As the year 2002 comes to an end, it is time to take stock of the
key stories, issues and figures that helped to define and shape the texture
& contour of the past 12 months.
Due to space constraints it is impossible to touch upon all the significant
events that helped to shape the past year.
But in the political realm, here are a few of the key items that resonate
large and deserve to be reviewed as we absorb the lessons of the past year
and prepare to face a new one.
THE ENRON SCANDAL
Apart from the uneasy specter of the possibility of war looming
against Iraq in the New Year, which has received extensive coverage in the
media, the 'Major Story' of 2002 was undoubtedly the collapse of ENRON,
and the connection that G.W. Bush holds to the energy giant.
In 2002 ENRON filed the biggest bankruptcy in American history which
carried a staggering human impact. Some 4500 employees out of work, tens of
thousands of investors witnessing their stock shrink from $83 per share to
26 cents, wiping out $60 billion in stockholder value, and 11,000 employees
whose 401K funds were invested exclusively in ENRON that today have no
retirement plan at all.
More than the world's biggest corporate disaster, ENRON was also the
world's biggest case of corporate criminality. Its demise was not due to
business factors like competition, a shrinking market, or a lagging
economy. It was due to deceitful and illegal games played by corporate
executives, diverting funds into secret partnerships, cooking the books to
keep the deals secret, lying to investors and employees, all while selling
their own stock to make sure they wouldn't get hurt when the house of cards
fell.
ENRON couldn't have happened anywhere but Texas. It was only able to grow
so big, so fast, because of the deregulation of energy companies by then
Governor George W. Bush. And Chairman Ken Lay rewarded his good friend by
giving over $2 million to Bush's campaigns for governor and president.
Lay was also the only energy executive to meet privately with Vice
President Dick Cheney to help reshape the administration's new energy
policy.
Indeed, the Enron scandal makes Whitewater look like peanuts. Lawrence B.
Lindsey, Bush's top economic adviser, was an Enron consultant, Robert
Zoelick, U.S Trade Representative served on Enron's advisory council and I.
Lewis Libby, and Cheney's Chief of Staff was a major Enron stockholder.
Meanwhile, Thomas White, Secretary of the Army, was an Enron executive for
over 10 years.
America is still waiting for a Congressional Investigation into these
connections and the policies that allowed ENRON to occur and wreck havoc
throughout our economy.
But in the aftermath of the September elections, the American public may
never have the answers, or the truth that it deserves.
The IPPEL FIRE
In January of this year, the biggest local story was the fire on Tuesday,
Jan. 29th that burned down the historic 134-year old Merrill/Ippel Building
in Old Town Saginaw.
Linked to a tenant that started a fire from a cigarette in a sleeping bag,
the incident nonetheless brought to surface issues of responsibility &
negligence on the part of government, tenants, the owner, and longstanding
debates concerning the vision & value of the Old Town area.
DIOXIN IN THE WATERSHED
In February of this year, a big story that broke and has persisted
throughout the year, receiving local, statewide, and even national
attention, is the discovery back in April, 2000, of dioxin contamination
near the Greenpoint Nature area and along the Tittabawassee floodplain at
levels up to 80 times higher than deemed tolerable by state standards.
20 months after the discovery, the Michigan Dept. of Community Health
recommended the state implement soil sampling to determine the extent of
the contamination in the Tittabasassee River watershed and the city of
Midland.
Rather than take timely action, MDEQ Director Russell Harding chose to hold
off testing until the federal Agency for Toxic Substances & Disease
Registry (ATSDR) issued their final report on the matter.
The extent and existence of the problem was brought to light by members of
The Lone Tree Council, who unveiled documents that were suppressed by the
DEQ.
Despite meetings with property owners and affected parties throughout the
summer promising a process that would include all affected parties, the
State DEQ and John Engler adopted a very closed 'Consent Order' late in the
year with Dow Chemical, that the State Attorney General has deemed illegal.
This in turn prompted a lawsuit and a request for a temporary restraining
order.
The proposed "corrective action consent order" drafted by DEQ in
consultation with Dow, substitutes a standard of 831 parts per trillion of
dioxin in soil, far above the 90 parts per trillion cleanup standard in DEQ
policies and rules.
The less protective standard would initially apply to the Midland area,
where sampling has shown high levels of dioxin in public areas, but could
later be extended to other contaminated areas.
Families who live along the Tittabawassee River fear the standard will be
extended to their yards and neighborhoods. The coalition also believes
that a state and national precedent could be set if the methods used to
derive the standards are adopted.
Hopes of improving the situation by having the site scored for Superfund
dollars have also diminished. In 1980 lawmakers established this fund in
the wake of the Love Canal chemical scandal, which gave the EPA authority
to identify toxic sites, find polluters, and make them pay for their fair
share of the cleanup. EPA could also pay for the entire cleanup if the
original polluters could not be found or made to pay.
Money from Superfund came from a small fee on oil & chemical companies that
had more than $2 million in profits. Since it's creation, about 60% of the
1,238 sites nationwide have been cleaned up.
Under the Clinton Administration, the program was streamlined and the pace
of cleanups quickened. Of the 65 sites certified in Michigan, almost 50
were cleaned between 1993 and 2000.
However, in 1995, the Republican Congress refused to renew the fees that
funded the program, and now the Bush Administration has decided that
industry should not be asked to share any of the cost. Rather, taxpayers
will not foot the entire bill for toxic cleanups.
Circuit Court Judge William Collette set a hearing on Jan. 6th 2003 on the
DEQ/DOW consent order. Although petitioners' request for a Temporary
Restraining Order was denied, the Tittabawassee River Watch, Lone Tree
Council, residents of Midland and the floodplain will have their day in
court.
In addition Judge Collette indicated that the right to challenge the
consent order, even if signed, would be preserved. Petitioners' attorney,
Chris Bzdok was pleased with the ruling.
U.S. EPA, Region V, in correspondence dated December 6, 2002, has provided
more than 40 objections to the proposed deal between Michigan DEQ and the
Dow Chemical Company on widespread dioxin contamination in the Midland area
and a total of 31 pages of comments questioning or seeking clarification of
the proposed health study and consent order.
Most of the comments are outright objections to the consent order and
health study being foisted on this watershed.
REJECTION TO LIFTING THE TAX CAP
Locally, one of the majors decision voters made in November was to turn
down efforts by city leaders to remove the longstanding property tax cap in
the City of Saginaw.
Saginaw City Council is adamant that the decision by voters to not remove
the cap will result in drastic reductions in service for 2003, yet
proponents of the cap maintain such actions are unnecessary if the City
more efficiently utilizes the considerable resources it already has.
Given reductions in State Revenue sharing and federal money to all local
levels of government, not merely the City of Saginaw, perhaps lawmakers
should now seriously start to look at the duplication of service in
government that drives costs skyward.
In Saginaw County, for example, we have one unit of government for every
5,000 people, more than a couple dozen school districts, 17 police chiefs
and fire departments scattered throughout the county.
ENGLER'S GIFT TO SBC/AMERITECH
In August, SBC Ameritech was allowed to keep roughly $300 million in
customer access charges the State Legislature declared unreasonable two
years ago because of a legal settlement reached between the phone giant and
Gov. John Engler.
The deal also allowed Ameritech to keep charging the monthly access fee,
although reduces it from $3.28 per month to $2.78 per month on residential
phone lines.
The charge is worth an additional $380 million to the company over the next
three years.
Engler's settlement also would allow Ameritech to escape the 2000 law's 5
percent cut and three-year freeze on basic phone rates.
Attorney General & Governor elect Jennifer Granholm blasted the action as a
"bad deal for consumers" and filed a motion to intervene in the case. In
her motion, Granholm argued that a May U.S. Supreme Court opinion gave
states broader authority to set phone rates and that the court ruling made
a settlement premature.
"The settlement forces consumers to write the phone company a $680 million
check to pay a fee that the Legislature says they shouldn't have to pay at
all," Granholm said.
McDONALD'S NEW SANDWICH
Humanitarian groups blasted McDonald's in 2002 for a new sandwich called
the McAfrika, saying the offering is poorly timed because millions of
Africans face starvation.
The sandwich was offered at 15 restaurants in Oslo, Norway. It consists of
beef & vegetables wrapped in pita bread.
THE STATE BUDGET
Michigan government has four basic functions that everybody,
regardless of party affiliation, can agree upon: education, public safety,
maintenance of state highways, and providing health care to the poor &
elderly.
But thanks to the reign of John Engler, one thing we can count upon in the
next year is a reduction of public service and further budget cuts and/or
tax increases to stave off the leaking financial budget in Michigan.
The 2002 and 2003 budgets are based upon a 5 percent revenue growth. But a
stagnant economy and worsening consumer confidence translate into the fact
that actual receipts of the three major taxes collected in Michigan -
income, sales, and business taxes - won't come close to matching that
estimate.
Because of approved tax reductions in 1999, the income tax rate, which
dropped to 4.1% on Jan. 1 will fall to 4% this Jan. 1 and to 3.9% on Jan.
1, 2004. Each tenth of a point drop means a revenue loss, or taxpayer
savings, of about $180 million.
While Republicans led by Engler opted to boost tax collections by
increasing the tax on cigarettes and business this summer to attempt to
balance the budget, a growing number of analysts are realizing that tax
collections aren't keeping pace with expenditures, which will undoubtedly
result in further cutting of public services.
By pushing for elimination of the Single Business tax over the years, the
entire rainy day fund has been depleted and in essence approved corporate
socialism for a privileged few. This was achieved by giving hundreds of
millions of dollars statewide to only 17 of the top wealthiest businesses
in Michigan that pay 75 percent of the Single Business Tax.
In contrast, if the same SBT tax rate were applied to a person earning
$50,000 per year, the tax cut would amount to about 96 cents per week - not
even enough money to buy a McDonald's Quarter Pounder.
Meanwhile, Michigan's legislators are among the highest paid in the
country. Last year Michigan's legislative salaries increased 34% percent,
making Michigan's lawmakers the highest paid behind California and New York.
AT YEAR'S END
Facing a deficit in the 2002-03 budget, Governor John Engler issued an
executive order cutting $337 million in state spending as part of his plan
to close a $460 million gap in the budget.
The Appropriations Committees in the House and Senate both approved the
executive order, which cuts state revenue sharing to local units of
government by 3.5 percent, funds to state universities and community
colleges by 2.5 percent, and $107.4 million in departmental budget cuts,
which average 2.5 percent in all departments.
A supplemental budget bill subsequently approved cuts the budgets for the
state judiciary and the Legislature by another $63.7 million and $58.2
million for state employee retirement prefunding.
Governor Engler had insisted to lawmakers that a cut in the income tax
scheduled for January 1, 2003 not be postponed.
The House had also strongly rejected a bill which would have stopped the
next income tax cut scheduled for January 1, 2004. Speaker of the House
Rick Johnson (R-LeRoy) insisted that the tax cuts remain on schedule.
Governor-elect Jennifer Granholm (D), when asked if she would support
halting the income tax cuts, said repeatedly that she prefers spending cuts
to deal with the deficit.
TELEMARKETING
The House and Senate have both approved legislation creating a state "do
not call" list aimed at controlling the number of telemarketing calls made
in Michigan to homes in Michigan.
The Michigan Public Service Commission or a designated vendor will develop
the list to which a Michigan resident can have their name added.
The legislation also requires that if the federal government establishes
such a list, the state will adopt that list as its own. Currently, federal
law requires companies to maintain their own internal do not call lists to
which people can request their name be added.
But if you place your name on the list, don't expect an end to the calls.
Curiously exempted from the requirements were several categories of calls:
charitable, public safety and political calls.
In addition, until a national list is created, calls from out of state will
continue, such as calls from major banks and lending institutions located
outside of Michigan. Officials estimate that most telemarketing calls come
from outside Michigan.
BUSH'S NUCLEAR HIT LIST
As if it weren't bad enough that President Bush said he would use nuclear
weapons against Iraq should they attempt to unleash any weapons of
terrorism on the United States, creating greater instability in the world
through such unilateral statements, Bush faced even greater anger in
September when he announced America's 7 Nation Nuclear Hit List.
British MPs joined the outcry after a leaked Pentagon report revealed
contingency plans to use nuclear weapons against China, Russia, Iran, Iraq,
North Korea, Syria and Libya. The secret policy was denounced as
warmongering "lunacy".
Alarmed officials from Moscow to Tehran warned that the President, buoyed
up by the successful campaign in Afghanistan, could plunge the world into
chaos. British politicians said the strategy threatened the stability of
the NATO alliance.
Amid mounting anger, the target nations accused America of intimidation and
"wreaking havoc on the whole world" and branded the plans a "lunatic"
threat to world peace.
In Britain, MPs said the sensational disclosures threatened the stability
of the Western alliance.
The Pentagon document, known as the Nuclear Posture Review, was leaked as
the US lobbied Britain to join an invasion of Iraq.
The review says the US must be ready to use nuclear weapons against China,
Russia, Iran, Iraq, North Korea, Syria and Libya. It then identified four
areas where the US should be prepared to press the button:
In an Arab-Israeli conflict, in a war between China and Taiwan, in an
attack by North Korea on South Korea and in an attack by Iraq on Israel or
another neighbor.
Additionally, the weapons could be used against targets able to withstand
conventional attack and in retaliation for the use of nuclear, biological
or chemical weapons.
They could also be used in the event of "surprising military developments";
reflecting fears that rogue states or terrorists could deploy weapons
against the US.
The review, leaked to the Los Angeles Times, orders the military to plan
for the use of "smaller nuclear weapons" as a more effective deterrent
against terrorist attacks. It also calls for cruise missiles to carry
nuclear weapons. It is the first time the US has reviewed its nuclear
strategy since 1994 and the first list of target nations to be made public.
National security adviser Condoleezza Rice added: "We all want to make the
use of weapons of mass destruction less likely.
"The way that you do that is to send a very strong signal to anyone who
might use them against the United States that they'd be met with a
devastating response."
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