Beam me to Planet Gore !
Posted on 05/29/2010 1:19:33 PM PDT by day21221
Just one day after the Democrats seized control of Congress, the Chief Executive of Fannie Mae, Franklin Raines, received the patent for a residential cap-and-trade system (Patent 6904336), What this means is that Raines, along with several colleagues who also “own” the patent, could stand to make huge amounts of money if the cap-and-trade regime was ever brought to the residential marketplace. What does this have to do with Fannie Mae? Absolutely nothing.
To understand the implications, a little discussion about patenting is needed. Patents are basically “ownership” rights to an invention. If you invent something, you can license it to others to produce and collect royalties. Each year, thousands of patents are sent to the US Patent Office for consideration. Many “patent houses” simply put in very general patents so they can turn around and sue businesses later for “stealing” their inventions. Sometimes it’s legit, many times its bogus.
As examples, Amazon holds the patent of “one-click purchasing”. Litigation ensued on that. There’s a patent on a “self-executing webpage” which is the reason why a few years ago Microsoft had to convert Internet Explorer to not automatically play media as soon as someone visited a webpage. (i.e. why you have to click a YouTube video for it to play).
Here is where things get interesting. Cap-and-trade legislation literally creates an asset out of thin air. It requires some means to “value” the asset and some means to trade it. In essence, it would lead to government created assets and trading mechanisms. However, when this patent was awarded and applied for, cap-and-trade was not even on the public radar yet.
It is important to remember a few things. Franklin Raines has privileged access to Congress and politicians. He knew and could talk to them about what they were thinking and what they planned to do. As head of a government corporation, he also had a degree of access to the Patent Office to help “smooth the way” to get a patent.
What happened here has all the marks of “insider patenting”. While technically legal, Raines was able to use inside information to put a patent into place before government action created a new marketplace that would require the creation of this systems. The result would have been huge amounts of cash to him and his “co-inventors” and likely, a few patrons on Capitol Hill as well.
This is also likely the first (and probably not the last) case of apparent insider patenting. As big government grows more and more into industry, insiders like Raines will be able to use advanced knowledge of legislative actions to put himself out in front with patenting and ensure he will make piles of cash. What this shows is that the only innovation big government breeds is innovation in new ways for unethical self-enrichment.
Cap-and-Trade
Simply put, the idea behind the cap-and-trade plan is this: The federal government would set limits or cap the amount of pollutant a business could create. If the business chose to emit levels exceeding the cap they would have to find a business not using its full allotment and purchase the surplus from them. Needless-to-say, for the concept to work there would need to be a highly centralized infrastructure to facilitate the transactions, matching buyers to sellers.
The CCX: A Dream Come True?
For people like Richard Sandor and former Vice-President Al Gore the focus on "green politics" represented the culmination of years of planning and a giant step towards a massive payday.
With a big helping hand from then Illinois State Senator Barack Obama, Sandor's brainchild, The Chicago Climate Exchange, opened for business in 2003 billing itself as "North America's only cap-and-trade system for greenhouse gases..." In other words, the facilitator for a scheme not quite hatched. Sandor, a long-time economist turned environmentalist shared his vision during a 1990 interview with the Wall Street Journal, saying, "Air and water are no longer the free goods that economics once assumed. They must be redefined as property rights so that they can be efficiently allocated." The statement didn't get a lot of attention back then but today seems prophetic. Sandor claims his idea of efficient allocation, also known as carbon trading, will develop into a $10 trillion industry.
Assembling the Team
During 2000 and 2001, the Joyce Foundation, a progressive trust with assets near $1 billion, known for funding groups like Center for American Progress and Tides Foundation, provided grants to CCX totaling $1.1 million. State Senator Obama served on the foundation's board of directors during that time and was instrumental in awarding the grants.
Shortly after the first grant was approved, the president of The Joyce Foundation, Paula DiPerna, left to join the executive team of CCX. Other notables with familiar names soon followed.
• Former Vice-President Al Gore became part-owner of CCX when his company, Generation Investment Management, made a sizeable investment. Gore brought with him his senior partner at GIM, David Blood, former CEO of Goldman Sachs Asset Management, along with a company chalk full of former Goldman Sachs' executives
• Goldman Sachs itself soon joined the team buying a ten percent interest in CCX
• (Maurice Strong), once linked to Tongsun Park, the central figure in the United Nation's oil-for-food scandal in 2005 and one of the architects of the Kyoto Protocol, joined the CCX board of directors
• Carlton Bartels was one of the first, and perhaps most important, additions to the CCX roster. As CEO of a company called CO2e, Bartels developed and delivered the actual guts of the exchange — a system for facilitating and managing the actual carbon trades
Strange Bedfellows
Just three weeks after filing for a patent for his carbon trade system, Bartels was killed during the attacks of 9/11. Bartels' death opened the door for a new partner to join CCX, easily the oddest fit of them all: Fannie Mae. In a move still unexplained, the quasi-governmental mortgage agency, led by (CEO Franklin Raines), purchased the rights to the system from Bartel's widow.
A patent on the invention was granted to Raines and Fannie Mae on November 7, 2006, ironically, the day after the Democrats regained control of Congress.
According to Barbara Hollingsworth of the Washington Examiner, the patent covers both the "cap" and "trade" parts of Obama's top domestic energy initiative and gives Fannie Mae proprietary control over the automated trading system used by Sandor's CCX.
When asked about the patent recently Fannie Mae communications director Amy Bonitatibus told the Washington Examiner, "Fannie Mae earns no money on this patent. We can't conjecture as to the cap-and-trade legislation." A source close to Fannie Mae, however, says a plan is in place to funnel future earnings from the patent to a non-profit housing organization called Enterprise Community Partners. Ironically, Raines, who left Fannie Mae in 2004 amidst allegations that he inflated earnings reports in order to collect higher bonuses ($52 million in bonuses over 5-years; $90 million in total compensation), serves on the board of trustees at Enterprise. In a continuation of theme, Goldman Sachs also has a representative on the board in the person of Alicia Glen.
Off to See the Wizard
In December 2009 The Joyce Foundation awarded Raines and Enterprise a $200,000 grant to launch Emerald Cities Collaborative. According to its website, "The Emerald Cities Collaborative (ECC) is a start-up, national coalition of diverse groups that includes unions, labor groups, community organizations, social justice advocates, development intermediaries, research and technical assistance providers, socially responsible businesses, and elected officials."
Emerald Cities' goal is "the greening of our nation's central cities and the creation of a "new vital economic sector." The collaborative is headed up by Joel Rogers, widely recognized as the "man behind the curtain" of today's progressive political movement. Rogers founded the powerful Apollo Alliance, the group recognized as having shaped much of the Obama administration's stimulus bill. Former White House green jobs "czar," Van Jones, described Rogers influence this way: "The best thinking that he represents… is now represented in the White House."
Also represented on the Emerald Cities board of directors, Gerald Hudson, executive director of SEIU (also on the Apollo Alliance advisory board); Phaedra Ellis-Lamkins, CEO of Green For All (created by Van Jones), and Doris Koo, CEO of Enterprise Community Partners, along with a collection of other union and community activist regulars.
The Bottom Line
The "environmental movement," once the bastion of peace loving hippies and Earth mothers, is potentially the booming business of the 21st century. Billions of dollars currently change hands each year in the name of the environment and, by all accounts, the surface is only scratched.
To date the missing piece of the puzzle has been a government mandate, something cap-and-trade legislation will remedy. Those already in the game stand to reap a fortune on the backs of average Americans who will see their energy bills "necessarily skyrocket," as President Obama explained, as businesses pass along the new cost of doing what they do in a "green America."
It's interesting to note that without the specter of a government mandate, the Chicago Climate Exchange would hold no value. Likewise Fannie Mae's patented trading system and Emerald Cities' prospects for "a new vital economic sector" would be nothing more than fool's gold.
Equally troubling is the blatant acknowledgement by those involved in this high stakes green rush that power and profit are the only real benefits to be had. The words of Joel Rogers: "I hope you all realized that you could eliminate every power plant in America today and you can stop every car in America. Take out the entire power generation sector and you still would not be anywhere near 80 percent below 1990 levels. You would be closer to around 60 percent... it would be around 68 percent and this is with bringing the economy to a complete halt… basically."
Crime Inc. – what do they know and when did they know it… and how much will it cost the American people?
By Steve Daniels May 26, 2010
(Crain’s) — David Vitale, the Chicago banking veteran slated to become executive chairman of ShoreBank Corp., recruited two colleagues from his days at First Chicago Corp. to beef up management of the South Side community lender following its controversial bailout led by Wall Street’s biggest players.
William Farrow, 55, with whom Mr. Vitale has worked both at First Chicago and the Chicago Board of Trade, Wednesday was named president and chief operating officer. He will report to George Surgeon, who continues as CEO of ShoreBank and president and CEO of the holding company.
Eileen Kennedy, 52, was named chief financial officer of both the Chicago bank and the holding company.
Mr. Farrow most recently was executive vice-president at CBOT and played an important role in the exchange’s initial public offering.
Ms. Kennedy most recently was CFO for Gartmore Asset Management, the London-based investment unit of Ohio-based Nationwide Mutual Insurance Co. Before that, she was CFO for life insurance arm Nationwide Financial Services Inc. She was treasurer at First Chicago when Mr. Vitale served as vice- chairman.
Some old hands at ShoreBank will have new roles. Ellen Seidman, 62, a former federal banking regulator and a ShoreBank officer since 2005, was named executive vice-president of mission and strategy. Kimberly Lynch, who joined the bank last year, will continue as general counsel. Leana Flowers, 60, will continue as head of human resources, and Laurie Spengler, 47, will continue as president and CEO of ShoreBank International Ltd., the bank’s unit specializing in microfinance in the developing world.
“With these professionals, ShoreBank will have in place a strong management team which knows ShoreBank well and is committed to forwarding ShoreBank’s mission to help the lower- and moderate-income communities we serve become stronger and healthier,” Mr. Vitale said in a news release.
The $2.3-billion-asset bank barely averted failure last week when it secured about $140 million in commitments for new equity from leading financial services firms including Goldman Sachs Group Inc., General Electric Co., Citigroup Inc., J. P. Morgan Chase & Co. and Bank of America Corp.
(((It now awaits word on whether it will receive a $75-million infusion from the Treasury Department’s Troubled Asset Relief Program. That’s expected within two months.))))
Top Republicans on the U.S. House Financial Services Committee have called for probes into the White House’s ties to ShoreBank. The bank’s outgoing founders, Ronald Grzywinski and Mary Houghton, have personal relationships with the Obamas, as well as ties to Bill and Hillary Clinton going back to the 1980s when an Arkansas bank modeled on ShoreBank was established.
The White House has denied any involvement with the ShoreBank rescue.
http://www.chicagobusiness.com/cgi-bin/news.pl?id=38380
What a totally evil concept, patenting a method to commit grand theft - it is no different than a bank robber patenting his method for robbing a bank.
I read the patent. It is the most vague thing you can imagine. It basically says that it covers carbon trading instruments. No detail, no “teaching”. This could only stand as a complete inside job.
Bump. Patents are interesting.
“your energy cost will necessarily soar” bump and read later.
Good post mr day
This is typical “business method” patent and subject to scrutinity and controvery. Basically, patents should be granted for technical inventions only, e.g. improved chemical process or hinge for iphone, not tax optimization or cap-and-trade scams. Supreme Court is now debating “Bilski”.
It is plausible that Supreme Court will struck down these kind of patents (ie they became obsolete). The decision will come no later than June 28.
This is the “invention”.
1. A computer-implemented method for providing a residential emissions trading program, comprising the steps of: identifying an energy savings opportunity in a residential property; quantifying an emissions reduction produced by the energy savings opportunity, wherein quantifying the emissions reduction further comprises measuring an energy savings resulting from the energy savings opportunity and calculating an emissions reduction resulting from the energy savings, and wherein calculating the emissions reduction further comprises qualifying a technical confidence factor for the energy savings opportunity; and aggregating the emissions reductions into a tradable commodity.
Personally, I believe Supreme Court will struck down these and this Fannia Mae insider patent will became more or less obsolete.
Interesting aspect here is that patents filed by Gov employees are owned by US Gov. Fannie Mae was not officially Gov agency, but it indirectly it was.
PATENTS
Government and Employee Rights and Responsibilities
Under Executive Order 10096 the Government has the right to obtain the entire right, title and interest in and to all inventions made by any Government employee (1) during working hours, or (2) with a contribution by the Government of facilities, equipment, materials, funds, or information, or of time or services of other Government employees on official duty, or (3) which bear a direct relation to or are made in consequence of the official duties of the inventor. See also 37 C.F.R. §501.6 and Kaplan v. Corcoran, et al.
Algore and his cronies can’t be far behind Raines.
Thanks for info.
Here is one thing that I hate about cap n trade. It stifles innovation. Once the system is in place, who would start a business that may cause emissions? Would you try to make a (more efficient) energy plant? Would you start a company that made engines?
Cap n Trade would give credits to existing businesses. New businesses would start with 0 and have to buy their way in. Growing businesses would would have to pay to grow.
Cap n Trade is a crap idea that belongs in the garbage bin. It is a step towards global fascism.
A shining example of why patenting processes should not be possible.
Great post. June 28th can’t come soon enough. Did you know IBM wants to patent a process for outsourcing?
http://www.informationweek.com/news/showArticle.jhtml?articleID=216402013
And the Patent will be seized to pay off the debts of Fanny and Freddy. Of course, the patent is worthless unless Cap & Trade goes forward. And there is the ultimate selling point to encourage America’s sheep to go along with Cap-n-tax.
“A shining example of why patenting processes should not be possible.”
Why? If I invent a new process that produces gold from combination of known metals, it would certainly be fair that I can patent that major innovation.
I think the key is that the invention must be technical, rather than dealing with abstract things (tax schemes, cap-and-trade policies).
The Government filed suit against F/M head Franklin Raines when the depth of the F/M accounting scandal became clear. READ IT HERE http://housingdoom.com/2006/12/18/fannie-charges/
The Government noted, "The 101 charges reveal how the individuals improperly manipulated earnings to maximize their bonuses, while knowingly neglecting accounting systems and internal controls, misapplying over twenty accounting principles and misleading the regulator and the public. The Notice explains how they submitted six years of misleading and inaccurate accounting statements and inaccurate capital reports that enabled them to grow Fannie Mae in an unsafe and unsound manner."
These charges were made in 2006. The Court ordered Raines to return $50 Million Dollars he received in bonuses based on the mis-stated Fannie Mae profits. (Did Raines ever return the money?)
Franklin Raines looted and pillaged Fannie Mae as Clinton's appointee. Raines famously bought into the climate control scam w/ F/M funds. Now he's hooked up with Ohaha's Chicago mob who organized the Chicago Climate Exchange.
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REFERENCE Franklin Raines' Letter to Shareholders----From 2003 Fannie Mae Annual Report
EXCERPT Ten years ago, for example, the typical conforming mortgage required a down payment of 10 to 20 percent, and low-down payment mortgages were considered too risky. But then we helped to standardize the 3 to 5 percent down payment loan, brought it to global capital markets, and made it available to lenders and communities nationwide. Now low-down payment loans are commonplace. And we just adopted a new variance in our underwriting standards that will make the $500 down payment loan widely available as well...
In 1994, we pledged to provide $1 trillion in capital to ten million underserved families by the end of 2000. Thanks to our housing and industry partners, we met that goal early. Then in 2000, we launched our American Dream Commitment, a pledge to provide $2 trillion in capital to 18 million underserved families by the year 2010, including $400 billion targeted specifically for minority families (later raised to $700 billion in response to President Bush’s Minority Homeownership Initiative).
After four of the strongest years in housing and mortgage finance history, we’ve already surpassed the top-line goals of this commitment. But our work is far from complete.
So in January 2004, we announced our Expanded American Dream Commitment and pledged significant new resources to tackle America’s toughest housing challenges. Our new commitment has three main goals.
First, we will expand access to homeownership for six million first-time home buyers in the next ten years, including 1.8 million minority first-time home buyers.We also will help raise the national minority homeownership rate from 49 percent to 55 percent, with the ultimate goal of closing it entirely.
Second, we will help new and long-term homeowners stay in their homes through a series of initiatives, and commit $15 billion to preserve affordable rental housing and $1.5 billion to support the revitalization of public housing communities.
Third, we will increase the supply of affordable housing and support community development activities in at least 1,000 neighborhoods across the country through our American Communities Fund, and through targeted investments like Low-Income Housing Tax Credits that help finance affordable rental housing.
It is because of initiatives like our Trillion Dollar Commitment and our American Dream Commitment that we have exceeded our HUD affordable housing goals for ten consecutive years. And we have increased our financing of mortgages to African Americans by over 400 percent and to Hispanic Americans by 470 percent in the past ten years, compared with a 205 percent increase in overall financing. Our Expanded American Dream Commitment will help us do even more. END RAINES LETTER
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