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Madigan joins calls to replace DeMarco at FHFA

Days after Illinois Attorney General Lisa Madigan joined the growing chorus demanding the replacement of FHFA interim director Edward DeMarco, fifteen protestors interrupted DeMarco’s appearance Tuesday before the House Finance Committee.

Five were arrested, according to the New Bottom Line Campaign.  (Video here.)

“DeMarco is kicking my family out of my home,” called out Ramon Suero, a homeowner facing foreclosure and one of the five arrested. “Dump DeMarco! Principal Reduction now!

“Ed DeMarco’s policies are putting my three kids, my wife, and me out on the street. If the president doesn’t get rid of him, he’s responsible for putting millions of Americans just like me on street as well.”

Housing advocates have been calling on President Obama to replace DeMarco, who has blocked principal reduction for underwater homeowners with mortgages held by Fannie Mae and Freddie Mac.  (See previous Newstips here.)

“DeMarco’s actions are driving millions of Americans into foreclosure and record debt,” said Tracy Van Slyke, executive director of the New Bottom Line.

“We are fed up, and it is time for President Obama to act on his promises to America’s middle class by dumping DeMarco and nominating a permanent director who will move principal reduction at Fannie Mae and Freddie Mac and stand with all homeowners and taxpayers.”

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AG Madigan to back ‘maximum’ homeowner relief

At a rally with community organizations on Sunday, Illinois Attorney General Lisa Madigan is expected to commit to pressing for “maximum” mortgage relief for underwater homeowners as part of the federal-state investigation into bank fraud.

She’ll appear with the regional organizing network IIRON on Sunday, June 10 at 3 p.m. at St. Mark’s United Methodist Church, 8441 S. St. Lawrence.  IIRON will also be unveiling a new Covenant for Economic Justice.

It’s a significant step for Madigan, who’s a member of an Obama administration task force investigating securitization fraud in the foreclosure crisis, organizers say.

Last year IIRON pressed Madigan to hold out for more money to help homeowners wrongfully foreclosed on in the robo-signing settlement by state attorney generals. Though the monetary settlement in that case was disappointing, grassroots pressure did result in limiting banks’ immunity from liability in the deal, said David Hatch of IIRON.

He said IIRON and groups including National People’s Action are calling for $350 billion worth of principal reduction for underwater homeowners.  An NPA report last year estimated underwater homeowners in the U.S. owe a total of $700 billion more than their homes are worth.

Stealth bailout

That’s a serious drag on the economy, these groups argue, taking hundreds of billions of dollars out of the consumer economy – and a “stealth bailout” of banks, which caused the housing crash through reckless and predatory lending practices, and which have received trillions of dollars in bailouts and backstops, most of which will never be repaid.

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Groups tell Madigan, Donovan: ‘No’ to foreclosure deal

Community groups confronted HUD Secretary Shaun Donovan and Illinois Attorney General Lisa Madigan on Monday over a foreclosure fraud settlement the groups say is entirely inadequate.

Protestors sang, prayed, and testified outside a room in the O’Hare Hilton where Donovan and Justice Department officials were meeting with staff from state attorney generals to urge them to sign on to a settlement in a case arising out of the “robo-signing” scandal of October 2010 (see 10-21-10 Newstip).

The groups object to the deal with the five largest mortgage services – including Bank of America and JPMorgan Chase — as a “slap on the wrist” that would shield them from legal liability for a wide range of foreclosure misconduct.

(Van Jones of Rebuild The Dream and George Goehle of National Peoples Action spell out some concerns at Huffington Post.)

“President Obama and Attorney General Madigan must choose,” says Rev. Marilyn Pagan-Banks of Northside POWER. “Will they settle for a deal that benefits the 1 percent and lets the big banks off the hook? Or will they stand with the 99 percent and fight for accountability and a solution that will help millions of people?”

The O’Hare meeting may have been called to create an aura of inevitability around the settlement, Firedoglake reports, but none of the state attorney generals who have criticized its provisions were expected to attend.

Dissension in the ranks

Attorney generals of New York, California and other states have opposed provisions of the settlement that would give banks blanket immunity for misconduct and shut down ongoing investigations in New York and elsewhere.

Last week attorney generals from a dozen states (not including Illinois) met in Washington DC to discuss coordinating investigations — and their displeasure with settlement talks, according to Huffington.

Madigan is on the committee that is negotiating the settlement. After 50 state attorney generals began an investigation in 2010, the Obama administration began pressing for a settlement. (At Politico, Simon Johnson calls the case the administration’s “last chance” to stand up to banks.)

Several weeks ago members of the regional organizing network IIRON met with Madigan staff to express their displeasure with the deal. “They seemed surprised that we didn’t think the settlement is a great thing,” said Kristi Sanford.

When they learned of the meeting Monday, they organized a rally at the State of Illinois building – and upon learning the meeting’s location, a contingent set out for O’Hare.

There a couple dozen members of community groups from across the city asked a Madigan staffer if the attorney general could spare a few minutes to talk with them. The aide never returned – but police came to ask the protestors to leave, Sanford said.

The groups want banks to agree to write down underwater mortgages, and they say there must be a full-fledged investigation of bank misconduct. Criminal behavior by banks in the scandal is alleged to include perjury, filing false documents, illegal foreclosures, and investor fraud.

King Day: Occupy the Fed, foreclosures, schools

The civil rights movement, the Occupy movement, and community organizations will come together for a series of events marking Martin Luther King’s birthday this week, including a demonstration Monday at the Federal Reserve led by African American clergy including Rev. Jesse Jackson.

At the time of his assassination, King was organizing an “occupation” of Washington D.C., and after his death thousands of people occupied Resurrection City there from May 12 to June 24, 1968, demanding jobs, housing and an economic bill of rights.

In other King Day activities, housing rights groups are stepping up the drive to occupy foreclosures, and teachers and community groups are demonstrating against school “turnarounds.”

Over a thousand community activists are expected for an Occupy the Dream event (Sunday, January 15 at 3 p.m. at People’s Church, 941 W. Lawrence), where elected officials will be called on to support jobs and tax reform, including closing corporate tax loopholes and instituting a financial transaction tax.

It’s sponsored by IIRON, a regional organizing network that includes Southsiders Organized for Unity and Liberation, Northside POWER, and the Northwest Indiana Federation. Occupy Chicago has endorsed the event.

“We are organizing in the tradition of the civil rights movement,” said Rev. Dwight Gardner of Gary, president of the Northwest Indiana Federation.

“In Dr. King’s very last sermon, he warned us not to sleep through a time of great change like Rip Van Winkle,” he said. “This is a moment of great change and we must put our souls in motion to occupy his dream.”

At the Fed: National Day of Action

Monday’s action at the Federal Reserve (Jackson and LaSalle, January 16, 3 p.m.) is part of a national day of action to “Occupy the Fed” by the Occupy the Dream campaign, with African American church leaders moblizing multicultural, interfaith rallies in 13 cities.  They’ll be emphasizing racially discriminatory practices by banks which have resulted in high foreclosure rates, as well as the issue of student debt.

“There needs to be economic equality, there needs to be jobs for all, there needs to be opportunities for the next generation,” said Rev. Jamal Bryant of Occupy the Dream.

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Water and privatization

While Chicago suburbs served by a private water company face steep rate hikes – and several communities band together to buy out the company’s pipeline – organizing around water privatization steps up in Chicago, and legislation promotion transparency in privatization deals is proposed in the City Council and state legislature.

A community forum on water privatization (Monday, April 19, 7 p.m., at Chopin Theater, 1543 W. Division) features Ald. Scott Waguespack along with two national experts on the subject, Jon Keesecker of Food and Water Watch and Phineas Baxandall of U.S. PIRG, who co-authored a report on privatization in Chicago issued last October by Illinois PIRG.  The event is free.

Food and Water Watch will be releasing an economic analysis of water privatization in Chicago.  The group, which assists local groups battling for public control of water around the world, recently opened a Chicago office.

FWW maintains water privatization leads to constant rate hikes and declining water quality.  It’s also a bad economic deal for cities, said Emily Carroll, FWW’s new Chicago organizer.

“Governments get a big lump sump up front – that’s the appeal of these deals,” she said.  “But in the long term, private companies do not give taxpayers what the asset is worth – that’s how they make money.  And these are really long-term leases.”

Groups weigh in

Since the parking meter controversy last year – and a Newstips report in October, which revealed the city’s consideration of water privatization – other local groups have weighed in on the general issue of privatization.

In February, Dennis Gannon of the Chicago Federation of Labor and Jerry Roper of the Chicagoland Chamber of Commerce wrote an op-ed calling parking meter privatization “a great success for Chicago’s businesses and the public” and urging renewed efforts to privatize Midway Airport.

The CFL’s major concern in protections for incumbent workers, said spokesperson Nick Kaleba.

Though it has criticized the excessive use of proceeds to cover operating budget deficits, the Civic Federation continues to advocate consideration of privatization as a means of reducing the city’s operating expenses and increasing efficiency, said Lawrence Msall.  He reiterated the guidelines proposed in a 2006 issue brief – deals should require competitive bidding and involve non-core services, and proceeds should be used to reduce long-term obligations, not operating costs.

Is water a core service for the city?  Msall thinks not, pointing out that many municipalities are served by private utilities.  “I don’t know that the citizens of Chicago care very much who is providing their water as long as it’s of high quality and safe,” he said.

The Better Government Association has urged greater transparency in privatization deals.  The problem with parking meter privatization was not the concept but the process, said Andy Shaw.  “The problem is when things are done in the dark of night,” he said.  “Give us transparency and information — and time for public input.”

Legislative protections

Two groups are backing legislative efforts to increase transparency in privatization deals —  though one hopes to restrain the process and the other to spur it.

Illinois PIRG is organizing support for an ordinance introduced last fall by Waguespack which would require the city to inform aldermen when a consultant is hired to consider a privatization deal; mandate a public hearing 30 days before a City Council vote on a deal; and limit leases of assets over $1 million to 30 years.

While some privatization deals may be appropriate, much more transparency and taxpayer protection is needed – and the city’s water system should be kept public, said Brian Imus of Illinois PIRG.

The Metropolitan Planning Council is backing SB 3482, sponsored by State Senator Heather Steans (D-7th), which would provide authority to the state’s transportation department, tollway authority, and municipal airports to enter public-private agreements to finance new transportation projects and lease existing infrastructure.

The bill would require prior authorization of deals by the General Assembly and independent review by the state’s government accountability commission, and it would require that proceeds go to a transportation fund.

“As a tool privatization can be good, though our experience in this region raises a lot of concerns,” said MPC vice president Peter Skosey.  With the state hard-pressed for cash, public-private partnerships could raise funds for high-speed rail, bus rapid transit in Chicago, or a new road providing western access to O’Hare, he said.

Privatization of water systems should be considered, he said, though any money generated should be reinvested in the water system.  Long-term sustainability of the region’s water supply is a major concern for MPC (the group issued a report on the subject last year, and is sponsoring a forum next month), and Chicago’s aging water infrastructure – over 4,000 miles of pipes, much of it dating to 1890 – is a significant source of water loss.

In addition, private utilities are required to include the full cost of providing water in their rates, while public utilities can tap other public funds.  Higher rates reflecting the true cost of water would discourage waste by consumers, Skosey said.

“There are towns in the region that lack the resources to upgrade and repair their water infrastructure,” he said.  And “some towns are very happy” with private water service, he said.

Another rate hike

That wouldn’t seem to include towns served by Illinois American Water Company, the largest private water utility in the state and a subsidiary of American Water Company, the largest private water utility in the nation.

On April 13, the Illinois Commerce Commission approved a $40 million rate hike for IAW’s 317,000 customers; about 37,000 customers in Chicago’s suburbs will see rates go up by 26.4 percent.  IAW had requested $61 million.

An IAW request for a 5 percent statewide increase to fund infrastructure improvements is still pending.  IAW’s last rate hike was August 2008.

The ICC expressed “serious disappointment” with IAW’s refusal to comply with the commission’s request for more support documentation.  “IAW can’t view Illinois ratepayers as an open checkbook,” warned ICC chair Manuel Flores.

Opponents of the rate hike included State Representative Renee Kosel (R-81st), the assistant minority leader.  She’s teamed up with Attorney General Lisa Madigan to sponsor an expert review of IAW’s operations which found the company was overcharging for management fees (paid to another American Water subsidiary) and cited problems with billing, metering, customer service, and fire protection. Kosel and Madigan argued IAW should decrease, not increase, their rates.

Citing “serious and pervasive” errors in the company’s record keeping, making it impossible to track water purchases and sales, in 2006 Madigan called for a comprehensive audit of the company.  “If the company can’t keep accurate records, we need to question everything about the fairness of their rates,” Madigan said.

Municipalities have also opposed IAW’s rate hikes over the years – one official said the relationship with the utility has been “adversarial most of the time” —  and the village of Homer Glen filed several complaints with the ICC.  In 2007 the ICC upheld complaints regarding inadequate inspections – including no records concerning fire hydrants – and billing irregularities.

In recent weeks village boards in Homer Glen, Bolingbrook, Woodridge, Romeoville, and Lemont have approved a Northern Will County Intergovermental Agreement to pursue acquisition of the 18-mile pipeline owned by another American Water subsidiary that brings water from Lake Michigan to the communities.  Individual communities are studying acquisition of distribution systems.

“The only solution to these outrageous rate increases is to buy the system,” Homer Glen Mayor Jim Daley told the Homer Horizon.

Broken hydrants

In addition to high rates there are issues of service and water quality, said Bolingbrook village attorney James Boan.  “The biggest thing is that a private company’s drive is for one thing – profit for its shareholders,” he said.  “A municipality’s drive is to provide a public service.”

He said a feasibility study recently completed by the communities found they could take over and operate the water at current rates – “and that was before this rate hike.”

A bill by Kosel to make municipal takeovers easier has attracted bipartisan support (and backing by the Illinois Municipal League).  HB 5485 would remove water infrastructure built by developers (and paid for by homebuyers) from the value of a water system in eminent domain appraisals.

IAW called the bill “an alarming attack on the value of private property,” the Horizon reported.

The notion that conservation is promoted by laws that let private utilities charge for all water costs – including water lost in leaks and unmetered construction sites – doesn’t make sense to IAW customers.  The company “has no incentive to conserve water because whatever it loses due to leaks in its pipelines, it makes up for in its charges to customers,” Kosel told Phil Kadner of the Southtown Star.

Boan recalls a water main which burst on a Saturday in Bolingbrook.  “They let it go all weekend, because we paid for the lost water and it was cheaper to bring in a crew on a Monday and avoid paying overtime,” he said.

In another example of the profit motive undermining the public interest, he cites a 2007 investigation by CBS2 which found that numerous fire hydrants operated by IAW were out of order, including hydrants outside schools in Lisle and Mount Prospect and a nursing home in Bolingbrook.  A subsequent inspection in Mount Prospect found that 50 percent of hydrants had problems.

Fire departments reported finding inadequate and conflicting records regarding hydrant repairs.  Lisle Fire Chief Tom Freeman said that because a private company owns the hydrants, the fire department has no authority to order them fixed.

American Water Company was bought by RWE, a huge European utility corporation, in 2001.  Four years later RWE announced it was selling off the company; by late last year RWE had reduced its holdings in AWC to 2 percent.

Minutes of an RWE board meeting leaked to US News and World Report by FWW showed the Europeans’ hopes of high growth were dashed “due to political resistance to water privatization in the U.S.,” in the words of CEO Harry Roels.  In addition, regulators were creating problems by demanding reductions in contamination by arsenic and lead in AWC pipes.

Roels estimated the company was losing 19 percent of its water value through leaking pipes – and that at the current rates of investment, it would take 200 years to replace all the distribution lines that need it.

In California, the Public Utility Commission’s ratepayers advocate opposed RWE’s sale of American Water, fearing the financial burden would be shifted to customers (pdf).

Tortured justice

Will Attorney General Lisa Madigan agree to a new trial for the latest Illinois inmate claiming a wrongful conviction based on a coerced confession ?

Michael Tillman, who’s been in prison for 23 years with a life-plus sentence for a 1986 rape and murder, filed a petition Tuesday seeking a new trial.

Tillman says his confession was coerced over four days of physical brutality in July of 1986 at the hands of detectives under Commander Jon Burge. (Burge now faces federal perjury charges.)

But Tillman isn’t the only person to have faced charges in the case.

A codefendant, Steven Bell, gave a statement implicating Tillman (after being beaten, by his account). Bell was subsequently acquitted.

Neither Tilllman’s nor Bell’s admission mentioned other culprits.  But three weeks after Tillman was charged, two other men were picked up driving the murder victim’s car.  Items taken from her home were found in their apartments, and fingerprints of one of them were found in her home.  (No physical evidence ever linked Tillman to the crime.)

That man, Clarence Trotter, was convicted of committing the same crime in 1988.  According to Tillman’s lawyers, Trotter says he confessed after being beaten and suffocated — and that police tried to get him to identify Tillman and Bell as partners in the crime.  He refused to do so.

Trotter has recently been charged in a 1981 rape-murder based on DNA evidence, according to Tillman’s petition.

Tillman’s motion to bar his confession was denied prior to his 1986 conviction, and his claim hasn’t been considered since.  Unaware of his right to file a post-conviction petition, his lawyers say, Tillman missed a filing deadline.  They say it would be “unjust” for Madigan to oppose his petition on such a technicality.

Madigan represents the state in Burge-linked cases since a judge removed the Cook County State’s Attorney’s office, citing conflict of interest, six years ago.  As Newstips has reported, many have called on Madigan to move more quickly on the backlog of torture cases.

G. Flint Taylor, one of Tillman’s attorneys, called on Madigan “to honor her prosecutorial oath, the interests of justice, and her pledge that she will not rely on tortured evidence” by agreeing to a hearing on Tillman’s claims of torture and innocence.

Justice delayed

When two men were released from prison on July 7, 21 years after they were falsely convicted in a quintuple murder, several questions were raised:

Why did it take Attorney General Lisa Madigan six years to free them?

How long will it take, and how many procedural battles must be fought, for other men who are in prison based on tortured confessions to have their claims heard?

And is it possible that some of them could be denied hearings altogether?

Ronald Kitchen and Marvin Reeves were freed Tuesday after the attorney general’s office decided to drop all charges against them. That decision came six years after Madigan was given responsibility for representing the state in convictions linked to a torture ring led by Chicago Police Commander Jon Burge.

The case for dismissal was not complicated, lawyers say. There was evidence supporting Kitchen’s claim that he was beaten by a Chicago detective (Kitchen says he confessed after 30 hours of physical abuse; he was originally sentenced to death). And it was known that a jailhouse informant against Kitchen and Reeves lied on the stand — about phone calls in which they supposedly confessed to him, and about inducements he received for his testimony — and that prosecutors committed misconduct by covering up for him.

“It could have been done six years ago,” but Madigan’s office has “dragged their feet,” said Flint Taylor of the People’s Law Office, who has represented Burge victims.

The problem was that Madigan decided to reinvestigate each Burge case individually and exhaustively — and in the meantime, to continue litigating them, he said.

“Why aren’t these cases being dealt with as a whole?” he asks. “That’s how they should have been treated from the beginning.”

In other cases where whole classes of convictions were tainted by police misconduct, wholesale reviews have allowed for much quicker determinations, he said. The Los Angeles district attorney took just two years to review 1500 cases tainted by the Ramparts District police scandal in the late 1990s; over a hundred convictions were overturned.

“Lisa Madigan has delayed and delayed,” said Julien Ball of the Campaign to End the Death Penalty, which has protested regularly outside her office. The group has called on Madigan to initiate new evidenciary hearings in all the Burge-related cases, Ball said.

In April, several of Madigan’s cases were handed off to a new special prosecutor, former Judge Stuart Nudelman, and a few more are working their way through the courts. Action on a couple more Burge-related cases is expected in July.

But in many of the cases, individuals now in prison have exhausted their appeals — many in the years before the Burge torture ring was documented, when claims of coerced confessions were routinely dismissed, Ball said. Without new hearings initiated by Madigan, their torture claims — and the convictions based on them — may never be aired, he said.

Rob Warden, of the Center on Wrongful Convctions at Northwestern, which provided attorneys for Kitchen and Reeves, agreed. “We think the attorney general should confess error and agree to a new trial in every case in which a confession extracted by the Burge crew was admitted in court,” he said. “We think all these men are entitled to new trials.”

AT&T charged in complaint with FCC

CAN TV is part of a national coalition of community media groups and municipalities that filed a petition for a declaratory ruling with the FCC today, charging that AT&T discriminates against local public channels with its U-verse video service.

Earlier this month Greg Hinz reported that Attorney General Lisa Madigan was opening an investigation into whether AT&T was violating the state’s cable franchise law with its treatment of public, educational, and governmental channels.

Last June, Newstips reported that the Metropolitan Mayors Caucus had requested an investigation by Madigan.  Much more on the U-verse controversy (including video links) there.



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