Category: Corruption

Now NASA is Kissing Lobbyist Ass

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A while back, NASA surveyed 24,000 pilots about safety. The results were grim, with a much higher number of things like runway incursions, etc. than had been previously recorded, so NASA suppressed the survey because it “could materially affect the public confidence in, and the commercial welfare of, the air carriers and general aviation companies whose pilots participated in the survey.”

In other words, it would scare the hell out of people. Sorry, but covering the ass of the Airline industry should not be a reason for an official coverup, except of course when Bush and His Evil Minions™ are in charge, I guess.

Tell Your Rep That You are a Net Neutrality Voter

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Last week there was news that Comcast was blocking traffic from BitTorrent, Gnutella, and other file sharing operations, Comcast has finally responded to these reports. They say that they are not blocking these applications, they are just delaying them.

Speaking on background in a phone interview earlier today, a Comcast Internet executive admitted that reality was a little more complex. The company uses data management technologies to conserve bandwidth and allow customers to experience the Internet without delays. As part of that management process, he said, the company occasionally – but not always – delays some peer-to-peer file transfers that eat into Internet speeds for other users on the network.

Of course, some of these applications have legal uses, BitTorrent was developed to do online software releases, and almost every Linux distro these days uses it, and it is blocking crippling other applications, like Lotus Notes.

While I think that Notes is one of the worst email/groupware packages ever written, and I would not shed a tear to see it gone, it would be inappropriate for me, as an ISP, to block it.

So, not only is Comcast dishonest and hypocritical, they are also incompetent. Who would have expected that from the cable company.

The Electronic Frontier Foundation noticed the same sort of packet forging that the AP did (and that Broadband Reports readers did some time ago), and continued its testing to see if other applications are affected. The answer is a disturbing “yes.” The results of additional testing done by the EFF indicate Comcast is sending forged reset packets with some Gnutella traffic. When the EFF ran a Gnutella node on a Comcast connection, the forged reset packets disrupted communication between the nodes.

What’s particularly insidious about Comcast’s packet forging is that it’s transparent to both its customers and those on the opposite ends of the connection. Applications such as BitTorrent and Gnutella retain some of their functionality, but they’ll also appear to malfunction for no apparent reason.

Even if you accept the argument that all P2P traffic is inherently evil, and that Comcast has the right to disrupt it in order to put a stop to copyright infringement, Comcast’s traffic-shaping efforts have apparently extended beyond the realm of P2P and into good old enterprise groupware. Kevin Kanarski, who works as a Lotus Notes messaging engineer, noticed some strange behavior with Lotus Notes when hooked up to a Comcast connection last month.

When Lotus Notes users attempt to send e-mail with larger attachments over Comcast’s network, Notes will drop its connection. Instead of a successfully sent e-mail, they’re greeted with the error message, “Remote system no longer responding.” Kanarski did some digging and has managed to verify that Comcast’s reset packets are the culprit. Instead of passing the legitimate e-mail through its network, Comcast’s traffic monitoring tool (likely Sandvine) is sitting in the middle, imitating both ends of the connection, and sending reset packets to both client and server.

So there is more than some arcane issue of people wanting their free music and pr0n, through incompetence (remember, this is the cable company), they are blocking legitimate software too,

Blackwater: Tax Cheats and Mercenaries Security Contractors

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Well, it appears that Blackwater is both more crooked, and more stupid, than I had previously thought. They have been classifying their mercenaries as independent contractors for tax purposes.

The rules on this are pretty strict. To be an independent contract, you have to be indepndent, you have to set your own hours, place of works, not be subject to company supervisors, etc. Mercenaries don’t qualify. They are told when and where and with what to fight, and Blackwater supplied them with uniforms, flak jackets, weapons, etc.

These were not freelance illustrators.

Henry Waxman has noticed this discrepancy, and that this does not correspond to the standard practices of other firms, like Triple Canopy and Dyncorp, and further noticed that his testimony did not jibe with direction from the IRS.

They are looking at huge fines. It may not be as satisfying as getting them for being mercs and war criminals, but it worked to get Al Capone.

Here is the first part of Waxman’s letter to Blackwater, which implies tax evasion and perjury before congress:

I have received documents which suggest that Blackwater may have engaged in significant tax evasion. According to an IRS ruling in March 2007, Blackwater violated federal tax laws by treating an armed guard as an “independent contractor.” The implication of this ruling is that Blackwater may have avoided paying millions of dollars in Social Security, Medicare, unemployment, and related taxes for which it is legally responsible.

Unlike DynCorp and Triple Canopy, the two other major private military contractors providing security services to the State Department in lraq, Blackwater classifies its armed guards as independent contractors rather than as employees. Under federal tax laws, this classification has important ramifications. Businesses must pay Social Security, Medicare, and unemployment taxes for their employees. They must also withhold federal income taxes on their salaries. By classifying its armed guards and other personnel as independent contractors instead of employees, Blackwater has apparently evaded withholding and paying these taxes.

When you testified before our Committee on October 2,2007, Congresswoman Norton asked you why Blackwater treats its security personnel as independent contractors, while your competitors treat their guards as employees. You responded that Blackwater treats its guards as contractors because you found “it is a model that works” and because your guards prefer the “flexibility” of an independent contractor relationship.

Since the hearing, I have learned that the IRS determined in March – six months prior to your testimony – that your classification of a security guard working in Afghanistan as an independent contractor was “without merit.” The IRS advised that “[y]ou are responsible for satisfying the employment tax reporting, filing, and payment obligations that result from this determination.” By its terms, the IRS ruling applied only to the individual security guard who protested his classification, but the IRS warned that its ruling “may be applicable to any other individuals engaged by the fum.” The logic of the ruling would appear to apply to your entire workforce in Iraq and Afghanistan.

There is also evidence that Blackwater has tried to conceal the IRS ruling and the evasion of taxes from Congress and law enforcement officials. The IRS determination was issued in response to an inquiry by an individual security guard who questioned his classification as an independent contractor. In June, Blackwater required this employee to sign a nondisclosure agreement before it agreed to pay the back pay and other compensation that he was owed. The terms of this agreement explicitly prohibited the guard from disclosing any information about Blackwater to “any politician” or “public official.” The agreement further provided: “THE UTMOST PROTECTION AND NONDISCLOSURE OF CONFIDENTIAL INFORMATION IS OF CRITICAL IMPORTANCE AND IS THE ESSENCE OF THIS AGREEMENT.“

It is difficult to read the IRS ruling and the nondisclosure agreement and not question Blackwater’s intent and actions. When the IRS issued an alert in 2004 warning employers not to “incorrectly treat employees as independent contractors,” the IRS Commissioner described the “[f]ailure to pay employment taxes” as “stealing from the employees of the business” and said that “those who embrace these schemes face civil or criminal sanctions.” Yet it now appears that Blackwater used this illegal scheme to avoid millions of dollars in taxes and then prevented the security guard who discovered the tax evasion from contacting members of Congress or law enforcement officials.

I believe that Blackwater is completely boned.

Another Politically Motivated DoJ Prosecution

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This time, it’s a hat trick, State Senator Matt McCoy: he’s Democratic, he’s gay, and he’s in Iowa, where the first of the nation caucuses occur.

According to court documents, the government withheld from the grand jury taped conversations in which McCoy explicitly told Vasquez that he would not suffer retribution if he didn’t share his earnings. The filing also accuses the government of intercepting emails between McCoy and his attorney, as well as surreptitiously paying Vasquez to cooperate in the prosecution (even offering him a bonus if the case returned a guilty plea).

For what it’s worth, he is charged with extorting his business partner, and appears to be rooted in sharing profit on installation of alarm systems.

How the feds got involved in this…..

Gantry-Gate

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It appears that there is a major scandal at Oral Sex Roberts university.

Richard Roberts, Oral’s son, has taken a leave of absence pending an investigation.

Among the allegations:

  • remodeled their home 11 times in 14 years
  • used the university jet for personal trips
  • forced members of the university to play an active role in a political campaign
  • retaliation against whistle blowers
  • Richard Roberts’ wife, Lindsay, spent the night in the ORU guest house with an underage male “on nine separate occasions
  • Lindsay was photographed 29 times with an underage male in her sports car

Many people, when they see self-righteous professions of faith, assume that at the bottom of everything is corruption. Episodes like this show why.

Abu Gonzales May Be Facing Prosecution

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At least that’s what one of the fired prosecutors thinks. He believes that the IG will recommend prosecution.

FWIW, “Fredo” Gonzalez clearly thinks so too. He’s lawyered up, and he’s not saying a word to anyone.

Personally, I’d like to see him go to the Hague, not for his perjury, but for his active participation in the torture policies of Bush and His Evil Minions™. He’d get a fair trial, and it would be telecast.

Scaife Divorce Schadenfreude

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I really can’t do justice to the reporting of the Washington Post with regard to the Scaife divorce, but it could not happen to a nicer guy than the man who ran the Arkansas project against Bill Clinton, drove Vince Foster into suicide, and very likely contributed to the death of Steve Kangas.

Here’s a quick sample, then go and read, and enjouy:

The culture of his own marriage is apparently past restoring. With the legal fight still in the weigh-in phase, the story of Scaife v. Scaife already includes a dog-snatching, an assault, a night in jail and that divorce court perennial, allegations of adultery.

Oh, and there’s the money. Three words, people.

No. Pre. Nup.

…

Dickie, as he’s known to his handful of friends, acquired a mean streak at an early age, according to his now-deceased sister, Cordelia Scaife. (She once told The Washington Post that she and her brother hadn’t spoken for 25 years.) His trouble with alcohol started when he was at prep school, and he later was tossed out of Yale when he rolled a keg of beer down a flight of stairs and broke the legs of a fellow student. His father, a below-average businessman, died a year after Richard graduated from the University of Pittsburgh. His mother was “just a gutter drunk,” as Cordelia put it.

Scaife owns a handful of newspapers and newsweeklies, including the Pittsburgh Tribune Review, a conservative answer to the Post-Gazette. When he isn’t tending to this modest publishing empire, he’s underwriting what Hillary Clinton once called “a vast right-wing conspiracy.” His highest-profile expenditure is the $2.3 million he gave the American Spectator magazine in the mid-’90s, to try to unearth prurient and embarrassing details about Bill Clinton’s years as governor of Arkansas. (The magazine came up virtually empty-handed.)

I wish his soon to be ex-wife all the best. Him, I am not so magnanimous in his wishes.

Shailagh Murray is a Tool and an Idiot

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Dodd Makes Play on FISA Legislation
Her analysis:

Whenever that big day comes, Dodd — as the keeper of the “hold” — must return from the campaign trail to officially block debate on the bill. That entails standing around on the Senate floor, forcing procedural votes, avoiding the furious glares of colleagues who don’t share the same concerns. The standard duration of such showdowns is about a week — time that Dodd, who is trailing badly in early primary polls, can scarcely afford.

Of course, there is the reality, with facts, as opposed to bloviating:

Chris Dodd: The Netroots Show the Love

Senator Dodd’s campaign communications director Hari Sevugan tells me that $150,000 in small contributions have poured into Dodd’s campaign in the past 24 hours, since his announcement that he will put a hold on–and may even filibuster–a foreign intelligence surveillance bill approved yesterday by the Senate Intelligence Committee. Dodd objects to a provision that would grant immunity to the telecommunications companies that turned over their customers’ phone and e-mail records to the government’s warrantless surveillance program. The companies have been hit with 40 pending lawsuits charging them with privacy violation.

You have a 3rd tier candidate for president who has just raised $150K in about 24 hours, and is probably in the 2nd tier (with Bill Richardson) as a result of his stand.

He’s on every bloggers lips right now, but according to Shailagh Murray his move is somehow a really bad idea.

My guess is that the lead levels in DC water are higher than they are letting on.

Margin and Leverage, and the Risks Involved

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For a while, I have been talking a bit about the dangers of highly complex and highly leveraged financial instruments, and how they might contribute to a crask.

It appears that some folks at Barron’s Magazineare now beginning to have the same concerns.

Let’s give some background on how a lot of these instruments work:

Investing on Margin:

What happens here, is that you borrow money from your broker to purchase stock, which is the collateral to the loan. Let us assume that you want to purchase stock for a company, you have $10,000 to spend.

If the costs $10/share, you can buy 10,000 shares. If the price goes to 11, you make $1,000.

Let us assume that you were to buy those shares on margin. The current US margin limit is 50% (correct me if I’m wrong), so with your $10,000, and the borrowed $10,000, you could buy 20,000 shares, and when they went to $11, you would make $2000, which after loan and margin fees would be around $1700.

The problem is that if the stock drops to $5.00, you will have lost all of your money.

If the stock drops to $3.00, you owe money to your brokerage.

Leverage can improve the upside of investments, but at the risk of significantly larger downside risks.

Securities Futures:

These are similar to commodities futures, except that deal with entities rather than stocks and bonds. They lack the justification that commodities futures do: If a tire manufacturer gets a large OEM contract from General Motors, there is a real business case for them to lock in the price of rubber with a futures contract, but a stock future’s contract is just speculation.

You make money with an appreciating stock by purchasing a contract to sell a stock purchased today at a later date, and you make money with a depreciating stock by purchasing a contract to sell a stock today that you are buying at a later date.

Generally, you only have to put down the cost for the contract, and ;”>not the cost of the security, so where a typical margin purchase may be 50% leveraged, stock futures might be more than 90% leveraged.

Obviously, if one is in possession of ;”>inside information both of margin purchasing and futures can greatly increase the return on this information for an unethical broker.

Just so you know, leverage has increased markedly over the past few years, see below for a picture of the roughly 300% increase in Margin since 1990.

It should be noted that the use of leverage, specifically margin purchasing, was one of the major causes of the stock market crash of 1929. It forced people who got margin calls to unload into a collapsing market. It is why the loan to value rate was set to about 75% in the 1930s (and subsequently lowered to 50% in the mid 1970s).

It should be noted that none of these techniques aid ;”>investors, they aid ;”>speculators, and they provide perverse incentives for people to cheat in some manner or another.

The repackaged loans that are currently weighing on the market are a rather similar sort of leverage, where the idea was that by packaging a large number of loans together, you would spread the risk of any individual loan defaulting, which allowed people to trade these securities in a brisk, and potentially lucrative manner, particularly for the brokers, who got a commission on each sale.

If we have a 1929 style crash in the stock market, or worse, a 1987 style crash in the stock market (it was a worse one day drop), the swings will be exacerbated by people who will be forced by their brokers to sell on the drop on a roller coaster ride.

If we were to return to the Depression era regulations that FDR implemented, much of the instability and speculation that causes this risk would be eliminated, but it would take years for the exotic financial instruments to work their way out of the market, so it is likely too late now.

Corrupt Maricopa County DA and Sheriff Back Down from Confrontation with a Press

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A Breathtaking Abuse of the Constitution The object of this story, the Phoenix New Times, got the hed for this story correct when they called it Breathtaking Abuse of the Constitution. The story begins a few years back, when the The Phoenix New Times, a Phoenix, AZ alternative newspaper began looking into the affairs of the very prominent, and very controversial Maricopa County Sheriff Joe Arpaio*, and found that since his election as sheriff, he has accumulated millions of dollars in real estate investments on a $78,000 sheriff’s salary, and he used “an arcane statute meant to conceal home addresses of law enforcement officials to shield his investments.” In commenting on Arpaio’s extensive real estate holdings, the New Times published his home address in an OP/ED on their web page, to show how this information was already publicly available, and the Arpaio filed a criminal complaint with the DA, Andrew Thomas†, who appointed one of his cronies, Dennis Wilenchik, as special prosecutors, to see if there was a violation of the law in publishing this information. ‡ Then, in a stunning abuse of the grand jury process, Wilenchik issued a grand jury subpoena to the Phoenix New Times, requesting:

  • “all documents related to articles and other content published by Phoenix New Times newspaper in print and on the Phoenix New Times website, regarding Sheriff Joe Arpaio from January 1, 2004 to the present.”
  • Detailed information on every person who has visited the Phoenix New Times web site since 2004.
    • which pages visitors access or visit on the Phoenix New Times website;
    • the total number of visitors to the Phoenix New Times website;
    • information obtained from ‘cookies,’ including, but not limited to, authentication, tracking, and maintaining specific information about users (site preferences, contents of electronic shopping carts, etc.);
    • the Internet Protocol address of anyone that accesses the Phoenix New Times website from January 1, 2004 to the present;
    • the domain name of anyone that has accessed the Phoenix New Times website from January 1, 2004 to the present;
    • the website a user visited prior to coming to the Phoenix New Times website;
    • the date and time of a visit by a user to the Phoenix New Times website;
    • the type of browser used by each visitor (Internet Explorer, Mozilla, Netscape Navigator, Firefox, etc.) to the Phoenix New Times website; and
    • the type of operating system used by each visitor to the Phoenix New Times website.”

The publishers of the paper, published that they had been subpoenaed, along with this analysis of the entire affair:

The seemingly picayune matter of Sheriff Arpaio’s home address getting printed at the bottom of an opinion column on our Internet site — and the very real issue of commercial property investments the sheriff hid from public view — have now erupted into a courtroom donnybrook against a backdrop of illegal immigration disputes, Mexican drug cartels, the Minutemen, political ambition, and turf disputes between prosecutors and the judiciary.

What’s more, the special prosecutor attempted to use a third party to set up an ex parte meeting with the judge supervising the grand jury, in direct violation of the most basic canons of legal ethics. Well, the newspaper, or more specifically its founders Michael Lacey, the executive editor, and Jim Larkin, chief executive, had had enough, so they published about the secret grand jury subpoena, and they were promptly arrested. Well, if they wanted news of the subpoena, and abuse of the grand jury process, covered up, they got it wrong, because, it got coverage from the New York Times here, and here, Slate, and (FINALLY) the Arizona Republic, to name a few. At this point, realizing that they were completely screwed, Thomas ended the investigation, with much press coverage. As an poster on the New Times web site said, “Not surprising. Cockroaches never do like being exposed to daylight.” *He has created a jail tent city, and sold himself as the “America’s toughest sheriff”. †Who appears to be so close to Arpaio that they could share a bathroom stall with Senator Larry Craig. ‡No, there wasn’t. You know the first amendment allows for reporting stuff like this. It’s news, and furthermore, it is germane, as they are covering the corrupt sheriff’s real estate holdings, which include his house, which he has covered up by misusing a that refers only to his home.

Countrywide CEO May Be Involved in Insider Trading

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What, the CEO of Countrywidemay have dumped his stock when he got advance notice in violation of insider trading law???

Don’t make me quote Claude Rains in Casasblanca.

Here is the CEO in an industry that has largely depended on a pump and dump mantality, and has increasingly relied on the ignorance of its customers for its business, and we are supposed to be Suprised when it turns out that there are indications that perhaps the senior management did not scrupulously follow the rules????

Well, knock me over with a sledge hammer.

FCC Chair Proposes Being Big Media’s Bitch

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The FCC is proposing changes to media ownership rules. Among other things, it proposes waiving the cross-ownership restrictions.

All you need to know is that FCC Chairman Kevin Martin is proposing to implement this in 30 days, in order to facilitate the sale of Tribune Company to real estate magnate Sam Zell.

You know the drill, http://www.fcc.gov/, and tell them that their idea sucks wet farts from dead pigeons (be more polite than I am).

More Evidence that the Siegelman Prosecution was a Frame Up

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Read the whole article, but it appears that the first judge was removed on the case because, on the basis that, “because he was prejudiced against the prosecution. The basis cited for this prejudice was that a California U.S. attorney had, a decade earlier, conducted an inquiry focusing on Judge Clemon’s sister.”

The judge that they selected, Judge Mark Fuller, was known to have a personal grudge against Siegelman, and he also had a CURRENT complaint of criminal activity against him with the public integrity division of the DoJ.

I believe that the status of food preservation in Copenhagen is extremely poor.

More Politically Motivated Prosecutions, This Time in Mississippi

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Seems strikingly similar to the Siegelman case in Alabama, but this time in Mississippi.

The case fits a familiar pattern. The corruption Mr. Minor was charged with was disturbingly vague, as it was with Ms. Thompson [Wisconsin where her case was overturned on appeal as “beyond thin”], whose only “crime” was awarding a contract to the lowest bidder, and Mr. Siegelman, who was convicted for fairly routine political behavior.

We will be paying for the Damage inflicted by for years to come.

Unconstitutional Republican Earmarks

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The Congressional Research Servicw has released a memo about the constitutionality of Alaska Representative’s Don Young’s earmark on the Coconut Road Interchange in Florida’s Lee County, which benefitted some real estate contributors of the then head House transportation panel (Corruption from north to south and from east to west).

It was inserted after both houses voted on, and passed the bill, so it is an earmark that was never voted on by anyone in congress becomes “law” (there is an appeal to the Supreme court over this).

Seriously, Republican corruption is so twisted that your average snake would be unable to follow it.

Top Air Force Procurement Official Dies in Apparent Suicide

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I don’t recall if I’ve written of this matter before, but while waiting for his white house clearance, Charles D. Riechers, was paid $13,400 a month by a private contractor, Commonwealth Research Institute, while he awaited clearance from the White House for his selection as principal deputy assistant secretary for acquisition. He was paid for no work at all, which sounds suspiciously like a birbe

The Commonwealth Research Institute and it’s Parent, Concurrent Technologies Corp. are tax exempt, but their primary business is defense contracting, which is odd.

This is freaky, and CRI and CTC are Jack Murtha’s best buddies, as Will Bunch notes. Frequently, Murhta’s press releases sounding as ife they were written by CTC PR flacks.

Mr. Bunch has repeatedly warned folks about Murtha, and it appears that this may be hitting the news shortly. Dead bodies have a way of getting journalists looking into things.

What is the Bailout Fund?

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It seems rather complex, and I’m having a problem wrapping my head around the finer points, so I started with a principle that has never failed me, that it is a Bush initiative, so it will be a failure.

I am drawing on what is to my mind the single wisest thing written thus far this millenia, by one Daniel daves, this is a truism about the Bush and His Evil Minions™:

But it does inspire in me the desire for a competition; can anyone, particularly the rather more Bush-friendly recent arrivals to the board, give me one single example of something with the following three characteristics:

  1. It is a policy initiative of the current Bush administration
  2. It was significant enough in scale that I’d have heard of it (at a pinch, that I should have heard of it)
  3. It wasn’t in some important way completely fucked up during the execution.

So I start from the assumption that it’s screwed up. Then I looked at what was going on with this fund, and it appeared that banks were investing in their own brokerage funds, which is generally not allowed in the US, and was a primary cause of Japan’s financial crisis that ran over a decade, and I am even more convinced that this will be ineffective at best, and harmful at worst.

Then I asked myself the question that Nouriel Roubini, has been asking, “Is this this a liquidity crisis, or an insolvency crisis?” I.E. Is the problem that the money has stopped moving because of fear, and when things get back to normal, everything will be fine, or is the underlying value of the assets in these funds far less than previously reckoned?

Obviously, if it is the former, it’s a matter of reassuring markets with some sort of capitalist WD-40, but if it is the latter, then these funds, and some of the companies, will go bust no matter what is done, and any bailout scheme is simply an attempt to pass the losses off on unsuspecting rubes.

I lean toward the the latter, particularly since there is SIGNIFICANT federal support of the plan, because the Treasury department had to waive significant regulations regarding cross-ownership to allow this plan to come into being.

Then I read Dr. Roubini’s analysis on the bailout fund, “Super-Conduit or Super-Bailout Shell Game?“, (warning: it’s a bit dense), and he seems to agree: this is about attempting to pass the losses downstream.