Trading democracy
2.1.02   transcript Bill Moyers Reports

B.Moyers:   Secret NAFTA Tribunals can force taxpayers to pay billions of dollars in lawsuits filed by corporations against the U.S.
B.Moyers:   The public doesn't have a clue?
Wm Greider: This was not in the debate at all.
Mike Allred: If the American people ever find out, they are going to be in open rebellion against this.
B.Moyers:   NAFTA's Chapter 11 threatens radical changes in public policy, all happening out of sight. Citizens have no seat at the table.

A trade agreement, supported by 2 Presidents and ratified by Congress, became an end-run around the Constitution. The terms were influenced by Washington lawyers and lobbyists, and the companies who employ them. Chapter 11 is only one provision in the 555 page N.American Free Trade Agreement negotiated to promote business among the US, Canada and Mexico. It was supposedly written to protect investors if foreign govts tried to seize their property. But corporations have stretched NAFTA's Chapter 11 to undermine environmental decisions, decisions of local communities, even the verdict of an American jury. The cases brought so far total almost 4 billion dollars. The claims are being decided not in open court, but in what has become a system of private justice, in secret tribunals. That's exactly the way the authors of Chapter 11 designed it.

Wm Greider (national affairs correspondent, The Nation:   What offends me most is that these lawyers understood that public laws were gonna come under attack in this system, and they just walked right past the question of where's the American public in this?
B.Moyers:   Wm Greider covered economics & politics, both national & global, for 35 years, first for Wash.Post.
B.Moyers:   They now have the right to sue govts?
Wm Greider:   Right, and sue them directly, without having to get the approval of their own govt. And that's one of the features of NAFTA which is distinctively different from all previous trade agreements.
B.Moyers:   Chap.11 gives corps the right to sue for damages if they believe they have been hurt by the action of a govt. The case is treated as if it were a simple trade dispute and argued in this room at the World Bank in Washington or in others in cities like NYC & Toronto.
The parties in the case, the co. & the govt it is suing, choose a 3-man tribunal, drawn mostly from a select pool of experts in intl law. Nothing is open to the public.
Wm Greider:   I think of it actually as kind of an exclusive court for capital. American citizens not admitted, even American legislators not admitted.

Sacramento, Calif.   B.Moyers:   Here in California, a Chap.11 claim may turn out to upend democracy. A billion dollar case has been filed against U.S. because of an effort by the state govt to protect the health of its citizens. It is the first NAFTA challenge against the US because of an environmental regulation.
Sen. S.Kuehl (Calif. Intl Trade Policy Committee chair):   First, I was astounded because I really knew nothing about Chap.11. And you know the kind of reaction that you get from people when you say, did you know that one investor in a foreign company can sue U.S. because of an environmental protection law in California? People are astounded once they kind of grasp it.
B.Moyers:   Senator Sheila Kuehl chairs a committee examining the impact of US trade agreements on California laws.
Sen. S.Kuehl: I think it's just the tip of the iceberg because, in a way, it opens the idea to foreign investors that wherever they might suffer, as they imagine, under some regulation, under some law, statute passed by a state, all they have to do is file a claim and, it's taken seriously; U.S. has to defend itself and the state has to defend itself.
B.Moyers:   The case in California began with a chemical, MTBE, added to gasoline to help the state clean up its air. But MTBE was found to cause cancer in laboratory animals. In 1995, it began to show up in drinking water.

Novato, Calif.   B.Moyers:   In a trailer park 20 mi. north of San Francisco, the additive was found in the community's well.
Eyvonne Watts:   We received a notice saying that MTBE was in the water. As I began to find out more information about it, I was really concerned because what is the long-term effect for my children? The water that's being used to cool the house off is the same contaminated water. We're breathing the water. The kids are walking around fine now, but who's to say that won't affect them later. I'm supposed to protect them in every way. They can't fight for themselves. That's why I'm here. How do I fight against something that we don't know what the long- term effect is of MTBE. And no real straight answers.

S. Lake Tahoe   B.Moyers:   The questions spread across the state. South Lake Tahoe, whose economy is dependent on tourists, had discovered MTBE in its drinking water.
Rick Hydrick, Water operations manager, S.Lake Tahoe Public Utility Dist.:   The clarity of Lake Tahoe is legendary, or it was. One of our board members asked me what I knew about MTBE, and I said nothing. And he said, well I heard about it, it's a fuel additive and it may be a problem. And maybe just a few months later, we got our first MTBE hits to the public water supply.
B.Moyers:   The water dept traced the source first to one gas station, then to more than half a dozen. Even the newest, most modern station in town found an MTBE leak the size of a pinpoint.
Casey Moss, Chevron co-owner:   Within this corner right here, you have 3 sites that are contaminated right now. There's one gas station, a previous gas station, and our gas station. I lived here my whole life and the last thing I want to do is contaminate the place where I live and my kids & my family are gonna live. So that's why we wanted to jump on it and start cleaning it up as soon as we could
. B.Moyers:   But MTBE spreads through water faster than the money can be spent to clean it up. In the end, S.Lake Tahoe was forced to shut down a third of its wells. Across Calif. 30 public water systems, and another 10,000 groundwater sites, were eventually found to be contaminated.
R.Hydrick   As long as it's in gasoline in the world that we live in, it will get into water a lot.
Sen. S.Kuehl:   This was an epidemic of MTBE sort of infection. And that caused our legislature to want to consider a total ban
. B.Moyers:   Univ. of Calif. scientists were commissioned to assess the problem. Their 10 month study warned that the state was placing "its limited water resources at risk."
Sen. S.Kuehl:   We were not going to act precipitously. We wanted to see the science. And having reviewed the report, I think the governor & the legislature were both equally convinced that this was good science, that there was harm. There were independent studies about the health effects of MTBE. This was not political.
B.Moyers:   On 3.25.99, Calif. governor ordered MTBE be phased out of all gasoline sold in the state. But that order didn't sit well with Methanex, Canadian company that is the world's largest producer of the key ingredient in MTBE. Within months, Methanex invoked Chap.11 and claimed that its market share, and therefore its future profits, were being taken away, expropriated, by the governor's action. Allow us to sell MTBE for gasoline in California, the company argued or pay us $970 million dollars in compensation.
M.Wagner, Earthjustice Legal Defense Fund atty:   This is incredible. This is a foreign corp. coming in and saying first of all, that a regulation that the Calif. govt, through normal democratic processes, has decided is important to protect health & the environment either can't implement this protection or that they get a billion dollars. People should be outraged by that.
B.Moyers:   Martin Wagner represents 3 environmental groups who lobbied for MTBE ban. He never expected that action to be challenged under NAFTA.
M.Wagner: One of the things this law does is give corporations sort of a guarantee that they won't suffer from the gamble that they take normally that they take as being part of the economic marketplace. If they gamble that they're going to be able to sell their product, but it turns out that their product is harmful, they're claiming that this investment provision protects them against that gamble, that they should get to make their profits anyway.
B.Moyers:   While NAFTA may protect investors like Methanex, who declined to talk to us, it does not protect ordinary people, like Chris Christiansen & wife, Claudia. A decade ago, they used their life savings to buy the home where they would retire.
Claudia Christiansen:   With MTBE, it's been totally devastating to us. The biggest devastation is everything you've worked for is not worth anything now. You cannot sell this property because it has a contaminated domestic well. You lose everything you've put into a home because you can't sell. And that haunts me at night.

Wash.D.C.   B.Moyers:   When the NAFTA tribunal meets to consider the Methanex claim, Calif. citizens like the Christiansens will not be invited. Nor will the taxpayers who will foot the bill if the tribunal decides in favor of the Canadian company. NAFTA makes no provisions for a full appeal to US courts and sets no caps on the amount of damages that can be awarded a corporation.

Sacramento, CA   Sen. S.Kuehl U.S. tax money goes to Methanex and then U.S. has to decide a couple of things. Do they want to get the money back from California, which they could? Do they want to hold federal money back from California so that they keep a billion dollars that California otherwise would have gotten for its welfare to work program, healthy families, anything? Well, they could. Would they like to call the governor and say, you know, you ought to do away with that pesky ban because it costs us a billion dollars and now, who knows what else is going to happen under Chap.11? Perhaps you ought to review all of your laws that might be a threat to Chap.11.
Wm Greider:   If Methanex wins its billion-dollar claim over California environmental law, there ain't gonna be many states enacting that law, are they? You'd be having second thoughts, wouldn't you? That's the bow wave of this whole subject. Many critics think the really essential point is that this legal system hobbles the authority of govt to act in the broader public interest. That was the idea in the first place.

Ottawa, Canada   B.Moyers:   They've learned in Canada how NAFTA can be used to hobble the authority of govt. The first Chap.11 case filed here also involved a gasoline additive, called MMT. Canadian parliament was considering banning it. That's when the Ethyl Corp., American manufacturer of the chemical, decided to sue under NAFTA. Canada enacted the ban anyway then backed down, lifted it, and paid Ethyl $13 million for the short time the ban had been in place. Ethyl demanded and got a letter to use in its advertising saying there was no new proof MMT was harmful. This despite the fact that MMT is effectively banned from use in most gasoline sold in U.S..
Howard Mann, Ph.D Intl Inst. for Sustainable Development:   Essentially, we've now seen a shift of the use of investment agreements as a shield to using them as a sword against govt activity.
B.Moyers:   During NAFTA negotiations, international lawyer Howard Mann advised the Canadian govt on environmental issues.
H.Mann:   We begin to see now in a number of other cases where one of the first things that the politicians will receive is a letter from lawyers either representing an industry association or a specific business or other stakeholders saying, we will challenge this through the Chap.11 process if you indeed go ahead and adopt it. They're real explicit. This will be a breach of Chap.11 and we're gonna sue you for x hundred million dollars. And that's the new genie that's out of the bottle.
B.Moyers:   Within days of Canada's retreat on Ethyl, the same law firm initiated a second NAFTA case against Canada on behalf of another American client.
Wm Greider:   Govts are already being intimidated by the mere threat of a claim being filed against some regulatory action. If you're a civil servant, or even a political leader, you've gotta think twice when a corporate lawyer comes to you and says, quite forcefully, we're gonna hit you for a half a billion dollars, if you do this.
The most outrageous one was exercised by Carla Hills, who supervised & led NAFTA negotiation, then left govt and started her own intl consulting firm. She sent her chief negotiator to tell the Canadian govt that if they went ahead with a regulation on cigarette packaging, which they were considering, her clients, big tobacco, would file a huge claim against them. Canada backed off, and the reason they backed off is because they could read the terms and see that, my God, they're right, if we do this, which they regarded as a health regulation, we're gonna get stuck with a big bill for it
. H.Mann:   Clearly a situation where bureaucrats are always looking over their shoulder now. They don't want to be the next guy who has to withdraw a measure because of a Chap.11 challenge. And, you know, when you're in the bureaucracy, it's not easy to be the face of the challenge to the dominant trade interest. You've gotta feed your family, too.
B.Moyers:   Since NAFTA was enacted, only 2 new environmental regulations have been considered by Canada's federal govt; both were challenged under Chap.11.

Sacramento, CA.   Sen. S.Kuehl:   There's no democracy in any of this stuff. It's of grave concern to us because the state is really not a party at all, not in the negotiation of these agreements, not in the interpretation of these agreements, and not in the defense of our own laws.
B.Moyers:   Yet at least 80 Calif. laws could be at risk. State regulations that restrict development in scenic areas or coastal zones, for example, are open to challenge by a foreign developer. Enacting more stringent laws about what can be added to California wine or what can be labeled organically-grown food could be challenged. Authority to limit commercial fishing when fish are scarce could provoke claims from foreign-owned fleets. Even state support for alternative energy could come into conflict with trade rules.
Sen. S.Kuehl:   We are experimenters in democracy. We're certainly accountable to our own people & constituents. But I think if there is a threat to the ability of our 50 states to legislate in these arenas it's a very, very serious thing. And especially if the threat is because of a single or a couple of investors in a company who are not themselves nationals of U.S.

Mexico City. MX   B.Moyers:   NAFTA was promoted as promoting democracy. And in the early 1990s, democracy was a new possibility in Mexico. NAFTA was also promoted as promoting investment. Desperate for that investment, Mexico eventually agreed to Chap.11. The people in one Mexican community would soon discover that NAFTA might be friendly to investment, but it was not all that friendly to democracy.

Los Amoles, MX   B.Moyers:   The Chap.11 claim had its beginnings here in the poorest region of the state of San Luis Potosi. It was brought by an American investor, a company called Metalclad, and brought against Mexico govt . The center of the dispute was a toxic dump. Mexican owners had dumped more than 20,000 tons of waste here and left it exposed, equal to what had been buried beneath NY's Love Canal. Although Metalclad had no experience operating toxic waste landfills, it saw a lucrative market in helping Mexico solve a big problem. So, in 1993, the American co. bought the abandoned dump. But the people who lived near it like Juan Romo did not want the dump re-opened. They believed it had been making them sick.
Juan Romo:   After the landfill first opened, we began to fear personally the word cancer. Because it began to appear in peoples' bones, cancer in women's wombs, cancer in peoples' blood. Then we got scared.
Hermilio Mendez:   The number of cases in this region is not normal. And we blame it completely on the contamination, which started in the early 90s and continues to this day.

Guadalcazar, MX   B.Moyers:   The fears had led people in the community of Guadalcazar to force the Mexican owners to shut down. Now, with town councilor Hermilio Mendez, they demanded that Metalclad clean up the site it had bought before it brought in more waste. The company refused.
H.MENDEZ:   There has been a lot of propaganda on Metalclad's part. Here is how they think of us, with these caricatures. I remember when I was a kid, we used to entertain ourselves with these types of cute drawings. And that is how Metalclad views us. That's how they see us, as little kids.
B.Moyers:   Opposition to the co. spread as was clear in the graffiti that sprouted on the streets of Guadalcazar. But it was shrugged off by Metalclad and the company's president.
GRANT KESLER, METALCLAD pres.:   Believe me, the natural & expected opposition to a landfill in your backyard is no different in Mexico than it is in U.S.. We felt that the key to the broader political support was not direct to the people. And every adviser that I had in Mexico told me if the governor supports this project, you don't have to worry about that local community

San Luis Potosi, MX   B.Moyers:   But in 1993, the state of San Luis Potosi was the hotbed of Mexico's emerging democracy, and candidates for governor were listening to the voters. To endorse reopening the dump, the eventual winner said, would have been a "political Molotov cocktail."
Hon. Horacio Sanchez Unzueta, San Luis Potosi gov. 1993-97:   I met with Mr. Grant Kesler, owner of Metalclad. I talked very clearly with him, saying that it was, from my point of view, virtually impossible to open the site due to the opposition of the local community and the local authorities. And he said, no, no, no, it will take a lot of time, but more important, I have the federal permit in order to do so. And I say, well, is not enough.
B.Moyers:   That would be the key. Metalclad had managed to get a permit to operate a landfill from the federal govt in Mexico City which gave the co. 5 years to clean up the existing waste. But the democratically- elected Guadalcazar town council would not give its permission unless Metalclad agreed that the clean up would happen first. Without the local permit, the American co. started building anyway.
Guadalcazar has only 2 policemen, with one station wagon, to enforce the law. But when it was discovered that construction had begun, town councilmen personally delivered a "stop work" order to the site.
G.Kesler:   It was in pencil on a piece of paper. We showed this to the federal inspector. He says, this is a request for you to go get a local construction permit. He says, if I were you, as a matter of comity, I would go apply for the permit. They may charge you 500 pesos, but they can't deny you. But by all means, go on with the construction. So we did.
H.Sanchez Unzueta:   It was an illegal construction, never had the permit to build.

Mexico City, MX   B.Moyers:   Assuming top down pressure would still work in Mexico, Metalclad turned to the US Embassy. The embassy accepted co. claim that it had vast experience in operating toxic landfills, and the ambassador summoned Governor Sanchez Unzueta for a conversation.
H.Sanchez Unzueta:   Since the very beginning, the position of the American ambassador was very, very clear. I think crude. Saying that if my govt didn't open the local facility, the American embassy would put the San Luis Potosi name in a black list in order to warn the investors in U.S. not to invest in San Luis Potosi.
Hon. James Jones, U.S. Mexico amb. 1993-97):   If this is the way you do business in San Luis Potosi, we're going to tell other businesses in U.S. who want to invest in Mexico, you can invest here, but don't invest in San Luis Potosi.
H.Sanchez Unzueta:   And I clearly said to him that it was not only a threatening against San Luis Potosi but it was a sort of blackmailing.
Jas Jones:   It was not blackmail. It was just a, you know, one of the job of a US Amb. is to protect the interest of U.S., whether they're political interests, commercial interests, or what have you. The reason we have Ambassadors in embassies is to be able to understand on the ground what another country is like. So when there's a problem, I think it's the US Ambassador's job to tell US interests what the real facts are. I don't think that's blackmail.
B.Moyers:   Even with the full weight of the American embassy behind it, Metalclad could not get the locals to relent. They were not going to be told what to do. And when the co. staged a "grand opening" at the landfill for its investors & stockholders in March, 1995, the community turned out in protest.
Metalclad rep.:   Let me speak, please. Let me speak.
First Protester:   The governor told us that if the people didn't want them here, Metalclad would go. We don't want them here!
Second Protester:   If they want permission, they have to get it from us.
Third Protester:   Next time, they have to respect the local municipality.
First Protester:   Guadalcazar wants no dump! We want none of it!
B.Moyers:   The town council stood firm. Gov. Sanchez Unzueta eventually declared the entire region a protected ecological zone. But by that time, Metalclad had filed its Chap.11 claim against Mexico. The actions of state & local govt, Metalclad argued, amounted to an "expropriation" of its investment.

Wash.D.C.   B.Moyers:   It is a case that could not have been filed in the US court system had Metalclad tried to build a waste facility in, for example, Iowa and moved ahead without local approval. But under the rules set by NAFTA, Metalclad could file a claim and the tribunal rule in its favor just as the advocates of "investor protection" intended.
Edwin Williamson, Sullivan & Cromwell:   What you had was some pretty egregious govt action.
B.Moyers:   Edwin Williamson was State Dept legal counselor when NAFTA was negotiated. He has since headed Intl Law Group of the conservative legal organization Federalist Society
E.Williamson:   Then the obstructionist tactics that the local authorities took were inconsistent with the basic belief in the rule of law.
B.Moyers:   What we found when we went there were people telling us, at the local level, this was a toxic dump that they didn't want reopened until it had been cleaned up. That's all they were asking for. And they felt that their politicians were responding to their needs, the needs of constituents. In other words, democracy at work.
E.Williamson: Well, but we have rules within democracies, and the rules in Mexico, according to the panel, was that the federal govt in Mexico made those decisions, and while they may have received a sympathetic ear from the local politicians, that is not what Mexico had promised, in effect, to Metalclad that the rules were.
B.Moyers:   Mexico's defense against Metalclad's claim was led by Hugo Perezcano.
B.Moyers:   We have talked to a number of people who say, in their opinion, the federal permit was enough. That the community & local govt actually had no role in this decision
. Hugo Perezcano Trade Negotiations, Mexico general counsel:   Well, Let me tell you, Bill, that is a matter of Mexican domestic law. It is a matter that Mexican courts should address. That is not why intl tribunals, that is not what they were set up to do. Intl tribunals were set up to interpret & decide on intl law. And the NAFTA has not come in to replace our domestic judicial system for the benefit of foreigners
. B.Moyers:   But faced with the choice between the Mexican govt's or Metalclad's interpretation of Mexican law, the NAFTA tribunal ignored Mexico's arguments and consistently sided with the American company.
H.Mann:   The underlying principle is clearly the right of the investor. That was clearly paramount & foremost in the decision. This is a really key feature of the Metalclad judgment. Essentially we see Chap.11 operate to reverse the globally accepted "polluter pays" principle and we see it being turned into a "pay the polluter" principle under Chap.11. That's a significant risk we now see.
B.Moyers:   There's almost no collective action we take as democracy that doesn't have some negative effect on a product or on a practice.
Wm Greider:   The distinction that the advocates make for this doctrine is that we're not overturning any laws, we're simply making the public pay the costs they have imposed on some private investor. That sounds, at least on the surface, like an attractive idea: Well, if we're gonna hurt these people in order to protect clean water, clean air, maybe we should compensate them in some way. The fallacy, of course, is that the way NAFTA defines it, any firm that suffers any slight, or large, injury from what it perceives as regulatory controls gets to collect money.
B.Moyers:   That, say the critics, is the Trojan horse of NAFTA. Multinational corps have seized on one definition in the treaty to claim compensation for unrealized profits. It consists of 3 key words: "Tantamount to expropriation."
M.Wagner:   Generally, it's been understood that govts can do what they need to protect their people & their environment without having to pay if they diminish the value of property. But these corps are using NAFTA Chap.11 to expand that and say govts do have to pay for every amount by which the value of their property is reduced. One of the bases on which they've made that claim is the fact that NAFTA's Chap.11 uses this phrase "tantamount to expropriation." Not only do govts have to compensate when they expropriate or take away property, but they have to do so whenever they do something that is "tantamount to expropriation."
B.Moyers:   Prompted, in part, by the Metalclad tribunal's decision, companies are attempting to stretch "tantamount to expropriation" even further and have mounted attacks on the ordinary activities of all 3 NAFTA govts.
United Parcel Service claims that Canada's publicly-subsidized pkg delivery system is unfair competition. UPS wants $230 million in damages. At a new interchange on VA Interstate Hwy 95, steel & cement being laid are required to be made by American workers. But the "buy American" requirements of US highway programs are under challenge from a Canadian steel maker as illegal under NAFTA. The threats, one Washington lawyer says, are "out of control."
Wm Greider:   Some companies are probably gonna win huge claims on issues that will seem utterly illegitimate to most Americans.
B.Moyers:   I read where one of these lawyers, a Canadian trade lawyer, said to the Canadian govt, this is a direct quote: "They could be putting liquid plutonium in children's food. If you ban it and the co. making it is an American company, you have to pay compensation."
Wm Greider: The boundaries on this are literally the infinity of the legal imagination.
B.Moyers:   How did this happen with no public discussion or debate? We asked the Washington atty who was #2 on the US trade team that negotiated NAFTA.
Chas. Roh, NAFTA deputy chief negotiatior:   I don't find it altogether surprising that there have been creative uses of the mechanism because, I mean, I'm a lawyer and our profession is creative. People use worse words for us, but they are at least creative. And that can result in, you know, attempting to make a use of a provision that perhaps was not in the contemplation of the drafters.
B.Moyers:   What concerns people is that it would be a real stretch of this whole notion of expropriation if you can get compensated simply because the govt decides to enact environmental standards. Is that a stretch?
Chas. Roh: I think it is a stretch, actually. It would be a very big thing if instead of providing for compensation for expropriations, you were also providing compensation for measures that diminished the profits of business. That would be a big change.
B.Moyers:   Chap.11 claims are now being fashioned in the offices of many of the biggest NY & D.C. law firms. Pillars of the bar like Hogan & Hartson, White & Case, Baker & Botts.
Wm Greider:   These lawyers may typically serve at the State Dept or Treasury, or the U.S. Trade Rep Office, help negotiate the agreements, carefully supervise the legal language that goes into those agreements, and then they return to their firms, in private life, and represent clients using this new language they created as legal tools, and they may even personally become advocates and, and sort of generate a new legal boutique, which around the practice of, say, Chap.11 cases.
B.Moyers:   A legal boutique?
Wm Greider: Well, a specialty that, that suddenly provides a new market for lawyers' talents. And I think that's happened with Chap.11.
B.Moyers:   One Washington firm that seems to be developing a Chap.11 specialty represents Methanex in its billion dollar claim against U.S.. Now Jones, Day, Reavis & Pogue has brought another action, demanding almost as much money, for a Canadian client that found itself on the losing end of a Mississippi jury trial.

Jackson, MI   B.Moyers:   You don't find many people at the Mississippi state fair asking questions about obscure language in an obscure provision of one trade agreement, esp. when there was no public debate about it in the first place. But NAFTA's Chap.11 goes to the heart of some established customs & traditions here.

Biloxi, MI   In Mississippi, as in most of America's small towns, funeral homes have long been run as family dynasties.
Jerry O'keefe:   My great-grandfather was an Irish farmer, came over here in the 1840s and farmed before the civil war; right after the civil war started this small livery & undertaking business. A lot of the funeral homes & undertaking establishments in the south came out of the livery business or the furniture business. It's been in the family since 1865
. B.Moyers:   78 year old Jerry O'Keefe owned 8 funeral parlors, a funeral insurance business and still found time to serve 2 terms as mayor of the Gulf Coast town of Biloxi. But in the early 1990s, he & Mississippi were introduced to a handful of giant death-care companies competing to buy up as many funeral homes as possible. One of the biggest was a Vancouver-based co. owned by Raymond Loewen, multinational corp. that had already bought hundreds of family-owned funeral homes in Canada & U.S..
J.O'keefe:   They would buy funeral homes and then they were able to buy funeral merchandise, caskets, vaults, burial clothing, embalming chemicals and other items like that on a, on a greatly enlarged quantitative basis and get a much better price than an individual funeral home could. But unlike the, the Walmarts and JC Penneys who buy in great bulk that way, their theory is not to pass on any of that to the consumer.
B.Moyers:   The Loewen Group quietly bought several of O'Keefe's Mississippi rivals. But the Loewen corporate logo never replaced the more familiar local facades.
M.Allred, O'KEEFE atty:   They hide behind the honored names of these family businesses and they go way out of their way to keep anyone from finding out that they have placed the Loewen golden arches over the local business.
B.Moyers:   One of the funeral homes bought by Loewen had a longstanding contract with O'Keefe to sell his funeral insurance. Instead of honoring that contract, Loewen began selling its own.
J.O'keefe: I suggested that I go to Vancouver and sit down and talk to Mr. Loewen, which I did.
B.Moyers:   Raymond Loewen was known to court funeral home owners during dinner cruises on his 110- foot yacht.
J.O'keefe: We went out on the yacht and had dinner on the yacht and cruised around the harbor there in, in Vancouver and it was very pleasant. And Mr. Loewen, I was amused because he had a secretary there to serve the drinks and serve the meal and to light Mr. Loewen's cigars. I was really amused by that because for years, I smoked cigars myself and one of the pleasures of smoking a cigar is actually lighting it, you know. But I think that he went to that means to impress me and it did impress me, but it wasn't favorable.
B.Moyers:   The night on the yacht did not resolve the conflict.
M.Allred:   Their motive was to destroy him as a competitor and to acquire his businesses in these key areas to secure absolutely monopoly power.
B.Moyers:   O'Keefe decided to sue under Mississippi law. His legal team alleged that the Loewen Group had engaged in "fraudulent" & "predatory" trade practices. The Bible Belt jury was urged to view the case as a morality play, what O'Keefe's lead trial lawyer called the "oldest known sin to anybody, greed."
M.Allred:   Juries always respond with a sense of justice according to the morality of the schoolyard. If a big mean kid on the schoolyard is beating up the little guys, people are more offended than if a big mean kid is beating up another big mean kid.
B.Moyers:   Loewen argued this was a simple contract dispute between 2 parties. But at the end of a 7 week trial, the jury found for O'Keefe and awarded him damages totaling $500 million dollars.
Bob Bruce, juror:   The punitive damages, of course, had to be to see that the Loewen Group stopped doing what they were doing. You had to send a message, there's no doubt about that. And that's what we did.
B.Moyers:   "Not one of my lawyers flagged the danger of a Southern jury," Raymond Loewen later complained.
Hon. James Graves, presiding judge O'KEEFE V. LOEWEN:   It is understandable that someone would feel aggrieved by a jury's verdict. But if there's a judgment rendered by a trial court and if the appellate court affirms it, and you appeal that and ultimately get to U.S. Supreme Court and they hear it, they affirm it, that's kind of it. And, I mean, little kids know, U.S. Supreme Court, that's the last word.
B.Moyers:   Instead of appealing the jury's decision, the Loewen Group settled with O'Keefe for $175 million, a third of the original award. But 3 years later, using NAFTA, the co. struck back. Contending that the Mississippi trial was "infected" by appeals to the jury's anti-Canadian & racial bias, the corp. filed a Chap.11 claim. Loewen is asking for $725 million from American taxpayers, $550 million more than it had paid O'Keefe.
E.Williamson:   Federal govt of U.S. failure to police, in effect, the states is the cause, is the reason U.S. govt is being threatened with a substantial monetary liability.
B.Moyers:   We talked to a number of jurors down there. They told us that it wasn't the fact that Loewen was a Canadian co.. They just said it was the company's behavior that angered them.
E.Williamson: I think it's a runaway jury, and I do not think the way our jurisprudence, I don't think fair & equitable treatment contemplates runaway juries.
B.Moyers:   Would all juries have to now look over their shoulder at Loewen and this decision?
E.Williamson:   First, if I were in the U.S. Federal govt, I'd say wait a minute, what kind of exposure do I have to misbehavior in the state of Mississippi. And so I would start looking around for what I can do to make sure this doesn't happen again. I would find some way to impose on Mississippi that liability, and then once Mississippi had the liability, then I think it would be incumbent upon them to do something about it.
B.Moyers:   To say to the juries, behave or else.
E.Williamson:   Exactly.
Chas. Roh:   By intl standards our punitive damage system is remarkable.
B.Moyers:   In the sense of being excessive?
Chas. Roh:   Well, yeah, a lot of people say it's excessive.
B.Moyers:   I understand that, but it still is troubling to me as an American citizen that our jury system could potentially be upheld as illegal under a NAFTA provision that was not debated which was not explored, which was not explained in an open way.
Chas. Roh:   Right. I mean, there was nothing hidden about it, but no, no one sat there, because, honestly, none of us thought about it. I mean, candidly, of course, if the govt finds itself laying out several hundred million dollars in this kind of a case, it is, you may say, well, you're free to keep your system the way it is, but it's sure going to be expensive to.
B.Moyers:   In a preliminary ruling, the Loewen tribunal declared that the Mississippi trial is a legitimate target under NAFTA. And that could, conceivably, open the US civil justice system to challenge including decisions of U.S. Supreme Court.
Jas Graves:   I know I sound like some flag-waving patriot, but I have a profound deep-seated belief in the ability of this system to work exactly the way it's supposed to work most of the time. Because if not juries, then who? And if someone else, then why are they better than those 12 citizens?
Wm Greider:   The politics of this gets very interesting if a claim like Loewen wins. Will average Americans sort of shrug and say, well, that's the price of globalization and, and if this is what it takes to spread democracy around the world, overthrowing American jury verdicts through some, quote, offshore legal system, that's okay with me? I don't think so.
B.Moyers:   Most Americans do not know about Chap.11 and they do not know there is a push now in Washington to expand NAFTA to 31 more countries in another agreement called the Free Trade Area of the Americas. Extending Chap.11 privileges for corporate investors is at its core. Giants of American business are among those demanding it, as they made clear in a letter to the official in charge of current US trade policy. The letter was written by their lobbyist, Dan Price, who 10 years ago was the lead US attorney shaping Chap.11. Price declined to talk to us. The deputy NAFTA negotiator agreed.
B.Moyers:   We've been given a letter that was written to U.S. Trade Rep. Zoellick in which business says they want quote protection of assets from direct or indirect expropriation, to include protection from regulations that diminish the value of investors' assets." That's a pretty clear demand, isn't it?
Chas. Roh:   Yeah, it is. Well, I can see how you can take that particular set of phrasing and say, oh, well, what business is saying is if you regulate & make me less profitable, pay me off. I'm not sure whether that was the intent
If you took that wording literally and said, okay, let's make it clear or let's add a rule that says, by the way, expropriation means anything that diminishes the value of your investment, then it seems to me that that's probably, I, who am a huge supporter still of these agreements, would say that's a a big mistake because if you try to push it to there, the people are not going to go with you, because that's just too greedy.
B.Moyers:   You write that Chap.11 is a ticking time bomb in the politics of globalization. Why?
Wm Greider:   Because I think the public ignorance will be shocked and quite confused, if any of a number of cases, whether it's Methanex or Loewen, or some of the others, manage to win damages against U.S.. People at first are gonna say, Huh? What is that about? And then, as it's explained to them, they're gonna say, we didn't sign on for that. That's not what we think about as a global trade agreement. And then the education process is quickly gonna turn into anger, I believe.
B.Moyers:   Will the jurors of Mississippi or the citizens of California be overruled by the NAFTA tribunals? The decisions are still pending; the deliberations secret. So we simply do not know. But on 10.25.0, abiding by the order of one tribunal, Mexico govt paid Metalclad $16,002,433 dollars.
H.MENDEZ: Our people couldn't believe that Metalclad won compensation. How is this possible? What will happen to the people who were hurt? We are the lab rats and they experiment with us.
B.Moyers:   NAFTA may have established a private court for capital. But there is no private court for the citizens of San Luis Potosi who are left with 20,000 tons of toxic waste that the Mexican govt now owns and must find the money to clean up. And there is no private court for the Christiansens, who fear their life savings are gone or for Eyvonne Watts, who does not know how contaminated water may affect her children.
The story is not yet over. But if, through trade agreements like NAFTA, the President & Congress continue to create one-sided privileges for multinational corporations, the country must ask: Are they promoting democracy as they claim or trading it away?

Lloyd's   per Wiki (excerpt)   Þ   µ   Ñ

In 1871, the first Lloyd's Act was passed in Parliament which gave the business a sound legal footing. The Lloyd's Act of 1911 set out Society objectives, incl promotion of its members' interests and collection & dissemination of information. By this time the business had become one of the pre-eminent insurers in the world.
Society membership, largely market participants, was realised to be too small in relation to the market's capitalisation and the risks that it was underwriting.

Lloyd's response was to commission a secret internal inquiry, known as the Cromer Report, which reported in 1968. This Report advocated the widening of membership to non-market participants, including non-British subjects and women, and to reduce the relatively onerous capitalisation requirements, creating a more minor investor known as a 'mini-Name'.
The Report also drew attention to the danger of conflicts of interest.

During the 1970s, unrelated issues of significant influence on the course of the Society arose.
First was the tax structure in the UK; capital gains taxed at 40%, earned income taxed in top bracket at 83%, and investment income in top bracket at 98%.
Lloyd's income counted as earned income, even for Names who did not work at Lloyd's; this heavily influenced the direction of underwriting. It was desirable for syndicates to make a (small) underwriting loss but a (larger) investment profit.

Losses were 98% funded by the taxpayer while the gains largely accrued to the Names; when Thatcher's govt greatly reduced the top rate of income tax, proportion of losses paid by Names increased astronomically.
Investment profit was typically achieved by 'bond washing' or 'gilt stripping': buying the bond 'cum dividend' and selling it 'ex dividend', creating an income profit and a capital loss.
Syndicate funds were also moved offshore, which later created problems through fraud & self-dealing.

Because Lloyd's had turned itself into a tax shelter, the second issue affecting Lloyd's was an increase in its external membership, such that, by the end of the decade, the number of passive investors dwarfed market investors.
Thirdly, during the decade a number of scandals had come to light, including the collapse of the Sasse syndicate and the disgrace of Christopher Moran, which had highlighted both the lack of regulation and the legal inability of the Council to manage the Society.

Expulsion set By Lloyd's   10.28.82   Reuters


World's largest insurance market Lloyd's of London today expelled a broker for the first time in its 300-year history. A Lloyd's committee announced the expulsion of Christopher Moran after an internal inquiry into his business conduct found him guilty of discreditable acts.
Last year he had been cleared at London's Old Bailey criminal court of plotting to defraud members of Lloyd's over aircraft insurance. The expulsion required approval by 80% of committee members; 92 percent voted him out.
Mr. Moran said the decision was unfair and he would appeal.

In 1980, Sir Henry Fisher was commissioned by the Council of Lloyd's to produce the foundation for a new Lloyd's Act. The recommendations of his Report addressed the 'democratic deficit' and the lack of regulatory muscle.
The Lloyd's Act of 1982 further redefined business structure, designed to give 'external Names' introduced in response to the Cromer Report, a say in the running of the business through a new governing Council. Immediately after 1982 Act passage, evidence came to light and internal disciplinary proceedings were commenced against individual underwriters who had siphoned sums from their businesses to their own accounts.
These included Lloyd's deputy chair Ian Posgate and chair Sir Peter Green.

In 1986 UK govt commissioned Sir Patrick Neill to report on the standard of investor protection available at Lloyd's. His report was produced in 1987 and made a large number of recommendations but was never implemented in full.
Lloyd's most traumatic period in its history was the late 1980s and early 1990s.
US courts' unexpectedly large punitive damages awards led to large claims by insureds, especially on APH (asbestos, pollution and health hazard) policies, some dating as far back as the 1940s. Many of these policies were designed to cover all liabilities not excluded on broadform liability policies.

Current Lloyd's members liability to pay these historical losses came as result of the Lloyd's accounting practice known as 'reinsurance-to-close'.
Membership of a Lloyd's Syndicate was not like owning shares in a company. An individual "joined" for one calendar year only, the famous 'Lloyd's annual venture'. At the end of the year, the Syndicate as an ongoing trading entity was effectively disbanded.
It was very common for the Syndicate to re-form for the next calendar year with more or less the same membership and the same identifying number.

In this way, a Syndicate could appear to have a continuous existence going back fifty years or more. In reality it did not. Separate incarnations of the Syndicate, each a unique trading entity underwrote insurance for one calendar year only.
Claims take time to be reported and paid so the profit or loss for each Syndicate took time to become apparent. Lloyd's practice was to wait 3 years, 36 months from the beginning of the Syndicate, before 'closing' the year and declaring a result.

Syndicate's members were paid any underwriting profit during the early part of 4th calendar year in proportion to their 'participation' in the Syndicate or they would have to reimburse the Syndicate during 2006 for their share of any underwriting loss.
Reserves set aside reserves for future claims payments for both claims notified but not yet paid and estimated amounts required for 'incurred but not reported' claims were difficult to estimate hence inaccurate, particularly liability or long-tail policies producing claims long after the policies are written.

Future claims liabilities' reserves were set aside in a unique way.
The Syndicate bought a reinsurance policy to pay any future claims: the premium was the exact amount of the reserve. Rather than putting the reserve into a bank to earn interest, the Syndicate transferred liability to pay future claims to a reinsurer.
This was 'reinsurance-to-close', a transaction that allowed the Syndicate to be closed, and a profit or loss declared. The reinsurer was always another Lloyd's Syndicate, nearly always the succeeding year of the same Syndicate.

Liability for past losses could be transferred year after year until it reached the current Syndicate. A member joining a Syndicate with a long history of such transactions could and often did pick up liability for losses on policies written decades previously.
So long as the reserves had been correctly estimated, and the appropriate reinsurance-to-close premium paid every year, then all would have been well. But in many cases this had not been possible. No-one could have predicted the surge in APH losses. Money transferred from earlier years by successive 'reinsurance-to-close' premiums to cover these losses were insufficient, and the current members had to pay the shortfall.

Within a stock company, initial reserve for future claims liabilities is set aside immediately in the ifrst year. Any deterioration in that initial reserve in subsequent years will result in a reduced profit-&-loss for the later year, with a reduced dividend &/or share price for shareholders in that later year, whether or not those shareholders in the later year are the same as the shareholders in the first year.
Arguably, Lloyd's practice of using third year reserves to establish the reinsurance-to-close premiums should have resulted in a more equitable handling of 'long-tail' losses such as APH than would the stock company approach. Difficulties in correctly estimating losses such as APH overwhelmed even Lloyd's extended process.

Many individual Members of syndicates underwriting long term liability insurance at Lloyd's faced financial loss, even ruin, by the mid 1990s. In the early 1980s, some Lloyd's officials began a recruitment program to enroll new Names to help capitalise Lloyd's prior to the expected onslaught of APH claims, known as 'recruit to dilute'.
When huge asbestosis losses came to light in the early 1990s, for the first time in Lloyd's history members refused or were unable to pay the claims, many alleging that they were the victims of fraud, misrepresentation, and negligence.

Opaque accounting at Lloyd's made it difficult if not impossible for many Names to realise the extent of the liability that they personally and their syndicates subscribed to. The market was forced to restructure.
In 1996 the ongoing Lloyd's was separated from its past losses. Liability for all pre-1993 business was compulsorily transferred (by reinsurance-to-close) into a special vehicle called Equitas at a cost of over $21 billion and enormous personal losses to many Names.

It was subsequently discovered that a bribe, described as an 'educational briefing', had been paid by Lloyd's to the Californian Insurance Commissioner in order that he should assist Lloyd's in preventing the prosecution of Lloyd's by the California State Attorneys Office for the sale of 'unregistered securities' to US Resident Names or 'investors.
Quackenbush, using his office as Chair of the N.A.I.C (National Association of Insurance Commissioners) facilitated the approval of the Equitas entity.

The 'recruit to dilute' fraud allegations were heard at trial in 2000 in the case Sir William Jaffray & Others v. The Society of Lloyd's, and the appeal was heard in 2002.
On each occasion the allegation that there had been a policy of 'recruit to dilute' was rejected: however, at first instance the judge described the Names as "the innocent victims … of staggering incompetence"; appeal found that representations that Lloyd's had a rigorous auditing system were false and strongly hinted that one of Lloyd's main witnesses, Murray Lawrence, a previous Chairman, had lied in his testimony

Lloyd's then instituted some major structural changes.
Corporate members with limited liability were permitted to join and underwrite insurance. No new "unlimited" Names can join although a few thousand existing ones remain.
Financial requirements for underwriting were changed, to prevent excess underwriting that was not backed by liquid assets. Market oversight has significantly increased. It has rebounded and started to thrive again after the World Trade Center attacks, but it has not regained its past importance as newly created companies in Bermuda captured a large share of the reinsurance market.

Unlike most of its competitors in the reinsurance market, it is neither a company nor a corporation, but an insurance market of members serving as a meeting place where multiple financial backers or "members", whether individuals (traditionally known as "Names") or corporations, come together to pool and spread risk.
As the oldest continuously active insurance marketplace in the world, Lloyd's retained unusual structures & practices that differ from all other insurance providers today.

Originally created as an unincorporated association of subscribing members in 1774 it was incorporated by the Lloyd's Act 1871, and is currently governed under the Lloyd's Acts of 1871 through to 1982.
Lloyd's itself does not underwrite insurance business, leaving that to members. The Society operates effectively as a market regulator, setting rules under which members operate and offering centralised administrative services to those members.

Structurally Lloyd's is governed by the 18 member Council of Lloyd's, roughly equivalent to the board of directors of a company. The Council administers the Corporation of Lloyd's which runs services & administrative operations of Lloyd's.
The Council delegates most of its day to day oversight roles, particularly relating to ensuring the market operates successfully, to the Franchise Board.

In the first year of account, the venture accepts premiums from customers to insure risks for one year, the annual venture. At the end of the year, the venture stops writing new business, but continues to exist to pay claims for the next 2 years of account.
. After 3 years, one year of writing and 2 years of paying claims, the venture is closed. Its books are balanced, any profits left over after paying out claims and reinsurance-to-close are paid out to members. Each year's venture stands on its own with regard to paying claims and collecting premiums.

Unlike most businesses, accountancy at Lloyd's does not assume the "Going concern" basis, because it is expected that each venture will last for three years and then end. The origin of this accounting cycle was in the shipping business.
Syndicates would insure a ship before the start of its voyage, and the three-year period was considered to be the amount of time that it took a ship to sail around the world.

Since the 1930s, many Lloyd's syndicates branched out to underwriting policies providing coverage for general liability, and excess liability beyond that covered by other insurance policies, as well as providing upper layers of reinsurance.
Comprehensive unrestricted general liability policies were very popular in the US market from the late 1940s to mid 1970s. These types of policies involve time spans longer than the finite three years of a Lloyd's venture.

Insurance policies that cover liabilities that may extend for many years are called long-tail policies because the "tail" of the liability can extend out for many years into the future.
Ex. subsidence damage is often not detected until the relevant building is subjected to a structural survey, which typically may not occur for many years until it is about to be sold; it is only at this point that the insured person contacts the insurer, who then has to estimate the cost of rectifying the damage.
Short-tail insurance relates to liabilities that are notified and settled quickly ex. motor vehicle insurance and domestic house contents insurance.

Before an insurance venture can be closed at the end of three years, its liabilities must be balanced by paying out all outstanding claims which have not been paid, and making provisions by setting aside reserves for any unpaid claims and for any incurred but not reported losses (IBNRs) which may occur in the future.

Of 2 classes of people & firms active at Lloyd's, first are members or providers of capital; second are agents, brokers, and other professionals who support the members, underwrite the risks, and represent outside customers.
For most of Lloyd's history, rich individuals, "Names" (ANA), backed policies written at Lloyd's with all of their personal wealth, obligated by unlimited liability. Since 1994, Lloyd's has allowed corporate members into the market with limited liability.

Early 1990s losses devastated the finances of many Names; upwards of 1,500 out of 34,000 Names were declared bankrupt. Today, individual Names provide only 10% of capacity at Lloyd's, with corporations accounting for the rest.
No new Names with unlimited liability are admitted, and the importance of individual Names will continue to decline as they slowly withdraw, convert into Limited Liability Partnerships or die.

Managing agents sponsor and manage syndicates, canvassing members for commitments of capacity, creating syndicates, hiring underwriters, and overseeing all syndicate activities.
Members' agents coordinate the members' underwriting and act as a buffer between Lloyd's, the managing agents and the members. Introduced in the mid 1970s, they grew in number until many went bust. There are now only three left, Argenta, Hampden and LMAS which has no active names. It is mandatory that unlimited Names write through a members' agent.
Recent results have benefited from tougher underwriting standards imposed by the Franchise Board and terms and improved terms and conditions following the World Trade Center disaster in 2001.

Outsiders, whether individuals or other insurance companies, cannot do business directly with Lloyd's syndicates. They must hire Lloyd's brokers, who are the only customer-facing companies at Lloyd's.
They are therefore often referred to as 'intermediaries'. Lloyd's brokers shop customers' policies among the syndicates, trying to obtain the best prices and terms.

When corporations became admitted as Lloyd's members, they did not like the traditional structure. Insurance companies did not want to rely on the underwriting skills of syndicates they did not control, so they started their own.
An integrated Lloyd's vehicle is a group of companies that combines a corporate member, a managing agent, and a syndicate under one ownership. Some ILVs allow minority contributions from other members, but most now try to operate on an exclusive basis.

General Insurance Current Issues Newsletter, From the world of general insurance NEWS From the industry 5.07 http://www.the-actuary.org.uk/pdfs/07_05_industrynews.pdf Lloyd’s A new Lloyd’s underwriting agency, Ark Syndicate Management Ltd, has been established, with funding from Aquiline Capital Partners LLC, a New York private equity firm, and others. The agency will manage a new Lloyd’s syndicate with capacity of £114m, writing principally marine and energy business. The senior management team is largely derived from executives previously employed by Aspen Insurance Holdings and the Wellington agency.

7.31.01   press release   We reviewed operation of Chapter 11 of NAFTA and issued interpretations of certain Chapter 11 provisions. Furthermore, we directed experts to continue their work examining the implementation & operation of Chapter 11, incl developing recommendations as appropriate.
The experts are to report to Ministers on a periodic basis and, at a minimum, prior to the next meeting of the NAFTA Free Trade Commission.

We view these steps as contributing to the efficient & transparent operation of the Chapter 11 dispute settlement process and to proper & responsible participation of the disputing parties in such proceedings. Concurrently, we agree to make accessible to the public, in a timely manner, documents submitted to, or issued by, Chapter 11 tribunals, pursuant to the interpretation.

Jan. 2002 This Chapter establishes a mechanism for the settlement of investment disputes that assures both equal treatment among investors of the Parties in accordance with the principle of international reciprocity and due process before an impartial tribunal.
A NAFTA investor who alleges that a host govt has breached its investment obligations under Chapter 11 may, at its option, have recourse to one of the following arbitral mechanisms:
• the World Bank's Intl Ctr for Settlement of Investment Disputes (ICSID);
• ICSID's Additional Facility Rules;
• rules of UN Commission for Intl Trade Law (UNCITRAL rules).

Alternatively, the investor may choose the remedies available in the host country's domestic courts.
An important feature of the Chapter 11 arbitral provisions is the enforceability in domestic courts of final awards by arbitration tribunals.

fast track trade authority

  Global Trade Watch per Sierra Club GPSD

This travesty of a vote will be remembered as the Midsummer Night's Massacre, where growing popular concern about corporate-led globalization was shot down in favor of a backwards policy combining corporate managed trade and global deregulation of basic consumer, environmental and other public interest standards. Over the past decade, public opposition to NAFTA-style trade deals has grown so strong that now the only way to move this policy is to ram through at 3a.m. in the dark of night 304 pages of legislation combining 5 different trade bills which was unavailable for public or congressional review until hours before the vote.

This Fast Track bill is supposed to set the next 5 years of U.S. trade & globalization policy. If U.S. negotiators follow the outrageous agenda in this bill, including a 31-nation NAFTA expansion and global deregulation of food safety, accounting, energy and other standards, the resulting agreements would be dead on arrival in Congress and in the court of public opinion. Tawdry spectacle to watch the GOP House leadership & Pres.GWBush ramming through a a trade bill which has as its main agenda promoting massive global corporate deregulation just hours after crowing about passage of new regulations aimed at the corporate crime wave caused by the very sort of deregulation this bill promotes globally.
The trade package included authorization to negotiate a 31-nation Free Trade Area of the Americas NAFTA expansion, new limits on enforcement of labor or environmental standards in trade agreements, a modest Trade Adjustment Assistance program, and an expansion to more nations of the investor-to-state lawsuits of the North American Free Trade Agreement, which allows foreign corporations to challenge domestic regulatory standards before trade tribunals if they limit future expected profits.

Timing for vote
7.26.02   T.Gerson, FTAA coord. Global Trade Watch

They are planning to vote on Homeland Security at 9pm, then go to the debate and vote on Bankrupcy and then Fast Track after that. Have a phonebank party tonight; it's great to call DC offices after business hours because the only people to pick up are the Members and the senior staff! If you are on the West Coast, maybe head to district office and demand Cong. staff watch C-SPAN with you.

In terms of content:
•   TAA:   Only 65% COBRA co-pay and even that is a tax credit, NOT up front money. Too bad if you get sick in Dec., you're not going to be able to pay for care until April;
  Only workers whose jobs go to NAFTA countries (Mexico, Canada) are eligible, so if the factory moves to China, you're out of luck.
  Secondary workers like contract workers, service workers, truckers and other "downstream" folks are NOT eligible for TAA
•   Dayton-Craig   completely gutted, now just requiring a "presidential consulation" with Congressional oversight committee i.e.meets to tell them what he's going to do or has already done, but they can't do anything about it.
  Congress can pass non-binding resolution to not trade away our trade laws. Actually, Congress DID this before the WTO Ministerial in Qatar, and Zoellick put them on the table DESPITE resolutions passed overwhelmingly by both chambers.
•   Chapter 11 provision has actually been made WORSE!
•   Gramm language still in.

It took nothing short of "martial law" to overcome the mighty fair trade field and pass this retrograde Fast Track bill at 3:30 Saturday morning before Members slink back into their districts. The last 72 hours of steam roller, the long-march process all through the night. Quality & intensity of local activism inspiring. Continual building of new coalitions & political capacity is our longterm strength. Watching this debate and seeing how over the past decade grassroots activity has one-by-one moved almost the entire Democratic caucus onto our message is what we carry away with us on this frustrating, infuriating night. There is the catharctic & politically important business of accountability for those Representatives who betrayed us.

Many who watched 12.06.01 vote thought the GOP couldn't sink any lower. This morning, they went to the Rules committee without a bill text and did not make one available for the 304 pg text until late afternoon. Then, Members were instructed to print out a copy of the304 page bill from a website. Starting at 7pm Friday night in the middle of the Homeland Security debate when the text became available, Members, incl Adam Smith and other sell-out Dems, were given less than 5 hours to analyze the legislation that will determine trade policy for the next 5 years. Democratic losses kept to 24; 4 flipped after being with us in 2001.
It is testament to force & relentless committment of fair trade grassroots that so many "free" trade Dems were forced to hold their nose and vote against this bill. The stronger we get, the more they have to resort to procedural tricks because it's clear that we have them completely beat on the merits. Even Ron Kind, co-chair of the New Dem (read: Gop wannabe) caucus came out against the bill on the floor, thanks to great work by the fine folks of Wisconsin. In this fight, we saw incredible growth of fair trade movement, the NAACP, the National Organization of Women, the Postal Carriers, the Audubon Society and hordes of subfederal organizations fought along side traditional allies. We've got the FTAA fight, the WTO fight and November election.

Kudos to California who worked miraculously with Rep. Eshoo & Rep. Lofgren voting no. Kudos to OR coalition, who held onto all their swings. Note for next time: live cows really work in lobbying startegy (at least with Ron Kind!). Props to Florida who got Stearns (unbelieveable!) and the Texas Fair Trade Coalition who kept EJ Johnson & Gonzalez from running off a cliff. The WA coalition has plans for free-traitor Adam "sell-out" Smith, who refused to listen to the overwhelming majority of his constituents, only kept from shouting his yes vote from the rooftops months ago due to effort by phonebanking, grasstop pressure exerting, veiled threat letter writing WA fair traders). Same for Larsen.
Marinade sell-outs in accountability juice and shower the "no" votes with love. Don't worry, they have the money, but we have the masses!

"Never doubt the capacity of a small group of concerned citizens to change the world; In fact, until now that is that is the only thing that has"

Margaret Mead

Accord reached on trade authority
President gains power to cut deals
7.26.02   J.Eilperin & H.Dewar Wash.Post pA1

The past 5 presidents enjoyed this authority, but it lapsed in 1994, and President Clinton was unable to persuade a Republican-run Congress to renew it.