Wednesday, March 18, 2009

Obama Proposes to Tax AIG Payments to Vets

(White House Press Pool) In what insiders say is a move calculated to penalize insurance giant AIG for recent bonus payments that have outraged Washington, President Obama announced today that he is backing a bill proposed by Senator Charles ("Chuck") E. Schumer, D-NY, that would retroactively tax benefits paid by "any insurance company more than 79% owned by the Federal Reserve Bank" to veterans of the first or second Gulf Wars. The description is applicable to AIG, which is the only insurance company to date in which the Fed has purchased a 79.9% stake, by fronting to it more than $170 billion. 

(The White House simultaneously announced [scroll down for details] that it was withholding $165 million---an amount equal to the bonuses that AIG paid---out of the next $30 billion it is advancing in its latest effort to keep the huge corporate sponge afloat, so that it will receive only $29,835,000,000. "That will sure teach AIG a lesson," said Press Secretary Robert Gibbs. "This administration was shocked---shocked! I say---that AIG would actually go ahead and pay those bonuses. But now our total investment in AIG, thanks to the President's quick thinking, will be only $199,835,000,000 instead of $200,000,000,000.")

Timothy Geithner, Secretary of the Treasury, estimated that the proposed tax, applied retroactively to all private health insurance benefits paid by AIG to wounded veterans since 1991, could bring as much as $460 million into the Government's coffers. "We're hurting right now," he said in a hastily arranged press conference at the White House, just after he finished meeting with President Obama to go over the details of the unusual plan. "That money, plus the $540 million we expect to raise by billing the veterans' insurers directly for all the future costs of their care, will come to an even $1 billion that the Government would otherwise not have. It will allow us to release more funds to community organizers than we had anticipated, and I'm sure you realize that when you gain a billion here and a billion there, it all adds up---especially when we're spending trillions as I speak."

Pressed for an explanation, Secretary Geithner ticked off a number of rationales for the retroactive tax:

"Number one," he said, "President Obama himself---remember, he used to be on Harvard Law Review---figured out that Senator Dodd's call for a 100% tax on the AIG bonuses, especially after he (or persons in his office unknown to him) authored the language that exempted them, would probably be struck down as an unconstitutional 'bill of attainder'. So we had to go back to the drawing board to figure out a way to reach AIG, and really send it a message that it's no longer 'business as usual,' now that I am---I mean we---we are its chief shareholder."

"Number two," he continued, "we realized that the bonus payments are already going to be taxed, just in the normal course of things, at about a 50% rate, when you take into account state and local income taxes as well as federal income and employment taxes. So taxing the remaining 50%, even had we been able to do so at a 100% rate, would have yielded only an additional $83 million. But by taxing the benefits paid to vets, we figured we could bring in nearly five times that much. So it was a no-brainer."

"And thirdly," he concluded, "we realized that if we could have made the AIG executives return their bonuses, the same rationale would have required legislators to return all of their AIG political contributions. That would not have been politically acceptable in the current economic downturn." [Ed. note: Campaign finance records [scroll down], which are difficult to read because of the faded and blurred state in which they have been made available to date, are believed to show that AIG paid only two legislators amounts in the six figures for 2008: the sum of $103,100 to a "C. Dodd" of "WashDC", obviously a resident of the nation's capital, and the sum of $101,332 to a "B. Hussein O___" (the last name has been scratched out), identified only as from a place called "Hide Park". Journalists from the major newspapers are systematically questioning Capitol office receptionists in order to find out who received the money, and where it went.]  

Asked how taxing wounded veterans could possibly be justified, Secretary Geithner responded: "We recognize that the burden of spreading the wealth around cannot be imposed equally on all," he said. "These particular citizens, however, received substantial benefits in the form of health care for which they were never taxed, and that's just not right. I, of all people, ought to know that," he chortled.  "Fortunately, AIG kept excellent records of all those payments, and so we were able to estimate the anticipated revenues almost to the penny---at least, assuming all those wounded vets are still alive. But even that doesn't matter, because for those of you who can read the budget, you know that starting next year, we are going to reimpose the death tax, and we'll get that money then."

When queried about how the tax could be made retroactive to 1991, the Secretary had a ready answer: "Oh, we've looked thoroughly into that, and there's no problem. Congress frequently makes taxes retroactive, and no one has ever successfully complained. Besides, given that President Obama did not vote for either of the wars in question, the people who are now veterans were employed illegally to fight them, and so they have no ground whatsoever on which to object." 

In response to a reporter who tried to point out that both Gulf Wars had been authorized by Congressional resolutions, Secretary Geithner testily snapped: "That was then, this is now. The point is that the President did not vote for either of them, so from his perspective, which is all that counts here---remember, he won the election---those wars were 'dumb' and unauthorized. I'm sure the Secretary of Defense will back me up on that. Besides, those soldiers missed their opportunity. They should have lost the war while they had a chance. Then we might have bailed them out, too," he finished.

With that, Secretary Geithner turned his back on reporters and strode quickly away. He paused briefly, however, when a journalist shouted after him: "But how will taxing wounded veterans punish AIG?" 

"You think you're as smart as the President? You figure it out," he called over his shoulder, as he disappeared through a door in the West Wing.





Tuesday, March 17, 2009

A Pewster's Primer for St. Patrick's Day

St. Patrick may not have been entirely responsible for removing the snakes from Ireland, but that does not mean we cannot celebrate his feast with a call to drive out the snakes that today beset the Episcopal Church (USA). Not literal snakes, of course, but figurative ones, that are seducing the Church into the coils of ruinous litigation.

The Episcopal Majority website has put up just such a call to action: "A Primer for Those in the Pews" (H/T: Transfigurations). It deserves the widest possible attention of those to whom it is addressed. Mr. R. A. Livingston's piece is chock-full of facts about what is currently wrong with the Episcopal Church (USA)'s budget. It shows how amounts being spent on lawsuits are currently out of control, while the Church is being forced to cut back in almost every other area. It also concludes with some pragmatic advice for those in the pews who contribute money without determining where it goes.

You will find at this link a printable version of the full post, so that you can print it out and distribute it at your church as you see fit. (Thanks to Martial Artist for cleaning it up, and I have him also to thank that I can now link to a .pdf version that you can download and email to others. And thanks to RobRoy for creating the easy-to-remember URL: http://tinyurl.com/Primer4PewSitters for the HTML version.) Below is an excerpt, to which I have added some additional links to back up the statements made in the article. If this whets your appetite, be sure to click over to The Episcopal Majority and read the entire post.

* * * Begin excerpt * * *

Christians Suing Christians

"Episcopal Church Sues . . ." reads the headline. Why is the Church so much in the news these days as the plaintiff in multiple lawsuits across the country, from California to Virginia? The Church's General Convention, which meets this summer in Anaheim, California, will be asked to approve a budget for the next three years that allocates $1.8 million for legal expenses (see line 57, column N). This is an increase of six times over the amount that was allocated by General Convention 2006 (see page 8, line 12).

And that is by no means the whole story. The estimate of just $300,000 for legal expenses made in 2006, for the years 2007-2009, was off by a factor of 1,560%! You can see the entire story in this one line (#57) on the first page of the proposed budget to be presented at Anaheim, which breaks out as follows:

57| Title IV & Legal Assistance to Dioceses
2007-2009 Budget: $ 300,000
2007-2009 Actual (estimated): $ 4,704,138
2010-2012 Projected: $ 1,800,000

The $300,000 is the amount that was budgeted in 2006 for 2007-2009; the figure of $4,704,138 is what the projected total for those three years is actually expected to be, based upon what has been spent and committed thus far. And the $1,800,000 is the figure projected for 2009-2012, which is proposed for General Convention to adopt this summer. (A small portion of these totals, approximately $100,000 annually, covers the cost of disciplinary ("Title IV") proceedings against Bishops. The remainder is for outside lawsuits.)

If we add the last two amounts, we get the sum of $6,504,138 of Episcopal Church revenue---more than three-quarters of which comes from current donations plus income earned on prior gifts---being devoted to legal expenses, or more than one million dollars annually over the six-year period. When one compares this amount to the $100,000 per annum that was originally projected in 2006, one sees an eleven-fold increase, on the average, in this one budget item over the entire six years, and almost a twenty-fold increase just for 2008 alone.

The Nature of the Problem

At the same time, a review of the proposed new budget presentation for General Convention 2009 shows that the Church is slashing expenses in other areas. Anticipated revenues are down by $7.5 million; the presenters comment that they are "[c]urrently witnessing economic conditions not seen since the Great Depression of the 1930s". This requires "deferring major debt repayment," freezing salaries, laying off staff, and "cutting most non-personnel expenditures"---while increasing legal expenses by more than ten times. What is going on here?

The problem, in a nutshell, is this: beginning in late 2004, the Episcopal Church began to intervene and participate in lawsuits brought by dioceses against departing churches. The object of each of these lawsuits has been to enforce through the courts a trust which the Church maintains exists on the property of every single one of its 7,000+ parishes. Under the terms of the trust, first expressed in an amendment to the Church canons (bylaws) in 1979, every Episcopal parish and mission holds its real and personal property---everything from the land and buildings down to the hymnbooks and altar furnishings---in trust for the diocese of which it is a member, and for the Episcopal Church as a whole.

The parish itself is allowed to be the trustee of the trust, and to use the property for its purposes, for as long as it remains in the Episcopal Church. Should it ever vote to leave its diocese, however, the Church and the diocese then become the co-beneficiaries of the trust, which would give them the right to enforce it, and assert that the property must go to them. These are the terms of the so-called "Dennis Canon", enacted by General Convention in 1979, which lay dormant for more than twenty years before it first came into play against a parish that tried to leave.

With billions of dollars' worth of tax-exempt religious property in the name of its parishes, the Episcopal Church committed itself to enforcing the Dennis Canon in the courts when parishes tried to retain their property after voting to leave. Most trusts are created by the person who has title to the property that is placed in trust. The Dennis Canon, however, is different. It is a trust created by the national Church, without needing the signatures of each parish vestry or rector to be effective---or so the Church claims. The lawsuits brought by the Church have each been filed with the purpose of obtaining rulings from the various State courts which uphold and enforce individual Dennis Canon trusts on parish property.

The Track Record Thus Far

Look back at the budget figures for the three-year period ending in 2009. The Episcopal Church expects that it will have spent nearly five million dollars pursuing its goal of establishing Dennis Canon trusts since 2006. What is its track record in that time? (I am talking only about the track record of the national Church in cases in which it has participated as a litigant. This leaves out another fifty or so cases [see pp. 28-32] that have been brought by individual dioceses to enforce the Dennis Canon against departing parishes.)

It is this: it has won a preliminary round in California, but has lost a preliminary round in Virginia. (The loss in the court in Virginia, however, will become permanent unless the Supreme Court of Virginia accepts the Church's request, which has just been filed, to review that decision.) It also was told that had an "insufficient interest" in the property of a parish in Syracuse, New York to be granted full participating status; that case later settled. Another suit brought by the Church is pending in a different court in California, and the Church has just requested permission to intervene in another lawsuit in Pennsylvania. Recent events in Fort Worth would indicate the Church is gearing up to file an additional lawsuit there, all pursuant to a master strategy intended to make the cost of departure too high for parishes and dioceses to consider.

When one considers that the very first lawsuit over the Dennis Canon---in which the national Church was a defendant, not a plaintiff---began in South Carolina in 2000, and is still not concluded, one may begin to get a sense of the horizon to which the Episcopal Church has committed itself in this area.

Carnage in the Church

Six million dollars spent on litigation against parish churches and departing clergy, however, does not begin to tell the ecclesiastical carnage that has occurred since the Most Reverend Katharine Jefferts Schori assumed the office of its Presiding Bishop in November 2006. As documented in the report mentioned earlier, there have been more bishops and clergy deposed, or involuntarily removed from the ranks of the Church, in the two-and-a-half years of her term than at any other time in its four-hundred-year history. The Presiding Bishop has brought before the House of Bishops resolutions to depose two active bishops, and one retired bishop (who was the oldest living bishop in the Church). She has declared that a further six bishops would be deprived of all ministry in the Church after they informed her that they were transferring to other churches in the Anglican Communion, and intended to retain their episcopal status. And following her leadership, the bishops of another two dozen dioceses have deposed or removed some ninety members of the clergy during the same period.

Normally, the only way that bishops and clergy may be deposed from their positions is after a trial, and proof of charges of misconduct. But such trials, like their counterparts in civil courts, can be lengthy, and are also subject to appeal. The only means by which more than 100 bishops and clergy of the Church have been deposed and removed in the last thirty months is by abusing the Church canons in ways for which they were never intended. Unfortunately, the Presiding Bishop has been the leading abuser of the canons, by far, while her peers in the House of Bishops have for the most part abetted her efforts. A total of five bishops and their dioceses have dissented from the depositions of the three bishops, and have refused to recognize their validity. Other churches in the Anglican Communion, of which the Episcopal Church is a constituent member, have similarly continued to recognize the bishops despite their removal. The result has been the creation of two classes of clergy within the Anglican Communion, and indeed, within the Episcopal Church itself: those whose orders are recognized by the entire Communion, including the Episcopal Church, and those whose orders are recognized by all of the Anglican Communion except for the Episcopal Church (apart from five of its dioceses).

The Risks of Lawlessness

As so often happens, lawlessness in one area begets lawlessness in other areas. From choosing to misread the language regarding the number of bishops required to consent to the deposition of a fellow bishop, the Presiding Bishop and her colleagues have gone to reading into the Constitution and canons language which simply isn't there. The Episcopal Church is a voluntary association of member dioceses. Dioceses join the Church by agreeing to abide by its rules, just as in any other voluntary group. But there is nothing in those rules that says a diocese cannot leave the Church once it has joined. Yet the Presiding Bishop is currently staking millions of dollars on a bet that she can convince the courts that she is right, even without any express language to support her position. This is what is currently happening in the litigation in San Joaquin, is what the Church is seeking to argue in the Pittsburgh litigation, and no doubt is what it will soon be arguing to court in Texas and in Illinois.

What is still worse is that the Presiding Bishop and those who support her are risking not just millions of dollars, but individuals' lives and careers in the Church, on the correctness of their position. For if a diocese may voluntarily leave a voluntary association, then that association no longer has a diocese in the geographical area once represented by the departing diocese. A new diocese has to be formed out of those parishes that choose to remain. Those parishes have to come together in a new convention, adopt appropriate rules and bylaws, and then petition General Convention to join the Episcopal Church.

The Presiding Bishop, however, does not see things that way. To her, since a diocese may never leave the Church, then only its people leave, while the structure itself remains. Even though a diocese is also a "person" in the eyes of the secular law, she refuses to admit that the courts can continue to recognize the diocese that departed as the same group that joined the Church originally, and that has now chosen to leave. Instead, she argues that the minority that remains behind continues to be that same original group, only now much diminished in numbers. This ignores the democratic right of the majority to vote to change their constitution and bylaws. And it takes us in a circle right back to the argument that dioceses are not free to change their bylaws so as to leave the Episcopal Church, even though there is no direct language to that effect in the national Church's Constitution or canons.

If the Presiding Bishop's position proves to be wrong, the consequence could be a disaster for all those who made decisions depending on it. If a diocese is found not to be a legitimate diocese, what happens to the resolutions it has made, the officers it has elected, and the deputies it has sent to vote at General Convention? What happens to the votes of those deputies who are subsequently found not to have been legitimately elected? And what happens to the pension contributions made on behalf of dioceses found not to have existed? All these are just some of the complications that could arise should the present course of the Church prove unjustified.

The Costs of Continuing to Fight Each Other

Such victories as the Church has managed to secure thus far in State courts have all dealt with the right of parishes to choose to leave their dioceses, and not with the right of the dioceses to leave the Church itself. The parishes that have lost have all had language in their corporate articles and bylaws by which they agree to remain subordinate to the diocese of which they are a member. No such language, however, exists at the diocesan level (Colorado, Utah and Los Angeles are exceptions, and do subordinate themselves to the national Church). Thus the theory on which so much is being staked is untested, and will require years and years of litigation in many State courts before its validity can be known for certain.

All of these lawsuits, depositions and removals come with a price that is far greater than the dollar amounts they have cost the Church thus far. The degree of stress and conflict is reflected in steadily declining membership numbers, and in the shortfall reported in contributions at all levels (which is only exacerbated by the recent economic downturn). As the canons of the Church are twisted more and more to achieve the short-term goal of ridding the Church of its dissenters, they are seen not as rules for Christian conduct, but simply as means to an end. Perhaps most harmful of all is the sheer hypocrisy of a church that professes to be Christian suing its members, and requesting tithes to support the enormous expenses of doing so.


Summary:

  • The General Convention in 2006 allocated $300,000 for all legal expenses in the years 2007-2009. Actual expenses will exceed $4,700,000 a 1,560% increase.
  • The proposed budget for the next three years is $1,800,000.
  • $100,000 of each of these budgets is set aside for disciplinary actions against bishops and similar cases. The balance is for lawsuits.
  • Other expenses both at TEC headquarters in New York City and elsewhere are being cut at the same time litigation expenses are significantly increasing.
  • The 'Dennisâ€� Canon purports to place all real and personal property of all Episcopal parishes in trust for the diocese and the national church.
  • Lawsuits by TEC invoking the Dennis Canon have been successful only about half the time.
  • When TEC sues or intervenes in a diocese’s suit, compromise and negotiated settlements are cut off.
  • Other carnage: There have been more bishops and clergy deposed, or involuntarily removed from the ranks of the Church, in the two-and-a-half years of Presiding Bishop Jefferts Schori'€™s term than at any other time in its four-hundred-year history.
  • In doing so, the Presiding Bishop has repeatedly violated the Canons of the church.
  • Are dioceses members of a voluntary association from which they can depart or are they forever a part of the whole?
  • The threat of anarchy looms as multiple dioceses vie for the same jurisdiction.
  • The scorched earth policy in lawsuits has created tension and mistrust, increased the flow of those leaving and exacerbated the shortfall in contributions at all levels of the church.
  • The twisted and abused Canons are seen not as rules for Christian conduct, but simply as means to an end.


What Can You Do?

What can individual parishioners do? Here are some practical suggestions:

1. Find out where your money is going. Ask your parish treasurer the amount that your church contributed to its diocese last year, and ask him or her to break it down into unrestricted funds, and funds designated for a specific purpose. Also, ask for an itemization of what your diocese contributes to the national Church, broken down in the same fashion.

2. Give no more money for lawsuits. Give your treasurer a letter specifying that no part of the funds you donate is to be used to support lawsuits at either the diocesan or national level. If the treasurer cannot guarantee they will not be so used, stop giving unrestricted funds to your church. Write a restriction on every check you give, such as "for parish salaries only", "for Church utilities only", and so forth.

3. Become involved at the local level. Get the word out, and get others behind the simple proposition that churches do not sue other churches, they mediate disputes as Christians. There are ways to share Church property and assets among differing groups that do not force a "winner-take-all" outcome; for some suggestions, see this post.

4. Do not vote for convention deputies who want to see the lawsuits continue. This may be the most important thing you can do at the local level. Parishes elect deputies to diocesan conventions, and diocesan conventions elect deputies to General Convention. If those who elect the deputies insist that they commit to oppose any funding for lawsuits, then the Church will have to use other means to resolve its differences.

5. Become involved yourself, and get others to do likewise. It is your Church that is at stake here. Litigation is the last resort for most people, and it should not be the first resort for Christians---particularly against each other. Litigation is driven by emotions, not reason, and it is fueled by money. Withdraw the money, and refuse to legitimize the emotions, and the lawsuits can and will be settled. There is no other alternative, because the lawsuits will end up swallowing the Church as we know it.

6. Finally, spread the word! Get this information into the hands of as many of your fellow parishioners as possible. There are many links in this article to useful information; below are some further resources for you to explore.

The Church's current master litigation strategy, discussed openly and freely for all to understand:

http://www.episcopalchurch.org/79901_104592_ENG_HTM.htm

A good article summarizing the parish property disputes, and explaining why most parishes are unsuccessful:

http://www.trincoll.edu/depts/csrpl/RINVol10No3/show%20me%20the%20moneyt.htm

Three excellent papers asking questions that need to be asked:


http://www.anglicancommunioninstitute.com/?p=326
http://www.anglicancommunioninstitute.com/?p=332


http://www.anglicancommunioninstitute.com/?p=338


* * * End of excerpt * * *



This is, as you can see, a very important resource for all those who are just beginning to learn from a headline or two, or from a post on the Web, about the incredibly wasteful use which the leaders of the Episcopal Church (USA) are making of donated money. That leadership should be challenged to prove how the money spent this far, and budgeted to be spent until 2012, could possibly be less than the value of the property that has actually been recovered in lawsuits.

As I noted in an earlier post, an old Spanish proverb expresses this concept as follows: "The Jew ruins himself on Passover feasts, and the Arab on weddings, but the Christian ruins himself on lawsuits." There is simply no way that the Church can rationally expect to recover all the legal fees it has poured into its efforts: to my knowledge, no property recovered has gone to the Episcopal Church (USA) directly, as opposed to going back to a diocese (as in New York). Thus $4.7 million dollars of the Church's donated funds has literally been spent for nothing to date, and the leadership proposes to send another $1.8 million down the same rathole. Such madness will stop only when those in the pews withdraw their support from funding it. (See that same post to appreciate the hypocrisy in giving money to the church to support its lawsuits.)


Monday, March 16, 2009

A New Blog Worthy of Your Attention


I would like to call your attention this morning to a wonderful post at a blog that started up recently, and to which I have provided a link in the sidebar: the blog is Front Porch Republic. It has a wide variety of authors who put up well-crafted essays on topics that go to the heart of America's character, in the venerable tradition of someone sitting on his front porch and offering observations and comment on what passes by.

One particular post this morning is an excellent way to introduce you to the merits of the site: Mr. Herbert's Sunday Morning Service.  Author James Matthew Wilson offers up a wonderful short meditation on how the sense of the sacred has shifted from the seventeenth century to today, and uses a brief "shrub of a verse" by George Herbert to illustrate his theme. "A brief didactic anecdote entirely unimpressive at first glance," he says, "it reads thus:"

As on a window late I cast mine eye,
I saw a vine drop grapes with J and C
Anneal’d on every bunch. One standing by
Ask’d what it meant. I (who am never loth
To spend my judgement) said, It seem’d to me
To be the body and the letters both
Of Joy and Charity. Sir, you have not miss’d,
The man reply’d. It figures JESUS CHRIST.

The insights Mr. Wilson draws out of these eight short lines are very rewarding. For a five-minute uplift to start your week, you could do far worse than click on this link and treat yourself to the whole piece. (The picture above is one of two that Mr. Wilson gives of the church where George Herbert spent the last years of his life: St. Andrew's in Bremerton, England.) And keep checking the site---given the engaging variety of the posts, you will be bound to find something to your liking, and not just once.