Tag: ek Politics

If you follow my Formula One coverage you’ll remember that at the Marina Bay race last week Singapore had to resort to cloud seeded rain to reduce the level of particulates and general air pollution enough so that divers could see all the way down the straights (not to mention the breathing problems).

The acute levels of toxicity had to do with massive fires in Indonesia, how’s that working out for them?

Smoke from Indonesia fires puts Singapore’s air at ‘hazardous’ level

Al Jazeera

September 24, 2015 12:28PM ET

Air quality deteriorated to officially “hazardous” levels Thursday in Singapore – a key Southeast Asian business and transit hub – as choking smog blew in from Indonesia’s neighboring island of Sumatra, where forests and brush are being illegally burned to clear land for oil palm plantations and other farming.

The Singapore government’s three-hour Pollutant Standards Index (PSI) hit 319, its highest level so far this year, around midnight local time. The country’s National Environment Agency lists a level of 201-300 as “very unhealthy,” and above 300 as “hazardous.” Thick gray smoke shrouded the island city-state’s gleaming skyscrapers and crept into homes, even as many residents were staying indoors in attempt to escape the pollution.

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For the past two decades, smoke from Indonesia has been spreading to other parts of Southeast Asia during the region’s annual mid-year dry season, when plantation owners and other farmers deliberately start brush and forest fires to clear land.

Southeast Asia’s most damaging cross-border haze came in 1997 and 1998, when the smog caused an estimated $9 billion in losses in economic activity across the region.

Skull and Bones.

David Cameron, a pig’s head and a secret society at Oxford University – explained

by Nadia Khomami, The Guardian

Monday 21 September 2015 09.29 EDT

What have we learned about David Cameron today?

An unofficial biography of David Cameron written by the Conservative donor Lord Ashcroft contains a series of allegations. They include that the prime minister spent time in a drug-taking environment at university, that he took part in a bizarre dinner club initiation ritual, and another claim about Cameron’s knowledge of the peer’s offshore tax status.

One specific allegation is that, in the words of the Daily Mail, Cameron took part in an initiation ceremony in which he “put a private part of his anatomy” into a dead pig’s mouth. It cites a source – a current MP – who claims to have seen photographic evidence. It allegedly took place at a notorious Oxford University drinking club, the Piers Gaveston Society.

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What is the Piers Gaveston Society?

“Piers Gav” is highly exclusive, made up of a self-selecting group of 12 undergraduates. The men-only club, named after the alleged male lover of Edward II, king of England from 1307 to 1327, was founded in 1977 and carries the motto: “Fane non memini ne audisse unum alterum ita dilixisse.” It translates to:

Truly, none remember hearing of a man enjoying another so much.

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What do people say about it?

Valentine Guinness, one of the founders of the society, once told the journalist Toby Young that the appearance of Piers Gav and other similar societies in the 70s “was a conscious effort to say, look, you know, the country may be in a mess but we’re still going to have a good time”.

And so they do. For its summer ball, members each invite 20 guests – preferably more women than men, who were last year given 72 hours’ notice, when they were told to turn up for a hired coach that would drive them to an undisclosed destination in the countryside. “Cross-dressing is as likely to feature as speed-laced jelly,” says the Telegraph of these parties. “The rules are simple – there are none.”

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What’s the difference between Piers Gaveston and the Bullingdon Club?

The Bullingdon Club is the other drinking society Cameron was known to be a member of. Most of the sonorous members of the Bullingdon are old Etonians. The prime minister was one such member, as were the London mayor, Boris Johnson and the chancellor, George Osborne.

They wore a bespoke uniform of tailcoats, waistcoats and bow ties, which could cost thousands of pounds, making membership difficult for ordinary students. One MP who was once asked to join the club said he walked out of a gathering in disgust. “What it basically involved was getting drunk and standing on restaurant tables, shouting about ‘f***ing plebs’. It was all about despising poor people,” he told the Daily Mail of the scene reminiscent of film The Riot Club, based on Laura Wade’s play Posh.

So, there are a couple of reasons why otherwise sensible and well raised people do these kind of embarrassing and horrific things.

The first is that they’re so drunk, stoned, or both that it seems like a good idea at the time.

A more powerful reason is that hazing rituals are frequently used to promote what we called in my club “Bonding Experiences.”

“Hah.  Remember when we wacked Bruno and it was raining and Fat Tony slipped and fell in the grave so Vito thought it would be funny to shovel some dirt on him?  Ah, good times.”

In truth shared events increase unit cohesiveness, either in enforcing a sense of superiority and dominance or in leveling class differences between leaders and the led.

Here’s a true story.  I was visiting a local as capo di tutti and they had just succeeded in a task for which the promised reward was they could pick someone to kiss a pig.  A live one that they had somehow smuggled into the ballroom of the hotel they met at.  I was of course a “lucky” nominee and, because I understood my responsibilities as a motivator, I was fully prepared, if not very comfortable with the concept, to kiss that pig.  In this instance the local capo was the target and he very gracefully acknowledged the accomplishment of his team.

But as I said, this type of group reinforcement can easily lead to feelings of entitlement and exclusivity.  That’s why the more drastic and formalized versions practiced by many upper classes, including our own, have a tendency to get more severe as those who have had to suffer humiliation to gain admittance consider it their privilege to not only continue, but increase it.

Is Trump too honest for the GOP? He’s actually challenging Republican fantasies – but it could spell trouble

by Simon Maloy, Salon

Thursday, Sep 17, 2015 02:45 PM EST

One thing I did notice that might end up stinging Trump is the fact that he’s a little bit too honest when it comes to certain key issue areas. The Republican Party and the conservative movement have dogmas and mythologies that they take great care to insulate from the corrosive effects of real life, particularly when it comes to economics and national security. At last night’s debate, Trump did his part to tear them down.

About halfway into the festivities, CNN moderator Jake Tapper asked Ben Carson about his Bible-inspired flat tax plan, which would have every taxpayer in America kick in ten percent of their income, regardless of what they make. Carson explained that his plan is an improvement upon our current system of progressive taxation, because the very idea of asking a wealthy person to pay a higher tax rate is “socialism,” and “that doesn’t work so well.”

Trump was given his opportunity to respond, and he correctly pointed out that progressive taxation isn’t “socialism,” but rather a matter of basic fairness: a multi-millionaire can shed ten percent of their income with little difficulty, but that’s not the case for someone living on a subsistence wage.

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That answer was a direct challenge to many of the other candidates in the race, who have proposed plans that either completely flatten the tax code or skew it more in favor of the wealthy. So much of Republican and conservative economic policy is premised on the idea that the tax code is unfair to high earners, who need more money so that they can create jobs for normal people, and Trump said that way of thinking is indefensible.

On national security, Trump went even bigger, having the temerity to suggest that George W. Bush’s eight years of bumbling mishaps and misguided invasions are the root cause of all instability in the Middle East. “Your brother – and your brother’s administration gave us Barack Obama, because it was such a disaster, those last three months, that Abraham Lincoln couldn’t have been elected,” Trump shot at Jeb. “You know what?” Jeb said in response. “As it relates to my brother, there’s one thing I know for sure. He kept us safe.” Trump fired back: “I don’t know. You feel safe right now? I don’t feel so safe.” At that point, Scott Walker joined the conversation to defend Jeb and his brother. “It’s not because of George W. Bush; it’s because of Barack Obama,” he said to applause from the audience.

The idea that George W. Bush’s foreign policy was ultimately a success is a fiction Republicans and conservatives tell themselves in order to keep faith in the “Bush Doctrine” or the “Freedom Agenda” or whatever the hell they’re calling the “invade and/or bomb everyone everywhere” strain of foreign policy thought. For the foreign policies of Jeb Bush, Scott Walker, Marco Rubio, and Lindsey Graham to make even the slightest bit of sense, you have to start from the premise that The Surge in Iraq fixed all the problems in the country after years of bloody sectarian violence and political intransigence. Then you have to convince yourself that the rise of the Islamic state and the attendant destabilization of the region are the fault of Obama for not forcing the Iraqis to agree to a residual force of few thousand U.S. troops. Trump challenged those fictions, causing the establishment candidates to huff in disagreement.

Statements like these might end up hurting him because there has to be a limit on how un-Republican the Republican primary electorate will allow a candidate to be. GOP voters and conservatives like being told that all the undocumented immigrants will be kicked out and that we’ll stick it to the Chinese. They also like being told that tax hikes are socialism and that all the problems in the Middle East are Barack Obama’s fault for surrendering to the terrorists. The worst thing that could happen to Trump is if those voters get tired of his immigration act and start paying more attention to the other things he says.

The Donald is an umitigated asshole but I think he’s very important.  He shows how fundamentally angry even Republicans are at the Beltway Neo-Lib consensus and how thin support for the tired tropes is.

If you see Stupid say Stupid.

Here’s The Ridiculous Texas Law That Allows Law Enforcement To Pretend A Digital Clock Is A Hoax Bomb

by Tim Cushing, Tech Dirt

Thu, Sep 17th 2015 10:37am

There may be some method behind the zero tolerance, racially-tinged madness of the Irving, Texas, police department. The department perp-walked fourteen-year-old Ahmed Mohamed out of school and into its welcoming arms for the crime of not building a bomb. It was a clock, but because it had wires and a circuit board and was contained in a metal case and was on school grounds and Ahmed Mohamed’s name is Ahmed Mohamed, the police decided that if it wasn’t a bomb, it was the next best thing: a “bomb hoax.”

So, after handcuffing him “for his safety” (ACTUAL QUOTE) and holding the non-bomb “as evidence” of a crime that wasn’t committed, the department has dropped all charges. It isn’t very repentant, however, despite everyone else — including the President of the United States — expressing support for the student. It still claims everything about the horrendous debacle was by the book. And, sadly enough, it probably was.

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Mohamed didn’t pretend the clock was a bomb. Far from it. But that doesn’t matter because of subsection (2), which takes away anything involving intent and puts it all in the fearful minds of nearly any government official. “Alarm or reaction of ANY type.” How does one avoid causing an alarm or reaction in others, especially others that seem particularly easily alarmed? It’s impossible.

Mohamed’s science teacher wasn’t alarmed, but he did remark that maybe Ahmed shouldn’t show this project to anyone else. Mohamed didn’t plan to, but the clock started beeping during another class and shortly thereafter, his English teacher started panicking. (But in the controlled sort of panic where a person demands someone hand over a bomb — something no rational person would do if they actually thought the device in question was a bomb.)

Now, if we’re going to play along with this statute’s wordings, a whole lot of everyday items suddenly become much more “dangerous.” Road flares, cell phones, batteries, a box full of wires, a vibrator, a doorbell, a power inverter… basically anything someone might feel could explode or could trigger an explosion would fall under the enormous shadow this statute casts.

But if we’re going to play along with the police and the stupid law they used to defend their actions, we have to ask why several school officials — including the English teacher who reported Mohamed to them — weren’t arrested as well. After all, they very likely knew they didn’t have an actual “explosive or incendiary device” in their hands, and yet they approached the police department with claims that they did. This very definitely provoked a reaction and, at that point, the device was in the possession of school personnel. That’s subsection (2).

By claiming a bomb was on the school’s premises (when they likely knew it wasn’t a bomb — see also: no evacuation of the school, no warning sent to parents, etc.), they also violated subsection (1) of the statute.

…

Perp walking a few school officials out of the building and into squad cars would certainly teach them not to waste valuable law enforcement resources with stupid, fearful bullshit. But these actions would only be taken by a police department not so inclined to waste its own time investigating bombs that aren’t bombs and arresting students who aren’t criminals. And, as can clearly be seen, the Irving PD does not meet these standards.

Nick Merrill: the man who may unlock the secrecy of the FBI’s controversial subpoenas

by Spencer Ackerman, The Guardian

Thursday 17 September 2015 07.30 EDT

Unless the US Justice Department challenges a federal judge’s order that was kept secret until Monday, 27 November will be a landmark date for transparency in the post-9/11 era. The black bars obscuring the specific kinds of data the FBI sought from Merrill in 2004 will lift, revealing categories of information the bureau seeks to acquire outside the normal warrant process.

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Merrill, president of the firm Calyx, which at the time provided web hosting services, chose to fight the NSL instead of complying. He said that the public would be horrified to see the sorts of things the FBI acquires without a warrant.

“Internet service providers, email providers and other online services often store huge amounts of intensely personal and revealing data. NSLs have allowed the FBI to run rampant, demanding the sensitive records of innocent people in complete secrecy, avoiding the constitution’s carefully designed system of checks and balances, without ever appearing before a federal judge,” Merrill, now 42, told the Guardian.

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The 2001 Patriot Act lowered the standards for issuing NSLs substantially. No longer did the FBI need a particularized suspicion against an individual target, just “relevance” to a terrorism or espionage investigation. Special agents-in-charge at the FBI’s 56 field offices could now issue an NSL, not merely senior officials at its Washington headquarters. The gag orders, however, remained.

Accordingly, the Patriot Act transformed NSLs from a rarity into a routine tool. While secrecy has made hard numbers about NSLs hard to acquire, the FBI made 8,500 requests for data through NSLs in 2000. In 2014 an advisory group on surveillance appointed by Barack Obama reported that the FBI now issues 60 NSLs on average every day, which works out to 21,900 annually. Since a single NSL can request records from multiple people, the total number of people affected is likely to be vastly higher – and remains obscured in secrecy.

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Obama’s surveillance advisory group, which included former US intelligence officials, warned that NSLs sought for intelligence investigations “are especially likely to implicate highly sensitive and personal information and to have potentially severe consequences for the individuals under investigation”. It said it was “unable to identify a principled reason why NSLs should be issued by FBI officials“.

…

As Merrill sought to disclose more, the FBI said, according to New York federal judge Victor Marrero, Merrill “would reveal law enforcement techniques that the FBI has not acknowledged in the context of NSLs, would indicate the types of information the FBI deems important for investigative purposes, and could lead to potential targets of investigations changing their behavior to evade law enforcement detection”.

Marrero, on 28 August, ruled in Merrill’s favor anyway. But the judge’s opinion was kept secret until Monday to ensure that it did not itself reveal classified information.

“The gag was never necessary to protect national security, but to prevent a fulsome debate about the scope of the government’s unchecked power to obtain personal information about Americans,” said German, the former FBI agent, now with the Brennan Center for Justice at NYU Law School.

“Its release should be just the first step in a much more comprehensive discussion about the full range of government programs to spy on its own citizens.”

No, the dog is not there to lick your plate and it’s terribly undignified.  Hey look!  There are more clowns!

I’d tell you to send in the lions except they’re clowns too.

We start tonight with Funnel in your Pants, one of the classics.

Performing are Lindsey Graham, Bobby Jindal, George Pataki and Rick Santorum.  Unfortunately we will not be favored by Rick Perry who is too busy being indicted to appear or Jim Gilmore (who is he again?).

Lehman Day: Making Fun of the Second Great Depression Crowd

By Dean Baker, Truthout

Monday, 14 September 2015 00:00

This week marks the seventh anniversary of the collapse of Lehman Brothers, the huge investment bank. This collapse set off the worldwide financial panic that brought Wall Street to its knees. The anniversary of this collapse, September 15, is the day set aside to ridicule the people who warned of a second Great Depression (SGD) if the Treasury Department and the Federal Reserve Board didn’t rescue the Wall Street banks.

Just to recount the basic story, there is no doubt that without a government bailout most of the big Wall Street banks would have gone under. Citigroup and Bank of America were both effectively bankrupt and remained on life support with hundreds of billions of dollars of government subsidized loans well into 2010. The remaining investment banks, Merrill Lynch, Morgan Stanley, and Goldman Sachs were all facing bank runs. These would have been unstoppable without the helping hand of big government. Many other financial institutions also would have been brought down in the maelstrom, but these giants were for sure dead ducks at the time of the bailouts.  

There is no doubt that the initial downturn would have been more severe if the market was allowed to work its magic and put these banks out of business. But the question the SGD gang could never answer is how this collapse would prevent the government from boosting the economy immediately afterward. After all, then Federal Reserve Board Chair Ben Bernanke once ridiculed people who questioned the ability of the government to boost the economy, commenting the government “has a technology, called a printing press…”

Rather than sitting through a decade of double-digit unemployment, why would Congress not pass a large stimulus package supported by aggressive monetary policy from the Fed? There certainly was no economic obstacle to this path. And the claim that political gridlock somehow would have prevented any stimulus flies in the face of history. Even Republicans have supported stimulus to counter economic slumps. For those too young to remember, the last such incident was the stimulus package signed by President George W. Bush in February of 2008, when the unemployment rate was 4.7 percent.

In short, the idea of the government sitting paralyzed while the unemployment rate sat in the double digits is entirely an invention of the SGD crew. It has no basis in the real world.

It is easy to see why the SGD myth persists. Most obviously, the big Wall Street banks like to pretend they did us all a favor by letting the government bail them out. In their story the bailout wasn’t about saving Goldman Sachs and Citigroup, it was about rescuing the economy.

…

They want the public to believe that the issues involved are complicated and beyond the understanding of normal people. This is why their focus is always the financial crisis. After all credit default swaps and collaterized debt obligations can be complicated.

On the other hand, the basic story of the housing bubble was pretty damn simple. When the country saw an unprecedented run-up in house prices it should have caught some economists’ attention. After all, the US housing market was the largest market in the world and it was not previously subject to erratic fluctuations of this sort.

The huge construction boom driven by the bubble was also not a secret. Nor was the flood of dubious loans, which even at the time were the subject of jokes about their poor quality by people in the industry.

In short, the story of the housing bubble and the devastation wreaked on the economy by its collapse is a simple one that the great minds of the economics profession should have all seen coming. Rather than acknowledge that they made a colossal blunder, it’s much better to build up the myth that it’s all so complicated. And, if we didn’t give Wall Street everything it wanted, we would be subject to the curse of the SGD.

Therefore everyone who hears these words of mine and puts them into practice is like a wise man who built his house on the rock. The rain came down, the streams rose, and the winds blew and beat against that house; yet it did not fall, because it had its foundation on the rock. But everyone who hears these words of mine and does not put them into practice is like a foolish man who built his house on sand. The rain came down, the streams rose, and the winds blew and beat against that house, and it fell with a great crash.

Officials Cover Up Housing Bubble’s Scummy Residue: Fraudulent Foreclosure Documents

by David Dayen, The Intercept

Sep. 14 2015, 8:17 a.m.

Every day in America, mortgage companies attempt to foreclose on homeowners using false documents.

It’s a byproduct of the mortgage securitization craze during the housing bubble, when loans were sliced and diced so haphazardly that the actual ownership was confused.

When the bubble burst, lenders foreclosing on properties needed paperwork to prove their standing, but didn’t have it – leading mortgage industry employees to forge, fabricate and backdate millions of mortgage documents. This foreclosure fraud scandal was exposed in 2010, and acquired a name: “robo-signing.”

But while some of the offenders paid fines over the past few years, nobody cleaned up the documents. This rot still exists inside the property records system all over the country, and those in a position of authority appear determined to pretend it doesn’t exist.

In two separate cases, activists have charged that officials and courts are hiding evidence of mortgage document irregularities that, if verified, could stop thousands of foreclosures in their tracks. Officials have delayed disclosure of this evidence, the activists believe, because it would be too messy, and it’s easier to bottle up the evidence than deal with the repercussions.

…

In both of these cases, evidence of fraudulent activity harming homeowners has either been suppressed or not acted upon. Refusing to investigate illegal actions is an effective way of remaining in denial. But refusing to release the contents of those investigations, or refusing to rule on cases where the illegal actions have already been proven, really takes denial to the extreme.

In November 2010, Georgetown law professor Adam Levitin explained in testimony before the House Financial Services Committee why there were no real investigations of bank misconduct during the foreclosure crisis.

“Federal regulators don’t want to get this information, because they are too scared that if there is a problem, they’re going to have to do something about it,” Levitin said.

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

Evil says they knew exactly what they were doing.

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

Have you been asleep since Lehman?

Now the DOJ Admits They Got it Wrong

by William Black, New Economic Perspectives

Posted on September 11, 2015

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

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

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

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

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

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

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

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

By David Dayen, The Fiscal Times

September 11, 2015

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

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

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

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

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

The End of the Deferred Prosecution Agreement?

by David Dayen, Naked Capitalism

Posted on September 8, 2015

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

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

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

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

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

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

…

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

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

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

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

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