Category: Corruption

Bank’s Solution for the Credit Crunch: F$%k the Small Depositor

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Yep, they banks are looking at implementing new larger fees on holders of small accounts.

I guess that they need to stick it to the little guy because of all the money that they are losing on the high rollers that they gave exotic mortgage packages to.

Today, the average ATM fee is $1.78, while five years ago it cost a little more than a $1 to retrieve money from a bank with which you didn’t have an account.

In some areas, JP Morgan Chase, Bank of America and Wachovia fees have hit $3 for non-customers.

Bankers and the Sirius Cybernetics Corporation, the first up against the wall when the revolution comes.

Reports of Corruption in FCC D Block Auction

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Once again, I would direct you to Harold Feld’s “Tales of the Sausage Factory”, here, and here, with a backup from Morningstar and News.com.

The short story is as follows, a company was formed, Frontline, to bid on the portions D block auction.

Frontline actively lobbied for the partnership with public safety agencies, and based its entire business model on such a network.

The idea was that whoever built the network would then sell access at a discounted basis to the public safety community. Any spare capacity would then be sold to the commercial wireless industry.

Frontline was expected to bid for 10 megahertz of spectrum, which would give the winner a national license with which they could build a next-generation wireless broadband cellphone and communications network.

…


O’Brien also told Frontline that in addition to negotiating for public safety agencies, Cyren Call intended to become the “monopoly buyer” of broadband service on the network once it was complete.

Under this arrangement, Frontline would be obliged to negotiate with Cyren Call when discussing terms of how the network would be built, and then be forced to sell the bulk of the access to Cyren Call once it was up and running.

OK, this seems straightforward, if a bit involved, but the FCC added something else, “In order to ensure the winner of the D-block license cooperates with the public safety community, the FCC rules say if it is deemed the licensee wasn’t negotiating in “good faith” it could be forced to forfeit more than $100 million and lose all rights to the spectrum it had acquired.”

But the FCC gave no direction as to what it meant. So it was completely vague.

It gets worse, Cyren Call, an organization set up by Morgan O’Brien (the Billionaire who founded Nextel) was negociating “on behalf of the public safety community”, but it is clear that his end goal was that he be the one of control of this spectrum, and so he was throwing around outrageous demands, such as a $500 million dollar fee.

He deliberately scared off Frontline’s investors so that he could be in control, despite the fact that he was representing the public safety providers and had a fiduciary responsibility to them.

Scientology Vs. The Internet: All Your Bases Are Belong To Us

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Well, it appears that a group of anonymous internet vigilantes, calling themselves “Anonymous” (not a whole bunch of imagination there), have decided, since the attempted suppression of Tom Cruise’s “crazy as a bed bug” Scientology tape, have decided to go after the organization, see here, here, and here.

It appears that the people involved call this “Chanology“.

While I understand how these folks feel, someone, and I don’t mean a member of Scientology, is going to end up dead.

I used to follow Alt.Religion.Scientolgy on Usenet, and I will simply note that this organization browbeat the Internal Revenue Service into submission.

Here is the “official” “Anonymous” video.

OK, it wasn’t their official video, that is here, at least until Youtube is forced to kill it:

Robert J. “I Hate Poor People” Samuelson Comes Out Against Corporate Excess

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This guy has been infesting the Washington Post for years, and if you know the topic, you generally don’t have to read him.

His standard schtick is something like, “Social Security and Medicare? They are bad, they make you stupid. You should be an overpaid pundit like me,” so you could have knocked me over with an adolescent tuna when I came across Mr. Samuelson railing against excess salaries and lack of accountability:

Here are estimates for 2007:

  • Investment banker: $2.1 million, consisting of $275,000 in base pay plus $1.2 million in cash bonus and $625,000 in long-term bonus. (An investment banker helps firms raise capital by selling new stocks and bonds and also advises on mergers and acquisitions.)
  • Bond trader: $1.5 million, with $240,000 in base pay, $975,000 in cash bonus and $310,000 in long-term bonus.
  • Hedge fund manager: $1.8 million, split between a salary of $265,000 and $1.5 million bonus.

    • Just why investment bankers and traders out-earn, say, doctors or computer engineers is a question I’ve never heard convincingly answered. Are they smarter? Unlikely. Do they contribute more to the economy? Questionable. True, Wall Street often performs a vital function. It channels savings into productive investments. It helps provide access to capital and credit. In 2006, U.S. companies raised nearly $4 trillion through new stocks and bonds. Many financial innovations, including mortgage-backed securities, have benefited individuals and companies.

    But Wall Street also frequently misallocates capital and credit. The “tech bubble” of the late 1990s was one episode. Now we have subprime mortgages. Why? Well, the herd mentality of financial crazes has a long history. But compensation practices skewed so heavily toward bonuses based on annual profits make matters worse.

    You know, these lessons are not only the same ones that were used to change public policy (Glass-Steagal anyone?) following the Great Depression, but they are actually predicted by free market theory.

    If I can make a million or so dollars, and and do not lose this money when the crash comes, why the hell should I care about long term consequences?

    One hopes that the current crisis will lead to a re-evaluation of the slavish devotion to the unregulated market as a solver of all problems.

    And From the Fascist Wing of the Catholic Church

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    St. Louis Archbishop Raymond Burke calling for Rick Majerus, the St. Louis University basketball coach, to be disciplined for making a campaign appearance for Hillary Clinton and expressing support for Roe v. Wade.

    This is not a priest, this is not a professor in the divinity department, this is a freaking BASKETBALL COACH.

    I understand that St. Louis University is a Catholic school, but demanding that employees who have absolutely nothing to do with the religious mission of the school have to toe their political is outrageous, particularly given this:

    Last year, St. Louis U. celebrated a legal victory that affirmed it is not controlled by the Catholic church or by its Catholic beliefs.

    The Missouri Supreme Court agreed with the school in handing down a decision that the city of St. Louis did not violate state and federal constitutions by granting the university $8 million in tax increment financing for its new arena.

    Opponents of the $80 million arena sued the school in 2004, halting construction.

    The Missouri Constitution prohibits public funding to support any “… college, university, or other institution of learning controlled by any religious creed, church or sectarian denomination whatever.”

    The debate came down to two words: “control” and “creed.” Does the guiding mission of a Catholic university align with the specific system of religious faith espoused by the Catholic church? And if so, does that system of faith control the actions of the university?

    In a 6-1 decision, the court said SLU “is not controlled by a religious creed.”

    As I recall*, Rush Limbaugh’s cousin, Stephn N. Limbaugh, Jr. serves on this court, and had been nominated by Bush to the U.S. District Court for the Eastern District of Missouri.

    Hmmm….I guess that Rush is the smart one of his family…Scary thought.

    *And by, “As I recall”, I mean checking the Wiki.

    And in the Department of the Amazingly Obvious,

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    Bush and His Evil Minions™ are lying sacks of sh$@!

    Lying about the Iraq, here, and here.

    NINE HUNDRED AND THIRTY FIVE LIES

    Bush comes in number two on the lie parade, but number two is a bit of a surprise:

    The study says Bush made 232 false statements about Iraq and former leader Saddam Hussein’s possessing weapons of mass destruction, and 28 false statements about Iraq’s links to al Qaeda.

    …

    The study, released Tuesday, says Powell had the second-highest number of false statements, with 244 about weapons and 10 about Iraq and al Qaeda.

    Yep, the most overrated man in America lied to us more than anyone except for Bush himself.

    Can we please stop calling “respected”.

    Missouri: Matt Blunt Not Seeking Reelection

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    The decision by right wing Missouri Matt Blunt, son of House Minority Whip Roy Blunt not to run for another term has come as a surprise, as he had already raised millions of dollars for his campaign.

    The Fired Up! Missouri blog suggests a scandal and lists about a dozen potential ones, and mentions that he spent $100k in legal fees.

    If baby Blunt is in legal trouble, his dad is too, as Blunt won’t take a crap without his dad’s permission.

    The First Act of Bush and His Evil Minions&trade Upon Squatting at 1600 Was to Trash the Email Archive System

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    The Washington Post has a pretty good summary, though they soft pedal the conclusion.

    Let’s make this clear, the Clinton administration got into legal trouble with a small problem with backups, the Reagan administration had its email backups used to investigate the Iran-Contra scandal, but somehow these folks, who have a pathological need for secrecy, just screwed up.

    Yeah, sure.

    Probation Office Recommends 60 Years for Wilkes

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    Yes, Randy “Duke” Cunningham, the gift that keeps on giving. the probation office of the DoJ has recommended, Brent Wilkes, who bribed Cunningham, and might have other bribes outstanding, be given a 60 year sentence.

    Note that this is the probation office, not the prosecutor.

    Judges take these recommendations rather seriously.

    If Wilkes other figures that he can roll on, now would be a good time for him.

    The US Attorney Firing Scandal Continues

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    It appears that the investigations by the DoJ’sof Inspector General (OIG) and the Office of Professional Responsibility (OPR) are picking up steam.

    Investigators from these offices have been questioning whether senior officials lied to Congress, violated the criminal provisions in the Hatch Act, tampered with witnesses preparing to testify to Congress, obstructed justice, took improper political considerations into account during the hiring and firing of U.S. attorneys and created widespread problems in the department’s Civil Rights Division, according to several people familiar with the investigation.

    The internal Justice Department probe cannot bring charges but can refer findings to a U.S. attorney for the District of Columbia or a special prosecutor, who could then pursue a criminal investigation. One source close to the investigation expects the offices to issue a scathing report within the next three months, but they have not announced a timeline for their joint inquiry.

    In addition, it appears that the Senate Ethics Committee has spent money to send investigators to Arizona, where former US Attorney David Iglesias alleged that Sen. Pete Domenici (R-N.M.) and Rep. Heather Wilson (R-N.M.) pressured him to engage in prosecutions for political gain.

    We have allegations of violations of the Hatch Act and obstruction of Justice by some of the people involved.

    The Hill expects for a report to be issued in the next few months, but I think that the DoJ will get it pushed back until after the elections.

    Accusations of Inappropriate Pressure by WaMu on Appraisers

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    I am so not shocked that Jeniffer Wertz is claiming that claiming she was blacklisted last year for providing a housing market forecast that was too gloomy.

    In the lawsuit, which was filed a week ago, Wertz says she completed appraisals on two houses in May and then quickly got a call from a WaMu sales manager demanding she change her outlook to “stable” so a loan could be approved.

    The WaMu sales manager also demanded Wertz change her appraisal process to produce higher prices for the properties she was evaluating, according to Wertz’s lawyer Stephen Danz. The higher an appraisal comes out, the more likely it is a home loan will get approved.

    When Wertz refused to comply, she claims the sales manager threatened to block her from doing future appraisal work for the bank. A month later, Wertz’s suit says, a third-party appraisal request assigner told her WaMu would no longer accept her work.

    I have no doubt that this is true, and that this was endemic in the lending industry among most, if not all of the major players.

    Andrew Cuomo is alleging that WaMu’s pressure on “title company First American and its appraisal unit, eAppraiseIT” is why they were basically falsifying appriasals, and The Securities and Exchange Commission and the Office of Thrift Supervision has opened an investigation.

    I think that it will be more difficult to find a major lender who did not do this than to find one who did.

    Tapes destroyed over CIA’s objections my ass!

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    It appears that Rep. Pete Hoekstra (R-MI)is trying to hang Jose Rodriguez out to dry.

    I guess you gotta have a scapegoat, and true to form, just as in the military prosecutions regarding Abu Ghraib, the goal is to find the lowest possible level person possible to assign blame.

    The pertinent quote is from an anonymous Senate staffer

    “If you look at the documents, you get very close to a direct order (not to destroy the tapes) without it being, ‘Jose, you’re not going to do this,'” the official said.

    Sounds to me like everyone knew what was going on. Higher ups wanted plausible deniability, so they gave “strong advice” without giving an “order”, so they could have it both ways.

    Hoekstra said Rodriguez must testify to the committee to determine on whose authority the tapes were destroyed, and he said the panel will consult with the Justice Department on whether granting Rodriguez immunity would undermine its own investigation.

    “If there appears to be any criminal activity taking place, the last thing we would want to do is get in the way of a successful prosecution,” Hoekstra said.

    Translation: let’s bury this until after the election.

    Bush Administration Lied on Iraqi Reconstruction Spending

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    The GAOhas the details on Iraqi reconstruction spending, but the nickel tour is that Bush and His Evil Minions™ lied when they said that, “By July 2007, the administration said, Iraq had spent some 24 percent of $10 billion set aside for reconstruction that year”, as was stated in documents given by Crocker and Petraeus to Congress.

    But in its report on Tuesday, the accountability office said official Iraqi Finance Ministry records showed that Iraq had spent only 4.4 percent of the reconstruction budget by August 2007. It also said that the rate of spending had substantially slowed from the previous year.

    The reason for the difference, said Joseph A. Christoff, the G.A.O.’s director of international affairs and trade, was that few official Iraqi figures for 2007 were available when General Petraeus and Mr. Crocker went to Congress.

    So the administration, with the help of the Finance Ministry in Baghdad, appears to have relied on a combination of indicators, including real expenditures, ministries’ suggestions of projects they intended to carry out, and contracts that were still under negotiation, Mr. Christoff said. But actual spending does not seem to have lived up to those estimates for spending on reconstruction, a budget item sometimes called capital or investment expenditures, he added.

    “So it looked like an improvement, but it wasn’t an improvement,” he said.

    Meaning that there was no data, and that they did not look for ways to get that data, because they were under orders to sell Bush’s endless war™.

    This was not bad data, this was Crocker and Petraeus telling the Iraqis the numbers they wanted, and then getting those numbers.

    BTW, the 2007 number on Iraqi spending is LESS than the 2006 number. It’s getting worse, not better.

    Bill Clinton and the Repeal of Glass-Steagall

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    The Nation has a very interesting article, Citigroup: Too Big to Fail?, which goes a long way towards seeing how the deregulatory attitudes of the past 31 years (yes, it started with Carter) have led to our current mess.

    Citibank is the poster child for this problem, though the bank has a very long history of being on the wrong side of collapses (they were deep in Mexico and Asia when both needed bailouts).

    First, let’s look at the Glass-Steagall act of 1933. It was a New Deal law, which was enacted in response to abuses preceding the Great Depression, where bankers were pushing depositors to invest in dubious stocks that they were also being paid by the company to sell.

    Basically, it made it illegal for a commercial bank to operate as an investment bank, and vise verse, because there are too many conflicts of interest created when commercial banks are permitted to underwrite stocks or bonds“.

    Bill Clinton delivered his “New Democrat” party, accompanied by lots of happy talk about magic words like “synergy” and how “modernization” would create a more stable (and profitable) financial system. It did the latter, for sure, but not the former.

    Actually, the combination of insurance, investment banking and old-line commercial banks multiplied the conflicts of interest within banks, despite so-called “firewalls” supposed to keep these activities separate. Much like Enron, placing some deals in off-balance sheet entities did not insulate Citigroup from the losses in its swollen subprime housing lending. The bank has so far written off something like $15 billion and more to come.

    The problem is, of course, that Citi is so large that the consequences of its failure would be disastrous to the markets. It would make the collapse of LTCM, which reaqired a Fed orchestrated (Alan “Bubbles” Greenspan) bailout look like the failure of the corner 7-11.

    Over the past few years it has appeared that the every single rollback of Depression Era regulations has been a mistake.

    Justice Deptartment Says State Department Offers of Immunity Make Prosecution Difficult

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    Gee, I wonder if those offers of immunity, which make complication prosecution because they, “might make it difficult to prove that evidence gathered by federal prosecutors did not stem from statements made by the guards after they were promised limited immunity,” have anything to do with the fact that this guy is a loyal Republican donor from a family of loyal Republican donors.

    It certainly seems that Blackwater has been using State to run interference on drunken murder, fraudulent billing practices, and human sacrifice.

    OK, the last one is pulled out of my ass, but I’m going BillO here.

    Yeah, Right, “Recycled Tapes”, and the Dog Ate My Homework

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    Yes, all those emails from the time of the Valeria Plame outing, reused and overwritten in a “consistent with industry best practices”.

    Remember yesterday’s post on the lies of our times, this one needs to be added.

    Not only are these clearly government records which require retention, but these tapes have been used in investigations going back to Iran-Contra.

    They knew that this could be used as evidence, and they knew that it had been used as evidence, and they deliberately decided to destroy this evidence.