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Tillerson to leave Exxon with $180 million retirement package

Rex Tillerson will get a $180 million retirement package from Exxon Mobil Corp. if he is confirmed as President-elect Donald Trump’s secretary of state.

Tillerson will give up more than 2 million Exxon shares he would have received over the next 10 years.

In exchange, the company will make a cash payment equal to the value of those shares to a trust to be overseen by a third party.

Exxon said Tillerson already promised the State Department that he will sell another 611,000 shares he currently owns, worth about $55 million at Wednesday’s price, if confirmed. His Senate confirmation hearing begins next week.

Tillerson’s selection raised potential conflict-of-interest issues because Exxon has business interests around the globe, including Russia.

Putting his retirement nest egg into a trust is intended to ease concerns that Tillerson could make decisions as secretary of state that would financially help himself or his former associates.

Federal ethics rules do not require government officials to sell off their investments but they must recuse themselves from matters that would affect those investments. Given Exxon’s global operations, ownership of Exxon stock could severely limit Tillerson’s actions as the nation’s chief diplomat.

Tillerson’s move comes as pressure mounts on Trump to make clear how he would separate himself from his company. Presidents are exempt from federal ethics rules, though most recent holders of the office have sold off their financial holdings and put them in trusts as if the rules did apply to them.

Trump has said he would hand management control of his business to his two adult sons, along with executives, but has given no indication he plans to sell his ownership interest in his company.

Tillerson has been CEO and chairman of the Irving, Texas, oil giant since 2006. Exxon spelled out the arrangement with Tillerson in a regulatory filing Wednesday with the Securities and Exchange Commission.

Edwin Williamson, a former State Department legal adviser who has reviewed the agreement, said that Tillerson agreed to put the cash he gets from Exxon in a trust that will invest only in Treasury securities and diversified mutual funds.

“They have eliminated anything that runs afoul of the conflicts-of-interest rule,” said Williamson, a lawyer at Sullivan & Cromwell in Washington.

Democratic Sens. Tammy Baldwin of Wisconsin and Elizabeth Warren of Massachusetts, however, called Tillerson’s payout egregious. Baldwin is proposing to ban corporate payments that are tied to an employee accepting a government job.

To avoid violating federal rules, business executives moving into top government jobs have often sold shares and created trusts as Tillerson is doing. This also gives them freedom to weigh in on policy without constantly consulting lawyers about the possible impact on their personal finances.

Henry Paulson, who was CEO of Goldman Sachs when President George W. Bush nominated him as Treasury secretary, sold about $500 million worth of Goldman stock. His predecessor, former Alcoa chairman Paul O’Neill, sold his stock and options after first saying he should have been be able to keep them.

Like presidents, vice presidents are exempt from federal ethics rules. After becoming vice president in 2001, Dick Cheney received payments and held stock options from his former oil-industry employer, Halliburton Co. The arrangement became a controversy because Halliburton was a major defense contractor.

Trump operates a sprawling global business with real estate holdings that aren’t as easily divested as stock. In addition to handing over control to his adult son, he has said he won’t make new deals while in the White House and will turn over his company to his adult sons and dissolve his charitable foundation.

Critics say that could leave Trump vulnerable to foreign governments that could try to influence him by rewarding or punishing his business interests in their countries. They say he should go much further and liquidate his assets and put the proceeds in a blind trust.

Because of the way Tillerson’s compensation is being dispensed, he will give up about $7 million compared with what he would have been paid if he retired in March as planned before Trump announced his cabinet nomination. Tillerson stepped down as CEO over the weekend.

Under the agreement, if Tillerson returns to the oil and gas industry within 10 years, the money in the trust will be paid out to a charity chosen by the controlling trustee.

Tillerson began his career at Exxon as a production engineer straight out of the University of Texas at Austin in 1975. He replaced longtime CEO Lee Raymond in 2006 and led the company during one of the most turbulent periods in its history, including its most profitable years but also the 2008 financial crisis and the slump in oil prices that began in mid-2014 that sharply cut into Exxon’s earnings.

Darren Woods, a 25-year Exxon veteran who had served as the company’s president, took over as CEO on Sunday.

FEATURED PHOTO: Hundreds recently rallied outside U.S. Sen. Dianne Feinstein’s office at 1 Post St. in San Francisco to send a message to every U.S. senator: Reject Donald Trump’s reckless climate denying (big oil) cabinet nominees. — PHOTO: Peg Hunter/Flickr

Cocaine investigation leads to discovery of 2 Van Gogh paintings

Police investigating suspected Italian mobsters for cocaine trafficking discovered two Vincent Van Gogh paintings hidden in a farmhouse near Naples, masterpieces that had vanished in 2002 during a nighttime heist at Amsterdam’s Van Gogh Museum, authorities said this past week.

The two paintings were “considered among the artworks most searched for in the world, on the FBI’s list of the Top 10 art crimes,” Interior Minister Angelino Alfano said.

They were found in a farmhouse near Castellammare di Stabia as Italian police seized some 20 million euros ($22 million) worth of assets, including farmland, villas and apartments and a small airplane.

Investigators contend those assets are linked to two Camorra drug kingpins, Mario Cerrone and Raffaele Imperiale, according to a statement by prosecutors Giovanni Colangelo and Filippo Beatrice.

The recovered masterpieces, propped up on easels, were unveiled for reporters at a news conference in Naples.

Museum director Axel Rueger said Italian investigators contacted the museum earlier in the week and art experts determined the paintings were authentic.

“Needless to say, it’s a great day for us today,” Rueger told Sky TG24 TV. “We hope they are soon back where they belong.”

With their frames removed and covered by cotton cloths, the paintings appeared to be in relatively good condition despite their long odyssey, the museum said.

One of the paintings, the 1882 “Seascape at Scheveningen,” is one of Vincent Van Gogh’s first major works.

It depicts a boat setting off into a stormy sea, and the thick paint trapped grains of sand that blew up from the Dutch beach as Van Gogh worked on it over two days.

The other is a 1884-85 work, “Congregation leaving the Reformed Church in Nuenen,” which depicts a church in the southern Netherlands where the artist’s father was the pastor.

Experts believe it was done for Van Gogh’s mother.

Despite the wishes of the museum, the paintings are not leaving Italy anytime soon. They are evidence in an investigation of whether gangsters from the Camorra crime syndicate were behind the original theft or might have become involved with the artworks later.

The Camorra is one of Italy’s three largest organized crime syndicates, with the Calabria-based ‘ndrangheta by far the most powerful. The Camorra consists of many crime clans, based in Naples as well as many of the Campania region’s small towns.

Financial Police. Col. Giovanni Salerno said investigators looking into the syndicate’s cocaine trafficking operations got a tip that the Camorra might have the Van Gogh artworks.

“One of those being investigated made some significant comments about their illegal investments made with earnings from drug trafficking, and he indicated two paintings of great value that supposedly were purchased by Imperiale. They were the result of a theft carried out in the Van Gogh Museum in Amsterdam almost 14 years ago,” Colangelo, the chief prosecutor in Naples, told reporters.

When renowned masterpieces are stolen, it’s usually a theft commissioned by a private collector who has already agreed to buy them, since it’s virtually impossible to sell them in the legitimate art market.

The Camorra and other Italian crime syndicates, awash in illegal revenues from drug trafficking, designer-goods counterfeiting and toxic waste dealings, are increasingly looking to launder their dirty profits and make even more money in the process.

Salerno said a person at the farmhouse when the paintings were found “didn’t say a word” about how they wound up there. He declined to elaborate, saying the case is still under investigation.

The museum said the paintings, inspected by a curator, do show “some damage.” Authorities don’t know where the paintings were kept in the 14 years since they were stolen by thieves who broke into the museum overnight and made off with the works from the main exhibition hall, where dozens of Van Gogh paintings were on display.

The seascape painting had some paint in the bottom left corner broken away, while the other painting had “a few minor damages at the edges of the canvas,” a museum statement said.

Police who arrived at the Amsterdam museum on Dec. 7, 2002, discovered a 4.5-meter (15-foot) ladder leaning against the rear of the building.

The thieves had apparently climbed up to the second floor using a ladder and broke in through a window, according to Dutch police at the time. Within a year, Dutch authorities had arrested two suspects, but the paintings’ whereabouts remained a mystery _ until Italian authorities searched the farmhouse.

“After all these years, you no longer dare count on a possible return,” Rueger said. “The paintings have been found! That I would be able to ever pronounce these words is something I had no longer dared to hope for.”

Van Gogh's "Congregation leaving the Reformed Church in Nuenen." — PHOTO: WikiArt
Van Gogh’s “Congregation leaving the Reformed Church in Nuenen.” — PHOTO: WikiArt

Feds: Enbridge Energy to pay $177M more after Midwest oil spills

Enbridge Energy’s bill continues to grow for the worst inland oil spill in U.S. history.

The U.S. Justice Department and Environmental Protection Agency announced earlier in July a proposed settlement with Enbridge and related companies.

Enbridge must spend at least $110 million on a series of measures to prevent spills and improve operations in the Great Lakes region.

The company also must pay civil penalties — $62 million for Clean Water Act violations, including $61 million for discharging at least 20,082 barrels of oil in Marshall, Michigan, and $1 million for discharging at least 6,427 barrels of oil in Romeoville, Illinois.

The settlement includes an “extensive set of specific requirements to prevent spills and enhance leak detection capabilities” throughout Enbridge’s Lakehead pipeline system — a network of 14 pipelines spanning nearly 2,000 miles across seven states, including Wisconsin. The system moves about 1.7 million barrels of oil each day.

Enbridge also must improve its spill preparedness and emergency response programs. as well as replace close to 300 miles of one of its pipelines.

“This settlement will make the delivery of our nation’s energy resources safer and more environmentally responsible,” assistant Attorney General John C. Cruden said in a news release. “It requires Enbridge to take robust measures to improve the maintenance and monitoring of its Lakehead pipeline system, protecting lakes, rivers, land and communities across the upper Midwest, as well as pay a significant penalty.”

Already Enbridge has reimbursed the federal government for $57.8 million for cleanup costs from the Marshall spill and $650,000 for cleanup costs from the Romeoville spill.

U.S. Attorney Patrick Miles Jr., assigned to the Western District in Michigan, said his office was pleased with the deal.

“Prevention of future pipeline leaks and immediate detection and repair of problem areas are critical when protecting health and the environment,” he said.

The Marshall spill was the largest inland oil spill in U.S. history. Enbridge discharged at least a million gallons of oil into Talmadge Creek near Marshall.

After 22 months of cleanup work, the Kalamazoo River reopened for recreational activities but environmental groups continue to question whether the cleanup was complete.

 

Spending $110 million

Under the proposed settlement, Enbridge must:

  • Implement an enhanced pipeline inspection and spill prevention program.
  • Implement enhanced measures to improve leak detection and control room operations.
  • Commit to additional leak detection and spill prevention requirements for a portion of Enbridge’s Line 5 that crosses the Straits of Mackinac in Michigan.
  • Create and maintain an integrated database for the Lakehead Pipeline System.
  • Enhance its emergency spill response preparedness programs by conducting four emergency spill response exercises to test and practice Enbridge’s response to a major inland oil spill.
  • Improve training and coordination with state and local emergency responders.
  • Hire an independent third-party to assist with review of implementation of the requirements in the settlement agreement.

 

The case against Enbridge

The government’s complaint alleges Enbridge owned or operated a 30-inch pipeline, known as Line 6B, that ruptured near Marshall on July 25, 2010.

The Line 6B rupture triggered numerous alarms in Enbridge’s control room, but Enbridge failed to recognize the ruptured pipeline until at least 17 hours later.

In the meantime, Enbridge restarted Line 6B twice on July 26, 2010, pumping additional oil into the ruptured pipeline and causing additional discharges of oil into the environment.

Ultimately, Line 6B discharged at least 20,082 barrels of crude oil, much of which entered Talmadge Creek and flowed into the Kalamazoo River, which flows to Lake Michigan.

Flooding caused by heavy rains pushed the discharged oil over the river’s banks into its flood plains and accelerated its migration more than 35 miles downstream.

Enbridge later replaced Line 6B, which originates in Griffith, Indian, crosses the lower peninsula of Michigan and ends in Sarnia, Canada, with a larger pipeline, also known as Line 6B.

The rupture and discharges were caused by stress corrosion cracking on the pipeline, control room misinterpretations and other problems and pervasive organization failures at Enbridge.

The government complaint also alleges that on Sept. 9, 2010, another Enbridge pipeline, known as Line 6A, discharged at least 6,427 barrels of oil which Romeoville, Illinois, much of which flowed through a drainage ditch into a retention pond in Romeoville.

Groups sue government for allowing Nestle to bottle water from national forest in drought-stricken California

The U.S. Forest Service was sued on Oct. 13 for allowing Nestlé to continue to bottle millions of gallons of water from the San Bernardino National Forest with a permit that expired 27 years ago.

The Story of Stuff Project, the California-based Courage Campaign Institute and the Center for Biological Diversity filed the lawsuit, challenging Nestlé’s 4-mile pipeline that siphons water from San Bernardino National Forest’s Strawberry Creek to bottling operations in Ontario, California.

The groups are calling on the court to shutdown the pipeline and order the Forest Service to conduct a full permitting process that includes environmental reviews.

In 2014, an estimated 28 million gallons were piped away from the forest to be bottled and sold under Nestlé’s Arrowhead brand of bottled water. The permit expired in 1988, but the piping system remains in use, siphoning about 68,000 gallons of water a day out of the forest last year.  

“We Californians have dramatically reduced our water use over the past year in the face of an historic drought, but Nestlé has refused to step up and do its part,” said Michael O’Heaney, executive director of the Story of Stuff Project. “Until the impact of Nestlé’s operation is properly reviewed, the Forest Service must turn off the spigot.”

Recent reports have indicated that water levels at Strawberry Creek are at record lows.  In exchange for allowing Nestlé to continue siphoning water from the creek, the Forest Service receives just $524 a year, less than the average Californian’s water bill.

“Nestlé’s actions aren’t just morally bankrupt, they are illegal. In the spring, we asked Nestlé to do the right thing, and they threw it back in our faces, telling Californians they’d take more of our water if they could,” said Eddie Kurtz, executive director of the California-based Courage Campaign Institute. “The US Forest Service has been enabling Nestlé’s illegal bottling in the San Bernardino National Forest for 27 years, and it has to stop. Our government won’t stand up to them, so we’re taking matters into our own hands.”

“California is in the middle of its worst drought in centuries and the wildlife that rely on Strawberry Creek, including southwestern willow flycatchers and numerous amphibians, are seeing their precious water siphoned away every day,” said Ileene Anderson with the Center for Biological Diversity.  “It’s inexcusable for the Forest Service to allow this piping system to continue year after year without a permit or any review of how it’s impacting wildlife or local streams. The forest and the wildlife that live there deserve better.”

Earlier this year, more than 500,000 people signed a petition calling on Nestlé to stop bottling water during the drought, and a poll found that a majority of people in the U.S. believe Nestlé should stop bottling in California. 

Despite the clear public outcry, when asked about the controversy, Nestlé CEO Tim Brown said he wished the multinational corporation could bottle more water from the land.

 

Millennial conservatives work to reform the GOP platform

Reform the platform — that’s the million-dollar message from the millennials involved in the Young Conservatives for the Freedom to Marry.

The group, affiliated with the nationwide Freedom to Marry campaign, announced earlier this spring that by the 2016 Republican National Convention it hopes to have persuaded GOP leaders and delegates to replace anti-gay language in the party platform with respectful and unifying language.

“It’s time to modernize the Republican Party,” said Tyler Deaton, campaign manager for Young Conservatives for the Freedom to Marry. “Our aim is to make the national platform less divisive toward gay people and their families — and more focused on unifying all conservatives around our core beliefs of freedom, family and limited government.”

At the Republican National Convention in Tampa in 2012, delegates adopted a platform that called for a U.S. constitutional amendment defining marriage as the union of a man and a woman, affirmed support for the 1996 Defense of Marriage Act and objected to the repeal of the ban against openly gay members of the military.

Republicans Mitt Romney and Paul Ryan lost the race for the White House that November, and the GOP went through a process of self-analysis that revealed the party must improve its standing with young people, women and minorities, including gays.

“We do need to make sure young people do not see the Party as totally intolerant of alternative points of view,” the party’s post-election Growth and Opportunity Project stated. “Already, there is a generational difference within the conservative movement about issues involving the treatment and the rights of gays. If our party is not welcoming and inclusive, young people and increasingly other voters will continue to tune us out.”

Since then, there’s been colossal change, especially on the issue of marriage equality and gay families. The U.S. Supreme Court struck down the U.S. Defense of Marriage Act provision that had barred federal recognition of same-sex marriages. Gay couples can now marry in 19 states plus the District of Columbia. Marriage equality lawsuits are pending in another 29 states, including Wisconsin, as well as the territory of Puerto Rico.

In the past year, there have been some bipartisan votes on the issue in some of the states that recently adopted marriage equality. And in April, the Nevada Republican Party dropped statements on marriage from the state platform, which is in the running to host the 2016 GOP Convention.

“The Republican Party in Nevada is doing something that I think we’re going to see a lot more of, which is appealing to the things that unite Republican voters across the country — the bread-and-butter issues,” said Jeff Cook-McCormac, adviser to the American Unity Fund, which is building GOP support for LGBT civil rights.

A poll conducted by Pew earlier this year found that 61 percent of Republicans under the age of 30 support marriage equality. A poll for The New York Times and CBS News found that a majority of Republicans under 45 also support marriage equality.

“The future of the party is clear on the marriage issue — a seismic shift is already underway in support of the freedom to marry,” Deaton said.

Later this spring and throughout the summer, the Young Conservatives for the Freedom to Marry will take its Reform the Platform campaign to New Hampshire, Iowa, Nevada and South Carolina — states that traditionally have early presidential primaries.

The New York-based Freedom to Marry campaign is responsible for funding the three-year Reform the Platform effort. The organization played a key role in convincing Democratic leaders and delegates to endorse marriage equality in that party’s 2012 platform.

The Young Conservatives have draft language for the 2016 Republican National Party platform, even though the 2016 convention does not have a home. In part, the draft reads, “We believe that marriage matters both as a religious institution and as a fundamental, personal freedom. Because marriage — rooted in love and lifelong commitment — is one of the foundations of civil society, as marriage thrives, so our nation thrives. We recognize that there are diverse and sincerely held views on civil marriage within the party, and that support for allowing same-sex couples the freedom to marry has grown substantially in our own party. Given this journey that so many Americans, including Republicans, are on, we encourage and welcome a thoughtful conversation among Republicans about the meaning and importance of marriage and commit our party to respect for all families and fairness and freedom for all Americans.”

For now, Republican National Committee spokeswoman Kirsten Kukowski maintains that the national platform “stands for traditional marriage” and potential changes to that position won’t come up for two years.

The AP contributed to this report.


Political health care ads cost $445 million

A new analysis finds the nation’s health care overhaul deserves a place in advertising history.

That’s according to a report by nonpartisan analysts Kantar Media CMAG.

The president’s health care law has been the focus of extraordinarily high spending on negative political TV ads — ads that have gone largely unanswered by the law’s supporters.

The report estimates that $445 million has been spent on commercials mentioning the law since 2010.

Spending on negative ads outpaced spending on positive ones by more than 15 to 1.

Nearly all the spending was on local TV stations, in campaigns ranging from state treasurer and governor to congressional offices and the presidency.

Trickle up economics in the fast food industry

Fast-food workers across the country went on strike in more than 130 U.S. cities on Dec. 5 to demand better wages. We enthusiastically support their efforts and others to raise the minimum to a livable rate.

Protesters in Milwaukee, Madison and Green Bay were among the thousands nationally who raised picket signs against companies such as McDonald’s, Burger King, Wendy’s and KFC for paying unlivable wages while banking billions in profits and using tax loopholes available only to the very rich to avoid paying Uncle Sam at the same rate as their middle-class workers. At the same time, a portion of the average American’s tax payments end up going toward food stamps for fast-food workers living near poverty. 

McDonald’s is an excellent example of what’s happened over the past three decades since elected officials began altering tax codes and re-engineering economic policy to redistribute the nation’s wealth to their rich donors. 

In 2012, McDonald’s Corp. made $5.5 billion in profit. The company has increased shareholder dividends for 25 consecutive years. CEO Don Thompson recently got a raise to $13.8 million, up from the $4.1 million he made in 2011.

But front-line fast-food workers earn only a median hourly wage of $8.94. For a single mother of two working 40 hours per week, that comes out to less than the federal poverty level. If the worker also must pay for child care, which averages $11,666 per year, then she can’t afford to work at all.

More than half the families of front-line, fast-food workers are enrolled in one or more public programs, compared to 25 percent of the workforce as a whole, according to a study from the UC Berkeley Labor Center. Your tax dollars contribute $7 billion in public assistance to families of workers in the fast-food industry, the study found.

All of this means that your Big Mac takes more out of your wallet than you pay at the cash register. In order to maintain the extreme wealth of McDonald’s corporate chiefs, you pick up some of the company’s cost of maintaining a workforce.

Of course, there’s also an issue with the quality of fast food, which is harmful to public health. Since it’s cheap and heavily consumed by poor people, fast food also ends up costing you additional bucks when you pay your insurance premiums. Poor people often lack adequate health insurance, and they have no regular or preventive health care. So when they get sick, they go to the emergency room, which cannot turn them away by law. The cost of treating them for free is transferred to you. 

The corporate right has warned that raising the minimum wage for fast-food workers would increase the cost of their products. But padded by big profits, McDonald’s could easily absorb the cost. And maybe if the price of their poor-quality food rose a little, people would eat less of it, thus reducing overall health costs.

There’s no excuse for keeping hardworking people in economic misery and making the middle class pay for it while a few people become fabulously wealthy pushing junk food.