On Contact: American coup d’état (Part 2)

CH: In the second part of our interview with Dennis Kucinich, who served as the Representative from Ohio from 1997 to 2013, losing his seat after the State Democratic Party Machine redrew Ohio’s 10th Congressional District.  And he was also the 53rd Mayor of Cleveland.  We look at how corporate power unites to destroy politicians who refuse to do its bidding.  Kucinich is at a corruption campaign which included battling back against the efforts to privatize the city’s municipal electric utility, and going after the outsized influence of organized crime, led to a vicious smear campaign, amplified by a press that obsequiously catered to the interest of its big advertisers, a recall vote, forcing the city into default, and even assassination attempts.  Kucinich in his new book, “The Division of Light and Power,” looks back on his tenure as mayor, and his confrontation with corporate power that today holds most cities and the country hostage.  So Dennis, last week, we talked--we didn’t get into the campaign, of how they went after you--and we will in this segment, and it’s interesting, when I read the book, as a former war correspondent, I would report on atrocities--I mean massacres that have been carried out by military leaders, and it didn’t--it was dangerous.  But as soon as I reported on how they were making money illicitly by--for instance, selling AID food in the market, then my life was in danger.  And that reminded me very much of your experience.  Before we get into what they did to you, the campaign against you, I want to talk about why they had to destroy the public utility because the profits that they can make by privatizing utilities and all public services are immense.  I think you talk about 45% increases, I mean--but explain why they’re going after these public utilities, and how profitable it is for them.

DK: Well, in CEI’s case, Muny Light was providing power to about a third of the city at 20% cheaper than the private utility.  Why?  It’s so simple, you know, Muny Light did not have to pay high salaries, they didn’t have to provide for dividends, and, you know, that whole system of corporate aggrandizement which is supported by ratepayers, you know.  Muny Light wasn’t involved, and it was just simply providing electricity at the lowest possible cost.  So in Muny Light’s case, if you were to privatize Muny Light, then the rates of all the Muny Light customers in this case, you know, eventually, it’s about 46,000 customers, would automatically, you know, rates are low, they automatically go up to CEI’s level.  Then since there’s no yardstick, CEI can keep raising the rates up and up and up.  Now, in Muny Light’s case, Muny Light provided electricity to 76 city facilities and provided the street lighting.  So what does that mean?  That means, you know, the street--the costs were lower, but then all of a sudden, they’re going to start to go up and up, then there’s no yardstick, and they go up for the city facilities, and for street lighting, which means higher taxes.  So the--you know, we calculated, that as a result of my refusal to sell, we stayed probably about a half a billion dollars, all told, including the value of the utility, plus the ratepayer savings, plus the taxpayer savings.  The kind of money that’s involved in privatization is extraordinary, and one must keep in mind, you know, we’re past this prologue, this book is a warning to what’s going to happen when American Rescue Plan Money runs out and cities are pressured then to privatize their municipal services, and that is coming, there’s a wave of that coming, and that’s why “The Division of Light and Power” assumes even greater importance today because it’s a warning about what can happen.  And as Tom Johnson said, you either own them or they’re going to own you.  And there’s a lot of communities that are going to be under threat.

CH: I want to talk about bond markets, because this becomes one of the cudgels they use to destroy you.  Explain.

DK: Well, you know, Cleveland had attorneys who represented them to various bond markets, and to the rating services.  And the rating services, which, you know, everyone knows that--at least at that time, you could basically--you give a rating service enough money, you’re going to get a good rating, that’s just the way it work, it’s, you know, totally pay to play.  And conversely, if a powerful financial interest makes their own unique case, a rating service can downgrade somebody.  So the city will not have access to credit, we’ll have to pay more for it.  So, you know, this is a game that was played against the interest of the city of Cleveland.  And inevitably, what was the paradox of this is that even after the default, people were buying bonds from Muny Light because they knew it was a good investment, but the city had to pay a higher interest rate.  It’s just that, you know, that was out in the open market, but in the book, I also point out how CEI lobbied to make it--to put a provision in the city’s bond offering to Muny Light to make it impossible to sell the bonds on the open market.  So, you know, this is a game that was played using the financial power of Wall Street against the city.  And the other thing is the credit racket.  You know, bond--in order to get a rating today, you have to have a certain amount of money you set aside.  But what cities are doing right now is they’re setting multiples of money aside, and rates are higher than they should be everywhere.  And so Wall Street has enormous influence on cities today.  And the bond market is structured so as to grab as much you can out of cities, and to force cities to basically be a cash cow, and in a way cities end up backing--in some way, considering that we’re talking about the fungibility of money, cities end up backing the casino on Wall Street, that the solid position of the city ends up backing the Wall Street traders.

CH: Well, and if you don’t play the game, in your case, you didn’t even ask for more money, they just wouldn’t roll over your bond.  I mean, that--roll over your debt.

DK: Well, here’s the thing.  We were trying to get not more--you know, not more credit, we’re trying to just get an extension of existing debt on loans that I hadn’t even taken out.  And keep in mind, the city was said to have had a very high credit rating under the previous administration when all these loans were going out, that they really didn’t know if they could be paid back if they were called.  Well, for those viewers who are out there, imagine, you know, you’re making your house payments, and suddenly you’re told you have to pay the entire balance, they called the note.  The city basically had their notes called?  How did that happen?  Because on December 12th, 1978, the largest bank on the State of Ohio told me that if you sell the electric system to the Cleveland Electric Illuminating Company, which it turns out it was a business partner of the bank, or we, the bank, will not renew the city’s credit on loans that I hadn’t taken out.  So they threaten us with defraud if I didn’t sell Muny Light.  I refuse to sell Muny Light, they put us into default and kept us in default, even though the people of Cleveland passed a tax--the tax themselves to get us out of default, the bank’s committed to being able to--the bank’s committed to removing us from default if the tax passed.  Tax passed, they reneged on their promise, kept us in default until I left office.  This was an example of the weaponizing of credit, and it was, you know, like, being in a banana republic.  They were--they were exercising this power, simply because they could.  And they have no objective reason to.  We had income tax revenue to get us out.  We had property we could sell.  There were so many different areas that we had resources, they wouldn’t take it.  Nothing else was acceptable except the sale of our municipal electric system.  During my term, I operated the city on a cash basis.  We’re the only city in America that was able to do that.  Didn’t borrow a dime, cut city spending 18% without reducing services because of the waste fraud and abuse that existed at city hall.  So, you know, it doesn’t--you could play [INDISTINCT] it doesn’t matter.  These financial concerns will try to strangle a city if you don’t march to their tune.  Well, I didn’t march to their tune, but we still have public power today.

CH: Let’s talk about the school system, because this has real consequences for the children of Cleveland and for children in cities across the United States.

DK: Well, in Cleveland at that time, the city would grant tax abatements and the money would also come from the schools.  And schools, check this out, the schools were on the verge of an insolvency, at the same time, the city council is giving away tax abatements.  And then the banks were threatening the schools while the banks are getting money that should be going to the schools.  This is horrific.  In addition to that, state law was changed in Ohio to tax commercial properties at the same rate as residential, and it’s called the park investment case.  A park investment case enabled commercial and industrial interests to have lower taxes, and residential had to pay more.  So that’s one of the reasons why when school [INDISTINCT] would come forward, they’d be voted down because the property tax burden on homeowners was exceptional.  And so, you know, this whole system has been set up against the interest of the average Clevelander.

CH: Great.  When we come back, we’ll continue our conversation about the corporate assault on public assets and our democracy with Dennis Kucinich.  Welcome back to On Contact, we continue our conversation about the corporate assault on public assets and ultimately, our democracy with Dennis Kucinich.  So just in the last part of this show, Dennis, I want to talk about what they did to you.  We’re--and we’re talking about very serious assassination attempts, firing a high-powered rifle fired into your home, someone throws a Molotov cocktail towards your home, the police and the FBI uncover a plot to assassinate you while you’re in kind of a local parade.  And you’re saved only because you have a bleeding ulcer and have to go to the hospital.  I mean, this--they don’t play games.  When they realize they could not buy you off than they did an--and we’re talking about the mob, certainly, because you went after the gambling and the--all the kind of vices, you have a great line that city fathers hypocritically went on crusades against some types of crime while enabling vice to profit which you didn’t allow to happen.  So, you had the banks, destroying the fiscal solvency.  You had a recall campaign, they orchestrated an election to try and recall you and then it failed.  I mean, it just talked about when they realized they couldn’t buy you off what they did?

DK: Well, you know, I led a campaign as I went from City Council where I discovered what’s going on to Clerk of Courts, which is the second highest elected office.  And when I was clerk, that’s when the city made a move to sell the municipal electric system, even though they knew all of the corruption and--that was being committed against it.  So, they tried to sell it at a cut rate.  I intervened with the campaign.  The minute I started that campaign, high-powered rifle shot, misses my head by a fraction.  And then I found out--I mean, that was before I became mayor.  I was elected mayor on a promise to save the municipal electric system.  And it wasn’t too long into that that I was apprised of the fact that there was a plot against me.  Now, I never said anything about that publicly, Chris during that time.  It was only years afterwards it came out.  A US Senate subcommittee investigation on organized crime in the Midwest determined that there was this mob plot and what was going on, the chief investigator for the city, the head of the intelligence Lieutenant Karasik.  And I write about this in the book.  I asked him, I said, “Why is this happening?”  And he said, “Well, you know, I’m not in politics.  But let me tell you something.  This is about Muny Light.  You’re stopping a lot of people from making some money or you’re stopping people from making a lot of money.  And, you know, so my--our job is to protect you.  I can’t give you political advice.”  So, you know, this.  Yeah, it was about Muny Light, no question about it.  And, yeah, they, you know, these people play for keeps, and it was only through, in my estimation, act of God that I was still alive, because had I been in that parade in October of 1978, according, you know, to the Senate report, you know, there would have been an attempt made and keep in mind, Cleveland, during that period, was considered the bombing capital of America.  The mob was very active, there were competing interests, there was a war going on for control the rackets.  And, you know, we were under pressure at city hall to look the other way.  I wouldn’t do that.  So, you know, this could--we weren’t talking about being back here.  This is a serious business that was going on.  And--so but what the first time the connection is made between a corporate objective and an assassination attempt.

CH: They’re quite successful because the media serves as their echo chamber.  You go out to throw out the first ball and your--you have to wear a bulletproof vest.  Upon the mention of my name, tens of thousands of fans rose as one producing a hearty standing boo.  It rocketed around the stadium, a homerun cheer in reverse.  What did you feel inside at that moment?

DK: I just wanted to throw a strike.  You know, that’s all--I mean really, it’s, like, as I white in the book, focus, focus.  This was a dream for me when I was elected.  I--I’m a kid from the neighborhood of the city.  I’m gonna get to throw out the first pitch at a Cleveland-Indians baseball game.  So, you know, and I mean, and I had the general manager of the Indians, Gabe Paul.  He used to be the head of the Yankees.  He came to me and he said, “You know, I don’t think you should do this.  Not a good idea.”  And I’m thinking, “Well, you know, if you get every time American [00:05:05] political trouble you can throw out the first pitch, you just you know, what do you do?”  Anyhow, I--yeah, walked to the mound--I walked to the mound with a bulletproof vest on.  And I was looking up at the rim of the stadium.  There weren’t--there weren’t pennants there, there were sentinels with sharpshooters, just, you know, readying their aim to protect me.  You know, that was kind of surreal.  But as I’ll let the reader determine how that pitch came out.

CH: So, at the--they’re determined to remove you from office.  The police go on strike, there’s a garbage strike.  The city’s in default.  They control the press.  What’s the difference between what they did to you?  And in a more extreme form, what they did to Allende and Chile.

DK: Oh, well, look.  Yeah, I have people call Allende’s plight to my attention while it was going on.  People were involved in the documentary about it.  You know, he did not get out alive.  You know, I will tell you that.  No question it was a coup attempt in Cleveland.  You know, when you think about destabilizing a government, you know, don’t pay, you know, create police strikes, create garbage strikes.  And all of this was aimed to try and to force me to sell the electric system, there’s just no question about it.  And each time was like a new test.  You know, are you going to sell?  Are you going to sell?  Are you going to sell?  And, no, I--you know, there’s a point in life where you have to figure out who you are and what you stand for.  And if you’re, you know, there--it’s easy to stand for someone [00:07:09] when there’s no consequences.  I knew full well what the consequences would be.  I knew I was looking into an abyss, that my political career was going to be over.  I had no idea I’d ever be able to have another one again.  And you have to remember, I was only 31 years old when I took office as mayor.  I was a youngest mayor in the country.  And, you know, like, there was another 31-year-old officeholder at the time, who was governor of Arkansas.  You know, the point is that not many young people get into positions of power like that, and I was fully aware of what the opportunities were.  But in order to advance, I was basically told the price of my advancement was selling out to people elected me.  And I also thought about--

CH: I was pushed out of the New York Times for denouncing the call to invade Iraq.  It ended my career in mainstream journalism and you say, looking into the abyss, but really, what you were looking into was salvation, wasn’t it?

DK: Well, yeah, I mean, the--as I--when I spoke on a night of default in city council, I used the story of Shadrach, Meshach and Abednego and how King Nebuchadnezzar said they had to worship an idol of gold.  And they refused to do it.  And he threw them into the furnace, but they came out whole.  You know, I was not going to worship this idol of gold that have been constructed in the form of an electric system of bank, the city’s establishment you know, I believe there is such a thing as a soul.  And I--to me, when it--the way I grew up, what profit a person if they gain the whole world but lose their soul, I believe that so I can’t be bought, can’t be bossed.  To me, you know, there are some things that are worth fighting for.  And that’s what I did.  And the city has its electric system today.

CH: Towards the end of the book, you quote, Weir, I don’t have his first name.  But he writes…

DK: Brock Weir.

CH: Yeah.  And he says, “This is a war.  They are on one side, you are on the other.”  We’re not talking about recovering $5,000,000.  We’re talking about recovering a city.  When he says we, you have to understand that Cleveland trust not only owns a big share of CEI, they own substantial portions of nearly every major business and Cleveland, corporate Cleveland finance the recall, Cleveland Trust is corporate Cleveland.  It is a war.  And it’s a war we’re losing.  And it’s not just in Cleveland.  Although you did manage heroically to save the public utility just in the last two minutes and you mentioned it earlier with--now, the results of the pandemic and this push by corporations to privatize everything.  Talk about the war we’re facing.

DK: We have to work to maintain democratic governance.  I mean, democracy is an idea, the expression of it and the activation of it is up to those who are elected.  What happens is that when corporations own a public official, the corporations will see government working in our interest.  I point out in the--at the beginning of the book government works.  Question is who is it working for?  And with Citizens United and other impairments of campaign financing, there’s more and more influence that corporations have.  So, what happens?  It’s up to the individuals to take a stand again, you know, and challenge the system.  And I think there will be change coming.  I do think there are more enlightened people who are going into court, you know, into various businesses, who understand that, “Hey, they better pay attention to their own businesses and not think they can run the government at the same time.”  I mean, let’s face it.  Some of these corporate leaders who got involved in Cleveland, their businesses eventually went like this because they lost sight of what they were supposed to be doing.  Now, you know, I’m--I feel that there can be in this room, certainly for working together with business.  But if public officials do not function in the interest of the general public as opposed to function in the interest of major contributors or big corporation, if you can’t do that, you’re going to lose you’re--not just your community, we’ll lose our democracy.  And, you know, there were kind of there have been some ways already.  How do we retrieve it?  Informed citizenry, don’t be afraid to take a stand if you’re running for office.  And if you’re in office, remember who put you there, if it was for the people.

CH: Great.  That was Dennis Kucinich on his new book, the division of light and power.