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Two Houston-Area Residents Convicted in Medicare Fraud Scheme Involving Fraudulent Claims of Hurricane Damage to Power Wheelchairs

A federal jury in Houston today convicted Helen Etinfoh, 50, and Paula Whitfield, 43, for their roles in a Medicare fraud conspiracy involving, among other things, fraudulent claims of hurricane damage to power wheelchairs.



  • OPA Press Releases

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California Patient Recruiter Sentenced to 12 Months in Prison for Medicare Fraud in Power Wheelchair Scam

Maria Nela Moreno, 57, was also sentenced by U.S. District Judge John F. Walter of the Central District of California to three years of supervised release and was ordered to pay $110,000 in restitution.



  • OPA Press Releases

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Former Chairman of Taylor, Bean & Whitaker Indicted for His Role in a More Than $1.9 Billion Fraud Scheme That Contributed to the Failure of Colonial Bank

Lee Bentley Farkas, the former chairman of a private mortgage lending company, Taylor, Bean & Whitaker (TBW), was arrested last night in Ocala, Fla., and charged in a 16-count indictment for his alleged role in a more than $1.9 billion fraud scheme that contributed to the failures of Colonial Bank, one of the 50 largest banks in the United States in 2009, and TBW, one of the largest privately held mortgage lending companies in the United States in 2009.



  • OPA Press Releases

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Houston-Area Resident Sentenced to 21 Months in Prison for Medicare Fraud Scheme Involving Claims of Hurricane Damage to Power Wheelchairs

Paula Whitfield, a patient recruiter for a Houston durable medical equipment company, was sentenced today to 21 months in prison in connection with a $3 million power wheelchair fraud scheme.



  • OPA Press Releases

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New York Merchant Bank Pleads Guilty to FCPA Violation; Bank Chairman Pleads Guilty to Failing to Disclose Control of Foreign Bank Account

– The Mercator Corporation, a merchant bank with offices in New York, pleaded guilty today in federal court in Manhattan, N.Y., to one count of making an unlawful payment to a senior government official of the Republic of Kazakhstan, in violation of the Foreign Corrupt Practices Act (FCPA).



  • OPA Press Releases

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Three Individuals Plead Guilty for Their Roles in a Houston Medicare Fraud Scheme Involving Claims of Hurricane Damage to Power Wheelchairs

Three individuals pleaded guilty today in connection with a Medicare fraud scheme operated out of a Houston-area durable medical equipment (DME) company.



  • OPA Press Releases

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Los Angeles Medical Equipment Supplier Sentenced to 46 Months in Prison for Role in Power Wheelchair Scheme to Defraud Medicare

The owner and operator of a Los Angeles durable medical equipment company was sentenced to 46 months in prison in connection with a power wheelchair scheme to defraud Medicare.



  • OPA Press Releases

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Jury Convicts Oakland, California, Patient Recruiter for Participating in Wheelchair Scam to Defraud Medicare

On Monday, after a one-week trial in federal court in Los Angeles, a jury found Donna K. Wells, 52, guilty of one count of health care fraud.



  • OPA Press Releases

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Office Manager of Los Angeles Medical Supply Business Pleads Guilty to Conspiring to Defraud Medicare of More Than $6 Million in Wheelchair Scheme

The office manager of a Los Angeles durable medical equipment (DME) company pleaded guilty today to conspiring with her former church pastor to run a power wheelchair scheme that defrauded Medicare of more than $6 million, the Departments of Justice and Health and Human Services (HHS) announced.



  • OPA Press Releases

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Houston-Area Resident Sentenced to 41 Months in Prison for Medicare Fraud Scheme Involving Claims of Hurricane Damage to Power Wheelchairs

Helen Etinfoh, the former owner and operator of a Houston durable medical equipment (DME) company was sentenced today to 41 months in prison in connection with a $3 million power wheelchair fraud scheme.



  • OPA Press Releases

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Former Chairman of Taylor, Bean & Whitaker Convicted for $2.9 Billion Fraud Scheme That Contributed to the Failure of Colonial Bank

Lee Bentley Farkas, the former chairman of a private mortgage lending company, Taylor, Bean & Whitaker (TBW), was convicted today for his role in a more than $2.9 billion fraud scheme that contributed to the failures of Colonial Bank, one of the 25 largest banks in the United States in 2009, and TBW, one of the largest privately held mortgage lending companies in the United States in 2009.



  • OPA Press Releases

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Oakland, California, Patient Recruiter Sentenced to 57 Months in Prison for Causing the Submission of $1.2 Million in False Power Wheelchair Claims to Medicare

An Oakland, Calif., woman was sentenced today to 57 months in prison for her role in a scam to bill Medicare for more than $1.2 million in claims for expensive, high-end power wheelchairs and other durable medical equipment (DME) that were not medically necessary.



  • OPA Press Releases

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Houston Federal Jury Convicts Patient Recruiter of Medicare Fraud Involving Claims of Hurricane Damage to Power Wheelchairs

Marion Beverly Metoyer, a patient recruiter for a Houston durable medical equipment (DME) company, was convicted today by a Houston federal jury of health care fraud related to a power wheelchair fraud scheme.



  • OPA Press Releases

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Former Chairman of Taylor, Bean & Whitaker Sentenced to 30 Years in Prison and Ordered to Forfeit $38.5 Million

The former chairman and owner of Taylor, Bean & Whitaker (TBW) was sentenced today to 30 years in prison and ordered to forfeit approximately $38.5 million for his role in a more than $2.9 billion fraud scheme that contributed to the failure of TBW and Colonial Bank.



  • OPA Press Releases

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Houston Patient Recruiter Sentenced to 21 Months in Prison for Medicare Fraud Scheme Involving Claims of Hurricane Damage to Power Wheelchairs

Marion Beverly Metoyer, 57, of Dayton, Texas, was sentenced by U.S. District Judge Gray Miller in the Southern District of Texas. Metoyer was convicted by a jury on May 26, 2011, of one count of conspiracy to commit health care fraud, three counts of health care fraud, one count of conspiracy to defraud the United States and to receive health care kickbacks and two counts of receiving kickbacks.



  • OPA Press Releases

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Taiwan Aftermarket Auto Lights Manufacturer and Its Chairman Indicted for Participation in Price-Fixing Conspiracy

A federal grand jury in San Francisco returned a superseding indictment yesterday against a Taiwan aftermarket auto lights manufacturer, its U.S.-based subsidiary distributor and its chairman for participating in an international conspiracy to fix the prices of aftermarket auto lights.



  • OPA Press Releases

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Former Chairman and CEO of Kellogg, Brown & Root Inc. Sentenced to 30 Months in Prison for Foreign Bribery and Kickback Schemes

Albert “Jack” Stanley, a former chairman and chief executive officer of Kellogg, Brown & Root Inc. (KBR), was sentenced today to 30 months in prison for conspiring to violate the Foreign Corrupt Practices Act (FCPA) by participating in a decade-long scheme to bribe Nigerian government officials to obtain engineering, procurement and construction (EPC) contracts and for conspiring to commit mail and wire fraud as part of a separate kickback scheme.



  • OPA Press Releases

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Former Chairman of Taiwan Aftermarket Auto Lights Manufacturer Agrees to Plead Guilty in Price-Fixing Conspiracy

The former chairman of a Taiwan aftermarket auto lights manufacturer has agreed to plead guilty for his participation in an international conspiracy to fix the prices of aftermarket auto lights.



  • OPA Press Releases

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Ohio-Based Wheelchair Manufacturer Agrees to Consent Decree to Resolve Allegations of Food, Drug and Cosmetic Act Violations

The Justice Department, at the request of the Food and Drug Administration (FDA), today filed a complaint and a proposed consent decree in the U.S. District Court for the Northern District of Ohio against Invacare Corp., Gerald B. Blouch and Ronald J. Clines.



  • OPA Press Releases

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Los Angeles-Area Doctor and Patient Recruiter Plead Guilty to Participating in a Power Wheelchair Scheme That Defrauded Medicare of Over $10.1 Million

A Los Angeles-area doctor and a patient recruiter pleaded guilty today for their roles in a power wheelchair fraud scheme that defrauded Medicare of over $10.1 million.



  • OPA Press Releases

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Wheelchair propulsion fatigue thresholds in electromyographic and ventilatory testing




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U.S. chairmanship of the Arctic Council: The challenges ahead


This weekend the United States will assume the chairmanship of the Arctic Council for a two-year term. While the Obama administration has been preparing for this for several years, it remains to be seen how the president will balance the concerns of most Arctic residents who view development of the region as vital to improving their economic and social livelihood and those individuals inside and outside the administration who want to limit development out of concern for the how economic development may cause local environmental degradation while also accelerating climate change.

The National Strategy for the Arctic Region

As part of this preparation, in May 2013, the president launched a new National Strategy for the Arctic Region based on three principles

  1. Advancement of U.S. security interests defined as ensuring the ability of our aircraft and vessels to operate, in a manner consistent with international law through, under, and over the airspace and waters of the Arctic; to support lawful commerce; to achieve greater awareness of activities in the region; and to intelligently evolve our Arctic infrastructure and capabilities including ice-capable platforms as needed;
  2. Pursue responsible Arctic regional stewardship defined as protection of the Arctic environment and conservation of its resources, establishment of an integrated Arctic management framework, charting of the Arctic region, and employment of scientific research and traditional knowledge to increase understanding of the Arctic;
  3. Strengthen international cooperation defined as working through bilateral relationships and multilateral institutions, including the Arctic Council, to advance collective interests, promote shared Arctic state prosperity, protect the Arctic environment, and enhance regional security, and to work toward U.S. accession to the United Nations Convention on the Law of the Sea.

Undergirding these principles were commitments to make decisions using the best available information, to foster cooperation with the state of Alaska, other international partners, the private sector, and to consult and coordinate with Alaskan natives to gain traditional knowledge. As part of this new strategy, the president appointed Admiral Robert J. Papp Jr. as the U.S. special representative for the Arctic in July 2014. Shortly after his appointment, and in several major speeches since, including one at Brookings, the admiral has stated that the administration’s agenda centers on stewardship of the Arctic Ocean including insuring its safety and security, improving economic and living conditions for the regions’ inhabitants, and addressing the impacts of climate change on the region. 

The administration’s new policy was buttressed in January 2015 by an executive order designed to enhance coordination of all the various agencies responsible for different aspects of federal oversight of the Arctic (Alaska). Paradoxically, however, the fact that the reorganization came nearly in tandem with the announcement of new wilderness restrictions on the exploration of oil and gas in the Arctic National Wildlife Refuge (ANWR) and the Arctic Coastal Plain. This announcement left many Alaskans skeptical on how further restrictions on development of the state’s resources could be viewed as improving economic and living conditions of people in the region. In a February 2015 meeting of Arctic Council Senior Arctic Officials (SAOs) in Yellowknife, Canada, the administration looked to put meat on the bones of what it intended to pursue upon assumption of the chairmanship of the Arctic Council. This resulted in an additional elucidation of 15 broad themes that had originally been presented in a Virtual Stakeholder Outreach Forum on December 2, 2014 in Washington, D.C..

Streamlining Arctic policy and key questions

The announced reorganization of government agencies and lines of authority dealing with U.S. Arctic and Arctic Council policy has done little or nothing to streamline the overlapping and sometimes conflicting policies governing natural resource development or energy projects in Alaska. These overlapping jurisdictions are well highlighted in a major new National Petroleum Council (NPC) report, Arctic Potential: Realizing the Promise of U.S. Arctic Oil and Gas Resources. This report was prepared at the request of Energy Secretary Moniz to address how best to pursue prudent development of Alaska’s offshore oil and gas resources and ironically issued shortly after the president’s closing of ANWR. Whether or not the White House was even aware of the NPC’s report, which represented months of substantive work by many people, remains open to question.

The Arctic reorganization plan did little to resolve some key questions as to actually who is in charge of Arctic policy in the United States. While Admiral Papp was named “Coordinator” of the U.S. Arctic Council Chairmanship, this position is not listed in the Council’s enabling documents. Historically, the foreign minister or the secretary of state of the country chairs the Council while a career diplomat chairs the meetings of the senior officials dealing with the day-to-day activities of the Council. It appears that Admiral Papp has neither of these positions. In any case, it looks from the organizational chart that the White House science advisor will be the real coordinator of U.S. Arctic policy.

The chief problem that U.S. Arctic policy must resolve is that while in the Arctic Council we have to address issues affecting the entire Circumpolar North, our domestic Arctic policy centers only on Alaska, where a slew of domestic agencies have overlapping and often conflicting oversight and regulatory responsibilities. The situation is made still more complex by the large amount of the state that is owned by the federal government. This makes it almost inevitable that any resource development project by private or state interests will run into federal government restrictions, in terms of needing to cross federal land to get a resource to market, permitting to ensure that water resources are not polluted, or making sure that fish and wildlife habitats are not disturbed, etc.

Our Arctic policy also suffers from an acute lack of awareness by most Americans that we are an Arctic nation with a huge maritime boundary and very limited resources (ice-worthy ships, proper navigation charts and aids, lack of port facilities, lack of search and rescue capabilities, lack of knowledge of what fishery resources we possess) to protect it. While many of these issues lie outside the scope of the Arctic Council, many are cross-cutting with our Arctic neighbors, most notably with increased traffic in the region (from tourism, fishing, energy development, and shipping) comes the increased possibility of an accident. Currently, the United States does not have the capable means (both in terms of timely response and adequate infrastructure) to respond to an accident in the Arctic, which could be catastrophic, as all of these industries are active and gaining popularity every day.

Core questions for the administration

As the United States takes the helm of the Arctic Council, there are several core issues that the administration must address. Some critical questions are: What is the U.S. position on the development of the Arctic’s oil, gas, mineral, and fishery resources? What specific action is the United States prepared to support in the Arctic Council to uplift the standard of living of Arctic people across the Circumpolar North? Given that each icebreaker costs at least $700 million and that we only have one in operation, what resources are we prepared to expand to build a fleet capable to respond to events in the Arctic? Should any of these expenses be viewed as vital to our national security and defense, and if so, which budget should they be taken out of? What role does the United States in its chairmanship role see for closer interaction between the Arctic Council and the Arctic Economic Council? Would the United States support the closing off of certain ecologically sensitive parts of the Arctic to all commercial exploitation? Finally, how does the administration in its Arctic Council leadership role get its Arctic policy in sync with that of the state of Alaska in its recently released Alaska Arctic Policy Implementation Plan?

Other Arctic nations surpass the United States in terms of Arctic policies. Norway, Russia, Canada, and even Denmark (through complicated ties with Greenland’s claim on the Arctic) all have the Arctic at the front and center of policymaking decisions. I hope to see these issues addressed as the United States moves to enact effective policy on the Arctic over the next two years as the alternative is too great a risk and too great a wasted opportunity. 

     
 
 




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The halfway point of the U.S. Arctic Council chairmanship


Event Information

April 25, 2016
2:00 PM - 3:30 PM EDT

Falk Auditorium
Brookings Institution
1775 Massachusetts Avenue NW
Washington, DC 20036

Register for the Event
An address from U.S. Special Representative for the Arctic Admiral Robert J. Papp Jr.

On April 24, 2015, the United States assumed chairmanship of the Arctic Council for a two-year term. Over the course of the last year, the United States has outlined plans within three central priorities: improving economic and living conditions for Arctic communities; Arctic Ocean safety, security, and stewardship; and addressing the impacts of climate change. Working with partners on the Council, U.S. leaders have moved forward policies ranging from joint efforts to curb black carbon emissions to guidelines for unmanned aerial systems conducting scientific research. With half of its short chairmanship behind it, what has the United States accomplished over the last 12 months? What work remains to be done?

On April 25, the Energy Security and Climate Initiative (ESCI) at Brookings hosted U.S. Special Representative for the Arctic Admiral Robert J. Papp, Jr. for a keynote address on the state and future of U.S. leadership in the Arctic. ESCI Senior Fellow Charles Ebinger moderated the discussion and audience Q&A.

Join the conversation on Twitter using #USArctic

Video

Audio

      
 
 




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The Biggest News from Brisbane: China to Chair the G-20 in 2016


The biggest news at the end of the Brisbane G-20 on Sunday will be to confirm for the first time in an official G-20 communique that China will indeed chair the G-20 Summit in 2016. 

Coming on the heals of a momentous week of great power realignments and breakthroughs at the APEC Summit in Beijing and other one-on-one meetings of heads of state, the timing of China’s presidency of the G-20 Summit in 2016 could not be a better follow-up to this week’s accomplishments. It puts China in play as a global leader at a critical moment in geopolitical relations and in terms of several global agendas that will culminate in the next two years. It also provides an unusual opportunity for the U.S. and China to collaborate on a broader set of societal issues affecting everyone everywhere building on their agreements this week.

One of the reasons why the G-20 Summits have yet to realize their full potential is that the leaders-level summits have been captured by the finance ministers’ agendas and discourse. Leaders at G-20 Summits have individually and collectively failed to connect with their publics; ordinary citizens do not see their urgent issues being dealt with. Exchange rates, current account balances, reserve ratios for banks, and the role of the IMF do not resonate with public anxieties over their lives and livelihoods.

Three streams of global issues will culminate in 2015:  the forging of a “post-2015 agenda” on sustainable development with a new set of global goals to succeed the Millennium Development Goals (MDGs); the agreement on  “financing for development” (FFD) arrangements and mechanisms to support the new post-2015 Sustainable Development Goals (SDGs) to be realized in 2030; and the achievement of a United Nations Framework Convention on Climate Change (UNFCCC) by the end of 2015, which looks more promising now than it did a week ago.

What has been learned from previous global goal setting processes is that building on the momentum for the goal-setting process in 2015 and carrying it directly into the mobilization of national political commitment, resources and policies for implementation is vital. China as a member of the G-20 troika in 2015 through 2017 will be in crucial position of bridging the goal-setting and implementation phases of the new SDGs for 2030 to be adopted at the United Nations in September of next year.

China, as one of the five permanent members of the U.N. Security Council, will be in a pivotal position to create complementarities between the G-20 forum for the major economies and the U.N. as a forum for all countries for this critical period of setting the global sustainability agenda for the next fifteen years.  

The post-2015 agenda for social, economic and environmental sustainability is of high interest to the United States, and the new China-U.S. climate change agreement in Beijing this week augurs well for collaboration between the two countries on the broader agenda. White House Chief of Staff John Podesta was on the high-level panel for the post-2015 development agenda last year, which signals high U.S. policy involvement. The Shanghai Institute for International Studies has argued in a recent paper for the U.N. Development Program that “the G-20 and the U.N. could have certain complementary roles. The development issue could become the one linking the major work of both the U.N. and the G-20.”  

The world should welcome the unique role that China can now play in bringing the international community and the global system of international institutions together in charting a common path forward building on the progress made in the various summits this week. 

     
 
 




chair

Japan’s G-7 and China’s G-20 chairmanships: Bridges or stovepipes in leader summitry?


Event Information

April 18, 2016
10:00 AM - 11:30 AM EDT

Falk Auditorium
Brookings Institution
1775 Massachusetts Avenue NW
Washington, DC 20036

Register for the Event

In an era of fluid geopolitics and geoeconomics, challenges to the global order abound: from ever-changing terrorism, to massive refugee flows, a stubbornly sluggish world economy, and the specter of global pandemics. Against this backdrop, the question of whether leader summitry—either the G-7 or G-20 incarnations—can supply needed international governance is all the more relevant. This question is particularly significant for East Asia this year as Japan and China, two economic giants that are sometimes perceived as political rivals, respectively host the G-7 and G-20 summits. 

On April 18, the Center for East Asia Policy Studies and the Project on International Order and Strategy co-hosted a discussion on the continued relevancy and efficacy of the leader summit framework, Japan’s and China’s priorities as summit hosts, and whether these East Asian neighbors will hold parallel but completely separate summits or utilize these summits as an opportunity to cooperate on issues of mutual, and global, interest.

Join the conversation on Twitter using #G7G20Asia

Audio

Transcript

Event Materials

      
 
 




chair

The Biggest News from Brisbane: China to Chair the G-20 in 2016


The biggest news at the end of the Brisbane G-20 on Sunday will be to confirm for the first time in an official G-20 communique that China will indeed chair the G-20 Summit in 2016. 

Coming on the heals of a momentous week of great power realignments and breakthroughs at the APEC Summit in Beijing and other one-on-one meetings of heads of state, the timing of China’s presidency of the G-20 Summit in 2016 could not be a better follow-up to this week’s accomplishments. It puts China in play as a global leader at a critical moment in geopolitical relations and in terms of several global agendas that will culminate in the next two years. It also provides an unusual opportunity for the U.S. and China to collaborate on a broader set of societal issues affecting everyone everywhere building on their agreements this week.

One of the reasons why the G-20 Summits have yet to realize their full potential is that the leaders-level summits have been captured by the finance ministers’ agendas and discourse. Leaders at G-20 Summits have individually and collectively failed to connect with their publics; ordinary citizens do not see their urgent issues being dealt with. Exchange rates, current account balances, reserve ratios for banks, and the role of the IMF do not resonate with public anxieties over their lives and livelihoods.

Three streams of global issues will culminate in 2015:  the forging of a “post-2015 agenda” on sustainable development with a new set of global goals to succeed the Millennium Development Goals (MDGs); the agreement on  “financing for development” (FFD) arrangements and mechanisms to support the new post-2015 Sustainable Development Goals (SDGs) to be realized in 2030; and the achievement of a United Nations Framework Convention on Climate Change (UNFCCC) by the end of 2015, which looks more promising now than it did a week ago.

What has been learned from previous global goal setting processes is that building on the momentum for the goal-setting process in 2015 and carrying it directly into the mobilization of national political commitment, resources and policies for implementation is vital. China as a member of the G-20 troika in 2015 through 2017 will be in crucial position of bridging the goal-setting and implementation phases of the new SDGs for 2030 to be adopted at the United Nations in September of next year.

China, as one of the five permanent members of the U.N. Security Council, will be in a pivotal position to create complementarities between the G-20 forum for the major economies and the U.N. as a forum for all countries for this critical period of setting the global sustainability agenda for the next fifteen years.  

The post-2015 agenda for social, economic and environmental sustainability is of high interest to the United States, and the new China-U.S. climate change agreement in Beijing this week augurs well for collaboration between the two countries on the broader agenda. White House Chief of Staff John Podesta was on the high-level panel for the post-2015 development agenda last year, which signals high U.S. policy involvement. The Shanghai Institute for International Studies has argued in a recent paper for the U.N. Development Program that “the G-20 and the U.N. could have certain complementary roles. The development issue could become the one linking the major work of both the U.N. and the G-20.”  

The world should welcome the unique role that China can now play in bringing the international community and the global system of international institutions together in charting a common path forward building on the progress made in the various summits this week. 

      
 
 




chair

Japan’s G-7 and China’s G-20 chairmanships: Bridges or stovepipes in leader summitry?


Event Information

April 18, 2016
10:00 AM - 11:30 AM EDT

Falk Auditorium
Brookings Institution
1775 Massachusetts Avenue NW
Washington, DC 20036

Register for the Event

In an era of fluid geopolitics and geoeconomics, challenges to the global order abound: from ever-changing terrorism, to massive refugee flows, a stubbornly sluggish world economy, and the specter of global pandemics. Against this backdrop, the question of whether leader summitry—either the G-7 or G-20 incarnations—can supply needed international governance is all the more relevant. This question is particularly significant for East Asia this year as Japan and China, two economic giants that are sometimes perceived as political rivals, respectively host the G-7 and G-20 summits. 

On April 18, the Center for East Asia Policy Studies and the Project on International Order and Strategy co-hosted a discussion on the continued relevancy and efficacy of the leader summit framework, Japan’s and China’s priorities as summit hosts, and whether these East Asian neighbors will hold parallel but completely separate summits or utilize these summits as an opportunity to cooperate on issues of mutual, and global, interest.

Join the conversation on Twitter using #G7G20Asia

Audio

Transcript

Event Materials

      
 
 




chair

Overcoming corporate short-termism: Blackrock's chairman weighs in


When the head of the world’s largest investment fund raises fundamental questions about U.S. corporations, we should all pay attention.

In a letter earlier this week to the Fortune 500 CEOs, BlackRock Chairman Larry Fink criticized the short-term orientation that he believes shapes too much of today’s corporate behavior. “It concerns us,” he declared, that “in the wake of the financial crisis, many companies have shied away from investing in the future growth of their companies. Too many have cut capital expenditure and even increased debt to boost dividends and increase share buybacks.” And he concluded, “When done for the wrong reasons and at the expense of capital investment, [returning cash to shareholders] can jeopardize a company’s ability to generate sustainable long-term returns.”

Fink is correct on all counts. In a new Brookings paper out today, University of Massachusetts economist William Lazonick states that the 454 companies listed continuously in the S&P 500 index between 2004 and 2013 used 51 percent of their earnings to buy back their own stock, almost all through purchases on the open market. An additional 35 percent went to dividends. “Buybacks represent a withdrawal of internally controlled finance that could be used to support investment in the company’s productive capabilities,” he said.

This is bad for the economy in two ways. As the growth of the U.S. workforce slows dramatically, economic growth will depend increasingly on improved productivity, must of which comes from raising capital investment per worker. Failing to make productivity-enhancing capital investments will doom our economy to a new normal of slow growth.

Many business leaders say that they are reluctant to make long-term investments without reasonable expectations of growing demand for their products. That brings us to the second way in which corporate short-termism is bad for the economy. Most consumer demand comes from wages. If employers refuse to share gains with their employees, growth in demand is bound to be anemic.

Although he clearly cares about his country, Fink is also acting as the steward of $4.8 trillion in investments. In an article published by McKinzie earlier this month, he warns that although the return of cash to shareholders is juicing equity markets right now, investors “will pay for it later when the ability to generate revenue in the long term dries up because of the lack of investment in the future.”

Unlike most other corporate leaders who express concerns about these developments, Fink is unwilling to rely on moral suasion alone. Because current incentives are so perverse, he argued, “It is hard for even the most dedicated CEO to buck this trend.” The constant pressure to produce quarterly results forces executives to go along—or risk losing their jobs. That pressure comes from investors who are, in Fink’s words, “renters, not owners, who are going to trade your stock as soon as they can pocket a quick gain.”

This logic leads BlackRock’s chairman to propose changing the tax code by lengthening to three years the the period needed to qualify for capital gains treatment while taxing trading gains at an even higher rate than ordinary income for investment held less than six months. To encourage truly patient capital, the capital gains rate would be stepped down to zero over a period of ten years.

We can argue the merits of this idea, and we should. But the main point should be beyond argument. We need more builders and fewer traders, more Warren Buffetts and fewer Carl Icahns. And to get them, we’re going to have to change the laws governing corporate and investor behavior. Fink has opened up a crucial debate, and it’s time for Congress and presidential aspirants to join it.
Image Source: © Brendan McDermid / Reuters
     
 
 




chair

Japan’s G-7 and China’s G-20 chairmanships: Bridges or stovepipes in leader summitry?


Event Information

April 18, 2016
10:00 AM - 11:30 AM EDT

Falk Auditorium
Brookings Institution
1775 Massachusetts Avenue NW
Washington, DC 20036

Register for the Event

In an era of fluid geopolitics and geoeconomics, challenges to the global order abound: from ever-changing terrorism, to massive refugee flows, a stubbornly sluggish world economy, and the specter of global pandemics. Against this backdrop, the question of whether leader summitry—either the G-7 or G-20 incarnations—can supply needed international governance is all the more relevant. This question is particularly significant for East Asia this year as Japan and China, two economic giants that are sometimes perceived as political rivals, respectively host the G-7 and G-20 summits. 

On April 18, the Center for East Asia Policy Studies and the Project on International Order and Strategy co-hosted a discussion on the continued relevancy and efficacy of the leader summit framework, Japan’s and China’s priorities as summit hosts, and whether these East Asian neighbors will hold parallel but completely separate summits or utilize these summits as an opportunity to cooperate on issues of mutual, and global, interest.

Join the conversation on Twitter using #G7G20Asia

Audio

Transcript

Event Materials

      
 
 




chair

The halfway point of the U.S. Arctic Council chairmanship

On April 24, 2015, the United States assumed chairmanship of the Arctic Council for a two-year term. Over the course of the last year, the United States has outlined plans within three central priorities: improving economic and living conditions for Arctic communities; Arctic Ocean safety, security, and stewardship; and addressing the impacts of climate change.…

       




chair

Stalemate in Kigali: African Union fails to elect a chairperson


During the 27th Heads of State Assembly of the African Union (AU) meeting in Kigali, Rwanda, from July 17-18, 2016, the heads of state were supposed to elect individuals to lead the AU for the next four years. One of the most important functions that the delegates were expected to perform was to elect the chairperson of the AU Commission to replace the present chairperson, South Africa’s Dr. Nkosazana Dlamini Zuma, who had indicated that she would not seek re-election.

Three candidates were standing for the position of chairperson of the AU Commission. These were Dr. Pelonomi Venson-Moitoi, foreign minister of Botswana, Dr. Specioza Waigaga Wandira Kazibwe, former vice president of Uganda, and Mr. Agapito Mba Mokuy, foreign minister of Equatorial Guinea. There was great expectation that the election of any one of these three candidates would significantly advance gender and regional balance, with respect to key leadership positions in continental institutions. Hence, the election of either one of the two female candidates would have been welcomed by supporters of gender balance. However, if the delegates had opted for Mr. Mokuy, such a choice would have been welcomed by the Spanish-speaking community, as well as the continent’s smaller and historically marginalized states. Given the fact that the outgoing chairperson of the AU Commission, Dr. Zuma, is a woman, the hope within the central African community was that Mr. Mokuy would emerge victorious and represent the region, as well as serve as a sign of hope for the heretofore marginalized regions.

No clear winner among the three candidates leads to stalemate

Reports from Kigali are that the election for the chairperson has been postponed until January 2017. It is reported that the AU took that decision based on the fact that none of the three candidates had secured the two-thirds majority of votes needed to win. During the election’s first round, Dr. Venson-Moitoi received 16 votes, Mr. Mokuy received 12 votes, and Dr. Kazibwe received 11 votes. 

Those who abstained from voting claimed that the candidates were not qualified to lead the commission.

After receiving the least votes in the first round, Dr. Kazibwe withdrew from the competition. That left Dr. Venson-Moitoi and Mr. Mokuy to compete for the position. Although Dr. Venson-Moitoi garnered 23 votes in the next round, that number was less than the 36 votes to constitute the two-thirds majority needed to emerge victorious.

Part of the reason for this quagmire, as the news from Kigali is indicating, is that as many as 15 heads of state abstained from voting in the first round of the competition and that in the second round, 20 acted similarly. These many abstentions derailed the process and made certain that none of the remaining candidates would emerge victorious.

While these may be legitimate issues to raise, one wonders why these issues were not raised and fully resolved before the delegates actually assembled in Kigali.

Indeed, the AU assembly chair, President Idriss Déby of Chad, cited the boycott as a deciding factor in the failure of any of the three candidates to secure the necessary votes to win. He then announced that the elections had been postponed until January 2017 and that the heads of state had opened up the contest to more candidates—a decision that appears to be a slap in the face of the current candidates. Notably, this appears to support the Economic Community of West African States (ECOWAS) bloc’s pre-election petition that the elections be postponed because, as they argued, none of the candidates was qualified to lead. That petition, however, had been previously denied.

The argument for new candidates and postponement: Determining who is qualified

President Déby argued, in his post-election proclamation, that the delay would provide candidates and their respective regions with the time to adequately prepare for the elections in January 2017. What appears to be implied by this declaration is that preparations for the failed July elections were inadequate and that with this extra time, the type of behavior exhibited by some representatives during the recently concluded elections would not occur in January. However, unless the AU puts in place rules to prevent such an eventuality, there is no guarantee that January 2017’s elections would not be marred by such last-minute maneuvering again. What is to prevent other blocs from engaging in similar strategic behavior (i.e., boycotting the election) in order to promote their own candidates for the various leadership positions in the commission?

Nevertheless, the AU is a continental organization, and no country or region should be allowed to dominate and monopolize leadership positions in its institutions.

Those who abstained from voting claimed that the candidates were not qualified to lead the commission. Dr. Kazibwe’s candidacy was questioned on the grounds that she was previously convicted of abusing state funds. Mr. Mokuy was taken to task for his country’s human rights record, while Dr. Venson-Moitoi’s candidacy was questioned because her home country, Botswana, has often taken positions that are contrary to those of many other AU members, notably on the issue of Africa’s relations with the International Criminal Court.

While these may be legitimate issues to raise, one wonders why these issues were not raised and fully resolved before the delegates actually assembled in Kigali. Certainly, the AU must have mechanisms to vet individuals who are nominated for leadership positions in its institutions to determine their fit for office. During such a vetting process, groups and individuals within the AU can make known their objections to candidates that they believe are not qualified to perform the jobs for which they are being nominated. Of course, such a vetting process must be governed by rules chosen in an earlier period such as those presented in The Statutes of the Commission of the African Union, which provide information on the minimum qualifications and experience of the commissioners. Hence, any challenge to the qualifications of an individual running to serve on the commission should begin with and be governed by such rules.

How the African Union can stay unified

Once candidates have been fully vetted and determined to meet the minimum qualifications to stand for the positions for which they have been nominated, no head of state (i.e., elector) should boycott the voting. Of course, it is not surprising that electors would prefer to vote for candidates from either their own countries or region. Nevertheless, the AU is a continental organization, and no country or region should be allowed to dominate and monopolize leadership positions in its institutions. Hence, the AU Commission’s leadership must reflect the continent’s diversity, with specific emphasis on gender and geographic balance. Efforts by heads of state or blocs (e.g., ECOWAS) to engage in last minute strategic maneuvering (e.g., boycotting of elections) in order to secure certain political advantages should be discouraged. Such opportunistic behavior can seriously undermine the AU’s electoral system and place the organization in a very precarious position. In fact, one could argue that the outcome of the July 2016 commission elections in Kigali betray an organization that appears to be adrift and without proper leadership and one that is not willing to follow its own rules.  

In fact, one could argue that the outcome of the July 2016 commission elections in Kigali betray an organization that appears to be adrift and without proper leadership and one that is not willing to follow its own rules.

As the AU looks forward, it must make certain that no voting bloc within the organization is allowed to grant itself the power to derail the electoral process. Such opportunism and capriciousness on the part of any group within the AU can prevent the deepening and institutionalization of democratic principles within the organization and effectively hold hostage the interests of the continent to those of a smaller group or region.

Thus, the process through which the member states of the African Union choose individuals to serve in and manage their institutions must be competitive and based on democratic principles. The AU should learn a lesson from what happened in Kigali and put legal mechanisms in place to deal fully and effectively with any future efforts by groups, individuals, and factions to engage in any behavior that can frustrate the functioning of the organization and its institutions. Perhaps the failure of the AU to anticipate such behavior is due to its inexperience. Nevertheless, the organization must provide itself with the wherewithal to prevent this type of stalemate. For, come January, another region may, at the last minute, register its dissatisfaction with all candidates and seek to replace them.

If the AU is to teach member states the principles of good governance, it must first put its own house in order and lead by example.

As the AU looks forward to the January 2017 round of elections, Senegalese politician and diplomat, Abdoulaye Bathily, has already indicated his interest in competing for the position of chairperson of the AU Commission. To avoid the problems that were encountered by the electoral process in Kigali, he, his country, and his region should commence the formal nomination process in order to provide all interested parties with the opportunity to properly vet his candidacy and determine his fit for office. In fact, other candidates who are planning to stand for the elections in January 2017 should also have themselves formally nominated as soon as possible so that the vetting process can be completed and a final list of qualified candidates agreed before the delegates meet in January 2017.

If the AU is to teach member states the principles of good governance, it must first put its own house in order and lead by example. It must, for example, make its electoral decisions through a democratic and competitive process. It must be governed by the rule of law in order for it to stand as a beacon of light for the many countries in the continent that are trying to deepen and institutionalize democracy. Unless the AU puts into place mechanisms to deal with the types of behaviors that derailed the commission elections in Kigali in July 2016, it risks descending into a quagmire from which it might not get out uninjured.

      
 
 




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