a country passing legislation empowering the president to lock up citizens and
throw away key. Then, on
the same day, the evening news (instead of covering the massive
power grab) runs a story showing the president defending civil liberties by
cracking down on “unconstitutional policing”. This would be called
government propaganda, and it is happening in America.
The Reality:On December 15, the Obama administration was granted
(as requested) the legal authority to send Americans to jail without charges,
without trial, without end.
The video below explains how Habeas Corpus (the right to due process) died.
Buried within an 1,844-page bill currently
sitting on Barack Obama's desk awaiting his signature is text that many critics are
warning could give the president
legal authority to send Americans to jail without charges, without trial,
without end. Both the U.S. House and Senate have passed
Defense Authorization Act, a sweeping piece of
legislation that affects dozens of aspects of foreign
and military policy, but that was designed
primarily to give the military – and not civilian courts – the
clear authority for prosecuting and jailing terrorists.
But voices from across the political spectrum are concerned that the
bill opens the door for the military – led by the
president as commander in chief – to
indefinitely detain American citizens, even within the U.S.
"We're talking about American citizens
who can be taken from the United States and sent to a camp at Guantanamo Bay
and held indefinitely," explains Rand Paul of Kentucky, one of 13
senators who voted against the bill. …
… "It's something so radical that it
would have been considered crazy had it been pushed by the Bush
administration," said [Tom] Malinowski [of Human Rights
Watch]. "It establishes
precisely the kind of system that the United States has consistently urged
other countries not to adopt. At a time when the United States
is urging Egypt, for example, to scrap its emergency law and military
courts, this is not consistent."
Reality Check: The Obama administration demanded power to
detain U.S. citizens Posted: Dec 15, 2011 11:08 PM EST Updated: Dec 16, 2011 7:40 AM EST
By Ben Swann …
According to Sen. Carl Levin, who helped to craft this bill, not
only did the President want the power, THIS
ADMINISTRATION WAS THE ONE WHO DEMANDED THE POWER TO DETAIN U.S. CITIZENS
INDEFINITELY BE PLACED INSIDE THE BILL. …
Why Isn't Wall Street in Jail? Financial crooks
brought down the world's economy — but the feds are doing more to protect
them than to prosecute them
By Matt Taibbi
February 16, 2011 9:00 AM ET
Illustration by Victor Juhasz
Over drinks at a bar on a dreary, snowy night in Washington this past month, a
former Senate investigator laughed as he polished off his beer.
"Everything's fucked up, and
nobody goes to jail," he said. "That's your
whole story right there. Hell, you don't even have to write the
rest of it. Just write that."
I put down my notebook. "Just that?"
"That's right," he said, signaling to the waitress for the check. "Everything's
fucked up, and nobody goes to jail. You can end the piece
Nobody goes to jail. This is the mantra of
the financial-crisis era, one that saw virtually every
major bank and financial company on Wall Street embroiled in obscene criminal
scandals that impoverished millions and collectively destroyed hundreds of
billions, in fact, trillions of dollars of the world's wealth — and
NOBODY WENT TO JAIL. Nobody, that is, except Bernie Madoff, a
flamboyant and pathological celebrity con artist, whose victims happened to be
other rich and famous people.
The rest of them, ALL OF THEM, got off.Not a single
executive who ran the companies that cooked up and cashed in on the phony
financial boom — an industrywide scam that involved the mass sale of
mismarked, fraudulent mortgage-backed securities — has ever been
convicted. Their names by now are familiar to even the most casual
Middle American news consumer: companies like AIG, Goldman Sachs, Lehman
Brothers, JP Morgan Chase, Bank of America and Morgan Stanley. Most of these
firms were directly involved in elaborate fraud and theft. Lehman Brothers hid
billions in loans from its investors. Bank of America lied about billions in
bonuses. Goldman Sachs failed to tell clients how it put together the
born-to-lose toxic mortgage deals it was selling. What's more, many of these
companies had corporate chieftains whose actions cost investors billions
— from AIG derivatives chief Joe Cassano, who assured investors they
would not lose even "one dollar" just months before his unit
imploded, to the $263 million in compensation that former Lehman chief Dick
"The Gorilla" Fuld conveniently failed to disclose. Yet not one of them has faced time behind bars.
Instead, federal regulators and prosecutors have let the banks and
finance companies that tried to burn the world economy to the ground get off with carefully orchestrated settlements — whitewash jobs
that involve the firms paying pathetically small fines without even being
required to admit wrongdoing. To add insult to injury, the people who
actually committed the crimes almost never pay the fines themselves; banks caught defrauding
their shareholders often use shareholder money to foot the tab of justice. "If
the allegations in these settlements are true," says Jed Rakoff, a
federal judge in the Southern District of New York, "it's
management buying its way off cheap, from the pockets of their victims."
To understand the significance of this, one has to think carefully about the efficacy of
fines as a punishment for a defendant pool that includes the richest people on
earth — people who simply get
their companies to pay their fines for them. Conversely, one has to
consider the powerful deterrent to further wrongdoing that the state is missing
by not introducing this particular class of people to the experience of
incarceration. "You put Lloyd
Blankfein in pound-me-in-the-ass prison for one six-month term, and all this
bullshit would stop, all over Wall Street," says a former congressional
aide. "That's all it would take. Just
But that hasn't happened. Because the
entire system set up to monitor and regulate Wall Street is fucked up.
Just ask the people who tried to do the right thing.
Here's how regulation of Wall Street is supposed to work. To begin with,
there's a semigigantic list of public and quasi-public agencies ostensibly
keeping their eyes on the economy, a dense alphabet soup of banking, insurance,
S&L, securities and commodities regulators like the Federal Reserve, the
Federal Deposit Insurance Corp. (FDIC), the Office of the Comptroller of the
Currency (OCC) and the Commodity Futures Trading Commission (CFTC), as well as
supposedly "self-regulating organizations" like the New York Stock
Exchange. All of these outfits, by law, can at least begin the process of
catching and investigating financial criminals, though none of them has
The major federal agency on the Wall Street beat is the
Securities and Exchange Commission. The SEC watches for violations like
insider trading, and also deals with so-called "disclosure
violations" — i.e., making sure that all the financial information
that publicly traded companies are required to make public actually jibes with
reality. But the SEC doesn't have prosecutorial power either, so in practice, when it looks like
someone needs to go to jail, they refer the case to the Justice Department. And since the vast
majority of crimes in the financial services industry take place in Lower
Manhattan, cases referred by the SEC often end up in the U.S. Attorney's Office
for the Southern District of New York. Thus, the
two top cops on Wall Street are generally considered to be that U.S. attorney — a job that has
been held by thunderous prosecutorial personae like Robert Morgenthau and Rudy
Giuliani — and the SEC's director
of enforcement. The relationship between the SEC and the DOJ is necessarily
close, even symbiotic. Since financial crime-fighting requires a
high degree of financial expertise — and since the typical
drug-and-terrorism-obsessed FBI agent can't balance his own checkbook, let
alone tell a synthetic CDO from a credit default swap — the Justice
Department ends up leaning heavily on the SEC's army of 1,100 number-crunching
investigators to make their cases. In theory, it's a well-oiled, tag-team
affair: Billionaire Wall Street Asshole commits fraud, the NYSE catches on and
tips off the SEC, the SEC works the case and delivers it to Justice, and
Justice perp-walks the Asshole out of Nobu, into a Crown Victoria and off to 36
months of push-ups, license-plate making and Salisbury steak.
That's the way it's supposed to work. But a
veritable mountain of evidence indicates that when it comes to Wall
Street, the justice systemnot only sucks at punishing financial criminals, it has
actually evolved into a highly effective mechanism for protecting
financial criminals. This institutional reality has absolutely
nothing to do with politics or ideology — it takes place no
matter who's in office or which party's in power. To understand how the
machinery functions, you have to start back at least a decade ago, as case
after case of financial malfeasance was pursued too slowly or not at all,
fumbled by a government bureaucracy that too often is on a first-name basis
with its targets. Indeed, the shocking pattern
of nonenforcement with regard to Wall Street is so deeply ingrained in Washington
that it raises a profound and difficult question about the very nature of our
society: whether we have created a
class of people whose misdeeds are no longer perceived as crimes, almost no matter what
those misdeeds are. The SEC and the Justice Department have evolved into a
bizarre species of social surgeon serving this nonjailable class, expert not at
administering punishment and justice, but at finding and removing criminal
responsibility from the bodies of the accused.
The systematic lack of regulation has left even the country's
top regulators frustrated. Lynn Turner, a former chief accountant
for the SEC, laughs darkly at the idea that the criminal justice system is
broken when it comes to Wall Street. "I think you've got a wrong
assumption — that we evenhave a law-enforcement agency when it comes to Wall
Street," he says.
In the hierarchy of the SEC, the chief accountant plays a major role in working
to pursue misleading and phony financial disclosures. Turner held the post a
decade ago, when one of the most significant cases was swallowed up by the SEC
bureaucracy. In the late 1990s, the agency had an open-and-shut case against the Rite Aid drugstore
chain,which was using diabolical accounting
tricks to cook their books. But instead of moving swiftly to crack
down on such scams, the SEC shoved the case into the "deal with it
later" file. "The Philadelphia
office literally did nothing with the case for a year," Turner recalls. "Very
much like the New York office with Madoff." The Rite Aid case
dragged on for years — and by the time it was finished, similar
accounting fiascoes at Enron and WorldCom had exploded into a full-blown
financial crisis. The same was true for another SEC case that presaged
the Enron disaster. The agency knew that appliance-maker Sunbeam was using the
same kind of accounting scams to systematically hide losses from its investors.
But in the end, the SEC's punishment for Sunbeam's CEO, Al "Chainsaw"
Dunlap — widely regarded as one of the biggest assholes in the history of
American finance — was a fine of $500,000. Dunlap's net worth at the time
was an estimated $100 million. The SEC also barred Dunlap from ever running a
public company again — forcing him to retire with a mere $99.5 million.
Dunlap passed the time collecting royalties from his self-congratulatory
memoir. Its title: Mean Business.
The pattern of inaction toward shady deals on Wall Street grew worse and worse
after Turner left, with one slam-dunk
case after another either languishing for years or disappearing altogether. Perhaps the most
notorious example involved Gary Aguirre, an SEC investigator who
was literally fired after he questioned the
agency's failure to pursue an insider-trading case against John Mack, now the chairman of
Morgan Stanley and one of America's most powerful bankers.
Aguirre joined the SEC in September 2004. Two days into his career as a
financial investigator, he was asked to look into an insider-trading complaint
against a hedge-fund megastar named Art Samberg. One day, with no advance
research or discussion, Samberg had suddenly started buying up
huge quantities of shares in a firm called Heller Financial. "It was as if Art
Samberg woke up one morning and a voice from the heavens told him to start
buying Heller," Aguirre recalls. "And he wasn't just buying shares
— there were some days when he was trying to buy three times as many
shares as were being traded that day." A few weeks later,
Heller was bought by General Electric — and
Samberg pocketed $18 million.
After some digging, Aguirre found himself focusing on one
suspect as the likely source who had tipped Samberg off: John Mack, a close friend of
Samberg's who had just stepped down as president of Morgan Stanley. At the
time, Mack had been on Samberg's case to cut him into a deal involving a
spinoff of the tech company Lucent — an investment that stood to make
Mack a lot of money. "Mack is busting my chops" to
give him a piece of the action, Samberg told an employee in an e-mail.
A week later, Mack flew to Switzerland to interview for a top job at Credit
Suisse First Boston. Among the investment bank's clients, as it happened, was a
firm called Heller Financial. We don't know for sure what Mack learned on his
Swiss trip; years later, Mack would claim that he had thrown away his notes
about the meetings. But we do know that as soon as Mack
returned from the trip, on a Friday, he
called up his buddy Samberg.The very next morning, Mack was cut into
the Lucent deal — a favor that netted
him more than $10 million. And as
soon as the market reopened after the weekend, Samberg started buying every
Heller share in sight, right before it was snapped up by GE — a suspiciously
timed move that earned him the equivalent of Derek Jeter's annual salary for
just a few minutes of work.
The deal looked like a classic case of
insider trading. But in the summer of 2005, when Aguirre told
his boss he planned to interview Mack, things
started getting weird. His boss told him the case wasn't
likely to fly, explaining that Mack had
"powerful political connections." (The investment banker
had been a fundraising "Ranger" for George Bush in 2004, and would go
on to be a key backer of Hillary Clinton in 2008.)
Aguirre also started to feel pressure from Morgan Stanley, which was in the
process of trying to rehire Mack as CEO. At first, Aguirre was contacted by the
bank's regulatory liaison, Eric Dinallo, a former top aide to Eliot Spitzer.
But it didn't take long for Morgan Stanley to work its way up the SEC chain of
command. Within three days, another of the firm's lawyers, Mary Jo White, was
on the phone with the SEC's director of enforcement. In
a shocking move that was later singled out by Senate investigators, the
director actually appeared to reassure White, dismissing the case
against Mack as "smoke" rather than "fire." White, incidentally, was herself the
former U.S. attorney of the Southern District of New York — one of the top
cops on Wall Street.
Pause for a minute to take this in.Aguirre, an SEC
foot soldier, is trying to interview a major Wall Street executive — not handcuff
the guy or impound his yacht, mind you, just talk
to him. In the course of doing so, he finds out that his target's firm is
being represented not only by Eliot Spitzer's former top aide, but by the
former U.S. attorney overseeing Wall Street, who is going four
levels over his head to speak directly to the chief of the SEC's enforcement
division — not Aguirre's boss, but his boss's boss's boss's boss. Mack
himself, meanwhile, was being represented by Gary Lynch, a former SEC director
Aguirre didn't stand a chance. A month after he
complained to his supervisors that he was being blocked from interviewing Mack,
he was summarily fired, without notice.
The case against Mack was immediately dropped: all depositions canceled,
no further subpoenas issued. "It all happened
so fast, I needed a seat belt,"recalls Aguirre, who had
just received a stellar performance review from his bosses. The
SEC eventually paid Aguirre a settlement of $755,000 for wrongful dismissal.
Rather than going after Mack, the SEC started looking for someone else
to blame for tipping off Samberg. (It was, Aguirre quips, "O.J.'s
search for the real killers.") It wasn't until a year later that the
agency finally got around to interviewing Mack, who denied any wrongdoing. The
four-hour deposition took place on August 1st, 2006 — just days after
the five-year statute of limitations on insider trading had expired in the
case. "At best, the picture shows extraordinarily lax
enforcement by the SEC," Senate investigators would later
conclude. "At worse, the
picture is colored with overtones of a possible cover-up."
Episodes like this help explain why so many Wall Street executives felt
emboldened to push the regulatory envelope during the mid-2000s. Over and over,
even the most obvious cases of fraud and insider dealing got gummed up in the
works, and high-ranking
executives were almost never prosecuted for their crimes. In 2003, Freddie Mac
coughed up $125 million after it was caught misreporting its earnings by $5
billion; nobody went to jail. In 2006, Fannie Mae was fined $400 million, but
executives who had overseen phony accounting techniques to jack up their
bonuses faced no criminal charges. That same year, AIG paid $1.6
billion after it was caught in a major accounting scandal that would indirectly
lead to its collapse two years later, but no
executives at the insurance giant were prosecuted.
All of this behavior set the stage for the crash of 2008, when Wall Street
exploded in a raging Dresden of fraud and criminality. Yet the
SEC and the Justice Department have shown almost no inclination to prosecute
those most responsible for the catastrophe — even
though they had insiders from the two firms whose implosions triggered the
crisis, Lehman Brothers and AIG, who
were more than willing to supply evidence against top executives.
In the case of Lehman Brothers, the SEC had a chance six months before
the crash to move against Dick Fuld, a man recently named the worst CEO of all
time by Portfolio magazine. A
decade before the crash, a Lehman lawyer named Oliver Budde was going through
the bank's proxy statements and noticed that it was using a loophole involving
Restricted Stock Units to hide tens of millions of dollars of Fuld's
compensation. Budde told his bosses that Lehman's use of RSUs was dicey at
best, but they blew him off. "We're sorry about your concerns," they
told him, "but we're doing it." Disturbed by such shady practices,
the lawyer quit the firm in 2006.
Then, only a few months after Budde left Lehman, the SEC changed its rules to
force companies to disclose exactly how much compensation in RSUs executives
had coming to them. "The SEC was basically like, 'We're sick and tired of
you people fucking around — we want a picture of what you're
holding,'" Budde says. But instead of coming clean about eight separate
RSUs that Fuld had hidden from investors, Lehman filed a proxy statement that
was a masterpiece of cynical lawyering. On one page, a chart indicated that
Fuld had been awarded $146 million in RSUs. But two pages later, a note in the
fine print essentially stated that the chart did not contain the real number
— which, it failed to mention, was actually $263 million more than the
chart indicated. "They fucked
around even more than they did before," Budde says. (The law
firm that helped craft the fine print, Simpson Thacher & Bartlett, would
later receive a lucrative federal contract to serve as legal adviser to the
Budde decided to come forward.In April 2008, he
wrote a detailed memo to the SEC about Lehman's history of hidden stocks. Shortly thereafter, he
got a letter back that began, "Dear Sir or Madam." It was an
"They blew me off," Budde says.
Over the course of that summer, Budde tried to contact the SEC several more times, and was
ignored each time. Finally, in the fateful week of September
15th, 2008, when Lehman Brothers cracked under the weight of its reckless bets
on the subprime market and went into its final death spiral, Budde became
seriously concerned. If the government tried to arrange for Lehman to be pawned
off on another Wall Street firm, as it had done with Bear Stearns, the U.S.
taxpayer might wind up footing the bill for a company with hundreds of millions
of dollars in concealed compensation. So Budde again called the SEC, right in
the middle of the crisis. "Look," he told regulators.
"I gave you huge stuff. You really want to take a look at this."
But the feds once again blew him off.A young staff attorney
contacted Budde, who once more provided the SEC with copies of all his memos.
He never heard from the agency again.
"This was like a mini-Madoff," Budde says. "They
had six solid months of warnings.They could have done something."
Three weeks later, Budde was shocked to see Fuld testifying
before the House Government Oversight Committee and whining about how poor he
was. "I got no severance, no golden parachute," Fuld moaned. When
Rep. Henry Waxman, the committee's chairman, mentioned that he thought Fuld had earned more
than $480 million,Fuld
corrected him and said he believed it
was only $310 million. The true number, Budde calculated, was
$529 million. He contacted a Senate investigator to
talk about how Fuld had misled Congress, but he never got
any response. Meanwhile, in a demonstration of the government's
priorities, the Justice Department is proceeding full force with a
prosecution of retired baseball player Roger Clemens for lying to Congress
about getting a shot of steroids in his ass."At
least Roger didn't screw over the world," Budde says, shaking his
Fuld has denied any wrongdoing, but his hidden compensation was only a
ripple in Lehman's raging tsunami of misdeeds.The
investment bank used an absurd accounting trick called "Repo 105"
transactions to conceal $50 billion in loans on the firm's balance sheet. (That's $50 billion, not million.) But more than a
year after the use of the Repo 105s came to light, there
have still been no indictments in the affair. While it's possible
that charges may yet be filed, there are now rumors
that the SEC and the Justice Department may take no action against Lehman.If that's true,and there's no
prosecution in a case where there's such overwhelming evidence — and where the
company is already dead, meaning it can't dump further losses on investors or
taxpayers — then it might be time
to assume the game is up. Failing to prosecute Fuld and Lehman
would be tantamount to the state marching into Wall Street and waving the green
flag on a new stealing season.
The most amazing noncase in the entire crash — the one that
truly defies the most basic notion of justice when it comes to Wall Street
supervillains — is the one involving AIG and Joe
Cassano, the nebbishy Patient Zero of the financial crisis. As chief of AIGFP, the
firm's financial products subsidiary, Cassano repeatedly made public statements
in 2007 claiming that his portfolio of mortgage derivatives would suffer
"no dollar of loss" — an almost comically obvious
misrepresentation. "God couldn't manage a $60 billion real estate
portfolio without a single dollar of loss," says Turner, the agency's
former chief accountant. "If the SEC can't
make a disclosure case against AIG, then they might as well close up
As in the Lehman case, federal prosecutors
not only had plenty of evidence against AIG — they
also had an eyewitness to Cassano's actions who was prepared to tell all. As an accountant at
AIGFP, Joseph St. Denis had a number of run-ins with Cassano during the summer
of 2007. At the time, Cassano had already made nearly $500 billion worth of
derivative bets that would ultimately blow up, destroy the world's largest
insurance company, and trigger the largest government bailout of a single
company in U.S. history. He made many fatal mistakes, but chief among them was
engaging in contracts that required AIG to post billions of dollars in
collateral if there was any downgrade to its credit rating.
St. Denis didn't know about those clauses in Cassano's contracts, since they
had been written before he joined the firm. What he did know was that Cassano freaked
out when St. Denis spoke with an accountant at the parent company, which was only just
finding out about the time bomb Cassano had set. After St. Denis finished a
conference call with the executive, Cassano suddenly burst into the room and
began screaming at him for talking to the New York office. He then announced
that St. Denis had been "deliberately excluded" from any valuations
of the most toxic elements of the derivatives portfolio — thus preventing
the accountant from doing his job. What St. Denis represented was
transparency — and the last thing
Cassano needed was transparency.
Another clue that something was amiss with AIGFP's portfolio came when Goldman
Sachs demanded that the firm pay billions in collateral, per the terms of
Cassano's deadly contracts. Such "collateral calls" happen all the
time on Wall Street, but seldom against a seemingly solvent and
friendly business partner like AIG.And
when they do happen, they are rarely paid without a fight. So St. Denis was
shocked when AIGFP agreed to fork over
gobs of money to Goldman Sachs, even while it was still
contesting the payments — an indication that something was
seriously wrong at AIG. "When I found out about
the collateral call, I literally had to sit down," St. Denis recalls. "I
had to go home for the day."
After Cassano barred him from valuating the derivative deals, St. Denis had no
choice but to resign. He got another job, and thought he was done with AIG. But
a few months later, he learned that Cassano had held a conference call with
investors in December 2007. During the call, AIGFP
failed to disclose that it had posted $2 billion to Goldman Sachs following the
"Investors therefore did not
know," the Financial Crisis Inquiry Commission
would later conclude, "that AIG's
earnings were overstated by $3.6 billion." "I remember thinking, 'Wow, they're just not telling
people,'" St. Denis says. "I knew. I had been there. I knew
they'd posted collateral."
A year later, after the crash, St. Denis wrote a letter about his
experiences to the House Government Oversight Committee, which was looking into
the AIG collapse. He also met with
investigators for the government, which was preparing a
criminal case against Cassano. But the case never went to court. Last May, the
Justice Department confirmed that it would not file charges against executives
at AIGFP. Cassano, who has denied any wrongdoing,
was reportedly told he was no longer a target.
Shortly after that, Cassano strolled into Washington to
testify before the Financial Crisis Inquiry Commission. It was his first public
appearance since the crash. He has not had to pay back a single cent out of the
hundreds of millions of dollars he earned selling his insane pseudo-insurance
policies on subprime mortgage deals. Now, out from under prosecution, he
appeared before the FCIC and had the enormous balls to compliment his own
business acumen, saying his atom-bomb swaps portfolio was, in retrospect, not
that badly constructed. "I think the portfolios are withstanding the test
of time," he said.
"They offered him an excellent opportunity to redeem himself," St.
In the end, of course, it wasn't just the executives of Lehman
and AIGFP who got passes. Virtually every
one of the major players on Wall Street was similarly embroiled in scandal, yet their
executives skated off into the sunset, uncharged and unfined. Goldman Sachs paid $550
million last year when it was caught defrauding investors with crappy
mortgages, but no executive has been fined or jailed — not even Fabrice
"Fabulous Fab" Tourre, Goldman's outrageous Euro-douche who gleefully
e-mailed a pal about the "surreal" transactions in the middle of a
meeting with the firm's victims. In a similar case, a sales executive at the
German powerhouse Deutsche Bank got off on charges of insider trading; its
general counsel at the time of the questionable deals, Robert Khuzami, now
serves as director of enforcement for the SEC.
Another major firm, Bank of America, was
caught hiding $5.8 billion in bonuses from shareholders as part of its takeover
of Merrill Lynch. The SEC tried to let the bank off with a
settlement of only $33 million,
but Judge Jed Rakoff rejected the action as a "facade of
enforcement." So the SEC quintupled the settlement — but it didn't
require either Merrill or Bank of America to admit to wrongdoing. Unlike
criminal trials, in which the facts of the crime are put on record for all to
see, THESE WALL STREET SETTLEMENTS ALMOST NEVER
REQUIRE THE BANKS TO MAKE ANY FACTUAL DISCLOSURES,effectively burying the
stories forever. "All this is done at the expense
not only of the shareholders, but also of the truth," says Rakoff. Goldman,
Deutsche, Merrill, Lehman, Bank of America ... who did we leave out? Oh, there's Citigroup,
nailed for hiding some $40 billion in liabilities from investors. Last July, the SEC
settled with Citi for $75 million. In a rare move, it also fined two Citi
executives, former CFO Gary Crittenden and investor-relations chief Arthur
Tildesley Jr. Their penalties, combined, came to a whopping $180,000.
Throughout the entire crisis, in fact, the government has
taken exactly one serious swing of the bat against executives from a major
bank, charging two guys from Bear Stearns with criminal fraud over
a pair of toxic subprime hedge funds that blew up in 2007, destroying the
company and robbing investors of $1.6 billion. Jurors had an
e-mail between the defendants admitting that "there is simply no way for us to make money — ever"
just three days before assuring investors that "there's no basis for thinking this is one big disaster."Yet THE CASE STILL SOMEHOW
ENDED IN ACQUITTAL — and the
Justice Department hasn't taken any of the big banks to court since.
All of which raises an obvious question: Why
the hell not?
Gary Aguirre, the SEC investigator who lost his job when he drew the ire of
Morgan Stanley, thinks he knows the answer.
Last year, Aguirre noticed that a conference on financial law
enforcement was scheduled to be held at the Hilton in New York on November
12th. The list of attendees included 1,500 or so of the country's
leading lawyers who represent Wall Street, as well as some of the government's
top cops from both the SEC and the Justice Department.
Criminal justice, as it pertains to the Goldmans and Morgan
Stanleys of the world, is not adversarial combat, with cops and
crooks duking it out in interrogation rooms and courthouses. Instead, it's
a cocktail party between friends and colleagueswho from month to month
and year to year are constantly switching sides and trading hats. At the Hilton
conference, regulators and banker-lawyers rubbed elbows during a series of
speeches and panel discussions, away from the rabble. "They were chummier
in that environment," says Aguirre, who plunked down $2,200 to attend the
Aguirre saw a lot of familiar faces at the conference, for a simple reason: Many
of the SEC regulators he had worked with during his failed attempt to
investigate John Mack had made a million-dollar pass through the Revolving
Door, going to work for the very same firms they used to police.
Aguirre didn't see Paul Berger, an associate director of enforcement who had
rebuffed his attempts to interview Mack — maybe because Berger was tied
up at his lucrative new job at Debevoise & Plimpton, the same law firm that
Morgan Stanley employed to intervene in the Mack case. But he did see Mary Jo
White, the former U.S. attorney, who was still at Debevoise & Plimpton. He
also saw Linda Thomsen, the former SEC director of enforcement who had been so
helpful to White. Thomsen had gone on to represent Wall Street as a partner at
the prestigious firm of Davis Polk & Wardwell.
Two of the government's top cops were there as well: Preet Bharara,the U.S. attorney for the Southern District of New
York, and Robert Khuzami, the
SEC's current director of enforcement. Bharara had been
recommended for his post by Chuck Schumer, Wall Street's favorite senator. And
both he and Khuzami had served with Mary Jo White at the U.S. attorney's
office, before Mary Jo went on to become a partner at Debevoise. What's more,
when Khuzami had served as general counsel for Deutsche Bank, he had been hired
by none other than Dick Walker, who had been enforcement director at the SEC
when it slow-rolled the pivotal fraud case against Rite Aid.
"It wasn't just one rotation of the revolving
door," says Aguirre. "It
just kept spinning. Every single person had rotated in and out of government
and private service."
The Revolving Door isn't just a footnote in financial law enforcement; over the
past decade, more than a dozen high-ranking SEC officials have
gone on to lucrative jobs at Wall Street banks or white-shoe law firms,
where partnerships are worth millions. That makes SEC
officials like Paul Berger and Linda Thomsen the equivalent of college
basketball stars waiting for their first NBA contract. Are you really going to
give up a shot at the Knicks or the Lakers just to find out whether a Wall
Street big shot like John Mack was guilty of insider trading? "You take one
of these jobs," says Turner, the former chief accountant
for the SEC, "and you're fit for life."
Fit — and happy. The banter between the speakers at the
New York conference says everything you need to know about the level of chumminess and mutual admiration that
exists between these supposed adversaries of the justice system. At one point in the
conference, Mary Jo White introduced Bharara, her old pal from the U.S.
"I want to first say how pleased I am to be here," Bharara responded.
Then, addressing White, he added, "You've spawned all of us. It's almost
11 years ago to the day that Mary Jo White called me and asked me if I would
become an assistant U.S. attorney. So thank you, Dr. Frankenstein."
Next, addressing the crowd of high-priced lawyers from Wall Street, Bharara
made an interesting joke. "I also want to take a moment to
applaud the entire staff of the SEC for the really amazing things they have
done over the past year," he said. "They've done
a real service to the country, to the financial community, and not to mention a
lot of your law practices." Haw! The line drew snickers from
the conference of millionaire lawyers. But the real fireworks
came when Khuzami, the SEC's director of enforcement, talked about a new
"cooperation initiative" the agency had recently unveiled, in which executives are
being offered incentives to report fraud they have witnessed or committed. From
now on, Khuzami said, when
corporate lawyers like the ones he was addressing want to know if their Wall
Street clients are going to be charged by the Justice Department before deciding whether
to come forward, all they have to do is
ask the SEC.
"We are going to try to get those individuals answers," Khuzami
announced, as to "whether or not there is criminal interest in the case
— so that defense counsel can have as much
information as possible in deciding whether or not to choose to sign up their
Aguirre, listening in the crowd, couldn't believe Khuzami's brazenness. The
SEC's enforcement director was saying, in essence, that
firms like Goldman Sachs and AIG and Lehman Brothers will henceforth be able to
get the SEC to act as a middleman between them and the Justice Department,
negotiating fines as a way out of jail time. Khuzami was basically outlining
a four-step system for banks and their executives to buy their way out of
prison. "First, the SEC and Wall Street player make an agreement
on a fine that the player will pay to the SEC," Aguirre says. "Then the
Justice Department commits itself to pass, so that the player knows he's
'safe.' Third, the player pays the SEC — and fourth, the player gets a
pass from the Justice Department." [wow]
When I ask a former federal prosecutor about the
propriety of a sitting SEC director of enforcement talking out loud about
helping corporate defendants "get answers" regarding the status of
their criminal cases, he initially doesn't believe it. Then I
send him a transcript of the comment. "I am very, very surprised by
Khuzami's statement, which does seem to me to be contrary to past practice — and
not a good thing," the former prosecutor says.
Earlier this month, when Sen. Chuck Grassley found out about Khuzami's
comments, he sent the SEC a letter noting that the
agency's own enforcement manual not only prohibits such "answer
getting," it even bars the SEC from giving defendants the Justice
Department's phone number. "Should counsel or the individual ask which
criminal authorities they should contact," the manual reads, "staff
should decline to answer, unless authorized by the relevant criminal
authorities." Both the SEC and the
Justice Department deny there is anything improper in their new policy of
cooperation. "We collaborate with the SEC, but
they do not consult with us when they resolve their cases," Assistant
Attorney General Lanny Breuer assured Congress in January. "They do that
Around the same time that Breuer was testifying, however, a story broke that
prior to the pathetically small settlement of $75 million that the SEC had
arranged with Citigroup, Khuzami had ordered
his staff to pursue lighter charges against the megabank's executives. According to a letter
that was sent to Sen. Grassley's office, Khuzami had a
"secret conversation, without telling the staff, with a prominent
defense lawyer who is a good friend" of his and "who was
counsel for the company." The unsigned letter, which appears to have come
from an SEC investigator on the case, prompted the inspector general to launch
an investigation into the charge.
All of this paints a disturbing picture
of A CLOSED AND CORRUPT SYSTEM, a timeless circle of friends that
virtually guarantees a collegial approach to the policing of high finance. Even
before the corruption starts, the state is crippled by economic reality: Since law enforcement
on Wall Street requires serious intellectual firepower, the banks seize a huge
advantage from the start by hiring away the top talent. Budde, the former
Lehman lawyer, says it's well known that all the best legal minds go to the big
corporate law firms, while the "bottom 20 percent go to the SEC."
Which makes it tough for the agency to track devious legal machinations, like
the scheme to hide $263 million of Dick Fuld's compensation.
"It's such a mismatch, it's not even funny," Budde says.
But even beyond that, the system is skewed by the irrepressible pull of riches
and power. If talent rises in the SEC or the Justice Department, it
sooner or later jumps ship for those fat NBA contracts. Or, conversely, graduates of the
big corporate firms take sabbaticals from their rich lifestyles to slum it in
government service for a year or two. Many of those appointments are inevitably
hand-picked by lifelong stooges for Wall Street like Chuck Schumer, who has
accepted $14.6 million in campaign contributions from Goldman Sachs, Morgan
Stanley and other major players in the finance industry, along with their
As for President Obama, what is there to be said? Goldman
Sachs was his number-one private campaign contributor. He put a Citigroup executive
in charge of his economic transition team, and he just named an executive of JP
Morgan Chase, the proud owner of $7.7 million in Chase stock, his new chief of
staff. "The betrayal that this represents by Obama to everybody
is just — we're not ready to believe it," says Budde, a classmate
of the president from their Columbia days. "He's really fucking us over
like that? Really? That's really a JP Morgan guy, really?"
Which is not to say that the Obama era has meant an end to law enforcement. On
the contrary: In the past few years, the administration has allocated massive amounts of
federal resources to catching wrongdoers — of a certain type. Last year, the
government deported 393,000 people, at a cost of $5 billion. Since 2007, felony
immigration prosecutions along the Mexican border have surged 77 percent;
nonfelony prosecutions by 259 percent. In Ohio last month, a single mother was
caught lying about where she lived to put her kids into a better school
district; the judge in the case tried to sentence her to 10 days in jail for
fraud, declaring that letting her go free would "demean the
seriousness" of the offenses.
So there you have it. Illegal immigrants: 393,000. Lying moms:
one. Bankers: zero. The math makes sense
only because the politics are so obvious. You want to win elections, you bang
on the jailable class. You build prisons and fill them with people for selling
dime bags and stealing CD players. But for stealing a billion dollars? For
fraud that puts a million people into foreclosure? Pass. It's
not a crime. Prison is too harsh. Get them to say
they're sorry, and move on. Oh, wait — let's
not even make them say they're sorry. That's too mean; let's just give
them a piece of paper with a government stamp on it, officially clearing them
of the need to apologize, and make them pay a fine instead. But don't make them pay
it out of their own pockets, and don't ask them to give back the money they
stole. In fact, let them profit from their collective crimes, to the tune of a
record $135 billion in pay and benefits last year. What's next? Taxpayer-funded massages for every Wall Street
executive guilty of fraud?
The mental stumbling block, for most Americans, is that financial crimes don't
feel real; you don't see the culprits waving guns in liquor stores or dragging
coeds into bushes. But these frauds are worse
than common robberies.They're crimes of intellectual choice,
made by people who are already rich and who have every conceivable social
advantage, acting on a simple, cynical calculation: Let's steal
whatever we can, then dare the victims to find the juice to reclaim their money
through a captive bureaucracy. They're attacking the very definition of
property — which, after all, depends in part on a legal system
that defends everyone's claims of ownership equally. When that definition
becomes tenuous or conditional — when the state simply gives up on the
notion of justice — this whole American
Dream thing recedes even further from reality.
My reaction: I don’t really have much to add
to all this. The corruption speaks for itself.
There is a whole list of topics, like congressional corruption (See ‘60 Minutes’ Blows Lid Off Congressional Insider Trading), that mainstream media doesn’t write about. Keeping Americans uninformed about these topics is, at this point, a matter of survival. For example, if Americans realize that Russia-style, clear-as-day corruption has been rampant in congress for decades (again, see ‘60 Minutes’), they will realize that this Washington corruption simply would not be possible without an equally corrupt mainstream media, willing to look away again and again, year after year. That is why mainstream media wants stories like congress’s insider trading to die, keeping the public uninformed about the most vital matters (how can democracy work if the media won’t cover the corruption of elected leaders?).
Part of mainstream media's effort to keep Americans in the dark involves making sure big news makers don't talk about undesired topics and sidelining news makers who do. Since the biggest newsmaker is the president of the United States, mainstream media always aggressively winnows the presidential election field down to "status quo" candidates, those who don't talk about unnecessary things like congressional corruption (See VIDEO: Ron Paul Slams Congressional Insider Trading). This leads us to why mainstream media hates Ron Paul: his candidacy will not die.
However, mainstream media’s efforts to derail Ron Paul's presidential chances go way beyond simply ignoring him. Below I will cover mainstream media's complicity in three attempts to kill off Ron Paul’s campaign: Rick Perry's Candidacy, Occupy Wall Street, and Newt Gingrich's "Surge".
August 18, 2011, 11:27 AM ET Ron Paul: Perry ‘Makes Me Look Like a Moderate’ Presidential candidate Ron Paul, who has long called for abolishing the Federal Reserve, said he now looks “like a moderate” compared with GOP rival and fellow Texan, Gov. Rick Perry, who said it would be “almost treacherous, or treasonous,” if the central bank increased the money supply before the 2012 election.
Referring to Mr. Perry, the Texas congressman told supporters at a campaign event in Concord, N.H., Wednesday that “He realizes that talking about the Fed is good, too. But I tell you what: He makes me look like a moderate.” Mr. Paul added, “I have never once said [Fed Chairman Ben] Bernanke has committed treason.” Mr. Perry, who entered the race on Saturday,raised eyebrows among both Democrats and some Republicans Monday with his remarks on the Fed, including the idea that things could get “pretty ugly” for Mr. Bernankein the Lone Star State if he chooses to pump more money into the economy before the election.
The attention on Mr. Perry has irked Mr. Paul’s campaign because Mr. Paul has been railing against the Fed for years, including a 2009 book titled “End the Fed.” In Congress, Mr. Paul chairs the House subcommittee that oversees the central bank. …
On basically all important policy positions, Rick Perry mimicked Ron Paul:
1) Ron Paul wants to eliminate the Fed… … Rick Perry wants to eliminate the Fed. 2) Ron Paul wants to eliminate five federal agencies… … Rick Perry declares he wants to eliminate three federal agencies.
3) Ron Paul had staked out a lonely position as the only presidential candidate to oppose aid to Israel (Paul is against all foreign aid)… … Then Rick Perry more or less aped him on that (see Rick Perry: Israel Foreign Aid Starts 'At Zero').
The end result is that Rick Perry is a spoiler custom designed to hurt Ron Paul. He is appealing to exactly the same demographic as Ron Paul, and virtually all his supporters would otherwise be for Ron Paul supporters. To understand Ron Paul’s true level of support, Rick Perry’s and Ron Paul’s poll numbers should be added together.
…lot of Perry's wealth has come from well-timed real estate investments. As the Fort Worth Star-Telegram's Aman Batheja reported earlier this year, Perry has long faced criticism that he used his political connections to make money.There was the time in 1993 when he bought 10 acres of undeveloped land that happened to occupy the space between computer magnate Michael Dell's home and municipal sewer lines. Two years after buying it, Perry sold the land to Dell for $465,000-- more than triple the price he paid. There was the time in 2001 when Perry bought some land in Horseshoe Bay, Texas, for $314,770 and sold it six years later for $1.1 million -- to a guy who was a business partner of with the man Perry bought the land from in the first place. And Perry made some lucky trades himself: In 1996, Perry made $38,000 by selling stock in Kinetic Concepts, a medical supply company founded by a donor…
Rick Perry: The Best Little Whore In Texas The Texas governor has one driving passion: selling off government to the highest bidder November 26, 2011, by Matt Taibbi … Those in Texas who have followed Perry most closely over the years have all come to the same conclusion about him. "He's a cash-and-carry governor," says Craig McDonald, director of Texans for Public Justice, a group that monitors campaign contributions in the state. "He has an extremely strong stomach for holding his nose and doing really dirty favors." "He'll be whatever you want him to be," says one longtime political opponent. "He's all about greed."
"There's no line he won't cross," says another.
"This guy doesn't believe in one damn thing," says a third.
As for how this classic, big-government, machine politician…could run as a small-market conservative and Tea Party champion, many in Texas express bewilderment.
"If you tell a lie often enough, people believe it," says Debra Medina, a Tea Party Republican who ran against Perry in the gubernatorial primary last year. "That's Rick Perry." …
Will 'Oops' be Perry's campaign epitaph? Posted by CNN Political Unit
(CNN) - A visibly flustered Rick Perry was reduced to "Oops" after a painful 53 seconds of trying to remember the name of the third of three federal agencies he would cut at a Republican presidential debate in Rochester, Michigan, on Wednesday.
Answering a question about jobs creation, Perry attempted to name the three agencies he has proposed shutting. He named two, but could not come up with the third, even after appearing to consult notes. … "The third agency of government I would - I would do away with Education, the Commerce, and, let's see. I can't. The third one, I can't. Sorry. Oops." …
Commentary: Paul’s authenticity keeps his campaign afloat December 1, 2011 at 9:06 pm By Patricia Kilday Hart, Austin bureau … Paul is unlikely to be accused of a flip-flop, or have an “oops” moment about his positions. YOU FORGET LINES THAT HAVE BEEN FED TO YOU — NOT YOUR CORE BELIEFS. …
Mainstream media’s role in promoting the Rick Perry's fabricated candidacy
Just look at the chart below. While Ron Paul only appeared as the "primary newsmaker in only 2% of all election stories", Rick Perry appears in a shocking 17%of all election stories, more than any other candidate.(Source: Ron Paul media blackout has been officially confirmed)
And it isn’t just any news stories. Search for any major Washington scandal on Google News and Rick Perry shows up at the top of the results:
What this means: If an average American googles any of the scandals that Ron Paul has been railing about for years, all they find is Rick Perry, Rick Perry, Rick Perry… Think about how twisted that is.
Status of Rick Perry’s cadidacy
Between his career ending “oops” and his deep history of personal corruption, Perry has no chance of being president.
Is Rick Perry giving up? Hell no. His purpose was never to win, but to make sure Ron Paul doesn’t.
EXCLUSIVE: ACORN Playing Behind Scenes Role in 'Occupy' Movement By Jana Winter Published October 26, 2011 | FoxNews.com The former New York office for ACORN, the disbanded community activist group, is playing a key role in the self-proclaimed “leaderless” Occupy Wall Street movement, organizing “guerrilla” protest events and hiring door-to-door canvassers to collect money under the banner of various causes while spending it on protest-related activities, sources tell FoxNews.com.
The former director of New York ACORN, Jon Kest, and his top aides are now busy working at protest events for New York Communities for Change (NYCC). That organization was created in late 2009 when some ACORN offices disbanded and reorganized under new names after undercover video exposes prompted Congress to cut off federal funds.
NYCC’s connection to ACORN isn’t a tenuous one: It works from the former ACORN offices in Brooklyn, uses old ACORN office stationery, employs much of the old ACORN staff and, according to several sources, engages in some of the old organization’s controversial techniques to raise money, interest and awareness for the protests. Sources said NYCC has hired about 100 former ACORN-affiliated staff members from other cities – paying some of them $100 a day - to attend and support Occupy Wall Street. Dozens of New York homeless people recruited from shelters are also being paid to support the protests, at the rate of $10 an hour, the sources said.
At least some of those hired are being used as door-to-door canvassers to collect money that’s used to support the protests. Sources said cash donations collected by NYCC on behalf of some unions and various causes are being pooled and spent on Occupy Wall Street. The money is used to buy supplies, pay staff and cover travel expenses for the ex-ACORN members brought to New York for the protests.
In one such case, sources said, NYCC staff members collected cash donations for what they were told was a United Federation of Teachers fundraising drive, but the money was diverted to the protests. Sources who participated in the teachers union campaign said NYCC supervisors gave them the addresses of union members and told them to go knock on their doors and ask for contributions—and did not mention that the money would go toward Occupy Wall Street expenses. One source said the campaign raked in about $5,000. Current staff members at NYCC told FoxNews.com the union fundraising drive was called off abruptly last week, and they were told NYCC should not have been raising money for the union at all.
Sources said staff members also collected door-to-door for NYCC’s PCB campaign — which aims to test schools for deadly toxins —but then pooled that money together with cash raised for the teachers union and other campaigns to fund Occupy Wall Street. “We go to Freeport, Central Islip, Park Slope, everywhere, and we say we’re collecting money for PCBs testing in schools. But the money isn’t going to the campaign," one source said.
"It’s going to Occupy Wall Street, and we’re not using that money to get schools tested for deadly chemicals or to make their kids safer. It’s just going to the protests, and that’s just so terrible.” A spokesman for the United Federation of Teachers told FoxNews.com, "The UFT is not involved in any NYCC fundraising on the PCB issue.”
Multiple sources said NYCC is also using cash donations through canvassing efforts in New York’s Harlem and Washington Heights neighborhoods for union-backed campaigns to fund the Wall Street protests. … Those who contribute don't know the money is going to fund the protests, the source said.
“They give contributions because we say if they do we can fix things - whatever specific problem they’re having in their area, housing, schools, whatever ... then we spend the contributions paying staff to be at the protests all day, every day. That’s where these contributions - the community’s money – is going,” the source said. … Another source, who said she was hired from a homeless shelter, said she was first sent to the protests before being deployed to Central Islip, Long Island, to canvass for a campaign against home foreclosures.
“I went to the protests every day for two weeks and made $10 an hour. They made me carry NYCC signs and big orange banners that say NYCC in white letters. About 50 others were hired around my time to go to the protests. We went to protests in and around Zuccotti Park, then to the big Times Square protest,” she said.
“But now they have me canvassing on Long Island for money, so I get the money and then the money is being used for Occupy Wall Street—to pay for all of it, for supplies, food, transportation, salaries, for everything ... all that money is going to pay for the protests downtown and that’s just messed up. It’s just wrong.” …
ACORN Officials Scramble, Firing Workers and Shredding Documents, After Exposed as Players Behind Occupy Wall Street Protests By Jana Winter Published November 03, 2011 | FoxNews.com Officials with the revamped ACORN office in New York -- operating as New York Communities for Change -- have fired staff, shredded reams of documents and told workers to blame disgruntled ex-employees for leaking information in an effort to explain away a FoxNews.com report last week on the group’s involvement in Occupy Wall Street protests, according to sources.
NYCC also is installing surveillance cameras and recording devices at its Brooklyn offices, removing or packing away supplies bearing the name ACORN and handing out photos of Fox News staff with a stern warning not to talk to the media, the sources said.
“They’re doing serious damage control right now,” said an NYCC source.
NYCC Executive Director Jon Kest has been calling a series of emergency meetings to discuss last week’s report—and taking extreme measures to identify the sources in their office and to prevent further damage, a source within NYCC told FoxNews.com.
Two staffers were fired after NYCC officials suspected them as the source of the leaks, a source told FoxNews.com. “One was fired the day the story came out, the other was fired on Friday. (NYCC senior staff) told everyone that they were fired because they talked to you,” a source said.
NYCC spokesman Scott Levenson denied that anyone was fired for talking to the press.
FoxNews.com’s report identified NYCC as a key organizing force behind the Occupy Wall Street protests. Sources within the group also told FoxNews.com NYCC was hiring people to carry signs and join the protests. NYCC -- a nonprofit organization run almost entirely by former ACORN officials and employees --did not reply for comment prior to the publication of the initial article, but later posted a statement on its website dismissing the article and denying that it pays protesters.
A source said that immediately following publication of the FoxNews.com report staff were called into the Brooklyn office for meetings headed by NYCC’s organizing director, Jonathan Westin. Westin handed out copies of the article and went through it line-by-line, the source said.
Staffers were also given copies of photos of Senior Fox News Correspondent Eric Shawn and three other Fox News staff members, including this reporter.
“They reminded us that we can get fired, sued, arrested for talking to the press,” the source said. “Then they went through the article point-by-point and said that the allegation that we pay people to protest isn’t true.” “‘That’s the story that we’re sticking to,’” Westin said, according to the source.
The source said staffers at the meeting contested Westin’s denial:
“It was pretty funny. Jonathan told staff they don’t pay for protesters, but the people in the meeting who work there objected and said, ‘Wait, you pay us to go to the protests every day?’ Then Jonathan said ‘No, but that’s your job,’ and staffers were like, ‘Yeah, our job is to protest,’ and Westin said, ‘No your job is to fight for economic and social justice. We just send you to protest.’ “Staff said, ‘Yes, you pay us to carry signs.’ Then Jonathan says, ‘That’s your job.’ It went on like that back and forth for a while.” During the meetings, NYCC Deputy Director Greg Basta provided Westin with the copied photos of Fox News reporters to hand out to staff members, the source said. Basta told staffers they might be asked about the article when out in communities working on campaigns or when calling people by phone, the source said.
“They told us if people bring up the article, we’re supposed to say the source and all the stuff in there came from a disgruntled ex-employee who’s not working with us anymore.” NYCC is also monitoring its staff’s behavior, cracking down on phone use and socialization. Officials have ordered all papers -- even scraps -- to be shredded every night, the source said.
“And all the supplies—everything around the office that said ‘ACORN’ -- is now all in storage until this blows over,” the source said. “People literally have to cover up the cameras on the back of their cellphones in the office.” “Now there’s no texting in the office, no phone calls in the office. They tell us to take our phone calls out into the waiting room where there’s an intercom, and then they turn on the intercom to hear our conversations. They’re installing new cameras and speakers around the building so they can hear everything.
US Justice Department Involved In New Corruption Scandal, Says Watchdog Group – OpEd Written by: Jim Kouri December 5, 2011 The already scandal-ridden Obama Justice Department is being accused of more misbehavior, according to a blog this week by a top “Inside the Beltway” watchdog group.
A Justice Department program that distributes hundreds of millions of dollars each year to supposedly combat juvenile delinquency is now under fire for giving a leftist group nailed for rampant corruption in the past — the Association of Community Organizations for Reform Now or ACORN — taxpayers’ money that was fraudulently spent. According to a report on the Judicial Watch blog, this is just the latest of several controversies for the DOJ’s Office of Juvenile Justice and Delinquency Prevention (OJJDP) which has managed to maintain a significant budget through the years despite multiple allegations of cronyism.
… Now, the Justice Department’s own Inspector General released a report that exposes corruption surrounding a $138,130 grant that OJJDP awarded to an ACORN branch in New York City. The IG’s audit found that there were internal control weaknesses, unsupported grant expenditures, lack of contractor monitoring, weaknesses in budget management, inadequate grant reporting, unmet conditions and deficiencies with the program’s overall performance.
The IG also describes the New York group as a “pass-through entity” for ACORN, the crooked nonprofit that’s raked in huge sums of taxpayer dollars over the years. In 2009, Congress actually passed a law (Defund ACORN Act) to ban federal funding for ACORN after a series of exposés about the group’s illegal activities,which include fraudulent voter registration drives and involvement in the housing market meltdown.
The group has close ties to President Barack Obama, who worked for ACORN as a “community organizer” in Chicago, prior to embarking on his political career.
Earlier this year a Judicial Watch probe found that the Obama Administration violated the ban on federal funding for ACORN by giving the beleaguered group nearly $80,000 to “combat housing and lending discrimination” against minorities.
… This year Judicial Watch also published a special report about the organization’s transformation into various spinoffs and affiliated groups. Amid a massive fraud scandal and a series of criminal probes, ACORN supposedly dismantled but the reality is that it simply changed its name.
For instance, … ACORN has been one of the driving forces behind the movement to end economic segregation and social injustice in the U.S. culminating in the current Occupy Wall Street movement. …
In the 2008 election, Obama’s theme was “political division”. In the 2012 election, Obama's theme will be “economic division” (inequality), as foretold by this December 6 speech. It's Occupy Wall Street's narrative.
Media skews tea party, ‘Occupy’ coverage November 25, 2011 2:40PM How can America solve its problems when the media — our source for information — is biased,hypocritical and short on facts and rational analysis?
Americans have observed this journalistic failure in the coverage of the Occupy Wall Street activities and the tea party rallies.
The media reaction to the tea party generally was negative, with reporters claiming racist motives without proof. Yet, the tea party clearly stated its goals — stop out-of-control government spending, soaring national debt, and dictatorial rule from Washington, D.C.
Tea party members obtained legal permits for their rallies and left public areas clean after making their point. But according to an examination of all mainstream television news reports covering the tea party, only 13 positive accounts were broadcast the first two weeks about this organic outpouring of citizen discontent. The media later wavered between blaming the tea party for gridlock and claiming the tea party was dying.
In contrast, the Occupy Wall Street protesters have polluted public parks and walkways, disobeyed laws, created health hazards and resisted police. Yet, the liberal media supported these clueless occupiers 113 times during the first two weeks. …
Tea party groups criticize media coverage of ‘Occupy Wall Street’ Published: 12:04 AM 10/11/2011 | Updated: 5:06 PM 10/11/2011 By Alex Pappas--The Daily Caller
Activists affiliated with the tea party movement say they’re witnessing a double standard in the way the media is covering the “Occupy Wall Street” protests compared to the tea party.
“It’s almost laughable,” said Sal Russo, a strategist with the California-based group Tea Party Express, in an interview.
While reporters at first didn’t always cover tea party rallies, Russo said, a California newspaper has recently been putting stories about the Occupy Wall Street on its front page. “The Sacramento Bee actually had a front-page story before the rally, TELLING PEOPLE WHERE IT WAS AND WHAT TIME IT WAS,” Russo said.
An official at FreedomWorks, the Washington, D.C.-based group that has organized tea party rallies since the movement burst onto the scene in 2009, said the media has been ignoring negative features of the “Occupy Wall Street” protests while it played up dubious charges against conservative activists last year.
Mark Meckler, the co-founder of the Tea Party Patriots, struck a similar note, saying that when the tea party protests first began, “we were ignored, mocked, and then attacked by the media” and “called ‘Astroturf,’ ‘fringe,’ ‘racists’ and ‘Nazis.’”
“Yet today, the leftist media seemingly cheers for a group of lawbreaking miscreants who have openly committed a variety of illegal acts,” Meckler said.
Said Brandon: “Of course, you hear about the guy who got arrested throwing a shoe at the White House. I heard they were pepper-spraying people down at the Smithsonian. I have yet to hear a story about a tea partier ever doing that.”
And Judson Phillips, the leader of the Tennessee-based group Tea Party Nation, said the “media’s coverage of Occupy Wall Street has been almost totally positive to the point of glossing over some serious issues.”
While there have been news stories about some of the more negative attributes of the Occupy Wall Street protests, these conservative activists say it’s nothing in comparison to the scrutiny the media applied to tea partiers.
“While a number of people have been arrested and there is even a photo of a protester defecating on a police car, there still is no really negative coverage from the mainstream media,” Phillips said.
“Meanwhile, protesters in New York had a photoshopped image of the decapitated head of the chairman of Goldman Sachs on a pike and no one seems to be talking about that,” he said.
Wednesday, Nov 23, 2011 8:00 AM 17:26:38 EST Newt: The ultimate Beltway swindler Gingrich has taken money from everyone from Big Pharma to Freddie Mac. How is he leading the Republican pool? By Michael Winship
You maybe should think twice when even Jack Abramoff thinks you’re beneath contempt. Not that Newt Gingrich cares.
Abramoff, America’s favorite convicted influence peddler, told NBC’s David Gregory that presidential candidate and former Speaker of the House Gingrich is one of those “people who came to Washington, who had public service, and they cash in on it. They use their public service and access to make money.”
Newt, he continued, is “engaged in the exact kind of corruption that America disdains. The very things that anger the Tea Party movement and the Occupy Wall Street movement and everybody who is not in a movement and watches Washington and says why are these guys getting all this money, why do they go become so rich, why do they have these advantages?”
Why indeed? Granted, Abramoff’s in the middle of his promotion tour of confession and attempted redemption, a pot obscenely eager to call his kettle and former mentor black – especially if it sells books. But Casino Jack does have a point.
Gingrich personifies everything rotten about the ATM machine we call Washington: the merchandising of favors and votes; the conversion of past incumbency into insider information, making your contacts and the ability to play the system available to the highest bidder; the archetypal revolving door between government service and shilling for corporate America.
Yet there he is, suddenly riding at the top of the polls, his debate skills lauded, his churlish dismissal of the media praised, and infused with sufficient cheek to portray himself to gullible elements of the electorate as an outsider. It’s as if Kim Kardashian proclaimed herself American Housewife of the Year.
(Gingrich now is trying to play the inside-outside game both ways, proclaiming last week, “We just tried four years of amateur ignorance and it didn’t work very well. So having someone who actually knows Washington might be a really good thing.”)
In fact, a quick look at just a few of Newt’s activities since his GOP colleagues tossed him out of the speakership in 1998 is sufficient to expose him as the ultimate poster boy for inside-the-Beltway game playing — adherence to ideology often shoved aside in favor of expedience and the chance to make a buck.
You’ll remember hearing just this past spring about Mr. and Mrs. Gingrich’s revolving, no-interest credit line at Tiffany’s, a luxury store they treated like a diamond encrusted version of the Home Shopping Network, and Tim Carney’s report in the Washington Examiner that, “Christy Evans, formerly a top staffer to … Gingrich, is a registered lobbyist for Tiffany’s.”
Now Carney writes, “We know that Gingrich has been paid by drug companies and by the drug lobby, notably during the Medicare drug debate. A former employee of the Pharmaceutical Research and Manufacturers of America (the main industry lobby) told me Gingrich was being paid by someone in the industry at the time. A spokeswoman for Gingrich’s healthcare consulting firm, Center for Health Transformation, told me that drug companies have been CHT clients. PhRMA confirmed in a statement that they had paid Gingrich. Bloomberg News cited sources from leading drug companies AstraZeneca and Pfizer saying that those companies had also hired Gingrich…
“Three former Republican congressional staffers told me that Gingrich was calling around Capitol Hill and visiting Republican congressmen in 2003 in an effort to convince conservatives to support a bill expanding Medicare to include prescription-drug subsidies. Conservatives were understandably wary about expanding a Lyndon Johnson-created entitlement that had historically blown way past official budget estimates. Drug makers, on the other hand, were positively giddy about securing a new pipeline of government cash to pad their already breathtaking profit margins.” On Monday, the chair of Gingrich’s Center for Health Transformation estimated its revenues over the past decade at $55 million. Fees are flexible, she said, with “charter memberships” going for an annual fee of $200,000. According to the Nov. 21 Wall Street Journal, “The health think tank also charges for consulting sessions with the former speaker and Mr. Gingrich’s speeches, according to two health care trade groups.”
More dynamically, the center’s P.R. materials promised “direct Newt interaction”(!) and as per the Washington Post, “The biggest funders, including such firms as AstraZeneca, Blue Cross Blue Shield and Novo Nordisk, were also eligible to receive discounts on ‘products and workshops’ from other Gingrich groups.” Sounds like the Potomac edition of “The Price Is Right.”
Another Center for Health Transformation charter member was Gundersen Lutheran Health System of La Crosse, Wis. The Nov. 17 New York Times reported that in July 2009, without reporting his connection, Gingrich praised the company in the Washington Post “for its successful efforts to persuade most patients to have ‘advance directives,’ saying that if Medicare had followed Gundersen’s lead on end-of-life care and other practices, it would ‘save more than $33 billion a year.’”
Advance directives means helping families determine future care for the terminally ill, but when Tea Partyers and others started yelling about “death panels” during the healthcare reform fight, Gingrich made a quick flip-flop to the right and changed sides. Listening to Newt attack child labor laws this week, I thought one of his clients might be Miss Hannigan’s Orphanage. In reality, others who have anted up for his advice include GE, IBM, Microsoft, Growth Energy (a pro-ethanol lobby group that between 2009 and 2011 paid him $575,000) and the U.S. Chamber of Commerce. The Wall Street Journal notes that, “The Chamber, the largest lobbying organization in Washington, paid Mr. Gingrich about $840,000, according to people familiar with the arrangement, or about $120,000 a year for seven years, beginning in 2001, to serve on an informal board of advisers to its president and senior staff.”
And then, of course, there’s Freddie Mac, which triggered this recent tsunami of scrutiny when Gingrich claimed at the Nov. 9 candidates’ debate that it was for his expertise as an historian that the home mortgage giant had paid him $300,000. Bloomberg News then reported that THE NUMBER WAS ACTUALLY AS MUCH AS $1.8 MILLION, paid as consulting fees right up until 2008, when the failing agency was taken over by the government and such outside contracts were suspended. Gingrich claims he warned Freddie about “insane” loans and then told USA Today, “I was advising them over a period when they weren’t in crisis. I’m pretty happy to say, I gave these guys advice… on how do you build opportunity for the poor to learn to be non-poor?” Until caught,he hadn’t bothered to mention his own involvement, even as he attacked Barney Frank and others for taking Freddie Mac’s campaign contributions.
Through it all, GINGRICH HAS DENIED BEING A LOBBYIST, apparently adhering to a very narrow definition – he’s not officially registered with Congress under the Lobbying Disclosure Act of 1995, as amended by the Honest Leadership and Open Government Act of 2007.
But you do the math: According to Julie Hirschfeld Davis and Kristin Jensen at Bloomberg News, “The former Georgia congressman reported assets in 1997 of between $197,000 and $606,000, according to his last House personal financial disclosure report, which permits lawmakers to record their wealth in broad ranges. According to his 2011 presidential disclosure report, the Republican primary candidate today is worth between $7.3 million and $31 million.”
NOT BAD FOR GOVERNMENT WORK.
Gingrich is utterly unprincipled (he even had delivered divorce papers to his wife at her bedside in the hospital).
Most of Newt Gingrich's Twitter Followers Are Fake By John Cook, Aug 1, 2011 4:05 PM Yesterday Newt Gingrich laid out a new argument for why he should be the GOP presidential nominee: He's got the most Twitter followers. But according to a former Gingrich staffer, he bought them.
Gingrich complained yesterday that the press is ignoring his prodigious Twitter audience: "I have six times as many Twitter followers as all the other candidates combined, but it didn't count because if it counted I'd still be a candidate; since I can't be a candidate that can't count." Which is true! Gingrich currently boasts 1,325,842 followers, whereas competitors Mitt Romney and Michele Bachmann have yet to crack 100,000. But IF NEWT IS WINNING THE TWITTER PRIMARY, IT'S BECAUSE OF VOTER FRAUD. A former staffer tells us that his campaign hired a firm to boost his follower count, in part by creating fake accounts en masse:
Newt employs a variety of agencies whose sole purpose is to procure Twitter followers for people who are shallow/insecure/unpopular enough to pay for them. As you might guess, Newt is most decidedly one of the people to which these agencies cater.
About 80 percent of those accounts are inactive or are dummy accounts created by various "follow agencies," another 10 percent are real people who are part of a network of folks who follow others back and are paying for followers themselves (Newt's profile just happens to be a part of these networks because he uses them, although he doesn't follow back), and the remaining 10 percent may, in fact, be real, sentient people who happen to like Newt Gingrich. If you simply scroll through his list of followers you'll see that most of them have odd usernames and no profile photos, which has to do with the fact that they were mass generated.Pathetic, isn't it? …
While it would be impossible to survey all of Gingrich's followers, a cursory glance immediately turned up a fewaccountsthat featured odd names, no personal information, no followers, no posts, and a small follow list. And there's certainly a healthy market out there for buying Twitter followers, either by hiring a company to strategically follow accounts that will follow you back or by paying for dummy accounts. If Gingrich did goose his Twitter numbers, it would help explain why he has, for instance, more than twice as many followers as Sarah Palin, which just doesn't sound right. …
Consider this: The media is justifying Gingrich’s sudden surge as a reflection of his sharp speaking skills. However, Newt has been debating for months, and his performance has been pretty consistent throughout. Are we are supposed to believe that the public suddenly had a complete change of heart right when Paul started leading in the polls?
Sunday, December 4, 2011 The Media Created Grand Illusion of Gingrich.
One thing I learned is well spoken charismatic people seeking power can be the most dangerous. I give Newt credit for being a good well spoken orator. But so is any good con artist or a used car salesmen. If BS was money, we would not have a national debt. President Obama, Bush and Clinton would have a budget surplus but giving a good speech if BS was the currency. The truth about Newt must be told.If the media is choosing the person and the party.That is the man who will hurt the country to preserve the power of the party. Newt Gingrich is the poster child for everything that is wrong with Washington DC and the Republican party. What he stands for is the status quo of politics as usual. The Americans are sick and tired of business as usual in the District of Con-artist were everything changes but still stays the same. He is the new boss, same as the old boss. The media in Iowa and New Hampshire is in a synchronized effort to prop up the establishment candidate in an effort to defeat Ron Paul.Skewed polling data trying to sell the illusion must be countered and debunked. … We must not allow Gingrich a free rise … with this synchronized media effort to sell their candidate. Newt is for Carbon taxes and individual mandate for us to purchase health insurance. He still wants to sell the illusion of a war on terror, the patriot act, the justification for torture, wars for Israeland still tries to talk like Ron Paul when it concerns the Federal Reserve. To me IT IS ALL JUST RHETORIC TO WOO THE VOTERS JUST TO GET BURNED ONE MORE TIME AFTER THE ELECTION.It goes back to business as usual.
The establishment is scared of Ron Paul. If Ron Paul wins the party nomination and the Presidency. Not only the Federal reserve is in peril. The GOP might have all the globalist and neo cons removed who pretend to be patriots. Ron Paul will be able to change the leadership inside the party back to a libertarian, constitutional orientated people no longer under the globalist control. We can see more fairness in election breaking the monopoly of the two party system controlling the election process allowing other candidates of minor parties the equal forum as the two major political parties enjoy. Ron Paul represents real change and not just political rhetoric.That is what scares the establishment about Dr. No. This is why the media is trying to sell Newt like they are selling the Iphone or the Ipad as the next best thing to sliced bread.Newt is like stale bread and a loser. In an open forum, Newt would lose when his record is shown for all to see. Ron Paul represent who the globalist establishment fear. Loss of control of a major political party that can be a severe blow to the globalist agenda.
We in the alternative media must dispel the white wash they will try for Newt. We must shatter this media created illusion. We must show why the main stream news media cannot be trusted and why they are losing credibility. We have to discredit Newt for what he is. A globalist traitor, a sell out, an authoritarian calling for the end to US sovereignty. We allowed the media to burn us with McCain four years ago. We must not let happen fours years ago happen again. If we do not redouble our efforts or nothing will change. No more grand illusions. Ron Paul for President or bust. If we don't, we will again say meet the new boss, same as the old boss. We must never accept that again. This is the year we sink or swim as a republic.
The Mainstream media had no choice but to go back to Gingrich. The public was fast losing confidence in Perry (his debate "oops" moment was not supposed to happen). The Gingrich "surge" is fiction.
Below is a video showing why so many people like Ron Paul: his consistency and his integrity.