Category: Corruption

An Outbreak of Journalism

No Comments

When U.S. District Judge Martin Feldman, a Reagan appointee, struck down the Obama administration 6-month moratorium on deep water drilling, I kind of figured that I would hear stories about appeals.

It turns out that the story about his decision is all about the judges investments in a number of energy companies, including Transocean, operator of the ill-fated Deepwater Horizon rig:

U.S. District Judge Martin Feldman, a 1983 appointee of President Ronald Reagan, reported owning less than $15,000 in stock in 2008 in Transocean, the company that owned the sunken Deepwater Horizon drilling rig.

………

Feldman’s 2008 financial disclosure report — the most recent available — also showed investments in Ocean Energy, a Houston-based company, as well as Quicksilver Resources, Prospect Energy, Peabody Energy, Halliburton, Pengrowth Energy Trust, Atlas Energy Resources, Parker Drilling and others. Halliburton was also involved in the doomed Deepwater Horizon project.

I am stunned.

Not by a judge ruling in a case where the appearance of a conflict of interest is clear, after all, the moratorium might expose both Halliburton and Transocean but rather that someone in the mainstream media actually checked out his disclosure forms, and that it actually is now all over the place.

Props to the MSM.

Quote of the Day

No Comments

I think Woodward’s capitulation to interviewing people in limousines, as opposed to people on the subway, is something I feel is partly responsible for the fact that we ended up in Iraq. Because so many reporters, Judith Miller is the most egregious of them, spoke to Scooter Libby and some other higher officials, and never spoke to intelligence people on the ground. They swallowed wholesale Colin Powell at the U.N., and [ultimately] their limousine reporting meant that 100,000 Iraqis lost their lives. I don’t think anything can be so neatly drawn, but I think in this case it can be neatly drawn.

—Novelist, and former Washington Post reporter Lorraine Adams on her former colleague Bob Woodward

(emphasis mine)

A very succinct indictment of what is wrong with the Washington DC press corps.

Warren Buffett Subpoenaed

No Comments

He was invited to speak before the Financial Crisis Inquiry Commission, and politely declined, so now he has been subpoenaed to testify:

When Warren Buffett testifies before the Financial Crisis Inquiry Commission next Wednesday, it will be because he was subpoenaed. If you don’t know how a subpoena works, this one begins with capital letters, “YOU ARE HEREBY COMMANDED to appear and give testimony.”

As Buffett characterizes it, “This is an offer you can’t refuse.”

………

But ah, it was. Buffett could by then see the likely end of this argument. But he was also determined to stick to his belief that the “private interview,” followed by hearings, would neither be beneficial to anyone nor a good use of his time. So Buffett told Cohen in a phone call that he would not be volunteering to testify — and if that meant a subpoena was in the cards, let it happen.

The subpoena — that command in capital letters — came on May 25. But the continuing, urgent wish of the commission to avoid coercion was contained in an accompanying letter, also dated May 25, that “respectfully” requested Buffett’s testimony at a hearing on June 2 in New York City.

My guess is that the net effect here is that the board won’t get its private interview, and so won’t know what he intends to say until he testifies in public, which might make for some good theater.

On a more salient legal note, now that Buffet has been compelled to testify, he can say anything, and not be held liable for those statements, since it is compelled testimony, which might make it even better theater.

Personally, I think that Buffet should bring the Geico Gecko with him. (Buffet owns Geico)

Why Senior Management at BP’s Should Be In a Deep Dark Hole

2 Comments
Click for full size

The Crime Scene

Hours before the Deepwater Horizon exploded, representatives of Slumberger*, who had been called in to perform a “Cement Bond Log (CBL) ” test.

Slumberger, much like Halliburton, is primarily an oil services firm, though it’s rep is as the Cadillac of the service companies, and is, unlike Halliburton, considered to be highly ethical.

Well, they were getting ready to run the test, about 6 hours before the blowout and explosion, and they look at the numbers, and say shut down the operation now, and when the BP management says, “no”, they ask to be flown off, and BP refuses, so they call in a Slumberger helicopter to get the hell out of dodge:

BP contracted Schlumberger (SLB) to run the Cement Bond Log (CBL) test that was the final test on the plug that was skipped. The people testifying have been very coy about mentioning this, and you’ll see why.

SLB is an extremely highly regarded (and incredibly expensive) service company. They place a high standard on safety and train their workers to shut down unsafe operations.

SLB gets out to the Deepwater Horizon to run the CBL, and they find the well still kicking heavily,† which it should not be that late in the operation. SLB orders the “company man” (BP’s man on the scene that runs the operation) to dump kill fluid down the well and shut-in the well. The company man refuses. SLB in the very next sentence asks for a helo to take all SLB personel back to shore. The company man says there are no more helo’s scheduled for the rest of the week (translation: you’re here to do a job, now do it). SLB gets on the horn to shore, calls SLB’s corporate HQ, and gets a helo flown out there at SLB’s expense and takes all SLB personel to shore.

6 hours later, the platform explodes.

Note that we do have confirmation that this cement bond log test was never conducted:

BP hired a top oilfield service company to test the strength of cement linings on the Deepwater Horizon’s well, but sent the firm’s workers home 11 hours before the rig exploded April 20 without performing a final check that a top cementing company executive called “the only test that can really determine the actual effectiveness” of the well’s seal.

A spokesman for the testing firm, Schlumberger, said BP had a Schlumberger team and equipment for sending acoustic testing lines down the well “on standby” from April 18 to April 20. But BP never asked the Schlumberger crew to perform the acoustic test and sent its members back to Louisiana on a regularly scheduled helicopter flight at 11 a.m., Schlumberger spokesman Stephen T. Harris said.

…………

Schlumberger’s Harris said the contractor was ready to do any such wireline tests, but was never directed to do so. The team had finished doing tests on the subsea layers of earth being drilled five days earlier and hadn’t done any work since, Harris said.

In fact, Harris said there was no time to get the company’s wireline testing equipment off the rig before it exploded.

So BP’s side of the story is that they hired the most expensive, top of the line, oil field services company out there to run a test, and never bothered to let them complete what they had paid for, and the time line is a bit different.

But what is clear is that Slumberger left, and they left their very expensive equipment in their haste to get off the platform, because they saw a disaster coming, and they could not stop it.

H/t Thom Hartmann.

*Full disclosure, one of my step-mother’s oldest and dearest friends was a Slumberger, yes, one of those Slumbergers.
†Basically, as they drill a well, they add fluid (mud) to balance the pressure so that it does not erupt out of the well head. When a well is “kicking”, it means that the pressure is not properly balanced and the oil/gas/water is blowing out the mud. See the Wiki.

Anti-Vacc Fraud Doc Gets Medical License Pulled

No Comments

The General Medical Council, the physicians’ regulatory body in the UK, has revoked the medical licens(c)e of Andrew Wakefield and his colleague John Walker-Smith, though the 3rd participant in the study, was exhonerated when it was determined that he stopped doing tests when he determined that they were unethical.

The first two “doctors” subjected children to excruciating tests like lumbar puncture without any review from ethics committees,

For a devastating cartoon version of the facts, which details how Wakefield did this because he was bought and paid for, see here.

Unfortunately, it is highly unlikely that he will get what he really deserves, which is a very long time in gaol.

Earlier posts on the subject.

More, “Looking Forward, Not Backward,” from the Obama DoJ

2 Comments

There will be no criminal prosecutions of the people who created the clusterf%$# that took down AIG:

Federal prosecutors will not bring criminal charges against current and former American International Group Inc. executives for their role surrounding financial contracts that nearly brought down the insurer about two years ago, according to people familiar with the matter.

The decision brings to a close a criminal investigation that, while mostly under wraps, was widely followed. The September 2008 bailout of AIG was one of the biggest and most shocking of the financial crisis, as trading by a noninsurance unit brought down one of the most iconic financial companies world-wide.

The probe focused on Joseph Cassano, who headed a London-based unit of AIG called Financial Products, people familiar with the matter have said. Other executives at the unit, Andrew Forster and Tom Athan, also were targets of the investigation, these people said.

Seriously, at this point, we should be referring anything with the slightest possibility of conviction to a grand jury for indictment.

Anything else encourages more wrongdoing by the Wall Street boys, much in the same way that Obama’s policy of not prosecuting torturer, but pursuing the whistle-blowers encouraging more torture.

Remember the Laptop Spycam Cased in Lower Merion, PA

No Comments

I’ve been kind of remiss in all of this, but the final analysis is that someone working at the Lower Merion school district) there took thousands of pictures of minors without any justification. (Background here)

Basically, the school supplied laptops took thousands of pictures of children to whom the computers were assigned, including some that involved children in a state of partial undress, and the school district’s information systems coordinator took the 5th when questioned.

As always, there are emails:

Back at district offices, the Robbins motion says, employees with access to the images marveled at the tracking software. It was like a window into “a little LMSD soap opera,” a staffer is quoted as saying in an e-mail to Carol Cafiero, the administrator running the program.

“I know, I love it,” she is quoted as having replied.

What’s more, the behavior is so egregious that the school district’s insurer is balking at covering legal fees:

A New York insurer that issued a $1 million liability policy to the Lower Merion School District is balking at the school board’s request that it cover any legal costs and payments associated with the civil rights lawsuit challenging the district’s secret laptop tracking program.

In a suit filed in federal district court in Philadelphia, Graphic Arts Mutual Insurance Company contends that none of the seven claims made by Harriton High School sophomore Blake Robbins in his invasion of privacy lawsuit amount to “personal injury” as defined in the coverage that the district bought last year.

So, a vice principal got a copy of some of the pictures, of a kid eating Mike & Ikes candy, which she thought were drugs, the school district scrambled to buy insurance, and the behavior seems to have been egregious enough that the insurer is claiming, albeit indirectly, that the Lower Merion SD’s claim is fraud.

This is pretty much what an independent investigation of this cluster f%$# determined too.

What is abundantly clear is that the taking of these pictures constituted an invasion of privacy, that there was a reasonable expectation that this created what is technically child porn, and that a significant number of school staff, both in and out of the Information Systems department, knew that this was going on.

No prosecutions yet, but there should be.

11 Seconds?

No Comments

The New York Times has an article about high frequency traders, and how they handled the Flash Crash.

It appears that they might have made it worse, because a lot of them just sold everything and shut down their computers when the market drop started.

That’s not a big deal, that’s what happens when you are in the middle of a panic, even one that only lasts about 15 minutes.

What shocks me is this:

These are short-term bets. Very short. The founder of Tradebot, in Kansas City, Mo., told students in 2008 that his firm typically held stocks for 11 seconds. Tradebot, one of the biggest high-frequency traders around, had not had a losing day in four years, he said.

(emphasis mine)

I don’t know what is more disturbing, the fact that these guys are buying and selling stocks 5½ times a minute, or the fact that they always make money.

Either they are front-running, they have access to inside information, or they are a Ponzi scheme, just like Bernie Madoff, and my guess is that it’s the former. High frequency trading makes its money by seeing large trades, and then using shortcuts to buy before the buy, or sell before the sale.

I thought that this was illegal, and if it is not, then it should be.

Some speculation is unavoidable in any system where you have open investment, but there have to be limits.

H/t The Big Picture, who believes that the claim is “bullsh%$”.

Dodd Drops Plan to Kill Lincoln Swaps Restriction

2 Comments

If Blanche Lincoln had won the primary outright last night, then her proposal to require that banks separate themselves from their swap desks would be dead, and the bullet would have been Chris Dodd’s proposal, which was to defer implementation for a year for a ‘study’, and then let Timothy “Eddie Haskell as Wall Street’s Bitch” Giethner decide whether it was necessary.

We all know what Geithner would do.

But Lincoln is going to a runoff, and her opponent, Bill Halter, is already saying that this is exactly what she planned, that she would make the proposal, but would let it die once it was politically convenient.

So, Chris Dodd has decided not to introduce the “kill the regulation” amendment.

My guess is that he got a frantic call from Lincoln this morning, begging him to wait until after the June 8 runoff, and so the dynamics of the Congressional incumbency protection racket dictates that he pull the amendment off the table ……… At least until June 9.

Final Child Trafficker Released in Haiti

No Comments

Laura Silsby, the leader of the “missionary” expedition to rescue Haitian “orphans”, wasconvicted on charges related to human trafficking and sentenced to time served, so she has been released, and I assume that she is heading back to Idaho:

All 10 of the Americans were initially detained by the Haitian authorities, but only Silsby was charged.

Prosecutors first accused her of abducting the children, but the charge was downgraded to one of “irregular travel” – a crime which covers people smuggling.

Prosecutor Jean-Serge Joseph said she had been sentenced to three months and eight days in jail – the exact time she had spent in custody waiting for her trial.

IMHO, she used the tragedy, as well as the fervor of her fellow church members, who believed that they were rescuing from Catholicism and damnation by raising them as Evangelicals, to get the ball rolling, and I think that at least part of her motivation was money.

Considering her own problems with her failing online shopping business and her association with a man under investigation for sex trafficking, there is a strong stench of corruption and the profit motive.

Older posts are here.

Afghan Prosecutor Issues Arrest Warrant for US Officer for Murder

1 Comment

It is alleged that a special forces officer in Kandahar authorized a militia that he armed and trained to break some of their compatriots out of jail, and in the process, they murdered the police chief of Kandahar, Matiullah Qateh:

The militia, which Ranjbar claimed is armed and trained by US special forces, also allegedly killed Kandahar’s head of criminal investigations and two other officers, when they attempted to free one of their members from a courthouse.

“We lost one this country’s best law enforcement officers for the [attempted] release of a mercenary,” said Ranjbar, interviewed for a film to be shown on Channel 4 News tomorrow.

He accused American officials of refusing to hand over evidence or to permit his investigators to interview the special forces commander, known to Afghans only as “John or Johnny”, who he alleges sanctioned the raid.

If the facts are as alleged, the charge would be felony murder under most statutes, though, under the status of forces agreement, this officer would be subject to trial and sentencing by a US court martial, where, I am sure justice would sought with the same vigor that was applied to the Calavese cable car disaster of 1998.*

It gets even more complex, because this militia is also tied to the corrupt, drug running brother of the Afghan President, Ahmed Wali Karzai, is also tied to the militia, and is publicly calling for amnesty for the shooting.

This is a natural, and foreseeable, consequence of employing mercenaries as a matter of course in a war zone.

*A 6 month sentence for negligently killing 20 people.†
†Actually, the pilot was acquitted, despite flying lower and faster than regulations required. They eventually got him on obstruction of justice for wiping the video tapes at the end of the flight.

I Love Me Some Viking Justice

No Comments

Much more satisfying than putting their photos on the urinals

Iceland, a tiny nation of only 317,593 souls has looked at its epic bank failures, and said, “Why yes, we do have to make a federal case out of this:

More than a year and a half after Iceland’s major banks failed, all but sinking the country’s economy, police have begun rounding up a number of top bankers while other former executives and owners face a two-billion-dollar lawsuit.

Since Iceland’s three largest banks — Kaupthing, Landsbanki and Glitnir — collapsed in late 2008, their former executives and owners have largely been living untroubled lives abroad.

But the publication last month of a parliamentary inquiry into the island nation’s profound financial and economic crisis signaled a turning of the tide, laying much of the blame for the downfall on the former bank heads who had taken “inappropriate loans from the banks” they worked for.

What a quaint and old fashioned idea. When people corruptly enrich themselves at your expense, investigate.

If you find that they broke the law, arrest them and try them.

I vote for going medieval on the bankers asses.

[on edit]

Perhaps the bankers should learn this old prayer, “A furore normannorum libera nos domine.”*

*From the fury of the Northmen deliver us, O Lord!

The Incumbent Protection Racket in Action

No Comments

Remember when I said that Blanche Lincoln’s ambitious proposal to regulate banks was intended to fail?

I said that it was just a reelection ploy in a tight primary election.

Well, the US Senate is proving me right:

But they [Senate leadership, the Obama administration, etc.] may have gotten themselves stuck with it–at least for now. With their assent, the plan was authored by Sen. Blanche Lincoln (D-AR), who designed it to guard her left flank against a somewhat formidable primary challenge, and has been boasting of it on populist grounds for weeks. And that according to Republican and Democratic Senate sources, has led Democrats to quietly agree to postpone any changes they decide to make to her proposal until After this Tuesday’s election has passed, to avoid embarrassing her in front of voters.

(emphasis original)

Lincoln pushed it out of committee knowing that it would be shredded by the Senate leadership.

She just wanted someone else to be the villain, preferably on Wednesday, May 19, or a few days after that.

It Ain’t Just Goldman

No Comments

You are no doubt aware of the SEC, and criminal, investigations of Goldman Sachs misleading investors by selling them bad CDOs, and then betting against the instruments.*

Well, it appears that practice may have been more common than previously understood, because Morgan Stanley is under criminal investigation for similar activities. (see also here and here)

The CDOs in question were named after dead presidents, James Buchanan and Andrew Jackson were two of the names, but they appeared to have been referred to generally as “Dead Presidents.”

Seriously, these guys watched the movie Wall Street, and they though that Gordon Gecko was a Christ figure.

*Earlier posts on Goldman Sachs’ alleged misdeeds here, here, here, here, here, and here.