How the first Republican president defended the nation against extortion by banks...Badlands Journal editorial board
The Republican Party at the moment seems to be as militantly organized as ever, but lacking any idea beyond pure opposition. Their ideology, never terribly factual, is now veering toward nihilism in the totality of its denial of any responsibility for the present economic collapse, its denial of memory and of history, even very recent history.
Ellen Brown, in an open letter to President Obama, reminds us of what Lincoln did when facing banks that sought to extort profits as he fought to preserve the Union during the Civil War.
Badlands Journal editorial board
Revive Lincoln's Monetary Policy
An Open Letter to President Obama...Ellen Brown
Dear President Obama:
The world was transfixed on that remarkable day in January when, to poetry, song, and dance, you gazed upon Abraham Lincoln’s likeness at the Lincoln Memorial and searched for wisdom to navigate these difficult times. Indeed, you have so many things in common with that venerable President that one might imagine you were his reincarnation in different dress. You are both thin and wiry, brilliant speakers, appearing on the national stage at pivotal times. Fertile imaginations could envision you coming back triumphantly as one of those slaves you freed, to prove once and for all the proposition that all men are created equal and can achieve great things if given a fighting chance. But as Wordsworth said, our birth is but a sleep and a forgetting; and if that is true, you may have forgotten a more subtle form of slavery from which Lincoln freed his countrymen, even if you were there at the time. You may have forgotten it because it has been omitted from the history books, leaving Americans ill-equipped to interpret the lessons of our own past. This letter is therefore meant to remind you.
We are now met on another battlefield of that same economic war that visited Lincoln and the Founding Fathers before him. President Obama, the fate of our economy and the nation itself may depend on how well you understand Lincoln’s monetary breakthrough, the most far-reaching “economic stimulus plan” ever implemented by a U.S. President. You can solve our economic crisis quickly and permanently, by implementing the same economic solution that allowed Lincoln to win the Civil War and thus save the Union from foreign economic masters.
Lincoln’s Monetary Breakthrough
The bankers had Lincoln’s government over a barrel, just as Wall Street has Congress in its vice-like grip today. The North needed money to fund a war, and the bankers were willing to lend it only under circumstances that amounted to extortion, involving staggering interest rates of 24 to 36 percent. Lincoln saw that this would bankrupt the North and asked a trusted colleague to research the matter and find a solution. In what may be the best piece of advice ever given to a sitting President, Colonel Dick Taylor of Illinois reported back that the Union had the power under the Constitution to solve its financing problem by printing its money as a sovereign government. Taylor said:
“Just get Congress to pass a bill authorizing the printing of full legal tender treasury notes . . . and pay your soldiers with them and go ahead and win your war with them also. If you make them full legal tender . . . they will have the full sanction of the government and be just as good as any money; as Congress is given that express right by the Constitution.”
The Greenbacks actually were just as good as the bankers’ banknotes. Both were created on a printing press, but the banknotes had the veneer of legitimacy because they were “backed” by gold. The catch was that this backing was based on “fractional reserves,” meaning the bankers held only a small fraction of the gold necessary to support all the loans represented by their banknotes. The “fractional reserve” ruse is still used today to create the impression that bankers are lending something other than mere debt created with accounting entries on their books.1
Lincoln took Col. Taylor’s advice and funded the war by printing paper notes backed by the credit of the government. These legal-tender U.S. Notes or “Greenbacks” represented receipts for labor and goods delivered to the United States. They were paid to soldiers and suppliers and were tradeable for goods and services of a value equivalent to their service to the community. The Greenbacks aided the Union not only in winning the war but in funding a period of unprecedented economic expansion. Lincoln’s government created the greatest industrial giant the world had yet seen. The steel industry was launched, a continental railroad system was created, a new era of farm machinery and cheap tools was promoted, free higher education was established, government support was provided to all branches of science, the Bureau of Mines was organized, and labor productivity was increased by 50 to 75 percent. The Greenback was not the only currency used to fund these achievements; but they could not have been accomplished without it, and they could not have been accomplished on money borrowed at the usurious rates the bankers were attempting to extort from the North.
Lincoln succeeded in restoring the government’s power to issue the national currency, but his revolutionary monetary policy was opposed by powerful forces. The threat to established interests was captured in an editorial of unknown authorship, said to have been published in The London Times in 1865:
“If that mischievous financial policy which had its origin in the North American Republic during the late war in that country, should become indurated down to a fixture, then that Government will furnish its own money without cost. It will pay off its debts and be without debt. It will become prosperous beyond precedent in the history of the civilized governments of the world. The brains and wealth of all countries will go to North America. That government must be destroyed or it will destroy every monarchy on the globe.”
Lincoln was assassinated in 1865. According to historian W. Cleon Skousen:
“Right after the Civil War there was considerable talk about reviving Lincoln’s brief experiment with the Constitutional monetary system. Had not the European money-trust intervened, it would have no doubt become an established institution.”
The institution that became established instead was the Federal Reserve, a privately-owned central bank given the power in 1913 to print Federal Reserve Notes (or dollar bills) and lend them to the government. The government was submerged in a debt that has grown exponentially since, until it is now an unrepayable $11 trillion. For nearly a century, Lincoln’s statue at the Lincoln Memorial has gazed out pensively across the reflecting pool toward the Federal Reserve building, as if pondering what the bankers had wrought since his death and how to remedy it.
Building on a Successful Tradition
Lincoln did not invent government-issued paper money. Rather, he restored a brilliant innovation of the American colonists. According to Benjamin Franklin, it was the colonists’ home-grown paper “scrip” that was responsible for the remarkable abundance in the colonies at a time when England was suffering from the ravages of the Industrial Revolution. Like with Lincoln’s Greenbacks, this prosperity posed a threat to the control of the British Crown and the emerging network of private British banks, prompting the King to ban the colonists’ paper money and require the payment of taxes in gold. According to Franklin and several other historians of the period, it was these onerous demands by the Crown, and the corresponding collapse of the colonists’ paper money supply, that actually sparked the Revolutionary War.2
The colonists won the war but ultimately lost the money power to a private banking cartel, one that issued another form of paper money called “banknotes.” Today the bankers’ debt-based money has come to dominate most of the economies of the world; but there are a number of historical examples of the successful funding of economic development in other countries simply with government-issued credit. In Australia and New Zealand in the 1930s, the Depression conditions suffered elsewhere were avoided by drawing on a national credit card issued by publicly-owned central banks. The governments of the island states of Guernsey and Jersey created thriving economies that carried no federal debt, just by issuing their own debt-free public currencies. China has also funded impressive internal development through a system of state-owned banks.
Here in the United States, the state of North Dakota has a wholly state-owned bank that creates credit on its books just as private banks do. This credit is used to serve the needs of the community, and the interest on loans is returned to the government. Not coincidentally, North Dakota has a $1.2 billion budget surplus at a time when 46 of 50 states are insolvent, an impressive achievement for a state of isolated farmers battling challenging weather.3 The North Dakota prototype could be copied not only in every U.S. state but at the federal level.
The Perennial Inflation Question
The objection invariably raised to government-issued currency or credit is that it would create dangerous hyperinflation. However, in none of these models has that proven to be true. Price inflation results either when the supply of money goes up but the supply of goods doesn’t, or when speculators devalue currencies by massive short selling, as in those cases of Latin American hyperinflation when printing-press money was used to pay off foreign debt. When new money is used to produce new goods and services, price inflation does not result because supply and demand rise together. Prices did increase during the American Civil War, but this was attributed to the scarcity of goods common in wartime rather than to the Greenback itself. War produces weapons rather than consumer goods.
Today, with trillions of dollars being committed for bailouts and stimulus plans, another objection to Lincoln’s solution is likely to be, “The U.S. government is already printing its own money – and lots of it.” This, however, is a misconception. What the government prints are bonds – its I.O.U.s or debt. If the government did print dollars, instead of borrowing them from a privately-owned central bank that prints them, Uncle Sam would not have an eleven trillion dollar millstone hanging around his neck. As Thomas Edison astutely observed:
“If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good, makes the bill good, also. The difference between the bond and the bill is that the bond lets money brokers collect twice the amount of the bond and an additional 20%, whereas the currency pays nobody but those who contribute directly in some useful way.
It is absurd to say that our country can issue $30 million in bonds and not $30 million in currency. Both are promises to pay, but one promise fattens the usurers and the other helps the people.”
A Wake-up Call
Henry Ford observed at about the same time:
“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”
Today we the people are starting to understand our banking and monetary system, and we are shocked, dismayed, and furious at what we are discovering. The wizard behind the curtain turns out to be a small group of men pulling levers and dials, creating an illusory money scheme that, behind all the talk and bravado, is mere smoke and mirrors. These levers are controlled by a privately-owned, unaccountable central bank called the Federal Reserve, which has recently dispensed billions if not trillions in funds to its banker cronies, without revealing where these monies are going even under Congressional inquiry or in response to Freedom of Information Act (FOIA) requests. As Chris Powell pointed out recently in conjunction with an FOIA request brought by Bloomberg News, which the Fed declined to comply with:
“Any government that can disburse $2 trillion secretly, without any accountability, is not a democratic government. It is government of, by, and, for the bankers.”4
There was a time when private central bankers were the heavyweights in control, able to run their ultra-secret agenda with impunity; but that era is coming to an end. The bankers are scrambling, trying to patch up their crumbling creations with schemes, bailouts and sleight of hand. That effort, however, must ultimately prove futile. As investment adviser Rolfe Winkler said in a recent article:
“The great Ponzi scheme that is the Western World’s economy has grown so big there’s simply no ‘fixing’ it. Flushing more debt through the system would be like giving Madoff a few billion to tide him over. Or like adding another floor to the Tower of Babel. To what end? The collapse is already here. The question is: How much do we want it to hurt? Using the public’s purse to finance ‘confidence’ in a system that is already kaput may delay the Day of Reckoning, sure, but at the cost of multiplying our losses. Perhaps fantastically.”5
The bankers are on the run, feverishly trying to use the collapse of the current system to steer us toward an “Amero”-style North American currency, or a one-world private banking system and privately-issued global currency that they and only they control. We the people will not accept those solutions, however, no matter how bad things get. We demand real solutions that empower us, not further enslave us.
Abraham Lincoln had such a solution. President Obama, you can finally bring his monetary solution to fruition. Manifest the vision of Lincoln, Jefferson, Madison and Franklin, and we the people will make sure you are placed in the pantheon of our greatest leaders and are revered for all time. America’s greatest days can still be ahead of us; but for this to happen, we need to expose and root out the deceptive banking scheme that would enslave us to a future of debt and increasing homelessness in this great country our forefathers founded. The time has come for democracy to rise superior to a private banking cartel and take back the power to create money once again. Such a transformation would represent the most epochal and empowering shift that humanity has ever seen. As you recently said:
“This country has never responded to a crisis by sitting on the sidelines and hoping for the best. Throughout our history we have met every great challenge with bold action and big ideas.”
Your words are a timely reminder of our long legacy of action and bold solutions in the face of adversity. Can we do this? Yes we can.
For more information, see the writings of a variety of money reformers including David Korten, Richard Cook, Stephen Zarlenga, Michael Hudson and this author; articles collected at www.webofdebt.com/articles and www.GlobalResearch.ca; the documentary videos “The Money Masters” and “Money as Debt;” and proposed legislation by Congressman Dennis Kucinich to nationalize the Fed, and by Congressman Ron Paul to audit it (HR 1027).
1. See Ellen Brown, “Borrowing from Peter to Pay Paul: The Wall Street Ponzi Scheme Called Fractional Reserve Banking,” www.webofdebt.com/articles (December 29, 2008).
2. Congressman Charles Binderup in a 1941 speech, “How America Created Its Own Money in 1750: How Benjamin Franklin Made New England Prosperous.” Binderup quotes historian John Twells on this point.
3. E. Brown, “Turning the Tables on Wall Street: North Dakota Shows Cash-starved States How They Can Create Their Own Credit,” www.webofdebt.com/articles (March 11, 2009).
4. Chris Powell, “Fed Refuses to Disclose Recipients of $2 Trillion,” GATA (December 12, 2008).
5. Rolfe Winkler, “More Debt Won’t Rescue the Great American Ponzi,” Option Armageddon (March 9, 2009).
Special thanks to CC for his invaluable help with this article.
Ellen Brown developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest book, she turns those skills to an analysis of the Federal Reserve and “the money trust.” She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her earlier books focused on the pharmaceutical cartel that gets its power from “the money trust.” Her eleven books include Forbidden Medicine, Nature’s Pharmacy (co-authored with Dr. Lynne Walker), and The Key to Ultimate Health (co-authored with Dr. Richard Hansen). Her websites are www.webofdebt.com and www.ellenbrown.com .
March aims to draw attention to real victims of water crisis...Editorial
In the long-standing battles over water in California, we're treated to titanic clashes between powerful interests. Farmers and their wealthy allies in the business world square off against well-heeled environmentalists and their political allies in Sacramento and Washington.
We rarely hear from the people most profoundly affected by water policy and politics: the farmworkers whose very livelihoods -- and the lives of their families -- depend on reliable supplies of water reaching the fields where they make a living, planting, nurturing and harvesting the food we eat.
Changing that focus is the goal of organizers who've planned a four-day march across the Valley's west side this week. The California Latino Water Coalition has joined with farmers and others to promote what they hope is a massive turnout of farmworkers, farmers, small business people, elected officials and politicians and other civic leaders.
They want to bring attention to the desperate conditions facing California -- a growing water shortage caused by decades of inattention and political gridlock, and exacerbated by three years of drought. We urgently hope they succeed.
The short-term goal of the marchers is to get immediate relief in the form of increased water supplies from the Sacramento-San Joaquin Delta. Legal battles and a court order have shut down the supplies for west-side farms this year, driving many farmers to fallow their fields. That puts thousands of farmworkers out of a job and consigns their families to real misery.
Unemployment in Mendota -- where the march starts on Tuesday -- is already officially at 40%, and is likely higher. That exceeds the worst of the Great Depression.
Legal protections for threatened species of fish in the Delta led to the court's ruling shutting off the pumps and the water flow.
But it's people here in the Valley who pay the price for that decision. And there has to be a way to mitigate that impact. If it means a short-term easing of environmental regulations, so be it.
Some measure of water must be moved to the west side to ease the terrible burdens facing those who've been put out of work by the failure of elected leaders and the intransigence of special interests. It may already be too late to salvage most of the growing season for many crops, but some of the damage may be avoided.
And by damage, let's be clear what we're talking about: This is about people's lives and the lives of their families.
For the long term, we have long endorsed the goals being advanced by the water coalition. California needs new surface storage, expanded underground water banking and dramatic increases in conservation efforts.
That comprehensive solution won't be achieved until all the parties understand that there must be compromise. It is difficult for us to believe that, with all the skills and talent arrayed on both sides of the water issue, it's not possible to find a compromise that meets most of our needs for reliable water supplies and a healthy, sustainable environment.
And we hope the world's attention is focused on the marchers as they deliver that message in their 50-mile trek from Mendota to the San Luis Dam. They and their families have gone unnoticed for far too long. It's time their needs are factored into the equation.
The King of California...Mark Arax. Mark Arax, a staff member of the California Senate majority, is a co-author of "The King of California: J.G. Boswell and the Making of a Secret American Empire." He is the author of a new book, "West of the West: Dreamers, Believers, Builders and Killers in the Golden State."
He was the biggest farmer in America and the last of California's great land barons, a man who had drained an inland sea and made the rivers run backward as he carved out the richest cotton patch in the world.
How his family had brought their Southern plantation to a corner of the West in the 1920s was a story of astonishing vision and will and the flouting of nature, not to mention a parade of hubris. Yet J.G. Boswell was quite determined to die without ever telling it.
"You don't get it, do you?" he snarled at me during a phone call in 1999 to discuss the idea of a book about him. "I don't give a damn about my legacy."
He died April 3 at the age of 86, still clutching the notion that he could take a $10 million cotton subsidy check from Uncle Sam and remain a rugged individualist, that he could amass a 200,000-acre farm in the middle of California and "own" 15 percent of the Kings River, and still righteously bristle at the suggestion that he had built an "empire."
"What are you, a tax collector? I abhor the word 'empire.' It's a word for nations, for civilizations. Why do you have to get into this whole damn 'big' thing anyway?"
Boswell had built the most highly industrialized cotton operation in the world and grew more irrigated wheat, safflower and seed alfalfa than any single farmer in the country. Now he was aiming to do the same with onions and tomatoes. Though he would deny it, he dictated California water politics in Sacramento and Washington, D.C. I was drawn to his story for the simple reason that he had created the quintessential "factory in the field," from laser-leveled earth to gleaming gins to labs that minted new varieties of seeds – all of it rising out of the bottom of what was once the largest body of fresh water west of the Mississippi.
I was born in Fresno and spent years as a journalist poking into the crannies of the San Joaquin Valley, but I had never glimpsed Tulare Lake, at least not with water in it. Dams thwarted the four rivers that fed into the basin. The rivers were no longer rivers but rather precise bands of irrigation water. Along their straitjacketed banks, Boswell had planted massive pumps to make sure that no water flowed where he didn't want it to flow. Even so, once every decade, and sometimes more often, when a heavy winter gave way to a hot spring, the snowmelt would shoot down from the Sierra and push past the contrivances of even Boswell. Near his hometown of Corcoran, a remnant of the old Yokut lake would come back to life.
In the flood years of 1997 and 1998, I drove for miles and miles across a flat expanse of Kings County, past vineyards and almond orchards, past dairies and alfalfa fields, until the road suddenly quit at the base of a huge earthen wall. It was a dike not unlike the dikes of Holland. The air filled with the faint smell and sound of ocean. Climbing atop the muddy embankment, gaping at the lake's big belly, I felt lost for a moment, dizzy with vertigo. Was this the heart of California cotton country or the New Jersey shore? The lake was brown in parts and pure blue in others, and the speed with which nature had found its old self was a wonder to behold. The sun glinted off flocks of mud hens, pintail and mallard ducks, giant blue and white herons and pelicans scooping up catfish.
On the drive home, I wondered what kind of dreamer would pick such a spot after watching the boll weevil devour his family's cotton fields back in Georgia. Was God's 100-year-flood, which arrived each decade, a lesser wrath than pest?
The dreamer in question was a wildcatter named J.G. Boswell, one more Southerner who had landed West wearing the title "Colonel." He was the uncle who founded the company in 1921 and insisted on a culture of stealth: "As long as the whale never surfaces," the family motto went, "it is never harpooned."
The colonel married Ruth Chandler, the disobedient daughter of California's most powerful clan, but they had no children. So when it came time to turn over the Corcoran fields and gins – and all the water rights he had collected with them – he handed over the keys to his nephew and namesake, J.G. Boswell II ("Call me Jim"), fresh from Stanford University. To prove his mettle, the kid promptly got into a cattle roping accident on the family spread in Arizona and lost the two middle fingers on his right hand.
For the rest of his life, Jim Boswell enjoyed "flipping the bird" by implication, making his enemies (tree huggers, union pinkos, journalists) guess what gesture he was intending with the upward thrust of his hand.
He was 76 years old but still running the show when I first appealed to his sense of history, and then vanity, in the hope that he might talk to me and my co-author Rick Wartzman. Boswell was living in Ketchum, Idaho, but flying into Corcoran on a regular basis to oversee an operation that punched out 146,000 bales of the finest cotton a year – enough fiber to make 840,000 pairs of boxer shorts every day. For two years, he wanted no part of our book. Then during one phone conversation, I let it slip that the old-timers of Corcoran were portraying his father as the town drunk.
"My dad had a problem, that's true, but you'd be wrong to reduce him to some stumbling drunk."
So as a way to keep us straight with certain facts, he invited us out for a tour of the land where he hunted Yokut arrowheads as a kid. We piled into a beat-up Chevy truck and barreled into an immense engineered landscape where the earth hardly rose or fell an inch as it rolled out – the secret heart of California.
At some point, it occurred to us that we had traveled half a day, a distance of some 150 miles, and never left his farm. Nearly every road, field and irrigation canal belonged to Boswell and every worker we passed and he waved to was a Boswell worker, and every truck, tractor and leveler for which he politely moved to the side of the road bore the same diamond-B logo.
To hear him tell it, he had more than doubled the size of his uncle's company through a series of chance encounters with desperate sellers. He went looking for none of it.
"I'm the bad guy in agriculture because I'm big," he explained. "And I'm not going to try and fight it. I can't change an image and say, 'Well, I'm righteous and good and all that.' But I'm telling you, I'm proud of what we've built."
No one paid farmworkers a better wage, and several of his top men, experts in agronomy and hydrology, had become millionaires. Like the boss, they weren't showy. But because Boswell had swallowed up all but a handful of competitors, Corcoran had the feel of a stunted company town. He tried to right things with his considerable philanthropy, but it wasn't enough to close the gap between rich and poor. A community of big farms simply didn't spread the wealth like a community of smaller ones.
He understood where our book was headed, the contradictions that defined him as well as his empire. Yet once he agreed to cooperate, he never broke his word to meet us again and again on the land. One afternoon, to our surprise, he even landed us an interview with Fred Salyer, his main rival in the lake bottom for more than half a century, whose family was even more contemptuous of the press than the Boswells.
I'll never forget the encounter. It took place in a small office next to Salyer's airplane hangar, all that was left of the Salyer empire after Boswell had bought him out. Fred Salyer sat silent for several minutes and then began to narrate a tale of how his father, Clarence "Cockeye" Salyer, had been the gunman in one of the most infamous unsolved murders in California history, the shooting death of a cotton striker in Pixley in fall 1933. Cockeye had asked his son to light up the coal forge and melt the gun so no cop could ever trace it. The son followed orders, and Cockeye got away with murder. But the son had kept the forge all these years so he might one day donate it to the local museum.
Boswell did extract one promise from us – that we would show him the manuscript before turning it in to our publisher. This way, he might correct any wrong dates and other missed facts. I remember arriving at his Corcoran cabana after he had read the manuscript – not once but twice. I walked in and there sat the pages on the breakfast table, full of yellow Post-its. We went through them one by one. He didn't like the way we had portrayed his power when it came to defeating the peripheral canal in the early 1980s and other water issues; he didn't like that we had documented a feud between him and his son, who had told us his father would never hand over the reins until the day he died; he didn't like it that we had given so much attention to the plight of the black Okies, who had come West to follow the cotton trail. In each instance, I told him these weren't changes we could make.
"Well then," he said. "This title. 'The King of California.' It's a deal breaker. If it sticks, I'll never talk to you again."
"It's a helluva title, Jim," I replied. "What would you suggest to replace it?"
"How about 'A King of California?' "
"A king? Who in the heck is going to read that?"
"Well then," he said, pondering. "How about 'The King of Kings?' "
"Jim," I said, trying not to chuckle. "I think that one's been taken."
James G. Boswell II dies at 86; cotton magnate built family farm into agribusiness giant
Heralded as 'The King of California,' Boswell at one point oversaw an empire spanning 200,000 acres in the San Joaquin Valley, transforming the industry and influencing pivotal state water policies...Jerry Hirsch...Los Angeles Times...April 7, 2009
James G. Boswell II, the intensely private businessman who transformed his family's cotton holdings into California's first giant agribusiness and one of the nation's great farming empires, has died. He was 86.
Boswell died of natural causes Friday at his home in Indian Wells, Calif., according to a statement from the family.
As head of the family-owned J.G. Boswell Co., Boswell ran a company that has dominated California cotton growing for generations and has used its clout to influence land- and water-resource policy throughout much of the state.
He was just 29 when he inherited the company following the death of his uncle J.G. Boswell, the family patriarch. Over the next half-century, he transformed the business and more than tripled the size of the family farm, which peaked about 200,000 acres and now spans 150,000 in the San Joaquin Valley town of Corcoran. Boswell's labs created new, more productive seeds. Technological improvements to his gins boosted their capacity to 400 bales of cotton a day -- enough to produce 840,000 pairs of boxer shorts, according to a 2003 Times article.
Historians and agriculture economists credit Boswell with creating the template for large agribusiness concerns.
The Boswell business remains one of the world's top sellers of "the extra-long staple cotton that goes into fabric blends and both soft and high-end apparel," said Don Villarejo, director emeritus of the California Institute for Rural Studies in Davis.
"His legacy is quite impressive," said Villarejo. "He was a brilliant business leader beloved by many of his employees. At the same time, his company was able to be ahead of and often acquire his chief farming competitors."
Boswell also was legendary for using a combination of political clout and legal strategy "to outwit many of the environmental groups that have tried to restrict water deliveries to California agriculture," Villarejo said.
He was an innovative water user, one of the first to employ lasers to level fields so that water flowed evenly and efficiently, said Richard Howitt, an agriculture economist at UC Davis.
Careful water management, including employing agronomists to determine when and how to water, allowed Boswell's farms to produce more cotton with less water than competitors, Howitt said. Many of his techniques were later adopted by other farms.
But even during this period of growth and success for the enterprise, which included diversification into tomatoes and other crops, real estate development and farming in distant Australia, Boswell remained an intensely private man at the head of an intensely private family business.
A rare 1999 interview with two now-former Los Angeles Times writers gave outsiders a sense of Boswell's character.
For years staff writer Mark Arax and business editor Rick Wartzman had attempted to meet the cotton patriarch. But each letter and call was rejected. The two were writing "The King of California: J.G. Boswell and the Making of a Secret American Empire," a book about the family's cotton business, and they needed to talk to him. Finally he agreed.
J.G., as Boswell liked to be called, wanted to meet them on his land rather than in some sterile office. His intent was to show them that the business was only as good as its earth.
Boswell, the pair wrote, "wore a Cal Poly Ag hat tucked low, frayed khaki pants, a flannel shirt and Rockport shoes."
"It was all part of an image that Boswell loved to play up. He had earned an economics degree at Stanford and sat on the board of General Electric and other big corporations, but he fancied himself a cowboy," they wrote in a 2003 Times article.
Boswell attended the Thacher School, an exclusive private boarding school in Ojai, graduating in 1941.
He served in the Army during World War II in the South Pacific before graduating from Stanford in 1946. That's where he met his first wife, Rosalind Murray. They raised their three children in Pasadena, far from the farm. She died in 2000.
The company remains headquartered in Pasadena.
Fancying himself a cowboy and living like a city boy, J.G. proved to be a complex figure. When he reached out to shake the writers' hands, they noticed the missing fingers on his right hand, the result of a cattle-roping accident.
They jumped into an aged Chevy truck for a tour of his holdings. The writers said they traveled half a day and 150 miles but never left the farm. When they asked Boswell how much land he really owned, he responded, "What are you, a tax collector?"
"I'm the bad guy in agriculture because I'm big," he said later. "I'm not going to try to fight it. I can't change an image and say, 'Well, I'm righteous and good and all that.' But I'm telling you . . . I'm not going to apologize for our size."
Wartzman, now director of the Drucker Institute at Claremont Graduate University, said he was sad to learn of Boswell's death.
"He was an immensely complicated guy, someone who knew every inch of his land but whose company did some pretty awful things to the land," Wartzman said. "It is just hard to farm in an environmentally sound manner at that scale."
The company used its political clout to encourage the building of the Pine Flat Dam to shut the flow of water to Tulare Lake, which at one point was the largest freshwater lake west of the Mississippi River. The drained lake bed is now farmland, located at the heart of Boswell's sprawling enterprise.
Boswell was born March 10, 1923, in Greensboro, Ga., the son of William Whittier Boswell Sr. and Kate Hall Boswell, and moved west with his parents and his uncles.
He was named after his uncle J.G. Boswell, who married Ruth Chandler, the daughter of Los Angeles Times Publisher and real estate baron Harry Chandler.
With no children of his own, J.G. Boswell picked his nephew to take control of the company he had founded in 1921 with the help of his brothers.
In the early 1980s, Boswell and the company would spend $1 million to defeat the Peripheral Canal, a system proposed to move water to Southern California. He thought it would hurt farming interests.
During the same period, Boswell helped farmers outflank state and game regulators and pump water from excessive snowmelt into the north fork of the Kings River. The move prevented farmland from flooding but also introduced the nonnative predatory white bass into the Sacramento-San Joaquin River Delta.
At times profane, Boswell liked to be in control. For many years his company extended its influence throughout the San Joaquin Valley by lending money to other growers.
He served as chairman, president and chief executive of the company from 1952 until his retirement in 1984. He remained on the company's board of directors until his death. His son James W. Boswell now runs the business.
In addition to his son, he is survived by his wife, Barbara Wallace Boswell; daughters Jody Hall and Lorraine Wilcox; and five grandchildren.
A memorial service is planned for April 22 at 1 p.m. at the Corcoran High School Memorial Stadium.
Marcos Breton: Delta Shores lawsuit about greenbacks, not greenbelt
For 40 years, some Meadowview residents have longed for their own grocery store instead of traveling to other neighborhoods for a gallon of milk.
"We've been at this since I was a little girl," said Karen Johnson Rivera, who is 48 and has lived in Meadowview since 1965. "When it was approved (by the Sacramento City Council in January), I told my mother: 'We finally got our grocery store.' "
The hope for a shopping center and housing units on 800 acres of vacant land between Meadowview and Interstate 5 has been stopped by – what else? – a lawsuit.
We are talking about one of the last large swaths of undeveloped land in Sacramento. The project's first piece would have been construction of a freeway interchange on Interstate 5 near Freeport – and an extension of Cosumnes River Boulevard west to I-5. Work would have begun this summer. It was stopped by what seemed to be environmental litigation.
Filed against the city of Sacramento, the suit expresses concern for Swainson's hawks, greater sandhill cranes, vernal pool crustaceans and burrowing owls.
And really, who doesn't worry about vernal pool crustaceans?
Forgotten in this story are Meadowview senior citizens hauling their groceries on the bus from Greenhaven.
"You see a lot of elderly people carrying these big old hand carts," Johnson Rivera said. "My neighbor does, and she has major health issues. She has no choice but lugging those groceries."
Two local environmental groups oppose Delta Shores. And so do the Pipefitters Union, Local 447; the International Brotherhood of Electrical Workers Union, Local 340; and the Sheet Metal Workers Union, Local 162.
You've probably heard of the pipe fitters. During last year's mayoral election, Harry Rotz – Lord of Pipe Dudes – produced campaign mailers with an unflattering image of Mayor Kevin Johnson, doctored to make him look menacing.
Think KJ as Willie Horton. It was real progressive stuff.
Rotz won't talk to the media, and other union folks demurred this time as well.
But maybe they truly are concerned about furry owls. Maybe they hug trees on the coffee breaks.
And maybe a Swainson's hawk will fly out of my nose.
If San Diego-based M&H Realty Partners – the Delta Shores developers – agreed to protect labor agreements with the unions, the burrowing owls would be kicked to the curb.
This is about greenbacks, not greenbelts. Some call it "greenmail" – blackmail cloaked in green. Greg Thatch, a lawyer for M&H, said union labor will undoubtedly be used for Delta Shores. The developers just don't want to be locked into quotas. It's a reasonable position in a deep recession.
Meanwhile, all the union lawsuit does is ensure no one gets paid to work. It shamefully delays a neighborhood of services sought for decades. And it makes environmental law seem like a sham.
Sage grouse suit targets grazing, drilling in West...SCOTT SONNER, Associated Press Writer
RENO, Nev. (AP) - Conservationists say federal rules that allow livestock grazing and oil and gas development across 25 million acres of public land in the West are illegal because they fail to acknowledge the harm being done to sage grouse.
A lawsuit recently filed in federal court accuses the Bureau of Land Management of violating two major environmental laws and its own regulations by allowing commercial activities to continue on those lands in Nevada, Idaho, Montana, Wyoming, Utah and California.
But in a switch in strategy, the environmentalists aren't asking a judge to immediately halt those operations. They want to talk, and they think they may have a willing listener in the new Obama administration.
"What we are after is finding a way to do things differently than in the past and better manage these public lands into the future," said Laird Lucas, a lawyer for the Western Watersheds Project, which filed the suit.
"The next 20 years are going to be really critical, not just for sage grouse, but for the whole sagebrush ecosystem," he said. "Getting an injunction that creates a crisis in the short term doesn't really serve that role."
Since taking office, President Obama has distanced himself from several Bush administration policies on the environment and suspended some administrative orders Bush signed in the waning days of his term that could lead to the easing of protections for threatened wildlife on federal land.
The change in administrations prompted the new approach from the Idaho-based environmental group that has spent much of the past eight years in court battling land use rules adopted by the BLM and Forest Service under the Bush administration.
"The Obama White House has a very strong and public commitment to applying science-based decision-making for natural resource issues," said Jon Marvel, the group's director.
"We want to show the Obama administration the misdeeds of the Bush administration in the hope they will understand and be interested in correcting those," he said.
Kendra Barkoff, press secretary for Interior Secretary Ken Salazar, said Friday "we are in the preliminary stages of litigation and as a result can't comment."
Ranchers and drillers said the suit is part of an effort to keep livestock, energy development and other commercial activities off an area of the West bigger than the state of Indiana.
The Wyoming Stock Growers Association and the Petroleum Association of Wyoming have joined the government in seeking to dismiss the suit. A hearing on one of those motions is scheduled in Boise on April 16.
"They are trying to tie up 25 million acres and close it down to livestock operators altogether," said Ronald Opsahl, a lawyer for the Mountain States Legal Foundation, which represents the two Wyoming groups.
"As far as the scope of this case, it has to be unprecedented," he said. "I've never seen one lawsuit challenge 18 resource management plans in six states."
So far, Justice Department lawyers representing the BLM, have restricted their legal arguments primarily to matters of jurisdiction. Deborah Ferguson, assistant U.S. attorney for Idaho, said each of the 18 plans being challenged should be handled separately in U.S. courts in each of the six states.
The focus of the lawsuit is a chicken-sized game bird - mottled brown, black and white - found on sagebrush plains and high desert from Colorado to California and into southern Canada. The government estimates as many as 16 million sage grouse inhabited the West in the early 1800s when they were first observed by Lewis and Clark. Today their numbers have dwindled as low as 100,000, according to a U.S. Fish and Wildlife Service census in 2005.
Wildfires, development and industry have cut steadily into their habitat, now estimated to be about half of what it once was when the birds ranged from Kansas to Washington and into the Dakotas.
North Dakota's sage grouse population is limited to the far southwestern corner of the state, in Golden Valley, Slope and Bowman counties. A record-low number of male sage grouse in breeding grounds prompted biologists to close last fall's hunting season.
At issue in the lawsuit is the BLM's National Sage Grouse Habitat Conservation Strategy. The agency adopted it in 2004 as an interim plan to help protect the bird and guide management of federal rangeland while the U.S. Fish and Wildlife Service considered whether to protect the sage grouse under the Endangered Species Act - a move ex-Interior Secretary Gale Norton predicted would have a more significant economic impact on the West than did the listing of the northern spotted owl in the early 1990s.
The wildlife service determined in 2005 not to list the sage grouse as an endangered or threatened species, but a federal judge overturned the decision.
Responding to a suit filed by the Western Watersheds Project, U.S. District Judge B. Lynn Winmill in Boise ruled in December 2007 that the wildlife service's decision had been tainted by political pressure from an assistant Interior Department secretary who since has resigned. Winmill will preside over the current lawsuit.
While the wildlife service is expected to deliver a new decision on whether to protect the bird this year, the BLM already considers the sage grouse a "sensitive" species.
Therefore, the suit contends, the agency must treat it as if it is protected and make sure it takes no action that could push the bird closer to a federal listing. Environmentalists note the agency already has banned grazing on 220,000 acres of southern Nevada where the threatened desert tortoise lives.
The lawsuit alleges BLM violated the National Environmental Policy Act and the Federal Land Policy Management Act by failing to consider the cumulative impact of the 18 individual resource plans on the sage grouse.
The lawsuit said the BLM refused to consider whether the lands in question are capable of sustaining livestock grazing without causing environmental harm or whether grazing remains a legal suitable use of the lands.
It says the agency also did not weigh the effects of dramatic increases in wildfires, invasive weeds and drought in recent years.
BLM "acted in shocking disregard of the specific sage grouse conservation strategy that BLM itself adopted," the lawsuit said. It added the existing plans "will certainly drive sage grouse closer to extinction."
Agency officials disagree.
"BLM does consider impacts to sage grouse in land use plans," said Jolynn Worley, a spokeswoman for BLM in Nevada. She said the agency does not comment on pending litigation.
Dan Gralian, president of the Nevada Cattlemen's Association, said the Western Watersheds Project claims to be interested in restoring rangeland but its primary agenda is to get livestock off public lands.
"We cattle and sheep ranchers work hard to manage both our private and public lands for its livestock, wildlife and environmental values and we find such attacks by radical environmental groups counterproductive," he said.
San Francisco Chronicle
How Merced snagged first lady for commencement...Willie Brown
I had a heck of a trip a few days back to Merced, where I learned how the little UC campus there managed to land Michelle Obama as commencement speaker for its first graduating class next month.
The reason for my visit dates to my time as state Assembly speaker. When the University of California started making noises about adding a campus, I quickly figured out that it would be a real political plus to put it somewhere in the Central Valley.
I knew that if I ever pulled it off, it would make me bigger than the head of the National Rifle Association with the people down there.
The question was where. Bakersfield? Fresno? Modesto?
I never saw any of the sites, but I studied all the proposals meticulously and we settled on Merced. I finally visited the campus for the first time Monday, having been invited down there to speak.
If I had any clue of the location, I probably would never have supported it. It's almost three hours from anywhere.
But - when you get there - it is a lovely piece of land. And I think the campus will eventually be one of the premier UC institutions.
Anyway, as to how they got the first lady to be commencement speaker: The students mounted a letter-writing campaign. They must have gotten everybody in the valley to write one, because there were thousands. Then they packaged them all and delivered them to the White House on Valentine's Day.
And these weren't your typical letter-writing campaign letters, where there's a master form and everyone copies it in their own hand.
No, everyone wrote their own. Somebody on the first lady's staff took one look and realized this was really genuine.
So now the first lady gets the campus' first honorary degree, and UC Merced gets on the map.
Former San Francisco Mayor, State Assembly Speaker Willie Brown Jr. pays a visit to UC Merced...DANIELLE GAINES...Merced Sun-Star...4-7-09
Willie Brown Jr., famous mayor of San Francisco and longtime state Assemblyman, spoke before a crowd of business management students at UC Merced on Monday night.
Brown was invited to the campus by Mark T. Harris, a visiting professor of management. The former mayor gave a short lecture before taking questions and giving advice to students.
On running for office:
Brown said he began his career with endless ambition as a member of the San Francisco State University student government, which felt the school needed no chancellor.
In 1964, Brown won his first state office by knocking on doors and getting to know absolutely everyone, he said.
He beat Edward Gaffney, a 22-year incumbent, with no more than a few thousand dollars and hard work, he told the students.
Brown added that public office was a career of profound influence. "You really ought to consider running for public office," he told them. "And if you're serious, read my book."
On the 2010 governor race:Brown ruled out running for the position himself. "I don't want to do those things. I want to go to Paris," he said.
He said the Democratic candidates were a "wonderful, talented collection of people," but Jerry Brown would win. Republicans, he said, have "virtually no one" in the race. "I just don't think it's in the cards for the Republicans this year, no matter who runs," Brown said.
A few crowd members asked Brown tough questions on the topic of redistricting and term limits.
Creating term limits, he said, robbed the state of experienced politicians. Redistricting will always be a subjective exercise, Brown said. He added that he would have created a district that included only himself and his mother if allowed.
State must rescue delta from crisis...George Miller, Lois Wolk. Rep. George Miller, D-Martinez, is a member of the House leadership and the former chairman of the House Natural Resources Committee. State Sen. Lois Wolk, D-Davis, is chair of Senate Select Committee on Delta Stewardship and Sustainability, and a member of Delta Protection Commission.
California's Sacramento-San Joaquin River Delta, the largest estuary on the Pacific Coast of the Americas, is in crisis. Multiple species of fish are in rapid decline. First the delta smelt, and then the steelhead and salmon that once migrated through the estuary by the tens of thousands. Now, even the orcas that feed on the salmon are threatened. The dominoes are falling every day.
This crisis didn't happen overnight. It came after years of mismanagement by the federal and state water and wildlife agencies that ignored what the science was telling them and resisted new realities about climate change.
Fortunately, change in Washington is giving Californians new opportunities to rescue our delta from the failed policies of the past. With a new administration committed to sustainable energy and environmental policy, it is time to form a new state-federal-local partnership to save the delta.
We need this vital region - its ecosystem and its economy - to thrive. Working together, we can use new tools to meet our clean water needs, overhaul the responsible agencies, and implement a new management plan that is grounded in science - and gets results.
But first we must realize that there are no silver bullets that will solve all of California's water woes. Suspending the federal Endangered Species Act certainly won't do it. Nor will sprinting to commit billions of taxpayer dollars to dig a water supply ditch the size of the Panama Canal around the delta.
Our years in California water policy have taught us that you've got to put the right policies in place before you decide to build expensive and divisive water infrastructure.
Yet the state Department of Water Resources is now spending more than $1.1 billion on canal and water project planning - off budget, with no legislative oversight or public accountability - while Gov. Arnold Schwarzenegger's Cabinet has asserted that the state could break ground on a canal before the governor's term expires.
There are better answers, both short and long term, that have a greater chance to bring back our fisheries, deliver reliable clean water, and bolster, not threaten, the delta region, including its $35 billion economy with more than 200,000 jobs. These solutions include the region's communities as partners, not adversaries.
Immediately, we should expand proven and cost-effective water supply strategies such as conservation, recycling, groundwater cleanup, desalination, enhanced coordination between reservoirs, and regional water supply projects in Southern California and the Bay Area. President Obama's economic recovery package included a record $126 million for water reuse projects across the West: a good start, but only a drop in the bucket given the demands we face.
In the longer term, we believe that the delta needs a steward, an entity whose sole responsibility is the recovery and health of the delta. We propose a Delta Stewardship Council, which will include representation from different perspectives, all bound by a legal obligation to restore and protect the delta ecosystem. This would help resolve the confusion of 200 federal, state, and local agencies bumping into one another, often at cross purposes, while decision-makers' primary obligations are to outside interests with no responsibility for this critical estuary's survival.
The delta and its watershed also need funding, a conservancy like those California has established to preserve other natural treasures: the coast, the Sierra Nevada and Lake Tahoe.
Much like the Florida Everglades, the delta is a vital economic and environmental resource - not just a plumbing fixture that two-thirds of the state relies upon for its water supply.
Several months ago, the Delta Vision Task Force took an important first step by identifying two co-equal goals for delta policy: water supply reliability and restoring the ecosystem. We believe in elevating a third goal, the delta itself as a place, including the communities, economy, culture, historic, recreational and environmental values that make it valuable to all Californians.
We recognize California's water supply challenges are real and interconnected to the crisis in the delta. Both issues demand action and results. As residents and elected representatives of the region, we urge all Californians to work together to get the policy right before we make the problem worse.
Bay Area's tricky choices about delta's future...Ellen Hanak, Jay Lund. Ellen Hanak is director of research and a senior fellow at the Public Policy Institute of California. Jay Lund is the Ray B. Krone Professor of Environmental Engineering and co-director of the Center for Watershed Sciences at UC Davis. The report "Comparing Futures for the Sacramento-San Joaquin Delta" is available at www.ppic.org.
Something must be done about the failing Sacramento-San Joaquin River Delta.
Continuing to supply the Bay Area and other water users directly from the delta is the worst long-term strategy for native species and a poor strategy for California's economy. The most promising long-term strategy for native fishes alone is to end water exports entirely, at a still greater water supply and economic cost.
The most promising strategy to restore the delta's native fishes and ensure a reliable water supply for 22 million Californians is to build a suitable peripheral canal with substantial additional habitat investments.
These are the conclusions of our recent analysis, published by the Public Policy Institute of California.
The delta - part of the largest estuary on the West Coast - is the Bay Area's largest single water source. Since late 2007, water supplies from the delta have been reduced for many Bay Area users, due to declining populations of endangered native species, worsening the effects of a multiyear drought. Yet the current problem is small compared with the risk of a major earthquake, which would probably destroy many fragile levees, causing a rush of seawater toward the pumps that supply water to the Bay Area, Southern California and San Joaquin Valley and delta farms. The Bay Area as a whole could face a 30 percent loss of water supply for months or years.
Even if such a catastrophe is averted, the rising sea level and flooding of many islands will make the delta's water saltier over time, reducing its suitability as a source of drinking water. These factors make current water management policies for the delta unsustainable.
Bay Area residents depend on water from the delta. Much of the Bay Area's population growth since the 1970s has been supplied by water pumped through the delta. While 30 percent of the region's supplies are now channeled through these pumps - serving much of Santa Clara, Contra Costa, Alameda and Solano counties - an additional 40 percent is diverted from tributaries located upstream.
This diverted water flows through San Francisco's Hetch Hetchy aqueduct and East Bay Municipal Utility District's Mokelumne River aqueduct, serving San Francisco and parts of Alameda, Contra Costa, San Mateo and Santa Clara counties. Both direct and indirect diversions from the delta have contributed to the decline of its native species, including the delta smelt and Chinook salmon, and the resulting cutbacks in water supplies.
Our recent analysis showed that efforts to maintain the delta in its current condition would be costly and largely ineffective for both native species and water users. Fundamental changes are inevitable for much of the western and central delta. Sooner or later, many of the islands that lie below sea level will flood permanently, returning to aquatic habitat.
Continued viability of native species and continued water exports will require major changes in how we manage both water and the ecosystem. There are two long-term alternatives: End water exports from the delta, or divert water around it using a peripheral canal.
Ending exports entirely would probably be the best solution for the native fishes. But it would entail significant costs to the state's economy and reduce Southern California's interest in financing restoration of the delta ecosystem. A peripheral canal is the best strategy for simultaneously improving conditions for native fish and continuing water supplies.
In a 1982 referendum, Bay Area voters rejected a peripheral canal intended to greatly expand water diversions, fearing such a canal would harm the delta environment. Today we know that a well-managed peripheral canal would be much better for the fish than the current system. A peripheral canal would allow water to be managed separately, and more beneficially, for the different needs of native fish and humans. A peripheral canal would allow fresher Sacramento River water to be channeled to the pumps, improving water quality for cities and farms, and reducing the risks of water outages from earthquakes and floods. It also would allow the return to a more natural flow of water within the delta. Sending fresh water to the pumps has reduced the natural variability of water flow and water quality, creating better conditions for harmful invasive species. The large pumps also have distorted the direction of flows, disturbing the food web, putting fish in the wrong places and trapping some fish in the pumps.
Of course, the many Northern Californians who voted against a canal in 1982 will need to be convinced that this is not a "water grab." Safeguards are needed to ensure that water exports do not increase and that the canal is managed to benefit native fish. One option is to allocate a share of canal capacity to the fish, allowing water flow to be managed for their habitat. When more water is needed in the delta, much of the canal would remain empty; at other times, the fishes' share of the canal could be leased to water users, generating revenue to support environmental investments.
To make this work, cities and farms would probably need to commit to reducing water use from the delta - at least until fish populations recover - and support significant expenses for the restoration of aquatic habitat, destroyed by decades of managing the delta for water supplies and farming. Funds will also be needed to ease the transitions in the delta economy as some islands flood.
As major direct and indirect users of water from the delta, Bay Area water utilities are likely to see higher costs and diminished water supplies from the delta in the coming years. But these costs will be higher if California does not act to get ahead of the inevitable changes in the delta. California and the Bay Area need to prepare for the coming changes. The politics and controversies of the delta are difficult, but ultimately physical reality will prevail.
Contra Costa Times
Animal rights activist tells UC Berkeley students to free animals...Doug Oakley...4-10-09
An animal rights activist who spent two years in federal prison for freeing about 10,000 fox and mink from fur farms in the Midwest told UC Berkeley students Wednesday to stop protesting and start freeing animals from Bay Area research labs.
Peter Young spoke to the student group Berkeley Organization for Animal Advocacy days before a preliminary hearing in San Jose federal court for four animal rights activists accused of threatening University of California researchers in Berkeley and Santa Cruz in 2007 and 2008.
Those activists, who include one from Berkeley and one from Pinole, go to court Monday and are charged under the new Animal Enterprise Terrorism Act, which allows stiffer penalties for "animal rights extremists."
"These people are being charged as terrorists for things as benign as wearing masks, chanting, chalking sidewalks and using computers to make fliers," Young said.
Their indictment also alleges the four shook doors of a UC Santa Cruz professor's home and hit the professor's husband with thrown objects. In addition, it alleges some of the four yelled "we're gonna get you" and threatened UC professors in Berkeley and Santa Cruz.
Young, who is on probation and is convinced the FBI is following him everywhere, including to Wednesday night's talk in front of about 30 students and activists in a UC Berkeley classroom, said he doesn't condone violence, but he does support harassment of researchers and breaking the law to free animals.
"Say you are standing outside a building with 150 dogs inside. What is the appropriate action?" Young said.
"Your only responsibility is to get these animals out and make sure this place does not do business another day."
Young recounted his early days of animal activism, when he broke into research labs, fur farms and chicken farms in the Seattle area just to see what was going on.
In 1997, he and another man hatched a plan to free mink and fox from farms in the Midwest.
"There comes a point when you've seen too much, and you can't take it anymore," Young said.
He recalled looking into the eyes of many animals and "making promises to them that I couldn't keep."
On Oct. 14, 1997, Young and the other man hit their first Midwestern farm. Twelve days later, they estimate they released between 8,000 and 12,000 mink and fox from five farms in three states. The two were questioned and released by police in Sheboygan County, Wis., and told to come back to the station in 24 hours.
Young then became a fugitive for seven years until he was arrested for theft in a Starbucks in San Jose in 2005. His accomplice was arrested in Belgium in 1999 and extradited to the U.S.
As Young passed a hat around the room seeking money to support the activists going to court on Monday in San Jose, he called animal researchers and fur farmers "the real terrorists."
Los Angeles Times
A TIMES INVESTIGATION
HUD's Dollar Homes falls short of mission
The federal program sets out to help poor families buy homes. Instead, housing contractors and investors are reaping the benefits, records show...William Heisel
Jerry and Carol Ptacek bounced from one cramped apartment to another most of their adult lives, so they could hardly believe their luck when they were able to buy a San Bernardino house for the bargain price of $63,000.
Nine years later, they are renters again -- a testament to the failure of the federal government's Dollar Homes program.
Congress launched the program in 1998 to clear the Department of Housing and Urban Development's books of foreclosures and provide affordable housing. Local governments would buy the homes for $1, fix them up and resell them at a discount to poor families, who would get a chance to put down roots in the community.
At least that's how it was supposed to work.
A Times investigation has found that the Dollar Homes program has helped housing contractors and investors, but there is no evidence that it has provided any lasting benefit to people like the Ptaceks. The findings offer a cautionary tale as the Obama administration works to craft similar efforts to help communities ravaged by the housing slump.
"This is bad for taxpayers on both sides of the transaction," said Dean Baker, co-director of the Center for Economic and Policy Research in Washington.
More than 2,300 homes have been sold by HUD for $1 each nationwide, with 326 in California. Nearly half of the homes in California were bought by companies or individuals who typically resold them at a much higher price. Only 15% were sold to nonprofit housing groups such as Habitat for Humanity, records show.
The city of San Bernardino bought more Dollar Homes -- 62 -- than any other city or county in the state. But San Bernardino officials could not provide The Times with any account of what happened to the homes after they were sold.
"They went back to the private market, and hopefully they were maintained and kept up," said Carey Jenkins, the housing director of San Bernardino's economic development agency, which oversees the city's Dollar Homes purchases. "And that was pretty much the end of our involvement."
Using county property tax and assessor records, federal bankruptcy files and real estate listings, The Times tracked every property sale to San Bernardino under the program since 2000. Among the findings:
* At least 43 of the 62 homes were sold to housing contractors and investors. Within months after purchase, nearly all were resold, and for an average of three times the original sales price.
* The homes continued to change hands frequently. Some homes have been bought and sold eight times in as many years, defeating the intent of the program to encourage buyers to put down roots and revive downtrodden neighborhoods.
* Instead of continuing to provide opportunities for low-income buyers, these homes have become priced beyond their reach, shooting up more than 450% in value from 2000 to 2008, based on sale prices. Moreover, there are no rules to ensure the homes remain affordable when they are resold.
* Nearly half of homes ended up with buyers who struggled with homeownership, missing property tax payments, defaulting on their loans, and in at least nine cases falling into foreclosure.
* The program goes unmonitored. Cities are by law required to give HUD detailed accounts of who bought the homes and for how much. But in at least 31 cases, San Bernardino provided inaccurate information, incorrectly listing either the buyer or the sale price, the review found.
HUD officials said that because the Dollar Homes program was mandated by Congress, it does not receive the same type of attention and follow-up as programs created by HUD itself.
"You have to keep in mind that this program wasn't created for success," said Vance Morris, the director of HUD's office of single-family asset management, which oversees the Dollar Homes program. "Sometimes you have programs created for success and others that were created to be compliant with the law. In this case, we are just complying with the law."
Morris also said that new rules were being written for all homes sold by HUD at a low cost, and should be implemented this year.
In 1997, Jerry Ptacek was unloading concrete off the back of a flatbed truck when he lost his balance and fell, wrenching his back and hips. Despite several surgeries, he has walked with a cane ever since. His disability payments and a few odd jobs pay the bills. His wife, Carol, also has been declared permanently disabled after years of struggling with depression.
Getting by on Social Security checks, currently about $1,600 a month, the Ptaceks figured they were never going to own a home.
Their luck changed in 2000 when a real estate agent steered them to a two-bedroom home on Conejo Drive in San Bernardino. The price was right: $63,000, with just $500 down. They said they had no idea it had been foreclosed on by HUD and that it had been sold to the city for $1.
The home had fallen into HUD's hands when the borrowers defaulted on their federally guaranteed loan in 1998. San Bernardino acquired it under the Dollar Homes program and sold it for $2,000 to Schechtman Construction of Riverside, one of several companies that had applied with San Bernardino to buy and repair Dollar Homes and other HUD-owned properties, records show.
The city required that these companies make repairs noted by a city inspector and that they sell the homes to low-income families when they were finished. But San Bernardino did not screen the buyers to make sure they met any income requirements, Jenkins of the city housing department acknowledged. Nor did HUD place any restrictions on the local governments after they bought the homes for $1.
The Ptaceks said they started the process of buying the home in August 2000 while Schechtman was working on it. When they took possession that November, they said they had presumed the home had been completely overhauled. But it still needed substantial repairs, they said.
They say that the home's electrical wiring was connected to one circuit breaker and that the plumbing leaked. The home's one bathroom didn't have a window, they said; it had been covered up with stucco from the outside.
"It seemed like once we got through fixing one thing, we would have to turn around and fix something else," Jerry Ptacek said.
Steve Schechtman, the construction company's owner, said he made costly repairs, although he said he could not recall specifically what was done and no longer had records on how much was spent. He also noted that city inspectors had signed off on the work.
"How much more could we have possibly done to put people with marginal incomes into a home?" Schechtman said. "There is no justification for saying anything other than that we did a fabulous job."
To cover the costs of repairs and other improvements, the Ptaceks said they refinanced their home several times, so that by July 2006 they owed more than $220,000 on the home they had bought for $63,000. One of their loan brokers, La Verne Scruggs of Inglewood, supported the Ptaceks' account that the home needed extensive repairs. But the Ptaceks acknowledged that they too made mistakes.
One was to get a negative amortization loan, which kept their monthly payments artificially low, but at the cost of adding to the principal they owed. They also gambled thousands of dollars from their home equity at Indian casinos, they acknowledge.
"They never should have been allowed to buy that house in the first place," Scruggs, the loan broker, said. "That house needed a lot of work, and they didn't have the money to do the work."
The Ptaceks obtained their loans in the now-ended era of easy financing. The institutions that fronted the money for Dollar Homes purchases -- New Century Financial Corp., Ameriquest Mortgage Co., Washington Mutual Inc. and Countrywide Financial Corp. among them -- ultimately collapsed under the weight of soured mortgage loans.
Before they fell, lenders benefited in two ways. First, HUD bought their bad loans and got them off their books, taking over the homes that the agency later sold for $1.
Secondly, when the same homes were resold, these same lenders often provided the mortgages. In one example, Union Planters Bank, which is now part of Regions Bank in Tennessee, foreclosed on a Barstow home for $66,000 in 1999. HUD covered the bank's losses, and then sold the home to Barstow for $1.
When the home was sold in 2001 to a buyer, Union Planters provided a $38,000 loan, records show. So the bank was able to shove a bad loan off its books and onto the federal government and turn around and secure the income from a new loan on the same home just a few years later.
The Ptaceks refinanced their first loan in November 2003 with Ameriquest, which charged them a 9.9% interest rate. In June 2007, the Ptaceks decided they could no longer make their payments, and they signed the home over for nothing to Scruggs, the mortgage broker who had first helped them refinance, and her husband. They now rent the home from the Scruggses.
When Scruggs decides to resell the home, there will be no restriction on her to price it for low- or moderate-income buyers. A few blocks from the Conejo Drive house, a Dollar Homes residence that was sold by the city for $27,000 to an investor was resold several times before being sold for $355,000 less than six years later. The final buyer ended up in foreclosure.
Housing advocates say HUD has done a poor job of overseeing the program. The Times asked HUD for all documents that San Bernardino had provided to the agency as part of its annual reporting requirement through the program. It provided eight pages, mostly listings of property addresses and buyers.
These lists were peppered with inaccuracies. The city told HUD that in most cases it sold the homes directly to first-time home buyers, such as the Ptaceks. It did not mention to HUD that it had actually sold these homes to developers like Schechtman.
The Ptaceks did not realize until they were contacted by The Times that the home was sold under a government program.
"The only time I've seen someone from the city out here was when there was a code enforcement guy telling me I had too much dirt next to my driveway," Jerry Ptacek said.
Housing advocates such as the Rev. David Kalke, executive director of the Central City Lutheran Mission in San Bernardino, think cities could better serve poor people if they used the homes for subsidized housing and tapped nonprofits for the rehabilitation work.
The mission bought two of the Dollar Homes residences for $2,000 in 2001 and turned them into low-income rental housing for homeless people with HIV.
Because of the grants he receives from HUD to help subsidize the program, Kalke said he has to provide extensive documentation every month on how he spends the money. His homes are two of only three that were sold to nonprofit groups in the city.
"Sometimes the government doesn't do things very brightly, and the people who are supposed to be helped end up being hurt," Kalke said. "This kind of initiative could be supported in a much bigger way for less money."
The Ptaceks say they wish they'd never tried to buy a home. They would have been better off renting, they said, and are now trying to qualify for federal rental assistance funds.
Sitting in the living room under a portrait of Jesus, "The Jerry Springer Show" blaring on the TV, the couple look defeated.
"I've started going back to church," Carol Ptacek says. "This whole thing has just been so hard. Praying helps, but it doesn't pay our bills."
Jerry stares blankly at his wife as she talks, leaning against a shelf full of DVDs, many of them Disney films. Their economic situation is so bad, she explains, that the Ptaceks have started watching their friends' kids in exchange for groceries.
Behind the Scenes as FBI Busts Mortgage Fraud Suspects
Suspected Scammers Allegedly Conspired With Appraisers, Brokers and Buyers for Millions...JIM AVILA, ELIZABETH TRIBOLET and LAUREN SHER...April 8, 2009
The Federal Bureau of Investigation swooped in and arrested 23 members of a suspected mortgage scam in San Diego today as part of a nationwide crackdown on real estate fraud.
ABC News was given exclusive access as FBI agents carried out sweeping arrests in the largest raid of its kind. Starting at 6 a.m. this morning, agents led alleged scammers of a diversity of races, ages and both genders into FBI headquarters in handcuffs. Some of them were still in their pajamas.
Federal agents believe that the arrests will stop a scam that has allegedly involved loans on more than 200 houses, costing banks millions and causing neighborhood property values to plummet in San Diego County.
"Agents reviewed many, many hundreds of suspicious activity reports and began to see patterns, trends, repeat occurrences," said Keith Slotter, the FBI's special agent in charge of the San Diego office.
U.S. attorney Karen Hewitt named Darnell Bell, a former gang member from the San Diego area, as the leader of the alleged mortgage fraud enterprise who the office says oversaw the purchase of property, among other tasks. Bell, who authorities say turned to mortgage fraud after a career of selling drugs, has been in jail on cocaine charges since April 2008.
FBI officials say that suspected fraudsters recruited or became loan brokers, contractors, appraisers and straw buyers, building a highly sophisticated scam and network of conspirators.
Authorities say ring leaders would find a property, such as a house listed for $499,000 that had often sat on the market for some time. A real estate appraiser, also involved in the alleged scam, would prepare an inflated appraisal for the house at $600,000. The appraisers promised to make improvements to the property, such as giving the homes access for people with disabilities, but never made them.
The "straw buyer," also in on the alleged conspiracy, would then apply for a 100 percent loan based on the inflated appraisal. The excess money, supposedly needed to rehab the house, was instead split among the scammers.
The buyer simply walked away from the house without making any payments. As a result of the alleged scam, the properties were foreclosed on.
Mortgage Fraud Cripples Neighborhoods
In a news conference in San Diego Tuesday, both the U.S. attorney's office and the FBI underlined the significance of charging this case under the Racketeer Influenced and Corrupt Organizations Act, or RICO. The statute, originally designed to target the mafia, provides for criminals to be penalized for acts that constitute a pattern of illegal activity. Groups such as Hells Angels have been charged under RICO, but officials believe it's the first time the law has been used to prosecute mortgage fraud.
Authorities say this is one version of the kind of mortgage fraud going on across the country that is dealing a crippling blow to one neighborhood after another.
"Home properties having declined over the years, [makes] mortgage fraud not only a terrible crime but that much more deplorable," Slotter said.
Scams, like the one alleged in this case, have led to rampant loss of home values for innocent people who made their payments and watched with dread as their neighbors' bad fortune or dishonesty cost everyone around them.
"So, on average, every time a house is foreclosed on, that scammer reached into the neighbors' pocket and took $8,600 out of their pockets," said Eric Halperin, director of the Washington office of the Center for Responsible Lending.
"That means there are going to be less property taxes paid, that's less money for schools, less money for fire departments, less money for police departments, and all of those costs are then going to affect the community at large."
The FBI now says mortgage scams are the crime of the moment -- ranking just below terrorism on the federal priority list. On Monday government officials vowed to crack down on real estate fraud.
"Scammers are taking advantage of people in a difficult situation -- people who are trying to modify their home mortgages or those who are trying to avoid foreclosure. We're enforcing the law against these scam artists," Federal Trade Commission Chairman Jon Leibowitz said in a statement Monday. "We're putting others on notice that unless they change their ways, they're next."