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Lessig Blog Archives: Dennis Kucinich Guest Entries

Lights Out on Deregulation

With and estimated 50 million Americans and Canadians left without power and in some cases water, common sense requires us to reflect on the absurdity of deregulation of public utilities. In the first case, the right of utility franchise is vested in the people. We give utilities permission to operate, and enable them to set up a profit making business in exchange for the promise of affordable and reliable service. In 1992, investor owned utilities pushed the Democratic House to pass HR776 which granted electric utilities broad powers. The bill was supposed to restructure the electric utility industry to spur competition.

Utilities used deregulation to effect a series of mergers limiting competition. In order to accelerate profits, cost cutting ensued, involving the layoff of thousands of utility company employees, including some who were responsible for maintenance of generation, transmission, and distribution systems. A number of investor-owned utilities stopped investing in the maintenance and repair of their own equipment, and, instead, cut costs to enhance the value of their stock rather than spending money to enhance the value of their service.

A prime case in point is FirstEnergy Corp, late of Ohio. FirstEnergy formed through a merger of utility companies which owned nuclear power plants which often were neither used nor useful, and as a result incurred huge debt. FirstEnergy’s predecessor, The Cleveland Electric Illuminating Company (CEI) in the 1950s and 60s was a high performing blue chip stock until they invested in nuclear power. FirstEnergy has tried without success to keep online a very troublesome nuclear power facility at Port Clinton, Ohio, the Davis-Besse plant. Davis-Besse is currently shut down and has been for some time. FirstEnergy and federal regulators failed to properly monitor the operations of the plant, resulting in conditions where the plant’s reactor vessel was threatened with a breach when boric acid ate into the head of the reactor.

Millions of people in the Midwest and the water supply of our entire Great Lakes region were at risk because of First Energy’s negligence, improper maintenance, and actual cover-up of the degradation of the reactor. Furthermore, federal regulators determined that notwithstanding the peril which was presented to one of the largest populated areas of the United States, FirstEnergy’s financial condition necessitated the continued operation of the flawed reactor. The regulators put profit ahead of public interest.

If there was ever an example of an unholy alliance between government and industry, this is it. If there was ever an example of the failure of necessary regulation by the government of an investor-owned utility, it is found in the government’s failure to regulate FirstEnergy, because now, according to published reports by the Associated Press, CNN, and ABC News, the blackout which affected an estimated 50 million people began in the FirstEnergy system.

I’ve been familiar with First Energy and the challenge of utility monopolies for over 30 years. Early in my career, in the 1970s, I watched FirstEnergy’s predecessor, CEI, as they were hard at work trying to undermine the ability of the City of Cleveland to operate its own municipal electric system. CEI conducted a tireless crusade to attempt to put the city’s publicly owned system, Muny Light, out of business. Muny Light competed against CEI in a third of the city and provided municipal power customers with savings on their electric bill of 20-30 percent. It also provided cheaper electricity for 76 city facilities and thousands of Cleveland street lights, saving taxpayers millions of dollars each year. In the 1970s, CEI applied for a license to operate a nuclear power plant. The license application triggered an antitrust review. The antitrust review revealed that CEI had committed numerous violations of federal antitrust law in its attempt to put Muny Light out of business. The Atomic Safety and Licensing Board of the Nuclear Regulatory Commission, in an extensive investigation, determined that CEI blocked Muny Light from making repairs to its generator by lobbying the Cleveland City Council to place special conditions on Muny Light Bonds which made the bonds more difficult to sell, thereby depriving the city of revenue it needed to repair its generators in order to provide its own power. The delay in repairs to the generators caused Muny Light to have to purchase power. CEI then worked behind the scenes to block Muny Light from purchasing power from other power companies. CEI became the only power company Muny Light could buy from. At that point, CEI sharply increased and sometimes tripled the cost of purchase power to Muny Light. And, as a result, Muny Light began to lose money. CEI used Muny Light’s weakened operational and financial condition (which they created) as evidence of the public system’s lack of viability and as proof that the only way the people of Cleveland could have reliable power was for the city to sell its electric system to CEI. The antitrust review cited one incident when during a period of inclement weather, Muny Light asked CEI for a special transfer of emergency power. The transfer of power was conducted in such a way so as to cause an outage on the Muny Light system. CEI used the incident as further proof of the city’s inability to operate a municipal electric system. Throughout this period, the Cleveland media, which received substantial advertising revenues from CEI, crusaded against the city’s ownership of a municipal electric system. When the federal government came to review CEI’s practices, CEI executives appeared at a city council committee meeting to declare that they had no interest in the acquisition of Muny Light even as they worked behind the scenes to put Muny Light out of business.

In 1976, after years of work to undermine Muny Light, CEI finally succeeded in getting the mayor and the council of Cleveland to agree to sell Muny Light, giving CEI a monopoly on electric power in the Cleveland area and enabling CEI to greatly expand its rate base to get more revenue to pay for its rapidly mounting expenses associated with building nuclear power plants. At that time, I was clerk of the Cleveland Municipal Court, a citywide elected office. I organized a civic campaign to save Muny Light. People gathered signatures in freezing rain to block the sale. I ran for mayor of Cleveland on a promise that if elected, my first act would be to cancel the sale of Muny Light. I won the election. I cancelled the sale. CEI immediately went to court to demand that the city pay 15 million dollars for power which it had purchased while CEI was running up charges to the city. The previous mayor had intended to pay that light bill by selling the light system and simultaneously disposing of a 325 million dollar antitrust damage suit. My election not only stopped the sale, but kept the lawsuit alive. CEI went to federal court to get an order attaching city equipment as a means of trying to destabilize city services as still another desperate effort to try to try to create a political climate to force the sale. I moved quickly to pay the bill by cutting city spending. The Muny Light issue came to a head on December 15, 1978, when Ohio’s largest bank, Cleveland Trust, the 33rd largest bank in America at that time, told me that they would not renew the city’s credit on 15 million dollars worth of loans taken out by the previous administration unless I would agree to sell Cleveland’s municipally owned utility to CEI.

On that day, by that time, the sale of Muny Light was being promoted by both Cleveland newspapers, virtually all of the radio and TV stations in town, the entire business community, all the banks, both political parties, and several unions, as well as a majority of the Cleveland City Council. All I had to do was to sign my name to legislation and the system would have sold and the city credit “protected.” The chairman of Cleveland Trust even offered 50 million dollars of new credit if I would agree to sell Muny Light.

Where I come from it matters how much people pay for electricity. I grew up in the inner city of Cleveland. The oldest of 7 children. My parents never owned a home, they lived in 21 different places by the time I was 17, including a couple of cars. I remember when there were 5 children and my parents living in a 3 room upstairs apartment on Cleveland’s east side. My parents would sometimes sit in the kitchen at one of those old white enamel top tables, which, when the surface was chipped, was black underneath. When they counted their pennies, I could hear them clicking on the enamel top table. Click, Click, Click.

When I was in the board room with the Chairman of Cleveland Trust Bank, I was thinking about my parents counting their pennies and I could hear those pennies hitting the enamel top table. So, I said no to the sale of Muny Light to CEI. At Midnight, Cleveland Trust put the City of Cleveland into default. Later, it was revealed, that Cleveland Trust and CEI had four interlocking directors. Cleveland Trust was CEI’s bank. Together with another bank, Cleveland Trust owned a substantial share of CEI stock and had numerous other mutual interests. Public power was saved in Cleveland. I lost the election in 1979 with default as the major issue. Cleveland Trust changed it name to AmeriTrust. The new mayor changed the name of Muny Light to Cleveland Public Power.

In 1993, the City of Cleveland announced that it was expanding Muny Light. It was the largest expansion of any municipal electric system in America. I had been long gone from major elected office. In fact, after the default, most political analysts considered my career over. I had been asked many times by other politicians why I just didn’t make the deal and sell the light system, especially when my career was on the line. I believe that there are, in fact, some things more important than the next election.

When a reporter from the Cleveland Plain Dealer reached me to tell me about the expansion, I was on a beach in Malibu watching the dolphins play. Cleveland was the farthest thing from my mind. After I left City Hall, I couldn’t get a job in Cleveland, I almost lost my home, and my marriage fell apart. But I had no real complaints, because, according to a US Senate Subcommittee studying organized crime in the Mid-Atlantic states, I had survived, through sheer luck, an assassination plot. There was something comforting looking out on the Pacific and watching the waves glisten in the sun.

So when a reporter told me that people were saying that the expansion could not have happened without my making a decision to save the system, I thought “that’s nice.” People in Cleveland began to say that I was right not to sell Muny Light and they asked me to come back. So I did. I ran for State Senate in 1994 on a slogan “because he was right” with little rays of yellow light shining behind my name on my campaign signs. I was one of the few Democrats to unseat a Republican incumbent that year in a state election.

Two years later, I was one of the few Democrats to unseat a Republican incumbent to gain election to Congress. My campaign signs had a light bulb behind my name with the words “Light up Congress.” Today, I’m running for President of the United States and I want to light up America, and a good place to start will be to shed light on a deregulation process that has abandoned the public interest.

Dennis J. Kucinich
On the road to Davenport, Iowa

This entry and my personal blog are licensed under a Creative Commons License.

Reclaiming Freedom

I thought it would be appropriate in Lessig’s blog to discuss what led to my adoption of the Creative Commons License and the GNU General Public License for our work on the Kucinich presidential campaign.

As a good friend of many artists and engineers, I understand and support their need to make a living. As a father, I don’t believe our government has any business locking up kids for sharing files on the Internet. As a Congressman, I have taken an oath to uphold the Constitution of the United States, which states very clearly in Article 1, Section 8, that “The Congress shall have Power: To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

“Yes, we did produce a near-perfect republic. But will they keep it? Or will they, in the enjoyment of plenty, lose the memory of freedom?” — Thomas Jefferson in a letter to John Adams

The framers knew the importance of the progress of science and useful arts. Their intention was clear. Unfortunately, corporate interests have intruded on our process of government. The overwhelming influence of political money from corporate interests has corrupted the ability of Congress to protect science and the arts. Today, much of our science and useful arts is coming forth from sources independent of monopolies, thanks to people like you. Yet Congress continues to try to limit certain activities of inventors and artists in order to preserve corporate power and domination. We must, once again, move to reclaim the promise inherent in Article 1, Section 8.

In my case, I have chosen the free content and free software licenses because I believe they will promote these important goals better than more restrictive “proprietary” licenses. On my presidential campaign, we are currently developing a policy requesting that our supporters license their works to us and others under free license as well. This is valuable because it will provide a body of work to be used by grassroots activists to create their own tools to promote individual and community based expressions of democracy. For example, anyone will be able to take photos, video, audio, or software and reuse it to create their own materials — without hiring an attorney to negotiate rights (sorry Larry). In this spirit, feel free to rip, mix, and burn my work here.

This is what the American Revolution was all about!

Dennis J. Kucinich
Des Moines, Iowa

This entry and my personal blog are licensed under a Creative Commons License.

Patriot John Gilmore (suspected terrorist)

I was reading Gilmore’s reply to Lessig’s earlier post and the conversation it stirred, and it moved me to share some of my own experiences with our fellow bloggers.

I have to admit to a feeling of resentment at the extent of the security searches every time I travel by air. The armed guards, the x-ray machines, the metal detectors, the pat downs, the search of luggage and personal effects, the removal of shoes, and for some, I suppose, the explanation of prosthetics, pacemakers, and appurtenances, constitutes a massive invasion of privacy. We have just come to accept this as a natural state of things because, like Gilmore, we’re all suspected terrorists. I find myself having to explain to people why I, as a Presidential candidate, am repeatedly shuttled off to that special line of selectees identified by the SSSS stamped on my ticket. The transportation security agents inform me that a computer has made this decision. I want to know who programs the computer. Is it John Ashcroft?

Even though I don’t feel as though I’m getting special treatment or that I’m entitled to special treatment, it makes me wonder how much of a threat I must be since I really do intend to replace the entire government. So when people occasionally recognize me getting the magic metal detector wanding and dutifully submitting to searches of my person, extending my arms and my legs spread-eagle, I explain with a smile, “I’m running against George Bush.”

What I’ve been able to determine from an informed intelligence source (oxymoron) is that I tend to get selected because I buy one-way tickets. This poses a dilemma. Should I change my campaign and do round trips say in a continuous loop from Seattle, Washington to Washington, DC in order to avoid greater suspicion or do I plan a practical itinerary from Seattle to San Francisco to Austin to Oklahoma City to Des Moines to Cleveland to Manchester and gain near public enemy status? The real reason that people who travel point to point instead of round trip are more likely to be subjected to a search is because, I’m told, that the hijackers bought one-way tickets. This is an interesting type of profiling that goes on. One which seldom invites an iota of self-reflection about America’s role in the world or about the basis for the murderous grievances which misguided individuals may have against us. It would be useful to have a national dialogue about our democracy and the manner in which it has been undermined since 9/11. The alternative is to proceed, robot like, and submit to metal detectors, x-ray machines, magic wands, pat downs, and the shuttling of point to point travelers to a point by point inspection.

It seems to me that the Bush Administration, with its moral obtuseness, its inconscience on matters of civil liberties, and its craven attempts to demolish the Bill of Rights has prepared for the American people a one-way ticket of sorts. When it comes to the quality of our democracy we are traveling on a road to nowhere.

Airline security is, as we have learned, a deadly serious business. The traveling public deserves assurances that they and their loved ones will be safe in the air. But when does security in a democracy morph into something profoundly anti-democratic. This is a discussion we need to have. And the answer, as Gilmore knows, cannot be simply “search me?”!

Dennis J. Kucinich
On the road to Des Moines

This entry and my personal blog are licensed under a Creative Commons License.

Congress, NAFTA, & WTO

Yesterday, Rob asked several questions:
1) It is almost certain that you will be working with a Republican-controlled Congress at least initially during your tenure. Given that, do you believe it likely that you will be able to get the Congress to pass bills authorizing programs for national health care, withdrawal from NAFTA and WTO, reversal of the Bush tax cuts (which will probably be permanent by then), and dealing with other hot-button issues that the Republicans have been so steadfastly against. You can’t just declare these things by executive order; and I don’t see how you can get such “radical liberal” programs passed. That makes many of your 10 key issues non-starters.

My nomination will set the stage for a Democratic Congress. In 1932, when president Franklin Roosevelt was nominated, he ran on a platform of broad economic reform, which excited people to come out in vote in their own enlightened self-interest. As a result, FDR led a Democratic sweep, which resulted in a pickup of 90 House seats and 13 Senate seats. This was accomplished because he represented profound change. He represented jobs, he represented rebuilding America, he represented a hope for popular control over predatory corporations. My nomination will reverse the results of the 1994 election when the Democrats were unable to regain the House and lost the Senate principally because the parties’ ties to corporate interests muted the differences between the parties and discouraged the Democratic base. My nomination will excite the Democratic base, will broaden the reach of the party, and will engage third party activists to join us in a mighty effort to reclaim our government.

2) You state that one of your first acts as President will be to unilaterally withdraw the U.S. from NAFTA and the WTO and institute a regime of “fair trade agreements.” Do you believe that our global trade partners will be receptive to such a regime, given that almost by definition those agreements will be fairer to us than to them? Or will we instead see a return to the bad old days of preferential tariffs and trade wars, which the WTO was created to try to prevent? Or even worse, would withdrawal merely accelerate the migration of trade from our country to other countries with more open trade practices? Would we not then be hoist by our own petard?

We are now being hoisted on the petard of NAFTA and the WTO. America’s trade policies have been dictated by powerful multinational corporations whose flag is not red white and blue, but green with a dollar sign. Our nation is approaching a $500 billion trade deficit, which represents a genuine threat, not only to our economy, but to our Democracy. Global corporations have used the United States to help create a multinational trading arrangement which denies both American workers and workers of other nations the protections of basic labor law. NAFTA and the WTO were written specifically to preclude the enforcement of rights to organize, collective bargaining, strike, rights to safe work place, and right to a secure retirement. This enabled corporations to move jobs out of America to places where workers have no protections. NAFTA and the WTO have facilitated a race to the bottom in terms of wages and workers rights generally. The WTO essentially locked in the NAFTA trading regime by making any attempts to modify the basis of trade WTO-illegal.

The question is not whether or not America trades with the world, the questions are what are the rules of the game. And America is claimed by rules which are rigged against us. I have said that I will cancel NAFTA and the WTO in order to return to bilateral trade, conditioned on workers rights, human rights, and environmental quality principles being written into our trade agreements with other nations. The is the only way that we can stop corporations from coercing wage concessions or breaking United States unions. This is the only way that we can re-empower the hopes of people of all nations for a better standard of living and for control of the institutions of their own governments.

This issue reflects not mere differences of opinion within our party but a great divide. On one side of the divide stands global corporations and their political supporters. On the other side stands workers and their supporters. I stand resolutely with America’s workers and with those peoples of the world who are also striving for human dignity. I will continue to challenge all other Democratic candidates on this issue to see whose side they stand on so that the American people can clearly see whose side they’re on. It’s not enough to say you’re going to fix NAFTA and the WTO, the only way to fix it to exercise the withdrawal provisions of both laws and return to bilateral trade, conditioned on workers rights, human rights and environmental quality principles.

Dennis J. Kucinich
Philadelphia, Pennsylvania

This entry and my personal blog are licensed under a Creative Commons License.

Corporate Media and Media Accountability

I would like to thank Professor Lessig for inviting me to begin a dialogue with you.

Wherever I travel throughout America, including here, the issue of corporate media and media accountability arises in every question and answer session. The American people are deeply concerned about the erosion of democracy, notably the impairment of free speech which has occurred through the increased concentration of market power in corporations which own newspapers, radio and television stations.

I’ve spent a great deal of time studying this issue. I hold bachelor’s and master’s degrees in speech and communication from Case Western Reserve University in Cleveland, Ohio. During my academic career, I studied the Failing Newspaper Act, which provided for joint operating agreements (JOA), which presaged the death of afternoon newspapers in America. In my own lifespan, I’ve seen the city of Cleveland go from 3 daily newspapers, the Cleveland News, the Cleveland Press, and the Plain Dealer, to just one. I’ve studied the Federal Communications Act of 1934, which set specific responsibilities for broadcast license holders to serve “in the public interest, convenience, and necessity.” H.L. Mencken, the famous critic, once wrote “freedom of the press is limited to those who own one.” Indeed, the Constitution is liberally interpreted when it comes to the government having any role in directing what goes into print. And that is as it should be (that is not to abandon questions of horizontal and vertical market concentration). However, holders of broadcast licenses have specific responsibilities to the public. It is the public which owns the airwaves. The public provides a license in exchange for service. At the same time the definition of media has expanded to include interactive services, the requirements of service have been largely abandoned as media monopolies have grown more powerful. Community groups struggle for recognition, social and economic causes which run counter to vested interests are marginalized, and our politics are corrupted by having to raise huge amounts of money from one set of corporate interest to buy airtime from another set of corporate interests.

As the next President of the United States, I intend to address this issue directly. First, the Justice Department will engage in an ongoing dialogue with major media over how the public interests can be better served. Second, I will sign an executive order which will require all broadcast licensees to provide free time for all federal candidates. Third, additional funds will be appropriated for the support of public television and public radio. Fourth, community cable systems will receive guidance as to how they may more effectively enlist community participation in the airing of broadcast media programs. Fifth, a White House conference on the protection of the First Amendment and its relationship to media concentration will be formed to enlist the participation of academics, activists, and the industry, in order to facilitate a broader and more effective understanding of the central role which media plays in the life of our nation.

Your comments and suggestions are appreciated. It is through such dialogues on democracy that we can fulfill our responsibility to form a more perfect union.

Dennis J. Kucinich
Philadelphia, Pennsylvania

This entry and my personal blog are licensed under a Creative Commons License.

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