Daily Archive: 10/22/2013

Oct 22 2013

More of ‘God’s Work’

Suit Revives Goldman Conflict Issue

By SUSANNE CRAIG and JESSICA SILVER-GREENBERG, The New York Times

October 10, 2013, 2:43 pm

At a March 2012 meeting, a group of examiners at the Federal Reserve Bank of New York agreed that Goldman Sachs had inadequate procedures to guard against conflicts of interest – guidelines aimed at stopping firms from putting their pursuit of profit ahead of their clients’ best interests.

The examiners voted to downgrade a confidential rating assigned by the New York Fed that could have spurred costly enforcement actions and other regulatory penalties. It is not known whether the vote in fact led to a rating change. The former examiner who pushed for a downgrade, Carmen M. Segarra, now contends in a lawsuit filed on Thursday that just weeks after the vote, her superiors asked her to change her findings on Goldman and fired her after she refused.



After Ms. Segarra joined the New York Fed, she said she examined several potentially controversial Goldman deals. For instance, in 2012 Goldman advised El Paso, an energy company, on its decision to sell itself to Kinder Morgan. Goldman owned a big stake in Kinder Morgan, which angered a number of El Paso shareholders, who argued this gave Goldman an incentive to undervalue El Paso. Goldman maintained that it had properly managed the conflicts but was later admonished by a judge, who noted the “disturbing behavior” that led to the deal.

As the deal was coming together, the lawsuit said, Ms. Segarra urged Goldman to provide her with its firmwide conflict-of-interest policy. But Goldman, the lawsuit said, told her that it had no such policy.



Such concerns, the lawsuit said, prompted Ms. Segarra to raise the issue with Mr. Silva, her boss, in a meeting in early December 2011. He seemed to agree. Mr. Silva “expressed concern that Goldman would suffer significant financial harm if consumers and clients learned the extent of Goldman’s noncompliance with the rules on conflict of interest,” according to the lawsuit.

Soon, though, Ms. Segarra was looking at another deal, involving Banco Santander, the largest bank in Spain, and Qatar Holding. As part of her review, Ms. Segarra asked Goldman to provide documentation that it had performed an anti-money-laundering analysis.

According to the lawsuit, Goldman executives told Ms. Segarra that it had done the analysis, but the bank later backpedaled, admitting that no such work had been performed.

Ms. Segarra took her concerns about the transaction to her bosses, who confronted Goldman. She contends that Michael S. Koh, another senior staff member at the New York Fed and a defendant in the lawsuit, told her that Goldman admitted to the misconduct but then he dismissed her concerns. Further efforts to raise the issue were also stymied and her bosses prohibited her from asking Goldman more questions about the deal – a decision that prevented her from finishing her report.



In March 2012, Ms. Segarra got her chance to voice her concerns to the New York Fed’s legal and compliance risk team. At the meeting, the group, roughly 20 people, agreed that the issues with Goldman’s conflict-of-interest procedures warranted a warning, known-as a “matter requiring attention,” or M.R.A., according to the lawsuit. As a result, the team approved a downgrade of Goldman’s annual rating from a 2, indicating satisfactory to a 3, indicating fair, according to a confidential document reviewed by The Times. The rating involving policies and procedures is one of several measurements that make up Goldman’s overall score, which is confidential.

Oct 22 2013

NSA Busted for Spying on Other Countries For Profit

The revelation that the NSA was using its hoovering of data from other countries broke in August with the Der Spiegel report that the NSA had bugged the UN Headquarters in New York City, as well as,  European Union and the International Atomic Energy Agency (IAEA). In early September, a week before the UN General Assembly meeting in NYC, Brazil’s president, Dilma Rousseff, cancelled her visit in Washington with President Barack Obama over the NSA’s spying on her, her inner circle of top aides and Brazil’s largest company, the oil giant Petrobras.

Now, this week its Mexico and France and its not about keeping us safe, its about industrial espionage:

In France, grabbed the data of over 70,000 phone calls:

Le Monde said the documents gave grounds to think the NSA targeted not only people suspected of being involved in terrorism but also high-profile individuals from the world of business or politics. [..]

French Prime Minister Jean-Marc Ayrault [said]  “I am deeply shocked…. It’s incredible that an allied country like the United States at this point goes as far as spying on private communications that have no strategic justification, no justification on the basis of national defence,” he told journalists in Copenhagen.

Mexico:

   The NSA has been systematically eavesdropping on the Mexican government for years. [..]

   In the space of a single year, according to the internal documents, this operation produced 260 classified reports that allowed US politicians to conduct successful talks on political issues and to plan international investments.

As has been revealed this summer, the NSA was recently revealed to have been spying on Brazil’s largest oil company. We now know they were also spying on the biggest financial payments systems such as VISA and Swift and on the on Chinese technology company Huawei.

One of the slides leaked by Edward Snowden from from a 2012 NSA presentation explained “economic” was one of the main justifications for spying.

The NSA would also like to keep better tabs on Wall Street under the guise of protecting it:

Drawing an analogy to how the military detects an incoming missile with radar and other sensors, (General Keith) Alexander imagined the NSA being able to spot “a cyberpacket that’s about to destroy Wall Street.” In an ideal world, he said, the agency would be getting real-time information from the banks themselves, as well as from the NSA’s traditional channels of intelligence, and have the power to take action before a cyberattack caused major damage.

Wall Street saw through Alexander’s “collect it all” ploy and quickly labeled it “wild:”

His proposed solution: Private companies should give the government access to their networks so it could screen out the harmful software. The NSA chief was offering to serve as an all-knowing virus-protection service, but at the cost, industry officials felt, of an unprecedented intrusion into the financial institutions’ databases.

The group of financial industry officials, sitting around a table at the Office of the Director of National Intelligence, were stunned, immediately grasping the privacy implications of what Alexander was politely but urgently suggesting. As a group, they demurred.

“He’s an impressive person,” the participant said, recalling the group’s collective reaction to Alexander. “You feel very comfortable with him. He instills a high degree of trust.”

But he was proposing something they thought was high-risk.

“Folks in the room looked at each other like, ‘Wow. That’s kind of wild.’ ”

DSWRight at FDL News Desk duly notes that the US government has been doing what it has prosecuted others for doing under  the Computer Fraud and Abuse Act (CFAA), the same law that was used to harass Aaron Swartz:

The hypocrisy is epic and disgusting. The NSA has disgraced and embarrassed the American people at home and abroad.

The rampant criminality and antisocial behavior of America’s intelligence community has not only diminished American rule of law at home, but is leading to increasing friction internationally with our allies. It is well past time for us to reexamine the power of the NSA and friends.

It is well past time the NSA was stopped before it shreds what remains of US credibility in the international and business community

Oct 22 2013

Punting the Pundits

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting thea Pundits”.

Follow us on Twitter @StarsHollowGzt

"More Paint, Sir" Banksy photo c23cf506_o_zps8c8f3ab0.pngChris Hedges: Let’s Get This Class War Started

“The rich are different from us,” F. Scott Fitzgerald is said to have remarked to Ernest Hemingway, to which Hemingway allegedly replied, “Yes, they have more money.”

The exchange, although it never actually took place, sums up a wisdom Fitzgerald had that eluded Hemingway. The rich are different. The cocoon of wealth and privilege permits the rich to turn those around them into compliant workers, hangers-on, servants, flatterers and sycophants. Wealth breeds, as Fitzgerald illustrated in “The Great Gatsby” and his short story “The Rich Boy,” a class of people for whom human beings are disposable commodities. Colleagues, associates, employees, kitchen staff, servants, gardeners, tutors, personal trainers, even friends and family, bend to the whims of the wealthy or disappear. Once oligarchs achieve unchecked economic and political power, as they have in the United States, the citizens too become disposable. [..]

“There are only two or three human stories,” Willa Cather wrote, “and they go on repeating themselves as fiercely as if they had never happened before.”

The seesaw of history has thrust the oligarchs once again into the sky. We sit humiliated and broken on the ground. It is an old battle. It has been fought over and over in human history. We never seem to learn. It is time to grab our pitchforks.

Graphic by Banksey

Richard (RJ) Eskow: The Road from Here: What About Medicare and Social Security?

As the Bob Dylan song says: “Things should start to get interesting right about now.” You may think they’re already interesting – what with government closings, threats of a debt default, and extremist rhetoric under the Capitol Dome – but chances are we ain’t seen nothin’ yet.

In twelve weeks or so our new system of government-by-crisis will resume its regularly scheduled programming: more threats, more confrontations, and even more extreme rhetoric.

There are only a few ways this could play out, and most of them involve cuts to Medicare and Social Security. The ones which don’t probably involve either A) catastrophic gridlock or B) a mobilized citizenry.

Your personal level of optimism probably correlates closely to whether you think A or B is more likely.

Walter Pincus: Fineprint: A new approach for Israel?

It’s time for Israel to stop making military threats and to propose an imaginative diplomatic move – risky as it may seem – to help ease nuclear tensions in the Middle East.

It can start by acknowledging its own nuclear weapons program.

It has accused Iran of seeking the capability to produce nuclear weapons, when for years Israel has been believed to possess hundreds of nuclear bombs and missiles, along with multiple delivery systems. It continues to insist it doesn’t have them.

Israeli Prime Minister Benjamin Netanyahu and other Israeli leaders continue to accuse Tehran of deceit in describing its nuclear program as peaceful.

Perhaps Netanyahu sees Iran following the path Israel took 50 years ago when it’s known that his country joined the relatively small nuclear weapons club.

Dylan Ratigan: Forming the Renaissance Preparation Committee

As we suffer in a paradigm where those who nominate dictate, our election finance system (juiced by less than one half of one percent of all Americans dispersing funds from a flawed banking system based on a monkey-wrenched housing and tax code) sprouts rotten fruit such as closed primaries and defective districting that perpetuate what I have longed defined by three nasty syllables — extraction.

With all due respect to the reform-minded types, we need to come to grips with the fact that we are not fixing an old engine. We are preparing for a renaissance, and our metaphors should reflect this reality in order to guide our actions.

How do we look past the debate on debt and taxes to focus on distributed electoral finance, open primaries and banking and tax reform?

Or, to crib a little Thoreau, how do we hack at the roots instead of the branches of our illness?

Bill Moyers and Michael Winship: Yes, Virginia, There Is a Santa Claus — Campaign Cash

If you want to see how grossly money can distort democracy, just go to the state of Virginia, where there are no limits on how big a check can be written for statewide office. Groups and individuals from outside the Old Dominion are taking full advantage, pouring millions into a governor’s race they see as a dry run for the tactics they’ll use in the 2014 midterms and the 2016 presidential race — sort of the way the Spanish civil war turned out to be a testing ground for many of the deadly weapons of World War II.

Billionaires like environmentalist Tom Steyer on the left and the Koch Brothers on the right are placing their bets, but as they say at the track, the horses they’re backing are just a couple of hay burners. Once the home of Washington and Jefferson, James Madison and Patrick Henry, Virginia now has a choice between two mediocrities slavishly devoted to their wealthy contributors.

William Astore: ‘Shock Doctrine’ Americana: Endless War as the Ultimate Business Model

Disaster Capitalism on the battlefield and in the boardroom

There is a new normal in America: our government may shut down, but our wars continue.  Congress may not be able to pass a budget, but the U.S. military can still launch commando raids in Libya and Somalia, the Afghan War can still be prosecuted, Italy can be garrisoned by American troops (putting the “empire” back in Rome), Africa can be used as an imperial playground (as in the late nineteenth century “scramble for Africa,” but with the U.S. and China doing the scrambling this time around), and the military-industrial complex can still dominate the world’s arms trade.

In the halls of Congress and the Pentagon, it’s business as usual, if your definition of “business” is the power and profits you get from constantly preparing for and prosecuting wars around the world.  “War is a racket,” General Smedley Butler famously declared in 1935, and even now it’s hard to disagree with a man who had two Congressional Medals of Honor to his credit and was intimately familiar with American imperialism.

 

Oct 22 2013

On This Day In History October 22

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

October 22 is the 295th day of the year (296th in leap years) in the Gregorian calendar. There are 70 days remaining until the end of the year.

On this day in 1975,Air Force Sergeant Leonard Matlovich, a decorated veteran of the Vietnam War, is given a “general” discharge by the air force after publicly declaring his homosexuality. Matlovich, who appeared in his air force uniform on the cover of Time magazine above the headline “I AM A HOMOSEXUAL,” was challenging the ban against homosexuals in the U.S. military. In 1979, after winning a much-publicized case against the air force, his discharge was upgraded to “honorable.”

Technical Sergeant Leonard Matlovich (1943 – June 22, 1988) was a Vietnam War veteran, race relations instructor, and recipient of the Purple Heart and the Bronze Star.

Matlovich was the first gay service member to fight the ban on gays in the military, and perhaps the best-known gay man in America in the 1970s next to Harvey Milk. His fight to stay in the United States Air Force after coming out of the closet became a cause celebre around which the gay community rallied. His case resulted in articles in newspapers and magazines throughout the country, numerous television interviews, and a television movie on NBC. His photograph appeared on the cover of the September 8, 1975, issue of Time magazine, making him a symbol for thousands of gay and lesbian servicemembers and gay people generally. In October 2006, Matlovich was honored by LGBT History Month as a leader in the history of the LGBT community.

Born in Savannah, Georgia, he was the only son of a career Air Force sergeant. He spent his childhood living on military bases, primarily throughout the southern United States. Matlovich and his sister were raised in the Roman Catholic Church. He considered himself a “flag-waving patriot,” but always regretted that for several years he maintained the racist attitudes he’d been exposed to as a child of the South. Not long after he enlisted, the United States increased military action in Vietnam, about ten years after the French had abandoned active colonial rule there. Matlovich volunteered for service in Vietnam and served three tours of duty. He was seriously wounded when he stepped on a land mine in DA Nang.

While stationed in Florida near Fort Walton Beach, he began frequenting gay bars in nearby Pensacola. “I met a bank president, a gas station attendant – they were all homosexual,” Matlovich commented in a later interview. When he was 30, he slept with another man for the first time. He “came out” to his friends, but continued to conceal the fact from his commanding officer. Having realized that the racism he’d grown up around was wrong, he volunteered to teach Air Force Race Relations classes, which had been created after several racial incidents in the military in the late 1960s and early 1970s. He became so successful that the Air Force sent him around the country to coach other instructors. Matlovich gradually came to believe that the discrimination faced by gays was similar to that faced by African Americans.

In 1973, previously unaware of the organized gay movement, he read an interview in the Air Force Times with gay activist Frank Kameny who had counseled several gays in the military over the years. He called Kameny in Washington DC and learned that Kameny had long been looking for a gay service member with a perfect record to create a test case to challenge the military’s ban on gays. About a year later, he called Kameny again, telling him that he might be the person. After several months of discussion with Kameny and ACLU attorney David Addlestone during which they formulated a plan, he hand-delivered a letter to his Langley AFB commanding officer on March 6, 1975. When his commander asked, “What does this mean?” Matlovich replied, “It means Brown versus the Board of Education” – a reference to the 1954 landmark Supreme Court case outlawing racial segregation in public schools. For Matlovich, his test of the military’s ban on homosexuals would be equivalent to that case. . .

From the moment his case was revealed to the public, he was repeatedly called upon by gay groups to help them with fund raising and advocating against anti-gay discrimination, helping lead campaigns against Anita Bryant’s effort in Miami, Florida, to overturn a gay nondiscrimination ordinance and John Briggs’ attempt to ban gay teachers in California. Sometimes he was criticized by individuals more to the left than he had become. “I think many gays are forced into liberal camps only because that’s where they can find the kind of support they need to function in society” Matlovich once noted.

With the outbreak of HIV/AIDS in the U.S. in the late 1970s, Leonard’s personal life was caught up in the virus’ hysteria that peaked in the 1980s. He sold his Guerneville restaurant in 1984, moving to Europe for a few months. He returned briefly to Washington, D.C., in 1985 and, then, to San Francisco where he sold Ford cars and once again became heavily involved in gay rights causes and the fight for adequate HIV-AIDS education and treatment.

During the summer of 1986, Matlovich felt fatigued, then contracted a prolonged chest cold he seemed unable to shake. When he finally saw a physician in September of that year, he was diagnosed with HIV/AIDS. Too weak to continue his work at the Ford dealership, he was among the first to receive AZT treatments, but his prognosis was not encouraging. He went on disability and became a champion for HIV/AIDS research for the disease which was claiming tens of thousands of lives in the Bay Area and nationally. He announced on Good Morning America in 1987 that he had contracted HIV, and was arrested with other demonstrators in front of the White House that June protesting what they believed was an inadequate response to HIV-AIDS by the administration of President Ronald Reagan.

On June 22, 1988, less than a month before his 45th birthday, Matlovich died of complications from HIV/AIDS beneath a large photo of Martin Luther King, Jr. His tombstone, meant to be a memorial to all gay veterans, does not bear his name. It reads, “When I was in the military, they gave me a medal for killing two men and a discharge for loving one.” Matlovich’s tombstone at Congressional Cemetery is on the same row as that of FBI Director J. Edgar Hoover.

A Website has been created in his honor and that of other gay veterans, and includes a history of the ban on gays in the military both before and after its transformation into Don’t Ask, Don’t Tell, and illustrates the role that gay veterans fighting the ban played in the earliest development of the gay rights movement in the United States.

DADT was officially ended on September 20, 2011. We still have a long way to go with equal right for our gay and transsexual brothers and sisters.