[Peace-discuss] Illinois' business

C. G. Estabrook cge at shout.net
Sun Jun 10 01:56:43 UTC 2012 


Chairman Lies to Shareholders, Mocks Protesters
Saturday, 09 June 2012 10:36
By Aaron Krager, Aaron Krager's Blog | Report



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Chairman Terrence Duffy lied to shareholders during the Chicago  
Mercantile Exchange’s annual shareholders meeting, held downtown on  
May 23. Protesters holding proxy shares attempted to probe Duffy with  
questions pertaining to CME’s lobbying for state tax breaks and their  
massive profits. Duffy rebuffed the questions as out of order because  
they did not address items on the agenda while telling them they could  
be asked during the open question and answer session at the end of the  
meeting.

Roughly 50 protesters scattered themselves around the room prior to  
the meeting but stood in solidarity with each other as proxy after  
proxy attempted to question CME’s profitable lobbying for a state tax  
break last fall. The company threatened to leave the state after more  
than 100 years of operation if it did not get its way. Duffy tried to  
hedge against the protesters’ concerns at the beginning of the meeting  
in his opening remarks.

“We are a global company, and we asked to be taxed like every other  
major company based in Illinois, many of which are much larger than  
CME Group,” said Duffy. “The Illinois Legislature recognized and  
corrected the unfair treatment by giving us an apportionment that is  
equitable and puts us closer to other Illinois companies.”

The supposed correction in the unfair treatment will deprive the state  
of nearly $1 billion over the next decade. The impact of this  
correction is severe as Stand Up! Chicago’s Elizabeth Parisan noted in  
the Huffington Post:

The cuts to these programs are so deep that they actually go back in  
time. Earlier this month, the state notified 40,000 childcare  
providers that they might not get paid for the last three months of  
services they provided because their program was underfunded by $73  
million. The announcement thrust thousands of families into turmoil as  
providers wondered how they would keep their doors open and working  
parents wondered if they would lose the safe and affordable childcare  
they depend upon in order to make a living.

“CME made $1.9 billion in profit last year. At the same time, CME is  
benefiting from millions of public dollars. That makes every taxpayer  
a shareholder in CME,” said Janet Edberg, an unemployed CME  
shareholder. “As an official shareholder in CME, I went to the meeting  
today to say enough is enough. Give back our tax dollars to the people  
and communities that desperately need help.”

Protestors interrupted in chanting after continually being denied  
answers to their questions. Less than an hour into the start of the  
meeting, those chanting were escorted out of the building by security.  
The meeting continued but chants of “pay your fair share” could be  
heard from outside as more than 500 protestors gathered in solidarity.  
Thousands of people participated in coordinated actions throughout the  
day, all aimed at the avoidable devastation to crucial social safety  
net programs if CME did not receive the tax break.

Most of the remaining questions came from traders at the exchange and  
focused on the collapse of MF Global. Putting myself into the story, I  
decided to interject with a couple questions of my own. Admittedly, I  
could have stood with more resolve and feel I allowed the presence in  
the room to intimidate me. With that said, I questioned Duffy on the  
campaign contribution to Mayor Rahm Emanuel and the proposal to place  
a financial transaction tax of a mere quarter per trade.

Armed with prepped answers and facing an inferiorly knowledgable  
questioner, Duffy snuffed the suspicion right out of me.

“We gave Mayor Emanuel $200,000, Mayor Emanuel gave us back $200,000,”  
said Duffy. “He could not accept the contribution from CME.”

But he did accept it. Until the election was over with and he had won.

While campaign disclosures might list this transaction as a campaign  
refund the fact is that it came after the election was already  
completed. Emanuel returned $198,500 of the $200,000 donation on the  
last day of February 2011, nearly four months after the initial  
donation. The Exchange has donated nearly a quarter of a million  
dollars to various politicians since the beginning of 2010.

Emanuel’s returning of the CME donation is not a refund as Duffy  
states. It is a repayment on a loan because the money was given in  
order to help win an election and the return came after the successful  
purchase of the Chicago mayoral race. On a financial transaction tax:

“We’ve done this exercise with politicians when they propose a  
financial transaction tax,” stated Duffy. “You have people trading  
fourteen cents out of their own account and you want to charge them  
twenty-five cents and they’re only making eighteen cents per trade. So  
every trade they make they lose six cents [sic].”

Actually the math would be seven cents but that’s not the point. It’s  
that Duffy lied on the first answer and misleads on the second.

The average trade at the exchange actually comes in at more than  
$200,000, according to Stand Up! Chicago. That’s more than enough to  
cover a single quarter tax on that one trade. Unfortunately, a Pew  
Center report from April showed that Illinois is one of 26 states that  
do not sufficiently track the efficiency of corporate tax break  
programs.

So, how are state legislators supposed to know if these types of bills  
have any positive long-term effects? Moreover, how are shareholders to  
know what the company is doing with its money with its spokesperson  
does not tell the full truth? The CME and Duffy must be held  
accountable to the people of Illinois and cannot justify their  
behavior to tax payers and shareholders by avoiding the hard  
questions. Corporate lobbying efforts should not override the hard  
work of other organizations and individuals in the state. Correcting  
the abuse of power will help bring transparency and equity to the  
process and the people.

This piece was reprinted by Truthout with permission or license.

AARON KRAGER

Aaron Krager is a former seminarian, a former political campaigner and  
now a current writer. Some of his work has been published in AlterNet,  
In These Times Magazine, Progress Illinois and other sites.

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Klaatu
This is Mickey Mouse stuff. CME is in the inner circle of the  
derivatives schemes that are collapsing the world economies. Report on  
that.

LikeReply
2 hours ago1 Like

Klaatu
This is Mickey Mouse stuff. CME is in the inner circle of the  
derivatives schemes that are collapsing the world economies. Report on  
that.

LikeReply
2 hours ago1 Like

Guest
$.25 per $200K trade is exponentially two orders of magnitude less  
than my credit union's negligible interest per share. A REAL (And JU 
$T) QUARTER financial transaction tax on $200K Would BE $50,000 -  
DEFICIT($) $OLVED!

LikeReply
3 hours ago1 Like

Mary Carroll
The most common proposal for a financial transaction tax (or "Robin  
Hood tax") is not a quarter per trade; it's either .25% or .5% of the  
amount of the trade. So if the average trade on the CBOT/CME is  
$200,000, the tax would add either $500 or $1,000 to the total cost of  
that trade. That's not chump change (and commodities trading is  
usually done on margin, so the trader wouldn't be paying the full  
$200,000), but I find it very hard to believe that the investors,  
traders, and/or intermediaries are operating on such a thin profit  
that a $500 or $1,000 tax turn a profitable trade into a loss....

LikeReply
18 minutes ago

chuntianwen
tinyurl.com/73huk6r

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1 hour ago
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