Tag: TMC Politics

“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

Christian Neumeister: It’s Just Business: How Corporate America Made Slaves of the Young

Companies across the nation are gleefully denying interns fair wages for their work, in flagrant violation of long-standing labor law, and have the nerve to tell the world they are doing these people a favor.

Huge numbers of college students and recent graduates in a tight labor market are too scared to ask for compensation. Consequently, many interns must work for years in unpaid positions to build their résumés while depending on their parents for financial support. Not only do unpaid internships stop some from paying down a collectively exploding student debt, they compound the economical class differences between those who can afford to work for free and those who can’t.

This exploitative practice has evolved over the generations since the passage of the Fair Labor Standards Act in 1938 and a 1947 Supreme Court ruling about railroad trainees that officially defined unpaid internships; that ruling was mostly ignored by businesses, and today’s systemic abuse of interns eventually developed.

Mark Weisbot: UN Should Get Rid of Cholera Epidemic That It Brought to Haiti

Haitians have had a long and arduous struggle just to achieve the rights that most people in the rest of the hemisphere have enjoyed. From the revolution of Haitian slaves that won independence from the French in 1804, through the U.S. occupation (1915-1934), the Duvalier family dictatorship (1957-1986), and the last 20 years of devastating foreign intervention, the “international community” just hasn’t seen Haitians as having the same basic human rights as people in other countries. [..]

This is perhaps most clear in the failure of the United Nations to take responsibility for the additional devastation they have brought to Haiti with the deadly disease of cholera. Since the outbreak began in October 2010, more than 7,445 Haitians have died of the disease and more than 580,000 have been infected, and these official numbers are an underestimate. It is now firmly established, by a number of scientific studies, that UN troops brought cholera to Haiti by dumping their human waste into the country’s water supply. [..]

No wonder more than 70 percent of Haitians responding to a recent poll said they wanted MINUSTAH to leave within a year.  The UN can use the money currently wasted on this military force to rid the country of cholera.  Then, at least, they will have cleaned up one of their biggest crimes in the country.

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.

“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

Dean Baker: The Fed, Ben Bernanke and the rotten Libor

Ben Bernanke had an obligation as Fed chair to expose and stop the rigging of inter-bank lending rates.

The case of the rigged Libor turns out to be the scandal that just keeps on giving. It reveals a great deal about the behaviour of the Federal Reserve Board and central banks more generally.

Last month, Federal Reserve Board Chairman Ben Bernanke gave testimony before Congress in which he said that he had become aware of evidence that banks in the UK were rigging the Libor – the inter-bank lending rate and one of the primary benchmarks for short-term interest rates – in the autumn of 2008. According to Bernanke, he called this to the attention of Mervyn King, the head of the Bank of England. Apparently Mervyn King did nothing, since the rigging continued, but Bernanke told Congress there was nothing more that he could do.

The implications of Bernanke’s claim are incredible. There are trillions of dollars of car loans, mortgages and other debts, in the United States, tied to the Libor. There are also huge derivative contracts whose value depends on the Libor at a moment in time. People were winning or losing on these deals not based on the market, but rather on the rigged Libor rate being set by the big banks.

Michael T. Klare: The Coming Hunger Wars: Heat, Drought, Rising Food Costs, and Global Unrest

The Great Drought of 2012 has yet to come to an end, but we already know that its consequences will be severe. With more than one-half of America’s counties designated as drought disaster areas, the 2012 harvest of corn, soybeans, and other food staples is guaranteed to fall far short of predictions. This, in turn, will boost food prices domestically and abroad, causing increased misery for farmers and low-income Americans and far greater hardship for poor people in countries that rely on imported U.S. grains. [..]

At this point, the focus is understandably on the immediate consequences of the still ongoing Great Drought: dying crops, shrunken harvests, and rising food prices. But keep an eye out for the social and political effects that undoubtedly won’t begin to show up here or globally until later this year or 2013.  Better than any academic study, these will offer us a hint of what we can expect in the coming decades from a hunger-games world of rising temperatures, persistent droughts, recurring food shortages, and billions of famished, desperate people.

The fines that are being levied against banks and companies for investment fraud, fraudulent advertising, money laundering and the like are large but come nowhere near the cost to tax payers and investors. Since these fines are but a fraction of the profits that these criminals reap, the fines won’t deter them from repeating the offense. Nor does it help that as part of the settlement the company and its employees are let off the hook for criminal wrongdoing.

Glaxo Agrees to Pay $3 Billion in Fraud Settlement

In the largest settlement involving a pharmaceutical company, the British drugmaker GlaxoSmithKline agreed to plead guilty to criminal charges and pay $3 billion in fines for promoting its best-selling antidepressants for unapproved uses and failing to report safety data about a top diabetes drug, federal prosecutors announced Monday. The agreement also includes civil penalties for improper marketing of a half-dozen other drugs. [..]

Part of the civil settlement also includes claims that the company overcharged the government for drugs. Glaxo did not admit any wrongdoing in the civil settlement.

Despite the large amount, $3 billion represents only a portion of what Glaxo made on the drugs. Avandia, for example, racked up $10.4 billion in sales, Paxil brought in $11.6 billion, and Wellbutrin sales were $5.9 billion during the years covered by the settlement, according to IMS Health, a data group that consults for drugmakers.

In the New York Times article, Patrick Burns, spokesman for the whistle-blower advocacy group Taxpayers Against Fraud, stated, “So a $3 billion settlement for half a dozen drugs over 10 years can be rationalized as the cost of doing business.” Also, Eliot Spitzer, former New York State Attorney General who sued GlaxoSmithKline in 2004 over allegations about the drug Paxil, was quoted as saying that “What we’re learning is that money doesn’t deter corporate malfeasance, The only thing that will work in my view is C.E.O.’s and officials being forced to resign and individual culpability being enforced.”

In another case, Morgan Stanley, an international investment firm, has agreed to pay a fine of $4.8 million with no admission of wrongdoing for electricity price-fixing said to cost consumers $300 million. Justice department officials said that it sends a message to the banking industry. What message would that be?

The government said the arrangement allowed KeySpan to withhold substantial electricity generating capacity from the market, driving prices higher for consumers, and generated $21.6 million of net revenue for Morgan Stanley.

U.S. District Judge William Pauley in Manhattan said he shared the concerns of state officials and the AARP, a nonprofit serving people 50 and older, that any settlement should have reflected the harm to consumers and forced Morgan Stanley to give up the $21.6 million.

“Given the government’s stark allegations of manipulative conduct against Morgan Stanley, disgorgement of $4.8 million is a relatively mild sanction,” Pauley wrote. “There is a risk that a large financial services firm like Morgan Stanley could view such a modest penalty as merely a cost of doing business.

“But despite this court’s misgivings, the government’s decision to settle for less than full damages is entitled to judicial deference, particularly in view of the novelty of the government’s theory.”

The judge also rejected the AARP argument that the $4.8 million be returned to consumers, in part because sending it instead to the U.S. Treasury served the public interest.

So the consumers are left holding the bag, particularly the financially stressed elderly and poor, while the Morgan Stanley and Keyspan continue business as usual concocting new ways to break the law.

If whistleblowers can reveal it, why can’t the government prosecute it? The claim by the Obama administration that it’s too hard to find the evidence to pin on an individual just rings too hollow. It may be hard but it is possible with subpoenas and little more effort. It is well past time we held the criminals responsible for breaking the laws and stop prosecuting those who expose it.

It’s getting warmer and that appears to be the trend. Is it too late to so something? What are the consequences? Is there the political will to take action? Naomi Wolf exams those questions in this article from The Guardian about the impact of the current American drought, the American phenomenon of climate change denial and the effects of “political polarization” on public opinion:

America has led the world in climate change denial, a phenomenon noted with amazement by Europeans, not to mention thinking people around the world. Year after year, the US has failed to sign global treaties or curb emissions, even as our status as a source of a third of the world’s carbon emissions goes unchanged. [..]

But could our denial be cracking, this summer, as, in the heartland – that most iconic of American landscapes – broiling temperatures injure humans and cook fish in the water? This summer a crisis has occurred (though one that, again, is seldom reported on in terms of our outsize contribution to the disaster), as midwestern farmers lost vast swaths of their corn crop to scalding heat and drought. In the American unconscious of wishful ignorance, this disaster and loss was to be borne, as usual, by other people far away. [..]

But we face some serious problems in rising out of our torpor. In “Shifting Public Opinion on Climate Change: An Empirical Assessment of Factors Influencing Concern over Climate Change in the US, 2002-2010“, John Wihbey shows that Gallup surveys reveal Americans’ level of concern varying widely [..]

Wihbey and colleagues’ study found that this fluctuation was caused by, among other factors, political polarization. In other words, when one party says global warming is a crisis and the other says all that is nonsense, and there is no cooperation between political elites at both ends of the spectrum, the net result is apathy.

What is even more ominous, is how China and India have manipulated carbon credits to make a profits from the production of HFC-23, a gaseous byproduct of a coolant that causes global warming and is used in air-conditioners and then destroying it:

When the United Nations wanted to help slow climate change, it established what seemed a sensible system.

Greenhouse gases were rated based on their power to warm the atmosphere. The more dangerous the gas, the more that manufacturers in developing nations would be compensated as they reduced their emissions.

But where the United Nations envisioned environmental reform, some manufacturers of gases used in air-conditioning and refrigeration saw a lucrative business opportunity.

They quickly figured out that they could earn one carbon credit by eliminating one ton of carbon dioxide, but could earn more than 11,000 credits by simply destroying a ton of an obscure waste gas normally released in the manufacturing of a widely used coolant gas. That is because that byproduct has a huge global warming effect. The credits could be sold on international markets, earning tens of millions of dollars a year. [..]

What was intended to fix the problem of hydro-chlorofluorocarbons has now created its own major problem:

The United Nations and the European Union, through new rules and an outright ban, are trying to undo this unintended bonanza. But the lucrative incentive has become so entrenched that efforts to roll it back are proving tricky, even risky.

China and India, where most of the 19 factories are, have been resisting mightily. The manufacturers have grown accustomed to an income stream that in some years accounted for half their profits. The windfall has enhanced their power and influence. As a result, many environmental experts fear that if manufacturers are not paid to destroy the waste gas, they will simply resume releasing it into the atmosphere. [..]

Some Chinese producers have said that if the payments were to end, they would vent gas skyward. Such releases are illegal in most developed countries, but still permissible in China and India. [..]

Already, a small number of coolant factories in China that did not qualify for the United Nations carbon credits freely vent this dangerous chemical. And atmospheric levels are rapidly rising.

Wall St. also has their grubby paws in this, too. Goldman Sachs invested in carbon credits and a coolant factory in Monterrey, Mexico, that receives carbon credits is 49 percent owned by Honeywell. So these companies, especially in China and India, are holding the world hostage. Pay up or we kill the climate faster.

James Hansen, director of NASA’s Goddard Institute for Space Studies joined Eliot Spitzer, host of “Viewpoint” to discuss how heat waves are a indicator of global warming.

“If we continue with business as usual this century, we will drive to extinction 20 to 50 percent of the species on the planet,” Hansen says. “We are pushing the system an order of magnitude faster than any natural changes of climate in the past.”

“We’re gonna have to reduce carbon dioxide emissions, and that is not as difficult as you think. If we would just make fossil fuels pay for their true cost to society, we could begin to move to different energies and energy efficiency,” Hansen contends. “We should be collecting a fee from fossil fuel companies that gradually rises over time and 100 percent of that money should be distributed to the public, not one dime to the government. If we did that, the people who do better than average in limiting their fossil fuel use will actually get more in this dividend than they would pay in increased energy prices.”

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.

“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”.

Wednesday is Ladies’ Day

Follow us on Twitter @StarsHollowGzt

Jeanne Mirer and Marjorie Cohn: The Toxic Effects of Agent Orange Persist 51 Years After the Vietnam War

From the beginning of the spraying 51 years ago, and even today, millions of Vietnamese have died from, or been completely incapacitated by, diseases which the US government recognizes are related to Agent Orange for purposes of granting compensation to Vietnam veterans in the United States. The Vietnamese, who were the intended victims of this spraying, experienced the most intense, horrible impact on human health and environmental devastation. Second and third generations of children, born to parents exposed during the war and in areas of heavy spraying hot spots, suffer unspeakable deformities that medical authorities attribute to the dioxin in Agent Orange. [..]

For the past 51 years, the Vietnamese people have been attempting to address this legacy of war by trying to get the United States and the chemical companies to accept responsibility for this ongoing nightmare. An unsuccessful legal action by Vietnamese victims of Agent Orange against the chemical companies in US federal court, begun in 2004, has nonetheless spawned a movement to hold the United States accountable for using such dangerous chemicals on civilian populations. The movement has resulted in pending legislation HR 2634 hot spots, lawsuit to compensate them, as the unintended victims, for their Agent-Orange-related illnesses. But the Vietnamese continue to suffer from these violations with almost no recognition, as do the offspring of Agent-Orange-exposed US veterans and Vietnamese-Americans.

Ruth Coniff: Tragedy in Wisconsin and Our Out-of-Control Gun Policies

The shooting rampage Sunday at the Wisconsin Sikh Temple outside Milwaukee has got to prompt serious soul-searching about our out-of-control gun policies in this country.

Although President Obama’s timely words of condolence strike the right note, once again the President did not seriously address the main problem: that the floridly psychotic, violent racists, and anyone else who attends a gun show or chooses to order thousands of rounds of ammunition online, has easy access to weapons like the two semiautomatic handguns the temple gunman apparently used.

This is not a hunting issue. It is not an issue of self defense. It is a question, as the President himself put it after the horrible massacre in a Colorado movie theater, of whether automatic weapons belong in the hands of soldiers, or of anyone who cares to use them.

“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”.

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New York Times Editorial: Business Fears the Fiscal Cliff

So it turns out that federal spending is important to the economy after all.

As Nelson Schwartz reported in The Times on Monday, a number of manufacturers say they are canceling plans for investing and hiring, in part, because they fear that some $100 billion in budget cuts will take effect in 2013. In all, the law currently calls for $1.2 trillion in automatic spending cuts over 10 years, starting Jan. 1, divided between nondefense programs and defense projects.

Republican lawmakers demanded the cuts last year as part of their brinkmanship over the debt ceiling, and business lobbies have generally supported slashing the deficit. But now that the cuts are imminent, corporate executives seem to have realized that the last thing the economy needs is a large budget cut across the board.

Gore Vidal: Gore Vidal Speaks Seriously Ill of the Dead

The following was first published March 20, 2008 at Truthdig

I can recall that day in the 1930s when a “news” (sic) magazine appeared in Washington, D.C.; it was called Newsweek: meant to be a counterbalance to Time Magazine’s uncontrollable malice. In due course the two became sadly alike as Vincent Astor morphed into Henry Luce: Was it something in the water? I once asked Henry Luce why he called Time a news magazine when it was simply Uncle Harry’s means of venting his rage (this was 1960 or so) at liberals, and “degenerate art” like the plays of Tennessee Williams-he had no answer. At Newsweek Vincent Astor was far too stupid to answer any such complaint. Now here we are in the Newsweek of 2008, and it’s still lousy. There have been a few decent writers in between that were less nutty than today’s Newsweek hacks. [..]

The unique mess that our republic is in can be, in part, attributed to a corrupt press whose roots are in mendacious news (sic) magazines like Time and Newsweek, aided by tabloids that manufacture fictional stories about actual people. This mingling of opinion and fiction has undone a media never devoted to truth. Hence, the ease with which the Republican smear-machine goes into action when they realize that yet again the party’s permanent unpopularity with the American people will cause them defeat unless they smear individually those who question the junk that the media has put into so many heads. Anyone who says “We gotta fight ’em over there or we’re gonna have to fight ’em over here.” This absurdity has been pronounced by every Republican seeking high office. The habit of lying is now a national style that started with “news” magazines that was further developed by pathological liars that proved to be “good” Entertainment on TV. But a diet of poison that has done none of us any good.

I speak ex cathedra now, ad urbe et orbe, with a warning that no society so marinated in falsity can long survive in a real world.

Here are some of the good guys in Congress who are trying to protect our freedoms under the Fourth Amendment:

Merkley Introduces Bill to Prevent Warrantless Surveillance of Americans

Under amendments to FISA passed during the Bush administration, the intelligence agencies may conduct warrantless wiretapping, potentially collecting vast amounts of communications and data, so long as they reasonably believe the communications involve individuals who are located outside of the United States and who are not U.S. citizens. However, there are loopholes in the current statute that could permit the intelligence community to intentionally or unintentionally collect and store the communications of American citizens and others living in the U.S. and to mine data collected from Americans without a warrant.  National security agencies have not even released estimates of how often Americans’ communications are swept up by the warrantless wiretapping program.  [..]

“Keeping Americans safe versus protecting American’s privacy is a false choice. We have a moral and Constitutional duty to do both,” Merkley said. “We can ensure our government has the tools to spy on our enemies without giving it a license to intrude into the private lives of American citizens.  This bill will establish new safeguards to respect the principles of the Fourth Amendment protections from government intrusion without a warrant while ensuring that the intelligence community has the tools it needs to combat terrorism.” [..]

“This bill will give the FISA Amendments Act the overhaul it so desperately needs, restraining the government from unconstitutionally collecting and using vast amounts of data about innocent Americans,” said Michelle Richardson, ACLU Legislative Counsel. “These amendments would allow collection against foreigners to continue while better protecting Americans and should be considered a win-win for both the intelligence community and the Constitution.”  

Wyden Places Hold on FISA Amendments Act Extension

Warns that Loophole Gives Government the Ability to Circumvent Warrant Requirements to Spy on U.S. Citizens

Wyden identified two specific concerns that he believes Congress must address before agreeing to a long-term extension of FAA’s authorities.

The first pertains to the lack of information regarding the number of law-abiding American citizens who have had their communications collected and reviewed under the FISA Amendments Act authorities.  Last Summer, he and Senator Mark Udall asked the Administration for an estimate of the “number of people located in the United States whose communications were reviewed by the government pursuant to the FISA Amendments Act.”  The Office of the Director of National Intelligence responded that it was “not reasonably possible to identify the number of people located in the United States whose communications may have been reviewed under the authority of the FAA.”  Nearly a year later, Congress has yet to receive an estimate of the number of Americans who have had their communications collected under FAA.  

“The purpose of this 2008 legislation was to give the government new authorities to collect the communications of people who are believed to be foreigners outside the United States, while still preserving the privacy of people inside the United States,”  Wyden explains in his hold statement.  “Before Congress votes to renew these authorities it is important to understand how they are working in practice.  In particular, it is important for Congress to better understand how many people inside the United States have had their communications collected or reviewed under the authorities granted by the FISA Amendments Act.”

Wyden’s second concern pertains to what he describes as the law’s inadequate protections against warrantless “back door” searches of Americans.

“I am concerned, of course, that if no one has even estimated how many Americans have had their communications collected under the FISA Amendments Act,” Wyden writes. “Then it is possible that this number could be quite large.  Since all of the communications collected by the government under section 702 are collected without individual warrants, I believe that there should be clear rules prohibiting the government from searching through these communications in an effort to find the phone calls or emails of a particular American, unless the government has obtained a warrant or emergency authorization permitting surveillance of that American.“

David Kravets alerts us to a proposal (pdf) by Rep. Jerrold Nadler (D-NY) and  Rep. John Conyers Jr. (D-MI) that require the government to obtain a probable-cause warrant to access data stored in the cloud:

The law that the measure would amend is the Electronic Communications Privacy Act, which has seen few updates following President Ronald Reagan’s 1986 signature on the measure.

The proposal represents yet another attempt to rewrite legislation that generally grants the government wide powers to access Americans’ cloud-stored data without a probable-case showing. [..]

Adopted when CompuServe was king, ECPA allows the government to acquire a suspect’s e-mail or other stored content from an internet service provider without showing probable cause that a crime was committed, as long as the content had been stored on a third-party server for 180 days or more. E-mail and other cloud-stored data younger than six months is protected by the warrant requirement, as is all data stored on a personal computer drive.

ECPA was adopted at a time when e-mail, for example, wasn’t stored on servers for a long time. Instead it was held there briefly on its way to the recipient’s inbox. E-mail more than six months old on a server was assumed abandoned, and that’s why the law allowed the government to get it without a warrant. At the time there wasn’t much of any e-mail for the government to target because a consumer’s hard drive – not the cloud – was their inbox.

But technology has evolved, and e-mail often remains stored on cloud servers indefinitely, in gigabytes upon gigabytes – meaning the authorities may access it without warrants if it’s older than six months.

The same rule also applies to content stored in the cloud. That includes files saved in Dropbox, communications in Facebook, and Google’s cloud-storage accounts. Such personal storage capabilities were nearly inconceivable when President Reagan signed the bill.

The proposal will probably never be even heard in the radical right wing House committee. Kravets notes that a similar proposal in the Senate by Sen. Patrick Leahy (D-VT) never even got a hearing in the Judiciary Committees that Leahy chairs.

While the Obama administration continues to carry out and expand the Bush/Cheney regime agenda and the obstructionist Republicans and Right wing Democrats unwittingly (or not) help him, there are some people who recognize that security and freedom are not mutually exclusive.

“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

Chris Hedges:The Science of Genocide

Now I am become Death, the destroyer of worlds.

On this day in 1945 the United States demonstrated that it was as morally bankrupt as the Nazi machine it had recently vanquished and the Soviet regime with which it was allied. Over Hiroshima, and three days later over Nagasaki, it exploded an atomic device that was the most efficient weapon of genocide in human history. The blast killed tens of thousands of men, women and children. It was an act of mass annihilation that was strategically and militarily indefensible. The Japanese had been on the verge of surrender. Hiroshima and Nagasaki had no military significance. It was a war crime for which no one was ever tried. The explosions, which marked the culmination of three centuries of physics, signaled the ascendancy of the technician and scientist as our most potent agents of death. [..]

All attempts to control the universe, to play God, to become the arbiters of life and death, have been carried out by moral idiots. They will relentlessly push forward, exploiting and pillaging, perfecting their terrible tools of technology and science, until their creation destroys them and us. They make the nuclear bombs. They extract oil from the tar sands. They turn the Appalachians into a wasteland to extract coal. They serve the evils of globalism and finance. They run the fossil fuel industry. They flood the atmosphere with carbon emissions, doom the seas, melt the polar ice caps, unleash the droughts and floods, the heat waves, the freak storms and hurricanes.

James Hansen: Climate Change is Here – and Worse Than We Thought

When I testified before the Senate in the hot summer of 1988 , I warned of the kind of future that climate change would bring to us and our planet. I painted a grim picture of the consequences of steadily increasing temperatures, driven by mankind’s use of fossil fuels.

But I have a confession to make: I was too optimistic.

My projections about increasing global temperature have been proved true. But I failed to fully explore how quickly that average rise would drive an increase in extreme weather.In a new analysis of the past six decades of global temperatures, which will be published Monday, my colleagues and I have revealed a stunning increase in the frequency of extremely hot summers, with deeply troubling ramifications for not only our future but also for our present.