The Fine Print: How Big Companies Use "Plain English" to Rob You Blind (47 page)

Chapter Six: Profits Upkeep Commissions

65
PG&E diverted much:
California Public Utilities Commission, Pacific Gas and Electric Company, 2011 General rate case, prepared testimony exhibit (PG&E-2), December 21, 2009.

67
This story is as old:
“Edison’s Electric Light: ‘The Times’ Building Illumination by Electricity.”
New York Times
, September 5, 1882.

69
But we’re not quite done:
State of New Jersey Board of Public Utilities. In the matter of the Energy Master Plan Phase II proceeding to
investigate the future structure of the electric power industry, docket no. EX94120585Y, attachment H: testimony of Dr. Colin J. Loxley.

71
These and other tax benefits:
MSB Energy Associates, “Major Federal Tax Breaks that Lower Investor-owned Electric Company Costs and U.S. Treasury Revenues 2006.” www.publicpower.org/files/PDFs/MajorIOUTaxBreaks2006.pdf.

72
Bill Bagley:
Phillip Matier and Andrew Ross, “CPUC Foundation to Raise Money from Utilities.” Wednesday, January 26, 2011.
SFGate
, www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/01/26/BAEI1HE615 .DTL.

73
Niagara Falls generates massive:
James Heaney, “Power Failure: Region Home to Cheap Power, High Bills and Huge Corporate Subsidies.”
Buffalo News
, April 29, 2007.

76
In reality, Wyatt wrote:
Dennis Wyatt, “CPUC: California’s Profits Upkeep Commission,”
Manteca Bulletin
, Dec. 12, 2010. www .mantecabulletin.com/archives/19207/.

Chapter Seven: “We Lead the Industry with Integrity”

78
Joe Seeber knows:
David Cay Johnston, “Businessman Ordered Jailed in Dispute with Utility,” September 12, 2007, and “Businessman Avoids Jail in Dispute With Utility.”
New York Times
, September 13, 2007.

78
Joe Seeber owns:
www.tristem.com/.

79
Late in 2009, the small:
City of Beaumont v. Entergy Texas,
Jefferson County District Court 172 case E184-962, filed September 21, 2009.

89
And the attempt:
“Code of Entegrity,” www.entergy.com/about _entergy/entegrity/.

Chapter Eight: Paying Other People’s Taxes

93
The court reversed:
BP West Coast Products LLC v. FERC et al
., 374 F.3d 1263, 362 U.S. App. D.C. 438.

96
This time Judge Sentelle:
ExxonMobil v. FERC
04-112, www.ll .georgetown.edu/federal/judicial/dc/opinions/04opinions/04-1102a.pdf.

97
In California, SFPP sought:
David Cay Johnston, “Tax.com Helps Win One for Taxpayers.” Tax.com, June 28, 2011, www.tax.com/taxcom/taxblog.nsf/permalink/uben-8j9kyv?opendocument.

98
Gooch says that corporate-owned:
David Cay Johnston, “Pipeline Profiteering.” Reuters, October 17, 2011. http://blogs.reuters.com/david-cay-johnston/2011/10/17/pipeline-profiteering/.

99
How many other rules:
The Shelf Project at www.utexas.edu/law/faculty/calvinjohnson/shelf_project_inventory_subject_matter.pdf.

Chapter Nine: Investors Beware

103
We met Sam Insull:
Hon. Richard D. Cudahy and William D. Henderson, “From Insull to Enron: Corporate (Re) Regulation after the Rise and Fall of Two Energy Icons.”
Energy Law Journal
25, no. 1 (2005): 35–110.

Chapter Ten: Playing with Fire

105
The explosion came:
Ellis E. Cinklin, “Boys Who Died Were ‘Unwitting Heroes’ in Pipeline Fire.”
Seattle Post-Intelligencer
, June 18, 1999.

106
Rushing down to the Pecos River:
Carol M. Parker, “The Pipeline Industry Meets Grief Unimaginable: Congress Reacts with the Pipeline Safety Improvement Act of 2002.”
Natural Resources Journal
(Winter 2004).

107
If you live in an urban:
David Cay Johnston, “Poorly Maintained Gas Pipelines Put Increasing Numbers at Risk.”
Remapping Debate
, Dec. 14, 2010. www.remappingdebate.org/article/corroding-pipelines.

109
At pipeline safety conferences:
Jeff Nesmith and Ralph K. M. Haurwitz, “Pipeline Office Is Small Agency with Big Job and Many Critics.”
Austin American-Statesman
, July 22, 2001.

114
In the Carlsbad disaster:
National Transportation Safety Board, Pipeline Accident Report: Natural Gas Pipeline Rupture and Fire Near Carlsbad, New Mexico, August 19, 2000; TSB/PAR-03/01 PB2003-916501 Notation 7310B adopted February 11, 2003, at p. 32.

117
Prior to protests from parents:
Dina Capielli, “Pipelines: What Lies Beneath.”
Houston Chronicle
, Nov. 12, 2006.

Chapter Eleven: Draining Pockets

119
How high can it go?:
Tim Reiterman, “Small Towns Tell a Cautionary Tale About the Private Control of Water.”
Los Angeles Times
, May 30, 2006.

120
In Felton, California:
Felton FLOW, www.feltonflow.org/.

123
Then, in 2005:
“Felton Backs Water Buyout.”
Santa Cruz Sentinel
, July 27, 2005.

Chapter Twelve: How We Beat the Garbage Gougers and Their Stinking High Prices

134
One community:
“Firefighters Watch as Home Burns to the Ground.” WPSD Local 6 News, www.wpsdlocal6.com/news/local/Firefighters-watch-as-home-burns-to-the-ground-104052668.html.

136
The 1911 Triangle:
“141 Men and Girls Die in Waist Factory Fire,”
New York Times
, March 26, 1911.

138
These prices should:
Waste Management 10-k reports.

Chapter Thirteen: Fee Fatigue

149
The United States Comptroller:
OCC’s Quarterly Report on Bank Trading and Derivatives Activities, Fourth Quarter, 2011. www .occ.gov/topics/capital-markets/financial-markets/trading/derivatives/dq411.pdf.

149
By waiving Rule 23A:
www.federalreserve.gov/aboutthefed/section23a .htm.

151
One set of those blinders:
www.fbi.gov/news/testimony/fbi-efforts-to-combat-mortgage-and-other-financial-frauds.

152
Many people saw:
David Cay Johnston, “A $1,000 Prize for Disagreeing,” January 18, 2004, and “In Debate Over Housing Bubble, a Winner Also Loses.”
New York Times
, April 11, 2004.

Chapter Fourteen: “Wells Fargo Will Take Your House”

156
Margaret L. Moses:
Margaret L. Moses, “Statutory Misconstruction: How the Supreme Court Created a Federal Arbitration Law Never Enacted By Congress.”
Florida State University Law Review
34 (Fall 2006): 99, http://papers.ssrn.com/sol3/papers.cfm?abstract _id=939609#%23.

159
Paul and Pamela Casarotto:
Scott J. Burnham, “The War Against Arbitration in Montana.”
Montana Law Review
(Winter 2005): 66. Mont. L. Rev. 139.

Chapter Fifteen: Giving to Goldman

166
Treasury Secretary—and former:
Gretchen Morgenson, “Behind Biggest Insurer’s Crisis, a Blind Eye to a Web of Risks.”
New York Times,
September 28, 2008.

166
In October 2008:
David Cay Johnston, “Invade the Caymans!”
Tax Notes
, Dec. 22, 2008.

167
As an extraordinarily profitable:
Goldman 10-K, 2004–2011.

167
In 2009 alone:
Author calculations from Goldman 10-K and IRS data.

168
Taxpayers are not the only ones:
Delaware Chancery Court Civil Action No. 6949-CS, decision February 29, 2012.

171
Phil Angelides:
David Cay Johnston, “Meltdown Redux.” Reuters, Nov. 15, 2012, http://blogs.reuters.com/david-cay-johnston/2011/11/15/meltdown-redux/.

Chapter Sixteen: Please Die Soon

172
Bob Manning enjoyed a wonderful life:
David Cay Johnston, “Paralyzed Since Fall in 1962, Man Is Still Seeking Benefits.”
New York Times
, May 5, 1995. www.nytimes.com/1997/05/05/nyregion/paralyzed-since-fall-in-1962-man-is-still-seeking-benefits.html.

173
While luckily none of the locked-in:
“The McWane Story.” PBS
Frontline,
www.pbs.org/wgbh/pages/frontline/shows/workplace/mcwane/.

175
Massey Energy contributed:
Caperton v. A. T. Massey Coal Co.
, 129 S. Ct. 2252 (2009).

176
First, a little background:
2009 California Workers’ Compensation Losses and Expenses, Workers’ Compensation Insurance Rating Bureau of California, June 2010. https://wcirbonline.org/wcirb/resources/data _reports/pdf/2009_loss_and_expenses.pdf.

Chapter Seventeen: Your 201(k) Plan

185
Mehling’s essential
: Staff Report Concerning Examinations of Select Pension Consultants, May 16, 2005. Available at www.sec.gov/news/studies/pensionexamstudy.pdf.

188
In all, 401(k):
Investment Company Institute at www.ici.org/pressroom/news/ret_10_q4.

190
Employers also shortchange workers:
David Hackett Fischer,
The Great Wave: Price Revolutions and the Rhythm of History
. Oxford University Press, 1996, p. 29.

193
There is no way to know:
Report and Recommendations Pursuant to Section 401(c) of the Sarbanes-Oxley Act of 2002 on Arrangements with Off-Balance Sheet Implications, Special Purpose Entities, and Transparency of Filings by Issuers. Available at www.sec.gov/news/studies/soxoffbalancerpt.pdf.

194
Despite government awareness:
Private Pensions: Conflicts of Interest Can Affect Defined Benefit and Defined Contribution Plans, May 24, 2009. Available at www.gao.gov/assets/130/122042.pdf.

Chapter Eighteen: Wimpy’s Tab

197
Congress does not require:
MSB Energy Associates, “Major Federal Tax Breaks that Lower Investor-Owned Electric Company Costs and U.S. Treasury Revenues 2006.” American Public Power Association, December 2008.

200
The 1954 overhaul:
Robert M. Solow, “The Production Function and the Theory of Capital.”
Review of Economic Studies
23, no. 2: 101–8.

202
The extra $2 million:
Christopher Drew and David Cay Johnston, “Special Tax Breaks Enrich Savings of Many in the Ranks of
Management.”
New York Times
, October 13, 1996. Available at www .nytimes.com/1996/10/13/business/special-tax-breaks-enrich-savings-of-many-in-the-ranks-of-management.html.

205
When Mitt Romney disclosed:
David Cay Johnston, “Romney’s Gift from Congress.” Reuters, January 31, 2012. Available at http://blogs .reuters.com/david-cay-johnston/2012/01/31/romneys-gift-from-congress/.

206
Almost anyone who is already very rich:
David Cay Johnston, “Tax-Free Living: How Some Wealthy Dodge the Top 400 Taxpayers List.”
Tax Notes
, March 15, 2010, p. 1411.

Chapter Nineteen: Pfizer’s Bitter Pill

210
There are other voices:
David Cay Johnston, “Largesse Out of the Public Treasury.”
Tax Notes
, July 7, 2008, p. 73.

212
So how much of the tax:
Pfizer 10-K, 2004–2009.

213
Let’s look again at the statement:
Jesse Drucker, “Dodging Repatriation Tax Lets U.S. Companies Bring Home Cash.”
Bloomberg,
December 29, 2010.

216
Tax Notes
writer:
Martin Sullivan, “Transfer Pricing Abuse Is Job-Killing Corporate Welfare.”
Tax Notes
, August 2, 2010.

Chapter Twenty: Hollywood Robbery

219
The Wisconsin tax credit:
David Cay Johnston, “Killing the Future: Tea Parties, Tax Credits, and Hollywood Jobs.”
Tax Notes
, April 27, 2009, p. 479.

223
The most generous state:
Steven R. Miller and Abdul Abdulkadri, “The Economic Impact of Michigan’s Motion Picture Production Industry and the Michigan Motion Picture Production Credit.” Center for Economic Analysis, Michigan State University.

223
The Michigan senate staff report:
Available at www.legislature .mi.gov/documents/2007-2008/billanalysis/Senate/pdf/2007-SFA-5841-F .pdf.

Chapter Twenty-one: Silly Software

227
Joe Bankman is a Stanford:
Joseph Bankman, “Simple Filing for Average Citizens: The California ReadyReturn.”
Tax Notes
, June 13, 2005, p. 1431.

228
People dislike filling out tax forms:
Intuit Investor Day 2011 presentation, http://investors.intuit.com/events.cfm.

232
ReadyReturn is also opposed:
Dennis J. Ventry Jr., “Intuit’s Nine Lies
Kill State E-Filing Programs and Keep ‘Free’ File Alive.”
State Tax Notes
, Aug. 30, 2010, p. 555.

Chapter Twenty-two: Pilfering Your Paycheck

234
You read that right:
David Cay Johnston, “Taxed by the Boss.” Reuters, April 12, 2012; available at http://blogs.reuters.com/david-cay-johnston/2012/04/12/taxed-by-the-boss/ and “More companies pocket workers’ state income taxes,” available at www.youtube.com/watch?v=SF4J-y7wJc0.

234
In Illinois, for example:
David Cay Johnston, “Paying Taxes Your Employer Keeps.” Reuters, July 19, 2001, available at http://blogs.reuters .com/david-cay-johnston/2011/07/19/paying-taxes-your-employer-keeps/ and www.goodjobsfirst.org/taxestotheboss.