Tag: corruption

On Wednesday in the early morning hours in Zurich, Switzerland, at a five star hotel, there were six phone calls made by the concierge to six rooms telling the occupants: “Sir,” the concierge said in English, “I’m just calling you to say that we’re going to need you to come to your door and open it for us or we’re going to have to kick it in.” How polite.

The hotel, which overlooks Lake Zurich, provided an unlikely setting for the apprehension of six global soccer executives who were arrested on corruption charges and now face extradition to the United States. The operation took less than two hours and was strikingly peaceful – no handcuffs, no guns drawn. It also involved an unusual use of a bedsheet.

Raids in the United States are typically led by armed SWAT team members wearing bulletproof vests and helmets, but the Swiss took a more subtle approach. Rather than storming into the executives’ rooms and hauling them out in their pajamas, the officers waited for the men to come to the door and then gave them a chance to get dressed and pack their bags.

The officers appeared to lead the officials out one by one, through several exits, including a side door, the hotel’s garage and, in one case, the main entrance.

Thus started the arrests of six global soccer executives on corruption charges. The indictments were brought by the US Justice Department stemming from an FBI and IRS investigation into the business practices of FIFA, the world governing body of the world’s most popular sport. soccer.

The Justice Department, F.B.I. and I.R.S. described soccer’s governing body in terms normally reserved for Mafia families and drug cartels, saying that top officials treated FIFA business decisions as chits to be traded for personal wealth. One soccer official took in more than $10 million in bribes, Attorney General Loretta E. Lynch said.

The schemes involving the fraud included the selection of South Africa as the host of the 2010 World Cup; the 2011 FIFA presidential elections; and several sports-marketing deals. [..]

The Department of Justice indictment names 14 people on charges including racketeering, wire fraud and money laundering conspiracy. In addition to senior soccer officials, the indictment also named sports-marketing executives from the United States and South America who are accused of paying more than $150 million in bribes and kickbacks in exchange for media deals associated with major soccer tournaments. [..]

The promise that the investigation would continue raised the specter of more arrests, but officials would not comment on whether they were investigating Sepp Blatter, the FIFA president and the man widely regarded as the most powerful person in sports. One federal law enforcement official said Mr. Blatter’s fate would “depend on where the investigation goes from here.” [..]

United States law gives the Justice Department wide authority to bring cases against foreign nationals living abroad, an authority that prosecutors have used repeatedly in international terrorism cases. Those cases can hinge on the slightest connection to the United States, like the use of an American bank or Internet service provider.

Switzerland’s treaty with the United States is unusual in that it gives Swiss authorities the power to refuse extradition for tax crimes, but on matters of general criminal law, the Swiss have agreed to turn people over for prosecution in American courts.

What Esquire’s Charlie Pierce said:

Here and overseas, the entire corporate universe is shot through with metastatic corruption and crime. It is an essential part of the business model almost everywhere, from Wall Street offices to the pitch at Wembley. FIFA’s corruption is more than an endemic phenomenon. FIFA was simply one corrupt enterprise working with and through hundreds of other corrupt enterprises. There are governments, and there are communications empires, and there are all manner of companies advertising their wares — the “corporate partners” of a claque of brigands. If you did business with the crooks of FIFA, you’re a crook, too. There’s no way to avoid it. All of them are guilty. All of them are responsible. All of them are complicit in the corruption in the spotlight today, and in the death of anonymous workers in Qatar whose names they don’t even know. The whole goddamn corporate universe is begging for a gigantice RICO indictment.

It seems the Justice Department is capable of investigating and obtaining indictments against officials of an organization whose business practices have been described as “byzantine and impenetrable,” why can’t the DOJ do the same for the bankers of JPMorgan Chase, HSBC, Citibank, Bank of America, et al? It apparently is not that hard, Loretta.

Illinois Republican Representative Aaron Shock, he of the Downton Abbey office, announced his resignation from the House of Representatives after questions about his finances and high spending life style.

Schock’s spending came under scrutiny after a Washington Post report highlighted the Republican’s newly redecorated office, allegedly modeled after the popular British period drama “Downton Abbey.” The report noted that the office’s decorator, Annie Brahler, remodeled the office for free, sparking an ethics complaint against the congressman.

Schock ultimately repaid $40,000 for the redecoration, but the initial story set off a series of reports on the 33-year-old congressman’s lavish spending habits. Subsequent reports detailed a taxpayer funded weekend in New York for his staffers, a dozen charter flights worth over $40,000 on donors’ planes and $24,000 in campaign funds spent on concerts and events, including a sold-out Katy Perry concert.

Other reports raised questions over Schock’s relationships with donors. In February, a complaint was filed against Schock over the alleged sale of his home to a campaign donor for a significant profit. And earlier this week, the Chicago Tribune reported that multiple Schock donors were directly involved in a 2014 property deal in which the congressman paid one donor for a commercial property, and then took out out a mortgage for that property from a bank run by other donors.

When Rep. Shock was first elected in 2008, he was the youngest member of congress. He is currently the third youngest.

In another development, the ex-girlfriend and fund raiser for convicted felon former Rep. Michael Grimm (R-NY11), was sentenced to three months in jail. Diana Durand, 48, plead guilty last September to violating campaign finance law. Despite the recommendation of the prosecutors for no jail time, Federal Judge Sterling Johnson Jr disagreed.

Ms. Durand pleaded guilty in September to using straw donors to illegally contribute more than $10,000 to Grimm’s 2010 congressional campaign. Kaplan had asked for no prison time, noting that she’s the single mother of a 16-year-old son.

Prosecutors did not object to that request, but U.S. District Judge Sterling Johnson Jr. had other plans Tuesday.

“This is a very perplexing case, as all sentences are,” he said, adding, “I think that a custodial sentence is necessary.”

Johnson gave no other explanation for the sentence — three months, followed by a year of supervised release and a $10,000 fine. Ms. Durand is slated to surrender to U.S. Marshals in Texas, where she lives, on May 1.

Ms. Durand was also accused of giving illegal funds to Rep. Shock. Nor does this bode well for Mr. Grimm who is to be sentenced June 10.

Illinois Governor Bruce Rauner (R) has five days to notify the county clerk of the vacancy and the state must hold a special election for Rep. Snock’s empty seat within 115 days. The special election for the NY-11 vacancy is May 5.

Ah, the young ans the restless.

It seems that since 2010, the US Department of Justice has known that one of the largest banks in Europe has been sheltering money for dictators and arms dealers, among others:

Banking Giant HSBC Sheltered Murky Cash Linked to Dictators and Arms Dealers

By Gerard Ryle, Will Fitzgibbon, Mar Cabra, Rigoberto Carvajal, Marina Walker Guevara, Martha M. Hamilton and Tom Stites, February 8, 2015, The International Consortium of Investigative Jouranlists

Team of journalists from 45 countries unearths secret bank accounts maintained for criminals, traffickers, tax dodgers, politicians and celebrities

Secret documents reveal that global banking giant HSBC profited from doing business with arms dealers who channeled mortar bombs to child soldiers in Africa, bag men for Third World dictators, traffickers in blood diamonds and other international outlaws.

The leaked files, based on the inner workings of HSBC’s Swiss private banking arm, relate to accounts holding more than $100 billion. They provide a rare glimpse inside the super-secret Swiss banking system – one the public has never seen before. [..]

These disclosures shine a light on the intersection of international crime and legitimate business, and they dramatically expand what’s known about potentially illegal or unethical behavior in recent years at HSBC, one of the world’s largest banks.

The leaked account records show some clients making trips to Geneva to withdraw large wads of cash, sometimes in used notes. The files also document huge sums of money controlled by dealers in diamonds who are known to have operated in war zones and sold gemstones to finance insurgencies that caused untold deaths.

These are some of the key findings the journalists found:

 

HSBC Private Bank (Suisse) continued to offer services to clients who had been unfavorably named by the United Nations, in court documents and in the media as connected to arms trafficking, blood diamonds and bribery.

   HSBC served those close to discredited regimes such as that of former Egyptian president Hosni Mubarak, former Tunisian president Ben Ali and current Syrian ruler Bashar al-Assad.

   Clients who held HSBC bank accounts in Switzerland include former and current politicians from Britain, Russia, Ukraine, Georgia, Kenya, Romania, India, Liechtenstein, Mexico, Lebanon, Tunisia, the Democratic Republic of the Congo, Zimbabwe, Rwanda, Paraguay, Djibouti, Senegal, Philippines and Algeria.

   The bank repeatedly reassured clients that it would not disclose details of accounts to national authorities, even if evidence suggested that the accounts were undeclared to tax authorities in the client’s home country. Bank employees also discussed with clients a range of measures that would ultimately allow clients to avoid paying taxes in their home countries. This included holding accounts in the name of offshore companies to avoid the European Savings Directive, a 2005 Europe-wide rule aimed at tackling tax evasion through the exchange of bank information.

If this seems all too familiar, that’s because it is. HSBC was fined $1.6 billion in June of 2013 after it reached an agreement with the US Department of Justice which resolved charges it enabled Latin American drug cartels to launder billions of dollars

HSBC was accused of failing to monitor more than $670 billion in wire transfers and more than $9.4 billion in purchases of U.S. currency from HSBC Mexico, allowing for money laundering, prosecutors said. The bank also violated U.S. economic sanctions against Iran, Libya, Sudan, Burma and Cuba, according to a criminal information filed in the case. [..]

Under a deferred prosecution agreement, the U.S. allows a target to avoid charges by meeting certain conditions — including the payment of fines or penalties — and by committing to specific reforms.

US government faces pressure after biggest leak in banking history

So just what was the Department of Justice and the IRS doing with this information about the bank and its clients? Apparently not much.

Confronted by the Guardian’s evidence, HSBC admitted wrongdoing by its Geneva-based subsidiary. “We acknowledge and are accountable for past compliance and control failures,” the bank said in a statement. The Swiss arm, the statement said, had not been fully integrated into HSBC after its purchase in 1999, allowing “significantly lower” standards of compliance and due diligence to persist. [..]

The 2012 settlement was overseen by Loretta Lynch, who was then US Attorney for the Eastern District of New York. Lynch is currently Barack Obama’s current nominee for attorney general.

At the time, the HSBC settlement was heavily criticised by both Republicans and Democrats for allowing the bank to escape criminal indictments and keep the charter which enables it to operate in the US. Lynch and other senior DoJ officials defended the deal, pointing out it committed HSBC to a five-year plan to stamp out money laundering and other illicit practices, an ongoing process that is being overseen by an independent, court-appointed monitor. [..]

The DoJ was under pressure to go beyond financial penalties – to bring criminal charges against HSBC or its bankers – in July 2012, after the Senate’s permanent subcommittee on investigations published its crushing 330-page report documenting how the bank’s lax anti-money laundering controls had been exploited by drug traffickers. [..]

The settlement proved controversial because it stopped short of criminally indicting the bank or its executives; lawmakers from both parties complained it revealed some Wall Street institutions were considered “too big to jail”. [..]

HSBC is now just over two years into its reform plan, and has been deemed to be complying with the terms of the settlement. However the court-appointed monitor, Michael Cherkasky, who oversees a team of banking investigators who review HSBC’s changes, has expressed some concern over the pace of reform. Cherkasky’s most recent assessment of HSBC’s ongoing efforts to clean up its act has once again concluded it could do better, according a recent report in the Wall Street Journal which cited people familiar with its findings.

CBS’s “60 Minutes” aired The Swiss Leaks a report by Bill Whitaker that examined “HSBC’s business dealings with a collection of international outlaws.”

The sickening part of this is the US Justice Department was well aware of this when they settled the HSBC’s drug laundering case in 2013. Also. HSBC is one of the institutions that is refusing to handle the money of legitimate marijuana businesses.

Nice going, Eric.

The American “system” has been a bit tardy in its response to climate change. Experts tell us that the longer it takes to make needed changes, the more difficult it will be to make them.

As 350.org’s Bill McKibben puts it:

We’re talking about a fight between human beings and physics. And physics is entirely uninterested in human timetables. Physics couldn’t care less if precipitous action raises gas prices, or damages the coal industry in swing states. It could care less whether putting a price on carbon slowed the pace of development in China, or made agribusiness less profitable.

Physics doesn’t understand that rapid action on climate change threatens the most lucrative business on Earth, the fossil fuel industry. It’s implacable. It takes the carbon dioxide we produce and translates it into heat, which means into melting ice and rising oceans and gathering storms. And unlike other problems, the less you do, the worse it gets.  Do nothing and you soon have a nightmare on your hands.

We could postpone healthcare reform a decade, and the cost would be terrible — all the suffering not responded to over those 10 years. But when we returned to it, the problem would be about the same size. With climate change, unless we act fairly soon in response to the timetable set by physics, there’s not much reason to act at all.

Unless you understand these distinctions you don’t understand climate change — and it’s not at all clear that President Obama understands them.

There are lots of reasons why the response of the system has been so slow. There is significant resistance in the system to the sort of changes that need to be made. That resistance has manifested itself in a number of ways, from President Obama using the spies at the NSA to kill global agreements on climate change to the bipartisan popularity of climate change denial in Congress, the media and the public relations industry, despite virtually indisputable scientific evidence.

Resistance is created by a variety of groups based on their perceived interests. Enormously wealthy, powerful corporations and individuals who want to preserve their profits from fossil fuels and related industries, people who rely on jobs created or enabled by fossil fuel industries, people who fear economic chaos and the loss of their comforts due to actions to stop climate change, and politicians whose fortunes depend upon the money and other resources of the fossil fuel industry are some huge sources of systemic inertia.

Lately I’ve been getting deluged with emails from politicians like President Obama, various Democratic Party fundraisers and political organizations that go a little like this:

Dear Joe,

Evil Republicans!

Koch Brothers!

The Senate!

I want to fight for you!

Can you help me out with $3, $5, $10 or more?

Really? These folks want to fight for me?

Look Honey, there’s a fella in a thousand dollar suit who wants to fight for me!

Were these guys fighting for me when they failed to meaningfully address climate change, or when Mr. Obama created and doggedly stuck to his disasterous “all of the above” energy policy? Were these guys fighting for me when they extended yet again the endless war – draining the blood and treasure of America despite the fact that those we are wasting trillions to incinerate pose no imminent threat to the United States? How about when they set up the Catfood Commission and tried to grand bargain away some part of my Social Security benefits? Was “my team” fighting for me when they set up secret trade deals that give corporations vast powers to force their demands on communities and destroy the environment with impunity?

Say, do you remember when Mr. Obama promised repeatedly that his signature accomplishment, Obamacare, would be transparent and negotiated in public on C-Span and then decided that the public didn’t need to see what the choices are? Who was “our team” fighting for when they froze out advocates of a single payer health system and then passed a new law guaranteeing a $100 billion a year subsidy to the insurance industry but leaving millions of Americans uninsured?

How about when a bunch of corrupt bankers crashed our economy, costing average Americans huge amounts of money, robbing state and local budgets of money for citizen services and threw millions of Americans out of work?  Oops, wait a minute…

Last year, after the New York State legislature failed to pass campaign finance and a year riddled with corruption scandals, New York State Governor Andrew Cuomo empaneled an “independent” commission to pursue misconduct among public officials and make recommendations to changes to the state’s election and campaign fund-raising laws. The 25 member Moreland Commission was created last July to restore public trust in government. But nine months later, Gov. Cuomo shut it down. The governor claimed that with “the passage of new tougher laws on bribery and  corruption, and improved enforcement of election law”, the commission was no longer needed.

That didn’t satisfy government watch dogs or some lawmakers. Nor did it satisfy Preet Bharara, US Attorney for the Southern District of New York, whose investigations had led to the commissions formation. According to the New York Times, Mr. Bharara contacted two of the commission’s three chairs, William J. Fitzpatrick and Milton L. Williams Jr. His suspicion was that Gov. Cuomo had shut down the commission for political expediency and because the commission’s investigation was getting to close to his office. It now appears that Mr. Bharara has really good instincts.

This week the New York Times broke with this extensive report:

With Albany rocked by a seemingly endless barrage of scandals and arrests, Gov. Andrew M. Cuomo set up a high-powered commission last summer to root out corruption in state politics. It was barely two months old when its investigators, hunting for violations of campaign-finance laws, issued a subpoena to a media-buying firm that had placed millions of dollars’ worth of advertisements for the New York State Democratic Party.

The investigators did not realize that the firm, Buying Time, also counted Mr. Cuomo among its clients, having bought the airtime for his campaign when he ran for governor in 2010.

Word that the subpoena had been served quickly reached Mr. Cuomo’s most senior aide, Lawrence S. Schwartz. He called one of the commission’s three co-chairs, William J. Fitzpatrick, the district attorney in Syracuse.

“This is wrong,” Mr. Schwartz said, according to Mr. Fitzpatrick, whose account was corroborated by three other people told about the call at the time. He said the firm worked for the governor, and issued a simple directive:

“Pull it back.”

The subpoena was swiftly withdrawn. The panel’s chief investigator explained why in an email to the two other co-chairs later that afternoon.

“They apparently produced ads for the governor,” she wrote.

The pulled-back subpoena was the most flagrant example of how the commission, established with great ceremony by Mr. Cuomo in July 2013, was hobbled almost from the outset by demands from the governor’s office.

Despite Gov, Cuomo’s denial and protestations that it was his commission to dismiss, Mr Bharara is taking over where the commission’s investigations. The lengthy article is a must read.

MSNBC’s Rachel Maddow roasted Gov. Cuomo in an extended segment that included an interview with Thomas Kaplan one of the three authors who wrote the NYT’s article.

The governor’s travails also caught the attention of The Daily Show‘s Jon Stewart

Gov. Cuomo’s Democratic Primary opponent Fordham University law professor Zephyr Teachout has called for the governor to resign should these allegations prove true.

Also complicating his headaches, Gov. Cuomo had some of the commission members sworn in as deputy state attorneys general by State Attorney General Eric Schneiderman that calls into question his assertions that he had a right to interfere with the commission. Quite similar to late President Richard M. Nixon’s Saturday Night Massacre when he ordered the independent special prosecutor Archibald Cox fired after Mr. Cox issued subpoenas asking for copies of taped conversations recorded in the Oval Office and authorized by Nixon as evidence.

Gov. Cuomo does have a lot of questions to answer and so far his answers have fallen very short.