Category Archives: Governance

Who’s Still Talking about A Green New Deal?

Almost nobody, as far as I can tell.

Just two short years ago, it seemed everyone at Davos was committed to striking a Green New Deal. This year, the phrase is no longer so fashionable, and you are more likely to come across it in populist rants against globalism and globalists or the Davos agenda.

Writing from Davos in the Wall Street Journal today, Walter Russell Mead eschews the term, arguing instead that any kind of deal that requires “coordination between private sector and political leaders,” and “global coordination” especially, will be repugnant to “the traditional standpoint of American pro-market conservatism.”

No argument there. What Mead doesn’t say, of course, is that the current policy environment favors some private-public coordination and some global coordination and industrial development over other kinds. The laissez-faire, go-it-alone, America First standpoint conservatives hold up for the world to admire is a fiction, rife with contradictions, a form of self-flattery or a story told in pursuit of policy goals. So is the soft denialism of the American right, which holds “that climate change will [not] arrive as quickly or be as devastating as the Davos consensus believes”; but Mead is probably correct that this position will carry the day in the US, at least for the near term.

The question, then, is what sort of deal or climate policy framework should we expect to emerge from this mix of soft denialism and anti-globalism? Nothing too ambitious or coherent, I imagine. The promises of the Green New Deal were abandoned almost as soon as they were made, or shortly after the 2020 election. So now what? I have been tentatively arguing that in the US we’re seeing the emergence of a Green Right. They will focus for the next couple of years on touting jobs in red districts (think infrastructure, mining, and EVs); taking an axe to environmental and financial regulation (e.g., permitting reform and attacks on “woke” ESG); setting border policy to keep migrants and refugees out; and striking an increasingly aggressive posture toward China (at Axios, Jael Holzman has a piece about how that could backfire).

And this program probably has better chances of taking hold in the US than the Green New Deal ever did.

The CEO Story, from Profitability Crisis to Polycrisis

Michael Roberts’ historical chart of the G20 rate of profit.

I’ve written a little about the the invention of the CEO — the title, the office, and the social position described by that term. This chart from Michael Roberts’ blog showing the declining rate of profit can help reframe that discussion.

In this view, the term “CEO” first comes into use in the midst of the profitability crisis, in the late 60s and 70s, after the postwar Golden Age. The CEO’s heyday runs through the neoliberal recovery. The Fall of the Celebrity CEO (to borrow a term from Edelman) coincides with the start of the Long Depression.

Unfortunately, Roberts’ chart doesn’t run up to the present, which would show the rate of profitability continuing its decline in the face of multiple, entangled, global crises all at once, a polycrisis:

A global polycrisis occurs when crises in multiple global systems become causally entangled in ways that significantly degrade humanity’s prospects. These interacting crises produce harms greater than the sum of those the crises would produce in isolation, were their host systems not so deeply interconnected.

Having helped steer society to this precarious juncture, has the institution of the CEO now run its course? And what would it take to reinvent it, so that the business enterprise can help address the overlapping crises we face, improve humanity’s prospects, and play a constructive role in a new social contract? 

Some Misgivings about the End of Section 206

2023 could see the end of Section 206, the New York LLC publication requirement. I have supported its repeal ever since I first came up against it, and I still support it, despite some misgivings. The legislation currently on the table does little to quell them.

Currently, New York Limited Liability Company law requires newly formed LLCs and LLPs to publish a notice for six successive weeks in two newspapers designated by the county clerk, “one newspaper to be printed weekly and one newspaper to be printed daily.” At the end of that period, founders have 120 days to file an affidavit of publication (and pay a $50 filing fee). Costs can run into the thousands of dollars, since local newspapers where the notices are printed — and they must be printed — effectively have a monopoly.

This part of the 1994 LLC law reads like an artifact from a bygone, pre-internet era, and it no doubt helped prop up struggling local newspapers financially even as the internet hastened their demise. It has also given rise to a professional services cottage industry.

Legislation to repeal Section 206 has been making its way at a slow crawl through the New York Senate and the Assembly since 2008. It was last referred to the Committee on Corporations, Authorities, and Commissions in January, 2022. In March of this year, the New York Bar Association came out in support of repeal. In November, the bill’s sponsors, Liz Kreuger in the Senate and Rebecca Seawright in the Assembly, both won re-election. So prospects for a repeal in the next legislative session look favorable.

The proposed amendments would not only repeal the publication requirement, but also establish something called the Department of State modernization fund. Notices would be published in an online database maintained by the Department of State; associated filing fees would go toward “the modernization and security of the Department of State’s public-facing website, and for developing alternatives to physical publication of documents.” The bill’s sponsors say it will “remove onerous and unnecessary requirements on LLCs and partnerships forming in New York state” and that online filings “will improve a citizen’s access to this information.”

The Bar Association rightly observes that LLC and LLP filing notices running in local newspapers are generally ignored. Publication costs are high; the current requirement “serves no legitimate business or economic purpose,” they write; and it creates an unjustifiable disparity, since New York corporations are not subject to the same requirement as LLCs. These are all good points, as almost anyone who has contended with the publication requirement will tell you, and 97 percent of the lawyers surveyed by the Bar Association agree.

In addition, eliminating the publication requirement will benefit the State of New York in several ways. It will likely increase business activity in New York, which will benefit the Department of State’s revenues. More companies forming and locating within the State would similarly benefit New York’s economy. As a result, this bill will likely lead to higher employment and greater tax revenue in New York. More companies with offices in New York will employ more New Yorkers, resulting in increased tax revenue to the State.

Here is where my misgivings start to kick in. It’s hard to say how “likely” any of this really is. The publication requirement is an inconvenience and a burden, but how many companies have really been deterred from forming and locating in New York because of it? When it comes to choosing between New York and Delaware, how much does Section 206 factor into the decision? Delaware LLCs and LLPs that do business in New York still have to register to do business here, pay an annual filing fee, and comply with New York tax laws. Could the repeal make New York the new Delaware? Unlikely: Delaware will still enjoy institutional advantages (namely, the Court of Chancery) and a reputation, deserved or not, as the best place to form a business and raise capital.

Maybe Delaware sets the bar too high. Will the repeal significantly increase business activity and contribute to higher employment and greater tax revenues? Look at the trend line on this US Census Bureau graph. Is the repeal of Section 206 the thing to keep it moving north? Will the upward trend accelerate once the legislation passes?

Time will tell, and some measure of skepticism seems warranted. What’s more, the repeal could have adverse consequences as well as benefits. What happens to the small, local print publications that have been practically subsidized since 1994 by LLC listings? Those local newspapers may not matter so much in New York City, where we have several daily newspapers (but I’m not sure that argument can stand much scrutiny), and protecting New York City publishers’ Section 206 interests may be outweighed by the economic benefits anticipated from the repeal. But what about in more rural counties?

Do printed daily and weekly newspapers still serve rural, or, for that matter, urban communities in other ways? Let me overdramatize just to drive the point home:

No surprise that local print publications failed to catch this brazen fraud.* It’s the rare local newspaper that can support investigative journalism or take on a newly elected member of Congress; and a Section 206 zombie newspaper probably isn’t going to be up to the job anyway. Subsidizing publishers on the back of new businesses, which is essentially what 206 does, is not the same thing as supporting local journalism. Still, it would be good to know or at least see some public discussion of what these print publications contribute to their communities before they try to set up entirely online or just fail; it would be even better to see some legislative efforts to keep local journalism alive. The LLC publication requirement cottage industry will likely disappear, too. I have more trouble shedding a tear for its demise.

Another set of questions concerns the modernization fund, its reach and its governance.

The legislation places the fund under the custody of the State Comptroller and specifies that “on the warrant of the State Comptroller” the moneys in the fund will be paid to cover modernization and security upgrades to the DOS website and development of digital alternatives to the current publication system. Moneys in this fund are “to be kept separately and not to be commingled with other moneys” in the Comptroller’s custody.

But what falls under the fuzzy heading of “modernization”? What does the firewall between modernization and other Department of State projects look like, and how will it be maintained by successive Comptrollers? Is modernization a project without end, lasting as long as the filing fees keep adding to the coffers? At bottom, my concern is that the modernization fund could, over time, turn into a consulting industry slush fund.

If it becomes law in the next legislative session, the repeal of Section 206 could do all that it promises to do: relieve founders and partnerships of a costly, bothersome requirement, improve public access to corporate records, and even deliver some limited economic benefits. It could also undermine or fail to serve the public interest in other, unanticipated ways.

*Update, 23 December: It turns out a local newspaper, The North Shore Leader, was wise to Santos’ fraud months ago. And the Leader is among the newspapers designated for publication of legal notices by the Nassau County Clerk.

This Twitter thread is also worth reading:

Will the 118th Congress See A Green Right Coalition?

Yesterday’s post about Nancy Pelosi’s remarks on China belongs to one strand of a larger story that’s coming into focus.  It’s a story about China and human rights, to be sure, but also about what role human rights issues will play in the transition to renewables and in the politics of the transition.

House Republicans on the Natural Resources Committee have already cited reports of human rights abuses in China and in the Democratic Republic of Congo (where Chinese companies control cobalt mining operations) as an argument for boosting extraction of critical minerals here in the US. As the gavel passes in the coming year, their position is likely to attract even more support.

In fact, the 118th Congress could see the emergence of a Green Right coalition: hawkish on China, touting the magic of markets, openly hostile to the administrative state, and more interested in achieving energy dominance (to borrow a phrase from the Trump years) than in paying lip service to a just transition (as some Democrats do).  The incoming Chair of the House Energy and Commerce Committee, Cathy McMorris Rodgers, plans to “outcompete China on climate:” that phrase sums up a whole political and geopolitical agenda. 

The program could be a political winner: anti-China, pro-growth, industry-captured climate policy may accelerate organized labor’s rightward drift; and the Green Right may even enjoy an uneasy honeymoon period with more left-leaning advocates of permitting reform.

Over the past year or so, as Joe Manchin tried but failed to advance his permitting deal, reformers have shown themselves ready to take an axe to environmental law, they have regularly dismissed public opposition as NIMBY whining, and some of them have done more public advocacy for extractive industry than seasoned lobbyists and flacks could ever dream of doing. 

Pelosi on the Moral Authority to Talk about Human Rights in China, or Anyplace

Asked this morning about Republican plans to create a Select Committee on China in the coming year, Speaker Nancy Pelosi noted that there is already a bipartisan, bi-cameral committee on China and made this “statement” about human rights.

Corporate America has [been] largely responsible for the situation we’re in, in terms of the trade deficit and the rest…but from a standpoint of values, from the standpoint of economy, and from the standpoint of security, China poses a challenge to us….We want to work together on climate issues and the rest, but, but we cannot have our workers disadvantaged by China having prison labor manufacture products or contribute to the manufacture of products that just provide unfair competition for us….My statement is that if we refuse to talk about human rights in China because of economic issues, we lose all moral authority to talk about human rights anyplace in the world.

Predictably enough, the press conference moved on quickly from there. A follow-up question on legislation to ban TikTok failed to elicit anything more on US economic interests and human rights in China. Here’s video of the moment:

A Newer Map of Lake Superior Mining and Mineral Exploration

 

This map helps us imagine what the onshoring of critical minerals production could bring to the Lake Superior region.

This looks like the most recent version of a map I’ve posted before, in 2013. It’s published by the Transportation and Resource Extraction Committee of the Great Lakes Indian Fish and Wildlife Commission.

The GLIFWC map appears on page 73 of the 2020-2024 Lake Superior Lakewide Action and Management Plan put out last week by the governments of the United States and Canada.

The report includes lots of information about mining in the Lake Superior region that deserves consideration. The report also notes: “The cumulative impact of mines on the ecological integrity of Lake Superior is not well understood.”

The Boundary Waters, Offshore: Luksic in the Pandora Papers

A chart of Luksic-connected offshore entities included with the CIPER report.

Last week, El Centro de Investigación Periodística (CIPER) published an investigative report on the offshore financial activities of Andronico Luksic Craig and the Luksic family, based on the Pandora Papers — a trove of over 11 million records leaked from tax havens in the British Virgin Islands. The investigation cast some new light on the elaborate network of offshore corporations, foundations, law firms, and corporate services companies involved in managing some of the Luksic family’s vast fortune, and brought me back to some of the records I’d uncovered in connection with Luksic’s purchase of the Washington, DC mansion where Jared Kushner and Ivanka Trump lived while serving in the Trump White House.

Luksic acquired that $5.5 million Kalorama property right after Trump won the 2016 election, right around the time Kushner-Trump were preparing for their move to the nation’s capital and at a critical moment when Antofagasta plc, the Chilean mining company controlled by Luksic, was counting on the Trump administration to reverse policies of the Obama administration (which it duly did). This neat arrangement may not have been a simple quid pro quo, a mansion provided in return for government approvals to mine copper and nickel on the edge of the Boundary Waters, but even to the casual observer it looks an awful lot like a foreign emolument. Unfortunately but not surprisingly, the matter never underwent a formal ethics review. (More on all that here, here, and here.)

While these new documents do not directly shed light on the Kalorama emolument, they provide some insight into how Luksic’s control of Antofagasta is connected to offshore schemes and how the Kalorama mansion might figure into a network of Luksic-controlled US property holdings.

One company called out in the CIPER investigation, FDMDA Corp, looks like a more elaborate version of a company I came across in Boston property records, LDMD Corp, which was registered as the owner of two Avery Street properties from 2011 to 2013. FDMDA carries the first initials of the names of Luksic’s five children, while LDMD appears to have been created solely for the male heirs. (I am assuming the L in LDMD stands for Andronico Luksic, the first-born son, with DMD representing Davor, Maximiliano, and Dax.) Two others, Beacon Eagle Corporation and Avery Eagle Corporation, also look like another iteration of Boston property-holding companies formed by Luksic attorneys, Avery Bicentennial Corp and The Avery Millennium Corp.

These corporations owned and still own condominiums on Avery and Beacon streets in Boston. The Beacon Street property includes a penthouse that Luksic (or, rather, Avery Bicentennial) purchased from quarterback Tom Brady in 2012 — which is right around the time that Luksic says he and Donald Trump “said hello” or exchanged a greeting at a New England Patriots’ game, where they would have been guests of Brady, a mutual acquaintance, or of billionaire owner Robert Kraft. So Brady connects Luksic to Trump — suggesting there might be a little more to the Kalorama mansion story than serendipity. What’s not clear is how the entities formed around the Boston properties, or even Luksic’s Miami and Washington DC properties, might be legally connected with the two Eagle companies mentioned in the Pandora Papers.

On April 28, 2017, FDMDA Corp and Beacon Eagle Corporation were relocated from the British Virgin Islands to Liechtenstein, where they were subsumed under an entity called The Lazare Tcherniak Foundation. (The disposition of Avery Eagle remains unclear.) The Lazare Tcherniak Foundation “provides for the economic furtherance of the descendants of Nadia Malvine Tcherniak” — Patricia Lederer Tcherniak is Luksic’s ex-wife and mother of his five children — “that bear the name Luksic as their first or second name and that are also biological descendants of Andronico Luksic Abaroa [Andronico Luksic Craig’s father]. They are all members of a generally defined and fully discretionary class of beneficiaries.”

While Beacon Eagle appears to be bound up with US-based real estate investments, FDMDA Corp. serves Lazare Tcherniak Foundation beneficiaries by managing and distributing stock dividends. Records reviewed by CIPER describe the source of FDMDA Corp’s funds as “mining activities in the Republic of Chile. The funds are mainly dividends indirectly received from Antofagasta plc, a public company listed on the London Stock Exchange.” Here, “indirectly” probably indicates that there is an entity — a partnership — to which the Antofagasta plc dividends are paid before they are distributed, in whole or in part, to the Liechtenstein-based FDMDA Corp.

Of course, all of this appears to be perfectly legal, as Andronico Luksic himself pointed out in a tweet responding to the CIPER report.

While technically true (“Liechtenstein is NOT a tax haven” because Chilean tax authorities don’t include it in their list of tax havens), this statement was rapidly ratioed. Along with President Sebastian Piñera’s own exposure in the Pandora Papers, Luksic’s exposure and his carefully lawyered response just provide more fodder for the debate over inequality in Chile.

Luksic’s  October 6 statement also prompts questions about corporate governance, the extent of the Luksic Group’s reach, and its attendant responsibilities. With a controlling interest in Antofagasta plc, the Luksic Group can easily thwart any shareholder resolutions not to its liking and effectively determine how the company and its subsidiaries are run, all from behind the scenes and with little accountability. That is shadow governance, and it’s the very model of corporate governance that Antofagasta brings to its Twin Metals project near the Boundary Waters.

Postscript. Oct 20, 2021. The same elaborate network of Luksic foundations, offshore companies, tax havens, and investment vehicles is evident in the disclosures filed by Antofagasta’s three lobbying firms: Brownstein Hyatt, Wilmer Hale, and The Daschle Group. I addressed the topic in this Twitter thread:

Read more about the Boundary Waters reversal here

John Ruggie (1944-2021)

Word of John Ruggie’s passing prompted me to look back at the times I engaged with his work on business and human rights, including these ten posts, and to revisit the one instance I know of where he engaged with mine. This was an endnote he wrote, with a link to this blog, for Life in the Global Public Domain.

It was nothing more than a brief reference (“also see…”), but it made an impression on me. After all, who was I to John Ruggie? Not a student, not a colleague in any formal sense. We never even met. But I read him and respected his work; and to my great astonishment, he read me and repaid me in kind with a small, gracious gesture.

Here, the Business and Human Rights Resource Centre has collected tributes to John Ruggie from around the world.

An Appeal to the State Department

Earlier this morning I appealed the State Department’s denial of my request for expedited processing on two Freedom of Information Act requests made in the fall of 2018.

As I mentioned in last month’s webinar, even though FOIA specifies that “records shall be made promptly available,” many agencies have a backlog of requests and some requests are deliberately slow-walked.

The State Department does not expect to complete these two 2018 requests until 2022. No reasonable definition of “promptly” contemplates a delay of four years, and, as I argue in my appeal, recent Federal government action — the June 30 Notice of Intent to prepare an Environmental Impact Statement for the Twin Metals project — compels the release of these records. Why? Because in compliance with the National Environmental Policy Act, the Bureau of Land Management plans to take public comment and hold public meetings on Antofagasta’s Minnesota project. The public can’t participate in a meaningful way or make considered judgments when critical facts are withheld.

I posted a copy of my appeal on Twitter.

The appeal’s argument about NEPA, which provides for meaningful public consultation, brings me back to a point I tried to stress in the webinar: what’s at stake here is not only a mining project or economic development in northern Minnesota or the fate of the Boundary Waters, though all of those things are matters of great concern, but also questions of meaningful consultation, citizen participation, and good government.

Both NEPA and the Freedom of Information Act are, or at least could be, conducive to responsible democratic governance. They are designed to make government conform to citizen demand, or at least make government inform, include, and answer to the public.

Charles Tilly puts it neatly: “a regime is democratic to the degree that political relations between the state and its citizens feature broad, equal, protected, mutually binding consultation.” If that is the kind of government we want to have, then those are the political relations we need to create, support, and insist upon. The state isn’t going to do that for us, and the current regime appears to be doing everything it can to frustrate and undermine those relations.

Update 28 Sept 2020. The Office of Information Programs and Services denied this appeal on September 24, saying I did not show a compelling need, and rejecting my argument that due to Federal government action my request meets the threshold of 22 C.F.R. 171.11(f)(2).

New Boundary Waters FOIA Complaint Filed Against US Department of Interior

Yesterday, I submitted my complaint against the United States Department of interior to the US District Court in the District of Columbia, asking the court to compel DOI to comply with the Freedom of Information Act and release documents I’ve requested about the Boundary Waters reversal.

As a pro se litigant, I had to petition the court for leave to use the Electronic Case Filing system, so for now I am in the slow lane, waiting for my paper filing to be assigned a case number. [Update, August 2, 2019: Galdieri v. US Department of the Interior has been assigned Case No: 1:19-cv-02253 and Judge James E. Boasberg has also granted my motion for pro se access to Electronic Case Filing.] In the meantime, I thought it would be helpful to post the complaint online.

There have been a number of reports lately about the efforts to hobble FOIA at the Department of Interior; and just this week, Gail Ennis, the Acting Inspector General at the Department of Interior, announced an investigation of the department’s FOIA Awareness Process.

Ennis is taking this step after several watchdog groups, including American Oversight and the Western Values Project, charged that the awareness review policy at Interior was instituted to protect Trump political appointees from public scrutiny. (EPA instituted a similar policy last month.)

In my complaint, I mention the expansion of that policy in February, 2019, to cover Ryan Zinke and other officials. It seems to have played into Interior’s abrupt cessation of all communications with me, and its apparent decision to withhold responsive documents.

After corresponding with me fairly regularly for almost a year about my FOIA request, providing two document releases, and promising “additional documents” as part of a “rolling response,” Interior went silent on me as soon as I put the documents I obtained online. Since February, when I first published those documents, they have failed to respond to multiple emails and phone calls requesting a status update on forthcoming releases. They even failed to respond to several emails asking whether I had, in fact, exhausted all administrative remedies. I guess their silence is the answer to my question.

I suspect I’ve been blacklisted, or, if that’s too strong a word, at least singled out. My argument here is not just post hoc propter hoc. About a month after I first put the Interior documents online, something else happened to deepen my suspicions.

On March 26th, the Solicitor at the Department of the Interior began to follow me on Twitter.

Jorjani1

This account — which was created in February of 2017, never tweeted, and has since been taken down — appears to have belonged to Daniel Jorjani (DJ). In February of 2017, Daniel Jorjani was Principal Deputy Solicitor (PDSOL) at the Department of Interior: DJ, the PD, at SOL. (I have no idea what the 9999 is about.) He’s now Acting Solicitor and — let’s not forget — he also serves as the Department’s Chief FOIA Officer.

Back in March, the DJPDSOL9999 account was following a number of environmental organizations, like EarthJustice, the NRDC, the Center for Biological Diversity, Defenders of Wildlife, Western Environmental Law, Wilderness Watch, Cultural Survival, and Indian Land Tenure. DJPDSOL9999 was also following Jenny Rowland Shea, who writes about public lands for American Progress, Anna Massoglia, who researches dark money, Aaron Weiss from the Center for Western Priorities, and climate scientist Katherine Hayhoe. The list went on.

At the time he followed me, @DJPDSOL9999 had “liked” only one thing, and that was on March 21st of this year: a retweet with comment by “Matilda Williams” (@katherinewill27) of a tweet by Swing Left of a Washington Post article.

Jorjani2

The article in question is by Julie Ellperin: “Federal Judge Demands Trump Administration Reveal How Its Drilling Plans will Fuel Climate Change.” It’s about a ruling by U.S. District Judge Rudolph Contreras that the Department of Interior “violated federal law by failing to take into account the climate impact of its oil and gas leasing in the West.” Judge Contreras ordered the Bureau of Land Management “to redo its analysis of hundreds of projects in Wyoming.” It was a big loss for BLM. Jeremy Nichols of Wild Earth Guardians is quoted as saying that the ruling “calls into question the legality of the Trump administration’s entire oil and gas program” — which is, of course, Daniel Jorjani’s responsibility.

The lazy false equivalence drawn by Matilda Williams — Obama too! — misses the entire point of Ellperin’s article. “While the Interior Department began to take into account the climate impacts of federal oil, gas and coal leasing toward the end of Obama’s second term, administration officials jettisoned those plans when President Trump took office.” Zinke, Pruitt, and Jorjani himself were enlisted in this fight, and back in March, DJPDSOL9999 apparently felt that they got a bad deal.

In theory, there’s nothing wrong with the Chief FOIA Officer at the Department of Interior operating a stealth account on Twitter. If, however, he’s using it to track people who are making public records requests, that is going to raise serious ethics concerns, especially if he is denying or withholding records on the basis of what those people publish.

Perhaps the Inspector General’s report will shed further light on the matter.

Read other posts about the Boundary Waters reversal here