Tag: Iran

I mean it. Can we simply talk about this? There are so many things to consider and ponder. We have a responsibility as US citizens and fellow human beings to those whom we might hurt, to be uncomfortable while we determine whether military action on our part is the right thing to do. It is also incumbent upon us to consider whether there are other things we might do. So, can we dig in and look at all that we know and enumerate all that we don’t know and speculate on all the possibilities which might explain both the current realities and the impacts of possible courses of action? Can we do this without being upset with each other for seeing things differently? Can we allow ourselves to remain open and to let more in than what we think we know or feel?

I challenge us all to hear out those who have a very different perspective, whether you think it’s a neoconservative tyranny or a manipulated scenario. We’re talking about bombing people. Certainly, we can afford the innocuous process of allowing ourselves to mentally wend our way down the myriad possibilities before we kill people, right? We have nothing to lose and they have everything to lose. If some country was threatening to bomb us and we learned that they weren’t willing to have a discussion about all the alternative assessments about what’s going on here and all the alternative action possibilities, we’d feel pretty worthless. Syria isn’t another target. It’s a country full of people. Give them the courtesy of considering every reason why we might not want to bomb them.

I’m going to outline some talking points for conversation starters below. I don’t claim to be an expert, in any way shape or form. I’m another Citizen Jane of a super-power wielding nation and I have tons of questions. I also have principles from which I approach things and, for the sake of disclosure, I’ll make those known as I pose the questions.  

The Central Intelligence Agency has decided to “come clean” about what most of already knew. Through a Freedom of Information Act by Foreign Policy, it has been confirmed that the CIA spied on famed activist and linguist Noam Chomsky in the 1970’s.

For years, FOIA requests to the CIA garnered the same denial: “We did not locate any records responsive to your request.” The denials were never entirely credible, given Chomsky’s brazen anti-war activism in the 60s and 70s — and the CIA’s well-documented track record of domestic espionage in the Vietnam era. But the CIA kept denying, and many took the agency at its word.

Now, a public records request by Chomsky biographer Fredric Maxwell reveals a memo between the CIA and the FBI that confirms the existence of a CIA file on Chomsky.

Dated June 8, 1970, the memo discusses Chomsky’s anti-war activities and asks the FBI for more information about an upcoming trip by anti-war activists to North Vietnam. The memo’s author, a CIA official, says the trip has the “ENDORSEMENT OF NOAM CHOMSKY” and requests “ANY INFORMATION” about the people associated with the trip.  request by Foreign Policy, the CIA finally admitted spying on famed activist and linguist Noam Chomsky in the 1970’s.

The CIA also admitted that while they had created a file, it had also been tampered with and destroyed at an unknown time. The destruction of the file may be in violation the Federal Records Act of 1950, requiring all federal agencies to obtain advance approval from the National Archives for any proposed record disposition plans. The Archives is tasked with preserving records with “historical value.” Maybe the dog ate the file.

The other not so surprising confession was the agency’s direct involvement, along with the British, in the 1953 Iranina coup that deposed the democratically elected government

Declassified documents describe in detail how US – with British help – engineered coup against Mohammad Mosaddeq

On the 60th anniversary of an event often invoked by Iranians as evidence of western meddling, the US national security archive at George Washington University published a series of declassified CIA documents.

“The military coup that overthrew Mosaddeq and his National Front cabinet was carried out under CIA direction as an act of US foreign policy, conceived and approved at the highest levels of government,” reads a previously excised section of an internal CIA history titled The Battle for Iran.

The documents, published on the archive’s website under freedom of information laws, describe in detail how the US – with British help – engineered the coup, codenamed TPAJAX by the CIA and Operation Boot by Britain’s MI6.

Britain, and in particular Sir Anthony Eden, the foreign secretary, regarded Mosaddeq as a serious threat to its strategic and economic interests after the Iranian leader nationalised the British Anglo-Iranian Oil Company, latterly known as BP. But the UK needed US support. The Eisenhower administration in Washington was easily persuaded.

This is one of those “no, duh” moments that we have always known was true and is now confirmed.

Yes, folks, it was and still is all about the oil. Forget the spin about Iran’s nuclear weapon’s program that doesn’t exist or the supposed threat to Israel, it’s all about who controls those oil fields. And the CIA is just another tax funded arm of the corporations that control the rest of the world’s government.

But there are no aliens in Area 51. Yeah, right.

In Part 7, and the final segment, of a series of interviews by Paul Jay of Real News Network, journalist and author, Chris Hedges answers viewers questions including about the American public’s complicity in the crimes of empire, if there’s any hope for Bradley Manning and whether the U.S. or Israel will attack Iran.

To the question of the American public’s responsibility for the crimes committed in its name, Hedges said:

   I would say very few Americans-and the exception would be probably those in the armed forces and those who work for contractors or the diplomatic service-actually grasp the dirty work of empire. Having spent 20 years of my life on the fringes of empire and seen how empire works, Conrad was right. It’s the horror, the horror. What is it that drones and hellfire missiles do to human bodies? Those images are rigorously censored. We never see them. We don’t understand what is done in our name. Instead, we’re fed this patriotic myth of glory and service and sacrifice and honor and heroism, terms that when you’re actually there on a battlefield become hollow if not obscene.

Recently, President Obama gave a speech at the U.N with a recurring theme I found disturbing. The whole bluster involved with the U.S “making sure there is not a nuclear Iran ever” as if repeating the straight up ignorance of the neoconservatives on Iran, is not dangerous and ignorant like anyone making excuses for it. It is.

Serious signs of this kind of ignorance are unfortunately coming from the President’s  Secretary of Defense; Leon Panetta who says “all options are on the table” with Iran. That’s really not OK. It’s actually insane. All Options were on the table when Bill Clinton bombed Iraq(which was used as an excuse for the 2003 invasion) as well so that is anything but an innocuous statement.

Make no mistake, the real danger here is a country and now two administrations addicted to war while we linger here without jobs.  I don’t find the case convincing at all that they are building a nuclear weapon in the NIE, but even if they are it doesn’t matter. There are a number of reasons; some which involve a basic education on the Middle East and Islam our President and too many Democrats didn’t take the time to learn.  

The Obama administration has now taken an even lower road the Bush/Cheney regime when it comes to terrorism and terrorist organizations. US Secretary of State, Hillary Clinton is expected to inform Congress that she will be removing Mujahideen-e-Khalq (MEK) from the department’s list of Foreign Terrorist Organizations (FTO). MEK was designated a terrorist organization in 1997 during the Clinton administration and was one of the reasons for the justification of the Bush invasion of Iraq. MEK has also has been linked to the assassinations of several of Iran’s nuclear scientists.

The decision was driven by a steady flow of funds to members of Congress, lobbying firms and former officials in support of Iranian group:

The campaign to bury the MEK’s bloody history of bombings and assassinations that killed American businessmen, Iranian politicians and thousands of civilians, and to portray it as a loyal US ally against the Islamic government in Tehran has seen large sums of money directed at three principal targets: members of Congress, Washington lobby groups and influential former officials.

There is a long list of MEK supporters from both sides of the aisle: Democrats Howard Dean, Ed Rendell, Wesley Clark, Bill Richardson, and Lee Hamilton;

Republicans Rudy Giuliani, Fran Townsend, Tom Ridge, Michael Mukasey, ex-FBI director Louis Freeh, Newt Gingrich and Andrew Card. Current Republican Congress members Ted Poe, Ileana Ros-Lehtinen, the chair of the House of Representatives foreign affairs committee,; Mike Rogers, chairman of the House of Representatives intelligence committee;  Dana Rohrabacher, chairman of the foreign affairs committee’s oversight subcommittee

Lobbyist groups: DLA Piper; Akin Gump Strauss Hauer & Feld; and DiGenova & Toensing;

Government outsiders and journalists: Nobel Peace Prize recipient, Eli Wiesel; pro-Israel supporter Alan Deschowitz; The Washington Post‘s Carl Bernstein and the Chicago Tribune‘s Clarence Page. Townsend and Rendell are both cable news contributors.

Glenn Greenwald, writing at The Guardian, has five lessons to be learned about :the rot and corruption at the heart of America’s DC-based political culture”:

Lesson One: There is a separate justice system in the US for Muslim Americans.

The past decade has seen numerous “material support” prosecutions of US Muslims for the most trivial and incidental contacts with designated terror groups. It is hardly an exaggeration to say that any Muslim who gets within sneezing distance of such a group is subject to prosecution. Indeed, as I documented last week, many of them have been prosecuted even for core First Amendment activities: political advocacy deemed supportive of such groups. [..]

In sum, there are numerous American Muslims sitting in prison for years for far less substantial interactions with terror groups than this bipartisan group of former officials gave to MEK. This is what New York Times Editorial Page Editor Andrew Rosenthal meant when he wrote back in March that the 9/11 attacks have “led to what’s essentially a separate justice system for Muslims“. The converse is equally true: America’s political elites can engage in the most egregious offenses – torture, illegal eavesdropping, money-driven material support for a terror group – with complete impunity.

Lesson Two: The US government is not opposed to terrorism; it favors it.

The history of the US list of designated terrorist organizations, and its close cousin list of state sponsors of terrorism, is simple: a country or group goes on the list when they use violence to impede US interests, and they are then taken off the list when they start to use exactly the same violence to advance US interests. The terrorist list is not a list of terrorists; it’s a list of states and groups which use their power to defy US dictates rather than adhere to them.

Lesson Three: “Terrorism” remains the most meaningless, and thus the most manipulated, term in political discourse.

Terrorism, at least in its applied sense, means little other than: violence used by enemies of the US and its allies. Violence used by the US and its allies (including stateless groups) can never be terrorism, no matter how heinous and criminal.

Lesson Four: Legalized influence-peddling within both parties is what drives DC.

MEK achieved its goal by doing more than merely changing the beneficiaries of its actions from Saddam to the US and Israel. It also found a way – how it did so remains a mystery – to funnel millions of dollars into the bank accounts of key ex-officials from both parties, a bipartisan list of DC lobbyist firms, and several key journalists. In other words, it achieved its policy aims the same way most groups in DC do: by buying influence within both parties, and paying influence-peddlers who parlay their political celebrity into personal riches.

Lesson Five: there is aggression between the US and Iran, but it’s generally not from Iran.

Over the last decade, the US has had Iran almost entirely encircled, thanks in part – only in part – to large-scale ground invasions of the nations on its eastern and western borders. Some combination of Israel and the US have launched cyberwarfare at the Iranians, murdered their civilian scientists, and caused explosions on its soil. The American president and the Israeli government continuously and publicly threaten to use force against them.

Remember Osama bin Laden and how well that went.

Where is the protest from the so-called progressive left who were so opposed to the right wing Republican fetish with a war with Iran? ‘It’s OK if you’re Obama” should not be acceptable.

Despite Israeli Prime Minister Benjamin Netanyahu’s bleating  on Sunday’s talk shows about Iran being months away from having a nuclear weapon, there is no hard evidence that Iran is even seeking to build one. I’ve written three articles since January dispelling this myth, yet here we are again. The right wing war hawks and Bibi are at it propagate this fairy tail. Even Israel’s own intelligence community has agreed with the International Atomic Energy Agency and U.S. defense and intelligence officials who have said that they believe that Iran has not made a decision on whether to acquire nuclear weapons. So once more here are the facts from historian of the modern Middle East and South Asia Juan Cole:

1. {..} Netanyahu’s own Defense Minister, Ehud Barak, who admitted that Iran has not decided to initiate a nuclear weapons program. Israel’s chief of staff, Benny Gantz, has also admitted that Iran has not decided to build a bomb.

2.  It is often argued that Iran does not need nuclear power. But it uses some petroleum for power generation, and Iranians are driving more and more. [..] Iran’s energy exports provide a crucial financial cushion, allowing the country to remain independent. Other oil giants, such as Saudi Arabia and the United Arab Emirates, are also building nuclear power plants. There is nothing illogical or unusual about Iran going in this direction.

3. It is alleged that Iran has threatened to annihilate Israel. It has done no such thing. Iran has a ‘no first strike’ policy, repeatedly enunciated by Supreme Leader Ali Khamenei. Iran’s president, Mahmoud Ahmadinejad, has expressed the hope that the ‘Zionist regime over Jerusalem” would ‘vanish from the page of time.’ But he didn’t threaten to roll tanks or missiles against Israel, and compared his hopes for the collapse of Zionism to the collapse of Communism in Russia. [..]

4. Supreme Leader Ali Khamenei has given a formal ruling or fatwa against nuclear weapons.

I skipped to 6

6. No, the International Atomic Energy Agency, on inspecting Iran, did not alleged evidence for bomb-making. It certified that no uranium has been diverted to a weapons program.

The last time that Iran launched a war of aggression was in 1826 when it attacked Russia over disputed territory. Iran, like the United States is a signatory of the Treaty on Non-Proliferation of Nuclear Weapons. Israel is not.

Mr. Netanyahu has been beating this drum since 1992. Iran is no closer now than it was then to having, or wanting, nuclear weapons. Yet, he and the right wing war hawks who took us into the Iraq misadventure, would have the world believe this fantasy. Pushing for another war in the Middle East would have very seriously negative consequences for the entire world.

No agreement is perfect but the settlement that was reached Tuesday afternoon with the New York Department of Financial Services over Standard Charter Bank’s illicit money laundering with Iran and other countries under sanctions was better than most. In particular, SBC’s admission that the “the conduct at issue involved transactions of at least $250 billion.” The fine of $340 million was larger than the $250 million SBC offered but smaller than either the $700 million to $1 billion that SBC might have had to pay if the case had gone to a hearing on Wednesday and large because of the multi-billion dollar transaction admission. So the agreement is being touted as a victory for Benjamin M. Lawsky and his 10-month old agency, the New York Department of Financial Services which took on the bank without the Federal agencies who have been negotiating with SBC.

Yves Smith at naked capitalism has the statement from Mr. Lawsky:

STATEMENT FROM BENJAMIN M. LAWSKY, SUPERINTENDENT OF FINANCIAL SERVICES, REGARDING STANDARD CHARTERED BANK

   Benjamin M. Lawsky, New York Superintendent of Financial Services, issued the following statement today.

   “The New York State Department of Financial Services (“DFS”) and Standard Chartered Bank (“Bank”) have reached an agreement to settle the matters raised in the DFS Order dated August 6, 2012. The parties have agreed that the conduct at issue involved transactions of at least $250 billion.

   “The settlement also includes the following terms:

       

• The Bank shall pay a civil penalty of $340 million to the New York State Department of Financial Services.
• The Bank shall install a monitor for a term of at least two years who will report directly to DFS and who will evaluate the money-laundering risk controls in the New York branch and implementation of appropriate corrective measures. In addition, DFS examiners shall be placed on site at the Bank.
• The Bank shall permanently install personnel within its New York branch to oversee and audit any offshore money-laundering due diligence and monitoring undertaken by the Bank.

   “The hearing scheduled for August 15, 2012 is adjourned.

   “We will continue to work with our federal and state partners on this matter.”

This settlement is only with the New York regulator and it includes the transfers with Libya, Mynmar and the Sudan.

While this could have been better, Mr. Lawsky did get the bank to concede that the transfer did indeed involve the $250 billion which resulted in a larger settlement. SBC still must deal with the federal regulators based on the concession with NYDF. As David Dayen at FDL sees it this put a whole new slant on those talks:

In addition, this does not end the legal trouble for Standard Chartered. This only resolves the issues with the New York Department of Financial Services. Federal regulators (including Treasury, the Federal Reserve and the Justice Department) as well as the Manhattan District Attorney must now enter into their negotiations, and if they cannot get as much as the DFS, it will be completely embarrassing. This could cost Standard Chartered at least double this initial figure.

Meanwhile over at the SEC, Wells Fargo walks away from mortgage investment case with a $6.5 million fine and no admission of wrongdoing as usual. Wells Fargo earned $16 billion last year.

The Securities and Exchange Commission has spent nearly four years building cases against the nation’s biggest banks for their role in the mortgage mess.The agency has filed civil actions against Goldman Sachs, JPMorgan Chase and Citigroup.

But in recent months, the agency has struggled to bring big cases as it pursued a second round of investigations focused on the banks’ failure to disclose the dangers of mortgage securities. The Wells Fargo case comes just days after Goldman Sachs revealed that the S.E.C. had closed an investigation into a 2006 mortgage deal without pursuing charges. [..]

The action also cited Shawn McMurtry, a former vice president and broker at the bank, over his role in selling the deals. Under the settlement, Mr. McMurtry agreed to a $25,000 fine and six-month suspension from the securities industry.

I’m sure Mr. McMurtry can afford it.

Yves Smith at naked capitalism and Marcy Wheeler at emptywheel have been following the latest banking scandal with a certain amount of “glee” as New York Superintendent of Financial Services, Benjamin Lawsky, Federal regulators (mainly Treasury and the Federal Reserve) and Mr. Lawsky’s target, the British bank, Standard Charter, all do the “Rule of Law” waltz in the media.

The “dance” so far has resulted in a flurry of furious responses to Mr. Lawsky’s charges that the Standard Charter Bank (SCB) laundered billions of dollars for Iran hiding the transaction from federal investigators for 10 years.

These are the latest developments over the last few days since the story broke:

First from Yves where she confesses her enjoyment of the “dust up” and the latest counter by SCB to sue Mr. Lawsky:

The lead story in the Financial Times on SCB is so obviously barmy that I’m astonished that the pink paper would give it prominent play. The headline: StanChart seeks advice over countersuit. Even floating this as an course of action reeks either of desperation to create positive news hooks or delusion:

   The bank’s legal advisers believe “there is a case” for claiming reputational damage, according to two people close to the situation, although StanChart is conscious of the delicacy of taking an aggressive stance towards its regulators.

The whole “delicacy” part is code for this having odds of close to zero of happening, so this looks like yet more spin.

The damage was done by the threat to yank the license and access to dollar clearing services, not the “rogue institution” label in the order. And as we’ve written in earlier posts, despite the spinmeister’s efforts to contend otherwise, Lawsky has cited violations of New York law that appear to let him get there, in addition to the charge under the Federal laws on transfers to Iran.

Yves notes that the likelihood of this lawsuit going forward is “zero” since the risk of losing in a NY civil court and the exposure of any other damning evidence that the superintendent has would be a disaster for SCB.

She also highlighted a comment made by Frank Partnoy, former derivatives salesman, now law professor, who noted:

   Indeed, the order puts the bank’s senior attorneys and compliance officers at the heart of the wire stripping scheme, even when outside counsel advised otherwise. As early as 1995, soon after President Bill Clinton announced economic sanctions against Iran, the bank’s general counsel allegedly “embraced a framework for regulatory evasion”. He allegedly strategised about how to avoid scrutiny by the US Office of Foreign Assets Control, known as OFAC, and instructed employees that a memorandum describing the plan to avoid regulatory compliance was “highly confidential & MUST NOT be sent to the US”….

   As recent debacles at Barclays, HSBC and now Standard Chartered demonstrate, employees of big global banks increasingly lack a moral compass. Some general counsels and compliance officers do provide ethical guidance. But many are facilitators or loophole instructors, there to show employees the best way to avoid the law. Not even mafia lawyers go that far; unlike many bankers, mobsters understand the value of an impartial consigliere who will tell them when to stop.

If silly civil lawsuits weren’t enough, the original Reuters’ article, the source of Marcy Wheeler’s original post, was edited to exclude the orders of magnitude of the fraud:

The Reuters article was a pretty damning picture of how the Get Out of Jail Free industry works.

And then, the most damning parts of the article disappeared (Update from Briinhild: the full story is back up). As Yves discovered later in the day yesterday, Reuters pulled those paragraphs of the story that described this whole process.

Yves then posted that Reuters was running interference for elite corruption by scrubbing the article clean of the damning parts and posted original Reuters’ article:

Now I decided to go have a look myself. Being on the vampire shift, I didn’t go looking until mid afternoon. And guess what, the story that was now at that URL was not the same story. Yes, there was a story on Standard Chartered. But the version that Marcy worked from was apparently the original, released at 00:28 AM, titled “U.S. regulators irate at NY action against StanChart.” I’ve loaded that version in a Word and put it up at ScribD, and am embedding it below. It’s 1766 words. Be sure to download it if you are interested in this topic.

Apparently, as was pointed out by an emptywheel reader, Briinhild, Marcy and Yves must have embarrassed Reuters because they reposted the original article later that day.

The latest today from Yves, this “plot thickens” as Federal regulators try to “leash and collar” Superintendent Lawsky:

Today, the Wall Street Journal reported that, “Regulators Seek Unity in U.K. Bank Talks.”

If you read the article, a more accurate headline would be “Federal regulators desperate to get in front of Lawsky mob and call it a parade.” All the article says is the mucho unhappy and very much outflanked Federal regulators have gotten a meeting with Lawsky. Just look at the disconnect between the PR in the first paragraph and the actual state of play in the second:

   U.S. authorities are forming a group with New York’s top financial regulator to negotiate a settlement with Standard Chartered over allegations it illegally hid financial dealings with Iran.

   The U.S. Treasury Department, Federal Reserve, U.S. Department of Justice and Manhattan district attorney’s office are scrambling to reach an understanding with the New York State Department of Financial Services over the ground rules for negotiations with the U.K.’s fifth-largest bank by assets, according to people familiar with the talks.

This is hysterical. “Ground rules for negotiations”? Lawsky does not need the permission of Geithner et. al. to negotiate with Standard Chartered. As long as Lawsky has Cuomo’s backing, he has all the leverage here. And three independent sources told me as of today that Cuomo was fully behind Lawsky. That means he is likely to remain free to operate as he sees fit. It’s a given that if the White House had any real sway over Cuomo and saw fit to intervene, they would have done so by now. There is no downside to Lawsky in going through the motions of seeing if there is a way for him to proceed and have the Feds save a bit of face.

Let me stress again: Lawsky has all the cards, and he must know that.

Yves also cites this article from Bloomberg:

   New York’s financial-services regulator has grounds to shut Standard Chartered Plc (STAN) in the state even if he accepts the firm’s argument that it illegally laundered only a fraction of the $250 billion he claims.

   As the state’s top banking regulator, Benjamin Lawsky has power to act in his discretion against any financial institution he deems untrustworthy, according to the charter of his year-old department.

   Penalties he could impose include fines and the revocation of the bank’s license to operate in the state…

   Even if Standard Chartered’s position is legally sound, the order’s disclosure of internal e-mails suggesting a conspiracy to hide the identity of Iranian clients from regulators has given Lawsky grounds to act when the two sides face off at an administrative hearing Aug. 15, according to experts on both sides of the Atlantic.

   “I don’t care whether it is a half of one percent that weren’t right,” said Arthur Levitt, former chairman of the Securities and Exchange Commission,…

   “There are going to be more that weren’t right…The e-mails are really outrageous. I think Lawsky has uncovered something that probably has a much deeper depth.”…

   Neil Barofsky, who oversaw the U.S. Troubled Asset Relief Program and criticized the U.S. Treasury Department in his book, Bailout, objected to the criticism heaped on Lawsky.

   “This is not Lawsky getting ahead of other regulators,” said Barofsky. “This is Lawsky doing his job.”…

   “Willful non-compliance is very serious,” said Tariq Mirza, a former Federal Deposit Insurance Corp. official now with Grant Thornton. “If those allegations can be substantiated, regulators throw the book at institutions.”

Another article from the International Business Times that speculates what SBC’s sentence would be if it were an individual found guilty of these crimes:

Under New York state statutes against those two crimes, a defendant found guilty could be sentenced to a penalty of between eight-and-one-third and 25 years. The attorney noted that “it seems likely that a maximum sentence would be given because of the extent of criminality alleged in this case.” And if the judge really wanted to throw the book at them, the attorney explained, they could consider every instance where Standard Chartered Bank engaged in alleged illegal conduct, no doubt hundreds of them, as a “discrete act of criminality” rather than “one criminal transaction.”

Federal involvement would make the possible prison term even stiffer, with the appropriate federal money-laundering statute carrying a penalty of “roughly 15 to 19 years,” and a racketeering conviction “punishable by up to 20 years” in Club Fed.

(emphasis mine)

Wouldn’t that be a delightful sight?

As Yves notes in her discussion of these news articles, there is a lot of spin or, as with the case of a New York Times article, misinformation:

There is also an article at the New York Times on Lawsky which comes close to being a hatchet job. It does not look as if the Times made any effort to get to anyone in Lawsky’s camp (by contrast, I know of at least one reporter working on a profile who says everyone who Lawsky has worked with him is extremely complimentary). It also has sources that are spinning (one might say misrepresenting) the genesis. It acknowledges that Lawsky discussed his findings and theories, so it undermines the “blindsided claim. We were told three months ago, with the Fed; the article says April, so this is pretty close to the same time frame and sounds like the same meeting. [..]

(emphasis mine)

The traditional MSM is going to do a lot of the work for federal regulators by sniping at Mr. Lawsky and painting him as a “rogue” and “over-stepping his authority”. It’s bloggers like Marcy Wheeler and Yves Smith that sort out the facts from the hype and innuendo. The ladies rock.

As Yves requested, if you live in New York and support what Mr. Lawsky is doing, especially since the New York Times is taking shots at him now, drop him a note using this form.

Thanks and a h/t to naked capitalism reader Bryan Sean McKown for the title.

The LIBOR scandal continues to rattle the banking industry revealing the fraud that has gone unchecked by regulators in the US and Europe. The latest scandal that is now rocking international banking involves billions of dollars that were laundered by the British bank, Standard Charter, for Iran:

Standard Chartered bank ran a rogue unit that schemed with Iran’s government to hide more than $250bn (£160bn) in illegal transactions for nearly a decade, according to a scathing report by New York regulators that may put intense pressure on the management of the UK-based bank.

According to the report filed by the New York state department of financial services (NYSDFS), when warned by a US colleague about dealings with Iran, a Standard Chartered executive caustically replied: “You f—ing Americans. Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians.” [..]

The 27-page report claims that Standard Chartered bankers helped Iranian clients skirt US financial sanctions against their country for nearly a decade.

Benjamin Lawsky, superintendent of the NYSDFS, said a Standard Chartered subsidiary in New York had also sought to do business with other US-sanctioned countries, including Libya, Burma and Sudan.

It is the latest blow to the reputation of the City, already criticised in Washington following the HSBC money-laundering debacle and JP Morgan’s multibillion-dollar trading losses at its London office. [..]

The New York regulator has provided emails between members of Standard Chartered staff. In one the head of the US operations warned, among others, the executive director of risk in London, that the dealings with Iran could cause “very serious or even catastrophic reputational damage” to the group.

The email, dated October 2006, warned: “There is equally importantly potential of risk of subjecting management in US and London (e.g. you and I) and elsewhere to personal reputational damages and/or serious criminal liability.” It was this memo that provoked the response about “you f—ing Americans”.

But it wasn’t the Treasury Department or the Federal Reserve that dropped the bomb with these charges, it was  Benjamin Lawsky, the New York Superintendent of Financial Services. Yves Smith at naked capitalism asked yesterday, “where were the Feds?”

The lack of action by everyone ex the lowly New York banking supervisor is mighty troubling. The evidence presented in Lawsky’s filing is compelling; he clearly has not gone off half cocked. Why has he pressed forward and announced this on his own? The Treasury Department’s Office of Terrorism and Financial Intelligence has supposedly been all over terrorist finance; the consultants to that effort typically have very high level security clearances and top level access (one colleague who worked on this effort in the Paulson Treasury could get the former ECB chief Trichet on the phone). For them not to have pursued it anywhere as aggressively as a vastly less well resourced state banking regulator, particularly when Iran is now the designated Foreign Enemy #1, does not pass the smell test.

At a minimum, this lack of sufficient inquisitiveness on behalf of the Feds would the bank snookered them by being terribly forthcoming (as in it was responding only to specific inquiries, and then as narrowly as possible). But it raises the more troubling specter that Federal regulators (oh, and the US Department of Justice) wanted to keep this all quiet so as not to lead to embarrassing headlines. Although there is nothing in the filing to point to failure to act by the New York Fed, which was presumably the lead party in the 2003 sanctions against SCB (indeed, it says specifically that SCB deceived Federal regulators), the flip side is there would be only downside to Lawsky in doing anything that would make Fed or Treasury think he was trying to make then look bad.

There was a huge furor in the UK over who among the banking regulators knew what when on the Libor scandal. If our Congresscritters are at all worth their salt, they ought to be putting Geithner and the relevant folks at the New York Fed under the hot lights. We’ll see soon enough how the Fed and Treasury play this. If they don’t launch parallel actions pronto, it will be a damning sign as to where they think their, and perhaps most importantly, Geithner’s, interests lie.

At emptywheel, Mary Wheeler, wondered as well why the Superintendent of Financial Services is policing our Iran sanctions?

Normally, we’d see accusations like SFS released today from Treasury’s OFAC (Office of Terrorism and Financial Intelligence), perhaps (for charges as scandalous as these) in conjunction with the NY DA and/or a US Attorney. And yet OFAC has had these materials in hand for 2 years, and has done nothing.

In fact, we have a pretty good idea what OFAC’s action would look like, because earlier this year it sanctioned ING for actions that were similar in type, albeit larger in number (20,000 versus 60,000) and far larger in dollar amount ($1.6 billion involving Cuba versus $250 billion involving Iran). Both banks were doctoring fields in SWIFT forms to hide the source or destination of their transfers. [..]

My wildarsed guess, in this case, is that we have an understanding with our allies that they’ll allow us to require the rest of the world to comply with our sanctions so long as it doesn’t affect that country’s businesses. That is, I suspect countries like Britain are happy to comply with our sanctions so long as British banks don’t lose competitive advantages as a result. Of course, these sanctions are different that-say-our stupid Cuba sanctions in that the UK is as enthusiastic about sanctioning Iran into docility as the US is, and this scheme is all about retaining lucrative business with Iran.

But we may never learn what reason that is, because that would make things uncomfortable for the entities that claim there is rule of law for banks while they ensure that usually is not the case.

But no matter, the Feds are now upset with Lawsky who had the cajones to do what they were obviously trying to cover up. Barry Ritholtz at Economonitor points out that Lawsky has virtually declared the Treasury and Federal reserve as “too corrupt” to handle this:

   “Pursuant to the statutory powers vested in him by the People of the State of New York . . . [and] extensive investigation included the review of more than 30,000 pages of documents, including internal SCB (Standard Chartered Bank) e-mails that describe willful and egregious violations of law.

  For almost ten years, SCB schemed with the Government of Iran and hid from regulators roughly 60,000 secret transactions, involving at least $250 billion, and reaping SCB hundreds of millions of dollars in fees. SCB’s actions left the U.S. financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes, and deprived law enforcement investigators of crucial information used to track all manner of criminal activity.

   –NYS Department of Financial Services

Benjamin Lawsky, head of the New York State Department of Financial Services, has declared that the Treasury Department and the Federal Reserve is “too corrupt” to be involved in NY’s actions against money launderers and Iran sponsors at Standard Chartered bank.

At least, that corruption is what was implied by his actions (note those are my words, not his). Lawsky refused to give Tim Geithner or Ben Bernanke or anyone else at Treasury or the Fed any advance notice of pending legal/regulatory actions. Sorry, Treasury, he seemed to be saying, but your track records preceded you. [..]

This Treasury Department, like the one that preceded it, along with Congress and the White House, have proven themselves to be utterly incapable of overseeing the banking industry. Rather than adhere to this betrayal of the public trust, Mr. Lawsky decided to do something amazing: He actually followed the law. The rest of the regulatory sector should take note.

Have a read of the paragraph at the top of this page to see how prosecution of banking felons and their crony capitalist allies is supposed to be done.

We live in the Banana Republic formerly known as the United States. Its time to turn this nation back into a Democracy . . .

Let’s hope that Mr. Lawsky doesn’t cave to pressure like NY State Attorney General Eric Scneiderman did.

While all eyes were on France, the ouster of Nicholas Sarkozy and a rejection of austerity, Iran has been conducting its first elections since the 2009 elections that reinstalled Mahmoud Ahmadinejad as president. This was the second round of voting for seats in the Parliament elections that were held in March. It has dealt a blow to Ahmadinejad and his supporters with a shift to more conservative backers of Ayatollah Ali Khamenei. The rift between Ahmadinejad and the Ayatollah began with dispute over the choice of the national security chief. The voting has left the Ayatollah firmly in charge:

With the bulk of seats decided in Iran’s parliamentary elections, it appeared on Sunday that the supreme leader, Ayatollah Ali Khamenei, has gained the ironclad majority he needed not just to bring the country’s president to heel, but to eliminate the position entirely.

Ayatollah Khamenei has jousted repeatedly with President Mahmoud Ahmadinejad – as well as the two previous presidents – so the supreme leader secured this majority at Mr. Ahmadinejad’s expense.

The ayatollah will seek “to eliminate the post of president,” said Aliakbar Mousavi Khoeini, a former reformist member of the Parliament now living in exile in the United States.

“If they can get that, they will not hold the next presidential election; instead, Parliament will chose a prime minister,” he said. “Then Khamenei will essentially have everything he does approved and pushed through Parliament by his allies.”

Ayatollah Khamenei suggested last October that Iran would be better off governed under a parliamentary system in which the prime minister was chosen from members of the 290-seat Parliament. Under Iran’s byzantine electoral system, most reformist candidates were barred from running in last Friday’s election, essentially creating a contest between the two main hard-liner camps.

With 90 percent of the districts counted, Ayatollah Khamenei’s allies had won about 75 percent of the 200 seats in those districts, according to Press TV, Iran’s state-financed satellite channel, quoting the Interior Ministry.

Khamesian said Ahmadinejad was gradually fading from Iran’s political scene but could still stir up conflict with parliament.

“Ahmadinejad is the losing party. So, he will try to create tensions in the hope of getting concessions,” he said.

The outgoing parliament and Ahmadinejad are at loggerheads over how quickly to slash food and energy subsidies. The president favors dramatic cuts to boost Iran’s ailing economy by reducing the massive drain on the state budget from the subsidies.

The government implemented a first phase of slashing subsidies in December 2010. Gasoline prices quadrupled and bread prices tripled after the cuts came into effect. Prices have also increased in recent months, partly as a result of sanctions over Iran’s nuclear program, as well as news that the government is considering ending subsidies altogether.

Parliamentary speaker Ali Larijani, one of Ahmadinejad’s opponents, said the parliament won’t allow him to quickly end the remaining subsidies because it would cause wild inflation and public dissatisfaction.]

(Reuters) – Iranian President Mahmoud Ahmadinejad, now out of favor with Supreme Leader Ayatollah Ali Khamenei, suffered more setbacks in a run-off parliamentary election seen as a pointer for next year’s presidential race, results showed on Saturday.

The authorities hailed the outcome as a resounding triumph for Iran as it prepares for nuclear negotiations with the West.

Results announced by the Interior Ministry showed the United Principalist Front, closely linked with Khamenei and critical of Ahmadinejad, leading Friday’s vote, but with the hardline Resistance Front of the Islamic Revolution close behind.

The allegiance of the Resistance Front is tricky to fathom. It also backs Khamenei, but some members have served under Ahmadinejad. Some still support the president, others dislike his chief of staff, accused of trying to undermine Iran’s theocratic system.

At the heart of this election were Iran’s nuclear energy program and continued subsidies for food and energy which have been cut, and along with Western sanctions, have resulted in drastic increases in the price of gas and bread:

“The vote is support for the ruling system as it faces the U.S. and its allies over the nuclear program … The vote also means that tensions will increase between Ahmadinejad and his opponents in the incoming parliament,” political analyst Ali Reza Khamesian said.

Khamesian said Ahmadinejad was gradually fading from Iran’s political scene but could still stir up conflict with parliament.

“Ahmadinejad is the losing party. So, he will try to create tensions in the hope of getting concessions,” he said.

The outgoing parliament and Ahmadinejad are at loggerheads over how quickly to slash food and energy subsidies. The president favors dramatic cuts to boost Iran’s ailing economy by reducing the massive drain on the state budget from the subsidies.

The government implemented a first phase of slashing subsidies in December 2010. Gasoline prices quadrupled and bread prices tripled after the cuts came into effect. Prices have also increased in recent months, partly as a result of sanctions over Iran’s nuclear program, as well as news that the government is considering ending subsidies altogether.

Parliamentary speaker Ali Larijani, one of Ahmadinejad’s opponents, said the parliament won’t allow him to quickly end the remaining subsidies because it would cause wild inflation and public dissatisfaction.

It’s difficult to tell how this will effect talks about Iran’s nuclear energy program but it will hopefully cool the the saber rattling rhetoric, letting saner voices prevail. We can hope.