Colorado Title Board reverses itself

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Friends,

Thursday, April 24th, the title board reversed its position from the previous week and found that our proposed amendment to the Colorado constitution for a publicly owned state bank violated the single subject provision.

According to the explanations given by the title board members, this finding was based on three issues raised by opponents representing the Colorado Bankers Association and the Independent Bankers of Colorado:

1. The proposed amendment (a) establishes a publicly owned state bank and (b) exempts the revenues for such from TABOR (Art. X, Section 20), which to their way of thinking is not essential to the bank.
2. The proposed amendment permits the bank, as a d/b/a of the state, to issue bonds (for the sole purpose of capitalizing the bank), which to their way of thinking is not essential to the bank.
3. The proposed amendment specifies that the bank shall not subscribe to the Federal Deposit Insurance Corporation (FDIC); instead, the bank shall self-insure deposits, i.e., the deposits shall be insured by the full faith and credit of the people of Colorado, which to their way of thinking lacks the assurance that comes with depositing moneys in private banks.

Considering that in 2012 the Title Board approved a previous version of the proposed amendment that contained the same elements, the question arises as to the reasons the board has reversed its position.

There are many ways to look at this, but for those of us that believe that the banks (and the corporations that they own) control the federal and state governments, as well as key county and city governments, what we have here is a well-orchestrated charade employing varied strategies that look like a legal process, but in practice are nothing but a cynical and corrupt mockery.

Notice of rehearing

At 6:48 PM, on Wednesday evening, April 23rd, the proponents of the measure received notice (and copies of the opponents' motions) from the Title Board that the rehearing slate would begin the next morning at 8:30 AM. Prior to this, at the conclusion of the hearings to set title, we had been told that opponents had until Thursday, April 24th, at 5 PM to file their appeals and that rehearings would begin on Friday, April 25th.

Title Board schedule/agenda

On scheduled hearing days, the only way to follow the progress of the Title Board through the long list of initiatives is to listen to the proceedings online, if you're lucky enough to get a stable connection on your laptop's Windows Media Player; so, to be safe, it's necessary to drive to the hearing room in Denver and sit around for six to eight hours and wait, while the title board may shuffle the list, change the hour at which they will end for the day, and generally give little or no consideration to petitioners. The members of the Title Board are being paid, as are most of the lawyers in attendance. The people, to whom they are constitutionally responsible, can eat cake.

Rules of the proceedings

Anyone who is not a lawyer will immediately be struck by the fact that these proceedings are not debates in the formal sense--with those presenting the superior facts and arguments getting the votes of the title board members; no, lawyers are paid by their clients to do whatever it takes to win their case, which means using every sophist trick they can conjure, including lying, if necessary, in this case to create an excuse for the Title Board members to align with the banks' position, or to pass it along for the supreme court to find or conjure legal precedence that follows the banks' bidding--this passive-aggressive, good-cop bad-cop game alternating from year-to-year. Before we recount this year's charade, let's look at the types of arguments that lose points in a real debate.

The Ten Commandments of Rational Debate

1. Thou shall NOT attack a person's character, but the argument itself. ("Ad hominem")

2. Thou shall NOT misrepresent or exaggerate a person's argument in order to make it easier to attack. ("Straw Man Fallacy")

3. Thou shall NOT use small numbers to represent the whole. ("Hasty Generalization.")

4. Thou shall NOT argue thy position by assuming one of its premises is true. ("Begging the Question")

5. Thou shall NOT claim that because something occurred before, it must be the cause. ("Post Hoc/False Claim")

6. Thou shall NOT reduce the argument down to two possibilities. ("Fake Dichotomy")

7. Thou shall NOT argue that because of our ignorance the claim must be true or false. ("Ad Ignorantiam")

8. Thou shall NOT lay the burden of proof onto him who is questioning the claim. ("Burden of Proof Reversal")

9. Thou shall NOT assume "this" follows "that" when "it" has no logical connection. ("Non Sequitor")

10. Thou shall NOT claim that because a premise is popular, therefore, it must be true. ("Bandwagon Fallacy")

Encapsulation of proceedings

Our proceedings began with Jason Dunn, counsel representing Don Childears, executive director and CEO of the Colorado Bankers Association, employing the "Straw Man Fallacy," "Begging the Question," and "Non Sequitor" strategies, claiming to the Title Board that the measure for a state bank would:

1. Create a new branch of government
2. Spend unlimited amounts of money on anything the bank wanted
3. Violate the provisions of TABOR (which limits tax increases and growth of government)
4. Provide no insurance for the state's moneys which would reside in its coffers

While Mr. Dunn was permitted to file his arguments in a petition for rehearing and therein state his entire case, the board chose to limit our (the proponent's) response to the single subject issue raised by Mr. Dunn, and to cut off our response to Mr. Dunn's many extraneous and untruthful points.

During the course of their proceedings, the Title Board members--David Blake, appointee of Attorney General John Suthers; Jason Gelender, appointee of the Director of the Office of Legislative Legal Services, Dan Cartin; Suzanne Staiert, Deputy Secretary of State, appointee of Secretary of State Scott Gessler--consistently refused to respond to the notion that the workings of public banks and private banks were two entirely different worlds. For example, Mr. Gelender stated that he could not understand how a public bank would return more money to state than the state currently receives from private banks.

Our explanation (see graphics below) is that the state currently receives approximately 0.5% back on its investment (i.e., the moneys it deposits in private banks) minus substantial charges for its voluminous transactions; whereas, if its funds were deposited in its own bank, the state's transaction charges would not include overhead for private bank profits, and that certain funds of the state, as well as other capitalization generated from bonds, would be leveraged to return approximately 25% on equity to the state, in the form of interest income (based on the performance of the Bank of North Dakota--the only publicly owned bank in the U.S.--over the past 10 years).

RETURN ON INVESTMENT OF STATE FUNDS = 0.5%
In the current model, the state receives taxes and other revenues,
deposits them in a Wall Street bank--which invest in speculative instruments--
and the state receives a pittance (approx. 0.5%) in return

RETURN ON EQUITY OF STATE FUNDS = 25%
With a state bank, the state puts its revenues in its own bank,
leverages certain funds plus bond revenues as capitalization
to make loans in the public interest,
with the interest income generated either returned to the general fund of the state to:
(1) Fund various legislatively mandated programs, restoring public services; or, (2) reducing taxes; and/or,
retained to expand its loan portfolio, independently, or in conjunction with local independent and community banks,
to provide liquidity to Main Street, generate new jobs, and expand the tax base.

Despite our explanation that the difference to the state between these two modes would run in the hundreds of millions of dollars on an annual basis, Mr. Gelander invoked the "Ad Ignorantiam" argument (#7 above), i.e., he said he couldn't understand the difference. Since it's hard to imagine that the state would hire Mr. Gelander if he were actually ignorant of the aforementioned simple distinctions--between a pittance of a return on the state's moneys that pass through a private bank and a substantial return on the state's moneys leveraged to provide loans--we assume Mr. Gelander was playing dumb.

Mr. Blake, who had not been present for any of the three previous rounds with the Title Board, based his notion--that single subject had been breached--by a cursory glance at last year's Title Board's filing with the state supreme court, failing to understand that the Title Board's motion was based on the objection that the proposed publicly owned state bank amendment would be permitted to transfers some or all of its surplus (profits from interest income) to the general fund of the state and that such funds would remain exempt from TABOR. It was Mr. Blake's contention that the proposed amendment would still allow this to occur, but he offered no evidence of such a claim. This argument falls somewhere between a "Fake Dichotomy" and a "Non-sequitor." It's worth noting that in a memo re TABOR dated 1/7/93, the Legislative Council stated that "... it would appear that the amendment's provisions regarding voter approval would apply to only the traditional revenue sources -- sales and use, excise, property, income, head, cigarette, motor fuels, etc." Also, Mr. Blake makes the same logical error made by Mr. Dunn (see below) with the assumption that the proposed amendment, when in effect, would violate TABOR, forgetting that TABOR itself allows for exclusions.[1] Mr. Blake also stated that he did not care about any examples cited regarding the nation's only public bank, the Bank of North Dakota. Perhaps Mr. Blake feels that the character of North Dakota and Colorado are too different to make any comparisons regarding banking; of course, this is like saying that investment and commercial banking are only applicable to New York City and not Denver.

Ms. Staiert, who had previously voted for setting title three times, apparently was taken in by Mr. Dunn's "Chicken Little" strategy of claiming impending doom, as if the current behavior of privately owned banks, as detailed in our response to the Legislative Council and submitted to these Title Board proceedings by Mr. Dunn as Exhibit A, is not the actual root cause of any financial doomsday scenario; that is, as the repeated frauds perpetrated by the private banks show, the private banking business model is BASED on fraud. In addition, Ms. Staiert picked up on the logical fallacy that because it has been speculated that if TABOR were presented today, it might fail the single subject requirement, therefore we will rule that this proposed amendment might fail such a test, so we will vote it down instead of allowing a judicial body to issue a definitive opinion. The reason for this, of course, is that preempting a ruling saves the state supreme court from having to look like fools trying to explain their way out of the corner into which they have been forced by their corporate overlords.

Since Ms. Staiert did not permit us the opportunity to respond to Mr. Dunn's spurious claims of doom during the course of the proceeding, we shall address them here in the court of public opinion.

1. Create a new branch of government

RESPONSE: The CONSTITUTION OF THE STATE OF COLORADO, ARTICLE II BILL OF RIGHTS, Section 2. PEOPLE MAY ALTER OR ABOLISH FORM OF GOVERNMENT - PROVISO states:

"The people of this state have the sole and exclusive right of governing themselves, as a free, sovereign and independent state; and to alter and abolish their constitution and form of government whenever they may deem it necessary to their safety and happiness, provided, such change be not repugnant to the constitution of the United States."

Clearly, the people have the right to create a publicly owned state bank, as has been done previously (in North Dakota) and upheld by the U.S. Supreme Court, and, further, the people have the right to stipulate that the board of directors of such a bank be elected by popular vote. It matters not whether Ms. Seifert or Mr. Dunn, or "the money masters" object to this, because such an objection, in and of itself, does not constitute a second subject, but merely a political opinion in defense of a corrupt industry, which by all rights in a democracy would be under indictment for racketeering.

It should also be noted that in North Dakota, the management of Bank of North Dakota comes under the directive of the executive and legislative branches, which have come to serve the interests of private corporations (most notably the oil industry), rather than the people of North Dakota. The result is wreaking environmental and social disaster in the oil fields and the surrounding environment, with greater damage to come from the first oil refinery in the U.S. in 40 years and fracking. Clearly, we can do better than this here in Colorado. This attack, by Mr. Dunn and his clients (the Colorado Bankers Association, as proxy for the international banking cartel and their corporations), on the electoral independence of the proposed publicly owned state bank, is an indication of their fear that they will not be able to control the bank as they do presently with the other three branches of the state government.

2. Spend unlimited amounts of money on anything the bank wants

RESPONSE: The limitations on the use of a one-time bond issue (for capitalization only), as it is defined in the proposed amendment--i.e., to create the reserves necessary to make loans--and what those loans may address (i.e., various sustainable activities), make it clear that Mr. Dunn is not being factual. We wonder if Mr. Dunn's client would permit a law the would limit the types of expenditures that private banks make? So, the question is, why do the banks want to limit the economic health of the state? The answer, as we explore here, is that one of the objectives of the banking cartel is to privatize public services, i.e., continue to operate governments as public sector organizations subservient to private corporations.

"I hope we shall ... crush in its birth the aristocracy of our moneyed corporations, which dare already to challenge our government to a trial of strength and bid defiance to the laws of our country." --Thomas Jefferson (Letter to George Logan, 1816)

"Corporations have been enthroned. An era of corruption in high places will follow ... until wealth is aggregated in a few hands ... and the Republic is destroyed." –-Abraham Lincoln, after the National Banking Act of 1863 was passed

"Whosoever controls the volume of money in any country is absolute master of all industry and commerce ... And when you realize that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate." –-James Garfield

"This is a government of the people, by the people and for the people no longer. It is a government of corporations, by corporations, and for corporations." –Rutherford B. Hayes.

"Behind the ostensible government sits enthroned an invisible government owing no allegiance and acknowledging no responsibility to the people." --Theodore Roosevelt

"Since I entered politics, I have chiefly had men's views confided to me privately. Some of the biggest men in the United States, in the field of commerce and manufacture, are afraid of somebody, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they had better not speak above their breath when they speak in condemnation of it." --Woodrow Wilson, The New Freedom: A Call For the Emancipation of the Generous Energies of a People, Section I: "The Old Order Changeth," p. 13

"In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist." –Dwight D. Eisenhower, farewell speech

"The real truth of the matter is, as you and I know, that a financial element in the large centers has owned the government ever since the days of Andrew Jackson." –President Franklin D. Roosevelt, November 21, 1933.

3. Violate the provisions of TABOR (which limits tax increases and growth of government)

RESPONSE: This is nothing more than sophistry by Mr. Dunn. If approved, the amendment would exempt the publicly owned state bank's revenues from TABOR. This is a standard exemption; for example, between 2011 and 2014, there were 7 initiatives and referenda that exempted revenues from any constitutional restrictions, and two of these measures--Ballot issue #35 (2004) and Referendum C (2005) were approved by the electorate, thus becoming law. We, the proponents of this initiative, had previously (2013) made these instances clear to the Title Board, although their collective memory seems to be limited by the late hour and their focus on text messaging during the proceedings. Further, in November 2005, Coloradans approved Referendum C, which exempted the state from TABOR for 5 years, exempted certain funds in perpetuity, and changed certain formulas in perpetuity. Finally, TABOR states that it's intention is to throttle MOST growth, not all, and that future exemptions are permitted by voter approval.[1] In summary, if the proposed amendment for a publicly owned state bank is passed, it does not violate TABOR.

4. Provide no insurance for the state's moneys which would reside in its coffers

RESPONSE: Here, Mr. Dunn, and anyone who buys into his shallow notion, is clearly stating that they find the "full faith and credit of the people of the state of Colorado" of no value. The full faith and credit of the people of the state of Colorado is this: The people of this state and corporations of this state, work (create value) and pay taxes on their income, as well as pay fees for various state services. This economic activity guarantees the state a certain income from year-to-year. Indeed, it is the highest form of insurance, since along with the collapse of the largest banks (that own the Federal Reserve and use it as a backstop under the guise that they are "too big to fail"), which were bailed out by "the full faith and credit" of the people of the U.S. (with a great deal of resentment), a number of insurance companies (AIG, etc.) were bailed out as well. So who is backing up whom? It is the "full faith and credit of the people" that ends up insuring the reckless banks and corporations that have hijacked our government.

It should also be noted that the Bank of North Dakota--which has operated successfully for 95 years and is principally responsible for North Dakota having the lowest unemployment in the U.S., running a large budget surplus, and being impervious to the 2008 economic crash--is self-insured, i.e., it is not a subscriber to the FDIC (a private insurance company owned and operated for the private banking cartel), nor does it purchase surety bonds to back up the taxpayers' money it holds. Again, to understand the requirements of public banking, and to understand why the various provisions of our proposed amendment qualify as a single subject, one must understand that the parameters of public banking are different that private banking, to wit:

That essential functions common to both public and private banks differ in nature
does not mean that these functions are inessential when applied to public banks.

5. Circumvent Colorado's prohibition against multi-year public debt (Article XI, § 3)

RESPONSE: Once again, Mr. Dunn would like us to believe that there shall be no amendments to the constitution that exempt certain actions from sections of the constitution previously approved. As noted in our response to #3 above, there have been numerous instances when amendments and laws have exempted certain actions from prior provisions of the constitution. Additionally, as noted in #3 above, TABOR itself was suspended, which exempted the state from TABOR for 5 years, exempted certain funds from TABOR in perpetuity, and changed certain formulas in perpetuity. Regarding bonded indebtedness specifically, the Title Board approved the Colorado Water Projects Bond, Referendum A, in 2003. While it may be argued that the state itself is not permitted to issue bonds, clearly various divisions of the state (water districts, etc.) are permitted exemptions. Mr. Dunn conveniently chose to ignore that such exemptions have been made numerous times. To say that such an exemption in the proposed amendment is a second subject qualifies as yet another "Non sequitur," since the examples in #3 cited above include the raising of revenues and the exemptions of said revenue; further, capitalization for any bank, public or private, is an essential function, as noted in the comparison chart above; and finally, as noted earlier, TABOR itself makes exclusions of any conflicts for itself, and permits future overrides.[1]

So, why would functions considered necessary for private banks be considered inessential or peripheral (and thus a second subject) for public banks? Because the title board deems them such to prevent the people from voting on this issue and to support an exclusive franchise to private banks to create money ex nihilo and to make loans denominated in their private bank notes (Federal Reserve Notes). This is clear abuse of the intention of the single subject rule, which was instituted to prevent unrelated subjects being banded together and to prevent the gathering of support from various constituencies through such banding. The interpretation that the title board and the state supreme court have given to this law is nothing more than a bludgeon by which the banks and their corporations, through their government proxies, cripple the state, thereby rendering it vulnerable to usurpation by private organizations. Private control over the state is one of the textbook definitions of fascism.

If ye love wealth greater than liberty, the tranquility of servitude greater than the animating contest for freedom, go home from us in peace. We seek not your counsel nor your arms. Crouch down and lick the hand that feeds you. May your chains set lightly upon you; and may posterity forget that ye were our countrymen. --Samuel Adams

Footnote: [1] Article X. Section 20 The Taxpayer's BilI of Rights. (1) General provisions. This section takes effect December 31, 1992 or as stated. Its preferred interpretation shall reasonably restrain most the growth of government. All provisions are self-executing and severable and supersede conflicting state constitutional, state statutory, charter, or other state or local provisions. Other limits on district revenue, spending, and debt may be weakened only by future voter approval. # # #

[We are pleased to announce that our book, 7 Steps to Global Economic and Spiritual Transformation, is now available online at Amazon and at Barnes and Noble.]