has become an acceptable norm for not only corporations but governments in the United States, on both the federal and state levels, to literally invest in the gambling industry, with the recession as the excuse for its necessity.

Yet, for years prior to the current recession, brokerage firms such as Goldman Sachs & Co., Merrill Lynch & Co. and Fidelity Investments were already investing their clients’ stocks and mutual fund portfolios, in financing offshore casinos.

The question remains as to whether they skirted U.S. federal law, which prohibits offshore online gambling for Americans, as well as to whether they made reliable investments on behalf of their clients, many of whom remain unaware that such financial instruments are involved in such volatile industries. So, Wall Street was already in on the game.

Fast forward to 2010, where many U.S. states are on the precipice of bankruptcy and are desperate for that magic bullet to increase tax revenues without continually cutting services for their already over-taxed residents. And to that end, many state governors and state legislators are clamoring to push through laws in anticipation of overturning the federal law in place, prohibiting sports betting on both professional and amateur sports, otherwise known as the Professional and Amateur Sports Protection Act of 1992 (28 U.S.C. §3701) (PASPA).

To wit, the state legislature of New Jersey passed State Resolution No. 19 on January 12, 2010, which authorizes its President of the Senate to “take legal action concerning certain federal legislation prohibiting sports betting.” It would repeal the federal ban on sports betting, in all other U.S. states, with the exception of Nevada, Delaware, Oregon and Montana, already permitted to offer parlay-type sports betting. Nevada, however, exclusively enjoys all types of sports betting, statewide, on any professional or amateur sports games, in any capacity.

Basically, New Jersey, and specifically Senator Raymond Lesniak, who originally launched a lawsuit on his own in March 2009 against the federal government, claims that the 1992 law violates the 10^th and 14^th Amendments to the U.S. Constitution, in that “It establishes a selective prohibition on sports betting in the U.S.” The argument is that it violates the 10th Amendment to the United States Constitution by regulating a matter that is reserved to the States. And that it violates the 14th Amendment to the United States Constitution by being unconstitutionally discriminatory against the Plaintiffs and the people of the State of New Jersey.

Lesniak’s case presently resides in the U.S District Court, District of New Jersey, seeking declaratory relief. But the upshot is that New Jersey believes that it “Would benefit significantly from lifting the federal ban and legalizing sports betting in this state, as increased revenues would be generated and numerous jobs would be created for New Jersey residents as a result of sports betting activities at Atlantic City casinos and New Jersey’s racetracks, further enhancing tourism and economic growth,” according to Resolution No. 19.

Prior to PASPA, the Wire Act was enacted in 1961. It was intended exclusively for prohibiting the placement of bets by telephone to bookmakers for sporting events, and was largely put in place by then U.S. Attorney General, Robert F. Kennedy, in order to discourage organized crime and bookmaking. But gaming and its technology has come light years since 1961, and it would appear that the Wire Act’s shelf life has thus expired.

Meanwhile, in the U.S. Congress, House Representative Barney Frank (D-MA), Chairman of the House Financial Services Committee, has promoted a federal resolution to legalize and regulate the internet gambling industry in the U.S. (H.R. 2667). That proposal falls on the heels of the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA). It proscribes that offshore internet gambling is a violation of federal law.

Furthermore, legislation was passed by the New Jersey legislature in its state Senate to amend the New Jersey State Constitution, allowing legalized sports betting, which the New Jersey voters would ultimately vote on in a referendum as early November 2010.

But this constant back and forth between drafting new law and upholding existing legislation on a federal level to regulate gaming, runs in direct conflict with those states introducing new laws, geared to open up the flood gates for a variety of legalized gaming platforms, including sports betting. In addition, the National Indian Gaming Association, with respect to state Indian gaming contracts, originally authorized by the U.S. federal government, presents other conflicts on both state and federal levels.

Therefore, with the rights of gamblers continually in flux, the question must be asked what about the rights of non-gamblers and the resources that will be expended towards the downside that accompanies a gambling culture, upon which states will necessarily become dependent?

In the state of Nevada alone, with unemployment approaching 23%, for those presently receiving extended unemployment benefits as well as those no longer receiving such benefits, it is the gaming industry specifically that is responsible for such a jobs freefall which accompanies a nearly $1 billion state budget shortfall. Add to that the highest mortgage foreclosure rates in the entire U.S. and there arises a recipe for disaster.

And as gaming drives all other industry including construction, conventions and tourism, primarily in Las Vegas, it would make one wonder what other state officials are thinking when gaming revenues in Las Vegas went down over 20% between 2008 and 2009, and it has yet to come out of its funk.

Las Vegas Strip properties’ construction is at a virtual standstill with over leveraged multi-national conglomerates also reeling from the worldwide mortgage crisis. It appears that it was not only the little guys at the slot machines who gambled with their fortunes over the past few years.

With respect to sports betting on the National Football League’s (NFL) Super Bowl, Las Vegas betting revenues for the past 2 seasons of 2008 and 2009 were down considerably from years past. Nevada casino sports books in 2008 lost $2.6 million on the Super Bowl and in 2010 a total of $82.7 million was wagered with a net gain of only $179,000.00 more for casino sports books than in 2009. In contrast, $94.6 million was wagered in 2006, prior to the recession.

Yet, New Jersey is convinced and presupposes that sports wagering will generate hundreds of millions of dollars in state revenue over the course of a 5 year period, for its state alone. And it remains dedicated to also expand casino gambling in spite of its own realized massive decline in profits over the past 2 years.

But the state of New Jersey is hardly alone in its desire to gamble on gambling with many states introducing legislation and campaigning for both intrastate and interstate forms of gambling, both online and throughout casinos and racetrack locales throughout the U.S.

Currently, 48 states enjoy some form of legalized gambling and/or state lotteries, with the exception of Hawaii and Utah which do not presently permit any type of gambling, wagering or lotteries. However, Hawaii is presently weighing legislation for a stand-alone casino in Waikiki.

States in addition to New Jersey proposing sports betting and some type of expansion of casino gambling, including online gaming, with some states already preparing such legislation regarding sports betting in the event that PASPA is overturned includes: Iowa, Delaware, Massachusetts, California, Texas, Alabama, Missouri, Georgia, Florida, Pennsylvania, Indiana, Maine, New Hampshire, Connecticut, , Michigan, Kentucky, Illinois, amongst others.

In the case of Delaware it won the right in 2009 to offer 3-game parlay style sports betting at its 3 racetracks or racinos for NFL games only, as states that previously offered lottery style or legalized sports betting from 1976-1990 were exempt from PASPA. Yet, after its well fought challenge in federal court in 2009 for Delaware to be permitted to bet on all professional sports a la Las Vegas style without restrictions, it was defeated. But Delaware has not yet given up its fight and its case has been appealed to the U.S. Supreme Court.

Iowa is also leading the charge in crafting legislation to allow legalized sports betting. However, Iowa State Senator, Jerry Behn (R-Boone), thinks that gambling is a “Tax on the people who can afford it the least.” Yet, his colleague, State Senator, Jack Kibbie (D-Emmetsburg), on betting on professional sports says, “People say I would love to do what they can do in Las Vegas.”

Perhaps those with the same sentiments as those of Senator Kibbie will not be so game, so to speak, when there remains little discretionary income for such sin taxes to generate anticipated windfall profits.

With respect to California’s new plan there comes an additional rub. It plans to introduce an online gaming network. Yet, it potentially could be in violation of Indian Gaming licenses or compact agreements that California entered into in 1999 with Native American tribes in its state. The compacts gave the tribes exclusive rights to any gambling that involved gaming devices including slot machines, roulette tables and video poker machines, etc.

Furthermore, it took 5 years for California to get the tribes to honor the payment of taxes due to the state of California by virtue of the compacts. The tribes withheld tax payments until 2004. However, the state of California still gives such exclusive rights to the Indian tribes through 2030, which remains a binding agreement to date.

Now, the California tribes have threatened to once again withhold paying the government of California its share of taxes due for gaming revenues, should California proceed with its online poker network plans. The state’s position is that the compacts do not include poker and cover only games of chance. Yet, the tribal councils deem gaming devices to include computers used for online gaming, and thus negating California’s plan.

Such a dust-up could resonate through the Native American community, with its 442 tribal casinos operated by 237 tribal governments and Alaska native villages in 28 states. Revenues translate into a nearly $30 billion a year industry for them.

And Congressman Frank’s legislation to regulate internet poker would also be a direct threat to Indian gaming casinos, unless the Indian Gaming Regulatory Act of 1988 is somehow amended.

Ideally, California wants its poker network to go nationwide, raising revenues by ultimately licensing interstate networks and thereby generating additional profits through the ownership of such various licenses between states. The hope is that it could eventually trump PASPA.

Everything is politics, it would seem. But complicated legislative loopholes aside, basing entire economies – and California’s alone is the six largest in the entire world – on games of chance is quite the risky proposition itself.

And how taxpayers can be expected to trust their state governments to invest in struggling enterprises, already in the red, in order to prop up their cash-strapped states, many nearing junk-bond status due to irresponsible governing, remains the $64,000.00 question.

Time was when Vegas thought gambling was recession proof. And there should be little doubt that Las Vegas now serves as the poster child for that which results when gamblers stop gambling and traveling to destination resorts.

And for public officials to abandon all reason and principles, looking for a quick fix, rather than by relying upon ingenuity for the creation of jobs and revenue outside of the gambling sector, could very well come back to bite them, in the end.

Copyright ©2010 Diane M. Grassi

Contact: dgrassi@cox.net

 

WesternFront America

– 1^st in A Series -

“This is just one sliver of it, one aspect of it,” President Barack Obama quipped, upon word on August 16, 2009, that his administration is supposedly revisiting the Public Option of its proposed healthcare legislation. Indeed. For virtually missing from the nationwide dialogue on President Barack Obama’s call to reform healthcare as we know it, is any detailed discussion as to how it would essentially operate and be structured; slivers and all.

Perhaps such details have wisely remained absent, as the proposed infrastructure, as laid out primarily in the House of Representatives’ H.R. 3200, known as America’s Affordable Health Choices Act of 2009, would not only change healthcare for every American, but would reconstitute its delivery system both for the private sector as well as federal agencies, some of which have yet to be formed.

Inducing Americans into believing that of which fairy tales are made is at worse deceitful and at best disingenuous:

“But what we’ll do is, we’ll have the negotiations televised on C-SPAN, so that people can see who is making arguments on behalf of their constituents, and who are making arguments on behalf of the drug companies or the insurance companies. And so, that approach, I think is what is going to allow people to stay involved in this process.”

– Presidential Candidate Barack Obama (Cluster, VA – 8/21/08)

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Unlike federal programs that may less directly impact taxpayers, an individual’s healthcare encompasses very personal and vital information that will be embedded in a complex new system utilizing multiple federal and state agencies in new and unprecedented ways. Such cannot simply be mandated by way of politics-as-usual.

No matter how badly the president and the Democratic Party apply strong-arm tactics to dictate passage of their healthcare legislation, it is such recalcitrance that flies in the face of representative government or good government, and improperly denies the American people of full disclosure on matters so vital to their personal well-being.

This series of reports will attempt to highlight those issues pertinent to Americans that are not being covered clearly, if at all, by the mainstream media nor by elected officials or lawmakers; that which depicts the elemental infrastructure for the implementation of this immense and controvertible proposed body of law.

The proposed layout of agencies or its hierarchy by the Obama administration and presently encased in H.R. 3200 and its various renditions, is draconian in nature. It would encompass up to 31 new federal programs, commissions and agencies, to be touched upon in this report.

Also, keep in mind, that all involved agencies, commissions and appointees will either have some type of systemic control of or access to Electronic Health Records (EHR), which will be a requirement for all healthcare providers and patients; that which is our most personal healthcare information. It is a mandate of the American Recovery and Reinvestment Act of 2009, (ARRA) also referenced as the stimulus package, which became law in February 2009. Such will be more fully covered in the 2^nd report of this series.

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By now, in the early Obama administration, many Americans are well aware that a broad-based change in the way in which they will access medical care and its delivery system in the United States is coming and in an aggressive manner. But it also requires change in the way the federal government shall be retrofitted in order to deliver such medical care to all.

And it has been seemingly decided by lawmakers and from those on-high that key words such as expenditures, cost containment, choice and privacy rights are no longer allowed into any honest discussion. Unfortunately, the American people will witness unabated unilateral healthcare reform measures, many of which will be only be realized by future dates certain, which will be provided subsequent to such legislation becoming law.

Yet, the term reform falls far short of its intended consequence. For not only will there be an expanse of federal mandates over Americans’ personal healthcare records and data, but necessary systems required to protect such data are still being discussed as we speak, for an initial rollout as early as 2011.

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H.R. 3200, as well as its various renditions in both the U.S. Senate and the U.S. House of Representatives, all provide for the restructuring of certain agencies, new cabinet secretaries, committees, appointees and councils, as key contributors to the impending bureaucratic upheaval. To wit, reinventing Medicare and Medicaid with new conditions for each state to embody in their own statutes.

Key to the new infrastructure is the White House’s heavy-handed dominance in the ultimate plan that waits for ratification by the Congress. The conglomerate for oversight and rule making will firstly stem from hand-picked White House czars, executive branch appointees, and White House and agency committees all chosen by President Obama. Essential to note, however, is that a majority of these appointments by the White House are out of the jurisdictional oversight of the U.S. Congress, nor require confirmation by the U.S. Senate.

Thus far, both the House and the Senate Democratic majority has backed such a re-engineering plan, also considered in the interest of reform. And it will impact multi-levels of both federal and state governments’ current systems.

Wide discretion has been awarded the executive branch in the Obama administration thus far, and in this, for purposes of healthcare reform. But the White House itself is not set up to administer or oversee agencies and legislation. That is the reason the U.S. Congress exists and why cabinet level officers are picked and confirmed by the U.S. Senate. And it is these types of legal complexities and knowing exactly which body of government will be looking out for constituents’ concerns, only heightened by an issue as compelling as their own personal healthcare.

And let us not forget the admission by many lawmakers, however only recently, that they do not read proposed legislation, suffer its details nor consider the future impact it will have on the American people. And in this case, they will not even be consumers of such new healthcare legislation, as their own platinum healthcare plan remains intact.

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Most notably, the legislation will give new and unprecedented power to the U.S. Surgeon General, which historically has been a position of advocacy, as an appointee by the president, rather than one that yields administrative power over other agencies or officials. There will also be a Health Choices Committee, appointed by the president, a Health Exchange agency, and formidable roles by both the Internal Revenue Service (IRS) and the Department of the U.S. Treasury, each with new directives and capacities specific to healthcare.

In addition, Senator Jay. D. Rockefeller, Jr., (D-WV) has recently introduced legislation to expand the role of the Medicare Payment Advisory Commission, (MedPAC) for determination and implementation of Medicare reimbursement policies. All the more remarkable, at such time in our history, that Senator Rockefeller believes that “It’s time to move MedPAC into the executive branch …. Congress has proven itself to be inefficient and inconsistent in making decisions about provider reimbursement under Medicare.”

Furthermore, Rockefeller believes, “Establishing MedPAC as an independent executive branch agency – which can only change through an act of Congress – is the cornerstone of improving our delivery system reform.”

Therefore, MedPAC will solely be under the auspices of the White House through a five-member independent Medicare Advisory Council, which by mandate would produce two reports per year, establishing Medicare rates for physicians, hospitals, nursing homes and medical equipment.

MedPAC will be remodeled after the Federal Reserve Board. And the only jurisdiction the U.S. Congress would have is to block a recommendation by resolution, provided it is done within 30 days. But the greater veto power would rest with the White House. Presently, MedPAC operates in an advisory capacity only. If that does not remain the case, then MedPAC would act unilaterally without any accountability to the U.S. Congress.

Additionally, under Rockefeller’s legislation, Congress would have even less authority, requiring a 3/5 majority of both the House and the Senate prior to overturn any payment decisions recommended by MedPAC. The MedPAC Council’s priority would be to reform payment rates healthcare providers receive for services for the elderly and the disabled. Secondarily, to date, private sector insurance rates generally follow the established rates approved for Medicare for their own customers.

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A Health Choices Commissioner, also appointed by the president, would oversee a new independent agency noted as the Health Choices Administration. It would be the regulatory agency of health insurance compliance. It does not provide for a collaborative effort with the various states and their set legislation concerning healthcare and would fundamentally require them to abdicate their authority to the federal government.

The new Health Choices Administration would also control the new Health Insurance Exchange, noted in H.R. 3200, Section 201, Title II, which calls for the Congress to establish such under the power of the Health Choices Commissioner. A Health Choices Committee, also appointees of the president, would advise the Health Choices Commissioner on crucial matters such as whether to recommend, for example, expenditures for medical procedures or funding for known cures for specific diseases.

The Health Choices Commissioner must establish “standards for and accept bids from qualified health benefit plans and negotiate and enter into contracts with these qualified health benefit plans, which must offer at least 3 different levels of benefits that are statutorily required with high degree of specificity.”

The Public Option, one of the more controversial elements of the drafted legislation in both the House and the Senate at present, will be overseen by the Health and Human Services Secretary and will involve both the IRS and the Department of the Treasury taking on brand new roles.

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And central to the distribution and flow of patients’ confidential medical records will be how it will be accessed throughout the country and the federal government, as mandated in ARRA. Presently, two committees are rushing to suggest a working framework, initially, for how health information systems shall at least be certified.

The National Coordinator for Health Information Technology, David Blumenthal, also a presidential appointee, has wide and sweeping power to make such decisions on IT, along with input from Secretary of Health and Human Services (HHS) Kathleen Sebelius, concerning not only how information will be disseminated but how it will be protected when shared.

But key to centralizing the exchange of medical records is a set of criteria for myriad software applications to be used by healthcare providers. And Blumenthal expects to unveil a framework for such certification guidelines by September 30, 2009.

Importantly, certification of such applications has a direct bearing as to whether Medicare and Medicaid providers will be appropriately reimbursed, a maximum of $44,000.00, if at all, for their cash outlay costs for the required certified software, which can cost an average of $300,000.00 for a 3 physician practice. The software will also be used to receive payments from Medicare and Medicaid for services rendered.

What remains to be decided is if there will be numerous certifying agencies or an additional new oversight agency. Yet, protection of patients’ rights in light of collection and dissemination of their medical information without systems already in place to protect such data has already spurred legal action by patients’ rights advocates. They wish to legally block allocation of the $22 billion provided in ARRA for EHR development. The concern is possible violations of the Health Insurance Portability and Accountability Act (HIPAA) as well as possible violation of Federal Common Law.

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As the federal government continues to seize more power, as more and more oversight is designed to originate from the executive branch in the White House, it will but leave states left to succumb to federal authority. To wit, the Health Choices Commissioner’s authority will encumber the ability of states to rely upon their own reforms for health insurance in their local markets, as they see fit. It will not be a relationship of mutual interests but rather one of domination and control by federal statute. And if the word nationalize is offensive to some, then try on the word federalize; perhaps the more correct legal term, yet just as much of a threat to states’ sovereignty.

And finally, this initial report has been an attempt to bring some clarity to an enormous change forthcoming, not only in how healthcare will be consumed by Americans, but the extreme and unprecedented governmental changes put forth in the process and in how the federal government and the White House will conduct the peoples’ business going forward. And that sets the foundation for all aspects of the future of U.S. governance, its management, oversight, accountability and its relationship to the private sector.

Part 2 of this series shall venture into providing more detail of the proposed responsibilities or powers many these fore-mentioned agencies, commissions, appointees, councils and committees will have, or those that have at least been thus far disclosed in H.R. 3200.

And whatever you may hear or read over the next few weeks, keep in mind that you are only hearing but a very small aspect of the real facts; intentionally so.

Copyright ©2009 Diane M. Grassi

Contact: dgrassi@cox.net

 

WesternFront America

“At a time when these young people are defending our country and its free institutions, the least we at home can do is to make sure that they are able to enjoy the rights they are being asked to fight to preserve.”

These words were penned to members of the United States Congress during the Korean War when then President Harry S. Truman was expressing his discontent that the votes of active duty soldiers in theater overseas were in jeopardy of their votes not being counted in the Presidential election of 1952.

And although the Presidential election of November 4, 2008 will be official come December 15, 2008 when the Electoral College casts its votes and later tallied by the U.S. Congress on January 6, 2009, remnants of the November 4^th election remain with a few states yet to certify their Congressional district vote counts, while a runoff election is set for December 2, 2008 in Georgia’s U.S. Senate District 1.

And in that regard, absentee overseas ballots of serving U.S. military members could ultimately be far more meaningful. With several close races not officially certified, military absentee ballots now play a greater role in those last few razor-thin vote counts ongoing in Minnesota’s Senate District 63 between Republican incumbent Norm Coleman and comedian, Al Franken; Virginia’s 5^th Congressional District, presently involved in a court decision, between six-term Republican Virgil Goode and Democrat Tom Perriello; California’s 4^th Congressional District between Democrat Tom McClintock and Republican Charlie Brown, who has not yet conceded; and the runoff election in Georgia, featuring incumbent Republican, Saxby Chambliss and Democrat Jim Martin.

Unfortunately, the Minnesota election may either be decided by the courts, similar to the case in Virginia, or could even wind up determined by the U.S. Senate itself, due to contested absentee ballot vote counts and their legal status.

But once again, 8 years removed from the controversial and unprecedented Presidential election of 2000 and its involvement of the U.S. Supreme Court over a disputed Florida ballot count, and 56 years since Harry Truman’s plea to the Congress, the overseas absentee military ballot election process remains terribly flawed and needlessly archaic.

And although the Congress in 1952 did not heed the outcry from President Truman, the 110^th U.S. Congress also gets a failing grade in that regard. Legislation designed to specifically expedite the mailing and transit process for troops serving in Iraq and Afghanistan for the November 4^th election was passed by the Senate on October 1, 2008.

The Military Voting Protection Act (MVP Act) S. 3073, was introduced by Senator John Cornyn (R-TX), of the Senate Armed Services Committee, in May 2008. The Act’s purpose is, “To amend the Uniformed and Overseas Citizens Absentee Voting Act (UOCAVA) of 1986, to improve procedures for the collection and delivery of absentee ballots of absent uniformed overseas service members and overseas voters and for other purposes.” It would ensure that U.S. military service members be fully able to participate in the electoral process.

The legislation would also require the Department of Defense (DoD) to track each ballot and materials sent between serving military and the various U.S. states to make sure that they properly arrive. And the DoD would be mandated to research the implementation of secure electronic voting mechanisms, most likely via the internet. More specifically, as in its companion bill, H.R. 5673, introduced in the House of Representatives on April 1, 2008, by Representative Kevin McCarthy (R-CA), it allows for the use of private contractors for express shipping instead of the U.S. Postal Service.

Over 500,000 military service members are presently deployed outside the continental U.S. and about 200,000 make up the total serving in Iraq, Afghanistan and other unaccompanied tours of duty. However, that number does not include the spouses of military service members who total approximately 120,000. They, too, face the same hurdles given the present voting process for personnel overseas.

On October 8, 2008, Representative Roscoe Bartlett (R-MD) along with 30 other co-sponsors of H.R. 5673, sent a letter to House Speaker, Nancy Pelosi, imploring her to move quickly for passage of H.R. 5673, in order to ensure that overseas military votes in this year’s election be received for the November 4^th election.

Rather than ratifying passage of the legislation that would have been the best guarantee that self-sacrificing military service members fighting for U.S. liberty abroad could have had, Speaker Pelosi left the legislation on the table as she did its companion bill, S. 3073, passed by the Senate on October 1, 2008.

Interestingly, but sadly so, out of the 54 sponsors of H.R. 5673, 53 were Republican members of the House. And of the 30 co-sponsors of S. 3073, all were Republican members of the Senate. It clearly speaks volumes about the Democrats’ lack of concern about the rights of the U.S. fighting military. And if such lawmakers on Capitol Hill had hoped to correct such a public impression, they have but failed in that regard as well.

As stated by Congressman Bartlett, “It’s very sad that the House leadership blocked a vote on a bill approved by the Senate that would make it easier for American soldiers deployed in harm’s way to vote in federal elections. In 2006, only one-third of the absentee ballots requested were counted because the current system is too cumbersome and complicated.” And Congressman Trent Franks (R-AZ) added, “Knowing that we have experienced problems with counting the absentee ballots from our soldiers, Speaker Pelosi and Democrat leadership have no excuse for disenfranchising our overseas military.”

The complex system that offshore military personnel endure involves 50 states and select territories all with their own unique voting statutes that cover everything from voting registration to obtaining military absentee ballot applications and materials, to the receipt and delivery of the actual voting ballot. For example, some states do not send out absentee ballots until 35-40 days prior to the day of election. Other states such as Rhode Island and Massachusetts send ballots out just 21 days prior to the election, and is certainly not enough time for troops serving in the Middle East or even for troops changing posts stateside, to cast their votes.

In addition, each state has varying rules on how many days past Election Day they allow in order for received ballots to be counted and if the date of receipt is the controlling date or the postmark on the ballot is the date used. In Florida, where 10 days post-election is allowed, only federal races count for those ballots received and not for state or local races, which is the case for all states receiving a Federal Voting Absentee Ballot (FVAB) returned in the mail in lieu of a state produced ballot.

Making it more cumbersome is the combination of the Military Mail Service Agency with the U.S. Postal Service that is used for all mailed overseas military ballots. It is a requirement of all states with the exception of those states who accept faxed ballots, but in outposts in the Middle East, fax machines are not used.

Yet, the U.S. Postal Service and its representative union, the National Association for U.S. Postal Inspectors (NAPUS) has lobbied Speaker Pelosi and members of the Congress in an effort to prevent private contractors from being used for expediting the delivery of military ballots as proposed in both H.R. 5673 and S. 3073. And other members of Congress believe that it directly influenced Speaker Pelosi’s decision to completely drop the legislation.

The number of possible obstacles in the mailing process can be exacerbated by mail getting lost between the U.S. Postal Service and the Military Postal Agency. Mail is initially shipped by military channels and can prove undeliverable based upon periods of heavy combat, that can obstruct supply convoys, as well as replacing mail with higher priority cargo such as weaponry.

The DoD is expressly responsible for the adequate flow of getting essential voting information to troops in addition to overseeing the mail delivery process, known as the Federal Voting Assistance Program (FVAP). And unfortunately, according to the Government Accountability Office (GAO) in a June 2007 report, the Election Assistance Commission under the purview of the DoD failed to proceed with an internet based absentee voting system as requested by the Congress, although $25 million was allocated for it..

In the 2006 election, of the 6 million overseas military service members and eligible overseas voters, only 16.5% of them were able to request an absentee ballot. And of the one-third of the total ballots requested by such voters, only 5.5% were able to cast absentee ballots. This was according to the DoD Inspector General and the Election Assistance Commission Report, available in 2007.

Yet, in spite of the tabled legislation earlier this year, the Pew Center on the States has several initiatives it has been working on over several years such as the “adoption of a uniform state law on military and overseas voting” using the Uniform Commercial Code as a basis.

And going forward, Senator Bill Nelson (D-FL) currently is preparing legislation, for the next session of Congress, requiring federal funding for states and counties in order to provide internet voting to U.S. citizens overseas. It is the opinion of proponents of electronic voting that since the military depends upon electronic transmission for high security data that certainly a like type of system could be used for the security of electronic voting.

With regard to Virginia’s 5^th District seat in the House of Representatives between Republican incumbent Virgil Goode and challenger, Democrat Tom Perriello, Perriello has been certified as the winner by a 745 vote margin. However, Goode has filed for a recount which has yet to be completed for certification.

However, on November 3, 2008, the McCain-Palin Campaign filed a lawsuit against the Virginia Board of Elections and 8 counties, over 4,750 absentee ballots. The issue is pertinent to the inclusion of military and overseas absentee ballots which remain uncounted. The suit contends that UOCAVA requires that ballots be mailed to military voters in foreign countries at least 45 days prior to Election Day, which this year would have been September 20, 2008. It also alleges that Virginia did not mail out the ballots until 35 days prior to the election, or in October, thus preventing sufficient time for voters to mail them back in time for Election Day.

But the state of Virginia contends in the lawsuit that, “There is no federal right to have absentee ballots mailed out 45 days before an election. The plaintiff’s claim is based on mere suggestion by federal officials, and suggestions are not enforceable under 42 U.S.C. § 1983.”

Virginia law requires that overseas absentee ballots be postmarked by Election Day and received no later than 10 days thereafter. Yet, the Virginia Board of Elections, as well as most states, do not keep data on how many overseas military members are even registered to vote.

Secondly, the McCain campaign claims that a federal law overrules Virginia state law that requires that a witness address be listed on absentee ballots. Both the state and federal forms issued by the state call for the signature of the witness to provide verification that the signature on the ballot is that of the registered voter. But the FVAB, which may be used in place of the state ballot, does not require the address of a witness, nor is there a space for it, causing even further confusion.

At a hearing on November 4, 2008, U.S. District Court Judge Richard Williams ordered all tardy ballots, in the 8 Virginia counties receiving overseas absentee ballots, be preserved. And on November 17, 2008 he removed McCain-Palin 2008 Inc. as the plaintiff and replaced it with the U.S. Department of Justice. So it will now be up to the U.S. Attorney General’s Office to pursue the contention that the nearly 5,000 ballots be counted. However, the exact number of military ballots remains unknown.

And Tuesday, December 2, 2008, as multi-million more dollars have been doled out for both candidates in Georgia, the remaining contest in 2008 for the U.S. Senate, between Republican incumbent, Saxby Chambliss and newcomer Democrat, Jim Martin, will hopefully be decided.

But the short turnaround time between November 4^th and December 2^nd in order to mail out ballots again to overseas destinations or even for the return mailing for those soldiers who were able to at least download the form either through the Overseas Vote Foundation website or from the Georgia Board of elections website, time may be too short. All ballots have to be postmarked by December 2, 2008 and received no later than December 5, 2008.

And prognosticators do not believe the Georgia election to necessarily be finalized on December 2^nd, either. For short of its certification date, if it too proves to be a razor-thin count margin, expect military and overseas absentee ballots to again be thrown into the mix.

Finally, U.S. voters will be glad to know that NASA astronauts were able to cast their votes on time for this year’s November 4^th elections onboard the International Space Station. In fact, a U.S. astronaut voted from the Russian Space Station as far back as 1997. And before this year, 4 different astronauts have successfully voted from outer space.

Digital ballot files are sent to NASA’s Johnson Space Center Mission Control Center which then sends them to the Space Station. The astronauts are then directly e-mailed encrypted credentials and passwords. When completed the encrypted ballots are e-mailed back to Mission Control.

– And for U.S troops overseas protecting the voting rights of Americans stateside? They can only hope.

Copyright ©2008 Diane M. Grassi

Contact: dgrassi@cox.net

 

WesternFront America

In this third chapter of this ongoing discussion and analysis of United States energy policy and its ramifications both realized directly and indirectly from the U.S. Energy Policy Act of 2005, (EPAct 2005) it would be irresponsible not to include U.S. nuclear energy policy in such analysis.

As such, the EPAct 2005 and its previously referenced and unprecedented mandates, in prior chapters of this report, play a role with the reformulation of the regulation of U.S. nuclear energy and its projected and rather overwhelming imminent comeback.

The nuclear energy industry has become a global proposition given the changing geographic demands of energy needs in newly industrialized nations such as India and China. And it would be foolish for the U.S. to assume that it operates in a vacuum and that its future energy needs and demands will not be impacted by such changes in a global economy; one in which the U.S. is now primarily at the receiving end of offshore manufactured goods, including more and more of America’s food supply.

But the global economy has but given the U.S. government and in particular in this case, the U.S. Department of Energy, (DOE) an excuse to take the proverbial lid off of sound national security policy which has necessarily dictated U.S. energy policy for decades, until now, for the safety of the American people and the integrity of its critical infrastructure.

Although the first large scale civilian nuclear plant started providing electricity in 1957, it was basically between that time and the late 1970’s when all of the current operating nuclear reactor facilities were constructed. And with an average lifespan up to 60 years for each, most of the currently operating 104 U.S. nuclear plants are either in or have applied for their 2^nd 20-year licensing period extensions.

Since the last U.S. nuclear reactor was ordered in 1973, those handful that were completed, after 1978 and post-3 Mile Island, were ordered prior to 1973. To wit, in 1996, the last U.S. plant constructed, the Tennessee Valley Authority’s Watts Bar 1 reactor in Tennessee, was the result of a revived dormant license from 1970. And there are plans to build the Watts Bar 2 from another previous license from dating back to1973.

Since U.S. nuclear energy policy has nearly come full circle today, it is important to take stock of its history. The Atomic Energy Commission, (AEC) was formed through the Atomic Energy Act of 1946, originally to specifically oversee the military’s and civic atomic energy programs. And it was given the expanded responsibility, for the first time, to assume dual oversight and regulation of atomic energy both militarily as well as commercially through the Atomic Energy Act of 1954.

But it was through the Energy Reorganization Act of 1974, that created the Nuclear Regulatory Commission (NRC), the present U.S. nuclear regulatory agency, to assume the oversight authority from the AEC. It now regulates most U.S. commercial nuclear activities, including nuclear power reactors and the use of radioactive materials in industry, medicine, agriculture and scientific research as well as fuel cycle facilities and nuclear waste management.

The 1974 law was seen as an opportunity to put trust back into the oversight agency which took on the dual task of both promoting nuclear power while safeguarding the American people, initially in 1954. And it was after that point in time that the American people had already begun to lose trust in the agency’s ability to do so. Apparently, the U.S. government thought that changing the acronym of the agency would calm the public’s displeasures.

But it was during the late 1960’s and early 1970’s when the nuclear plant construction boom was in full gear and simultaneous reassurances from the federal government to keep safeguards in place fell on the deaf ears of energy consumers. Most importantly, the agency was designated to walk a fine line of both promoting commercially viable nuclear energy as well as handling all of the required licensing for new construction of nuclear power plants.

And in this global economy, at a time when the U.S. is seeing extraordinary growth in the foreign direct investment and acquisition in U.S. critical infrastructure, it appears reaped with conflict for the licensing agency to also be able to independently assess potential security risks both civilly and criminally.

Unfortunately, the notorious Browns Ferry Nuclear Plant fire in 1975 in Decatur, AL could have been avoided and was the result of human error rather than an unexpected meltdown. A mechanical technician foolishly was looking for reported air leaks within the reactor with a lighted candle which ultimately started the fire. But Three Mile Island Unit 2 (TMI-2) nuclear power plant near Middletown, Pennsylvania, on March 28, 1979, was the most serious nuclear plant fiasco in U.S. history. The reactor sustained the melting of half its core, which was later found to be a combination of technical and human error and allowed for released radioactive gases into the atmosphere and putting its employees immediately at risk.

The 3 Mile failure was followed in 1986 by the misfortune of Unit 4 of the nuclear power station at Chernobyl, Ukraine in the former USSR. It emitted radioactive material, far more deadly an accident that 3 Mile Island, affecting 52,000 people in the vicinity, immediately killing 30 people and possibly impacting up to 5 million others. Nevertheless, it was 3 Mile Island that provided the final nail in the coffin for skittish investors in U.S. nuclear technology, although nuclear facilities throughout the U.S. still provide 20% of electrical power generation. It remains very low in greenhouse emissions and is considered a form of clean energy.

In spite of the NRC’s own damage control to restore safety measures in nuclear plant facilities over the past 30 years, its ill-repute remains along with remnants of trepidation in reinvesting in nuclear energy. Therefore, the apparent overnight reverse course by the DOE in lining up investors to submit license construction applications for nuclear energy plants, with some 20 expected by mid-2009, has set off alarm bells of another sort.

And that brings us back to the EPAct of 2005 which provides for a vast assortment of givebacks, subsidies and federally subsidized loan guarantees including risk insurance packages to the brokers and investors who come a-callin’, totaling billions of dollars worth of incentives. And once again, foreign owned holding companies, foreign government-owned entities and foreign-U.S. joint ventures, acquisitions and mergers will be the recipients of these U.S. taxpayer provided benefits.

The nuclear energy industry not only remains a hot-button issue because of its sullied past, but because of a heightened internal as well as public awareness of its ever-present national security risks it now poses in a post-9/11 world. In addition, there is the issue of the failing power grid infrastructure, which has not been improved in decades, and minimally maintained, along with a continued U.S. deregulation policy from which the American economy may never recover.

All of the aforementioned but creates for a perfect storm, all the while U.S. foreign policy dictates to other nations and regions on the ways in which they may engage or use nuclear material, whether for weaponry or for electrical power distribution.

The first step in trying to comprehend this multi-faceted and current energy policy, based upon both its history as well as current law, is to understand the revised NRC application process. Although the regulation revisions date back to 1989, the most recent and final rules were not certified and published in the Federal Register by the NRC until August 2007 (10 CFR Part 52).

The revisions have changed the entire regulatory review process and framework for the construction of new nuclear reactors and facilities. And over the next 18 months, such changes in the regulation process, with ink barely dry, will be tested in a paint-by-numbers fashion.

The EPAct 2005 while not intrinsic to the actual changes in NRC rule making, has played a consequential role in incentives for investors and ultimately the NRC’s seeming rush to finalize regulation revisions over a matter of months, after many years they were held in virtual abeyance.

And now the one time 2-step licensing process created for its thoroughness and for compliance with the Environmental Protection Agency (EPA) as well as providing enough time to have the appropriate number of public hearings, has been whittled down to a 1-step process; one that appears less investigative in scope and more equivalent to drive-through governance.

In order to supposedly bring an improved regulatory model for U.S. nuclear energy construction, which the NRC believes to be more efficient, the COL, early site permits (ESP), and standard design certifications pushes the process along more quickly. However, also cut in the process will be preoperational hearings on plant construction qualification that would be limited and not required by the NRC, and minimizing public input.

The ESP procedure includes site safety issues and emergency plans apart from the plant design. The NRC’s and nuclear industry’s reasoning is that the new process will cut down on delays, cost overruns and reduce the application process down to 42 months. In that regard, there is some speculation that the next nuclear plant could break ground in the U.S. by the end of 2010 and perhaps be completed by 2015.

In the final part of this series, the actual players or investors in new U.S. nuclear plants construction will be addressed as well as who and from where from these entities hale. And the mechanisms mandated in the EPAct 2005 for lucrative financial rewards to these corporations will be discussed. Whether or not such investors will be even remotely close to ensuring the fiscal as well as environmental health of the American people is an important question which will be asked.

And finally, that which is most crucial in this entire changing energy landscape, that being the national security of the U.S, was etched into law in the Atomic Energy Act of 1954 in 42 U.S.C. Sec. 2011 (1954) as follows: “Aliens and entities owned, controlled or dominated by aliens or foreign governments may not engage in operations involving the utilization of energy. This restriction applies primarily to nuclear reactors and reprocessing plants extracting plutonium.”

Yet, as will be analyzed in Part 4 of this series, we will see that through the use of joint ventures, foreign holding companies, license transfers and majority subsidiary investment mergers, rubber-stamped by virtually all branches of the U.S. government, historically held energy law no longer remains the watchdog it was once meant to be. Therefore, the best interests of the American people are now marginalized and the future national security interests of the U.S. may be forever compromised.

Copyright ©2008 Diane M. Grassi

Contact dgrassi@cox.net

 

WesternFront America

“I’m safer, somewhat, in Iraq than my son is on the streets of the United States. …My country let me down.”

–Sgt. Anita Shaw, United States Army

March 2, 2008 in Los Angeles, CA was no different than any other in the crime-ridden areas of the City of Angels where the homicide rate has risen by 27% since the same time period in 2007. What differentiates March 2, 2008 from other days, however, is that in areas not well known to be crime-ridden, where residents in communities try to get by in doing right by their neighbors, there is a war brewing for which they are unarmed.

Jamiel Shaw, Jr., a 17-year old Los Angeles High School football star running back, finishing his junior year in high school as the Southern League’s most valuable player, was celebrated by family, friends and his community. But Jamiel Shaw, Jr. was not only celebrated for being able to run with a football or beat county records on his track team, but as one who also represented ideals that every family strives for such as his commitment to his education, his devotion to his church and his loyalty to his family.

Unfortunately, on March 2, 2008, Jamiel Shaw, Jr. was slain three houses down from his own home at 6 o’clock on that Sunday evening after returning to his neighborhood by public transportation, following a weekend football symposium in which he participated. In fact, he was talking to his father on his cell phone minutes before he turned the corner prior to walking up his block.

Within minutes, Jamiel’s father, Jamiel Shaw, Sr., heard what he thought was a back-firing vehicle on the nearby interstate, poked his head outside of the front door and saw a crowd gathering in the direction in which his son was walking. Jamiel Shaw, Sr. ran down the street, only to find his son mortally wounded with a bullet hole in his head, lying on the ground.

The national mainstream media and numerous media outlets throughout Los Angeles, primarily the week that Jamiel was murdered, reported it as another ghetto crime as the result of gang violence. That caption, however, was not only inaccurate and incomplete but was a disservice to the real issues underlying this important story on a number of fronts. But such could not be handily fit into a headline sound bite for sensational purposes. So, the story angle was spun to fit an agenda.

Important to note, however, is that the essence of Jamiel Shaw, Jr. was not simply that of an aspiring athlete, already accepting football recruitment inquiries from Stanford University, Rutgers University and Arizona State University. For Jamiel Shaw, Jr.’s family did not raise Jamiel as a footballer but as a good human being, in order to excel in whatever path he chose for his life and to hopefully inspire his friends to do the same.

The family of Jamiel Shaw, Jr. included his dedicated father, raising him and his 9-year old brother while his mother was serving her 2^nd tour of duty in Iraq as a Sergeant in the United States Army. He also had an involved extended family, including school friends and church members, in what is now considered an old-school community, where folks still look after each other. And no, Jamiel did not live in a crime infested gang-banging ghetto.

The story of Jamiel Shaw, Jr., as reported, is not that of sensation but rather that of the war between our communities and our federal, state and local governments. For they have dropped the ball, not Jamiel, not his family, not his neighborhood.

Non-observation by local law enforcement and corrections officials, in confirming the legal immigration status of prisoners in U.S. county, state and federal prisons violates federal law and puts our citizens at risk. And it goes without saying that the non-arrest of persons illegally entering U.S. borders who then go on to commit criminal acts against Americans is but an act of criminality unto itself.

Such criminal and illegal aliens incarcerated in U.S. jails and in prisons serving time, upon such completion of their served time, are to be turned over to Immigration and Customs Enforcement (ICE) authorities, an agency of the Department of Homeland Security. They are then to arrange for the immediate deportation of such criminals back to their country of origin. Such is a requirement and a duty mandated by federal law.

The now arraigned, alleged murderer of Jamiel Shaw, Jr., Pedro Espinoza, is being held in lieu of a $1million dollar bond on first degree murder charges with a special circumstance, as an active participant in a criminal street gang, where the murder is carried out to further the activities of the criminal street gang.

But the legal status of Pedro Espinoza, a 19-year old illegal alien from Mexico, was not confirmed either by California law enforcement or the California Department of Corrections, prior to his release from the Los Angeles County Jail on March 1, 2008. He had been serving a prison term of less than 4 months for assault with a deadly weapon, possession of an unregistered handgun, carrying a concealed weapon without a license and resisting arrest. Moreover, he was never charged with being in the U.S. illegally.

Had the system worked properly, Pedro Espinoza would not have been let back into the community from which he was supposed to have been deported, and within 24 hours of his release he would not have been able to acquire another handgun, only to murder Jamiel Shaw, Jr.

Furthermore, when Jamiel Shaw, Jr. was gunned down in cold blood, it was not simply a matter of another street gang statistic. For Pedro Espinoza belonged to the 18^th Street Gang, a trans-national organization with direct ties to the Mexican Mafia. And some of Mexico’s largest drug cartels, with human smuggling and para-military weaponry operations, and some of the most powerful in all of Central and South America have direct ties to the Mexican Mafia gang.

Mexican drug cartels are now utilizing U.S. based Mexican gangs to aid them with the illegal U.S. importation of cocaine, heroin and methamphetamine, all of which wind up on American streets. No, the 18^th Street Gang is not your garden variety neighborhood gang-banger operation.

But the convenient and continual spin by both Los Angeles Mayor Antonio Villaraigosa and Los Angeles Police Commissioner William Bratton is that policing by enforcing immigration laws and obtaining gang members’ legal status but violates their civil rights.

They refer to Special Order 40, originally passed by the Los Angeles City Council in 1979 in order to encourage illegal aliens at that time to report crimes within their neighborhoods. Nearly 30 years later, and now a much different world, due to the neglect of our federal government in protecting the U.S. southern border, Special Order 40 has but backfired on the very people it was intended to protect. It designated Los Angeles as a “sanctuary city” for those illegally entering the U.S. and now by extension to felons of trans-national organized crime. It has outlived its intended purpose.

Since the death of their son, Jamiel’s parents have become pro-active in working to amend Special Order 40, in proposed legislation called Jamiel’s Law, through the efforts of prospective Los Angeles mayoral candidate, Walter Moore. Also, through a motion introduced by Los Angeles Councilman, Dennis Zine, to the Los Angeles City Council on 4/08/08 similar revisions were submitted. The goal is to eliminate the unabated and federally unlawful protective status accorded illegal aliens, now overwhelming the 9,600 member police force of Los Angeles.

The Shaw Family will now utilize this moment to help elevate all of us as Americans in coming together, not to divide our cities, unlike our politicians and bureaucrats who so relish in doing so. The Shaw Family’s hope is to engage our law enforcement officials with the very communities they purport to protect.

And Jamiel’s father believes that he has a calling not only on behalf of his now deceased son Jamiel, but his young son, Thomas, who no longer wants to be a footballer like his big brother was, but “a scientist” so that he can “invent a time machine” and turn back time in order to spare his big brother’s ultimate fate.

Copyright © 2008 Diane M. Grassi

Contact: Dgrassi@cox.net

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WesternFront America

As discussed in Fallout from the Energy Policy Act of 2005, the United States federal government is taking a more and more integral role in the distribution and transmission of electricity and in the energy sector throughout the U.S. And such is the result of both federal regulations and laws mandating the deregulation of public utilities as well as the repeal of the Public Utilities Holding Company Act (PUHCA) of 1935, as mandated in the Energy Policy Act of 2005 (EPAct 2005). It will prove to have profound impacts on the future of not only the fiscal health of public utilities but the oversight of their maintenance and the future construction of transmission lines.This continuing report, on the exploration of EPAct 2005, will focus upon a section of the law which has not been clearly articulated for the American people by either the Department of Energy (DOE) or members of either the U.S. House of Representatives or the U.S. Senate. Yet, this complex and important body of law represents but an ad hoc and unilateral takeover of not only the direction of energy policy but the very delivery system which Americans rely upon in order to live.

EPAct 2005 sets forth specific mandates whose ramifications are unprecedented with respect to U.S. energy law, states’ constitutional rights and sovereignty, as well as interstate commerce. Specifically, Section 1221 of EPAct 2005 updates Section 216 of the Federal Power Act (FPA). It provides for, among other things, the requirement of a National Electric Transmission Congestion Study, first completed in August 2006, a year after enactment of EPAct 2005. Such a Congestion Study will then be repeated every 3 years thereafter.

And it is the National Transmission Congestion Study which paved the way for the mandated National Interest Electric Transmission Corridors (NIETC). According to Section 1221(a) of EPAct 2005 (Section 326 of FPA, 16 U.S.C. Section 824p) the Secretary of Energy may designate “any geographic area experiencing electric energy transmission capacity constraints or congestion that adversely affects consumers as a national interest electric transmission corridor.” And the DOE then proposed as a direct result of the study two transmission corridors which consist of the Mid-Atlantic Area National Corridor and the Southwest Area National Corridor. The draft NIETC was issued in April 2007 and finalized in October 2007 by the DOE.

Why you may not be aware of such transmission corridors and their intended purpose can be answered simply because the public and consumers of public utilities were given little or no notice of opportunities to weigh in and attend very limited public hearings, abruptly announced in May 2007 by the DOE to take place in the very same month. That gave little time for proper public notice for participation by residents, lawmakers, ratepayers and consumer advocates, to name but a few.

Even more disconcerting is that the DOE claims that EPAct 2005 does not require it to hold any public hearings regarding the NIETC. And in spite of over 2000 written comments and reports submitted to the DOE by state governors, U.S. state and federal elected representatives, consumer advocacy organizations, and environmental and historic preservation organizations, which all protested such corridors because of the lack of public input, the DOE would have none of it. It instead made no changes or acted upon any of the recommendations it received on its draft proposal by finalizing the NIETC in October 2007, as originally drafted.

In terms of the enormous implications in the construct of the Mid-Atlantic Area National Corridor, on paper at least, there now exists an exact list of those states which are encompassed by it and will be impacted in a variety of ways; legislatively, constitutionally, economically, environmentally and historically. Following is a list of those states and counties designated in the Mid-Atlantic Area National Corridor: the entireties of New Jersey, Delaware, and Washington, D.C.; 22 of 24 counties in Maryland and all of Baltimore City, MD; 47 of 62 counties of New York; 7 of 88 counties of Ohio; 52 of 67 counties of PA; 15 of 95 counties and 7of 39 independent cities of Virginia; 42 of 55 counties of West Virginia.

By contrast, the Southwest Area National Corridor includes 7 of 58 counties of California and 3 of 15 counties of Arizona, albeit the most heavily populated areas of these states.

The NIETC lays the groundwork for transmission siting approval in the construct of High-Voltage Direct-Current (HVDC) Transmission lines above ground and throughout all NIETC designated states, and whether or not that particular state in fact has an electricity congestion problem. Initially problematic is that nearly the entirety of the U.S. power grid, as it presently exists, uses High-Voltage Alternating-Current (HVAC) Transmission lines and allows current to automatically reverse direction at regular intervals if necessary. HVDC requires an operator to reverse direction and its current flows in one direction only.

Only 2% of all electrical transmission line miles in the U.S. are presently HVDC. While the DOE insists that HVDC technology includes lower costs over long distances, in reality constructing HVDC lines costs more than construction of HVAC lines for short distances over a wide expanse of area. And according to the Government Accountability Office Report of February 1, 2008, (GAO-08-347R) with respect to HVDC, there will be “higher costs for short-distance lines due to the cost of equipment needed to convert DC into AC electricity used by residents and a lack of electricity benefits to consumers living along these lines -unless converter stations are installed at intermediate locations – because such lines are generally not connected to local electricity lines.”

The rationalization for designation corridors is not to facilitate or dictate how the states’ regions, transmission providers or electric utilities should meet their own energy challenges, according to the DOE. But truth be told, it is quite the opposite.

“The process is geared more toward expediting the approval and siting of transmission corridors than it is geared toward respecting states’ rights about their residents’ energy future and needs…and by a heavy-handed centralized one-size fits all approach..,” according to Congressman Maurice Hinchey (D-NY). And it is precisely such sentiments that have been raised to the Secretary of Energy, Samuel Bodman, by both federal and state lawmakers on both sides of the aisle in all 10 states and Washington, D.C. that will be directly impacted by NIETC.

And most crucial to note, EPAct 2005 enables eminent domain law over states by the federal government on a scale unlike the U.S. has ever seen.

In its effort to modernize the transmission lines infrastructure, EPAct 2005 provides for the DOE to assign the Federal Energy Regulatory Commission (FERC) siting authority. To review from Part I of this series, FERC is central to the regulation of energy policy both fiscally as well has been given oversight authority on the applications of new construction of transmission line sites.

Under Section 216(b) of EPAct 2005 -Back-Stop Siting Authority -FERC is given authority “to issue permits for the construction or modification of transmission facilities in a National Interest Electric Transmission Corridor if FERC finds that: (1)(A) a state in which the facilities are to be constructed is without authority to approve the siting of the facilities or to consider the interstate benefits expected to be achieved by the project; (B) the applicant for a permit is a transmitting utility that does qualify for a permit federally but does not qualify for a permit under state law because it does not serve end-use customers; or (C) the state has siting authority but (i) it has withheld approval for the later of one year after the filing of an application; or (ii) conditioned approval in such a way that the proposed construction will not significantly reduce transmission congestion or is not economically feasible.”

And to add insult to injury, Section 216(e) of EPAct 2005 on Rights-of-Way, “If a permit holder cannot obtain the necessary rights-of-way for the project, the permit holder can acquire the rights-of-way through an eminent domain proceeding in the federal district court where the property is located.” And furthermore, in Section 216(f), “A right-of-way acquired in an eminent domain proceeding is a taking of private property for which the landowner must receive just compensation, which is the fair market value on the date of exercise of eminent domain.”

Therefore, any fluctuation or rise in real estate property values during the course of the proceeding and including any period of time due to litigation arising from such a proceeding to the time of completion of the project, if finally approved, would not be taken into consideration. And the compensation or fair market value of the property to its owner would be locked in by the date of the initial date of the proceeding, which could potentially be years, as in the case of Kelo v. City of New London, CT 545 U.S. 469 (2005).

Crucial in understanding the bone of contention raised primarily by the 10 states within the Mid-Atlantic Area and Southwest Area National Corridors, is that historically, federal jurisdiction of the siting of transmission lines in states has been reserved for federal lands within respective states. It has been the state utility commissions of each given state which have otherwise been the regulators of siting permits and applications.

And it is only reasonable to understand the indignation and concerns by state governors and state representatives to learn that FERC has been granted a new breadth of authority that many believe is counter-productive to the best interests of their respective states and citizens which they believe they know best.

As discussed in Part I of this series, with the repeal of the Public Utilities Holding Company Act of 1935, (PUHCA) holding companies both foreign and domestic will now be the applicants for siting permits in both the Mid-Atlantic Area and the Southwest Area National Corridors for aboveground HVDC transmission lines which will range from 150-160 feet high. That is roughly three times the height of our present HVAC lines throughout the U.S. And they will cover thousands of total miles throughout NIETC, or these 10 states and Washington, D.C.

And in what could be the first official challenge to back-stop transmission authority given FERC, as prescribed by such EPAct 2005 mandate, has been pre-filed for consultation with FERC. A Southern California Edison (SGE) application to the Arizona Corporation Commission, (ACC) the public utility commission of Arizona, was rejected in May 2007 by ACC. SCE merely wanted to run a 230-mile transmission line from Arizona to California at a cost of $242 million to Arizona ratepayers. And the benefit to Arizona? None, as it would specifically be to serve Californians and their growing energy needs.

The ACC described SCE’s project as “a 230-mile extension cord” into Arizona’s generation supply. And likewise in his letter to Secretary Bodman in November 2007, after the NIETC was finalized, Pennsylvania Governor Ed Rendell wrote, “These transmission lines will be on our land and depreciate our property values, but they may not offer any benefit to Pennsylvania consumers. This designation and action by the federal government is a blatant abuse of states’ rights,” Governor Rendell said.

Yet, this is likely just the beginning, exemplifying a dysfunctional remedy, to “fix” the U.S. power grid and growing domestic energy needs, by way of EPAct 2005. It will essentially be a power grab for power both literally and figuratively, the sights of which the U.S. has never seen.

Part III of Fallout from the Energy Policy Act of 2005, will take a look at: the various federal and state laws which the NIETC either directly or potentially violate or conflict with; proposed or pending pieces of legislation in Congress in order to amend specific sections of EPAct 2005; and the mechanisms that the DOE and FERC either already have or expect to have in place in the future in order to maintain effective oversight of such a massive body of law and its unprecedented changes in U.S. energy policy.
Diane M. Grassi is a freelance columnist, who writes weekly commentary and op-ed pieces providing honest and often politically incorrect assessments of the US government’s public policy, its laws and its courts’ opinions.

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WesternFront America

“Energy independence from foreign sources.” A mantra repeated over and over again by Al Gore, by the Hollywood elite and by candidates running for the 2008 Presidential nomination. But rarely is it ever pointed out how this phrase is but an oxymoron with respect to United States energy policy, which becomes ever more vulnerable, not just as the result of its failing infrastructure, but from misguided public policy decisions.

And never is the topic broached publicly in how much of the U.S. energy infrastructure and lines of transmission have been consumed by a constant stream of foreign direct investors and diversified holding companies. Also unbeknownst to most consumers is that such activity was hailed from Wall Street to Capitol Hill as the answer to resolving U.S. energy woes.

And now those very foreign investors have been granted even greater leeway as now realized by such mandates of the Energy Policy Act of 2005 (EPAct) which essentially eliminated the Public Utilities Holding Company Act (PUHCA) of 1935.

And in 2007, barely after the ink dried from EPAct 2005, the Energy Independence and Security Act (EISA) of 2007 was passed by federal lawmakers and signed into law. EISA conveniently serves to obfuscate critical issues that continue to stress the U.S. electrical power grid, its energy generation and transmission capacity. Yet, EPAct 2005 has continually escaped public scrutiny and a lack of accountability in both houses of the U.S. Congress.

But U.S. energy policy and the generation of power is a complex web of public policy, law, economics, infrastructure and ever-present globalization. So for purposes of this report, and in order to best comprehend current U.S. energy policy, it will be helpful to take stock of the more recent evolution of such and to examine its many and varied elements which have changed again post-2005.

In addition to the repeal of PUHCA 1935, EPAct 2005 amended Section 203 of the Federal Power Act (FPA) which will have an unprecedented and profound impact of its own on how future transactions in the energy industry will be handled by the federal government, impact matters of states’ sovereignty and regulating costs to consumers.

For over 70 years, federal laws have played a vital and critical role in the operation, production, distribution and protection of the U.S. electrical power grid. Federal laws in concert with state laws and regulations have necessarily dictated that the power grid be shielded from market manipulation and criminal behavior.

But as the nearly 100 year old power grid has aged, facing a growing population and higher load demands for power, the industry has simultaneously become more and more deregulated by mandate. And deregulation has led to less and less necessary preventative maintenance, upgrades in technology as well as necessary investment in research and development. And the poorly maintained grid in many of the areas of the country, predominantly the mid-Atlantic and northeast states, has but put even more stress upon its transmission lines.

The basic structure of the North American transmission system is made up of over 140 control centers and approximately 3500 utility providers covering over 200,000 miles. Utility generating plants, transmission and sub-transmission systems, distribution systems and customer loads travel over a two-part power grid; one in the east and one in the west. Texas has its own grid.

Compounding the vast network and intricacy of the grid is the interconnectivity and delivery of power that in many cases is incompatible with widely varying levels of equipment integrity, data systems and personnel training. It is the secondary system which supplies the distribution of electricity to consumers, where most of the power failures occur, and that which require time to repair. And the network of sub-stations feeding electricity to neighborhoods, via feeders which flow to transformers, is where supposed problems arise during local outages, further exacerbated by non-maintained equipment.

But although deregulation of the utility industry began over two decades ago, it was the 1992 Energy Policy Act which changed the way electricity was sold to local consumers for the first time. Energy companies were permitted to install their own plants and sought customers throughout the country, but not necessarily in the same geographic region. Energy brokers then entered into the picture and utilized the open market to buy and sell power. And thus began the potential unreliability of energy delivery.

Purchasing power from plants hundreds of miles away from a respective region put unprecedented burdens upon the transmission system, raising the likelihood of power failures at the local level. Most importantly, the electrical grid, as it was originally envisioned, was never designed to absorb the transmission of high voltage capacity across the continent, and especially in absence of comparable and upgraded systems in place. Although Enron became the poster child for electrical power market manipulation, which came to light after the rolling blackouts of California in 2000 and 2001, U.S. public policy and lawmakers must be held responsible for even further erosion of federal regulations and mandates now realized in EPAct 2005.

The initial most striking change that EPAct 2005 provides is the repeal of PUHCA 1935, now amended as PUHCA 2005, and now administered by the Federal Energy Regulatory Commission (FERC). PUHCA 1935 became law after the height of the Great Depression and after the stock market crash of 1929 and was a cornerstone of President Franklin D. Roosevelt’s New Deal industry legislation.

It called for the prohibition of market manipulation, specifically to prevent then super-sized utility conglomerates, to prevent mega-mergers and to prevent monopolies from overtaking geographic regions. And just as importantly, PUHCA 1935 made it unfeasible for non-energy corporations to purchase a public utility.

Such abuses led to severe problems in the electric and gas industry in the 1920′s and in the 1930′s when three utility holding companies owned one-half of the electric utilities in the entire U.S. Thus, the emergence and formation of the Securities Exchange Commission (SEC) in 1934, which preceded PUHCA1935, and together became essential in safe-guarding the public trust and in protecting consumers and investors alike, as PUHCA 1935 delegated multi-state utility ownership regulation to the SEC.

Fast-forward to February 8, 2006, six months to the day of the enactment of EPAct 2005, when the official repeal of PUHCA 1935 was realized. As a direct result, the SEC vacated its regulatory authority over multi-state utility ownership by holding companies and only retains the ability to protect investors, not utility consumers or to prevent mega-mergers from consolidating. And now the FERC will assume cursory merger authority over generating plants and holding companies.

The repeal of PUHCA 1935 will not only allow multi-state transactions but also mergers of distribution facilities, utilities merging with non-utility corporations, and including foreign ownership over domestic utilities. Furthermore, oil companies may now own electricity and natural gas utilities, paving the way, yet again, for the formation of cartels. In addition, construction and infrastructure companies, especially those from abroad, are eager to partake in being afforded carte blanche in the acquisition of U.S. public utility operations.

In the post-PUHCA 1935 era, no individual state or federal agency will have the jurisdictional teeth to effectively regulate the finances of U.S. public utility assets totaling more than one trillion U.S. dollars. Nor will there be required oversight of such holding or parent companies such as investment banks from speculating and investing in far riskier businesses, with utility rate-payer revenues. ? We have already seen evidence of such with the current sub-prime mortgage loan crisis.?

At cost? The reliability standards of U.S. public utilities, which could have grave ramifications on U.S. national security, the U.S. economy and the well-being and safety of the American people; all with the blessings of the U.S. Department of Energy, the U.S. Congress and the global stock market.

To be continued in Part 2 of a Series. Next Up: Energy Department Uses Power to Trump States’ Rights.

Diane M. Grassi is a free-lance columnist writing commentary on current events of the day providing honest and often politically incorrect assessments. From U.S. public policy to Major League Baseball, Ms. Grassi is an eclectic thinker, demanding the readers to also observe their thinking patterns from a different perspective. Whether you agree with her or not, Diane Grassi will have you coming back to note her opinions, and if at best she wakes you up, then her goal will have been accomplished. Reach her via email at mailto:dgrassi@cox.net

 

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