Chapter X Obama brings Chicago politics to Washington

Chicago has been called the home of "gangster government." How bad is it?
Consider the following facts about the city from which President Obama rose through the ranks of American public life, from community organizer and local lawyer to the Illinois state legislature to the U.S. Senate and finally the Oval Office:

Obama's $787 billion economic stimulus program included $499 billion in federal spending, most of which was channeled through state and local governments. Eight of the 10 states getting the most contracts were heavily Democratic, with highly unionized state and local government workforces, according to stimulus award data at recovery.gov.

» Chicago's 2.7 million residents make up only about 21 percent of the state of Illinois' population of nearly 13 million. Yet the city and its suburbs have accounted for 84 percent of the state's public corruption convictions in federal courts since 1976, according to a study released earlier this year by the University of Illinois at Chicago.
» Four of the state's previous seven governors went to jail on public corruption charges, as did a third of Chicago aldermen who served during the period.

» New York and California have higher totals for public corruption convictions, but Illinois leads the nation on a per capita basis.

Michael Barone, a Washington Examiner columnist and longtime co-editor of "The Almanac of American Politics," coined the term "gangster government" in May 2009 in reporting how Obama used the General Motors and Chrysler bankruptcies to aid the struggling United Auto Workers union.
Barone defined gangster government as using the powers of public office "to transfer the property of one group of people to another group that is politically favored."

Obama was a little more direct during the 2010 congressional campaign, saying, according to the New York Times, "we're gonna punish our enemies and we're gonna reward our friends who stand with us on issues that are important to us."

The GM and Chrysler bailouts favored the UAW, an unsecured creditor, over secured creditors in the financial community by putting the union ahead of the financiers in the bankruptcy line for reimbursement of losses under the Obama-sanctioned March 2009 bailout.

And, as Barone predicted in 2009, taking care of his friends was Obama's characteristic approach when dealing with domestic issues.

Obama's $787 billion economic stimulus program, for example, included $499 billion in federal spending, most of which was channeled through state and local governments.

Eight of the 10 states getting the most contracts are heavily Democratic, with highly unionized state and local government workforces, according to the latest available stimulus award data at recovery.gov.

California with $35 billion and New York with $17 billion topped the list of award recipients. Illinois was fourth with $12 billion, Pennsylvania sixth with $9.3 billion, Ohio seventh with $8.9 billion, Michigan eighth with $8.6 billion, Washington ninth with $8.2 billion and Massachusetts 10th with $7.7 billion.

Thus, more than a fifth of Obama's direct economic stimulus funds went to eight states to save the jobs of state and local employees, many of whom were members of three public employee unions, the National Education Association, the American Federation of State, County and Municipal Employees and the American Federation of Teachers.

Between them, the trio's political action committees and individuals associated with the unions gave $116,965 directly to Obama's 2008 campaign, according to OpenSecrets.org.

They also did independent expenditures on Obama's behalf totaling nearly $4.8 million, plus $3.9 million against his opponent, Sen. John McCain.

But it has been in Obama's "clean energy" loan program that gangster government has been repeatedly on display, most famously in the $573 million Solyndra bankruptcy debacle.

Solyndra's main investor was Oklahoma billionaire and Obama campaign bundler George Kaiser. Solyndra was the first but no means the most egregious energy loan deal that benefited Obama's friends.

While researching his blockbuster 2011 book "Throw Them All Out," Hoover Institution fellow and Stanford University professor Peter Schweizer and his researchers found 31 Obama bundlers and big donors whose firms received more than $16 billion in clean energy loans and grants.

The list of recipients unearthed by Schweizer includes such luminaries as former Vice President Gore, Silicon Valley venture capital king John Doerr, Sergey Brin, Dan Reicher and Larry Page of Google, Jim Rogers of Duke Energy, Tesla Motors' Elon Musk and CNN founder Ted Turner.

But one of the lesser-known names in the Solyndra scandal perhaps tells the story better than the celebrities. Cathy Zoi was a senior White House environmental adviser during the Clinton administration, then CEO of Gore's Alliance for Climate Protection.

Under Obama, she was appointed assistant secretary of energy for energy efficiency and renewable energy, a position that put her at the center of the approval process for green energy loans and grants.

Following the Solyndra debacle, Zoi left the government to work for George Soros as head of a new clean energy investment fund he started. Soros had gotten on board with Obama in 2004 by contributing more than $60,000 to his U.S. Senate race. Soros was then one of Obama's earliest and most generous financial backers in 2008.

After Obama won the White House, Schweizer notes, Soros "had regular private consultations and meetings with White House senior advisers while he was making investment decisions related to the stimulus program."

It's impossible to determine from compulsory financial disclosure documents how much profit, if any, resulted for Soros, but, as Schweizer points out, "Soros seemed to have a keen ability to anticipate what Washington was going to do and position himself to potentially profit handsomely from it."

It certainly didn't hurt that Soros had political operatives like Zoi in his pocket. As The Washington Examiner's Tim Carney wrote in February 2011, Zoi's tenure at the Energy Department "was rife with conflicts of interest."
Her husband's firm, environmental windowmaker Serious Materials, benefited from presidential and vice presidential visits to its factories and was "the first window company to pocket a stimulus tax credit -- worth $584,000 -- for investing in new equipment."

Soros was born in Hungary and made his first fortune in Europe's money markets, but it appears that he understands the way gangster government works in Washington in the age of Obama.