Capitol Confidential are anonymous sources in the halls of power at the federal, state, and local levels. Big Government double-checks their stories and provides them the cloak they need to reveal the truth.

Capitol Confidential
Did Alexi Giannoulias Dodge the Draft in Greece?
by Capitol ConfidentialFrom 1998 to 1999, Alexi Giannoulias played professional basketball in Panionios B.C. Greece. That part we already knew.

But one thing we still don’t know is how an American with Greek citizenship was able to live in Greece without being drafted into the Greek military.
Under Greek law, all citizens must serve in the military once they turn 18. Much like in Israel, Greek citizens will perform a period of military service after high school.
Alexi Giannoulias was a college graduate when he came to Greece – an age meeting the requirement for military service. So how did he get around the requirement?
With many Americans holding dual Greek citizenship travelling to Greece, U.S. Embassy, Athens details the Greek government’s requirements for military service on its website.
California Tax Enthusiasts Target eBay Sellers
by Capitol ConfidentialLast week, Capitol Confidential reported on a new scheme being pursued by California Democrats to force out-of-state, online retailers to collect and remit California sales taxes.
But in a new development, it is now being reported that the proposal has attracted support from Republican State Sen. Roy Ashburn, making it technically bipartisan.
In addition, while proponents have been arguing that if pursued, this tax maneuver will not hurt smaller, online retailers, Capitol Confidential has learned that the preferred language of some movers and shakers in fact fails to exempt smaller retailers and would draw a surprising category of those selling to consumers online into the California sales tax net: Out-of-state small and medium-sized businesses that market through eBay.

Those familiar with one proposal floated this week say it would exempt from the requirement to collect and pay out California sales tax retailers who advertise with or market through California-based websites and who have not sold $10,000 or more worth of goods in aggregate to Californians during the prior 12 months.
However, even in a rough economy, experts say many small businesses who sell through California-based eBay could exceed that threshold.
If that is correct, such individuals speculate that it could hurt eBay, a big employer in the state, in addition to about 25,000 small online advertising businesses who carry ads by the likes of Amazon.com and Overstock.com.
New York Targets Bagels to Fill Budget Hole
by Capitol ConfidentialNew York, like most states in the nation, is facing a nasty budget hole which Gov. David Paterson attempted to fix earlier this summer by pushing through a tax hike on cigarettes. A pack of smokes now costs as much as $13 in Manhattan, but the high taxes being levied may not be helping to close the state’s budget gap. Revenue from cigarette sales following implementation of the 58 percent increase in tax levied by New York State totaled $125 million last month. During July 2009, it totaled $119 million.
Now, facing ongoing budget problems, New York is moving to impose taxes on a good the state is known for producing, and which many of its residents consider indispensible: The bagel.

An obscure provision in New York’s tax law allows Albany to tax “sliced or prepared bagels (with cream cheese or other toppings),” and the tax collectors are moving on bagel shops across the state. A particular target appears to be Kenneth Greene, who owns over thirty Bruegger’s Bagel franchises in New York. Greene’s customers are livid at the eight-cent per bagel tax being levied. In response to customer outrage, Greene has posted signs reading “We apologize for this change and share in your frustration on this additional tax.”
Other bagel shop owners meanwhile are holding out hope the tax collectors refrain from targeting them next. “I hope they don’t come after me for that,” said Florence Wilpon, a founding owner of Ess-a-Bagel in Manhattan, per a quote in the Wall Street Journal.
Gun Owners of America Exits Pro-net Neutrality coalition
by Capitol ConfidentialIn a further blow to those pressing for the institution of controversial net neutrality rules, it emerged on Monday that the Gun Owners of America (GOA) has exited the Save the Internet coalition backed by pro-regulation liberal groups such as Free Press.

GOA’s departure came after sustaining heavy criticism from conservative blog RedState for its support for net neutrality, and the organization’s willingness to associate itself politically with prominent liberal groups in the context of backing the proposal. Organizations such as SEIU and MoveOn.org are members of Save the Internet along with Free Press, which itself serves as Coalition Coordinator.
GOA spokesman Erich Pratt said in a statement to The Hill that “Back in 2006 we supported net neutrality, as we had been concerned that AOL and others might continue to block pro-second amendment issues.” But, he added, “The issue has now become one of government control of the Internet, and we are 100 percent opposed to that.”
Net Neutrality Group Caught Fudging Lobbying Disclosure
by Capitol ConfidentialA top network neutrality advocacy group is weathering a flap over its sketchy lobbying disclosures after it was reported last week the group had taken numerous unreported meetings with senior aides at the Federal Communications Commission (FCC) and the National Telecommunications and Information Administration (NTIA).

Free Press, among the fiercest and better funded Beltway groups lobbying for the adoption of net neutrality rules, has taken great pains to criticize industry groups for holding off-the-record meetings with FCC officials. But the group’s staff had lobbied FCC officials on more than two dozen undocumented occasions since January 2009. Additionally, discrepancies were discovered between the group’s filings relating to lobbying.
Federal legislation mandates the disclosure of lobbying efforts directed at federal employees with regard to the formulation of federal rules and laws. According to recently-obtained ex-parte data, serious discrepancies were discovered between filings with the Internal Revenue Service–which are to disclose generic, grassroots lobbying expenses–and those figures reported under the Lobbying Disclosure Act–which is to monitor federal-specific lobbying expenses.
Between the years 2005 and 2010, Free Press LDA disclosures showed the group had spent little more than $150,000 on direct lobbying of legislators and federal employees. But tax filings with the IRS–only presently available up to the year 2008–revealed the organization had spent nearly $1 million on lobbying in little more than half that time.
Paying the Piper in Ohio
by Capitol ConfidentialThere is little debate that the leadership of the House — lead by Nancy Pelosi — has successfully convinced vulnerable Democrats to walk the plank on issues like the government takeover of our health care system, trillions in wasteful spending, bailouts and even cutting food stamps to funnel tax dollars to the teachers’ unions. But for some members, it is the Cap and Trade tax that may turn out to be the anchor around their electoral necks. Look no further than Ohio and Reps. Zack Space and John Boccieri.
Reps. Space and Boccieri voted with Nancy Pelosi and against their districts by supporting the Cap and Tax bill and are now paying the price. A reader just sent us a copy of this incredibly effective ad that is now running in two districts in Ohio:
The ad reminds voters of the issues at stake — the budget, securing our borders, reckless growth of government and the cost of the Cap and Tax bill – and in Ohio Cap and Tax is a huge liability. Ohio is already experiencing some of the highest unemployment rates in the country (10.4%) and Cap and Tax would send upwards of 100,000 Ohio jobs overseas. The bill would damage the state so much that even the State Senate has gone on record opposing the bill.
California Liberals Resurrect Internet Sales Tax Plan
by Capitol ConfidentialIt’s ba-ack! Facing a $20 billion budget gap, California liberals in the state legislature are reviving a tax-hike plan targeting out-of-state, online retailers that has a diverse coalition of web entrepreneurs and business and political leaders fuming.
The proposal, mentioned during a California Senate hearing just last week, would force companies like Overstock.com to collect and remit to the Golden State sales tax where they advertise with California-based websites.

Supporters say it could add needed revenue to the Golden State’s coffers.
Opponents charge that deeming such out-of-state retailers to have “sales tax nexus” by virtue of advertising in the state would constitute a major tax hike that would worsen the state’s budget woes.
Furthermore, several prominent critics of the proposal contend that it could be unconstitutional.
Stealth Energy Tax Hike on Senate Agenda for September
by Capitol ConfidentialIn a little remarked upon move earlier this month, Sen. Max Baucus (D-Mont.) put forward a legislative proposal to raise taxes on energy companies by stripping them of the ability to claim a key tax deduction.

Known as Section 199 relief, the deduction in question has been available to companies engaged in energy production, as well as manufacturing, for several years as an incentive to encourage operations and employment.
However, under an amendment introduced by Baucus, which could be voted on in the Senate next month, that deduction would be eliminated for certain players in the energy industry.
According to a memo obtained by Capitol Confidential and written by Senate Finance Committee staffers Scott Mulhauser and Erin Shields, the Baucus amendment is intended as a substitute to another introduced by Sen. Mike Johanns (R-Neb.). The Johanns amendment is itself intended to modify the Small Business Jobs Act.
The memo states that “the Democratic alternative… would repeal Section 199 of the tax code, which currently allows these corporations to deduct six percent of their income from oil and gas production from their tax liability, effective December 31, 2010.”
FDA Rationing Battle Continues
by Capitol ConfidentialBig Government.com alerted it readers weeks ago about the emerging model for rationing health care at the FDA. The FDA is considering “de-listing” the drug Avastin for use with breast cancer patients– not because it doesn’t work, but because of its cost.

With a new government health care regime paradigm being established, cost to insurance companies and government health care services will play a critical role in whether patients will have the option of life extending drugs.
The Susan G. Komen Foundation and the Ovarian Cancer National Alliance has joined the Avastin fight and is pushing back on behalf of patients.
In a letter to the FDA and congressional lawmakers, OCNA and Komen for the Cure express concern for the impact on patients who are currently benefitting from the drug, concern for the impact on future drug development and cite concerns about fundamental fairness problems with subjective determinations that limit access to treatments.
Google Backs Down on Net Neutrality
by Capitol ConfidentialOn Monday, Google and Verizon—two of the nation’s biggest companies operating in the tech space—announced a compromise joint proposal on Internet regulation that has tech policy observers buzzing.

The proposal, discussed during a conference call featuring Google CEO Eric Schmidt and Verizon CEO Ivan Seidenberg, represents a substantial softening of Google’s position on controversial net neutrality proposals, say several tech policy observers.
Notably, while enshrining non-discrimination rules with regard to what is often referred to as “traditional Internet broadband service,” the proposal also allows broadband providers to offer what are known as “differentiated services,” such as Verizon’s FiOS service, which need not be neutral. This is being interpreted in some quarters as a major shift on Google’s part.

The company took fire yesterday from Free Press, a pro-net neutrality group that some tech policy experts have speculated for years took money from Google to finance its advocacy efforts, which helped promote an approach that observers say could, if adopted and enforced, have benefited the corporation substantially. In a statement, Free Press adviser Joel Kelsey remarked that “If codified, this arrangement will lead to toll booths on the information superhighway.”
‘Public Hazard’: Lawsuit Seeks Release of Rick Scott Video Deposition
by Capitol ConfidentialIn an action that one Florida GOP consultant said could be a late game-changer, a lawsuit was filed on August 9, 2010, seeking the release of a videotaped deposition given by GOP Gubernatorial candidate Rick Scott in April 2010, just days before he announced his candidacy.
The lawsuit, filed by Florida attorney Steve Andrews, contends that in March 2004, a company owned and directed by Rick Scott, Solantic LLC applied for a Florida Medical Care License for six clinics. The application listed Dr. Mark Glencross as the “Medical Director” for each of the clinics. Dr. Glencross, who had been an employee at Solantic, claimed he had never been asked nor given consent for his name to be included on the application. And he was never the Medical Director for the clinics. Under Florida law, it is a felony of the third degree to file false or misleading information on facility licensure applications. Glencross filed a lawsuit against Solantic in 2008 alleging fraud. Although it is uncommon for top executives to be questioned in cases such as this, Rick Scott was personally deposed on April 6, 2010 – six days before announcing his Gubernatorial bid. Almost immediately after the deposition, Solantic settled the lawsuit with Glencross for an undisclosed sum. As part of the agreement, the videotaped deposition of Scott was not filed with the Duval County Clerk’s office. (more…)
Stimulus Money Wasted on a Real ‘Bridge to Nowhere’
by Capitol ConfidentialThe New Hampshire Department of Transportation sought and on August 28, 2009 was awarded $150,045 to refurbish “a historic stone arch bridge [which] will be preserved and resurfaced to better accommodate pedestrians and bicycles.”

The NH DOT lists the following for the rationale for the project: “Facilities for Pedestrians and Bicycles. Preserve/Create jobs; and economic recovery. Invest in transportation.”
The project is nearly complete now but you still can’t cross the bridge to get to the other side. That’s because there is no other side.
As can be seen from the photos from Hillsborough, NH the word “bridge” does not adequately describe the structure. It’s really more of a pier. Nor does it appear there will ever be a bridge. The railing at the lopped-off end of the structure seems pretty permanent.
An actual bridge that crosses the Contoocook River is about 100 feet away.
Despite the $150,000 of stimulus money spent to resurface a bridge that doesn’t go anywhere, the state of New Hampshire does not have sufficient funding to repair the many functioning bridges that are falling apart. A recent report by TRIP indicates that almost one-third of all New Hampshire bridges are either “structurally deficient” or “functionally obsolete.”
Political Radicals + Environmental Regulations=Lost Jobs
by Capitol ConfidentialWhat do you get when you combine: 1) a political radical who has been arrested and charged with conspiracy after causing civil disruptions including riots and 2) bureaucratic agencies in California with a record of environmental extremism that are focused on putting in place regulations on businesses that far exceed those set by the federal government?

The answer is massive job loss and industry displacement that satisfies ideologues on the far left and hurts both Americans and the economy.
And that’s exactly what California is confronting concerning the Scientific Review Committee (SRC), which was appointed by the Department of Pesticide Regulation (DPR) to focus on reviewing new pesticides, which also happens to have significant overlap with the Scientific Review Panel (SRP), which is charged with evaluating the risk assessments of substances proposed for identification as toxic air contaminants by the Air Resources Board (ARB), the Office of Environmental Health Hazard Assessment (OEHHA) and the DPR.
You got that? And folks wonder why there is uncertainly in the marketplace and businesses are packing up and heading overseas due to the weight of government.
Federal Judge Colluded with Prosecutors and Law Enforcement, then Presided over Trial
by Capitol ConfidentialA federal judge conspired with the Bush Department of Justice to plan the largest immigration raid ever in the United States, and then presided over the trial of the plant’s manager, eventually sentencing him beyond even prosecutors’ recommendation.

New documents show Linda Reade, the chief judge of the U.S. District Court for the Northern District of Iowa, was involved in the planning of the Immigrations and Customs Enforcement raid on the Agriprocessors kosher meatpacking plant at least six months before it occurred in May 2008. She asked for briefings from law enforcement and went as far as to ensure the raid was conducted around her vacation schedule.
But the judge never said a word of this to the defense lawyers for Sholom Rubashkin, the Agriprocessors manager, when she presided over his trial on bank fraud. She didn’t recuse herself from the case, either.
Rubashkin was convicted of causing $20 million in loses to a bank because he overstated Agriprocessors’ assets to get a larger loan. The raid destroyed Agriprocessors and the bank then called the loan. Reade sentenced Rubashkin in June to 27 years in prison. That’s more than Jeffrey Skilling, convicted of causing $80 million in losses from Enron, who got 24 years. And Dennis Kozlowski, the former CEO of Tyco, got 8 ½ to 25 years in prison for a $150 million fraud.
Rubashkin’s sentence is extreme, especially for a first-time, non-violent offender. After all, six former U.S. attorneys general sent Judge Reade a letter arguing against a multi-decade sentence for Rubashkin before she announced her decision. And prosecutors asked for 25 years.
Gulf Area Workers Urge Obama and Congress to Kill the moratorium
by Capitol ConfidentialIn a visit to Washington, D.C., yesterday, a group of about fifty energy industry workers and representatives from the Gulf of Mexico area told lawmakers, reporters and bloggers that if the Obama administration and Congress are serious about creating and saving jobs, they will lift the moratorium on energy exploration in the Gulf.

The workers were joined by Sen. John Cornyn (R-Texas) and former Rep. John Peterson (R-Pa.), outspoken opponents of both the moratorium and tax changes proposed by Democrats that opponents charge would hammer the energy industry.
Thomas Pyle, President of the American Energy Alliance, a group focused on maintaining energy industry jobs in the Gulf area said in a statement, “In an economy like this, the President and Congress should be looking for ways to strengthen U.S. businesses, not weaken them.”
Several of those who traveled to the Hill for meetings with members of Congress say they are suffering financially in the wake of the moratorium’s imposition, and that layoffs and business closures will be unavoidable should it remain in effect.
“My job matters,” said Thomas Clements, co-owner of Oilfield CNC Machining in Broussard, Louisiana. “So I’ve come to Washington to find somebody to hear me, to see my hopelessness, my no-man’s-land that I’m in because of these proposed tax changes to the energy industry and the moratorium.” Clements elaborated, saying that he had planned to hire more workers this year, but the six-month moratorium on drilling has halted those plans. All orders for new metal parts used in drilling have been canceled and no new orders are anticipated, said the small businessman, who questioned how his business could survive for the full six months of the moratorium during a lunch attended by Washington, D.C.-based reporters and bloggers.
Show Me State Wisdom: Missouri Voters Reject ObamaCare and Rationing
by Capitol ConfidentialIn response the sharp rebuke of Obamacare sent by voters in Missouri, Senator Harry Reid says that voters in Missouri just don’t know enough about the new law yet and when they do, they will change their minds. Well Senator, Missouri is after all the Show Me State and apparently Missourians don’t like what they have seen so far.

The simple truth is: You can’t get something for nothing and someone has the pay the bill. Nothing in Obamacare creates more health care. It is merely injects government into the equation in order to take what we have currently and redistribute it. So naturally, the government will need to find ways to cut costs.
Soon to be former director of the OMB, Peter Orzag believes that we can save money “…if costly new medical services were adopted more selectively in the future than they have been in the past, and if the diffusion of existing costly services was slowed. “
Well, how does the government go about doing that? How do they tell people that a life saving or life extending treatment exists, but it just costs too much so patients can’t have it?
Well, they don’t. They utilize control over the system to manipulate the availability of the treatment and then lead people to believe that it just doesn’t work. Problem solved.
We’ve already begun to see this operation in action with the FDA’s recent attempts to de-label the cancer drug Avastin for use with Stage 4 breast cancer patients.
The FDA was created and designed to protect citizens from products that are inherently unsafe or that make claims of effectiveness that cannot be substantiated. There is no authority to consider drug pricing when evaluating a drug.
American Industry At Stake In Tanker Fight
by Capitol ConfidentialAnyone who claims that defense contract negotiations are uninteresting has yet to discover the battle brewing over who gets to build the next Air Force tanker.

American aerospace giant Boeing and European mega-corporation Airbus are locked in a war over who gets to deliver $35 billion worth of refueling planes to the Defense Department to replace about 80% of the Air Force’s refueling fleet – planes that average almost 50 years old, according to the Lexington Institute.
Just a few short weeks ago, Boeing and Airbus officially submitted bids to manufacture the tanker, and now both will compete to see who can create 179 tankers for less cash, who’s plane will be ready in time and who hits closer to the mark on meeting the Pentagon’s needs. Right now the momentum seems to be in Boeing’s favor, but the stakes are high.
From the Wall Street Journal:
For Boeing, the fight is to defend its home market and an area of expertise—tanker planes—that it once dominated. Boeing in 2001 beat Airbus to supply Japan with four 767 tankers. They are now in operation but differ substantially from what Boeing has offered the Pentagon…
For EADS, a U.S. win would cement its position as the new world leader in tankers. Since 2004, it has won orders for 28 tankers from Australia, the U.K., Saudi Arabia and United Arab Emirates. The Airbus design has also faced some delays in development.
Airbus has a version of the needed tanker that they will deliver to Australian forces this week, which they say will be about 90% identical to the version they want to deliver to the Pentagon. Boeing doesn’t have a version of the tanker in production, but they say they’re more willing to wait to develop the tanker so that it could be better in line with the Pentagon’s immediate needs, though it will be based on Boeing 767 plane.
Democrats Pursue New Tactics in War on Energy Companies
by Capitol ConfidentialWith the midterm elections approaching, it is now clear that cap-and-trade, Democrats’ main weapon in their war on energy companies, is effectively dead—that is, at least until after the election, when some Democrats who may then be exiting Congress will feel more comfortable supporting it.
However, the demise of cap-and-trade does not mean Democrats have put what some dub “plans” to target energy companies on hold completely, or placed them on the back burner.

The Obama administration has worked hard to impose a moratorium on deepwater drilling, which one prominent expert says could directly result in a loss of $2.1 billion in output, nearly $100 million in forfeited tax revenue, and close to 10,000 mostly middle-class job losses.
In addition, the agency responsible for issuing new permits to drill in the Outer Continental Shelf (“OCS”) has issued just four permits during the last three months, as compared to 56 permits in the three months prior to that.
ObamaCare: Another Rationing Shill
by Capitol ConfidentialLast week, we discussed the rigged game of three-card monte that the FDA is trying to run over unsuspecting patients. The game is rigged. If government is allowed to arbitrarily shift from objective data driven safety focused approval to subjective cost based standards for drug approvals — as the appears to be doing in the case of Avastin — patients will always lose.

As in any game of three-card monte — the shills come into play. In the card game on the streets, the shills pose as actual participants who make the game look simple goading unsuspecting observers to bet money who always lose. The shills work with the dealers.
In the case of the FDA — the shills were the Associated Press and TalkingPointsMemo.com. The FDA changed the rules so that price would be a determining factor in the approval process of drugs and the shills stepped in to belittle and goad anyone who didn’t play the game the way the dealers wanted.
Sen. Vitter decided to blow the whistle on the game and yet other shill stepped in. This time it is another liberal website ThinkProgress.com.
Jumping on the bias claim that Vitter had likened the FDA to a death panel, the group makes the false claim that “Avastin is more likely to harm cancer patients than to help them.” Patently false. If ThinkProgress didn’t have a Pavlovian response every time a Republican issued a press release, they would have seen that the article they linked to made no mention of any harm to cancer patients from taking the drug.
Quite the opposite is true. Patients who take the drug extend their lives. The only negative side effects motivating bureaucrats in this decision are the ones in their pockets. They are trying to make a subjective determination that the price of the drug outweighs its benefits. In other words, the FDA is trying to factor in cost of the drugs in whether it should be “de-labeled.”
ObamaCare’s Rationing Blueprint: Associated Press and Left Wing Bloggers Complete the Circle
by Capitol ConfidentialLike a game of three card monte, the FDA, the mainstream media and liberal bloggers have joined together to deny life extending options for victims of breast cancer – sacrificing life on the rationing altar of budgetary constraints. Once you understand how the game is played, you will see that patients will always lose.

Three card monte is a street card game where a dealer uses two shills to con unsuspecting observers to bet money. In this case the dealer is the FDA and the two shills are the Associated Press and the left-wing blog, TalkingPointsMemo.com.
Understanding the game is the key to understanding how ObamaCare and it’s rationing scheme will work. It’s time to learn the rules.
The FDA is tasked to determine the safety and efficacy of drugs. They are not charged to determine drug pricing; just safety. Avastin was originally labeled for treatment of breast cancer patients in an expedited fashion based on initial studies that showed the drug produced on average nearly 6 months without tumor progression. So the FDA is now looking a follow-up study that shows an average of about 3 months without tumor progression. These are average time frames, meaning that many in the studies got more than 6 months or 3 months in the respective studies. The FDA also looked for new adverse events (side effects) and determined that there are no new safety concerns raised in the trials for breast cancer applications for the drug Avastin.
Despite the determination that the drug was safe and effective, the FDA is trying to de-label the drug for use with late stage breast cancer patients by changing the evaluation rules to use the price of the drug to determine its effectiveness. That is rationing. Period. The FDA created a subjective standard they call “clinically meaningful.” Sounds impressive but what does that mean? In the case of Avastin, which has been shown to actually work, the FDA is just saying that the average extension of life of 6 months just isn’t meaningful enough. That is the new rules of the game. The dealer always wins.






Subscribe via RSS
Got a Tip?