Thursday, October 8, 2015

The NRA (Again)

One must not put a loaded rifle on the stage if no one is thinking of firing it.
—Anton Chekhov, Letter to Lazarev-Gruzinsky

Once again we are confronted with a school shooting, the 45th in 2015 and the 142nd since the 2012 massacre at Sandy Hook Elementary School in Newtown, Connecticut. We have, of course, grown accustomed to shootings in which four or more people are killed in one incident. Those events are considered to be mass shootings by Mass Shooting Tracker, a group that studies these events. After each mass shooting followers of those events await words of comfort from the NRA, since many in the country attribute the frequency of those events to the zealous support of gun rights by the NRA. Being the guns’ best friend, no one is in a better position than that organization to reassure the country that lenient gun laws have nothing to do with the frequency of these tragedies.

As eager as we are to receive reassurances from the NRA’s executive director, Wayne LaPierre, following these events, it is unrealistic to expect him to offer words of comfort after every mass shooting. Given the fact that there have been 295 mass shootings in 2015 alone, if we expected Wayne to offer solace after each of those events he would have to hold press conferences almost every day of the year and come up with different words of sympathy for the victims and those traumatized by these events. Even if he were to only comment after school shootings, the need for him to appear publicly would be unnecessarily burdensome and deprive him of the opportunity to do other meaningful work for the NRA. Since there have been 45 school shootings in 2015 alone, that would mean more than 4 press conferences a month and at some point people might start to think that if Wayne has to explain away each such tragedy perhaps the problem is really the omnipresence of the gun rather than the mentally unbalanced shooter. And, of course, if it’s comfort we want we can always go back to his historical comments about school massacres.

Following the Newtown school massacre, the NRA’s first response, issued four days after the shooting, was quiet and reasonable. It simply said: “We were shocked, saddened and heartbroken by the news of the horrific and senseless murders in Newtown. Out of respect for the families, and as a matter of common decency, we have given time for mourning, prayer and a full investigation of the facts before commenting. The NRA is prepared to offer meaningful contributions to help make sure this never happens again.” Three days later, a full investigation having apparently been completed to the NRA’s satisfaction, Wayne held a press conference in which he announced the NRA’s meaningful contribution. He suggested that to avoid future school shooting there should be armed police officers in every school in this nation. That has not happened and explains why school massacres continue to occur.

There have been no formal announcements from the NRA following the South Carolina or Oregon massacres. Following the Charleston massacre, NRA spokesperson, Jennifer Baker, said the NRA would have nothing to say, “until all the facts are known.” All the facts are still not known by the NRA and it has nadnothing further to say about that massacre. The same is true for the Oregon massacre. Andrew Arulanandam, a spokesperson for the NRA was asked for a response to President Obama’s criticism of Congress for its inaction with respect to the manufacture and sale of guns. Mr. Arulanandam used the same words the NRA spokespeople had earlier used saying that the NRA’s policy is “not to comment until all the facts are known.” Although the rest of the country thinks all the facts are known, the NRA does not, and neither Wayne nor his spokespeople have issued any comments. (One person has commented, however-presidential candidate and neurosurgeon, Ben Carson. He suggested that President Obama was politicizing the Oregon massacre by embracing the families of the dead. In a Facebook question and answer session described in the New York Times he offered his version of comfort to the families of the victims saying: “I never saw a body with bullet holes that was more devastating than taking the right to arm ourselves away.”)

Here is one bit of trivia that may have escaped readers’ notice and give them comfort. Following the Sandy Hook massacre, NRA membership dues income increased from $108 million to $176 million, a 62% increase. The organization’s surplus went to $57 million. Since the NRA is a 501©(3) organization it pays no income tax. If history is an instructor, we can be confident the Oregon massacre will boost membership in the NRA and increase the number of citizens of walking around with guns. That, the NRA would say, makes us all safer. Readers may decide for themselves whether it’s right.
Mea culpa. Thanks to readers who observed that I did not seem to know the difference between Beatles as a musical phenomenon and beetles from the insect world in titling last week’s column.

Wednesday, September 30, 2015

Nuts and Beetles

My object all sublime,
I shall achieve in time-
To let the punishment fit the crime.

—Sir William Schwenk Gilbert, The Mikado

Although I have never met Martin Winterkorn, the purpose of this column is to offer him the reassurance I am sure he badly needs. The news about his company’s misfortune came out at almost exactly the same time we learned of the sentencing of Stewart Parnell. News of that sentencing has probably given Mr. Winterkorn considerable concern. It needn’t. That’s because there is a difference between how the U.S. Justice system deals with criminal conduct involving cars and criminal conduct involving peanuts.

Stewart Parnell is the 61-year-old millionaire owner of the now defunct Peanut Corporation of America who was just sentenced to 28 years in prison. It all happened because of peanuts. In 2008 there was a salmonella outbreak that killed 9 people and sickened 714 others. The outbreak was traced back to peanut butter paste that Mr. Parnell’s company shipped to its customers. At the time of the shipments the company knew the shipments were contaminated with salmonella. At his criminal trial in 2014, Mr. Parnell was convicted of 72 counts of fraud, conspiracy and the introduction of adulterated food into interstate commerce. The sentence was a good news-bad news scenario for Mr. Parnell. The bad news was that he was the first corporate executive of a food company to be convicted of felony charges arising out of food poisoning caused by the company’s product. The good news was that he was only sentenced to 26 years in prison. The conviction could have resulted in a sentence of 803 years in prison but the judge decided Mr. Parnell was entitled to leniency and imposed a shorter sentence than the maximum allowed by law. Bill Marler who represented some of the victims of Mr. Parnell’s criminal conduct said: “Although his sentence is less than the maximum, it is the longest sentence ever in a food poisoning case. This sentence is going to send a stiff, cold wind through board rooms across the U.S.” Although not in the U.S., a boardroom in Wolfsburg, Germany may be feeling the chill and one of the occupants feeling the stiff cold wind may be Mr. Winterkorn. If recent events are a guide, however, he doesn’t need a sweater to protect him from the cold. The American justice system will do the trick.

At almost the same time that Mr. Parnell was sentenced, we learned that Volkswagen, a pillar of the automobile industry, had engaged in a different kind of corporate misbehavior from the peanut folk. It didn’t kill anyone outright. It just contributed more pollution to our world than anyone except a few people at Volkswagen, realized. Volkswagen’s transgressions are well known by now and need no reiteration here. Mr. Winterkorn and other Volkswagen executives who read about Mr. Parnell’s sentence may be worried that notwithstanding the absence of deaths as a result of their misconduct, they may nonetheless be facing long jail terms if found guilty of criminal conduct. They needn’t be concerned. That is because peanuts are different from cars,

There are two recent examples of corporate misbehavior by executives of car companies that have resulted in multiple deaths. General Motors executives, for example, knew that the company was installing faulty ignition switches in several models of cars it made. These switches caused the deaths of 124 people and severe injuries to another 275. Readers skilled in numbers will immediately note that the faulty ignition switch had much more serious consequences than the bad batches of peanut butter. Nonetheless, shortly before Mr. Parnell got his 28 years, General Motors agreed to pay a $900 million fine and entered into a deferred prosecution agreement with the government. No executive in that company will face criminal charges.

In 2014 Toyota agreed to pay a $1.2 billion penalty to settle the criminal probe into how it dealt with the consequences of the unintended acceleration problems that not only resulted in the deaths of a California Highway Patrol officer and three of his family members but the recall of 8.1 million vehicles. In announcing the Toyota settlement, then attorney general, Eric Holder, said: “Put simply, Toyota’s conduct was shameful.” At the time of the settlement of the criminal probe there were 400 wrongful death and personal injury lawsuits still pending because of the defect in Toyota’s vehicles. As a result of the settlement of the criminal probe, no one at Toyota needs to worry about facing any time in prison.

The foregoing is simply historical. All it is intended to do is to show Mr. Winterkorn and his colleagues that, although the Volkswagen Company may end up paying billions in fines and penalties, if history is a guide, no one in the company will go to prison, irrespective of what criminal investigations may disclose. And there is even a bright side to the fines that the company will have to pay. Although they will reduce the profitability of the company for the years in which the fines are paid that simply reduces the amount of money available to pay dividends to shareholders. It is a win-win situation. No one goes to jail and shareholders, rather than the executives, suffer the financial losses. That’s a great example of good old American know how. Christopher Brauchli can be emailed at For political commentary see his web page at

Thursday, September 24, 2015

Taxes Roads and Bridges

You can’t use tact with a Congressman! A Congressman is a hog! You must take a stick and hit him on the snout.

— Quoted by Henry Adams, The Education of Henry Adams

It is not uncommon to see legislation introduced in Congress that, as soon as it is introduced, finds itself encumbered with seemingly irrelevant provisions. It is not uncommon to see a Senator with an axe to grind, sharpen it by attaching those provisions to a piece of legislation that, to anyone but the Senator, would seem to be a peculiar place for it. The Highway Trust Fund Bill is a good example of the first and Senator Charles Grassley of Iowa, a good example of the second.

The Highway Trust Fund Bill being considered in Congress has given Senator Grassley an opportunity to let everyone see how tenacious he can be. Surprisingly, his persistence has nothing to do with highways or bridges although the uninformed might think that was what a bill with such a name was concerned. The Bill includes a provision that would provide for using private collection agencies known as PCAs to help collect delinquent taxes. In order to fully appreciate Senator Grassley’s obsession with private debt collection, a brief history lesson is in order. It goes back to the late 1990s.

In 1996 and 1997 Congress came up with the idea of permitting the IRS to turn delinquent IRS accounts over to PCAs. The program lasted one year and by the time it had ended had cost the government $17 million instead of generating the additional revenue that proponents of the legislation were confident would be realized. Not only was no additional revenue generated. The PCAs were found to have regularly violated the terms of the Fair Debt Collection Practices Act. Notwithstanding that failure, Republicans, who support anything that has the word “private” in it, were determined to give it a second chance.

In 2004 Congress “passed”: the American Jobs Creation Act. Among the jobs created by that Act were those created by handing out IRS debt collection to PCAs, the same kind of PCAs the IRS had been authorized to hire eight years earlier and was told to fire seven years earlier. As in 1996, proponents of the procedure anticipated great results from the activities of the PCAs. Projections in 2004 were that the PCAs would be able to collect $1.3 billion. Out of those collections they would receive commissions of $350 million or eight times more than it would cost the IRS to collect the same amount. In 2008 the House Ways and Means Committee held hearings to determine how well the program was working. The committee learned that 85 per cent of people contacted by PCAs did not owe back taxes. In addition it learned that whereas it cost the IRS $.07 for every dollar collected, it cost the PCAs $.24 to collect the same amount. The IRS had an 11 per cent success rate whereas the PCAs had a 4% success rate. Instead of collecting the anticipated $1.3 billion, it turned out the IRS only received an additional $4.5 million from the efforts of the PCAs.

Confronted with those facts, in 2009 President Obama decided to eliminate the program. Senator Grassley, a big supporter of PCAs, was outraged. He said: “The administration has decided that after spending nearly a trillion dollars in the stimulus bill to keep people working across the country, they are going to cut a program that provides jobs to hundreds of people during the middle of a recession, including 60 in Iowa. It’s hard to believe that after worrying so much about keeping people employed, the administration has chosen this route,” a cave in he attributed to union pressure. He did not care about the failure of the program to generate additional revenue. It created jobs in the private sector.

Now, thanks to the need for repairs to highways and bridges, the PCAs may again be back. As this is written Congress is considering the Highway Trust Fund Bill and an unresolved question is whether or not to turn over some IRS debt collection activities to PCAs. Support for the proposal is again being heard from Senator Grassley who continues to think it is a good idea even though it has been proven not to work. Commenting on the need for private debt collection he said: “The IRS just had one of the worst filing seasons for customer service on record. The IRS hung up on callers because it couldn’t handle the calls. “ The projection is that the PCAs will collect $2.4 billion, twice as much as was projected in 2004. If the results this time are the same as they were the last time, the IRS will receive an addition $9 million rather than $2.4 billion..

Senator Grassley ignores the fact that the PCA program has been a failure twice in the last twenty years. He ignores the fact that the reason the IRS offers poor service is that it is understaffed and it is understaffed because it is underfunded. Its funding has been slashed by $1.2 billion since 2010. This year Congress is considering funding it at $2.8 billion less than the administration has requested. Someone should explain to Senator Grassley that the need for principal trumps the need for principle when it comes to governing. He wouldn’t understand.