Hostile Takeover: Resisting Centralized Government's Stranglehold on America

I
MAGINE A ONCE SUCCESSFUL ENTERPRISE, LONG AGO BUILT ON THE
principles of hard work, growth, and innovation, that has grown arrogant, fat, and happy from earlier successes. Achievement, once sought out, strived for, rewarded, is now assumed as given. But there are telltale signs of trouble: Expenditures are skyrocketing even in the face of declining revenues. Debt servicing now dominates the company’s balance sheet. Leadership has been replaced with a stultifying bureaucracy, and hard work has given way to cynicism and complacency among the rank and file. Customers no longer want to buy what senior management is selling.

There was a time when things were good. “The customer is always right,” was the mantra that drove the corporate culture, and the CEO and senior managers vigilantly guarded against unnecessary spending, any hint of waste, or any deviation from the core mission of the enterprise. But now continued success is treated as a birthright, and innovation has been replaced with an aggressive sales pitch for tired ideas and bad products that customers don’t want.

It is a story that plays out time and again in the life cycle of a business. Over time, innovators are replaced by bureaucrats, and future managers lose sight of the values and principles that made the venture strong in the first place. As Apple founder Steve Jobs describes it in one of his last interviews, companies often lose their purpose and fail because producers who had a keen sense for innovation, and the drive to constantly create value for customers, are eventually replaced by salesmen simply intent on moving product and collecting new revenue. “I have my own theory about why decline happens at companies like IBM or Microsoft,” Jobs tells Walter Isaacson. “The company does a great job, innovates and becomes a monopoly or close to it in some field, and then the quality of the product becomes less important. The company starts valuing the great salesmen, because they’re the ones who can move the needle on revenues, not the product engineers and designers.” “So,” says Jobs, “the salespeople end up running the company.”

John Akers at IBM was a smart, eloquent, fantastic salesperson, but he didn’t know anything about product. The same thing happened at Xerox. When the sales guys run the company, the product guys don’t matter so much, and a lot of them just turn off. It happened at Apple when [John] Sculley came in, which was my fault, and it happened when [Steve] Ballmer took over at Microsoft.
1

Sounds familiar, doesn’t it? In America, our political management has failed us, attempting to replace founding principles with a slick sales pitch for tired, bad ideas. The American enterprise grew exceptional based on the bedrock foundations of individual freedom, decentralized knowledge, and accountable, constitutionally limited government. But our “leaders” in Washington, D.C. have systematically replaced the dispersed genius of America with top down dictates and expensive schemes designed to expand the power of insiders and protect the privileged positions of politicians and bureaucrats.

Senior management has failed us, and it’s time to clean house.

The American people know that it’s time to shake up senior management, and as shareholders we are acting swiftly to protect our interests and those of our children. But entrenched management—everywhere inside the Beltway, but particularly in the U.S. Senate and the West Wing of the White House—is circling the wagons. They don’t want change. Solutions are being ignored, and outsiders rebuffed.

We know where our problems begin, and they begin in Washington, with a political elite that has neither the will nor the inclination to do what must be done. But we do. And so America needs to
take over
Washington. Blithely ignoring our entreaties, the powers that be in Washington say: “no thanks, we got this.” Our shareholder proposal has been roundly rejected by the CEO and the Board of Directors, the microphone has been shut off, name placards removed, conference tables broken down, and naysayers herded out the front doors. In effect, America has been thrown out of its own shareholders meeting.

Things are getting, in the parlance of corporate governance, “hostile.”

On August 17, 2010, just a few months before the November 2, 2010, mid-term elections, Dick Armey and I called for a “hostile takeover” of the Republican Party in the
Wall Street Journal
.
2
The logic was simple: we had to beat the Republicans before we could beat the Democrats. We needed standing within the operations of government, a minority position in the company that would at least allow us entry into the room, a seat at the table. We got more than a few angry calls from the leaders of the Grand Old Party, but we meant it precisely, in the exact use of the phrase. Takeovers replace failed business practices and failed managers.
Hostile
takeovers do the same, but are decidedly unwelcomed by the existing management regime.

If you think of Congress as America’s Board of Directors and the federal budget as the annual operating budget for our country, it is immediately clear that something is fundamentally wrong with our company’s management team. In the private sector, showing no cash-on-hand and an operating debt equal to or exceeding total output, the heads of the entire finance team would roll. Shareholders would act swiftly to protect their interests. When a failing company burdened with entrenched, visionless executives is challenged by insurgent entrepreneurial leadership from outside the corporation, expect those in privileged positions to do whatever it takes to cling to power regardless of what is best for the company and its customers. Often CEOs pad their boards of directors with friends and other CEOs that manage related firms in a similar fashion. In this case, change is difficult, and any friendly takeover is rebuffed immediately.

It’s only “hostile” because the interests in Washington—the political class, the rent-seekers, the power-hoarders, the government-employees-for-life, the moochers and looters—like things just the way they are. The mere presence of citizens with better ideas and the will to implement them is viewed as a hostile act.

The only way we will ever reduce the debt, balance the budget, and restore constitutionally limited government is if America first beats Washington.

In the private sector, a “hostile takeover” seeks a controlling interest in a publicly traded company against the wishes of the current management. When you think about it this way, it seems like a perfect description of what needs to be done to take back control of our government. In our democratic republic, the people need to get involved again. As stakeholders in the American dream, as Sons and Daughters of Liberty inspired by our Founding Entrepreneurs, we need to take it over. We need to take it back from the Washington establishment, and from the crony capitalists that lobby through their “man in Washington” in lieu of producing better goods and services at lower prices. We need to pry it from the hands of well-heeled progressives that would block the unwashed
nouveau
from getting
riche
, through higher tax rates and government-imposed barriers to success. From the professional tax consumers—the public employees unions—who feed off the fruits your hard labor. And from a growing class of well-paid bottom-feeders who expect—no, are self-entitled to—a handout, a subsidy, a loan or a payment they did not earn and do not deserve, from each according to his ability and to each according to the loudest demands.

Know that “We the People” will not consent to this fiscal mismanagement by our government leaders, just like the citizen activists who did not consent to Crown-protected monopoly tea, choosing, instead, to spill it into Boston Harbor. We will not subjugate our voices to the whims of a king or a czar or a senate committee chairman, or even a president. We will not be silenced.

The shareholders need to take America back. We need to break up the privileged collusion of Washington insiders and return power from self-appointed “experts,” back to the people. This book tells you how we are going to do it, from the bottom up.

CHAPTER 1
T
HE
C
ENTRAL
P
ROBLEM

“T
HE CHAIRMAN TELLS US THIS EVENT HAS TO BE MOVED.”

So decreed the chief clerk of the Senate Rules Committee, Lynden Armstrong, as he and his colleagues proceeded to expel about 250 citizen activists from the Russell Senate Office Building’s Kennedy Caucus Room. It was November 17, 2011, and the room was already packed with regular folks who had traveled from across the country at the invitation of Republican senator Mike Lee of Utah. Months earlier Lee had offered to host a meeting of a grassroots group, the “Tea Party Debt Commission,” in the Russell Building and had gotten Senate Ethics Committee approval to do so. Together, we wanted to offer a budget-balancing alternative to the Joint Select Committee on Deficit Reduction (aka the “supercommittee”), and provide a hearing where the people would speak and members of Congress could listen.

The grandiose, century-old room (officially known as SR-325) with its thirty-five-foot ceilings was filling not only with senators and congressmen to listen, but also reporters and TV cameras from C-SPAN, Fox News, and other network outlets. The room seemed like an oddly discordant place for We the People to congregate, and a far cry from the street-corner protests Tea Partiers had started organizing in February 2009. As the U.S. Senate website describes it:

The interior decoration of the room is classically grand yet refined, much in the tradition of Versailles. Twelve Corinthian columns along the longitudinal walls flank three French windows and support an architrave and frieze. Above the frieze are classically derived motifs of dentils, egg and dart molding, and brackets. A Greek key forms a ribbon at the top of the Corinthian pilasters. . . . A large keystone crowns each window arch, and over the main doorway is a triangular pediment as found in ancient Greek temples.
1

Most who were gathered in the Kennedy Caucus Room that Thursday in November had made extraordinary sacrifices—traveling many miles away from job commitments and families—to petition their elected representatives with the commonsense proposition that our government cannot keep spending money it does not have. We were not in town to protest. Despite a certain let-them-eat-cake air about the Rules Committee staff, this was no modern-day Women’s March on Versailles. We had come peacefully and respectfully to the seat of federal power to offer budget solutions.

The Tea Party Debt Commission (TPDC) plan stood in perfect contrast to the way Washington typically conducts business. The process was completely open and transparent. Everyone was welcome to participate. A series of field hearings across the country asked local residents to take the microphone to offer to the TPDC commissioners—twelve community leaders who volunteered their time to oversee the process—their ideas to balance the budget. The TPDC crowd-sourced (i.e., surveyed) one million answers to budget priorities online, receiving input from more than 50,000 citizens.

This is hardly the way things work in Washington. The very idea of the supercommittee was founded on the proposition that an elite group of insiders knows better than the public what the people want and need. Of course, when you get twelve members of Congress together in one room—each beholden to interests other than the interests of the people, each of the opinion that his or her “expertise” trumps the will of the people—then you end up with what the country got: nothing. (Some would argue this was the goal all along.)

Contrast the Washington way with the people’s way: our work would quickly balance the budget using the Congressional Budget Office’s own scoring.

No matter: “The chairman tells us this event has to be moved.” Our ideas were unwelcome. So were we, apparently.

As remarkable as it seemed, we were getting kicked out. Who could possibly be so threatened by a mob of citizens armed with . . . notebooks, spreadsheet printouts, and a budget plan? Who would go to such extraordinary lengths to shut down a conversation (a particularly risky public relations move, given the reporters and cameras, and the way and speed with which information spreads these days)?

“Who told you to do it?” Senator Lee asked the chief clerk as Senate staffers collected our name placards and attempted to break down our conference tables. Who was kicking us out of a building financed by our tax dollars?

“Uh, Schumer,” the Senate staffer responded condescendingly, referring to his boss, Senator Charles Schumer, the hyperpartisan Democrat from New York and chairman of the Senate Rules Committee.

“Does the First Amendment have no application here?” asked an incredulous Lee.

“SIMULATING A HEARING”

I
T IS OFTEN SAID THAT HUMAN HISTORY IS WRITTEN BY THE VICTORS.
But that was before YouTube. That was before the democratization of information and knowledge online.

Julie Borowski, a young economist from FreedomWorks, had the foresight to capture the terse exchange between Senator Lee and the Rules Committee enforcers on her handheld camera just as they were evicting us, and she quickly posted the video on YouTube. This turned out to be the essential record of what actually happened, because as soon as we had left the hearing room the Rules staffers went into full spin mode to cover up what had just gone down.
2

Sony Bloggie HD Pocket Camcorder with 4GB memory and 360-degree lens: $79.97. The truth: Priceless.

Initially the Schumer staffers argued that Lee was violating Senate rules by “simulating a hearing,” despite the fact that senators make a regular practice of holding mock hearings on Senate property. “Funny thing is,” blogger Michelle Malkin later reported, “members of Congress have been able to convene politicized ‘hearings’ in government buildings for years. On the House side, Democrat Rep. John Conyers’ ‘basement hearings’ on everything from impeachment to illegal immigration are legend. On the Senate side, such non-official, non-hearing ‘hearings’ are plentiful.”
3
One such pretend hearing Malkin identified was in 2009 on climate change, presided over by then-senator Robert Bennett, Republican from Utah, and Senator Lamar Alexander, Republican from Tennessee. Another involved none other than Senator Schumer: the 2005 show trial on the Valerie Plame affair, which was referred to as a “forum on national security implications of disclosing the identity of a covert intelligence officer—committee hearing.”
4

So which was it? A “forum” or a “committee hearing”? Any rule of conduct ought to be applied consistently across the board; otherwise it can’t possibly maintain legitimacy. This seems so obvious and simple that even a senator can get it. Remarkably, one of Senator Schumer’s staffers, having been inundated by angry phone calls from disenfranchised Tea Partiers, actually argued that Senate rules don’t apply to Senate Rules Committee members. Surely that frazzled staffer misspoke. Surely Senate rules apply equally to all senators, even those writing the rules. Yet one can’t help but wonder what type of office culture would enable a young phone attendant to so casually channel Hugo Chávez or Vladimir Putin. Maybe this is where the problem starts?

And then there was also the odd coincidence that Shaun Parkin, the other “non-partisan” Rules staffer caught on video evicting the group, had long worked for the aforementioned Senator Robert Bennett, whom Lee, the Utah Tea Party, and FreedomWorks PAC had ousted in the 2010 elections. He now works as deputy staff director for the aforementioned Senator Lamar Alexander, the ranking minority member (i.e., Republican) on the Rules Committee. Presumably, the minority staff is present to protect the legitimate rights of minority members from arbitrary dictates from the majority, right? Is it possible that freshman Republicans, particularly members of the Tea Party class like Lee, were effectively treated like second-class legislators within the Republican caucus’s pecking order?

Even odder was the ex post facto decision by the U.S. Capitol Police (USCP) to demand, and receive, a correction to a
New York Times
online report that had originally described the ousting pretty much as it had happened.
5
In e-mails to reporters who covered the story, the chief information officer for the Capitol police wrote the following:

Re: the story you wrote here that you said you sourced from Freedom Works, here’s what really happened. . . . The USCP responded to room SR-326 in the Russell Senate Office Building for the report of a suspicious package. As a security and life safety measure, the USCP evacuated the immediate area until we could determine that nothing hazardous was found in SR-326. Obviously, SR-325 [the Kennedy Caucus Room] which is adjacent was affected by this suspicious package. I’ll look for the update soon & thanks in advance for making the correction.
6

Now it was “security” concerns and a mysterious package down the hall that forced the evacuation of all of us from the Kennedy Caucus Room that afternoon. There’s just one problem with this account. It’s not true. In addition to Borowski’s video, Ben Howe at
RedState
quickly posted a meticulous accounting of the facts, times, and e-mails of what actually happened. E-mails from Schumer’s staff belie the USCP’s claim that “a suspicious package” made them do it. An hour before the event was scheduled to begin, the aforementioned Rules staffer Lynden Armstrong sent an e-mail to a Lee staffer, time-stamped 1:03 p.m.: “Please call me ASAP or meet down at SR-325 about the Tea Party Budget Hearing that is scheduled at 2:00pm. There are two problems with this and that is they are simulating a hearing which isn’t allowed and the Rules Committee has determined events of this nature are political and not allowed.”
7

Two minutes later, the Lee staffer responded by e-mail: “This was an event to get input from some Utahns and others about the Debt.”
8
Five minutes after that, Lee’s staff replies, “Lynden I will be there in 10 minutes.”
9
Armstrong doesn’t wait, but instead responds, “Ok. At this point, we have to pull the plug on the event.”
10

During the next twenty minutes, Senator Lee confronts the two Rules Committee staffers in the corridor outside the Kennedy Caucus room (as shown in the Borowski video). Then, in an e-mail time-stamped at 1:31 p.m., the Capitol police broadcast the following message to all Senate staff:

The U.S. Capitol Police are responding to a suspicious package in Room 326 of the Russell Senate Office Building. All staff and other personnel are directed to avoid this area until further notice.
11

At this point, frustrated, but graciously concerned about his hundreds of guests, Senator Lee decided to relocate the meeting rather than make a stink. His staff began searching for an off-campus meeting place. At 2:08 p.m. a follow-up e-mail from the Capitol police declared that the “investigation of the suspicious package in Room 326” has concluded and that “all tests are negative and the area is now open.”
12

Was the “suspicious package” just a bizarre coincidence? Perhaps. But the USCP account is clearly not accurate. The e-mail evidence alone makes clear when the decision to “pull the plug” on the Tea Party meeting was made and why. We weren’t evacuated for safety reasons by the Capitol police; we were evicted for political reasons by the thought police. Why, then, did the Capitol police feel a need to make sure an inaccurate version of events got into the
New York Times
? What motivated them to “correct” the story soon after it had appeared online? At whose behest? Such palace intrigue raises serious questions. Is it the regular practice of congressional staffers and other government employees to manipulate media stories and misrepresent the facts?

One thing is for certain. If Julie Borowski had not captured the bouncers from the Senate Rules Committee red-handed in the act of evicting Senator Lee and his guests, the “history” of what happened that day would have been rewritten forever. If Michelle Malkin and Ben Howe had not reported on events in real time, digging up the facts and doing the type of investigative journalism that gets all the sources out in the open—reported—the version of the “truth” that came out would have conveniently protected Senator Schumer and his staff from the light of day. As it turns out, we are no longer dependent on one authoritative source for news. We are wholly independent of the old information monopolies, in fact.

WHOSE RULES?

I
S IT PARANOIA IF THEY REALLY ARE OUT TO GET YOU? IT WAS CLEAR TO
those present that the powers-that-be conspired to block outside voices from disrupting business as usual inside the marble walls of the Russell Senate Office Building. But our experience that Thursday was no watershed. They didn’t stop us. We simply relocated down the street, beyond the purview of Senate authority, at Hillsdale College’s Kirby Center—a move that Senator Lee, in a nice turn of phrase, dubbed the “walk of freedom.” But the experience is emblematic of the extent to which those in power will go to protect their station. It seems obvious that the Beltway establishment views any citizen seeking fiscal responsibility and an adult approach to making unlimited budgetary demands fit within scarce means as a hostile threat to be ignored, derided, demonized, and, when necessary, expelled from the building.

This is a pattern that can be documented over and over again since the emergence of the Tea Party and its massive grassroots uprising against our fiscally lascivious government. On September 12, 2009, more than one million people showed up for the Taxpayer March on Washington in Washington, D.C., gathering in Freedom Plaza and marching all the way to the U.S. Capitol’s steps. It was—by orders of magnitude—the largest gathering of limited-government activists in our nation’s history, the size of which caught FreedomWorks and the U.S. Capitol Police, the District of Columbia Police, and the National Park Service all by surprise. It was logistical chaos, as you might imagine.

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