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True Crime Stories

Tuesday, July 3, 2012

 

There's no police log in the New York Times, or if there is I never noticed, but there is a crime section, which for reasons all too apparent is called the “Business” section. It's chock-a-block with crime news, though the odd thing is that the crimes are being committed in plain sight, the perpetrators are well known, but no one ever seems to get arrested. Take a look at today’s Times. First we have the on-going saga of Barclay's, where we find, much to no one’s surprise, that the chief scumbag there just might have known more than he was letting on about Barclay’s market manipulations.

Robert E. Diamond Jr., the chief executive of Barclays, told employees on Monday that he was “disappointed and angry” about the bank’s past attempts to manipulate key interest rates to bolster its bottom line.

But fresh details about the case show how Mr. Diamond and other senior executives played a role in the questionable actions and failed to prevent them. In 2007 and 2008, Mr. Diamond’s top deputies told employees to report artificially low rates in line with its rivals, deflecting scrutiny about the health of Barclays at the height of the financial crisis, according to several people close to the case.

…

In the fall of 2008, Paul Tucker, deputy governor of the Bank of England, spoke with Mr. Diamond about the high Libor submissions, according to one of the people close to the case. The conversation prompted Mr. Diamond to relay the central bank’s concerns to his top deputies.

While Mr. Diamond never specifically told anyone to influence Libor, at least one of the deputies acted on the discussion, regulatory records show. After talking with Mr. Diamond, the deputy then instructed employees that the Libor submissions should be lowered to be “within the pack.”

(via The New York Times)

So, Mr. Diamond sayeth, “see you, our rates are too high, would that it were not so” and lo, the rates declineth and it was no longer so, and Mr. Diamond said it was good and Mr. Diamond never thought that mayhaps his minions were goosing the numbers. Henry II couldn't have given a broader hint.

Lest anyone conclude that this particular fraud was penny ante, the fact is that it has a significant impact in what is a $350 trillion (yes, that’s trillion) market.

“Because mortgages, student loans, financial derivatives, and other financial products rely on LIBOR and EURIBOR as reference rates, the manipulation of submissions used to calculate those rates can have significant negative effects on consumers and financial markets worldwide,” said Assistant Attorney General Lanny Breuer, in a statement.

(via The Street)

Next up, the inevitable JP Morgan Chase, which, faced with the prospect of losses, made money in what is now the old fashioned way, by scamming its clients:

Facing a slump after the financial crisis, JPMorgan Chase turned to ordinary investors to make up for the lost profit.

But as the bank became one of the nation’s largest mutual fund managers, some current and former brokers say it emphasized its sales over clients’ needs.

These financial advisers say they were encouraged, at times, to favor JPMorgan’s own products even when competitors had better-performing or cheaper options. With one crucial offering, the bank exaggerated the returns of what it was selling in marketing materials, according to JPMorgan documents reviewed by The New York Times.

The benefit to JPMorgan is clear. The more money investors plow into the bank’s funds, the more fees it collects for managing them. The aggressive sales push has allowed JPMorgan to buck an industry trend. Amid the market volatility, ordinary investors are leaving stock funds in droves.

(via The New York Times)

Finally, we have the civil libertarians at Moody’s and Standard and Poor’s, who are saying they simply can’t be sued for giving bogus opinions, because everyone’s entitled to their opinion, even if they know they’re spreading misinformation.

Documents in a civil suit in federal court appear to threaten a legal defense that credit ratings agencies have long used to fend off liability for misjudging securities that later cost investors vast sums in losses.

For years, the ratings agencies have contended that the grades they assign debt securities are independent opinions and therefore entitled to First Amendment protections, like those afforded journalists. But newly released documents in a class-action case in Federal District Court in Manhattan cast doubt on the independence of the two largest agencies, Moody’s Investors Service and Standard & Poor’s, in their work with a Wall Street firm on a debt deal that went bad as the credit crisis began.

The case, filed in 2008 by a group of 15 institutional investors against Morgan Stanley and the two agencies, involves a British-based debt issuer called Cheyne Finance. Cheyne was a structured investment vehicle, created in 2005, that raised $3.4 billion in short-term debt from investors. The company was meant to profit by purchasing longer-term obligations that generated more in interest than the company paid to its lenders.

But Cheyne collapsed in August 2007 under a load of troubled mortgage securities. The institutions that bought almost $1 billion of its debt, including the Abu Dhabi Commercial Bank, the fund manager SEI Investments and the Public School Employees’ Retirement System of Pennsylvania, lost much or all of their money.

(via The New York Times)

The first amendment defense strikes me as fairly laughable, and one only available to the rich. Imagine a court even listening to a snake oil salesman say that he was just giving his opinion when he said his noxious brew could cure cancer.

Now, all of these folks have one thing in common. Coming as they do from the upper echelons of the .01%, they will never see the inside of a courtroom, unless it’s to put the screws to some poor bastard who can’t pay his mortgage. But never fear, while the government can see no harm in these cases (at least no criminal harm), it is right on the spot when it comes to the aforesaid snake oil salesmen:

The chief of Full Tilt Poker surrendered to authorities on Monday and pleaded not guilty to charges of illegal gambling and that the online poker operator defrauded its players.

Raymond Bitar,40, had been working at Full Tilt’s Dublin, Ireland, headquarters, and until Monday had not returned to the United States since charges against him were first announced in April 2011.

Federal prosecutors in Manhattan have charged 11 people at the three biggest online poker companies: Absolute Poker, Full Tilt Poker and PokerStars. The U.S. government also seized their Internet domain names.

At a hearing late on Monday in Manhattan federal court, Bitar pleaded not guilty to nine criminal counts, including illegal gambling, money laundering and wire fraud charges.

Online gambling has been illegal in the United States since 2006, the year Bitar moved Full Tilt’s operations to Ireland. Some U.S. lawmakers have talked recently about legalizing Internet gambling and regulating it.

Since unveiling the case, prosecutors have expanded both their civil and criminal charges against Full Tilt. They say it operates as a Ponzi scheme and paid its directors more than $440 million while defrauding players, even after the charges were filed.

(via The New York Times)

These guys, having aimed way too low, are fair game for prosecution. Sure, $440 million is a lot of money to most of us, but it’s nothing in comparison to blowing up the entire international economy, or defrauding investors out of billions of dollars. If you don’t want to go to jail, you have to aim high.

 

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Chris Murphy coming to Drinking Liberally

Tuesday, July 3, 2012

I’m told that Chris Murphy will be coming to our next Drinking Liberally get together. If you’re a regular or semi-regular, don’t miss it. As always, newcomers, provided they’re liberal (or actually, merely not-Republican). are always welcome. Time and Place: Dev’s on Bank, 345 Bank Street, New London, at 6:30 PM.

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Song of Joy

Monday, July 2, 2012

Stuff like this makes me regain my faith in the human race. Helps you forget the Bill O’Reilly’s, Rush Limbaughs, and Mitt Romneys of the world, at least for a while.

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This week in God

Sunday, July 1, 2012

 

This may be a sign of where we’re going, as the definition of “freedom of religion” becomes more and more distorted by the right. It seems that Ling Chai, a former Chinese activist, now Republican Bostonian, is being sued by another former activist, who Chai fired from her human rights organization here in the states for being insufficiently zealous in practicing her religion, or, more accurately, Chai’s conception of what that religion should be.

The employee, Jing Zhang, is a Chinese activist who once spent five years in a Chinese prison for promoting freedom and democracy, according to the suit. In the United States, Zhang had already established her own nonprofit, Women’s Rights in China, in Flushing, N.Y., when she joined forces with Chai to develop programs to prevent forced abortions in China. Then, she alleges, Chai fired her for being insufficiently religious and for declining to engage in “weekly corporate worship.”

Attached to the lawsuit is a March e-mail that purportedly issued Zhang an ultimatum: She could either “seek the will of God in her life on a daily basis through study of God’s word and through prayer” or start looking for a new job.

‘You can discriminate in hiring and firing employees whose roles are at the religious core of your activity.’

That document asked Zhang to agree to statements, including, “I believe that Jesus is the Way, the Truth and the Life, and apart from him nobody can receive eternal life and enter the kingdom of God.”

(via The Boston Globe)

Presumably the bishops would applaud. But wait:

Kevin Mintzer, another attorney for Zhang, said All Girls Allowed’s articles of incorporation show it was formed as a human rights organization, not a religious group.

He said that Zhang, a Catholic, never agreed to practice her faith in the same manner as her boss, who is an evangelical Christian.

(via The Boston Globe)

The Catholic Church demands the right to impose its religion on both its employees and on the recipients of non-religious services it provides with government funds (e.g., health care) so is it comfortable with another group demanding that a Catholic act like a fundamentalist? Presumably (if consistency means anything), yes, though I'm sure they’re capable of making some distinction without a difference.

There is literally no endeavor that could not be dressed up as a religiously motivated organization, therefore privileged to hire and fire, grant or withhold employee benefits, or impose arbitrary discipline, using any discriminatory criteria that might suit their purposes. In this particular case, the employer apparently requires more than mere faith; that faith must be expressed in just the right way. No doubt the next step (or is it even a step?) will be firing employees who profess to believe based on an employer’s subjective belief that their professions are insincere, or not of sufficient strength.

In many instances, this amounts to government outsourcing of religious tests it cannot impose directly. The government gives money to religious organizations to provide supposedly secular services (e.g., Catholic Charities) and then, if the Church has its way, steps aside and lets the Church impose its religion on employees and service recipients. The present lineup in the Supreme Court makes this backdoor establishment of religion a distinct possibility.

 

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Friday Night Music-A Teabagger’s Anthem

Friday, June 29, 2012

Or is it lament? Whatever. In light of the recent decision, this seemed like a good pick. Dedicated to our friends on the right. It appears to express their feelings, at least in the refrain.

I couldn't find a decent video of this from the late, great, Ray Charles, but this version by John Mayer and John Scofield is quite good.

 

 

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Cut them loose

Thursday, June 28, 2012

17 Democrats voted to hold Eric Holder in contempt. They preferred to take orders from the NRA than stand with their party. There are some things that, even for Democrats, should be beyond the pale. They should be cut loose. Not a dime from the DNC or the DCCC. Let them get their money from the NRA, as if that group would go out of its way to protect Democrats. The Republicans are scum, but they would never allow something like this within the party, and in that instance, they'd be right.

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My take, as if it matters

Thursday, June 28, 2012

 

I would never have predicted that Roberts would be the fifth vote for the health care law, but as a blogger I have the absolute right to give an opinion about why it’s not surprising, now that it's happened.

So here’s my theory. It’s not the Scalia court, and it’s not the Alito court. It’s the Roberts court, and Roberts was probably keenly aware that what the minority was proposing to do was at variance with years of precedent, and that a contrary ruling would have resulted in a great deal of scorn heaped on his court by folks in the legal community, people whose opinions he cares about. In addition, this opinion will not disturb his core corporate constituency, in fact it enriches them, and he cares about them more than he cares about a bunch of easily manipulated teabaggers.

 

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Casey wants my money, he’ll stick it to me later

Wednesday, June 27, 2012

 

I get at least 10 distinct fundraising emails a day, so I normally just scan the subject lines and go on, but for some reason I read an email I received today from Ed Rendell on behalf of one of my least favorite (Democratic) senators, Bob Casey. Casey is one of those guys you can always count on to undermine the Democratic message. Now he’s got a teabagger opponent, so he’s out there sounding the alarm and trying to get money from the people to whom he regularly gives a metaphoric finger.

I found this quote interesting:

We can’t afford another politician campaigning on the Tea Party platform of partisanship and gridlock in Washington. That’s why I’m asking you to join me in supporting Bob’s campaign. Bob has a proven record of reaching across the aisle in order to deliver results for Pennsylvania – and that’s the kind of leadership we need in order to keep creating good middle-class jobs and growing the economy.

Maybe he’s talking about stuff like this where we see Casey undermining the president, not to mention women’s rights, by carrying water for the Catholic bishops and parroting their deceptive line on contraceptive coverage. Or maybe he’s talking about all the reaches across party lines described here. So maybe he’s reached across party lines, but like almost any such reach a Democrat can make these days, the result, for Pennsylvania and the nation, is destructive.

Yes, Casey wants my money. His pitch is that if I don’t give him my money and let him betray me in ways great and small for the next six years, I might get something worse. Well, if I were a rich man I might actually think about that, but things being as they are, I think I’ll send my money where it might get a Democrat elected.

 

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Is it possible? One small step?

Monday, June 25, 2012

A stopped clock is right twice a day, so why can’t a stopped Congress get it right once in two years? Suggesting that something good can even come from the reflexive anti-Obamaism of the modern day Republican party, we learn that there is a bi-partisan movement afoot to severely curtail the government’s use of the “state secret” defense, a defense born in fraud, which continues as a device to shield government wrongdoing from public exposure or accountability.

Obama and his successors in the White House would be banned from using false claims of national security to conceal “embarrassing or unlawful conduct” by the government, under new legislation proposed by lawmakers on both sides of the House.

The proposed State Secrets Protection Act, H.R. 5956, introduced by Rep. Jerrold Nadler (D-New York), would be the first law to rein in the president’s “state secrets privilege,” a nearly limitless power to kill litigation by claiming a lawsuit would expose national security information to the benefit of America’s enemies. First recognized by the US Supreme Court in a McCarthy-era lawsuit in 1953, the privilege has been increasingly and successfully invoked in the post-9/11 era to shield the government and its agents from court scrutiny in cases involving rendition, torture, warrantless wiretapping, and the lethal targeting of U.S. citizens.

“The ongoing argument that the state secrets privilege requires the outright dismissal of a case is a disconcerting trend in the protection of civil liberties for our nation,” Nadler said of the bill, unveiled last week. ”This important bill recognizes that protecting sensitive information is an important responsibility for any administration and requires that courts protect legitimate state secrets while preventing the premature and sweeping dismissal of entire cases.”

Also signing on to the legislation is Tom Petri (R-Wisconsin), John Conyers Jr. (D-Michigan), and Zoe Lofgren (D-California).

(via Wired)

If, as the article reports, this act truly has widespread support among Republicans, then the country stands to reap at least some benefit from the Republican penchant for opposing everything Obama does. It goes without saying that this bill would have zero Republican support were George Bush still president, or were Mitt Romney in office. The fact that Obama wields this power at the moment apparently blinds at least some Republicans to the possibility that what they do now could tie the hands of one of their own. But that’s all to the good, as it is a pernicious doctrine, and no one, Obama included (and he’s shown no real inclination to stop the abuse) should have the power to decide when he or his administration can be called to account.

All in all, it’s not much of a return for four years of obstructionism, but it’s not nothing, and if the bill should pass it will be one small step forward.

 

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The ACLU at the right wing money trough

Monday, June 25, 2012

 

A couple of years ago I became involved with a local branch of the ACLU, but I found that I just didn’t have the time to attend the meetings. Even then, I had my doubts about the organization, when I learned from a state legislator that the ACLU had opposed attempts to outlaw political robo-calls. I know that they’ve been analogized to door knocking politicos or religious fanatics, but analogies often obscure as much as they enlighten. Robo-calls are not only a corrosive force in politics, but they are inexcusable incursions into one’s privacy. But to the ACLU, the right of the individual to be left alone must be subordinated to the “right” of a machine to intrude with a message more often than not consisting of lies. But as this article makes clear, the ACLU, along with some other rights organizations, have turned a blind eye to worker’s rights, while remaining solicitous of the “rights” of corporations. To my mind the author, Mark Ames, makes a persuasive case, and since the ACLU has been the recipient of Koch brothers largesse, it will have no further need of mine:

And that brings me to the ACLU today—the most depressing part of this story. I had an inkling that the ACLU had abandoned labor before my simple exercise check of their website. Mike Elk has shared with me some of his research into this subject. And it’s well known that the ACLU vigorously supported the disastrous Citizens United decision; the ACLU also took $20 million dollars from the Koch brothers, whose libertarian outfits have played a major role in making Citizens United a reality. Supposedly that money was meant to “fight the Patriot Act”—which is odd, considering that the director of the Koch brothers’ Center for Constitutional Studies at Cato and Vice President for Legal Affairs at Cato, Roger Pilon, explicitly supported the Patriot Act from 2002 through 2008, and that the Kochs’ Cato Institute hired John Yoo to serve on their editorial advisory board for the Cato Supreme Court Review. One should be skeptical when it comes to Koch “donations” sold to the public as charity work in the service of human rights.

Maybe there’s no connection there whatsoever between the Kochs’ $20 million gift to the ACLU, and the ACLU’s advocacy for the Kochs’ pet political issue, Citizens United, which transferred greater power from democracy and into the hands of billionaire oligarchs like the Kochs. Maybe it’s all a coincidence, I don’t know. But we do know that there is precedent for the ACLU taking money from corporations, advocating their cause under the guise of “protecting free speech” and hiding the conflict of interest from the public in order to make their defense seem more convincing.

In the late 1980s and early 1990s, the ACLU vigorously defended the interests of the tobacco lobby under the guise of protecting their “first amendment rights”—and they did it for payments in-kind. Leaked tobacco documents in the 1990s exposed the ACLU working out explicit deals with the tobacco industry to take their money in exchange for advocating their interests in public, without disclosing that gross conflict of interest and violation of the public trust. The documents and memos revealed that the hundreds of thousands of dollars paid to the ACLU by the tobacco companies were payments in kind to for the ACLU’s defense of Big Tobacco, a relationship that both parties tried to hide in order to confuse the public into believing that the ACLU’s arguments for tobacco were motivated by purely altruistic constitutional arguments, rather than sleazy under-the-table cash payments. The ACLU is, after all, a trusted institution among progressives—that made them the ideal “Third Party Advocate” in PR terms for the tobacco industry’s interests.

(via Naked Capitalism)

It’s problematic in the extreme that the ACLU has abandoned labor, but even more problematic that it has lost sight of the free speech forest for the trees. The essence of the guarantee is that no subject matter is off-limits, which implies that there should be a wide ranging public debate. That also implies that government has a role, to be exercised judiciously to be sure, in making sure that no man or group of men (it’s always men) dominates the debate. I truly believe that James Madison was too keen a student of human nature to buy into the idea that money equals speech, or that a corporation was entitled to constitutional rights equivalent, and therefore by operation of reality, superior, to those of flesh and blood humans. A corporation is a creature of statute, and as the state’s creature it should be subject to whatever limits the state chooses to set. Lord knows that in the recent past, the state has chosen to set very few. We live in a nation where the discourse is dominated by corporations and billionaires. The ACLU, unfortunately, accepts this as an unfortunate by-product of a sacrosanct constitutional imperative, and has pretty much bought into the idea that if a person has the money to drown out other voices, than he has the right to do so. Money equals speech, and the more money you have, the more you get to talk, and the more other people have to listen.

Give a man a bullhorn, and he drowns out all other speakers, and imposes himself on his audience, whether it wishes to hear or no. The ACLU has helped hand that bullhorn to the corporations, and the end result will be the destruction of the republic.

 

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