Category: Corruption

Because Doing the Right Thing is Too Hard

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So, once again, after taking a bit of heat from Republicans, Barack Obama and His Evil Minions™ are looking to cave on a core value.

Only this time, it is not a core value of the Democratic party, but rather a core value which our nation was founded, the idea that the King’s power to simply imprison indefinitely on a whim is an anathema to a civilized society:

Khalid Sheik Mohammed, the self-proclaimed mastermind of the Sept. 11, 2001, attacks, will probably remain in military detention without trial for the foreseeable future, according to Obama administration officials.

The administration has concluded that it cannot put Mohammed on trial in federal court because of the opposition of lawmakers in Congress and in New York. There is also little internal support for resurrecting a military prosecution at Guantanamo Bay, Cuba. The latter option would alienate liberal supporters.

The administration asserts that it can hold Mohammed and other al-Qaeda operatives under the laws of war, a principle that has been upheld by the courts when Guantanamo Bay detainees have challenged their detention.

The White House has made it clear that President Obama will ultimately make the decision, and a federal prosecution of Mohammed and four alleged co-conspirators has not been ruled out, senior officials said. Still, they acknowledge that a trial is unlikely to happen before the next presidential election and, even then, would require a different political environment.

You see, even after they tried a child soldier using laws that were made up after the actions, and using evidence derived from torture, Republicans are still saying bad things about them, so now, they will now just stop trials altogether.

Due process is just too politically inconvenient.

There is a point where moral cowardice crosses a line, and becomes actively evil, and emulating the practices of the worst despots in history out of electoral consideration is way over that line.

What the Nobel Laureate Says

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No, not Paul Krugman, George Akerlof:

As economists such as William Black and James Galbraith have repeatedly said, we cannot solve the economic crisis unless we throw the criminals who committed fraud in jail.

And Nobel prize winning economist George Akerlof has demonstrated that failure to punish white collar criminals – and instead bailing them out- creates incentives for more economic crimes and further destruction of the economy in the future. See this, this and this.

OK, that’s one Laureate, but here is a second, Joe Stiglitz:

An institutionalized system of skewed incentives allowed Wall Street bankers and other corporate executives to gamble with America’s wealth and then get away largely scot-free after the house of cards came tumbling down, plunging the U.S. into the worst economic crisis in decades and destroying trillions of dollars of wealth worldwide.

That’s the analysis of Joseph Stiglitz, an internationally renowned economist and winner of the 2001 Nobel Prize in economics. ………

Of course, this will not happen unless the politicians are forced to, because in general, the establishment believes that the big Wall Street Banks must be free to rape and pillage innovate, and in the specific case, Obama likes Timothy Geithner, Larry Summers, and Robert Rubin, and any investigation of the fraud would doubtless have at least one, and possibly all three, of them in the dock facing criminal charges.

Yahoo’s Decline

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Click for full (BIG!)size


A Testament to Management Selfishness

I was discussing this graphic on the Stellar Parthenon BBS.

It details the history of Yahoo’s acquisition activity, and it is grim.

Pretty much everything that they ever bought never made money when they bought it, and never made money after they bought it, and they sold it for a loss.

In any case, someone was wondering why companies keep making purchases like this, and I put in my 2¢:

Carly bought Compaq, and then promptly demanded a raise from the board, since HP was now a larger firm.

Buying this sh%$ provides a justification for upper management to demand a raise, and provides a bump in visibility which raises their profile when they apply for the next position, where they demand even more money.

It’s the virtue of selfishness, baby.*

Basically, this is the problem with corporate governance in the United States, there isn’t any.

Basically, we don’t have managers, we have pillagers running companies in the United States, and it is destroying us.

Not only has our politics become klepto-capitalist, but so has our entire culture, even when the government is not involved.

H/t Barry Ritholtz.

*Why yes, this is a reference to the execrable Ayn Rand’s even more execreable book by the same name, why do you ask?

What Took Them So Long?

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Jack Johnson, the outgoing County Executive for Prince George’s County, has been arrested for corruption:

Prince George’s County Executive Jack B. Johnson and his wife were arrested at their home Friday and charged in federal court with trying to hide or destroy the proceeds from a bribe from a local developer, according to court papers and federal law enforcement authorities.

Johnson and his wife, Leslie E. Johnson, were charged with evidence tampering and destruction, alteration and falsification of records. After brief hearings late Friday, U.S. Magistrate Judge William Connolly ordered Jack Johnson to be released and placed under electronic monitoring. The judge released Leslie Johnson on her own recognizance. Both Johnsons were ordered to surrender their passports.

The charges stem from a frantic phone call on Friday in which Leslie Johnson told her husband that “two women were at the door” and ultimately ended when federal agents found $76,000 in Leslie Johnson’s underwear, according to an affidavit in support of the criminal charges.

I think that we are finally seeing the end of the PG County machine.

It began with Donna Edwards’ defeat of Al Wynn for Congress in the 2008 primary, and you can see things piling up in this handy Washington Post timeline.

The FBI has been investigating him for about 4 years, and the fact that he owns about 6 homes, with mortgage payments larger than his salary, might have been an indicator that something odd was going on.

Here’s hoping that maybe some reformers get swept in at the next election.

Rotten to the Core

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Happy Veterans Day

Not only is the US military is pressuring our own soldiers to get them to sign documents admitting to a pre-existing “Personality Disorder” when they are injured in combat, so that they are not eligible for disability, now we have testimony that they tortured at least one soldier for the requisite signature.

This is a rather profoundly unsettling 9 minutes and 37 seconds.

Not Enough Bullets

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The high frequency trading firms are ramping up their lobbying efforts to keep their front-running of markets legal:

The high-frequency trading industry is stepping out of the shadows in Washington.

Closely held companies with undisclosed profits and obscure names like Getco LLC, Hard Eight Futures LLC and Quantlab Financial LLC, are beginning to act more like Wall Street banks, cutting checks to politicians, forming trade groups and hiring lobbyists and ex-regulators. They’re looking to fend off tighter rules and appease lawmakers who say the firms disadvantage small investors and contribute to wild swings in stock prices.

While the companies, which use high-powered computers to execute thousands of trades in milliseconds, aren’t approaching the big banks in Washington spending, they have more than quadrupled their political giving over the last four years, a Bloomberg News analysis shows. The top recipients include Eric Cantor, set to become House majority leader, and several incoming senators who won in last week’s Republican rout.

Among other things, they are worried that the SEC will limit their ability to manipulate stocks by doing things like submitting large number of orders and then canceling them.

But Eric “Place” Holder Remains True to Form

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The Obama Department of Justice has elected not to prosecute CIA officials who obstructed justice by erasing torture tapes:

Central Intelligence Agency officials will not face criminal charges for the destruction of dozens of videotapes depicting the brutal interrogation of terrorism suspects, the Justice Department said Tuesday.

After a closely watched investigation of nearly three years, the decision by a special federal prosecutor is the latest example of Justice Department officials’ declining to seek criminal penalties for some of the controversial episodes in the C.I.A.’s now defunct detention and interrogation program. The destruction of the tapes, in particular, was seen as so striking that the Bush administration itself launched the special investigation after the action was publicly disclosed.

Government officials said Tuesday that the special prosecutor, John H. Durham, could still decide to charge current and former C.I.A. officers and lawyers with making false statements to a grand jury over the course of the investigation, which began in January 2008.

Yes, they could, “Charge current and former C.I.A. officers and lawyers with making false statements,” but they won’t because they want to cover this up because Obama and Holder fear a future prosecution by a future Republican administration want to “look forward, not backward.”

Respect for the rule of law, my ass.

Excuse Me While My Head Explodes

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So, someone in the Obama administration is floating the idea that it would be a good to make (likely soon to be former her election is still to close to call) Congress woman Melissa Bean head of the Consumer Financial Protection Bureau? (CFPB)

Yes, the Democrat most hostile to both to banking regulations in general and to the CFPB in general, is being mooted by some idiot in the Obama administration economic team *cough* Timothy “Eddie Haskell” Geithner *cough* being the first official head of a bureau dedicated to protecting consumers from predatory lenders.

If Elizabeth Warren played the role of Martin Luther, protesting the corruption in the system by nailing her 95 theses to the door of the church, then Melissa Bean is the Church of Wall Street’s Temple Prostitute, selling indulgences.*

And someone in the Obama white house wants her to head the CFPB.

Never heard of Melissa Bean? Well Jane Hamshire has the bill of particulars: (quoting)

Seriously, if Barack Obama nominates her for this post, it will show that he is completely in the pocket of the banking industry.

To be fair, this could be an administration official, *cough* Timothy “Eddie Haskell” Geithner *cough*, free lancing, but I am inclined to see this as deliberate and calculated. This administration revels in message control.

*Yes, I know, this is a badly mixed metaphor.

So After Months of Evidence That Their Lawyers Were Corrupt Bastards…

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The GSEs, Fannie Mae and Freddie Mac, have finally fired the foreclosure mill and forged document factory that is the law offices of David J. Stern:

Fannie Mae and Freddie Mac terminated their relationships with a top Florida foreclosure attorney on Tuesday, one day after the companies began taking back loan files from the firm that has processed thousands of evictions on behalf of the mortgage-finance giants.

Fannie and Freddie dispatched employees on Monday afternoon to begin removing loan files from the law offices of David J. Stern in Plantation, Fla. Those files are needed to process foreclosures, which must be done through courts in Florida.

………

The Stern law firm has been at the center of allegations by the Florida attorney general’s office of improper foreclosure practices and is one of four firms under state investigation. The office has released depositions of former law-firm employees who have alleged that the firm forged notarized documents and that employees signed files without reviewing them in an effort to speed through foreclosure filings.

In those depositions, former employees testified that the firms would go to great lengths to conceal improper practices during regular audits by Fannie and Freddie. A lawyer for Mr. Stern has dismissed the allegations as falsehoods made by disgruntled employees.

Well, it’s a start, though even the most tepid investigation of foreclosure fraud, which is all what Barack Obama would do, is sure to be sabotaged by the new Republican majority in the house, because:

  1. They will favor the banks even when they break the law because laws are for little people.
  2. They favor the Andrew Mellon school of dealing with the economy, foreclosure, and the financial crisis. As Hoover’s Treasury secretary, he suggested, “Liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate… it will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up from less competent people.”

So all that Daniel J. Stern, Esq. will see is a few bucks less profit, as opposed to disciplinary action from the bar or a criminal investigation.

Nothing to see, move along.

So they Torture a Little Boy, Admit the Testimony Thereby Extracted, Use it to Coerce a Confession, and Sentence Him to 40 Years in Prison

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Only he will actually be out in less than 3 years, since Omar Khadr will be transferred to Canada, and released for time served:

A United States military commission at Guantánamo Bay has sentenced a former child soldier for Al Qaeda to 40 years in prison for war crimes — but he might be released in less than three years, the Defense Department said.

A panel of seven military officers at the American military base in Cuba determined on Sunday that the child soldier, Omar Khadr, 24, should be imprisoned — for terrorism-related offenses he committed in Afghanistan when he was a teenager — until he nearly reaches retirement age.

But that sentence was theoretical. Under the terms of a plea agreement, Mr. Khadr will serve no more than eight years. Moreover, after one year, Mr. Khadr, a Canadian citizen, is likely to be transferred to a prison in Canada, where he would be eligible to apply for parole after serving two years and eight months.

Seriously.

The was a show trial, with a predetermined result specifically to allow face saving on the idea of military commissions.

The proceedings are a travesty of the law and basic decency, and every individual up the chain of command who allowed this case to proceed is guilty of conspiracy to violate both US anti-torture statutes and international treaties to which the United States is a signatory.

Not feeling hopey changey right now.

The Most Morally Repugnant Industry on the Face of the Earth

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It’s the private prison industry, which is lobbying for draconian immigrations laws, like Arizona’s “Papers Please” law, because more people in detention means more money for them:

NPR spent the past several months analyzing hundreds of pages of campaign finance reports, lobbying documents and corporate records. What they show is a quiet, behind-the-scenes effort to help draft and pass Arizona Senate Bill 1070 by an industry that stands to benefit from it: the private prison industry.

The law could send hundreds of thousands of illegal immigrants to prison in a way never done before. And it could mean hundreds of millions of dollars in profits to private prison companies responsible for housing them.

The story leads off with a private prison pitching an immigration detention facility for women and children in Benson, Arizona.

There are certain functions that cannot be fobbed off on the private sector, and this is perhaps the most sterling example.

Maybe the Blue Dogs Aren’t the Worst Democrats in Congress

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I think that the Blue Dogs are wrong, but I get the sense that they are motivated by values and ego.

I think that many of them legitimately believe that women cannot be trusted with their bodies, that rich people should not be taxed, and that idiot sons of rich people are entitled to be rich ad infinitum.

The larger New Democratic Caucus (Melissa Bean who The Onion excoriates is a senior member of the caucus), however, is just a bunch of people who want to suck at the tit of big business, as Sebastian Jones and Marcus Stern ably document:

As Congress entered the final weeks of its struggle to overhaul regulation of Wall Street in May, several hundred friends and colleagues slipped out of Washington for a private weekend on Maryland’s Eastern Shore. Most were lobbyists for large banks, pharmaceutical firms, insurance companies, and big-ticket trade groups. However, 28 were members of Congress, and 29 were legislative staffers, all part of a coalition of House Democrats with a business-friendly agenda.

The retreat was held in honor of the New Democrat Coalition, a group of 69 lawmakers whose close relationship with several hundred Washington lobbyists has made their organization one of the most successful political money machines since the Republican K Street Project collapsed in 2007. In the past year and a half, New Democrats have pulled in more than $18 million in campaign contributions from their lobbyist fundraising network. The lobbyists, in turn, have mingled with lawmakers and their staffers at least 850 times during fundraising events and informal get-togethers.

…………

These folks were hamstringing Barney Frank at every turn during work on financial reforms because they worked for the banks, and not the American people.

The Blue Dogs get the press, but when push comes to shove, it’s the New Dems who f%$# us.

Read the rest of the article. It’s long, but it’s long because it is exhaustive.

The Definitive Word on Hamp

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David Dayen summarizes it in a paragraph:

This is just a truism based on the Treasury Department’s own design for HAMP. Every trial modification payment reads as a default to the credit reporting companies. The Treasury Department could have set it up so that didn’t happen; they chose not to intervene in that reality. All of the money between the trial modification and the original payment that borrowers don’t pay during their trial period gets tacked on as part of the unpaid principal balance at the end. The servicers also tack on late fees. Treasury could have banned that. They chose not to intervene. The servicers can proceed with foreclosure operations during the trial period, arguing that the borrower is in default. They can’t actually foreclose (also in some cases they have). But they can go through the legal process. Treasury could have put a stop to that. They didn’t. Borrowers keep getting told they have to miss a payment to be eligible for HAMP. Treasury actually didn’t put that into the design. But they haven’t sanctioned a single servicer for this or any other violation of the program guidelines. They could have done something. They didn’t.

(emphasis mine, though inspired by Big Tent Democrat‘s similar exercise.)

I think that Mr. Dayen is far more forgiving than I am. He implies that it was combination of incompetence and timidity.

I think that it was actual malice. I think that the Treasury Department deliberately chose to deceive homeowners, because they thought that it would give the banks some breathing space.

Despicable……

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So the military commissions have secured another confession, Omar Khadr.

They shoot a 15 year old, torture and threaten confessions out if him, allow his confessions to be admitted anyway, and now they have coerced a confession out of him by throwing bogus charges at him:

This morning I sat in a U.S. military commissions courtroom in Guantanamo Bay, Cuba, and watched the first child soldier charged by a Western nation since World War II plead guilty to crimes he was never even accused of. If the guilty plea of Omar Khadr this morning was a face-saving effort by the U.S. government, it was a sad day for the rule of law in the United States.

Omar Khadr is the 24-year-old Canadian who’s spent a third of his life in U.S. custody without trial after being accused of helping his father’s al Qaeda associates build improvised explosive devices when he was just 15. He was taken to Afghanistan from Canada by his father at the age of nine. The lone survivor of a 2002 U.S. assault on an Afghan compound, Khadr was accused of throwing a grenade that killed a U.S. soldier.

But as he entered his guilty plea this morning — after the government agreed he’d serve just one more year at Guantanamo Bay, and an as-yet-unspecified number of years in Canada — it was clear that prosecutors had taken the opportunity to throw the kitchen-sink-full of charges at him – including far more crimes than he’d even been charged with. Most importantly, Khadr pled guilty to the murder of two Afghan soldiers who accompanied U.S. forces in the 2002 assault on the compound. The government has never presented any evidence whatsoever that Khadr was responsible for that.

…………

This is more than morally repugnant.

This sort of treatment of a child forced into battle by adults is is a war crime, and everyone involved in the trial, up to and including the commander-in-chief, Barack Obama are guilty.

Of course, there will never be an accounting, for even the worst of them.

After all, the two greatest mass murderers of the 20th century, Stalin and Mao, died of natural causes while remaining in power.

Pass the Popcorn

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A Judge in Alaska has ordered that the Fairbanks North Star Borough* personnel records of teabagger Senate candidate Joe Miller are to be released on Tuesday.

The judge set a Tuesday release date to allow an appeal to be filed on Monday:

A judge ruled Saturday that the Fairbanks North Star Borough must release personnel records of U.S. Senate candidate Joe Miller.

In an unusual weekend hearing, retired Superior Court Judge Winston Burbank ruled that the public’s right to know about candidates outweighed Miller’s right to privacy.

“I hold that although Mr. Miller has a legitimate expectation of privacy in those documents, Mr. Miller’s right to privacy is indeed outweighed by the public’s significant interest in the background of a public figure who is running for the U.S. Senate,” the judge said. He noted that U.S. senator is among the highest elected offices in the nation.

Burbank ordered that nothing actually will be released until Tuesday afternoon, however, to allow for the ruling to be appealed to the Alaska Supreme Court.

Mr. Miller has been fighting this kicking and screaming, which implies that this his personnel file is packed with lots crunchy goodness.

If this is true, I would think that an appeal by Mr. Miller is likely though. All he has to do is delay the ruling by 7-8 days, and it becomes moot.

My sense is that he was not a model employee, since we have heard whispers from both the City of Fairbanks, as well as his old law firm, that they were not sad to see him go.

*A borough in Alaska is roughly equivalent to a county.

Not What Ginny Thomas Intended

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That harassing phone call to Anita Hill is not working out as planned:

For nearly two decades, Lillian McEwen has been silent — a part of history, yet absent from it.

When Anita Hill accused Clarence Thomas of sexual harassment during his explosive 1991 Supreme Court confirmation hearing, Thomas vehemently denied the allegations and his handlers cited his steady relationship with another woman in an effort to deflect Hill’s allegations.

Lillian McEwen was that woman.

……

She has written a memoir, which she is now shopping to publishers. News broke that the justice’s wife, Virginia Thomas, left a voice mail on Hill’s office phone at Brandeis University, seeking an apology — a request that Hill declined in a statement. After that, McEwen changed her mind and decided to talk about her relationship with Thomas.

……

However bizarre they may seem, McEwen’s recollections resemble accounts shared by other women that swirled around the Thomas confirmation.

……

“I have no hostility toward him,” McEwen said. “It is just that he has manufactured a different reality over time. That’s the problem that he has.”

(emphasis mine)

Gee, Ginny, not turning out the way that you wanted it.

I think that I get it: She is raking in big bucks as a teabagger AstroTurfer, and she suddenly thought that she could alter reality with her new successes.

Reality has a way of not cooperating.

The fact that Clarence Thomas perjured himself 19 years ago is moot.

While Congress could impeach over this, they have done so over charges which have resulted in acquittals, they won’t.

It is an important thing to remember though: Republican court nominations lie when questioned, and Democrats should treat them has hostile witnesses in hearings.

The Mortgage Fraud Goes Max Bialystock*

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It turns out that some of the banksters have simultaneously sold mortgages to multiple people (see also here for the court fiuling):

In a complaint filed this month in Washington, D.C. federal court, Bank of America said the FDIC has wrongly denied claims by Ocala noteholders to recover from Colonial Bank and an Illinois lender also in receivership, Platinum Community Bank.

Bank of America accused executives at Taylor Bean, Colonial and Platinum of having fraudulently schemed to “double- and triple-pledge mortgages and steal assets” to hide their faltering conditions as the housing market declined.

So these banks, and a number of others, probably repeatedly sold the same mortgage to different trusts.

This is Max Bialystock level fraud. There is no gray area here, but predictably, the Obama administration is maintaining that somehow or other the problems are not systemic at the same time that they have convened a task force to see if laws were broken.

We have a system where banks simply ignored the law over what amounts to about a $30 dollar cost per loan transfer, MERS, we have banks destroying the chain of custody of the loans, and the solution of the Obama administration is to wave a wand and grant absolution.

That’s the message of these conflicting messages: There is a task force, but that is just politics, and all will be forgiven on November 3rd.

Un-dirtyword-believable.

*Just F%$#ing Google it.