Category: Justice

Republicans the Party of Values

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What a surprise. We have an Arizona sheriff being accused of corruption after he threatened to deport his gay lover in order to force his silence:

Pinal County Sheriff Paul Babeu — who became the face of Arizona border security nationally after he started stridently opposing illegal immigration — threatened his Mexican ex-lover with deportation when the man refused to promise never to disclose their years-long relationship, the former boyfriend and his lawyer tell New Times.

The latest of the alleged threats were made through Babeu’s personal attorney, who’s also running the sheriff’s campaign for Congress in District 4, the ex-lover says.

He says lawyer Chris DeRose demanded he sign an agreement that he would never breathe a word about the affair. But Jose (New Times is withholding his last name because Babeu and his attorney have challenged his legal status) refused.

This guy first came to prominence when one of his deputies fabricated a story about being shot at by illegal aliens, and Babeu went on a self promotional media tour.

BTW, until this all blew up, he was one of Mitt Romney’s campaign co-chairmen in Arizona.

Ha Ha!

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Lehman and its its creditors have subpoenaed Timothy Geithner over his discussions with JPMorgan Chase over the time when the investment bank collapsed:

Lehman Brothers‘ bankruptcy estate and its official committee of unsecured creditors asked a court late on Thursday to compel Treasury Secretary Timothy F. Geithner to testify about the investment bank’s collapse.

The request for a subpoena comes as part of the estate’s lawsuit against JPMorgan Chase, which asserts that the bank illegally took $8.6 billion in collateral from Lehman, precipitating that firm’s demise.

The lawsuit’s main argument is that JPMorgan, apprised of Lehman’s fragile condition, improperly profited from making its collateral demands — and also pushed Lehman into bankruptcy.

Lawyers for Lehman’s creditors wrote in a court filing that they and the estate served Mr. Geithner with a subpoena last August, ordering him to testify about conversations he had held with both JPMorgan and Lehman over the former’s calls for collateral in early September 2008.

Mr. Geithner, then president of the Federal Reserve Bank of New York, spoke with JPMorgan’s chief executive, Jamie Dimon, 10 times in the week before Lehman fell, according to the filing. Many of those conversations, the lawyers contend, must have been about JPMorgan’s collateral demands.

Basically, Lehman is asserting that Jamie Dimon’s bully boys stole from them in order to push them over into bankruptcy.

The implication is that they did so because they knew that, in the event of a collapse, they would get to keep the money.

Note that they are not asking about deliberations at the NY Fed, but the content of his discussions with Jamie Dimon.

Still, I relish the though of Geithner in the dock forced to answer questions about his dealings with the big banks.

Sergey Aleynikov Freed

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You may recall that he was convicted under the Economic Espionage Act for downloading some high frequency trading software from Goldman Sachs, where he worked.

Apparently, the judge in the trial completely bought into the prosecutions expansion of the law, intended to prosecute people for selling military secrets to the Chinese, to this case, and the appellate court came down hard on the judge. They did not just remand this back to the lower court, they ordered the lower court to enter a judgement of acquittal.

Felix Salmon explains why whole case was such an outrage:

The secrets at defense contractors, of course, are secret for reasons of national security. The secrets at investment banks and hedge funds, by contrast, are secret purely for reasons of profit: they reckon that if they have some clever algorithm which nobody else has, then that makes it easier for them to profit from it. Which is why it was always a stretch for the government to use the EEA to prosecute Aleynikov — indeed, it is why it was always a stretch for Aleynikov to be criminally prosecuted at all. Goldman could have brought a civil case against him, but instead they got their wholly-owned subsidiary, the U.S. government, to come down on him so hard that he ended up with an eight-year sentence. Violent felons frequently get less.

The forthcoming decision from the Second Circuit is likely to be a doozy; I’m told that the judges shredded the prosecutors during the oral hearing. And certainly their decision to enter a judgment of acquittal, rather than any kind of retrial, is a strong indication that they handed down this order with extreme prejudice against prosecutorial overreach.

(emphasis mine)

This has been a lose-lose for the Vampire Squid. They looked like bullies, they brought a lot of attention to the bit of front-running that is high frequency trading, and they have now lost the case.

That being said, I don’t expect Goldman, or the prosecutors, to give up just yet.

Background here.

My Heart Bleeds Borscht

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Bummer of a birth mark, Scott

It looks like prosecutors in Wisconsin are closing the noose on corruption by now Governor Scott Walker during his tenure as Milwaukee County executive:

A recall from his position as Wisconsin’s governor could ultimately be the least of Gov. Scott Walker’s worry, if a criminal complaint quietly moving forward in the Badger State court system continues on its current trajectory. At the moment, Walker seems to be at the bottom of a mountain where an avalanche is just beginning to roll.

A 51-page criminal complaint [PDF] (the “Rindfleisch complaint”), which formally charges Kelly M. Rindfleisch with four felony counts of misconduct in public office, contains factual allegations which implicate a number of individuals, listed as “interested parties,” including WI’s controversial Republican Governor, in a wide-reaching criminal conspiracy to misuse public employees and resources for partisan political gain.

…………

The factual body of the Rindfleisch complaint suggests that prosecutors are painstakingly examining evidence that may well place Walker at the center of a criminal conspiracy to illegally utilize employees within the Milwaukee County Executive Office to engage in fundraising and campaign activities on behalf of the Friends of Scott Walker and others during office hours at the expense of Milwaukee taxpayers.

Each violation of the relevant WI criminal statutes at issue in the matter carries with it a potential imprisonment of up to 3.5 years. As that case moves forward apace, Walker could lose a great deal more than simply his hold on the governor’s office. His very freedom may prove to be at stake as well…

I don’t expect an indictment of Walker before the recall vote, but this is another well-deserved nail in the coffin for his political career.

H/t Kenneth Quinnell.

Guess What, the Bank Deal is Even Worse Than You Thought

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We still have no written agreement, but we the North Carolina AG has released an executive summary, and it strongly implies that the immunity grant is a lot broader than has been implied:

This is the critical part:

The proposed Release contains a broad release of the banks’ conduct related to mortgage loan servicing, foreclosure preparation, and mortgage loan origination services. Claims based on these areas of past conduct by the banks cannot be brought by state attorneys general or banking regulators.

The Release applies only to the named bank parties. It does not extend to third parties who may have provided default or foreclosure services for the banks. Notably, claims against MERSCORP, Inc. or Mortgage Electronic Registration Systems, Inc. (MERS) are not released

.

This is sufficiently general so that it is hard to be certain, but It certainly reads as if it waives chain of title issues and liability related to the use of MERS. That seems to be confirmed by the fact that made by local recorders for fees are explicitly preserved (one would not think they would need to be preserved unless they might otherwise be assumed to be waived). This is exactly the sort of release we feared would be given in a worst case scenario. The banks have gotten a huge “get out of jail free” card of bupkis.

It’s gonna get worse.

Every time we get more information it’s gonna get worse.

We are going to discover that this precludes all sorts of remedies for bad acts, and there will be no enforcement mechanisms to prevent future bad faith actions.

It’s gonna be more extend and pretend, so the banksters can get their bonuses, and we get the shaft.

The Bank Deal is Likely Worse Than it Sounds

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Because the details of the deal have not been released, and they may in fact not have actually been settled, which means that when they are finalized, they could be worse than what we have already heard.

In fact they almost certainly will be worse, because the state AGs and the Obama administration simply cannot afford pull defeat from the jaws of what they claim to be victory:

You know it’s bad when banks are the most truthful guys in the room.

Remember that historical mortgage settlement deal that was the lead news story on Thursday? It has been widely depicted as a done deal. The various AGs who had been holdouts said their concerns had been satisfied.

But in fact, Bank of America’s press release said that the deal was “agreements in principle” as opposed to a final agreement. The Charlotte bank had to be more precise than politicians because it is subject to SEC regulations about the accuracy of its disclosures. And if you read the template for the AG press release carefully, you can see how it finesses where the pact stands. And today, American Banker confirmed that the settlement pact is far from done, and the details will be kept from the public as long as possible, until it is filed in Federal court (because it includes injunctive relief, a judge must bless the agreement).

This may not sound all that important to laypeople, but most negotiators and attorneys will react viscerally to how negligent the behavior of the AGs has been. The most common reaction among lawyers I know who been with white shoe firms (including former partners) is “shocking”. Let me explain why.

Negotiating of large, complex deals (or even little deals) does not happen in one fell swoop. Even when the two sides have outlined the major terms, and in sone cases hammered out the really important ones in some detail, there is still a great deal of negotiating that takes place in finalizing the text of the contract. The negotiation over the definitive agreement makes a great deal of difference on how fair the pact turns out to be. For instance, one of the sayings of transaction lawyers is “He who controls the document controls the deal.” The party that writes up the initial version of the contract has undue influence because that becomes the default and the other side has to negotiate back from that language.

Politics is trumping both the law and mathematics, and this will not end well.

The Drug War Sucks

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We’ve kind of been rolling the trifecta with colds.

Sharon* has been on antibiotics for a cough and sinus for a few days, and after being blown off by our kid’s pediatrician’s replacement doc, so we went to an urgi-care clinic, and we got diagnoses for them, and me as well, since I had a nagging cough, and it had gotten bad enough that I wasn’t waiting until I saw my doctor at my regularly scheduled appointment with my doctor.

Charlie has a sinus infection, Natalie’s sinus infection migrated down to pharyngitis, and mine had migrated down to a full blown bronchitis.

In addition, Marilyn, my mother-in-law is at Sinai Hospital for what appears to be pneumonia.

So, what does this have to do with the drug war?

Well, in addition to antibiotics, both Charlie and I were prescribed decongestants, and both of these medications contained Pseudoephedrine, and so I could not buy both, because federal regulations say that it’s too much, and we might ………… cook meth.

The war on drugs is, to misappropriate the words of Nietzsche, like the bite of a dog into a stone, it is a stupidity.

*Love of my life, light of the cosmos, she who must be obeyed, my wife.

Sorry Felix, You are Wrong

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Yesterday, I talked about Dave Dayen and Yves Smith’s take on the settlement, and their take was “bankster bailout”, and I noted that Felix Salmon’s take was that it was a good thing.

Well, now the journalist who is I think the best person (this side of Jon Stewart, anyway) at distilling the complexities of Wall Street to you average reader, Matt Taibbi has weighed in, and not only is he calling bailout for Wall Street crooks, but he apologizes for his earlier optimism. What’s more, he distills what it all means in one paragraph:

But this deal not only doesn’t end robosigning, it officially makes getting caught for it inexpensive. Shame on me for ever thinking that might be a good thing.

That is the final word.  Fraud and forgery have been given a price tag, and it’s less than 2 grand.

The Obama Administration Just F%$#ed Us All to Benefit the Banks Again

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Well, it looks like everyone (except Oklahoma) has signed onto Obama’s bank sellout settlement :

After months of painstaking talks, government authorities and five of the nation’s biggest banks have agreed to a $26 billion settlement that could provide relief to nearly two million current and former American homeowners harmed by the bursting of the housing bubble, state and federal officials said. It is part of a broad national settlement aimed at halting the housing market’s downward slide and holding the banks accountable for foreclosure abuses.

Despite the billions earmarked in the accord, the aid will help a relatively small portion of the millions of borrowers who are delinquent and facing foreclosure. The success could depend in part on how effectively the program is carried out because earlier efforts by Washington aimed at troubled borrowers helped far fewer than had been expected.

Still, the agreement is the broadest effort yet to help borrowers owing more than their houses are worth, with roughly one million expected to have their mortgage debt reduced by lenders or able to refinance their homes at lower rates. Another 750,000 people who lost their homes to foreclosure from September 2008 to the end of 2011 will receive checks for about $2,000. The aid is to be distributed over three years.

An announcement was scheduled in Washington for Thursday morning. The final details of the pact, including how many states would participate, were expected to be announced then. The two biggest holdouts, California and New York, now plan to sign on, according to the officials with knowledge of the matter who did not want to be identified because the negotiations were not completed.

So, if a bankster steals your house, you get $2000, which might cover the cost of having all your furniture hauled to the dump.

And as for the write-downs, that’s about $17 billion for about one million home owners ($5 B goes to the states), or about $17k  for homeowners, but there are 11 million homeowners under water, and on average it’s more than $50K each.

And, BTW, the banks get to do this for mortgages that they manage, but don’t hold, meaning that the money is coming from investors, pension funds, and the taxpayer, and this serves to strengthen the second mortgages, which the banks do hold.

I’m with Yves Smith’s take on this, “The Top Twelve Reasons Why You Should Hate the Mortgage-Settlement.html,” not Felix Salmon’s rather more optimistic take on this.

This is not a settlement, it’s another sellout and back door subsidy to the banksters.

The Foreclosure Sellout Settlement Is Getting Weird

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I missed it, but the New York AG canceled a press conference about his position on the mortgage/foreclosure fraud settlement at the last minute:

New York Attorney General Eric Schneiderman late Tuesday postponed a much anticipated conference call with reporters that was set up to announce whether the state would participate in broad a settlement with five big banks over foreclosure practices. Schneiderman, who is co-chair of a new mortgage fraud task force, told reporters in late January that he was not ready to participate in state settlement negotiations. Observers had speculated that he might announce his participation.

This is happening despite the full court press from the Obama administration for this deal to go through.

The sticking point appears to be the MERS lawsuit, and the banks want this dropped before they sign off on any deal.

I think that this delay is a good thing because:

  • The deal is basically another bailout for the banks.
  • As it gets nearer to the election without a deal, the more it becomes likely that the Obama administration will be forced to go after them for electoral benefit, as opposed to just going after some small fry.

This should get interesting.

Appeals Court Rules that Prop 8 Is Unconstitutional

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It was a 2-1 decision, and the opinion is a pretty strong:

“Although the Constitution permits communities to enact most laws they believe to be desirable, it requires that there be at least a legitimate reason for the passage of a law that treats different classes of people differently,” Judge Stephen R. Reinhardt wrote in the decision. “There was no such reason that Proposition 8 could have been enacted.”

“All that Proposition 8 accomplished was to take away from same-sex couples the right to be granted marriage licenses and thus legally to use the designation ‘marriage,’ ” the judge wrote, adding, “Proposition 8 serves no purpose, and has no effect, other than to lessen the status and human dignity of gay men and lesbians in California.”

BTW, all three judges agreed that the defendants request that the judge Vaughn Walker recuse himself was pretty much a crock of sh%$.

The precedent on this case is fairly straightforward, the Supreme Court ruling on Colorado’s Amendment 2 about 15 years ago, where they said that voters can’t strip rights from a group just because they make them feel squicky, the so-called “rational basis” test.

The question now is whether or not this case goes to the full appeals court (en banc), or to the Supreme Court.

And while we are on recusals.  Seeing as how Scalia has publicly, and repeatedly, made comments explicitly stating that he has pre-judged the matter, how about he recuse his flabby ass from the case?

If SCOTUS takes it, it will be closer though, as O’Connor has been replaced by Alito, who is an almost certain vote against gay civil rights.

Am I the Only One to Call False Flag?

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Symantec with an assist from the FBI, is now alleging that a group of hackers stole the source code for pcAnywhere and attempted to shake them down for $50,000.

OK, I get that. But what I doubt is the claim, coming from either the software firm, or the boyz in the Hoover building, that the miscreants are, “group of hackers associated with Anonymous and AntiSec.”*

As MP at the Stellar Parthenon BBS observes, “Anyone claiming to be raising funds in any way on behalf of Anonymous is about as kosher as bacon-wrapped shrimp.”

I have no doubt that Symantec got hacked. I’ve suffered with their software at a number of work places, but my sense is that any mention Anonymous is something that the FBI spent a lot of time manufacturing.

After all, it looks much better in a personnel file at annual review time.

*Tin foil hat. When I originally read the first article, there were constant mentions to anonymous, and now they are all gone.

And While We are Talking Bankster Corruption

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The Missouri AG has filed criminal indictments for felony forgery over “robo-signing”.

This is a remarkable development, because while what on pretty clearly was forgery, but I never expected someone to actually prefer criminal charges:

“Linda Greene” has become a household word to those on the foreclosure fraud beat. And it turns out, for once, that the work of diligent investigators such as the foreclosure attorneys around Max Gardner, and investigators like Lynn Szymoniak and Lisa Epstein led to press coverage which in turn spurred prosecutors to act.

What is striking about the indictment by a Missouri grand jury is that the Missouri AG Chris Koster has decided to challenge the banks’ party line that robosigning and related abuses were mere “paperwork problems.” He’s called robosiging what it is: forgery. The 136 count indictment is for forgeries and false declarations, and the targets are LPS subsidiary and its founder and past president, Lorraine Brown.

About f%$#ing time.

Foreclosure Sellout Settlement Update

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Well, over 40 states have signed onto the deal, but the biggies, New York, California, Nevada (highest foreclosure rate in the nation), and Delaware (all the banks are covered by Delaware law, and Beau Biden is Joe’s kid), are not (yet) a part of this deal, so the “deadline” has been pushed back two weeks.

We know the deal is bad.

We know that it’s a sellout because:

That being said, the fact that this deal is pitting one part of Wall Street against the other, with, asset management group of SIFMA frantically lobbying negotiators for a better deal,  is a welcome development.

We also have the fact that the deal  favors 2nd mortgages, generally held by the banks, would be favored over 1st mortgages, which the judge who has to approve the deal might see as an illegal taking.

FWIW, if any of the biggies move, it will be California first, because (when current Governor Jerry Brown when he was AG, thanks Governor Moonbeam) they already cut a deal with Bank of America/Countrywide, the largest mortgage lender in the state, which eliminated most pre-2008 liability, so they have the least to gain from holding out.

Well, This Has Me Confused

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New York Attorney General Eric Schneiderman has filed suit against the big banks for fraudulent use of the MERS electronic title registry.

He is claim fraud, deception, and illegal evasion of recording fees (to the tune of more than $2 billion on just the fees).

This is interesting. It appears that the settlement, for which Schneiderman is the most prominent hold out would not shut down any suits already filed.

To my mind, this is likely a bad thing, because it implies that Schneiderman is getting his ducks in a row in preparation for signing onto the sellout settlement with the banks.

I just hope that I am wrong about that last bit.

Full release from the AG after the break:

A.G. SCHNEIDERMAN ANNOUNCES MAJOR LAWSUIT AGAINST NATION’S LARGEST BANKS FOR DECEPTIVE & FRAUDULENT USE OF ELECTRONIC MORTGAGE REGISTRY

Complaint Charges Use Of MERS By Bank Of America, J.P. Morgan Chase, And Wells Fargo Resulted In Fraudulent Foreclosure Filings  

Servicers And MERS Filed Improper Foreclosure Actions Where Authority To Sue Was Questionable

 

Schneiderman: MERS And Servicers Engaged In Deceptive and Fraudulent Practices That Harmed Homeowners And Undermined Judicial Foreclosure Process

NEW YORK – Attorney General Eric T. Schneiderman today filed a lawsuit against several of the nation’s largest banks charging that the creation and use of a private national mortgage electronic registry system known as MERS has resulted in a wide range of deceptive and fraudulent foreclosure filings in New York state and federal courts, harming homeowners and undermining the integrity of the judicial foreclosure process. The lawsuit asserts that employees and agents of Bank of America, J.P. Morgan Chase, and Wells Fargo, acting as “MERS certifying officers,” have repeatedly submitted court documents containing false and misleading information that made it appear that the foreclosing party had the authority to bring a case when in fact it may not have. The lawsuit names JPMorgan Chase Bank, N.A., Bank of America, N.A., Wells Fargo Bank, N.A., as well as Virginia-based MERSCORP, Inc. and its subsidiary, Mortgage Electronic Registration Systems, Inc.
The lawsuit further asserts that the MERS System has effectively eliminated homeowners’ and the public’s ability to track property transfers through the traditional public records system. Instead, this information is now stored only in a private database – which is plagued with inaccuracies and errors – over which MERS and its financial institution members exercise sole control. Additional defendants include BAC Home Loans Servicing, LP, Chase Home Finance LLC, EMC Mortgage Corporation, and Wells Fargo Home Mortgage, Inc.
“The banks created the MERS system as an end-run around the property recording system, to facilitate the rapid securitization and sale of mortgages. Once the mortgages went sour, these same banks brought foreclosure proceedings en masse based on deceptive and fraudulent court submissions, seeking to take homes away from people with little regard for basic legal requirements or the rule of law,” said Attorney General Schneiderman. “Our action demonstrates that there is one set of rules for all – no matter how big or powerful the institution may be – and that those rules will be enforced vigorously. Only through real accountability for the illegal and deceptive conduct in the foreclosure crisis will there be justice for New York’s homeowners.”

The financial industry created MERS in 1995 to allow financial institutions to evade local county recording fees, avoid the hassle and paperwork of publicly recording mortgage transfers, and facilitate the rapid sale and securitization of mortgages. MERS operates as a membership organization, and most large companies that participate in the mortgage industry – by originating loans, buying or investing in loans, or servicing loans – are members, including JPMorgan Chase, Bank of America, Wells Fargo, Fannie Mae, and Freddie Mac. Over 70 million loans nationally have been registered in MERS System, including about 30 million currently active loans.

Through their membership in MERS, these companies avoided publicly recording the purchase and sale of mortgages by designating MERS Inc. – a shell company with no economic interest in any mortgage loan – as the “nominal” mortgagee of the loan in the public records. Instead, MERS members were supposed to log mortgage transfers in the MERS private electronic registry. The basic theory behind MERS is that, because MERS Inc. serves as a “nominee” (or agent) for most major lenders, it remains the “mortgagee” in the public records regardless of how often the loan is sold or transferred among MERS members. Thus, although MERSCORP has only about 70 employees, MERS Inc. serves as the mortgagee of record for tens of millions of loans registered in the MERS System.
MERS has granted over 20,000 “certifying officers” the authority to act on its behalf, including the authority to assign mortgages, to execute paperwork necessary to foreclose, and to submit filings on behalf of MERS in bankruptcy proceedings. These certifying officers are not MERS employees, but instead are employed by MERS members, including JPMorgan Chase, Bank of America, and Wells Fargo.
MERS’ conduct, as well as the servicers’ use of the MERS System, has resulted in the filing of improper New York foreclosure proceedings, undermined the integrity of the judicial process, created confusion and uncertainty concerning property ownership interests, and potentially clouded titles on properties throughout the State of New York. In fact, several New York judges have questioned the standing of the foreclosing party in cases involving MERS loans and the validity of mortgage assignments executed by MERS certifying officers.
The lawsuit specifically charges that the defendants have engaged in the following fraudulent and deceptive practices:
  • MERS has filed over 13,000 foreclosure actions against New York homeowners listing itself as the plaintiff, but in many instances, MERS lacked the legal authority to foreclose and did not own or hold the promissory note, despite saying otherwise in court submissions.
  • MERS certifying officers, including employees and agents of JPMorgan Chase, Bank of America, and Wells Fargo, have repeatedly executed and submitted in court legal documents purporting to assign the mortgage and/or note to the foreclosing party. These documents contain numerous defects, including affirmative misrepresentations of fact, which render them false, deceptive, and/or invalid. These assignments were often automatically generated and “robosigned” by individuals who did not review the underlying property ownership records, confirm the documents’ accuracy, or even read the documents. These false and defective assignments often masked gaps in the chain of title and the foreclosing party’s inability to establish its authority to foreclose, and as a result have misled homeowners and the courts.
  • MERS’ indiscriminate use of non-employee “certifying officers” to execute vital legal documents has confused, misled, and deceived homeowners and the courts and made it difficult to ascertain whether a party actually has the right to foreclose. MERS certifying officers have regularly executed and submitted in court mortgage assignments and other legal documents on behalf of MERS without disclosing that they are not MERS employees, but instead are employed by other entities, such as the mortgage servicer filing the case or its counsel. The signature line just indicates that the individual is an “Assistant Secretary,” “Vice President,” or other officer of MERS. Indeed, these documents often purport to assign the mortgage to the certifying officer’s own employer. Moreover, as a result of the defendants’ failure to track the designation of certifying officers and the scope of their authority to act, individuals have executed legal documents on behalf of MERS, such as mortgage assignments and loan modifications, when they were either not designated as a MERS certifying officer at the time or were not authorized to execute documents on behalf of MERS with respect to the subject loan.
  • MERS and its members have deceived and misled borrowers about the importance and ramifications of MERS’ role with respect to their loan by providing inadequate disclosures.
  • The MERS System is riddled with inaccuracies which make it difficult to verify the chain of title for a loan or the current note-holder, and creates confusion among stakeholders who rely on the information. In addition, as a result of these inaccuracies, MERS has filed mortgage satisfactions against the wrong property.
The lawsuit seeks a declaration that the alleged practices violate the law, as well as injunctive relief, damages for harmed homeowners, and civil penalties. The lawsuit also seeks a court order requiring defendants to take all actions necessary to cure any title defects and clear any improper liens resulting from their fraudulent and deceptive acts and practices. 
The matter is being handled by Deputy Bureau Chief of the Bureau of Consumer Frauds & Protection Jeffrey K. Powell, Assistant Attorney General Clare Norins, and Assistant Solicitor General Steven C. Wu, under the supervision of First Deputy Attorney General Harlan Levy.

This is an Epic Prank

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Righteous!

Something to add my rules to live by: Don’t use prison labor to do graphic design for law enforcement:

How did an image of a pig — the infamous ’60s-era epithet by protesters for police officers — wind up on a decal used on as many as 30 Vermont State Police cruisers?

State officials Thursday pointed to the failure of the quality assurance office within the Vermont Correctional Industries Print Shop in St. Albans to detect a prisoner-artist’s addition made four years ago to the traditional state police logo. A spot on the shoulder of the cow in the state emblem was modified into a pig.

An investigation has begun into how the computer program was improperly modified to insert the image, Vermont Corrections Commissioner Andy Pallito said.

I really hope that whoever did this does not get caught.

I’m Expecting an Alien Tort Claim Act Against Apple

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William Black makes the convincing case that the widespread abuse of contractors’ employees in the manufacture of Apple products is the product of deliberate management decisions:

Apple has released a report on working conditions in its suppliers’ factories. It highlights a form of control fraud that criminology has identified but rarely discussed. I write overwhelmingly about accounting control fraud because it drives our recurrent, intensifying financial crises. The primary intended victims of accounting control frauds are the shareholders and the creditors. Other private sector control frauds target customers (e.g., George Akerlof’s 1970 article on “lemons”), and the public (e.g., the unlawful disposal of toxic waste, illegal logging, and tax fraud).

Anti-employee control frauds most commonly fall in four broad, but not mutually exclusive, categories – illegal work conditions due to violation of safety rules, violation of child labor laws, failure to pay employees’ wages and benefits, and frauds based on goods and loans provided by the employer to the employee that lock the employee into quasi-slavery. Apple has just released a report on its suppliers that shows that anti-employee control fraud is the norm. Remember, fraud is hidden and is often not discovered and Apple did not have an incentive to make an exhaustive investigation. Apple calls its inquiries “audits” and it is apparent that most of its information comes from reviewing written and electronic records at its suppliers. That is exceptionally revealing. The suppliers know that they can defraud their employees with such impunity that they don’t even bother to get rid of records that prove their frauds. Apple has resisted making public its suppliers and the report refused to identify which suppliers committed which violations – often for years despite repeated, false promises to end their anti-employee control frauds. Two other facts are evident (but not reported). First, Apple rarely terminates suppliers for defrauding their employees – even when the frauds endanger the lives and health of the workers and the community – and even where Apple knows that the supplier repeatedly lies to Apple about these fraudulent and lethal practices. Second, it appears unlikely in the extreme that Apple makes criminal referrals on its suppliers even when they commit anti-employee control frauds as a routine practice, even when the frauds endanger the worker’s and the public’s health, and even when the supplier repeatedly lies to Apple about the frauds. Apple’s report, therefore, understates substantially the actual incidence of fraud by the 156 suppliers (accounting for 97% of its payments to suppliers).

The ATCA has been used in cases like this, and what is clearly a policy of deliberate blindness to these abuse by Apple, seems to me to bean opening for a very well deserved lawsuit.

Someone Flipped on the Scott Walker Prosecutions

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It has been announced that former Scott Walker aide Darlene Wink is cooperating with prosecutor:

Two staffers who worked directly for Gov. Scott Walker while he was county executive were charged Thursday with illegally doing extensive political work while being paid by taxpayers to do county jobs.

One of the two, Darlene Wink, cut a deal with prosecutors under which she agreed to provide information in a related investigation about the destruction of digital evidence and to aid in further prosecutions. This is the first indication that the multifaceted John Doe investigation may be pursuing charges of evidence tampering.

Milwaukee County prosecutors also made the surprising disclosure that top Walker aides set up a private Internet network to allow them to communicate with one another by email about campaign as well as county government work without the public or co-workers’ knowledge.

They set up a VPN to break the law? 

This is pretty f%$#ing brazen, and it has the advantage locating all the offending communications in one place, which might, as the article says, provide investigators with a trove of information as they pursue other angles in the case.”

It gets better, because it looks like it wasn’t just politicking on the job, but they are also looking things like bid rigging as well.

Of course, Scotty Walker is saying that it isn’t his fault, “Walker’s campaign said he had a policy against county employees using government resources to do campaign work.”

Dude, your guys set up a private network.  It simply does not get any more official policy than that.

I am smelling burnt bread in Wisconsin, because Scott Walker is toast.

H/t Susie Madrak.

Obama Goes for Accelerated Review of Healthcare Reform

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The Obama administration has decided not to appeal to the full 11th circuit court and go directly to the Supreme Court, which means that we could see a ruling as early as June.

I’m not sure what the tactics are here.

There are three legal questions here

  • The first question is whether they can rule on the mandate at all, since the anti-injunction act of 1869 prohibits suits against taxes until the tariff is actually levied.
  • The second question is whether if part of the law is struck down, is the entire law struck down. (severability)
  • The third question (and the biggie) is whether or not the mandate is constitutional. 

The third question is a slam dunk based on precedent, but I expect at least 4 of the justices to go full Bush v. Gore and find some contrived form of logic to ignore that.

It pretty much comes down to Justice Kennedy, but he ruled for Bush in Bush v. Gore, so I think that Obamacare is toast.

Obama’s War on Open Government Continues

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They are going after a CIA officer who revealed our chain of gulags and torture:

The Justice Department on Monday charged a former CIA officer with repeatedly leaking classified information, including the identities of agency operatives involved in the capture and interrogation of alleged terrorists.

The case against John Kiriakou, who also served as a senior Senate aide, extends the Obama administration’s crackdown on disclosures of national security secrets. Kiriakou, 47, is the sixth target of a leaks-related prosecution since President Obama took office, exceeding the total number of comparable prosecutions under all previous administrations combined, legal experts said.

Kiriakou, who was among the first to go public with details about the CIA’s use of waterboarding and other harsh interrogation measures, was charged with disclosing classified information to reporters and lying to the agency about the origin of other sensitive material he published in a book. He faces up to 30 years in prison if convicted.

Seriously, this sh%$ is just evil.

There have been more prosecutions of leakers in 3 years of the Obama administration than there had been over the prior two hundred and twenty years.

This is despicable.