Category: Corruption

This is So Unsurprising

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So, the other shoe has dropped on the former speaker, and we learn that Denny Hastert sexually abused a student:

J. Dennis Hastert stumbled into political power amid a Republican sex scandal in 1998 that unexpectedly elevated the husky Illinoisan to a position just two heartbeats away from the presidency.

He became the longest-serving Republican House speaker in U.S. history, but remained so proud of his days as a small-town high school teacher and wrestling coach that he relished the Capitol Hill nickname “Coach.”

But this week those once-idolized small-town roots caught up with the 73-year-old Hastert, who in recent years has worked behind the scenes as a Washington power broker.
Former House Speaker Dennis Hastert indicted

Federal prosecutors have announced bank-related charges against former U.S. House Speaker Dennis Hastert.

On Friday, federal law enforcement officials said Hastert had paid $1.7 million over the last four years to conceal sexual abuse against a former male student he knew during his days as a teacher in Yorkville, Ill., where Hastert worked until 1981.

A top federal law enforcement official, who would not be identified speaking about the ongoing federal case, said investigators also spoke with a second man who raised similar allegations that corroborated what the former student said. The second person was not being paid by Hastert, the official said.

The disclosures followed Thursday’s federal indictment against Hastert on charges of lying to the FBI about the reasons for large cash withdrawals he is accused of making to buy the man’s silence.

Currently, the age of consent in Illinois 17, but it is 18 if the person is in a position of authority, for example, being a teacher and coach. (Link)

This law appears to me to be something relatively recent, the whole “position of authority” thing really started in the 1990s, and I know that the age of consent in the 1920s was 16, so it is entirely likely that this did not constitute statutory rape.

Still, it is remarkable that the best Republicans could find for Speaker after Gingrich and Livingston had been driven from office at least in part for adultery.

I’m hoping that Larry Flynt offers another bounty on wandering Republican penises running for President..

We Already Knew that Hastert was Corrupt

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What you will notice in passing is that Hasterd made his money in real estate investments by earmarking money for a massive highway project that ran past his real estate investments, which jacked up the price of the land. (Prior Link)

Now though, we have allegations that Denny Hastert tried to evade the money laundering statutes and then lied to the FBI:

J. Dennis Hastert, the longest-serving Republican speaker in the history of the U.S. House, was indicted Thursday by a federal grand jury on charges that he violated banking laws in a bid to pay $3.5 million to an unnamed person to cover up “past misconduct.”

Hastert, who has been a high-paid lobbyist in Washington since his 2007 retirement from Congress, schemed to mask more than $950,000 in withdrawals from various ac­counts in violation of federal banking laws that require the disclosure of large cash transactions, according to a seven-page indictment delivered by a grand jury in Chicago.

The indictment did not spell out the exact nature of the “prior misconduct” by Hastert, but it noted that before entering state and federal politics in 1981, Has­tert served for more than a decade as a teacher and wrestling coach at Yorkville High School in Illinois.

In 2010, confronted about the “prior misconduct,” the former speaker agreed to pay $3.5 million to the person “to compensate for and conceal his prior misconduct against Individual A,” prosecutors alleged.

That person, whose identity was shielded by prosecutors, has known Hastert most of his or her life, growing up in Yorkville, the city next to Hastert’s home town of Plano, in the exurbs west of Chicago. Prosecutors said the actions “occurred years earlier” than the 2010 meeting that sparked the payments.

The investigation began in 2013, by the FBI and the Internal Revenue Service, which cited “possible structuring of currency transactions to avoid the reporting requirements.”

First thing to be noted here, if law enforcement (particularly the FBI) wants to have an innocuous discussion with here, tell them no.

  • They know what they are looking for, and you don’t.
  • They have a legal right to lie to you.
  • Even the most innocuous misstatement can be characterized by law enforcement and prosecutors as a felony.
  • If they can show inaccuracies in your statements, even honest ones, they can use this to impeach later testimony.

Politely let them know that you are asserting your constitutional rights, and will not talk without a lawyer.

It is important to specifically mention your constitutional rights.  Recent courses by the perfidious Roberts Court have allowed a person’s silence against them in court unless they specifically invoke the 5th amendment.

The second thing to be noted is that the prosecutors are being remarkably circuitous about the nature of  Hastert’s “Prior misconduct” against “Individual A.”

I’m not sure whether the prosecutor is giving Hastert a pass because he was House Speaker, or if the US Attorney will use that as a lever to get a guilty plea

The indictment provides some tantalizing clues though:

  • Hastert and this person have known each other for most of Individual A’s life, which implies that they are significantly younger than Hastert.
  • Individual is a resident of Yorkville, Illinois.
  • Before politics, Hastert was a teacher and coach at a school in Yorkville.

My guess is that he sexually abused a student when he was a teacher, but it’s just a guess, based on the amount of the blackmail and the above facts.

The interesting thing here is that it is likely, though not certain (Republicans are a perverted bunch), that whatever you and I imagine is far worse than the reality of the situation.

In any case, it’s nice to see Tom Delay’s sock puppet going down.

Well, Now We Know What You Have to Do to Make an American Interested in Soccer

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I love New Yorker cartoons


Note that John Oliver did this a year ago

It appears that the juxtaposition bribery, money laundering, and tax evasion is is enough to pique the interest in soccer of some people in America:

With billions of dollars at stake, Morocco, Egypt and South Africa jockeyed in 2004 for the privilege of hosting soccer’s most prestigious tournament, the World Cup. The outcome hinged on a decision by the executive committee of FIFA, soccer’s governing body, and a single vote could tip the decision.

And at least one vote, prosecutors said Wednesday, was for sale.

Jack Warner, a committee member from Trinidad and Tobago, shopped his ballot to the highest bidder, federal prosecutors said. In early 2004, he flew to Morocco, where a member of that country’s bid committee offered him $1 million. But South Africa had a sweeter deal, offering $10 million to a group that Mr. Warner controlled, prosecutors said. He voted for South Africa. South Africa got the 2010 World Cup. And Mr. Warner got his  $10 million payout, much of which prosecutors said he diverted for his personal use.

For decades, that was how business was done in international soccer, American officials said Wednesday as they announced a sweeping indictment against 14 soccer officials and marketing executives who they said had corrupted the sport through two decades of shadowy dealing and $150 million in bribes. Authorities described international soccer in terms normally reserved for Mafia families or drug cartels, and brought charges under racketeering laws usually applied to such criminal organizations.

Hours after Swiss authorities arrived unannounced at a Zurich hotel and arrested top FIFA officials early Wednesday morning, the Justice Department and prosecutors for the Eastern District of New York forcefully declared that their investigation had only just begun and pledged to rid the international soccer organization of systemic corruption.

“These individuals and organizations engaged in bribery to decide who would televise games, where the games would be held, and who would run the organization overseeing organized soccer worldwide,” said Attorney General Loretta E. Lynch, who supervised the investigation from its earliest stages, when she was the United States attorney for the Eastern District of New York. “They did this over and over, year after year, tournament after tournament.”

It’s been common knowledge that FIFA is so deeply corrupt that it makes the International Olympic Committee look like Bernie Sanders, so I am not at all surprised that allegations of corruption have finally been made public, though I am a bit surprised that it was the US that led the investigation.

As it stands now, the FIFA president, Sepp Blatter is not among those arrested, but given that these indictments include the FIFA statutes, which cast a very broad net (the phrase “corrupt pattern” comes to mind), if only a few of these people roll, I imagine that he could be a defendant as well.

It appears that these arrests are the proverbial good news for the Jews, as it looks like this will side-track for a while efforts to expel Israel from FIFA:

Israelis were expecting some big news to come out of the annual FIFA Congress this week. But they probably weren’t expecting this.

In a bombshell operation, a Swiss law enforcement team showed up at the Zurich hotel hosting the annual gathering of the international soccer organization — and arrested nine senior officials.

The arrests come after decades of corruption allegations aimed at FIFA. (If you’re unfamiliar, comedian John Oliver’s got you covered.) The arrested officials face charges of taking money in exchange for World Cup hosting bids, as well taking bribes in exchange for media and marketing rights for major international tournaments.

The allegations are damning, but frankly, they couldn’t have come at a better time for Israel. Until Wednesday, much of the coverage of the FIFA Congress surrounded whether delegates would vote to suspend Israel from world soccer.

The Palestinian Football Association is introducing the motion to suspend Israel, accusing it of unjustly restricting Palestinian soccer players’ freedom of movement and claiming that Israel’s West Bank settlement teams violate FIFA rules. Israeli officials have called the effort blatantly political and said that the Palestinians’ complaints all concern Israel’s security forces — not Israel’s soccer teams.

Needless to say, some people are already blaming  the “international Zionist conspiracy” for the arrests.

Personally, I’m hoping that we eventually see similar arrests directed at the NFL, and its head Roger Goodell.

I Think That Someone Has Whispered the Words “Obstruction of Justice” in His Ear

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New York Governor Andrew Cuomo has backtracked on his 90 days and then delete email policy:

The emails of New York officials will no longer be automatically deleted after 90 days, aides to Gov. Andrew Cuomo announced last week in response to political pressure over the purge policy.

It’s been a slow burn leading to the policy shift. The purge policy was first reported by the Albany Times Union back in mid–2013, but didn’t stir much protest until more recently, following coverage by ProPublica and Capital New York.

At a public meeting Friday, aides to the governor said they had reviewed the policies of other states and, going forward, any email deletion would be manual. That means more communications should be retained and be accessible in response to public records requests or in the case of investigations of wrongdoing.

Good government groups welcomed the move, writing in an open letter that it “shows the power the governor has to lead by example to increase transparency” – rare praise for Cuomo, whose administration has generally been marked by secrecy.

Since the purge policy was in effect for about two years in some state agencies, it’s probable some public records have been lost.

The cynic in me thinks that Cuomo has already managed to delete records that he wanted deleted.

The optimist in me thinks that someone, perhaps his counsel, or perhaps someone from the US Attorney’s office told him that they would either take actions to protect the data, which would be profoundly embarrassing to Hizzoner.

In either case, this is good news, and I am hoping to see Cuomo indicted, because he is clearly corrupt, at least by the ordinary standards of decency, if not the letter of the law.

Nothing to See Here, Move Along

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6 months after 12 year old Tamir Rice was killed by Cleveland police, and neither the cop who gunned him down nor his partner have been questioned:

Mother Jones has learned that the two officers involved in the shooting—Timothy Loehmann, who fired the shots, and Frank Garmback, who drove the police car—still have not been interviewed by investigators from the sheriff’s department. According to an official familiar with the case, investigators have made more than one attempt to interview Loehmann and Garmback since the Cleveland Police Department handed over the case in January. (Read more about why the sheriff’s department took over the investigation here .)

A county official familiar with the case told Mother Jones that the criminal investigation is focused solely on Loehmann. Garmback, who pulled the police car to within a few feet of Rice right before Loehmann stepped out and shot Rice almost instantly, is currently not under criminal investigation by the sheriff’s department, the official said.

In the surveillance footage, both Loehmann and Garmback can be seen standing around after the shooting while Rice lies bleeding on the ground. About a minute and a half after the shooting, Garmback can be seen tackling Rice’s 14-year-old sister as she tries to run to her wounded brother. Four minutes go by during which Loehmann and Garmback make no attempt to give Rice first aid. An FBI agent in the area then comes to the scene and begins to tend to Rice before an ambulance arrives to take him to the hospital (where he died the next day).

The fact that neither Loehmann or Garmback have been interviewed is a disgrace.

No doubt they have lawyered up, and they won’t be saying anything, but to not even try to interview the officers is mind boggling.

I’m Shocked, Shocked to Find That Gambling Is Going on in Here

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Cue Captain Renault

A whistle blower at Tiversa is alleging that the company manufactured false evidence of breaches to gin up business:

A bombshell lawsuit is raising eyebrows in the cybersecurity industry.

A former cybersecurity forensic examiner named Richard Wallace is claiming that his former employer — cybersecurity company Tiversa — “would typically make up fake data breaches to scare potential clients,” CNNMoney reports.

Wallace claims that Tiversa would routinely do this then “pressure firms to pay up” by buying its cybersecurity services, according to a federal courtroom transcript obtained by CNNMoney. This came to a head when Tiversa allegedly approached cancer testing services company LabMD about a supposed hack. LabMD refused to buy into Tiversa’s services, so Tiversa allegedly reported the cancer-testing company to the FTC for having a data breach.

………

This lawsuit raises some potentially worrisome issues about practices in the cybersecurity industry.

Gee you think?

It’s the f%$#ing Wild West out there, with no standards of what constitutes a breach, and no meaningful certification of the security firms.

People have been selling cyber Armageddon, with only one concrete example of their horror stories panning out (Stuxnet which was created by the US and Israeli government), why is it a surprise when we discover that people are selling “breaches” that are either non existent or minor.

I guess being a cybersecurity consultant beats working for a living.

$82,000 on Snacks? What the F%$# Are You Eating?

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Somehow or other, Chris Christie managed to spend $82,000.00 of state money on snacks at football games:

New Jersey Gov. Chris Christie spent more than $80,000 of taxpayer money on snacks at NFL games between 2010 and 2011, according to a report from New Jersey Watchdog. Christie used his government debit card 58 times at MetLife Stadium, and his office “did not provide any receipts, business reasons or names of individuals entertained, but defended the expense.”

Christie’s office has defended his use of the expense account, but were clearly embarrassed by the revelation that the governor was expensing quite a few beers while watching the Giants and Jets play because it reimbursed the costs associated with the games.

My first response was shock, of course. Christie averaged $1,500 in concessions at each game and didn’t bother keeping receipts to explain the expenses. But my second response was total envy. Spending $82,000 on snacks is an actual dream of mine. I mean, not the exact amount but the idea of spending the cost of a down payment on a home on queso and hot dogs has always been very appealing to me.

That $82,000.00 is only what he spent at the Meadowlands Stadium for football games, if you read the full report, the total spending on comestibles by Jabba the Governor is actually a bit more than $360,000.00, but that can include things like (for example) state dinners, and other public events.

Spending $1500.00 at a football game though is clearly excessive.

It should be noted that Christie has a long history of being profligate with taxpayer money in order to enhance his own comfort.  When he was US Attorney for New Jersey, he was cited for similar behavior:

When he was a top federal prosecutor, Gov. Chris Christie of New Jersey routinely billed taxpayers for hotel stays whose cost exceeded government guidelines, according to a report the Justice Department released on Monday.

The report, by the department’s inspector general, examined travel expenses for all 208 people who served as a United States attorney from 2007 to 2009. It spoke of five who “exhibited a noteworthy pattern of exceeding the government rate and whose travel documentation provided insufficient, inaccurate or no justification for the higher lodging rates.”

While the report did not identify any prosecutors by name, the travel patterns of an official called “U.S. Attorney C” — the one “who most often exceeded the government rate without adequate justification” in terms of percentage of travel — match records about Mr. Christie that were released in the 2009 campaign for governor by his Democratic opponent, the incumbent, Jon S. Corzine.

As governor, Mr. Christie, who was the United States attorney for New Jersey from 2002 to 2008, has pushed to cut government spending and waste, making him a rising star in the Republican Party.

………

The report also noted the reimbursements Mr. Christie received for airport transportation costs. Rather than taking a taxi for the four-mile trip between his hotel and the Boston airport, he took a car service costing $236. A similar arrangement for a London trip cost $562.

I really hope that someone in oppo research is paying attention to this stuff, because it’s not going to play well in either Iowa or New Hampshire.

I Think That We May Have Identified Part of the Problem in the Baltimore Police Department

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The most senior of the officers indicted in the Freddie Gray murder, Brian Rice,  has had multiple incidences of threats of violence and erratic behavior:

The Baltimore police lieutenant charged with the manslaughter of Freddie Gray allegedly threatened to kill himself and the husband of his ex-girlfriend, during incidents that led to him being disciplined and twice having his guns confiscated.

Brian Rice, who pursued and arrested Gray after the 25-year-old “caught his eye” on 12 April, was reportedly given an administrative suspension after being hospitalised for a mental health evaluation when he warned he was preparing to shoot himself in April 2012.

 Rice, 41, also received an internal discipline when a judge granted a temporary restraining order against him after a request from Andrew McAleer, the husband of Karyn McAleer, who is the mother of Rice’s young son and a fellow Baltimore police officer. Rice has been married to and divorced from two further women, according to court records.

A sharply critical 10-page complaint against Rice, which Andrew McAleer filed to a court in Maryland in January 2013, is being published in full for the first time by the Guardian. It details what McAleer, a Baltimore firefighter, described as a “pattern of intimidation and violence” by the officer.

McAleer said in his court filing, which was first reported by the Guardian last month, that Rice forced one of Karyn McAleer’s young children to “shoot” a photograph of her and her husband that Rice had “taped to a piece of cardboard intended for target practice”. It was not clear from the filing whether any weapon was actually used.

McAleer said that two months before this, in April 2012, his wife called to tell him to protect himself and her five children from Rice because the lieutenant had called her threatening to kill himself.

Deputies from the Carroll County sheriff’s department responded to an emergency call and transported Rice to a hospital, before confiscating his police service weapon, his personal 9mm handgun, two rifles and two shotguns.

It is unclear how long Rice spent as a patient. The police response to an incident at Rice’s home was first reported earlier this month by the Associated Press, which said it resulted in an administrative suspension from Baltimore police.

………

Rice was allegedly given another administrative suspension and had his guns confiscated again eight months later, according to court filings, after McAleer obtained the week-long peace order against the police lieutenant.

………

Rice was ordered to stay away from McAleer, his home and his workplace after a series of alleged confrontations, including one armed standoff in June 2012 when officers from two police departments responded to a 911 call and spent 90 minutes defusing the situation.

McAleer alleged Rice was screaming and smelled of alcohol during the 2am confrontation in front of McAleer’s house. He said his wife later said Rice had told her he planned to kill McAleer during the June 2012 encounter.

Great googly moogly. 

What does a Baltimore cop have to do to get fired?

This guy was a f%$#ing lieutenant after all of this?

H/T Neo at the Stellar Parthenon BBS.

That’s Entertainment, Albany Edition

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It appears that Preet Bharara, the US Attorney who has indicted the leaders of both houses in New York, has a major campaign donor who is singing like a f%$#ing canary:

Just as important as Monday’s charges against Senate Majority leader Dean Skelos and his son was the revelation, in the newly unsealed complaint, that an executive with the state’s top campaign donor is now cooperating with the feds.

Charles Dorego, the senior vice president of Glenwood Management, allegedly gave Skelos’ son Adam a $20,000 cash payment and steered him title insurance work. Like many big real estate firms, state policy changes on rent control and the 421-a subsidy program are worth millions to Glenwood, and it kept Dean Skelos, the Senate majority leader, quite close.

What’s prompting concern at the Capitol is that Dorego, as well as Glenwood founder Leonard Litwin, are close to everyone.

“If Dorego is involved,” said one lobbyist, speaking on background, “then you can bet more trees are going to fall.”

In the past four years, Glenwood passed out at least $3.6 million to state politicians and the political committees that support them through a roster of two dozen limited liability companies. Records show it has ties to a dark money group that spent another $1 million attacking Democrats in 2012. It’s hard to state definitively, because only some of the L.L.C.s can be readily associated, by address, with their parent company.

………

Governor Andrew Cuomo, a Democrat, has benefited the most, taking in $1.45 million for his campaign committee and the soft money account he controls at the Democratic State Committee. Glenwood is also the largest donor to Attorney General Eric Schneiderman and Tom DiNapoli, both Democrats.

There are more people on Bharara’s hit parade. That much is clear.

I also think that he is looking very hard at governor Cuomo, and the people closest to him, and given that New York state is New York state, I would expect to see some of his senior aides indicted, and I hope that hizzonner is indicted.

Is Bipartisan Governing More Corrupt?

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People say they want more bipartisanship. In poll after poll after poll, they decry the polarized atmosphere in Washington and say they want their leaders to work together.

To which the people of New York and New Jersey might reply: seriously?

It’s indictment-and-arrest season in the tri-state region. Monday morning, New York State Senate Leader Dean Skelos, a Republican, and his son Adam were arrested on federal charges of extortion, fraud, and soliciting bribes. It’s been just three months since State Assembly Speaker Sheldon Silver, a Democrat, was himself arrested on federal corruption charges. Meanwhile, across the Hudson River in New Jersey, Bridget Anne Kelly and Bill Baroni, two former top allies of Governor Chris Christie, pleaded not guilty to nine counts apiece including wire fraud and conspiracy in the George Washington Bridge Scandal. On Friday, David Wildstein, a Christie appointee, pleaded guilty to two conspiracy charges in the same scandal.

What New York and New Jersey share, besides oft-imitated accents and embarrassing reputations for political corruption, is bipartisan governance. It wasn’t that long ago—before the bridge scandal, credit downgrades, and collapse of Atlantic City—that Christie seemed like a model of a Republican who could work with Democrats and achieve his priorities. Christie forged an alliance with Jersey Democratic boss George Norcross and his protege Steve Sweeney, the Democratic president of the State Senate. Christie even managed to gain many Democratic endorsements in his 2013 run for reelection. In fact, prosecutors say it was his aides’ overzealous attempt to squeeze an endorsement from the Democratic mayor of Fort Lee that led to the bridge closure that now threatens to undo his career.

Something similar was going on in Albany. Governor Andrew Cuomo, a Democrat, became extremely close with Silver and Skelos, even though Skelos was a Republican. In his January State of the State address—the day before Silver’s arrest, it turned out—he described his relationship with the two as “the three amigos.” The alliance drove some other New York Democrats nuts. Even though Cuomo had delivered two major progressive priorities in passing gun control and legalizing gay marriage, he governed far too close to the center for liberals’ taste on economic issues. But that allowed Cuomo to run the state government smoothly and implement his agenda.

In both cases, government functioned thanks to the lubrication of lucre, which allowed coalitions to grow across the aisle. There’s been no clear evidence of illegality outside of the bridge scandal, but reporters including Alec MacGillis have shown how Christie doled out favors to his and Norcross’s factions while bullying opponents into support or at least silence. In Cuomo’s case, he launched a highly trumpeted ethics inquiry, the Moreland Commission, after a series of embarrassing arrests of lawmakers, but then muzzled and eventually shut it down—when, it seems, it annoyed too many members of both parties. Unfortunately for them, and for Cuomo, U.S. Attorney Preet Bharara decided to pick up where the commission left off and ended up with charges against the two leaders.

This is not surprising.  If there is a lesson to be learned from machine politics in the 19th century, it is that when there is personal profit in doing the business of governing, that business gets done..

Of course, this only works for moderate levels of corruption.

Above that, you have Nigeria, where the level of corruption is so high that there are resources left to actually provide services..

This is not an endorsement of corruption.  Neither am I am suggesting that excessive bipartisanship, particularly when the bipartisanship supports moneyed interests, causes corruption.

I am suggesting that it is an indicator of corruption.  I am suggesting correlation, not causation.

I would also suggest that the desire for a new era of bipartisanship is firmly in the, “Be careful what you wish for, you might get it,” category.

Whiskey Tango Foxtrot? Pulitzer Prize Edition

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The editor of the editorial page most likely to be shown as factually inaccurate by the front pate, that of the Wall Street Journal, has been named as the Chairman of the Pulitzer Prize Board:

Paul Gigot, the editorial page editor and vice president of The Wall Street Journal, has been elected chair of the Pulitzer Prize Board, Columbia University announced today.

Gigot succeeds Danielle Allen, a scholar and author who is the incoming director of the Edmund J. Safra Center for Ethics at Harvard University. The Pulitzer Board chairmanship is a one-year appointment. Board members serve a maximum of nine years.

 Gigot’s career at The Wall Street Journal spans 35 years. He has held his current position since 2001. He is responsible for the newspaper’s editorials, op-ed articles, arts criticism and book reviews. He also directs the editorial pages of the Journal‘s Asian and European editions and the OpinionJournal.com website. He is the host of the weekly half-hour news program, the Journal Editorial Report, on the Fox News Channel.

 Gigot joined the Journal in 1980 as a reporter in Chicago. He became the Journal’s Asia correspondent in 1982, based in Hong Kong. He won an Overseas Press Club award for his reporting on the Philippines. In 1984, he was named the first editorial page editor of The Asian Wall Street Journal, based in Hong Kong. In 1987, he was assigned to Washington, where he contributed editorials and a weekly column on politics, “Potomac Watch,” which won the 2000 Pulitzer Prize for Commentary.

The Journal‘s editorial page is the most fact averse in the nation. (with the Washington Post‘s OP/ED page being an embarrassingly close 2nd)

Putting him in charge of the prize is on a par with making Mary Mallon* the New York State Commissioner of Health.

*Aka Typhoid Mary.

Now Skelos ……… Whither Cuomo?

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The Republican leader of the New York State Senate Dean Skelos, and his son, have been arrested on federal corruption charges:

Dean G. Skelos, the leader of the New York State Senate, and his son were arrested on Monday morning by federal authorities on extortion, fraud and bribe solicitation charges, expanding the corruption investigation that has already changed the face of Albany.

The charges against Senator Skelos, 67, and his son, Adam B. Skelos, 32, were detailed in a six-count criminal complaint filed in United States District Court in Manhattan that details a five-year scheme to “monetize” the senator’s official position by extorting payments through a Long Island-based real estate developer and from an Arizona environmental company, with the expectation that the money paid to Adam Skelos — nearly $220,000 in total — would influence his father’s actions.

“Dean Skelos’s support for certain infrastructure projects and legislation was often based not on what was good for his constituents or good for New York, but rather on what was good for his son’s bank account,” said Preet Bharara, the United States attorney for the Southern District of New York, who announced the charges with Diego Rodriguez, the head of the New York office of the Federal Bureau of Investigation.

It is not known if Mr. Skelos, who has led the Senate Republicans since 2008, will resign his leadership role, but he is sure to face difficult questions from within his own ranks about his ability to lead while fighting criminal charges.

The case grew out of a broad federal investigation focused on the younger man’s business dealings, some of which were reported last month by The New York Times, including payments to Adam Skelos by an Arizona environmental company, AbTech Industries.

………

Adam Skelos made little secret of his father’s efforts to help his business interests. Frustrated that Nassau County was not acting promptly enough to pay AbTech, Adam Skelos suggested his father would retaliate. “I tell you this, the state is not going to do a [expletive] thing for the county,” he said on a recorded phone call in December.

AbTech’s fortunes appeared to weigh on the younger man. In January, in another call that was recorded by the authorities, he told his father that if the company did not succeed, he would “lose the ability to pay for things.”

The investigation, which made use of secretly recorded conversations and wiretaps, revealed how the senator and his son were concerned about electronic surveillance, and illustrated the son’s unsuccessful efforts to thwart it.

As time passed, Senator Skelos and his son also appeared to become increasingly worried about possibly scrutiny from law enforcement. Adam Skelos took to using a “burner” phone, according to the complaint, and told his father he wanted them to speak through a FaceTime video call in an apparent effort to avoid detection.

A burner phone?

Skelos, and his prodigal son, are completely screwed. Their only option is to roll on a bigger fish.

The only bigger fish is Andrew Cuomo, and it’s clear that the US attorney is scrutinizing his official actions very closely.

His dad must be spinning in his grave over this.

Look Out Below!

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If there is a rule in modern investments, it is that they will become increasingly complex, and then the small investors get in, the “Smart Money”, who created the complexity, and there is a crash, where retail investors lose.

It follows fairly simply from Saroff’s Rule.*

Well, it’s happening again, less than 7 years after the last crash:

People buying homes to live in – rather than as investments to be rented out – form the bedrock of a healthy housing market. It was once called the American Dream. Then came the bubble, its collapse, and the new boom that is already a bigger bubble than the prior one in many cities. And in some metro areas, investors are now the majority of buyers!

 In the first quarter, the proportion of owner-occupant buyers fell to 63.2% of all residential sales, down from 65.8% in the fourth quarter last year, and down from 68.6% a year ago, RealtyTrac reported today. It was the lowest quarterly level in the data series going back to 2011.

 Who were the other buyers? Investors. The report defined them as buyers who purchased a property but then had their property tax bill mailed to a different address. And these investors accounted for a record of 36.8% of all home sales.

 In some metro areas, investors went hog-wild, elbowing owner-occupants into minority status. Here are the metro areas with a population of at least 500,000 where this miracle of our “healed” housing market has occurred in Q1, the miracle being that investors make up the majority of all homebuyers:

………

 But “institutional investors,” entities that buy 10 or more units a year, accounted for only 3.4% of total sales in Q1, the lowest level in the data series, down from 6.2% in Q1 2014, and from 8.7% during the heyday in Q1 2013. These big investors, including large PE firms that used to buy tens of thousands of units – the “smart money” – have been losing interest for two years. But in the last quarter, they just about pulled up their stakes:

The investors that are now piling into the market like never before are “smaller, mid-tier, and mom-and-pop investors,” explained RealtyTrac VP Daren Blomquist.

And these investors are much more highly leveraged:

Of all investors, 44.7% were all-cash buyers, down from 61% a year ago. Cheap debt is just too tempting. A large variety of easy-money financing options have become available for small investors as “a new crop of nationwide companies has emerged offering financing specifically for investment properties,” Blomquist said. I can attest to that; I get their spam in my inbox.

Look out below.

History may not repeat itself, but there is some seriously heavy duty rhyming going on right now.

I expect another bust sometime in the next 2-3 years.

If some of the banksters were breaking rocks in a Federal Penitentiary, it would not have repeated itself so soon.

It would have taken at least a decade for the finance industry to create a new infrastructure of fraud.

* Saroff’s Rule: If a financial transaction is complex enough to require that a news organization use a cartoon to explain it, its purpose is to deceive.

Bridgegate, the Gift that Keeps on Giving

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Pass the Popcorn

It appears that David Wildstein has cut a deal, because the announcement of his guilty plea was followed immediately by the indictment of two of what were Governor Christie’s most senior aides:

After a 16-month federal investigation into the George Washington Bridge lane closings scandal, a judge in New Jersey unsealed indictments against two people close to Gov. Chris Christie, outlining a conspiracy made with a third confidant to exact political vengeance against a mayor for not endorsing the governor’s re-election.

The United States attorney for New Jersey, Paul J. Fishman, announced the indictments at a news conference on Friday, breaking his long silence about a scandal that started as an inquiry into the cause of a traffic jam and has since led to a host of other investigations into the Christie administration, threatening the political future of one of the nation’s leading Republicans.

Mr. Fishman said that the conspirators “callously victimized” the citizens of Fort Lee, N.J., purposely scheduling the lane-closing plan to coincide with the first day of school. Then, he said, they sought to cover up the scheme with a “sham” story of a traffic study on the bridge to Manhattan. He said that there was evidence to suggest that using a traffic jam to exact revenge was discussed as far back as 2011.

Bill Baroni, the former deputy executive director of the Port Authority of New York and New Jersey, and Bridget Anne Kelly, a former deputy chief of staff to Mr. Christie, were charged with nine counts, including conspiracy to commit fraud by “knowingly converting and intentionally misapplying property of an organization receiving federal benefits.”

David Wildstein, another former Port Authority official and a high school friend of Mr. Christie, pleaded guilty at the United States District Court in Newark to conspiracy to commit fraud and conspiracy against civil rights.

Mr. Fishman said that Mr. Wildstein corroborated the allegations in the indictment.

This is getting interesting.

I don’t expect Christie to be indicted, I think that he is familiar enough with the prosecutorial process to avoid his fingerprints being on this, but I think (hope) that this will end his political career.

This is F%$#ing Brutal

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Part 1


Part 2

Jon Stewart interviewed Judith Miller, one of the most egregious propagandists in American journalism, and he took her apart.

You need to watch the whole thing, but Stewart’s statement to towards the end of the interview gives one a sense of how Stewart gave Miller a bad time:

We’re obviously never going to see eye-to-eye on itI appreciate you coming on the program. These discussions always make me incredibly sad because they point to institutional failure at the highest levels and no one will take responsibility for it, and they pass the buck to every individual but themselves. It’s sad.

Miller came off as pathetic and evasive, which pretty much matches her career as a “Journalist”.

Free Speech for Thee, and Not for Me

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It looks like the Supreme Court has finally found a limit to campaign donations, limits on soliciting donations by candidates for Judgeships:

The Supreme Court on Wednesday upheld state laws that bar elected judges from asking for money to support their campaigns.

In a 5-4 decision, the court rejected a free-speech claim brought by a Florida judge.

“Judges are not politicians, even when they come to the bench by way of the ballot,” Chief Justice John G. Roberts Jr. wrote for the majority. “A state may assure its people that judges will apply the law without fear or favor — and without having personally asked anyone for money.”

The decision marks one of the few times the high court has rejected a free-speech claim involving politics and campaigning. Roberts split from the court’s four conservative justices to uphold the Florida law.

Rick Hasen, an election law expert at UC Irvine, called the ruling a surprise.

“This is a huge win for those who support reasonable limits on judicial elections. And getting Roberts on this side of the issue is surprising, welcome and momentous,” he said.

In the last decade, critics of judicial elections, including retired Justice Sandra Day O’Connor, have argued that the public’s confidence in judges is being undercut by big-money campaigns. Even worse, these critics say, is having judges personally solicit contributions from people and companies who may have cases before the courts.

Until Wednesday’s ruling, however, the Supreme Court had moved in the direction of allowing judges to campaign freely. In 2002, the justices struck down state bar rules that had prohibited elected judges from taking public stands on controversial issues.

The Supreme Court has been remarkably dismissive of the idea that campaign donations are corrupting, but when they look at their own profession, suddenly, it’s an issue.

Seriously.  How about connecting the f%$#ing dots, you black robed morons?

And Maryland has Among the Worst “Police Protection” Laws in the Nation

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A package of police reform bills that Maryland Gov. Larry Hogan is scheduled to sign into law today, in part as a response to the death of 25-year-old Baltimore resident Freddie Gray, was weakened under political pressure from Maryland police unions, a major force in state politics.

The bills will allow police to wear body cameras, increase the liability cap for lawsuits against government employees, and encourage the state to collect more data on police behavior.

But more substantial reforms, including legislation to add a civilian review process and to have state prosecutors investigate all killings by police, were shot down during a legislative hearing in Annapolis earlier this year.

So, despite the new measures, procedures for prosecuting police misconduct in Maryland will remain the same.

A recent report from the ACLU of Maryland found that at least 109 people died in police encounters in Maryland from 2010 to 2014.

Freddie Gray’s death — which came after his spinal cord was severed when he was in police custody — has become the latest national symbol of brutal policing in African-American communities, and has called particular attention to the poor relations between police and residents in Baltimore. Gray’s funeral sparked riots in Baltimore last night.

………

Maryland’s Law Enforcement Officer Bill of Rights, one of the strongest such statutes in the nation, is a considerable barrier to police reform. The LEOBR, enacted in 1974, shields officers from oversight by establishing a narrow standard for reviewing police misconduct and limiting the ability of victims to press charges. Current LEOBR law states that officers may not be questioned by their superiors for 10 days following an incident. And once an internal investigation is underway, disciplinary action can only happen after a recommendation by a hearing board comprised of the officer’s colleagues.

………

Though emotional witnesses testified about incidents of police violence and racism, legislators remained skeptical.

“I left Missouri 29 years ago. I live in Maryland now,” said Del. Deborah Rey, a member of the House Judiciary Committee. Rey questioned the need for police reform bills because the sponsors cited abuses in “Ferguson, Missouri, not Maryland.”

When a witnesss interjected to say that the failure to prosecute Ferguson police officers was a perfect example of the problems surrounding police oversight, Rey cut him off. “We’re not going to adjudicate Ferguson,” she said.

Deligate Ray, perhaps we should adjudicate Baltimore?

Unfortunately, until some bit of police excess creates riots, there is simply no political will to make police accountable to the laws that they are charged with enforcing.

And You Wonder Why I Do Not Believe This………

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Someone in the Baltimore City state security apparatus has leaked a report that Freddie Gray intentionally injured himself to the Washington Post:

A prisoner sharing a police transport van with Freddie Gray told investigators that he could hear Gray “banging against the walls” of the vehicle and believed that he “was intentionally trying to injure himself,” according to a police document obtained by The Washington Post.

 The prisoner, who is currently in jail, was separated from Gray by a metal partition and could not see him. His statement is contained in an application for a search warrant, which is sealed by the court. The Post was given the document under the condition that the prisoner not be named because the person who provided it feared for the inmate’s safety.

 The document, written by a Baltimore police investigator, offers the first glimpse of what might have happened inside the van. It is not clear whether any additional evidence backs up the prisoner’s version, which is just one piece of a much larger probe.

Yeah, it’s clear that Mr. Gray snapped his neck and crushed his larynx all by himself.

This reminds me a LOT of that cigar video that the Ferguson police released, or the videos of the victim that were recently released by the Tulsa police department in an attempt to justify the shooting by their septuagenarian “reserve deputy” sugar-daddy.

So, the Flash Crash Was Caused by Some Guy Living in His Parents’ Basement?

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The DoJ is attempting to extradite Nav Sarao to the United States because he allegedly caused the “Flash Crash”.

While this might be significant for Mr. Sarao, this is missing the forest for the trees.

If our markets are so unstable as to be tripped into catastrophe by one guy, they are too unstable to exist in their current form:

Everyone on Wall Street has been talking about this week’s arrest of a little-known UK-based trader on allegations that he caused the May 6, 2010 “Flash Crash.”

That’s because the consensus view on the Street is that the arrest itself is absolutely ridiculous. In fact, as one trader put it, it’s “beyond ridiculous.”

 Over the past few days, we’ve had several conversations with traders, quantitative analysts, and hedge fund managers. It was the topic of conversation at happy hours and charity events.

 What’s more, there wasn’t a single person we spoke to who bought the argument that one guy wiped billions from the market in a matter of minutes by “spoofing” — a practice in which a trader orders a bunch of trades and then cancels them. It creates artificial demand and manipulates the price of a stock.

 It’s been almost five years since the “Flash Crash” and regulators are suddenly blaming Navinder “Nav” Sarao, a 36-year-old who trades S&P futures from his mom and dad’s house in a London suburb. Yep, regulators think a guy in saggy sweatpants and Nike Airs trading from his parents’ basement did it.

It also appears that the charges are just plain bogus:

On May 6, 2010, Sarao’s algo started at 10:20:00 ET and turned off at 14:40:12. The flash crash ignition point was at 14:42:44
— Eric Scott Hunsader (@nanexllc) April 22, 2015

Spotting Sarao’s #HFT spoofing algo is like spotting an elephant at a tea party. An eMini chart on 5/6 pic.twitter.com/AN8Ov2VH7u
— Eric Scott Hunsader (@nanexllc) April 22, 2015


Round up the usual suspects!

This prosecution is all about covering up the total vulnerability in the market.

The “Flash Crash” was not a result of actions of one person. It was a result of the profit strategies of dozens, if not hundreds of actors in the markets, and they all are structured in a way that was calculated to maximize, and exploit, volatility.

The “market making” capabilities of high frequency traders is a mirage:  As soon as the market experiences upset, they pull out, and create a crash.

We need to make the markets less responsive, and create greater transaction costs.

Otherwise, instant market panics will become a routine part of our lives, and the lives of the 99% not extracting rents from the financial markets will suck.

The Shrill One is Sick of Those Muthaf%$#ing Liars on this Muthaf%$#ing Campaign

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Among other things, he appears to be calling out the New York Times, though not by name, who publishes his opinion pieces:

So there’s a lot of buzz about alleged scandals involving the Clinton Foundation. Maybe there’s something to it. But you have to wonder: is this just the return of “Clinton rules”?

If you are old enough to remember the 1990s, you remember the endless parade of alleged scandals, Whitewater above all — all of them fomented by right-wing operatives, all eagerly hyped by mainstream news outlets, none of which actually turned out to involve wrongdoing. The usual rules didn’t seem to apply; instead it was Clinton rules, under which innuendo and guilt by association were considered perfectly OK, in which the initial suggestion of lawbreaking received front-page headlines and the subsequent discovery that there was nothing there was buried in the back pages if it was reported at all.

Some of the same phenomenon resurfaced during the 2008 primary.

So, is this time different? First indications are not encouraging; it’s already apparent that the author of the anti-Clinton book that’s driving the latest stuff is a real piece of work.

The link that he mentions it sites dates that are wrong, conflating paid and unpaid speaking gigs, and the use of hoax press releases by parody sites.

I really don’t want to defend Hillary Clinton.

The dynastic issue is of concern, and it is clear, notwithstanding her recent statements regarding finance and inequality, that she is a tool of the banksters. (And then there is that whole frothing at the mouth war monger thing)

So damn the Times and the Post for making me defend her.

The only bright note to this, as Krugman observes later in his post, is that, “There’s a much more effective progressive infrastructure now, much more scrutiny of reporting, and the kinds of malpractice that went unsanctioned 20 years ago can land you in big trouble now.”

Truth be told, I don’t think that the progressive infrastructure will make a difference, but I do think that things like Twitter and Facebook, which make it a lot easier to point out unprofessional journalism, have become a much bigger part of the media landscape, if only because they influence what organizations like Politifact, the WaPo‘s Fact Checker, and FactCheck.org, who do a little bit of separating the wheat from the chaff.