Thursday, March 19, 2009

Connecting the dots in the Delaware way: our Department of Safety and Homeland Security

I started with what the MIAC fusion center report on the modern militia movement, which made me think about privacy issues with regard the fusion centers nationwide, which led me to thinking about the Delaware Information Analysis Center.

A parallel train of thought that I have been running for a long time: the incestuous relationship between government and corporate elites and the problems with eliminating the $750m Delaware budget.

I know, I know, this is a tangled web, so I'm going take a sort of connect-the-dots tour of the facts you need to know in order to get it.

The subject: Lewis D. Schiliro, Delaware Secretary of Safety and Homeland Security

Fact One: Schiliro was an FBI bigwig among FBI bigwigs. A classmate at the FBI Academy of Louis Freeh, Schiliro followed Freeh upward through the ranks until he became Director of the New York City Field Office. He had leadership roles in investigating such high-profile cases as the 1993 World Trade Center bombing and the crash of TWA Flight 800. He retired from the FBI in 2000, essentially leaving with Freeh because--although otherwise qualified--he had no possible political chance of succeeding Freeh as director.

Fact Two: Schiliro followed his mentor Freeh into a number of private enterprises, including the Freeh Group International and MBNA. These were the links that apparently brought Schiliro to Delaware, where both corporations were headquartered.

Fact Three: Schiliro reached MBNA at an interesting time, and in interesting company. According to the NYT this led to really interesting connections with MBNA's Charles Cawley:

More idiosyncratic was Mr. Cawley's preoccupation with security. The company cited security concerns, for example, as the justification for maintaining a fleet of corporate jets. It also hired a half-dozen former high-level F.B.I. officials, including Mr. Freeh and John E. Collingwood, who until last year lobbied Congress on behalf of the bureau.

Mr. Freeh said he first met Mr. Cawley in the summer of 1998. Taking a break from his F.B.I. duties, he packed his wife and six children into a Chevrolet Suburban and drove up Interstate 95 to Foxhill, as Mr. Cawley calls his sprawling waterfront estate in Camden, Me.

The idea for the trip had come from Jules J. Bonavolonta, a former chief of the organized crime and narcotics division of the F.B.I.'s New York office who had joined MBNA as a vice chairman a year earlier. Mr. Freeh said he did not reimburse Mr. Cawley because he considered the stay a gift from a friend.

Besides Mr. Freeh and Mr. Bonavolonta, MBNA has employed a few other former officials of the bureau: Lewis D. Schiliro, who was an assistant director and ran the F.B.I.'s New York office; James K. Kallstrom, who preceded Mr. Schiliro as head of that office; and William J. Esposito, who was deputy director of the bureau in 1997.

Gen. Charles C. Krulak, a former commandant of the Marine Corps, is a senior vice chairman of MBNA, and Benjamin R. Civiletti, former attorney general of the United States, has been a director since 1993.

It was never clear why a credit card company needed so many former law enforcement veterans. Mr. Freeh said that they lent management expertise and helped to bring in business. As evidence, he removed from his wallet an MBNA card issued by an exclusive group: the Society of Former Special Agents of the Federal Bureau of Investigation.


Fact Four: Of course, this ties Schiliro, if only indirectly, to the multiple tentacles that MBNA had going in Delaware prior to Bank of America gobbling it up. Again, the NYT:

MBNA has been the No. 1 donor to Senator Biden's campaigns since 1993 and has made substantial contributions to Senator Snowe and Representative Michael N. Castle, Republican of Delaware. Combined, those three politicians have received more than $700,000 from MBNA and its employees since 1993, according to the Center for Responsive Politics, a research group in Washington that tracks money in politics.

Mr. Freeh took issue with those figures, saying that putting all the individual contributions together was unfair and that only $57,000 of that total came from the company's official political action committee. He also said in an interview that, excluding the personal contributions of Mr. Lerner and Mr. Cawley, about 65 percent of MBNA's money goes to Republicans and about 35 percent to Democrats.

What did MBNA get for all that money? While Mr. Biden's main work has been on the Foreign Relations Committee, he has been a consistent advocate for MBNA. He has actively supported the company's favorite federal legislation, the Bankruptcy Reform Act, which would make it more difficult for consumers to escape their credit card debt....

The company also has ties to Senator Biden's son, R. Hunter Biden, a lawyer in Washington. Hunter Biden joined MBNA as a management trainee after graduating from Yale Law School and rose to be an executive vice president. Now a partner in Oldaker, Biden & Belair, a lobbying and law firm, he receives a $100,000 annual retainer from MBNA to advise it on "the Internet and privacy law," Mr. Freeh said. He added that Hunter Biden was not a registered lobbyist and did not lobby on legislation for the company.


Fact Five: Schiliro admits that is decision was in large part motivated by financial considerations--the need to cash in after a life in government. From Information Clearing House:

Schiliro said financial considerations played a role in his decision to leave his post as the bureau's top official in New York. He said he has a daughter who is a lawyer, a daughter who will soon be in medical school, and a son starting college.


Fact Six: MBNA was only one of Schiliro's many endeavors: he also became a partner in Freeh Group International, sometimes described as Louis Freeh's Private FBI, an international security consulting firm, as well as the Metropolitan Transport Authority, AIG, and the Hain Celestial Group.

Fact Seven: While it is not possible to trace most of the financial advantages that the former Assistant Director of the FBI might receive in such positions (you will look in vain for much info on what he did for MBNA or AIG), the public record from the Hain Celestial Group (a health and natural foods company) suggests that Schiliro did quite well. Immediately before accepting the Delaware Homeland Security position, Schiliro cashed out some of his stock option bonuses from Hain on 29 January 2008, selling 7,500 shares for $135,825 and 15,000 shares for $331,200--a nice $467,025 pad while moving back into public service.

Fact Eight: Schiliro has continued to receive stock options from Hain since become Delaware's Homeland Security czar to the tune of 2,500 shares on 3 April 2008 and 3,500 shares on 13 March 2009 [that's right: just a few days ago].

Fact Nine: Not that it specifically relates to Schiliro, but as an example of how people in his elite club move, Louis Freeh also diversified his interests, becoming (believe it or not!) a Director of Fannie Mae in May 2007. Just thought it would be fun to work Fannie Mae and AIG both into a story that also includes large executive bonuses.

Fact Ten: None of his Schiliro's post-FBI activities other than his MBNA position are listed on his biography page on the State of Delaware's official website.

So what did we get for all this?

Schiliro is an experienced bureaucratic infighter who protects his agency's budget at almost all costs. While throwing Governor Markell the bone of grounding his department's plane to save about half a million, this is what he said with regard to the current State shortfall last month:

DOVER -- Spending cuts alone will not be enough for the Department of Safety and Homeland Security to meet budget-reduction targets for the coming fiscal year, Secretary Lewis D. Schiliro told the Joint Finance Committee on Thursday.

But the department, whose largest component is the Delaware State Police, could meet that goal with a combination of cuts and revenue boosts that could include grounding its fixed-wing aircraft and increasing fines for driving under the influence, Schiliro said.


Revenue boosts? You mean selling tickets to the annual State Police Ball? No, Schiliro means treating drunk driving tickets as a revenue enhancer:

• Increasing fines for driving under the influence, and devoting the additional revenue to pay forensic chemists to do the chemical tests for blood alcohol.


Oh, and while you're at it, transfer part of your department's costs over to public education:

• Ask schools to share more of the cost of providing state police school resource officers. It costs the state police $3 million, and the school districts pick up $1.9 million of that total, Schiliro said. If the schools could pick up 85 percent of the cost, he said, it would save the department $600,000.


This did not necessarily go over that well with the Joint Finance Committee:

Although JFC members thanked Schiliro for suggesting the cuts and revenue-raising measures, some ideas didn't meet with an enthusiastic response.

Kenton Democrat Sen. Nancy W. Cook, JFC co-chair, reminded Schiliro that the Education Department has its own cuts to make -- and shifting the cost for school resource officers would add to that burden.


Now, here's the point: I am sure that Lewis Schiliro is a highly qualified, perhaps nearly legendary FBI agent, and in that sense I suppose Delaware should be proud to be paying him a six-figure salary (plus office and office staff, etc.) for a job in a State easily small enough to combine these duties with the commander of the Delaware State Police. And I am sure that all of his connections in the FBI and the corporate world will benefit Delaware and our citizens. Just look at what Joe Biden's corporate connections have done for people who need to declare bankruptcy.

But what I really wonder is why--in the world we currently live in--that nobody in the media or any watchdog group did due diligence on one of Governor Markell's senior appointees.

Here's the other point: in the US we have serious civil liberties and privacy issues with the way in which surveillance of private citizens who have not broken any laws is growing by leaps and bounds, and (a)we have a fusion center here whose director has openly stated that he can pretty much get any database he wants access to as long as he can pay for it, (b) a fusion center reluctant to release its address, (c) a fusion center without a separately identifiable budget line, and (d) a fusion center that takes information from (as well as providing information to) private clients (but we don't know who they are).

And we have a Secretary of Safety and Homeland Security with former business ties to the banking, insurance, and food industries, who is still apparently receiving stock option bonuses.

All of this information is freely available.

Whoever it was over at Delawareliberal who said investigative journalism is dead, is dead right.

So from now on you'd better connect your own damn dots.

1 comment:

Nancy Willing said...

ugh, this is more dots than I had in my files. Thanks for the update.