On Wall Street’s Private Police in NYPD Uniforms

We reported a bit more than a week ago on how JP Morgan had given a troublingly large donation of $4.6 million to the New York City Police Foundation. As we recounted, that foundation was established in 1971, which was when the city was sliding into its fiscal crisis, as a way for companies and individuals to bolster the NYPD’s budget. And even though in theory contributions go into a general coffer, one has to suspect in practice that big donors will get more attention from the cops. Even though this donation was the biggest the police foundation had ever received, it was still peanuts relative to the total NYPD budget. Nevertheless, as Richard Kline pointed out, the gesture was significant:

To me, the telltale with the JippyMo ‘donation’ is that it was _publicly_ announced. Jamie the Demon and his top heads want the public to know that the banksters LIKE the police, as opposed to those daft, sloppy, protestors.

The bankster/Kochster assault on unions was excruciatingly badly timed. It aims directly at public service unions. At their pensions. At their staffing levels. At their equipment. One of the most cogent remarks coming out of the intitial Wisconsin action (before the org-heads diverted it into failing to elect more Democrats) came from the police there, to the effect that lower staffing levels threatened _their_ safety. The local police were markedly sympathetic to the capitol building occupation in Madison. Some of this has clearly been whispered in the ear of the financial oligarchs by their paid consultants to the effect that alienating the police is not in the interests of the 1%. I don’t think that the sum of money is especially relevant or substantial. What matters is that it is a public demonstration that the banksters _like_ the police, with the implication that they will be prepared to drop a little more loose change on them if they’ll clap the rabble into Rikers like good fellows.

And it turns out that big financial service firms have also been buying protection via the NYPD. Literally.

Pam Martens in Counterpunch (hat tip reader 1sk) describes a program which allows private firms to pay the city to put a cop on the street to police for them. I am not making this up. Oh, and the white shirted cops that seem to be more aggressive in going after protestors (most notably, the one that infamously maced a group of women?) The assumption has been that they are supervisors. Martens suggests they are in the employ of businesses:

If you’re a Wall Street behemoth, there are endless opportunities to privatize profits and socialize losses beyond collecting trillions of dollars in bailouts from taxpayers. One of the ingenious methods that has remained below the public’s radar was started by the Rudy Giuliani administration in New York City in 1998. It’s called the Paid Detail Unit and it allows the New York Stock Exchange and Wall Street corporations, including those repeatedly charged with crimes, to order up a flank of New York’s finest with the ease of dialing the deli for a pastrami on rye.

The corporations pay an average of $37 an hour (no medical, no pension benefit, no overtime pay) for a member of the NYPD, with gun, handcuffs and the ability to arrest. The officer is indemnified by the taxpayer, not the corporation.

New York City gets a 10 percent administrative fee on top of the $37 per hour paid to the police. The City’s 2011 budget called for $1,184,000 in Paid Detail fees, meaning private corporations were paying wages of $11.8 million to police participating in the Paid Detail Unit. The program has more than doubled in revenue to the city since 2002.

The taxpayer has paid for the training of the rent-a-cop, his uniform and gun, and will pick up the legal tab for lawsuits stemming from the police personnel following illegal instructions from its corporate master. Lawsuits have already sprung up from the program.

If you assume a policeman works 48 weeks a year, that equates to 166 private goons masquerading as law enforcement. And remember, the corporate sponsors don’t pay for any benefits. The rule of thumb I’m used to is 25% to 30% of cash comp. And that’s before, as Marten stresses, training and litigation costs.

Lehman failed and owed the NYPD for 21 Paid Detail policemen. Goldman, the New York Stock Exchange, and the World Financial Center have all used Paid Detail. Martens points out that the New York Stock Exchange used its force to act under its direction (rather than the city’s):

On September 8, 2004, Robert Britz, then President and Co-Chief Operating Officer of the New York Stock Exchange, testified as follows to the U.S. House Committee on Financial Services:

“…we have implemented new hiring standards requiring former law enforcement or military backgrounds for the security staff…We have established a 24-hour NYPD Paid Detail monitoring the perimeter of the data centers…We have implemented traffic control and vehicle screening at the checkpoints. We have installed fixed protective planters and movable vehicle barriers.”

Military backgrounds; paid NYPD 24-7; checkpoints; vehicle barriers?..In his testimony, the NYSE executive Britz states that “we” did this or that while describing functions that clearly belong to the City of New York.

Martens also describes how the suit over the arrest of 700 OWS protestors on Brooklyn Bridge 30 members of the NYPD and 10 “law enforcement officers not employed by the NYPD”.

I found this report to be very troubling. Even though I’ve written how the US is moving towards becoming a Mussolini-style corpocracy, we are further down that path than I realized.

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46 comments

  1. Peter T

    I find this story also troubling. How could corporations be prevented from directing a part of the police?

    1. rotter

      Noooooooooooo. These are NYPD.The article makes that and all the implication of that clear. Also,Pinkertons goons were part of an age when there was no state or national law enforcement apparatus, no FBI, no NSA surveilance state, and before we had accumulated the past 100 years of criminal case law. As it was, the Pinkertons faded away because of those societal changes, because as we evolved, we saw that there are obviously critical jobs which private industry is ill equpped to perform. Police work and war fighting are the top 2 on the list. The Pinkertons probably prolonged the civil war by 2 years when they were hired to provide millitary intelligence for the army and did such a lousy job of it that the US army was convinced the confederate army had 2 million men 9there werent 2 million men eligible to fight in the entire southern confederacy at any time during the war). They were, all in all a miserable failure but THEY-WERE-NOT trained, and equipped, “indemnified”, at public expense.

      1. Richard Kline

        So rotter, that’s not quite true, and I think the substance of Eureka’s point holds. As you say, there was no realistic national police body, the Marshal’s service was severely limited in staff, funds, and authority. Many areas had little in the way of organized police, and urban police forces were notably corrupt, and so disinclined to pursue certain parties or factions. In that context, the Pinkertons, and lesser known but similar paramilitaries, were often hired by rich and corporate groups to suppress or ‘take into custody’ certain ‘known lawbreakers.’ The mine bosses and railroads were particularly active in doing this: they’d get a judge to swear out a warrant, and then hire private paramilitaries to ‘enforce the public writ,’ since there were far to few actual police to do the job, and the actual police were at times sympathetic or even in league with both justified resisters and actual criminals.

        Yes, the Pinkertons were not hired, paid, or explicitly endemnified by the public. But if they acted to enforce a judge’s write, they usually got off scot free even if the one so charged ended up riddled full of bullet holes. Yes, in the Civil War Alan Pinkerton was exceptionally incompetent, and as far as strategic vision the Pinkertons subsequently offered nothing. But this ‘private policing under the color of the law’ worked very well for the railroads and strikebreaking bosses a century ago. Only mass agitation after 1900, much of it under the Wobblie and suffrage banners, shamed public authorities into concessions.

        —And we see a return to that now. It is extremely troubling to me to find that paramilitaries serving under the _direction_ of private parties are granted law enforcement powers and the umbrella of public liability. That’s criminal, absolutely criminal, and I hope every citizen in the US sees that as the threat that it is. There are benefits and costs with _actual_ police (and simply costs to Homeland Insecurity), but being given the authority to act for the public they are accountable to the public. Private parties should under no circumstances be allowed to direct personal paramilitaries with full law enforcement powers AND EXEMPTION FROM LIABILITY. This must become an issue immediately.

        1. Kitt

          They are not working at the direction of the private
          business, they are still cops, doing what cops do.
          The business pays to have more cops in the area. Our
          church does this all the time. It costs money but is
          necessary when we have events, and for traffic control.

      2. Binky the Bear

        Pinkerton is still around, and supplemented by Dyncorp, Halliburton, Blackwater/Xe, and others. Trans Alaska Pipeline security/intelligence, for example, when the ownership is chasing down dissidents.

  2. gs_runsthiscountry

    History repeats itself yet again?

    The parallels to be drawn with this story, and that of the garment workers strike in the early 1900’s is real. For anyone interested watch the documentary “Triangle Fire” on pbs-online, specifically, from the 19 min mark.

    The more things change the more they stay the same.

  3. Middle Seaman

    As troubling as these reports are, they are expected and follow a long American tradition. When money and the owners are worshiped by the establishment, democracy and individual rights are swapped away.

    We should expect seeing much more of the same and worse. The right to the first born is just around the corner. Our current hope is in the large numbers. If OWS grows into a Vietnam era protest, gated communities will fall as did the walls of Jericho.

    1. aletheia33

      the linked story by pam martens in counterpunch presents other little-known details about a military/police repression system that seems to have already begun to take hold. note the tie-in with homeland security. i agree with yves and others here that this information is troubling.

      if all #OWS does is provoke this system to behaviors that clearly reveal the extent of reach and power it presently commands, they will have done the rest of us an immense service. i think this is part of what they intend, and things in this area may get very interesting.

      in this context, i’m interested that bloomberg’s announcement on sunday that #OWS will be allowed to occupy zuccotti park indefinitely “as long as they don’t break the law”, and that two recent news items present the owner of the park and the CEO of the owning company in a sympathetic light:

      http://cityroom.blogs.nytimes.com/2011/10/05/zuccotti-by-roberts/

      http://www.capitalnewyork.com/article/culture/2011/10/3658101/zuccotti-park-landlords-shared-interests-city-and-genial-reputation-

      this may be paranoid thinking, so other readers please call me on it if you think so, but timed in combination with what appears to be a decision by the democratic party powers-that-be to wrap their vampire squid tentacles all around OWS, i can’t help but wonder if bloomberg and zuccotti’s apparent benignity toward OWS at this juncture indicates that “the fix is in”, some kind of deal has been made, they’ve figured out what they hope will be some machiavellian, foolproof way to neutralize the OWS movement, at least the encampment that is its epicenter.

      or perhaps they simply are aware that the moment the protesters actively provoke a response with civil disobedience, the game will shift, and they hope to take advantage of that somehow.

      overall, given the 4-month permit extension in d.c. as well, is a weird standoff developing in which OWS and TPTB (including the democratic party) wait for one another to act first in a way that will repel the public?

      whatever TPTB try, i don’t think the new movement can be suppressed, or made invisible, long term, but if TPTB do come out in full physical force, it may mean the beginning of recognition that democratic freedom in our society will have to be reclaimed, or claimed in some ways for the first time, in a manner more evocative of the movements of soviet europe than anything in our own history as a supposedly outspokenly democratic society.

      in that context, one of the most relevant pieces i’ve read recently to OWS, which has stuck in my mind more than any others over the past week, was one that mentioned the orange alternative. (sorry, it may have been someone on this blog, i cannot track back to it.) the wikipedia piece on this very effective aspect of poland’s solidarity movement seems well worth a look for those looking into various models for possible new forms of effective action that OWS could draw on. from the wikipedia article “orange alternative” (forgive the length):

      “Its main purpose was to offer a wider group of citizens an alternative way of opposition against the authoritarian regime by means of a peaceful protest that used absurd and nonsensical elements.

      “By doing this, Orange Alternative participants could not be arrested by the police for opposition to the regime without the authorities becoming a laughing stock. Orange Alternative has been viewed as part of the broader Solidarity movement. Academics Dennis Bos and Marjolein t’Hart have asserted it was the most effective of all Solidarity’s factions in bringing about the movement’s success.”…

      “The actions of the Orange Alternative – although its leaders and participants often expressed anarchistic viewpoints – were not inherently ideological. No serious demands were ever expressed. Rather, the slogans were surrealist in character (such as “Vivat Sorbovit” (Sorbovit being a popular soft drink at that time) or “There is no freedom without dwarves.” Often they paraphrased slogans used by the Solidarity Union or the communists. Their role was to laugh at absurds and pompousness of both sides of the system and provoke to independent thinking.

      “Their open street formula allowed all individuals to take part in the happenings. This openness drew thousands of pedestrians to participate in the group’s actions. In such a way, the majority of the happenings could assemble thousands of participants, of whom many were accidental passers-by. The culmination point in the movement’s history was the action organized on June 1st, 1988, known as the “Revolution of Dwarves”, during which more than 10 thousand persons marched through the center of Wrocław wearing orange dwarf hats.

      “The happenings usually terminated with the arrest of hundreds of participants, who did not manage to escape in time from the hands of the militia. The happeners were even able to provoke the communist militia to arrest at one point 77 Santa Clauses or, at another occasion, all people wearing anything red.

      “For everyone of its actions, the Orange Alternative printed leaflets and posters, featuring slogans like ‘Every militiaman is a piece of Art’ or ‘Citizen, help the militia, beat-up yourself.'”

      and on that note… that’s more than enough from this corner.

      1. Zach Pruckowski

        I think they’re planning on weathering it. Remember, a lot of these cities (Boston, New York, DC) get REALLY F**KING COLD in November/December. If we get a normal-to-harsh winter, Zucotti Park or the Boston Greenway (esp. without tents) will be uninhabitable overnight in 8-10 weeks. Toss in the media refusing to cover it, and I bet Bloomberg et. al. think they just need to hold out for a bit. Will it work? Maybe, maybe not, but that’s probably their strategy.

      2. JasonRines

        Useful commentary. We’re Russia circa 1998. Watch the financeers for what nation they partner with to ‘contain’ Europe. This is a game within a game but this time is different for many reasons not so useful to list here.

        The violent crime rate is going to surge. Consider physically protecting your family from home invasion seriously, have three months food, water and medicine for WHEN the supply chains are disrupted. The Russians told me I was going to be more upset over boredom for a short time than fears. To have sin commoditiies like coffee, cigs and booze to trade which they considere more valuable then PM’s when they went through it.

        Look after one another and realize that if you don’t start acting like this now we won’t have much of a place worth rebuilding.

      3. John Merryman

        Mostly likely the democratic party sees it as balance to the Tea party. and will try to steer it as such. Given the extent to which the TP tail wags the Repub dog, this may prove to be wishful thinking.

        What needs to be done specifically is to drive a wedge between the financial sector and the productive economy and show how a market medium needs to be a public utility, like government, because it is the field, not just one of the players. We are not going to succeed in outlawing human greed, so it has to be used as a tool.

        The line between a symbiotic relationship and outright parasitism is quite fuzzy, until it has been definitively crossed and the financial sector has definitively crossed that line.

  4. nathan tankus

    Occupy Wall Street has gotten a lot of donations. can they rent their own cops to enforce the law? maybe that’s been the solution the whole time, let’s rent cops and tell them to arrest bankers who have committed fraud.

    1. psychohistorian

      Nice thought. Trouble is Obama just told us what they did was legal in this country.

      Laugh the global inherited rich out of control of our society and into rooms at the Hague. The definition of Moral Turpitude that US immigrants must meet should suffice for legal standards to hold them to in international courts.

    2. James Cole

      I think that renting a cop for #OWS is a great idea–either the attempt to rent a cop is rebuffed by the NYPD and that’s a controversy that highlights OWS’s main theme, or they actually get a cop standing there with a baton protecting the first amendment rights (such as they are) of OWS, and, presumably, staring back at the phalanx of actual cops, and that will obviously highlight the absurdity of the situation.

  5. YankeeFrank

    OWS should take some of that donation money they’re getting and purchase a few of NYC’s finest for protection from the rest of NYC’s finest.

    That being said, yes indeed Yves, we are much farther along into fascist police state than most Americans realize. African-Americans have known this forever.

    I’ve been reading some of the intellectual output of the OWS protesters. They are undoubtedly a pretty sophisticated crowd, at least as far as their understanding of some of the problems our nation faces are concerned. However, some of them appear to be operating under the misapprehension that if they embrace the 1% with love they will see the light and we can sing kumbaya together. I’m afraid they are going to learn the hard way that its going to be a very bloody fight if our side is going to prevail. Don’t get me wrong, I’d love it if they are correct, I guess I’m just cognizant of the bloody history of the labor movement in this country. Everyone seems to think the bad old days are gone — from greatly moderating and rationally expectorating economists, to Obama style incrementalists, to OWS protesters. The economists and Obama were obviously and completely wrong. OWS protesters…

    1. Darren Kenworthy

      Or Perhaps we are seeing the “Passive Aggression” strategy in action. Robert Greene’s “The 33 Strategies of War”:

      “In a world where political considerations are paramount, the most effective form of aggression is the best hidden one: aggression behind a compliant, even loving exterior.”

      He is thinking in Machiavellian terms, so he fails to grasp that this strategy is most potent when the love is authentic, yet not naive. A mask of love shatters when open conflict erupts. Naive ‘love’ becomes wrath when betrayed. Ahimsa/Agape/”universal love”, however, is robust in the face of hate because it seeks and finds the human behind the mask of rage, internally, and in the other. We know this experientially if we have ever forgiven someone who angered us.

      1. Darren Kenworthy

        Quakers have called the acceptance of the necessity and power of this kind of radical love “taking up the cross”. And yes, it is as potentially dangerous as it sounds.

      2. aletheia33

        thank you for this clarification, darren kenworthy.
        authentic, yet not naive.
        transmuting what arises in the heart into action.
        this is not emotionalism.
        it is the recognition that emotion–that is, relation–is that without which we cannot be human, we cannot live.

        if your parents are tired and old and have to keep on working, despite their most prudent planning, when they crave rest, and you realize that they have been made victims in this way, it is out of your caring that your anger will arise.
        if you fear that your children will not choose to have children themselves because the planet will have become too toxic to breathe the air, and you realize they have been made victims in this way, it is out of your caring that your anger will arise.

        when you come to see that there is a system at work in these abuses that designedly or not (perhaps not with much awareness of the consequences) is working to destroy human relation, destroy emotion, destroy caring, destroy the most basic human socialities of mutuality, neighborliness, and community, then you may come to feel that your only choice, if what you consider human is to survive, is to withdraw your consent from that system and invite others to join you in shutting it down.

        these are actions that arise from authentic, yet not naive, loving and caring.

        (also, they are exciting and get people excited. we are seeing this right here on this blog. what an explosion!)

        and who says “you can’t just shut down your social/political system and start all over again”–as if that isn’t what people have done many times over for centuries. like it or not, ready or not, change always comes.

        i see heartening (!) evidence at #OWS of the awareness you describe here, darren, and their choice to publish naomi klein’s perspective in issue 2 of their newspaper seems to bear it out.

  6. MyLessThanPrimeBeef

    I wonder if Wall Street also has private combat units in US Army uniforms…without actually paying for them (a better deal than its private NY police arrangement), courtesy of its politicians at the federal level, that can be sent, hypothetically, to Iraq, Afganistan or Libya?

    Sorry, I think that’s the oil industry’s private combat soldiers.

  7. Woodrow Wilson

    “The corporations pay an average of $37 an hour” –

    Wow, the NYPD is getting screwed.

    Here in Massachusetts, when I worked details, we started at $42/hr, if it was classified as a strike detail, which I would guess these protesters movements would be, we started at just over $50/hr, and that was years ago. I would venture a guess that thanks to the generous CBA environment here in MA, it’s worth more now.

    But hey, this is Massachusetts, where a high school diploma can get you a $150k/year job with an 80% pension, and retire at 55. I’m sure the math works on that.

    1. Moopheus

      I was thinking the same thing. Overtime pay for detail work is a major pay perk for cops. If the banks aren’t paying, then that doesn’t seem to encourage the sort of beat-cop sympathy the banks want.

    1. JasonRines

      Za, part of the responsibility of the global reserve currency is global policeman. Seasoned vets into the millions with training in all terrains of combat already are part and parcel of the society.

      1. decora

        its funny you should mention this.

        The HBGary/Anonymous thing, where Bank of America colluded with the DOJ to attack wikileaks, but also attack journalists who promoted wikileaks with “character assassination”, including Glen Greenwald of Salon.com, well,

        HBGary was not by itself. It was part of Team Themis. The other two companies in Team Themis were Palantir Technologies and Berico Technologies.

        Now, if you look at the executives working at Berico, they were a bunch of ex-military people. The main dude is a super gung ho guy, and which part of the military did he work in? Intelligence of course.

        Now, what part did they play in Team Themis plans to go after dissidents who supported wikileaks? Its not entirely clear, but Berico specialized in doing what they had been trained to do in Afghanistan, namely, use espionage and subterfuge against ‘targets’.

        In other words, the tools the military was trained to use against terrorists, were literally, being planned for use against US journalists, by ex-military people.

        Of course, Berico disavowed the whole thing after there was a big media storm when the HBGary documents were leaked by Anonymous. But, if there had never been a leak… how far would that project have gone?

  8. Fraud Guy- Also

    I am knowledgeable about what the “fringe benefit load” is for a big city cop. There is no way that it’s 25-30 percent. It’s more like 75-100% of base pay. It may be even higher right now in NYC, as the “normal cost” (an actuarial term) of a cop’s pension contribution is around 20% of pay. In NYC, the required pension cost may well be 40% right now to make up under-funding caused by the financial crisis market collapse.

    Further, as another reader pointed out, a good part of these detail hours are probably overtime, which jacks the price up even more.

    I don’t see how the city can offer this “service” without subsidy at less than approximately $100 hour. This suggests that they are probably subsidizing it to something like the tune of $63 /hr. More privatized cost and socialized gain.

  9. Jackrabbit

    JP Morgan’s $4.6 million went to the Police Foundation. So it would seem that money is for something other than Paid Detail work.

    What is the purpose of the $4.6 million? The Police Foundation is apparently meant to be a funding mechanism for new/experimental equipment and capabilities. If you think about how the protesters have succeeded – via social media – then you can guess that a good part of the $4.6 million may go to a counter that (essentially propaganda).

    There are a number of firms that provide “brand protection” that might provide that kind of service.

  10. James Cole

    That the $4.6 million went to the Foundation does not mean that the banks have not also paid for details separately although we apparently have no way of finding out if they have or have not.

    One other thing that I thought was common knowledge but has not been explicitly mentioned: Ray Kelly was head of security for Bear Stearns in 2000-01.

  11. bob

    As has been pointed out by others, the NYPD is alarmingly HUGE. The have foreign offices and personnel.

    They are much more an intelligence agency with some paid goons hanging around than a police department.

    $37 an hour won’t get you joe the plumber in NYC, what is their budget for medals?

  12. Tristan

    This practice is pretty fairly widespread (though this is the first time I’ve seen it officially sanctioned by a city). I’ve had friends who worked at higher-end ball boutiques in Chicago and Iowa, and at every store the managers have paid off duty police to act as plainclothes security guards. Basically they’re rent-a-cops, but their training and benefits are paid for by taxpayers.

    I’d be amazed if this was a very common practice wherever it’s not specifically prohibited.

  13. Mattski

    Guess it wasn’t J.P. Morgan but Jay Gould who said he could hire half the US working class to kill the other half. Still,
    this brings that assertion to mind.

  14. decora

    the first thing i thought of was Leah McGrath Goodman’s “The Asylum”, about the New York Mercantile Exchange.

    ex-cops allegedly ran security there and turned a blind eye to the massive drug and prostitution trade. and the real cops, their ex-coworkers, turned a blind eye to them turning a blind eye (“[professional courtesy]”?)

    the revolving door seems to cross every sector. Many crisis books, like Econned, have examples of people from politics jumping into nice jobs with financial companies after ‘graduating’ from government employment. Goodman’s book also mentions this occuring with financial journalists. Now, she doesn’t technically say this is the pattern with cops, but her description of how the cops arrangement worked, combined with this nakedcapitalism post, makes me really wonder. . .

    is there anyone the financial sector is NOT paying off to ‘come to the dark side’?

  15. scallywag

    Perhaps arresting these people has more to do with preserving the banks autonomy and very survival rather than the very interesting idea that all the security guards and cops were trying to do was put a sudden frenzy session of customers/vigilantes into quarantine mode. Who really needs to be quarantined are the banks, but that’s just the humble opinion of an individual with hardly a dime to his name.

    http://scallywagandvagabond.com/2011/10/citibank-would-like-to-blame-the-nypd-for-having-23-of-their-customers-arrested-for-trying-to-close-their-accounts/

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