Apparatchik (plural apparatchiki): a Russian word for a full-time, professional functionary of the Communist Party or government; i.e., an agent of the governmental or party “apparat” (apparatus) that held any position of bureaucratic or political responsibility. Members of the “apparat” were frequently transferred between different areas of responsibility, usually with little or no actual training for their new areas of responsibility. Thus, the term apparatchik, or “agent of the apparatus” was usually the best possible description of the person’s profession and occupation. Today this term is also used in contexts other than Soviet Union, to describe individuals, appointed to positions in any government, on the basis of ideological or political loyalty rather than competence.
James Delingpole of the UK’s Telegraph reports on April 27 that one of Obama’s energy advisers is on course to make millions from shares in green companies which may benefit from green policies that she has helped formulate:
Assistant Secretary of Energy Cathy Zoi has a huge financial stake in companies likely to profit from the Obama administration’s “green” policies. Zoi, who left her position as CEO of the Alliance for Climate Protection — founded by Al Gore — to serve as assistant secretary for energy efficiency and renewable energy, now manages billions in “green jobs” funding. But the disclosure documents show that Zoi not only is in a position to affect the fortunes of her previous employer, ex-Vice President Al Gore, but that she herself has large holdings in two firms that could directly profit from policies proposed by the Department of Energy.
Among Zoi’s holdings are shares in Serious Materials, Inc., the previously sleepy, now bustling, friend of the Obama White House whose public policy operation is headed by her husband. Between them, Zoi and her husband hold 120,000 shares in Serious Materials, as well as stock options. Reporter John Stossel has already explored what he sees as the “crony capitalism” implied by Zoi being so able to influence the fortunes of a company to which she is so closely associated.
In addition, Zoi holds between $250,000 and $500,000 in “founders shares” in Landis+Gyr, a Swiss “smart meter” firm. She also still owns between $15,000 and $50,000 in ordinary shares. “Smart meters” are electric meters that return information about customer power usage to the power company immediately and allow a power company to control the amount of power a customer can consume. These smart meters are a central component of the Obama administration’s plans to reduce electricity consumption as part of the “smart grid.”
Then Barbara Hollingsworth of the Washington Examiner reports on April 20 that Fannie Mae owns patent on residential ‘cap and trade’ exchange!
Fannie Mae, the cutsey name for the Federal National Mortgage Association, is the government-sponsored enterprise that’s a stockholder-owned corporation. (Don’t ask me to explain how something can be privately owned but government sponsored!)
Not only did Fannie Mae, together with its evil twin Freddie Mac, play a central role in the 2008 subprime mortgage meltdown and the ensuing collapse of the housing market, Fannie Mae has been mired in scandals and conflicts of interest.
In 2004, the Office of Federal Housing Enterprise Oversight released a report charging Fannie Mae with widespread accounting errors. In 2006, U.S. regulators filed 101 civil charges against chief executive Franklin Raines; chief financial officer J. Timothy Howard; and the former controller Leanne G. Spencer. The three are accused of manipulating Fannie Mae earnings to maximize their bonuses. The lawsuit sought to recoup more than $115 million in bonus payments, collectively accrued by the trio from 1998–2004, and about $100 million in penalties for their involvement in the accounting scandal. In 2008, the Wall Street Journal reported that two former CEOs of Fannie Mae, James A. Johnson and Franklin Raines had received loans below market rate from Countrywide Financial. Fannie Mae was the biggest buyer of Countrywide’s mortgages.
Fannie Mae and Freddie Mac have given contributions to lawmakers currently sitting on committees that primarily regulate their industry: The House Financial Services Committee (Barney Frank is the chair); the Senate Banking, Housing & Urban Affairs Committee; and the Senate Finance Committee. The others have seats on the powerful Appropriations or Ways & Means committees, are members of the congressional leadership or have run for president.
Can you spell C-O-R-R-U-P-T-I-O-N?
As reported by Barbara Hollingsworth:
When he wasn’t busy helping create a $127 billion mess for taxpayers to clean up, former Fannie Mae Chief Executive Officer Franklin Raines, two of his top underlings and select individuals in the “green” movement were inventing a patented system to trade residential carbon credits.
Patent No. 6904336 was approved by the U.S. Patent and Trade Office on Nov. 7, 2006 — the day after Democrats took control of Congress. Former Sen. John Sununu, R-N.H., criticized the award at the time, pointing out that it had “nothing to do with Fannie Mae’s charter, nothing to do with making mortgages more affordable.”
It wasn’t about mortgages. It was about greenbacks. The patent, which Fannie Mae confirmed it still owns with Cantor Fitzgerald subsidiary CO2e.com, gives the mortgage giant a lock on the fledgling carbon trading market, thus also giving it a major financial stake in the success of cap-and-trade legislation.
Besides Raines, the other “inventors” are:
- Former Fannie Vice President and Deputy General Counsel G. Scott Lesmes, who provided legal advice on Fannie Mae’s debt and equity offerings;
- Former Fannie Vice President Robert Sahadi, who now runs GreenSpace Investment Financial Services out of his 5,002-square-foot Clarksburg home;
- 2008 Barack Obama fundraiser Kenneth Berlin, an environmental law partner at Skadden Arps;
- Michelle Desiderio, director of the National Green Building Certification program, which trains “green” monitors;
- Former Cantor Fitzgerald employee Elizabeth Arner Cavey, wife of Democratic donor Brian Cavey of the Stanton Park Group, which received $200,000 last year to lobby on climate change legislation; and
- Jane Bartels, widow of former CO2e.com CEO Carlton Bartels. Three weeks before Carlton Bartels was killed in the Sept. 11 attacks, he filed for another patent on the software used in 2003 to set up the Chicago Climate Exchange.
The patent, which covers both the “cap” and “trade” parts of Obama’s top domestic energy initiation, gives Fannie Mae proprietary control over an automated trading system that pools and sells credits for hard-to-quantify residential carbon reduction efforts (such as solar panels and high-efficiency appliances) to companies and utilities that don’t meet emission reduction targets. Depending on where the Environmental Protection Agency sets arbitrary CO2 standards, that could be every company in America.
The patent summary describes how carbon “and other pollutants yet to be determined” would be “combined into a single emissions pool” and traded — just as Fannie’s toxic portfolio of subprime mortgages were.
“Fannie Mae earns no money on this patent,” communications director Amy Bonitatibus told the Washington Examiner. “We can’t conjecture as to the cap-and-trade legislation.” But passage of the legislation would create an artificial, government-mandated, trillion-dollar carbon trading market that would drive up the price of energy, indirectly making housing more expensive.
If the proprietary emissions trading system functions like other exchanges such as the New York Stock Exchange, which makes most of its revenue on listing and trading fees, its owners could see extremely generous profits, especially with a patent that keeps out competition for two decades.
So Fannie Mae, a quasi-governmental entity whose congressionally mandated mission is to make housing more affordable, has been a behind-the-scenes participant in a carbon trading scheme that would do just the opposite.
In January, Europol announced that up to 90% of the volume in the European Union’s own carbon-trading market was fraudulent, costing EU members $5 billion during the previous 18 months. That would be just the tip of the iceberg if the Congress were to make a similar mistake. But if it does, thanks to Raines and his fellow “inventors,” Fannie Mae will be laughing all the way to the (bailed-out) bank.
The Obama administration — the cleanest and most transparent administration ever! Yes, indeed!