Tag Archives: fraud

Waste And Fraud

This will be brief, since sitting still isn’t my strong point.

The idiots who believed–or pretended to believe–that DOGE was all about rooting out “waste and fraud” from the federal government will dismiss the truth, much as Trump has responded to economic data by firing the workers who reported it, but numerous outlets are reporting the all-too-predictable facts.

DOGE cost taxpayers a fortune. Far from finding waste and fraud, DOGE was waste and fraud.

Billionaire Elon Musk and President Donald Trump tried to take a chainsaw to federal government spending, but it turns out they actually wasted tens of billions of taxpayer dollars.

The Department of Government Efficiency generated some $21.7 billion in waste across the federal government in the first six months of the year, according to a new report from the minority staff of the Senate Permanent Subcommittee on Investigations (PSI).

As Talking Points Memo reported,

Democrats on the Senate Permanent Subcommittee on Investigations yesterday released a jaw-dropping report attempting to document the scope and scale of financial waste, personnel upheaval, and human suffering caused by the so-called Department of Government Efficiency and Elon Musk’s giddily uninformed strike force of Peter Thiel acolytes. In all, the Democrats, led by Richard Blumenthal (CT), estimated DOGE cost the government $21.7 billion.

“DOGE-generated waste could also have easily funded monthly food assistance for the 5.3 million families losing an average of $146 in monthly food security assistance ($9.3 billion per year) under the new budget; or it could have been used more broadly to support the 40 percent of taxpayers that will see a net increase to their taxes as a direct result of the Trump tax plan,” the report contends….

Neither the buyouts nor paying workers while on administrative leave (costing an additional $6.1 billion) increased government efficiency, as was always obvious and predictable. The report details many other costs, from the petty and pointless (millions of hours of wasted employee time writing the Musk-required email listing their weekly accomplishments) to the catastrophic (the elimination of the United States Agency for International Development, “projected to cause millions of additional deaths globally while simultaneously endangering domestic public health by reducing essential medical staff and programs.”)

There is much more, and you really need to click through and read the depressing details, but this is what happens when people who have absolutely no idea what they are doing–in this case, children in their early 20’s armed only with ideological platitudes–are given entry into sophisticated systems without any understanding of either the missions of the agencies involved, or the data relevant to that mission.

A perfect example of Trump/MAGA….

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Straight Talk About Government Efficiency

We can only speculate about the real motives prompting Trump/Musk to take a hatchet to the federal government. That motive is clearly not efficiency–indeed, in any logical world, it would be universally seen as insane, as would the betrayal of Ukraine, which undermines America’s global interests. (That betrayal is more than likely prompted by Trump’s continuing anger over Zelensky’s prior refusal to be blackmailed into accusing Joe Biden of invented crimes. Trump holds grudges.)

As I’ve watched Musk’s illegal DOGE wreak havoc with the federal government and put millions of Americans at risk, I revisited an article from Governing published just before that “department” began it’s slash and burn operations. The author,  who had participated in several state-level efforts to root out “fraud and waste,” noted that there are proper–and improper– ways to go about that task.

Before sharing the persuasive insights of that article, however, I want to point to a truly foundational issue–one that has become far more evident as DOGE continues its destructive path through our federal government. Most Americans reject what we now understand to be Musk’s definition of “fraud and waste.” Anyone who thinks that Social Security is a “Ponzi scheme” is clearly incapable of providing an evidence-based definition of either fraud or waste. (Evidently, to Musk, if a government program benefits millions of Americans–or if an agency’s operations interfere with the ability of Musk’s businesses to rip off taxpayers–that function is wasteful, if not fraudulent…)

The linked article begins by agreeing that efforts to streamline government and root out inefficiencies are always appropriate. It then points to some pesky facts about federal expenditures–facts that should guide any legitimate efforts.

Musk and Ramaswamy have promised a 30 percent cut in the federal government. Roughly 60 percent or so of federal spending, however, consists of interest payments on the national debt, Social Security, Medicare and national defense — largely (though not entirely) untouchable. The projected savings therefore purport to come mostly from wiping out everything else: cutting government regulation, eliminating large numbers of government programs and firing even larger numbers of employees.

Gutting regulation does little to reduce government spending, however, while employee compensation makes up only 4 percent of the federal budget. Firing every single federal employee would barely make a ripple. Whatever the merits of all this as policy, in reality it has little to do with efficiency.

In fact, in many ways, the proposed DOGE approach illustrates how not to pursue actual efficiency in government.

The author then suggests realistic ways to make government more efficient.

Be honest and realistic. Thirty years ago, the massive National Performance Review produced recommendations shaving nearly 7 percent off federal operations… it’s possible to reduce spending by as much as 10 percent annually — although not without severe political repercussions.

The “annually recurring” part is important. It’s easy to fake savings through accounting gimmicks and one-time asset sales. Sure, you can close a budget hole by raiding dedicated funds, postponing needed infrastructure repairs or construction, or even doing a sale-leaseback of the state capitol…  Real, meaningful “efficiency” recurs year after year. In fact, so should the search for efficiency.

It would be easy to cut government spending by 30 percent by eliminating all health and welfare spending. That may be the goal under DOGE. Unfortunately, about six months later, emergency rooms will be crammed, hospital systems will be incurring massive debts through charity care, workforce productivity will plummet, and communicable diseases will proliferate. Cutting just to cut generally costs more in the long term.

 Very little government spending consists of actual fraud and abuse, and less still by beneficiaries filing claims for, say, medical care they never received. It is mostly committed, rather, by providers seeking reimbursements for care they never delivered, or by big-dollar private contractors (particularly in defense: know anyone who fits that description?).

Sometimes, spending saves money. That may sound counterintuitive, but you wouldn’t fire your accounts receivable department, would you? Hiring more revenue collectors is good “business,” even in government.

The author noted that the best way to save money is by improving service delivery, not performative gestures like slashing huge programs. Cutting inefficiency doesn’t require attacking the people who carry out the processes — it requires streamlining the processes themselves.

And rather than firing staff, if we really wanted to find ways to eliminate waste and inefficiency, we would ask the people who work for government–because those are the folks who actually know. “That’s how leaders, public or private, proceed if they’re serious about making their operations work better.”

But of course, making government work better is the farthest thing from Trump/Musk’s mind. They just want it to work better for them.

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Democracy And Dirty Tricks

When Democrats gripe that American government is no longer small-d democratic, they have a point. Not only has extreme gerrymandering given more power to rural voters than to those who reside in cities, but the allocation of two Senate seats to each state, regardless of population, has grossly distorted the ideal of “one person, one vote.” The last time the GOP won the Senate, it was with twenty million fewer votes than had been cast for the Democratic “minority.”

Democratic Senators currently represent some forty million more voters than Republican Senators, despite an almost-even split in the upper house. Thanks to predicted demographic shifts, it’s poised to get even worse: one scholar estimates that by 2040, 70% of Americans will live in the fifteen largest states, and will be represented by thirty Senators, while the remaining 30% will have 70 Senators voting on their behalf.

If these structural advantages weren’t enough, the deep pocket donors who support the GOP continue to fund political dirty tricks. I’ve been reading a number of reports about the latest effort to re-elect Donald Trump: a phony “third party” called No Labels.

As Robert Hubbell recently wrote,

The “No Labels” organization is a GOP dark-money PAC designed to elect Donald Trump by running a doomed third-party candidate to draw votes away from Joe Biden in 2024.

Hubbell quotes the Intercept for a story suggesting that No Labels intends to run Manchin; whether that is accurate or not, what we do know is that No Labels is not a real political party. It is funded by the Koch brothers, Harlan Crow, and Peter Theil (among others).

Worse, “No Labels” is operating as a 501(c)(4) charitable organization so that it does not have to disclose its donors like every other political party—even though No Labels is registering as a political party across the nation for the 2024 election.

Arizona Democrats, among others, are challenging the organization’s misrepresentation of itself as a third party, alleging that, as a 501(c)(4) organization — which legally cannot primarily be engaged in political activity —  it cannot comply with federal election regulations governing political parties, including disclosure of contributors.

“No Labels is not following the rules for political party recognition, while attempting to be placed on the ballot alongside actual, functioning political parties who do,” a spokesperson for the Arizona Democratic Party said in March.

Hubbell quite properly characterizes articles suggesting that No Labels is a new, “centrist” political party as “journalistic malpractice.”

As anyone who has followed election politics even casually knows, thanks to America’s political structures, third party candidates are always spoilers. That’s true even when the third party is a legitimate party and the candidate honorable and sincere. The presence of such ballot options simply takes votes from one of the major party candidates. (Most consequential example: No Ralph Nader on the ticket, no George W. Bush in the White House.)

In this case, there is ample evidence that the effort to mount a bogus “third-party” option is anything but honest and sincere. There is also absolutely no doubt who they hope that bogus entrant will benefit–any doubt about the motives should be dispelled by the identity of the funders.

Harlan Crow already owns a Supreme Court Justice; now he and the surviving Koch brother and Peter Theil and their ilk want to ensure the election of Trump, an intellectually vacuous and mentally-ill narcissist they can easily manipulate.

I worry that this particular “dirty trick” may not receive the publicity it deserves–the media and the voters who pay attention are constantly distracted by the equally dangerous antics of the MAGA nutcases and Neo-Nazis currently impeding rational governance  and fiscal meltdown in Congress–and relatively few voters pay attention.

It is absolutely true that both parties have engaged in political trickery–mostly at the local level–just as both parties have gerrymandered when in a position to do so. In the last couple of decades, however, it is the GOP that has benefitted–thanks in large part to the huge amounts of money these millionaires and billionaires have been willing to spend in order to foreclose the twin threats of increased regulation and increased taxation.

If the Democrats ever secure a real, working majority in Congress, they need to address the structures that are most anti-democratic–at least, the ones that are amenable to changes in rules (the filibuster) and statutory repair (gerrymandering, vote suppression). They can also address the corruption at the Supreme Court. There is nothing lawmakers can realistically do about distorted Senate representation, and the National Popular Vote Interstate Compact would have to be passed by several Red States, which makes that effort to neuter the Electoral College unlikely.

But nothing good will happen without massive turnout that ignores third party candidates–real or fictitious.

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She Has The Receipts…

Oh, snap ! Excuse my  schadenfreude….

Those of us who follow the news have been hearing  about New York Attorney General Letitia James’ investigation of the Trump Organization for what seems like a century. Yesterday, we finally got to see the results of that methodical investigation–and they were  devastating.

As the saying goes, she brought the receipts.

What made the announcement of James’ suit even more satisfying was the fact that it followed by just a few hours the smackdown of Judge Cannon’s widely derided decision by the Court of Appeals. (It is worth noting that two of the judges on that three-judge panel were Trump appointees.) As Robert Hubbell wrote in his newsletter, “It is difficult to convey the extraordinary rebuke delivered by the 11th Circuit to Judge Cannon.”

Hubbell also quoted from Letitia James’ verbal presentation of her 225 page complaint at the press conference.

For too long, powerful, wealthy people in this country have operated as if the rules do not apply to them. Donald Trump stands out as among the most egregious examples of this misconduct. With the help of his children and senior executives at the Trump Organization, Donald Trump falsely inflated his net worth by billions of dollars to unjustly enrich himself and cheat the system. . . . Mr. Trump thought he could get away with the art of the steal, but today, that conduct ends. There are not two sets of laws for people in this country; we must hold former presidents to the same standards as everyday Americans. I will continue to ensure that no one is able to evade the law, because no one is above it.

In all my years of practicing law, I never saw a 225 page complaint; James has used those pages to enumerate in great detail an absolutely breathtaking amount of fraud, employed consistently over many years.  Those of you who want to read the entire document can do so here.

Among the “inaccuracies” Trump supplied to banks, taxing agencies and insurance companies were the following:

  • Trump’s apartment in NY was approximately 10,000 square feet. That’s really big– but of course, not as big as Trump’s ego.  In his financial statements (intended to be relied upon by lenders) he claimed it was 30,000 square feet.  That isn’t an inadvertent measurement error.
  • Trump purchased undeveloped land in Scotland for $12 million dollars.  Eight years later, he claimed it was worth $435 million. (A contemporaneous appraisal found that–if the land was developed–it would be worth $21 million.
  • Then there was the golf course Trump purchased on the  west coast near Los Angeles. He granted a conservation easement to the state, and  an appraisal valued the golf course at $18 million. When Trump claimed a tax deduction for the grant of easement, he claimed the property was worth $25 million–a value that reduced his taxes to the IRS by millions of dollars.
  • 40 Wall Street, a downtown building owned by the Trump Organization, was valued at $200 million on a tax filing in 2010. In the very next year, Trump valued it at an astronomical $524 million.

There is much, much more, and the sheer chutzpah is amazing. James’ office lacks the authority to bring criminal charges, so her case is civil, but she announced that she has made criminal referrals to both the U.S. Attorney for New York and the IRS.

Although James’ case is civil, it’s worth noting that she is seeking what you might call a “corporate death penalty” for the Trump Organization. Among the various remedies she’s seeking are cancellation of corporate certificates (without which businesses can’t operate), the appointment of an independent monitor, an order barring Trump and the Trump Organization from doing loan, real estate and other transactions relating to New York for five years, and permanently barring Trump, three of his adult children (I bet Tiffany is grateful for those years of cold shouldering) from serving as officers or directors of any New York businesses.

And since this is a civil suit, James is free to point to the hundreds of times Donald  and his son Eric refused to answer questions and  took refuge behind the Fifth Amendment. (In a criminal proceeding, prosecutors cannot draw inferences from the fact that a defendant claimed the Fifth; in civil suits, however, the rule is different.)

Vanity Fair ran an article under the headline: “How Screwed Are Donald Trump and his Adult Children?”I think the answer is: royally.  And it couldn’t happen to a more deserving family of grifters.

Pass the popcorn.

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Once A Grifter…

Whenever there is discussion on this blog about why thus-and-so happened, someone will inevitably post a comment containing “follow the money.” I wish I could say I disagree with the premise that–no matter what the subject is–money is a substantial part of the explanation, but I can’t. (The problem with dismissing adages of this sort is that, no matter how hackneyed, they tend to reflect reality.)

One of the most illuminating aspects of  the testimony that emerged from the June 13th hearing  of theJanuary 6th Committee was the obscene amount of money Trump raised in the run-up to January 6th–and the blatant dishonesty of the way he raised and distributed it. As the Daily Beast reported,

The committee also alleged that the Trump campaign and its allies used those false claims to exploit donors, to the tune of hundreds of millions of dollars. In perhaps the most egregious instance, multiple campaign officials told the committee that the “official election defense fund” mentioned in fundraising emails didn’t even exist. It was just a marketing ploy to extract money, which was then divvied up among a number of accounts.

And while Trump and GOP allies did end up igniting millions of dollars on the legal altar, most of the donations went elsewhere. A slide put together by congressional investigators pointed out that $5 million went to Event Strategies, which helped set up the rally at The Ellipse near the White House where Trump fired up an angry crowd that later attacked the Capitol building. They also noted that last year, $1 million went to the nonprofit that hired his chief of staff Mark Meadows, with another $1 million going to the America First Policy Institute, which backed the social media lawsuit Trump lost in April. Another $204,857 was funneled to the Trump Hotel Collection.

“The Big Lie was also a big rip off,” Lofgren said.

Co-chair Liz Cheney (R-WY) said the panel would explore that element in a future hearing.

I can hardly wait…

As Representative Lofgren pointed out, people making these small donations are entitled to know where their money is actually going. According to the findings of the investigation, however, funds were not only diverted from their purported purpose, it wasn’t inadvertence; that was pretty clearly the intent from the start.

As the Independent reported,

Donald Trump’s presidential campaign raised $250 million from supporters by telling them the money would be used to fight voter fraud, but the campaign knew those claims of fraud were bogus and instead diverted the money to his own political organisation, the House committee investigating the January 6 attacked claimed on Monday.

Mr Trump’s campaign sent millions of fundraising emails to supporters encouraging them to donate to help fight voter fraud between election day and January 6, the committee said. Many of those emails asked supporters to donate to an “election defense fund” for legal cases related to the election.

 However, an investigator for the committee said that fund did not exist, and most of that money went Mr Trump’s ‘Save America’ political action committee, not to election-related litigation.

“The evidence highlights how the Trump campaign pushed false election claims to fundraise, telling supporters it would be used to fight voter fraud that did not exist,” said Amanda Wick, senior investigative counsel for the House committee.

“The Trump campaign knew these claims of voter fraud were false yet they continued to barrage small-dollar donors with emails encouraging them to donate to something called the ‘Official Election Defense fund.’ The select committee discovered no such fund existed,” she added.

Everything this man ever touched was a grift–a con job. Trump steaks, vodka, University…the list goes on. Most sentient Americans concluded long ago that–in addition to his repellent personal characteristics–Trump was a petty crook, not a businessman.

The question we confront isn’t whether Trump himself was guilty of lies big and small, or whether he constantly engaged in unethical and illegal activities. We know the answer to that. The question–to which I have absolutely no answer–is why so many Americans see him as somehow admirable, as someone deserving of their loyalty and money.

The only answer that makes any sense is that these people–these members of the cult–live in an alternate reality, an information bubble in which Fox is actually a news organization, the My Pillow nutcase has access to classified information, Sidney Powell and Rudy Guliani are competent lawyers, and every “legacy” news source is part of a”deep state” conspiracy financed by George Soros that is lying to them.

There’s a diagnosis for people who believe those things…..

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