Daily Archive: 09/11/2015

Sep 11 2015

Stupid or Evil?

Stupid implies they were motivated by noble instincts and were merely misguided, ignorant, or incompetent.

Evil says they knew exactly what they were doing.

Unless you think everyone’s an idiot except you (which I do with ample justification but is not really relevant) I think you’ve got to come out somewhere on the evil side.  Does the rot go to the top?

Have you been asleep since Lehman?

Now the DOJ Admits They Got it Wrong

by William Black, New Economic Perspectives

Posted on September 11, 2015

It is now seven years after Lehman’s senior officers’ frauds destroyed it and triggered the financial crisis. The Bush and Obama administrations have not convicted a single senior bank officer for leading the fraud epidemics that triggered the crisis. The Department’s announced restoration of the rule of law for elite white-collar criminals, even if it becomes real, will come too late to prosecute the senior bankers for leading the fraud epidemics. The Justice Department has, effectively, let the statute of limitations run and allowed the most destructive white-collar criminal bankers in history to become wealthy through fraud with absolute impunity. This will go down as the Justice Department’s greatest strategic failure against elite white-collar crime.

The Obama administration and the Department have failed to take the most basic steps essential to prosecute elite bankers. They have not restored the “criminal referral coordinators” at the banking regulatory agencies and they have virtually ignored the whistleblowers who gave them cases against the top bankers on a platinum platter. The Department has not even trained its attorneys and the FBI to understand, detect, investigate, and prosecute the “accounting control frauds” that caused the financial crisis. The restoration of the rule of law that the new policy promises will not happen in more than a token number of cases against senior bankers until these basic steps are taken.



As a corporate executive once told a former Assistant Attorney General of ours: “[A]s long as you are only talking about money, the company can at the end of the day take care of me . . . but once you begin talking about taking away my liberty, there is nothing that the company can do for me.”(1) Executives often offer to pay higher fines to get a break on their jail time, but they never offer to spend more time in prison in order to get a discount on their fine.

We know that prison sentences are a deterrent to executives who would otherwise extend their cartel activity to the United States. In many cases, the Division has discovered cartelists who were colluding on products sold in other parts of the world and who sold product in the United States, but who did not extend their cartel activity to U.S. sales. In some of these cases, although the U.S. market was the cartelists’ largest market and potentially the most profitable, the collusion stopped at the border because of the risk of going to prison in the United States.”

As prosecutors, (real) financial regulators, and criminologists, we have known for decades that the only effective means to deter elite white-collar crimes is to imprison the elite officers that grew wealthy by leading those crimes (which include the largest “hard core cartels” in history – by three orders of magnitude). In the words of a Deutsche Bank senior officer, the bank’s participation in the Libor cartel produced a “mountain of money” for the bank (and the officers). Holder’s bank fines were useless – and the Department’s real prosecutors told him why they were useless from the beginning. No one, of course, thinks Holder went rogue in refusing to prosecute fraudulent bank officers. President Obama would have requested his resignation six years ago if he were upset at Holder’s grant of de facto immunity to our most destructive elite white-collar criminals.



The Department’s top criminal prosecutor, Lanny Breuer, publicly stated his paramount concern about the fraud epidemics that devastated our nation – he was “losing sleep at night over worrying about what a lawsuit might result in at a large financial institution.” That’s right – he was petrified of even bringing a civil “lawsuit” – much less a criminal prosecution – against “too big to prosecute” banks and banksters. I lose sleep over what fraud epidemics the banksters will lead against our Nation. The banksters have learned to optimize “accounting control fraud” schemes and learned that they can grow immensely wealthy by leading those fraud epidemics with complete impunity. None of them has a criminal record and even those that lost their jobs are overwhelmingly back in financial leadership positions. In the aftermath of the savings and loan debacle, because of the prosecutions and criminal records of the elites that led those frauds, no senior S&L fraudster who was prosecuted was able to become a leader of the fraud epidemics that caused our most recent financial crisis.

We have known for decades that repealing the rule of law for elite white-collar criminals and relying on corporate fines always produces abject failure and massive corporate fraud. We have known for millennia that allowing elites to commit crimes with impunity leads to endemic fraud and corruption. If the Department wants to restore the rule of law I am happy to help it do so. We have known for over 30 years the steps we need to take to succeed against elite white-collar criminals through vigorous regulators and prosecutors. We must not simply prosecute the current banksters, but also prevent and limit future fraud epidemics through regulatory and supervisory changes.

The Justice Department’s New Policy Is a Brutal Admission of Eric Holder’s Failures

By David Dayen, The Fiscal Times

September 11, 2015

This week, the Justice Department felt the need to write a memo to staff instructing them to indict individuals when they commit crimes, seemingly something implied by their job titles. It doesn’t say as much about the current Justice Department regime under Loretta Lynch as it does about the former one under Eric Holder.

No major Wall Street executive went to jail for the illegal actions that precipitated the financial crisis, despite a mountain of documentary evidence of fraud. Corporations and their employees got away with what amounted to slaps on the wrist. And Holder, after presiding over this, joined the head of his Justice Department criminal division and several top deputies at Covington & Burling, a white-collar defense firm that represents most major banks.

You can draw a direct line from this failure back to the “Holder memo,” written when he served as a deputy in the Clinton Justice Department. That memo created the “collateral consequences” policy, arguing that prosecutors who seek criminal cases against large companies should take into account innocent victims who may get hurt. It laid out a host of alternative remedies, such as fines and deferred prosecution agreements.



The Justice Department would not have attempted to make this change without full recognition of the loss of public trust its actions over the past several years have engendered. Relentless criticism of the lack of white-collar prosecutions had an impact, and those who participated in that conversation should be proud.

But at this point, guidelines won’t do the trick, only actions will – a genuine effort to make the concept of justice more than a punch line. This is the beginning of a real overhaul in mindset at the Department of Justice. Hopefully, the resources and training needed to undertake wide-ranging investigations will accompany the guidelines. Hopefully, U.S. Attorneys and FBI agents will be allowed to do their jobs. Hopefully, settlements with corporations no longer represent a dead end of accountability. Hopefully, the Justice Department will live up to its name.

The End of the Deferred Prosecution Agreement?

by David Dayen, Naked Capitalism

Posted on September 8, 2015

DPAs usually arise out of the company disclosing misconduct and convening an internal investigation with some Assistant AG, promising full cooperation. The company gets credit for remedial conduct prior to the settlement, essentially setting their own punishment. And typically, DPAs are not paired with prosecutions for individuals committing the crimes.

So let’s look at the DPA that could bring this cozy situation crashing down. DoJ headlined back in June 2014 that Fokker Services BV would forfeit $10.5 million for selling aircraft parts and services to customers in Iran, Burma and Sudan. There was a parallel civil settlement with the Treasury Department’s Office of Foreign Assets Control (OFAC) to pay an additional $10.5 million. If you go down the press release, you find that Fokker received $21 million in gross revenue for these 1,153 illegal transactions, so the penalty was simply to give back what they received. Now they’re out a bunch of aircraft parts, one assumes, and I don’t really know the markup here. But that doesn’t seem too taxing.

In fact, in the DPA itself, we learn that “at least $21 million” was involved in the transactions. So it’s not possible to know what, if any, financial penalty was imposed. And FWIW, the civil penalty for the crime FSBV committed could have been as high as $51 million, per corporate law firm Akin Gump.

FSBV had to “accept responsibility” for its actions and really do little else. They agreed to cooperate with any matters relating to this investigation, making documents and individual employees available. For what purpose I have no idea, since nobody at FSBV has been indicted for this, 4 years after the company disclosed everything. FSBV must also continue to apply what it has already implemented voluntarily, namely compliance programs to prevent it from continuing to break the law. And… that’s about it. Plus, “in consideration of FSBV’s remedial actions to date,” this “punishment” all goes away within 18 months.

So I can see why Judge Richard Leon rejected this deal back in February, calling it “grossly disproportionate” and that “it would undermine the public’s confidence in the administration of justice and promote disrespect for the law… to see a defendant prosecuted so anemically for engaging in such egregious conduct.”

Just as a sidebar, I have a problem with a Dutch company being prosecuted by the United States for trading with other countries. There are a series of “trading with the enemy” type of laws that put the U.S. in the position of world trading policeman, sometimes for inscrutable reasons. But as long as that law is on the books, sentencing an offender to give back (some? all?) of their profits and promise not to do it again does seem a bit thin.



DoJ and FSBV jointly appealed Judge Leon’s order, saying he exceeded his authority. When the law enforcement agency and the offending entity end up on the same side of a lawsuit, well, it certainly doesn’t look great.

So this week we’ll have arguments in the 1st Circuit Court of Appeals D.C. Circuit Court of Appeals (h/t Abigail Field). And I don’t really know what DoJ will have to say for themselves. These are the kind of craptastic agreements they’ve been making with corporate offenders for the entire Holder era (Holder, last seen just hanging out at his awesome new office at Covington & Burling, was AG when this DPA was made). Presumably they’ll avoid the specifics and just claim that judges can’t have the temerity to reject contractual agreements made by two sides, and how this would damage the separation of powers, prosecutorial discretion, &c.

But judges have held up DPAs in the past, though they were eventually approved. And considering that DoJ can also file a non-prosecution agreement, which don’t require court approval, there’s obviously some role for judges to play here. If you want to get judicial approval, you can’t expect that approval to come automatically. And if the goal is to extract the proper consequences out of a corporate offender, a judge resisting settlements that are overly lenient can only enhance DoJ’s efforts.

Of course, that isn’t what DoJ is after. They would rather settle these matters quietly, write a press release, and then get a judge to bless it to get buy-in from another branch of government, so if anyone questions the slap on the wrist they can say “well a judge approved it.”

Legally this is a jump ball; DoJ could easily wriggle off the hook here. But if the 1st Circuit D.C. Circuit blows up this little charade, they will have to make their terrible deals without a patina of outside approval. Or maybe, horror of horrors, they’ll have to do their job properly.

Sep 11 2015

No, Joe, You Shouldn’t Run

In an extended, and sometimes poignant interview with Stephen Colbert on “The Late Show,” Vice President Joe Biden discussed the loss of his son, Beau, and calls for his tossing his hat ring for president. Joe Biden is no doubt a really nice man and loving father and husband but even he expressed doubt last night that he has the heart, the soul or the energy to make that run.

“I don’t think any man or woman should run for president unless, number one, they know exactly why they would want to be president; and two, they can look at folks out there and say, ‘I promise you have my whole heart, my whole soul, my energy and my passion,'” he told comedian Stephen Colbert in an interview on CBS’ “The Late Show.”

“I’d be lying if I said that I knew I was there. I’m being completely honest,” Biden continued. “Nobody has a right in my view to seek that office unless they are willing to give it 110 percent of who they are.”

As Charles Pierce at Esquire Politics put it, “it was powerful television, but it doesn’t mean he should run for president.”

This is a guy who already had more tragedy than a merciful god would have allowed and that was before his son, Beau, died earlier this year. Of course, the man broke down. The wonder is that he ever gets out of bed in the morning. What he should do is continue as best he can to be the finest vice-president of my lifetime. What he should not do in his current state of emotional turmoil is run for president. [..]

Joe Biden shouldn’t run for president because he shouldn’t do it to himself. He has earned a unique place in the country’s heart, which is a far warmer place for him as a human being than shivering in some cornfield outside Ottumwa in the cold winter winds. A presidential campaign is a soulless mechanism designed to grind the human spirit into easily digestible nuggets. Moments of profound personal pain and loss are as unavoidable as are concussions in the NFL. It was almost unbearable to watch him speak of his son’s death even to someone as profoundly compassionate as Colbert. I would hate to see him coin that grief into political currency, or fashion it into a portion of a stump speech that would become banal the second time it was delivered. I think, at some level, he would come to hate himself for having to do that.  It’s not that I wouldn’t vote for Joe Biden, though I probably wouldn’t. It’s that I don’t want to see him hurt any more.

Like Charlie, I admire Biden as a person but he is as hawkish as Hillary and just as friendly to Wall Street and the banks as Presidents Bill Clinton and Barack Obama. His record as a senator would hurt him just as Hillary’s is hurting her, the nonsensical e-mail tempest aside. The Democratic Party needs to stop tacking right and embrace the popular policies of Senators Bernie Sanders (I-VT) and Elizabeth Warren (D-MA).

Sep 11 2015

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 the Pundits”.

Follow us on Twitter @StarsHollowGzt

Bill de Blasio: It’s Time to Close the Carried Interest Loophole

The rampant inequality that we face in America is no accident. It is the result of a system that, for too long, has rewarded existing wealth over work.

There is no more striking example of this phenomenon than the disparity between the earnings — and the tax rates — of kindergarten teachers and hedge fund managers.

In 2014, the top 25 hedge fund mangers made more money than every single kindergarten teacher in America — over 150,000 of them — combined. That’s right: 25 individuals — not even enough to fill the seating space on a single New York City subway car — made more than everyone who teaches our youngest learners put together.

What’s more, because of something called carried interest — a tax loophole that exists only to boost the earnings of hedge fund managers — those 25 people paid a lower tax rate than the average kindergarten teacher.

If we’re to truly tackle the crisis of income inequality, changing that rule — and investing that money in growing our middle class — is where we must start.

Norman Solomon: America’s post-9/11 Cassandras are still ignored

As the US war machine grinds on, mainstream media outlets bury prescient warnings

Fourteen years later, the horrors of 9/11 continue with deadly ripple effects. American militarism has become the dominant position of U.S. foreign policy, while other options remain banished to the sidelines. Yet from the outset of the “war on terrorism,” some Americans spoke out against a militarized response to the terrible events on Sept. 11, 2001. [..]

Even the most prominent warnings against such an approach were marginalized and vilified in the wake of Sept. 11. And those warnings have been buried by the U.S. media as though they never occurred, even though their concerns have proved prescient. The U.S. has spent trillions of dollars on military interventions across the Middle East, and yet the region is more violent and turbulent than ever.

This media amnesia helps keep the U.S. war train on track. The importance of the erasure is embodied in an observation by George Orwell, “Who controls the past controls the future; who controls the present controls the past.” The widespread pretense that there was no credible critique of going to war 14 years ago reinforces the assumption that there is no credible alternative to militarized responses today.

Paul Krugman: Japan’s Economy, Crippled by Caution

Visitors to Japan are often surprised by how prosperous it seems. It doesn’t look like a deeply depressed economy. And that’s because it isn’t.

Unemployment is low; overall economic growth has been slow for decades, but that’s largely because it’s an aging country with ever fewer people in their prime working years. Measured relative to the number of working-age adults, Japanese growth over the past quarter century has been almost as fast as America’s, and better than Western Europe’s.

Yet Japan is still caught in an economic trap. Persistent deflation has created a society in which people hoard cash, making it hard for policy to respond when bad things happen, which is why the businesspeople I’ve been talking to here are terrified about the possible spillover from China’s troubles.

Greg Grandin: The TPP Will Finish What Chile’s Dictatorship Started

Salvador Allende warned against neoliberalism’s disastrous effects just before he was overthrown. He was right to be worried.

This September 11th will be the forty-second anniversary of the US-backed coup against the democratically-elected Chilean government, led by the Socialist Salvador Allende, kicking off a battle that is still being fought: in Chile, protests led by students, indigenous peoples, and workers to rollback the “neoliberalization,” or Pinochetization, of society, are a continuing part of everyday life.

Neoliberalism is hard to define. It could refer to intensified resource extraction, financialization, austerity, or something more ephemeral, a way of life, in which collective ideals of citizenship give out to marketized individualism and consumerism. [..]

In the 1970s, socialism was, for many, on the horizon of the possible, with the principle of “excess profit” seen as a way for exploited countries to, in Allende’s words, “correct historic wrongs.” Today, forget nationalization, much less socialism. If the TPP is ratified and ISDS put into effect, countries won’t be able to limit mining to protect their water supply or even enforce anti-tobacco regulation.

This September 11th, as the Obama administration makes its final push for the TPP, it’s worth taking a moment to realize why all those people in Chile-and in Uruguay, Brazil, Argentina, Guatemala, El Salvador, and throughout Latin America-died and were tortured: to protect the “future profits” of multinational corporations.

Glenn Greenwald: Hillary Clinton Goes to Militaristic, Hawkish Think Tank, Gives Militaristic, Hawkish Speech

Leading Democratic presidential candidate Hillary Clinton on Wednesday delivered a foreign policy speech at the Brookings Institution in Washington. By itself, the choice of the venue was revealing.

Brookings served as Ground Zero for centrist think tank advocacy of the Iraq War, which Clinton (along with potential rival Joe Biden) notoriously and vehemently advocated. Brookings’ two leading “scholar”-stars – Kenneth Pollack and Michael O’Hanlon – spent all of 2002 and 2003 insisting that invading Iraq was wise and just, and spent the years after that assuring Americans that the “victorious” war and subsequent occupation were going really well (in April 2003, O’Hanlon debated with himself over whether the strategy that led to the “victory” in his beloved war should be deemed “brilliant” or just extremely “clever,” while in June 2003, Pollack assured New York Times readers that Saddam’s WMD would be found). [..]

So the hawkish Brookings is the prism through which Hillary Clinton’s foreign policy worldview can be best understood. The think tank is filled with former advisers to both Bill and Hillary Clinton, and would certainly provide numerous top-level foreign policy officials in any Hillary Clinton administration. As she put it today at the start: “There are a lot of long-time friends and colleagues who perch here at Brookings.” And she proceeded to deliver exactly the speech one would expect, reminding everyone of just how militaristic and hawkish she is.

Dave Zirin and Jules Boykoff: The US is not fit to host the Olympics

Sorry, Los Angeles, but Washington’s appalling human rights record contravenes the principles of the Olympic movement

On Sept. 1, the Los Angeles City Council voted to authorize the U.S. Olympic Committee’s (USOC) bid for the 2024 Summer Olympics. The committee dropped Boston in July amid tenacious activism, wavering politicians and paltry polling numbers.

Los Angelenos should emulate Bostonians to make sure that their political leaders say no. The Olympic games tend to militarize the host city and go over budget, saddling taxpayers with lopsided fiscal risk while private groups pile up profits. What’s more, the United States’ appalling human rights record should rule the country out as a host. [..]

But the USOC should be spurned. The United States’ horrific human rights record breaches the Olympic Charter’s fundamental principles of Olympism (PDF), which calls for leading by example, social responsibility and respect for universal ethics. The objections over the awarding of Olympic Games to other human rights violators such as China and Russia should also apply to the United States. In fact, the U.S. is a ghastly maverick in many respects. Look no further than the Guantánamo Bay prison in Cuba, where more than 100 detainees – most of them without a single charge – continue to languish.

Sep 11 2015

The Breakfast Club (Keep It Simple)

Welcome to The Breakfast Club! We’re a disorganized group of rebel lefties who hang out and chat if and when we’re not too hungover  we’ve been bailed out we’re not too exhausted from last night’s (CENSORED) the caffeine kicks in. Join us every weekday morning at 9am (ET) and weekend morning at 10:30am (ET) to talk about current news and our boring lives and to make fun of LaEscapee! If we are ever running late, it’s PhilJD’s fault.

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This Day in History

American Revolution: Gen George Washington defeated at the Battle of Brandywine; FDR dedicated the Hoover Dam; The Beatles recorded their first singles.

Breakfast Tunes

Something to Think about over Coffee Prozac

Life is really simple, but we insist on making it complicated.

Confucius

Sep 11 2015

On This Day In History September 11

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.

September 11 is the 254th day of the year (255th in leap years) in the Gregorian calendar. There are 111 days remaining until the end of the year. It is usually the first day of the Coptic calendar and Ethiopian calendar (in the period AD 1900 to AD 2099).

On this day in 1941, ground is broken for the construction of The Pentagon.

The Pentagon is the headquarters of the United States Department of Defense, located in Arlington County, Virginia. As a symbol of the U.S. military, “the Pentagon” is often used metonymically to refer to the Department of Defense rather than the building itself.

Designed by the American architect George Bergstrom (1876-1955), and built by Philadelphia, Pennsylvania, general contractor John McShain, the building was dedicated on January 15, 1943, after ground was broken for construction on September 11, 1941. General Brehon Somervell provided the major motive power behind the project; Colonel Leslie Groves was responsible for overseeing the project for the Army.

The Pentagon is the world’s largest office building by floor area, with about 6,500,000 sq ft (604,000 m2), of which 3,700,000 sq ft (344,000 m2) are used as offices. Approximately 23,000 military and civilian employees and about 3,000 non-defense support personnel work in the Pentagon. It has five sides, five floors above ground, two basement levels, and five ring corridors per floor with a total of 17.5 mi (28.2 km) of corridors. The Pentagon includes a five-acre (20,000 m2) central plaza, which is shaped like a pentagon and informally known as “ground zero”, a nickname originating during the Cold War and based on the presumption that the Soviet Union would target one or more nuclear missiles at this central location in the outbreak of a nuclear war.

On September 11, 2001, exactly 60 years after the building’s groundbreaking, hijacked American Airlines Flight 77 was crashed into the western side of the Pentagon, killing 189 people, including five hijackers, 59 others aboard the plane, and 125 working in the building.

Sep 11 2015

The Daily Late Nightly Show (Steroid Abuse)

So down 4.4 million for the 2nd episode and a .4 deficit in the demo (not insignificant, it’s like 30%) but ’twas ever thus destined to be.  Fallon labors under the handicap or advantage of a Thursday Night Throwball intro pairing the Patsies and the Steelers in the season opener.

Biden made ‘news?’ today in his interview with Stephen which was embargoed and then transcripts unembargoed while the tape remained embargoed.  I’m hard put to call it actual news because nothing new came out of it except his continued protestation that running for President takes your full commitment and he got all verklempt about his kid’s service in Iraq.

The reason Biden is being sucked up to by the Villagers is Good Old Senator Credit Card is their very own pod produced clone, a hollow empty husk of institutionalized graft and corruption that they hope can fool enough of the people when Hillary falls to their decades of Clinton hate.

He says himself he is no populist.  Do we really need another Democrat running to the right of Hillary?  That’s Jim Webb’s job.

I hope Stephen cleans him like a fish and drops him still flopping in a pan but I expect he’ll be much gentler than that.  His other guests are Travis Kalanick and Toby Keith.

So, do Natasha and Bruce ever get together?

The New Continuity

Welcome to Mars

Tonightly we will be talking about Tom Brady’s balls, concussions, and other things thrown with Tony Richards, Mike Yard and Rory Albanese.

Tomorrow will be all Amy Schumer all the time.