Campaign News

Federal Reserve bank presidents are pushing back against a rising chorus of voices saying the central bank’s century-old structure needs to be overhauled to reduce bankers’ influence over its operations and policies.

Presumptive Democratic presidential nominee Hillary Clinton and the party’s draft platform have echoed calls for change by left-leaning activists, a drive that could gain new attention this week during the party’s convention in Philadelphia.

At issue is the role played by private banks in the Fed’s 12 regional reserve banks, which supervise financial institutions, provide financial services and participate in the central bank’s monetary policy-making.

By law, private banks elect six of the nine members of each Fed bank’s board of directors, choosing three to represent the banks and three to represent the public. The other three are appointed by the Washington-based Fed Board of Governors to represent the public.

Critics say the setup creates an inherent conflict of interest, akin to the proverbial fox guarding the henhouse, and has resulted in too little diversity among the leadership of the Fed system.

“Common sense reforms—like getting bankers off the boards of regional Federal Reserve Banks—are long overdue,” Mrs. Clinton’s campaign said in May.

Fed leaders in recent public comments and interviews have defended the status quo as effective, though Chairwoman Janet Yellen said during congressional testimony in February “it is of course up to Congress to consider what the appropriate structure is of the Fed.”

Meanwhile, regional Fed bank officials have played down the potential for conflict of interest, noting that the directors aren't involved in bank supervision, and the directors who represent private banks don’t participate in choosing the Fed bank presidents. The officials also see value in having close ties to the banking community. Patrick Harker, president of the Philadelphia Fed, said most of the bankers in his district are from small firms, not the big financial institutions that can worry regulators.

“The banker from a small town in Pennsylvania provides incredibly important insight” about local conditions, and “I worry about losing that insight,” Mr. Harker said. He agreed bankers could provide input through advisory groups, but he said having them on his board, meeting every 15 days, provides a level of instant insight into the economy and financial system that would be hard to replace.

William Dudley, president of the New York Fed, told reporters in May, “The current arrangements are actually working quite well, both in terms of preserving the Federal Reserve’s independence with respect to the conduct of monetary policy and actually leading to pretty, you know, successful outcomes” in terms of hitting the Fed’s goals of maximum employment and low, steady inflation.

Another issue for some advocates of change is the regional Fed banks’ status as quasi-public, quasi-private institutions. The Fed board in Washington is a wholly government entity that ultimately oversees the regional Fed banks. But when private banks become members of the Federal Reserve system, they are required to buy stock, and in turn receive dividends from the Fed. So the private banks in a sense own the regional Fed banks, though they can’t transfer or sell the stock.

“It’s pretty indefensible for the Fed to be the only regulatory institution” in the U.S. “that’s owned by the industry it regulates,” said Ady Barkan, of the Center for Popular Democracy’s Fed Up Campaign.

Fed officials say the critics misunderstand the Fed’s ownership structure. Cleveland Fed President Loretta Mester said in an interview the quasi-private status of the regional Fed banks helps ensure the independence that is needed for good policy-making in an economically diverse nation. If the regional banks were made fully part of government, she worried, Washington’s power would grow, raising the risk of politics influencing the policy debate.

Ms. Mester said “yes, the banks have stock” in the Fed. “But that’s not owning the Fed in the sense of a corporation, right? It’s making sure that there’s representation from the district as part of the Fed structure,” she said.

Richmond Fed leader Jeffrey Lacker also worried making the regional Fed banks pure governmental entities might promote short-term thinking that would lead to bad policy outcomes.

Fed Up worked with former senior Fed staffer Andrew Levin, now a professor at Dartmouth College, on a proposal to make the Fed banks wholly government institutions, as are the central banks in all the major economies. His proposal also would eliminate the regional Fed board director slots reserved for bankers and have all the directors selected in a public process involving the Washington governors and local elected officials.

Mr. Levin said he’s somewhat mystified Fed officials appear to be rejecting almost all the major reform ideas now being debated. They “might not have much influence on the outcome if they wait too long to engage in the debate,” he warned.

Mr. Harker, the Philadelphia Fed president, worried “there are always unintended consequences anytime you make a change.”

But Mr. Barkan countered “it’s true the system could be made worse than it is now, but we think it could be made better.”

By MICHAEL S. DERBY

Source

Barkan, who was diagnosed with amyotrophic lateral sclerosis in 2016, started two programs at the Center for Popular Democracy, a national advocacy group that promotes progressive political groups. The programs include “Fed Up,” a pro-worker policy group, and “Local Progress,” a network of progressive politicians. For one of his projects, “Be a Hero,” Barkan traveled across a country in a wheelchair-accessible RV to campaign for political candidates who will “stand for” families so that “health care benefits [families have] paid for [will be] there for them when they most need it,” according to the campaign’s website.

Read the full article here.

LA Times - March 23, 2015, by Zahira Torres - California lawmakers must strengthen financial oversight of charter schools to stem cases of fraud and mismanagement that have already cost taxpayers $81 million, according to a new report from several advocacy groups.

The report by the Center for Popular Democracy, the Alliance of Californians for Community Empowerment Institute and Public Advocates Inc., said state and local leaders rely too heavily on self-reporting through whistleblowers or audits paid for by charter school operators. Local leaders also lack the staff and training to monitor charter schools and identify fraud, according to the report.

But the California Charter Schools Assn. offered a swift rebuke of the report in a two-page statement that said the authors offered dated examples of fraud and did little to prove that systemic problems exist.

The report pointed to cases that revealed $81 million in misused funds at charter schools over the last two decades, but said those do not reflect the true cost to taxpayers because weak financial controls allow fraud and mismanagement to go undetected.

Last year, the Los Angeles County Board of Education revoked the charter for Wisdom Academy of Young Scientists after auditors found that administrators funneled $2.6 million to the former director, her family and close associates.

“Given the rapid and continuing expansion of the charter school industry and the tremendous investment of public dollars, California must act now to reform its oversight system," the report said. "Without reform, California stands to lose millions of dollars as a result of charter school fraud, waste and mismanagement.”

The report said more focus must be placed on the state's 1,000-plus charter schools which received $3 billion in public funding last year.

Charter schools are publicly-funded but privately managed.

The California Charter Schools Assn. released a two-page statement Tuesday questioning the accuracy of the report and the authors' intentions. The group said it agreed that public dollars should be used appropriately, but argued that the report offered few examples of fraud.

In those cases, charter schools closed or made large-scale changes that helped prevent fraud in the future, according to the association.

"While we don't presume to understand the motives behind this report, we do know that California is a state where the charter school sector, authorizers and legislators have come together to put into place real solutions," the group said in the statement.

Recommendations in the report include mandating audits that would be specifically geared toward preventing fraud; requiring charter schools to set up internal risk management programs that would conduct annual fraud risk assessments; ranking charter audits by level of fraud risk and denying requests for new charter schools that do not commit to fraud controls.  

The report did not study oversight policies or make recommendations for traditional public schools.

"To assume that there is greater risk at charter schools than school districts, particularly in light of all the real time oversight on financial reports, is simply unfounded," the charter school association said in its statement.

Kyle Serrette, director of education at the Center for Popular Democracy, said many public school systems employ internal auditors and have developed policies to help prevent fraud. But he said public schools should face the same scrutiny.

“There is no proactive system to monitor for fraud, waste and abuse,” Serrette said about the charter schools studied in the report. “California set up a system that prosecutes fraud rather than prevents it.”

He added, "We want to be able to detect the sheep from the sheep in wolves' clothing.”

Source

As the gears of federal government have ground to a halt, a new energy has been rocking the foundations of our urban centers. From Atlanta to Seattle and points in between, cities have begun seizing the initiative, transforming themselves into laboratories for progressive change. Cities Rising is The Nation’s chronicle of those urban experiments.

Cities are where the action is these days. Progressive action, political action. From paid sick days to universal pre-K, fossil-fuel divestment to anti-fracking ordinances, police reform to immigrant rights, the country’s urban centers are leading the way, far outpacing the federal government in vision and action. Just look at the growing movement for a $15 minimum wage. While Bernie Sanders has been raising minimum-wage consciousness on the campaign trail—introducing a bill in July to raise the federal minimum to $15 and calling for the same during the first Democratic presidential debate—it was local politicians, with names barely known beyond their districts, who first heeded the call of struggling workers and made $15 a reality. Before Bernie, in other words, there was Nick Licata and Kshama Sawant, Ruth Atkins, and the Emeryville City Council.

In recognition of this moment, progressive politicians from cities around the country—Los Angeles, San Francisco, Minneapolis, Denver, Philadelphia, and beyond—have joined forces to begin sharing their strategies for creative progressive change. Calling themselves Local Progress, they swap policy solutions to urgent, ongoing injustices like income inequality and police brutality, share model legislation and provide strategic support for legislative campaigns. Kind of like an urban anti-ALEC. Today, just three years after it was formed, more than 400 elected officials from 40 states are part of the effort. And the victories are beginning to add up—from paid parental leave in Boston to paid sick leave in New York City, socially responsible investing in Seattle to the use of eminent domain in Richmond, California, to slash homeowner debt.

This week, Local Progress members from all over the country are meeting in Los Angeles for the group’s fourth national gathering. From October 26 through 28, they aretrading their best ideas and strategies for building progressive local power—and combatting police violence, spreading the Fight for $15, expanding affordable housing, boosting civic engagement, and pushing the fight for LGBTQ rights beyond marriage equality.

Chuy Garcia, who gave Chicago mayor Rahm Emanuel a run for his millions in this year’s election, will be on the scene, as will Minneapolis Mayor Betsy Hodges, SEIU President Mary Kay Henry, AFL-CIO Executive Vice President Tefere Gebre, and dozens of council members, alderman, and supervisors from around the country. If cities are the incubators of promising progressive ideas, this gathering is a bit like the annual science expo.

The Nation has asked four Local Progress stalwarts to share some of the policy solutions they’ll be discussing at the gathering. New York City Council members Brad Lander and Antonio Reynoso, San Francisco Supervisor John Avalos, and Chicago Alderman Scott Waguespack all weighed in, offering thoughts on everything from humanizing the sharing economy to organizing for police reform, protecting sanctuary cities, and pushing back against privatization and regressive tax policy. Here’s what they said.

 —Lizzy Ratner

PROTECTING WORKERS IN THE ON-DEMAND ECONOMY

By Brad Lander

Rides from Uber. Home cleaning from Handy. Meals from Seamless. Web design from Upwork. Even doctors from Medicast.

There’s no doubt the on-demand economy is convenient. Consumers can arrange for services at the tap of a touchscreen. Workers can choose their hours and earn a little extra cash.

But there’s a very dark side to the “sharing” economy: The benefits aren’t usually shared with the workers.

Working “by-the-gig” rarely provides job security, health insurance, paid sick days or family leave, on-the-job training, or retirement contributions. Workers lack the right to organize a union. And eight in 10 freelance workers report having been cheated out of wages they were owed.

President Obama and Democratic presidential candidates are finally talking about the issue. But the Republican Congress will likely block any progress. Marco Rubio recently called for even further deregulation, leaving workers at the mercy of multibillion-dollar corporations.

So cities are taking the lead in writing new rules, working with Local Progress, the National Employment Law Project, forward-thinking unions, and worker organizations to level the on-demand playing field.

In Seattle, City Council member Mike O’Brien is fighting for a bill that would allow drivers for Uber, Lyft, and other “ridesharing” companies to organize and bargain collectively so that workers have some voice in the terms and conditions of their work.

In New York City, we are working with the Freelancers Union to combat wage theft and late payment. When conventional employees are cheated out of wages, the state labor department can enforce and win double damages. The #FreelanceIsntFree campaign (which recently brought its message to the White House) would provide freelancers with similar protection.

Council Member Corey Johnson and I are working with the New York City Taxi Workers Alliance to mandate a “driver benefits fund” (funded by a small fare surcharge) to provide for-hire drivers with healthcare benefits—a first step toward the “Shared Security Account” that Nick Hanauer and David Rolf called for in a Democracy Journal article this summer. And we’re amending New York City’s human-rights laws to make clear they apply to independent workers. There is no reason Uber should be able to discriminate against drivers based on race or religion.

Meanwhile, from San Francisco to Burlington, cities are establishing offices of labor standards and adopting other innovative approaches (like partnering with community-based organizations) to enforce the laws that protect workers. One task: making sure conventional employees aren’t illegally misclassified as independent workers by employers trying to cheat them out of benefits and protections (a big problem for day laborers and domestic workers). These offices can also make sure that companies who need licenses from the city get and keep them only if they respect local, state, and federal laws.

Ultimately, we’ll need national regulation to match the growing on-demand economy. But for now, progressive cities are bringing worker protections into the 21st century—and some real sharing into the sharing economy.

THE MUNICIPAL BATTLE FOR EQUAL JUSTICE UNDER LAW

By Antonio Reynoso

Eric Garner. Michael Brown. Tamir Rice. Sandra Bland. For more than a year, the senseless deaths of young black men and women by police officers or in police custody have dominated headlines and helped fuel a movement. Under the banner of Black Lives Matter, this movement has been gaining ground in cities, towns, and counties across the country, spreading the call to end racist policing and begin enacting serious police reform. Its powerful message has reached all the way to the presidential campaign trail and beyond. But as the public waits for progress at the national level, change is already happening at the local level, thanks to powerful alliances between community activists and hundreds of local politicians.

In New York City, where I am a City Council member representingneighborhoods in Brooklyn and Queens, there is a desperate need for sensible reforms of the New York City Police Department (NYPD). For all to many New Yorkers, the excessive use of police force is a daily reality. The excessive surveillance of the Muslim community and a racialized stop-and-frisk policy also take their toll.

In response, organizations and progressive politicians have been fighting to improve accountability and transparency after years of racial profiling by the NYPD. The work has been supported by a broad coalition called Communities United for Police Reform, which has driven a strategic, multi-year campaign to knock on doors, organize the public, influence the public discourse, and pass legislation to implement smart reforms.

 Communities want change, and they want to participate in the process of reforming the NYPD. So, working together, we’ve introduced the Right To Know Act as a way to meet their demands. These bills would require NYPD officers not only to identify themselves when stopping civilians but also to explain that the searches are voluntary and may be declined.

This is not the first time we have stood up for the people of our community. In 2013 and 2014, in partnership with Communities United for Police Reform, the City Council passed a series of bills known as the Community Safety Act, which together banned racial profiling by police and made it easier for New Yorkers who have experienced profiling to sue NYPD officers. The act also installed an independent inspector general to oversee the actions of the NYPD.

Of course, New York City is not the only city in our nation where racial profiling, unjust searches, and incidences of police brutality are common occurrences. Nor is it the only city where coalitions of community leaders and elected officials are working to improve the system. In the last year alone, communities have joined together with progressive local legislators to correct the imbalance of justice.

In Los Angeles County, the grassroots organization Dignity and Power Nowwon a transformative campaign, led by formerly incarcerated people and their families, to establish a strong civilian oversight commission for the sheriff’s department, which has an ugly history of violence against civilians on the streets and in county jails.

In Newark, community leaders partnered with Mayor Ras Baraka to create one of strongest civilian complaint review boards in the country, which has both a voice in disciplining police officers and a policy advisory role.

And in Minneapolis, a coalition led by Neighborhoods Organizing for Change succeeded in pressing the City Council to repeal spitting and loitering ordinances that were being disproportionately used to harass and harm black and Latino residents. They also won passage of a data-collection law that will begin to collect and publicize important evidence about the police department’s stop-and-frisk and use-of-force practices.

Members of Local Progress, partnering with community-based allies, have been central to these fights and many more, and we will continue combating such injustices across the United States, fighting for everyone to be treated equally under the law.

 CITIES MUST LEAD THE NATION ON IMMIGRANT JUSTICE

By John Avalos

In the last few years, hundreds of cities across America have disentangled their police departments and jails from the federal immigrant-deportation machine, refusing to honor the Feds’ requests that cities detain immigrants past their release date so they could be picked up and deported. These policies protect immigrant families from the devastation of deportation and from crime, because they foster better relationships between the police and immigrant communities. The movement has been a bright spot for our country’s immigrant-rights movement.

But during the last few months, the policies, and in some cases the very idea, of sanctuary cities has come under attack. The catalyst for these changes was an undocumented immigrant named Juan Francisco Lopez-Sanchez who allegedly shot and killed a young white woman named Kate Steinle. He claims that the shooting was an accident, but her case has become a cause célèbre among opponents of immigrants because Lopez-Sanchez had been deported five times previously, and had recently been released from jail in San Francisco without being turned over to Immigration and Customs Enforcement (ICE).

San Francisco’s Due Process for All Ordinance, the latest update to its Sanctuary City policy, bars the sheriff from detaining people past their release date on behalf of ICE’s Secure Communities, or S-Comm, program. The goal of Due Process for All is to protect immigrants and their families from S-Comm, which created an immigration dragnet, deporting tens of thousands of immigrants and tearing their families apart. Due Process for All also enables immigrants to be integrated into San Francisco’s local law-enforcement efforts by promoting relationships between immigrant communities and the police. San Francisco has been at the leading edge of a national movement: across the nation, over 350 other local governments have recently adopted policies limiting collaboration with federal immigration officials.

But as a result of the widespread effort of local governments to limit coordination with the S-Comm, the federal government has tweaked and renamed its deportation effort the Priority Enforcement Program (PEP), which calls on local law enforcement to notify Homeland Security of a detainee’s release rather than detaining the individual past his or her release date. Like S-Comm, PEP has the same effect of weakening trust between immigrants and local law enforcement because local law enforcement is seen as an arm of federal immigration efforts.

The politics of race, citizen entitlement, and immigration reform have put San Francisco and other cities’ sanctuary-city policies squarely in the cross hairs of conservative extremists and political opportunists. From the highly polarizing presidential campaign of Donald Trump to the calculated posturing of Hillary Clinton (who supports PEP) to the election-year pandering of San Francisco Mayor Ed Lee, eager to blame the policy for Steinle’s death, politicians are scapegoating immigrants and undermining the sanctuary city policies that immigrants rely on for their security. Just last week, the US Senate narrowly failed to pass a Republican-backed bill that threatened to withhold federal grants from sanctuary cities and increase penalties for undocumented immigrants who reenter the United States after deportation.

Some cities are already working to resist this pressure. On the same day that Senate Republicans sought to punish sanctuary cities, the San Francisco Board of Supervisors unanimously passed a resolution reaffirming our commitment to the Due Process for All Ordinance and urging our sheriff not to comply with the new PEP program.

 Cities around the country should follow suit and adopt a wide array of programs and policies to protect and empower immigrant communities. Like New Haven, they can establish Municipal ID cards to help immigrants navigate daily life; like Chicago, they can ensure that city services are available in multiple languages; like New York, they can provide quality free legal counsel to residents facing deportation; and like Los Angeles, they can conduct outreach programs and offer affordable citizenship preparation courses to help residents naturalize and gain the benefits of citizenship.

This moment is a pivotal one for our nation and the many cities that have sought to protect immigrants against deportation. We either succumb to the rightward push of the politics of race and citizen entitlement or we strengthen our efforts to protect and integrate immigrants and their families in recognition and honor of the contributions they make to our society. Local governments must lead our nation forward.

FIGHT FOR A PROGRESSIVE SOURCE OF REVENUE IN CHICAGO

By Scott Waguespack

The fiscal crisis that’s squeezing cities and towns across this country is perhaps at its most dramatic in Chicago.

Our municipal pension systems are woefully underfunded, the result of decades of failure by city and state governments to pay their share. Our schools are facing an enormous fiscal shortfall that could result in the firing of 5,000 teachers in the middle of the year. And we’re witnessing heartbreaking violence in our communities, the result of an overwhelmed police force and neighborhoods mired in economic hardship.

Simply put, our city has a cash problem.

To his credit, Mayor Rahm Emanuel acknowledged this problem in his recent budget address, railing against the budgeting tricks of previous years and vowing to end the city’s structural deficit. Unfortunately, Mayor Emanuel reached into the same tired bag of tricks in order to solve the problem: regressive tax increases on working families and privatization of public services.

These are tricks we’re all too familiar with here in Chicago. We’ve already been through some of the worst privatization deals in the country, and we know full well from our experiences with parking meters and school janitors that it’s been a fiscal boondoggle resulting in higher costs and worse services for taxpayers. And the mayor’s regressive property-tax proposal is just another way to balance budgets by raising taxes on working families who are already struggling to get by.

Here’s the good news, though: Chicago is one of the wealthiest cities on the planet. There’s an enormous amount of capital flowing through this city every day. Chicago’s City Council Progressive Caucus, which I chair, has been advocating for common-sense tax ideas to direct some of these dollars toward crucial programs and services, easing the burden on working families without selling off public assets.

We’ve advocated for creating a special property-taxing district that covers the skyscrapers in downtown Chicago. Too often, owners of these buildings hire politically connected firms to get enormous discounts on their assessments; a more fair valuation would generate substantial new revenue.

We support reforming the billion-dollar mayoral slush fund called “tax-increment financing.” We support fixing the problems in the infamous parking-meter privatization deal. We introduced an amendment that would tax big-box stores for the undue stress they put on our stormwater system, and have called for expanding the sales tax to include luxury services like pet grooming or portfolio management.

 In short, the Progressive Caucus has progressive revenue ideas that will work for all of Chicago.  We’ve convened a series of town hall meetings across the city, drawing crowds of hundreds of concerned neighbors, and have introduced a series of amendments to move this budget in the right direction.

As progressive leaders who love this city, our caucus knows we need new revenue to educate our children, care for those in need, and provide growth and opportunity in every community. For our city to prosper, those dollars must come from those who can most afford to pay, not from the pockets of working families.