Phil Mickelson's Choice, Support Corporate Criminals or Social Justice?
Phil Mickelson's Choice, Support Corporate Criminals or Social Justice?
Forbes Magazine lists Phil Mickelson as the world's 7th highest paid athlete, with prize money earnings of $4.8 million and endorsements of $43 million for a very comfortable $47.8 million a year.[i] With his beaming smile, swashbuckling style of play, beautiful wife and children, $47.8 million a year; one could call them the All American Family.
What's not to love about Phil? After signing autographs at the Western Open autograph tent some years ago, he picked my son out of those still in line and signed his visor for him as he was leaving. As a golf fan, I agonized with him for years as he struggled to win his first major and step out of Tiger's shadow.
A Slight Hiccup
He had a slight hiccup earlier this year in January when he mentioned to reporters that he might have to either quit playing golf or leave his home in California because he was paying a total combined tax rate (federal, state, local, unemployment, Social Security, disability) of 62 or 63%. This though assumes that he has no tax planning or deductions. CNBC interviewed several accountants and the consensus was that with even the most basic tax planning he would pay around 50%.[ii] Does anyone believe that there is any American with $47.8 million a year in annual income who has only the most basic tax planning? Of course not, Americans with that kind of income have the most sophisticated accountants working for them to reduce their taxes as much as is legally possible. Certainly in some cases, as much as illegally possible, although I in no way believe that Phil is in this latter category.
Website TheRichest.org estimates Phil's net worth at $180 million.[iii] One would assume that much of this is invested and sheltered from taxation to the greatest possible degree. Also to be assumed, is that the income from his investments that is subject to taxes would be taxed at the lower capital gains rate of 23.8%.
We can only assume that Phil, with $180 million to invest, has significant income outside of his paltry $47.8 million in prize winnings and endorsements. But even if he has invested badly, has no investment income at all from his $180 million and actually pays a total 63% in taxes on $47.8 million in earnings, that leaves him and his family with only $17.7 million after taxes to scrimp by on each year. We can feel your pain Phil.
Phil issued this statement the day after his comments on taxes were reported.
"I absolutely love what I do. I love and appreciate the game of golf and the people who surround it. I'm as motivated as I've ever been to work on my game, to compete and win championships...
I'm like many Americans who are trying to understand the new tax laws. I certainly don't have a definitive plan at this time, but like everyone else I want to make decisions that are best for my future and my family.
Finances and taxes are a personal matter and I should not have made my opinions on them public. I apologize to those I have upset or insulted and assure you I intend to not let it happen again."
He apologized for making his opinions public, not for having the opinion that he deserves to keep more of his $47.8 million per year, while:
- Phil's countrymen and women enjoy a real unemployment rate of 23%, counting all those out of work who want to work and those working only part time that need the income from a full time job.[iv]
- For those in Phil's class that think U.S. government spending is too high; the U.S. ranks 144th of 160 countries surveyed in national government spending. The U.S. federal government spending is 19.9% of U.S. GDP (gross domestic product). That ties us with impoverished Chad.[v]
- The Organization for Economic Cooperation and Development (OECD) ranks the U.S. as the 3rd worst country for inequality and poverty, trailing only Mexico and Turkey.[vi]
- The OECD ranks the U.S. 5th from the bottom in overall social justice ranking,* trailing only Turkey, Mexico, Chile and Greece. * combining poverty rate, poverty prevention rate, child poverty rate, senior citizen poverty rate, income inequality, pre primary education, and health rating.[vii]
- Helsinki-based World Institute for Development Economics Research of the United Nations University Study reported in 2006 that the richest 2% of adults in the world own more wealth than the bottom 98%.[viii]
- Half of all U.S. kids will be on food stamps at some time during their childhood.[ix]
- U.S.corporate profits are at an all time high, wages at an all time low and the percentage of Americans working is at a 30 year low.[x]
While Phil and his fellow golf tour players enjoy ever increasing purses and earnings every year, he might be interested to know about income gains for the rest of us.
During Clinton's presidency 45% of all income gains went to the top 1%.
During Bush's presidency 65% of all income gains went to the top 1%.
During Obama's presidency 93% of all income gains went to the top 1%.[xi]
The question is with 93% of all income gains going to his 1% class, wouldn't an All American guy like Phil be in favor of just a little more income equality for the rest of Americans in the poor and working class? One of the ways to do this is to increase taxes on the very wealthy so that we can at least keep the poor alive. By doing so there is also a definite benefit for Phil's class, the ever expanding pool of unemployed poor keeps wages down for those of us in the working class that are still working. MBA types that handle guys like Phil's extra cash like to call this a "Win, Win." Socialists refer to this huge permanent class of unemployed created to depress wages for the working class as "supernumeraries" or extra numbers. Their misery is necessary for the health of the capitalist system.
No Austerity Program on PGA Tour
Prize money for Phil and the other tour players has increased from $5.5 million in 1970 the year Phil was born to $279 million in 2012. In other words Phil is playing for 50 times the money ( 8 times after adjusting for inflation) that tour players played for when he was born. Product endorsements before he was born amounted to little more than free golf balls and shirts, not the multi million dollar contracts of today. We have already seen that the prize money of $4.8 million that Phil won last year is chickenfeed compared to the $43 million he racked up in product endorsements.
He endorses Barclays Bank prominently on his golf shirts and KPMG Accounting on the goofy looking hat he wears. Who are these noble institutions?
Barclays Bank and the LIBOR Scandal
Barclays Bank is at the root of the LIBOR interest rate scandal that conservative Bloomberg News states "has the potential to become one of the most costly and consequential in the history of banking."[xii]
"Libor, the London inter-bank lending rate, is considered to be one of the most crucial interest rates in finance.
It underpins trillions of pounds worth of loans and financial contracts.
So, when Barclays was fined £290 million in June last year after some of its derivatives traders were found to have attempted to rig this key rate, already weak public confidence in banks was harmed further.
The scandal led to the resignation of both Barclays chief executive Bob Diamond and chairman Marcus Agius."[xiii]
LIBOR stands for the London Inter-Bank Offered Rate a benchmark interest rate that influences hundreds of trillions of dollars in financial contracts around the world. The $450-$600 million total fines Barclays paid in the U.S. and U.K. are only a drop in the bucket to the illegal gains Barclays enjoyed by rigging the LIBOR rates. The LIBOR rates set the benchmark for just about all interest rates, including consumer loans, home mortgages and municipal bonds that directly affect the working class.
U.S.Commodity Futures Trading Commission Press Release
June 12, 2012
CFTC Orders Barclays to pay $200 Million Penalty for Attempted Manipulation of and False Reporting concerning LIBOR and Euribor Benchmark Interest Rates
"Washington, DC– The U.S. Commodity Futures Trading Commission (CFTC) issued an Order today filing and settling charges against Barclays PLC, Barclays Bank PLC (Barclays Bank) and Barclays Capital Inc. (Barclays Capital) (collectively Barclays or the Bank). The Order finds that Barclays attempted to manipulate and made false reports concerning two global benchmark interest rates, LIBOR and Euribor, on numerous occasions and sometimes on a daily basis over a four-year period, commencing as early as 2005.
According to the Order, Barclays, through its traders and employees responsible for determining the Bank’s LIBOR and Euribor submissions (submitters), attempted to manipulate and made false reports concerning both benchmark interest rates to benefit the Bank’s derivatives trading positions by either increasing its profits or minimizing its losses. This conduct occurred regularly and was pervasive. In addition, the attempts to manipulate included Barclays’ traders asking other banks to assist in manipulating Euribor, as well as Barclays aiding attempts by other banks to manipulate U.S. Dollar LIBOR and Euribor.
The Order also finds that throughout the global financial crisis in late August 2007 through early 2009, as a result of instructions from Barclays’ senior management, the Bank routinely made artificially low LIBOR submissions to protect Barclays’ reputation from negative market and media perceptions concerning Barclays’ financial condition."[xiv]
This CFTC order illustrates that the LIBOR rate affects the then estimated $800 trillion in leveraged financial derivatives that brought the financial house of cards to a crisis in 2008 triggering the Neoliberal Depression. The GDP (Gross Domestic Product) of all the nations on earth is only $70 trillion, yet the Wall Street banksters were allowed to create exotic speculative bets, that dwarf the world's GDP, on just about any future financial event called derivatives. They were then allowed to create derivative on top of derivative, on top of derivative, on top of derivative to infinity. Allegedly they are insurance policies, but they are policies that can never pay off for the simple fact that there is not even close to enough money in the world to pay off financial derivatives that now exceed $1.2 quadrillion in "notional" value.[xv]
The Bank of International Settlements in Basel, Switzerland tracks the unregulated derivatives and states their value as being "notional". Synonyms for notional: dreamy, fanciful, illusory, imaginative, unreal, whimsical. Upon this "notional" derivative house of cards that was dreamed up by Wall Street in the U.S. and their counterparts in the U.K. rests the financial underpinning of the capitalist world economy. In our society, the poor and working class depend upon the wealthy to provide some sort of a functioning economic system. It is this system that has been manipulated by Barclays and others in the LIBOR scandal.[xvi] The conclusion is inescapable; if the wealthy are unable to provide a system that allows the poor and working class a decent life, a new economic system is needed.
"Barclays proud sponsor of integrity, expertise and Mickelson."[xvii] This from a Barclays TV commercial featuring Phil Mickelson advising a golfer not to cheat by kicking his golf ball away from a large rock. Are we really to assume that Phil Mickelson has no clue at all to the criminality and ethical poverty of his multi million dollar patron Barclays Bank?
Phil Wearing the KPMG Hat
KPMG is an international accounting, or in their words, a professional services firm. It is one of Big Four Auditors along with Deloitte, Earnst & Young and PricewaterhouseCoopers. It was founded in 1870 by William Barclay Peat of the Barclay Bank family. It is the type of firm that specializes in insuring that the Phil Mickelson's of the world will pay taxes at a lesser rate than working stiffs do. Since KPMG is paying Phil probably many millions of dollars each year to wear their goofy hat, one would assume that they are also advising him on how to reduce his taxes to the least common denominator.
But that is not all KPMG has been up to.
- "In early 2005, the United States member firm, KPMG LLP, was accused by the United States Department of Justice of fraud in marketing abusive tax shelters. KPMG LLP admitted criminal wrongdoing in creating fraudulent tax shelters to help wealthy clients avoid $2.5 billion in taxes and agreed to pay $456 million in penalties in exchange for a deferred prosecution agreement. KPMG LLP would not face criminal prosecution if it complied with the terms of its agreement with the government. On 3 January 2007, the criminal conspiracy charges against KPMG were dropped."[xviii]
- In 2003, KPMG agreed to pay $126 million to settle a lawsuit stemming from the firm's audits of the drug chain Rite Aid.[xix]
- In 2004, KPMG agreed to pay $115 million to settle lawsuits stemming from the collapse of software company Lernout & Hauspie Speech Products NV.[xx]
- In February 2007, KPMG Germany was investigated for ignoring questionable payments in the Siemens bribery case. The Siemens Supervisory Board then changed auditors from KPMG to Ernst & Young in 2008.[xxi]
- In 2013 KPMG and their client mortgage finance company Fannie Mae agreed to pay $153 million to an Ohio pension fund and others that had accused the two companies of issuing false and misleading financial reports that artificially inflated the price of Fannie Mae's securities.[xxii]
- "KPMG, one of the Big Four accounting firms, endorsed a move by New Century Financial, a failed mortgage company, to change its accounting practices in a way that allowed the lender to report a profit, rather than a loss, at the height of the housing boom, an independent report commissioned by a division of the Justice Department concluded."[xxiii] KPMG's share of the total $125 million settlement was $44.75 million. The New York State Teachers Pension Retirement Fund was the lead plaintiff in the lawsuit.[xxiv]
Phil's fans can also join him in wearing the goofy KPMG hat.[xxv] With each modest $7.50 purchase of one of the hats by fans, KPMG will use the entire amount to purchase books to teach poor kids how to read. It's really disgusting, the likes of KPMG and Barclays Bank being at the ground floor of the capitalist exploitation of society and then making such a pretense that they care about the destitute supernumerary class that they have created.
An Alternative Universe to Barclays and KPMG
This observer is well aware that making it to the PGA Tour and just staying on it for years, let alone becoming one of its premier players, is no small feat. I applaud Phil for his accomplishments on the golf course and certainly think he has earned a comfortable life for himself and his family.
I'm sure that Phil and his wife are proud to have created The Phil and Amy Mickelson Foundation that supports youth and family initiatives.[xxvi] After Phil's wife Amy and his mother were both diagnosed with breast cancer just a day or two apart, Phil advocated for a cure. I'm delighted that he gives his money and lends his name to these causes. But this is not activism and it is certainly not leadership. Activism and leadership involve standing for those that the majority of society neither knows nor cares about.
For the prisoners at Guantanamo Bay who have been on a hunger strike for well in excess of 100 days. 88 of whom were cleared to be released more than 2 years ago and yet none have been released. Most of them were turned into U.S. authorities 10 or 11 years ago by their neighbors in return for a bounty of $3,000. Of 166 current detainees only 6 have criminal charges pending against themselves and this after 10 or 11 years of incarceration under what has been labeled cruel and unusual punishment by some and outright torture by others.
Their hunger strike is basically an attempt to reclaim their humanity by choosing death over permanent military detention with no legal recourse in court. After 10 or 11 years they would rather die than continue on in this manner. The Obama Administration responds by strapping the prisoners down, sticking tubes through their noses and into their stomachs and force feeding them, because it would be a public relations disaster if they started dying by starvation.
“You can’t just set up something like that and keep it in perpetuity, which is in fact what Congress has made possible by bringing in a new law in the beginning of the year called the National Defence Authorization Act which essentially provides for the indefinite military detention without charge or trial of detainees at Guantánamo Bay,”Rupert Colville, a spokesperson for the UN Human Rights Office told UN Radio[xxvii]
Special Rapporteur on torture, Juan E. Méndez, noted that the indefinite detention of individuals, most of whom have not been charged, “goes far beyond a minimally reasonable period of time and causes a state of suffering, stress, fear and anxiety, which in itself constitutes a form of cruel, inhuman, and degrading treatment.”[xxviii]
How about "Solidarity with Guantanamo Detainees" on Phil's hat or chest.
End U.S. Wars, Empire & Militarism
What I would like the Phil Mickelson's of the world to do is to step outside the comfort zone of the 1% (more correctly 1/100th of 1%) and consider the brutality of an economic system that creates such massive inequality. Then reconsider who to sell the advertising space on his chest and head to. Does Phil really want to continue to be the front man for corporate criminals like Barclays and KPMG? How about some free advertising to end our country's illegal and immoral wars, empire and military spending to the tune of $1 trillion plus per year? Spending that $1 trillion per year on programs like repairing our country's deteriorating infrastructure and putting people to work at living wage jobs would be a good start. It shouldn't be too hard for an intelligent man like Phil to see the benefits of this kind of thinking.
Tax Rates and a Living Wage
Is Phil aware that the top federal income tax rate on the surplus income of the wealthiest Americans like himself for 44 years from 1936-1980 was never less than 70% and for many of those years was 90%,[xxix] while he is upset with a 2013 top rate of 39.6% on his surplus income? Is he also aware that while these tax rates were in effect during the post WWII boom years 1945-1970, we also enjoyed a much more equal and prosperous society?
There are other ways to create a more equal society besides taxation. One would be to guarantee all Americans a living wage job. Does Phil know that fast food and retail workers have been striking for a minimum living wage of basically $15 per hour?[xxx] And wouldn't these tens of millions of Phil's fellow Americans who are paid the $7.25 federal minimum wage or a couple of bucks and hour more be appreciative if a celebrity like Phil would put a message on his chest or hat saying something like "A Living Wage for All". They need Phil's support more than do the criminal Barclays and KPMG outfits.
Free Bradley Manning
Or how about supporting a real American hero, Private Bradley Manning. The young whistleblower who is being tried in a military court and risks life imprisonment. After spending more than three years in jail, the trial he is given is nothing more than a judicial lynching courtesy of the Obama Administration. Manning is not allowed to present the argument in court that our wars are illegal, immoral and that he has a duty based on the Nuremberg Principles to not participate in illegal wars and to reveal evidence of war crimes. He is also not allowed to present statements by government officials that no one has been hurt as a result of the information that Manning made available to the American people.[xxxi] "Free Bradley Manning" on Phil's shirt would be a great improvement to corporate criminal "Barclays".
Transform Now Plowshares, the Y-12 Three
Phil may also be interested in a recent article that I wrote "Justice American Style, the Obama War on Dissent".[xxxii] It covers the Manning case of putting the whistleblower who exposed war crimes on trial and letting all those responsible for illegal wars, torture and war crimes completely off the hook. It also covers 82-year-old nun, Sister Megan Rice, and two American war vets, one Vietnam, Michael Walli, 64, and, one Cold War, Greg Boertje-Obed, 56 who will stand trial by the Obama Administration for sabotage and risk 20-30 years in prison for making a peaceful, non violent protest against our country's nuclear weapons arsenal at the Y-12 National Security Complex in Oak Ridge, Tennessee. They are members of the group Transform Now Plowshares that lives the words of the Bible: “They shall beat their swords into plowshares. They shall learn war no more.” I'm sure that they and the millions of others that consider nuclear weapons to be an abomination that should never be used again and need to be destroyed would appreciate Phil's support on his hat, chest or anywhere else.
Occupy Wall Street
How about a little support for the Occupy Movement, Phil? Starting with Occupy Wall Street in the Fall of 2011, occupation camps soon sprung up in every major city in the country and across the world. The occupations brought many from the far left and far right together saying that the U.S. economic and political system doesn't work for the 99%. It works very well for the 1%. But until we change our exploitive capitalist economic system, the 99% will continue to have:
- Endless war, empire and militarism.
- A progressively greater and greater level of inequality in our society.
- The destruction of the earth's environment and ecosystems, threatening future human life as we know it.
- An undemocratic democracy.
- The continued shredding of our civil liberties.
"Occupy Wall Street", "Occupy Phoenix" or "Occupy San Diego" would look great on Phil's golf hat or shirt and set him apart as a thinking individual who is concerned about more than his golf game and how many millions he can pocket from criminals like Barclays and KPMG.
Phil has a choice. He can change his ways and make a commitment to social justice for all or he can continue to prostitute himself to the Barclays and KPMG's of the world, corporate criminals that will do anything to exploit the poor and working class.
Nick Egnatz is a Vietnam veteran. He has been actively protesting our government’s crimes of empire in both person and print for some years now and was named “Citizen of the Year” for Northwest Indiana in 2006 for his peace activism by the National Association of Social Workers.
Contact Nick OccupyNick@yahoo.com
[xi] Atkinson, Anthony B., Thomas Piketty, and Emmanuel Saez. 2011. "Top Incomes in the Long Run of History." Journal of Economic Literature, 49(1): 3-71.