When the Preet Promotion Industry Speaks, the Nation Gets Nervous

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In an article with the URL “when-preet-bharara-speaks-the-shady-get-nervous,” the WaPo repeats a now familiar formula for stories boosting US Attorney Preet Bharara’s fortune: lots of quotes from political powerful allies…

“If [Bharara] smells corruption, he’ll go after it and figure out a way to corral it,” [Chuck] Schumer said. “But he will not make up cases for the sake of making up cases.”

Lots of celebration of recent headlines (I mean, cmon, as I understand it, indicting corrupt NY officials has become the prosecutorial equivalent of shooting fish in a barrel)…

“For the second time in three days, we unseal criminal charges against a sitting member of our state legislature,” Bharara, 44, said during the Thursday afternoon news conference in downtown Manhattan. This time, the U.S. attorney accused a Bronx assemblyman of accepting bribes as part of a scheme to aid developers, which Bharara called “a fairly neat trick” that amounted to “a legislator selling legislation.”

And lots of hints that scream “Pick Preet! Promote Preet!”

It is now highly unlikely that the White House would forget about Bharara, as administration officials somehow did in 2009, when they failed to invite the Indian American powerhouse to the Indian state dinner.

[snip]

Such concerns are unlikely to slow down Bharara. Considered politically astute by observers in Washington and New York, Bharara made a point of not taking sides in the 2008 Democratic presidential primary that pitted then-senators Barack Obama and Hillary Rodham Clinton. He has been rumored as a possible successor to his boss, Attorney General Eric H. Holder Jr., either in the current administration or the next Democratic one.

But not one word about his failure to hold anyone accountable for the 2008 financial crash (aside from citing last year’s Time magazine story that falsely claimed “This Man Is Busting Wall Street”).

But Chuck Schumer and Preet’s other boosters appear to believe that’s the formula that will get Preet nominated to replace Eric Holder.

Sadly, they’re probably right.

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VirginLeak

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A number of journalistic outlets are cooperating in a project to describe the contents of 200 gigabytes of financial information from private incorporation agencies in the British Virgin Islands. The International Consortium of Investigative Journalists has links to all the stories using the data. The CBC has some of the most interesting graphics.

But I have yet to see a really good explanation of where this data came from–or why it was leaked in this form. The Guardian has one of the best explanations of what’s out there.

The leak of 2m emails and other documents, mainly from the offshore haven of the British Virgin Islands (BVI), has the potential to cause a seismic shock worldwide to the booming offshore trade, with a former chief economist at McKinsey estimating that wealthy individuals may have as much as $32tn (£21tn) stashed in overseas havens.

[snip]

The whistleblowing group WikiLeaks caused a storm of controversy in 2010 when it was able to download almost two gigabytes of leaked US military and diplomatic files.

The new BVI data, by contrast, contains more than 200 gigabytes, covering more than a decade of financial information about the global transactions of BVI private incorporation agencies. It also includes data on their offshoots in Singapore, Hong Kong and the Cook Islands in the Pacific.

And CBC offered this explanation of why they are shielding the identity of 450 Canadians who are stashing their money offshore.

The documentation provided to CBC News includes the names of some 450 Canadians who have set up these offshore accounts or holdings. We have already reported details concerning one such account-holder and expect to produce more such reports in the weeks and months to come.

At the same time, we are mindful of the reality that holding an offshore account is not evidence of wrongdoing and may not be controversial. So we are not simply reproducing the raw information we have received through the consortium. Our journalists are working through that information in a careful and methodical way to confirm the information received, identify appropriate stories, and complete them with appropriate context.

We shall see — both whether the elite of the world respond to this leak with the outrage they responded to Bradley Manning’s leaks, and whether the thus far selective nature of the stories on this betray whose agenda the leaks are serving.

While this data may just come from an insider releasing the information publicly (but then why not leak it all?), it is not inconceivable that BVI’s competitors in the secrecy business might want to cut into their market.

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Add Sovereign Citizens Who Have to Play by Rules HSBC Doesn’t

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Remember how HSBC facilitated massive money laundering, around the globe, for over a decade, but got away with a hand slap? Remember how a single check cashing store in LA got very different treatment?

Well, add sovereign citizens to the list of Americans who don’t get the treatment HSBC got.

A man known to reject government authority as a member of the “sovereign movement” was slammed with a federal sentence Wednesday of 98 months in prison and ordered to forfeit more than $1.29 million in assets.

Shawn Rice, 50, was convicted last July on one count of conspiracy to commit money laundering, 13 counts of money laundering, and four counts of failure to appear, the U.S. attorney for the district of Nevada said in a release.

Once again, after winning a harsh sentence, DOJ’s representative talked tough about the importance of prosecution.

“Persons who commit financial crimes victimize organizations, government and the public,” said U.S. attorney Daniel Bogden. “Our office and our federal partners will work jointly with local and state law enforcement to ensure that these persons are caught and prosecuted.”

If I weren’t officially on vacation, I’d check the docket on this, though for the moment I’ll accept that Rice warranted such tough treatment.

But these tough words would sure be more credible if DOJ consistently treated money launderers with this seriousness.

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Emergency Manager Kevyn Orr’s Nanny Factory

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When I wrote this post, describing Detroit Emergency Manager Kevyn Orr’s significant (and serial) tax lien in Maryland, I noted that the lien was very very high for just one nanny (which is the excuse Orr offered for the lien).

Using the numbers from the original Detroit News article, the average tax due from 2011 per delinquent Detroit property owner is about $1,790. Orr has been underpaying MD several times that every year, effectively asking the state to float his unemployment insurance obligations for two years until he gets around to paying them.

[snip]

Here’s another neat detail: The median household income in Detroit is $27,862. Orr consistently owes about $7,000 just in unemployment insurance for his nanny. It seems like most Detroit residents could get themselves a raise if only they tended Orr’s kids.

Scribe even did the math to show how high that lien was.

That’s a hell of a big paycheck to a nanny, to create UI liabilities in the $6500-9500/year range.

Calculating the actual tax rate can be a bit of a challenge, but this snip from a 10/14/2011 article (http://articles.baltimoresun.com/2011-10-14/business/bs-bz-unemployment-insurance-tax-rate-20111014_1_unemployment-insurance-maryland-employers-trust-fund ) says a lot: “Maryland has been stuck at “Table F” — rates ranging from 2.2 percent to 13.5 percent of the first $8,500 in wages paid, depending on an employer’s layoff history — since last year.”

Even assuming the worst layoff history, he’s paying a lot:
13.5 percent of 8500 is 850 + 255 + 42.50 = 1147.50
2.2 percent of 8500 is 170 + 17 = 187.00

It takes a lot more salary to get those liabilities up to where he’s finding himself. And I’m betting that, for the happiness of the kid(s) and parents who have to interview nannies, there is not much turnover and thus a lower layoff history, so his percentage is most likely toward the bottom of the scale.

Turns out Scribe was right.

Some, though, question how a baby sitter alone could be responsible for such a debt. The outstanding liens for unemployment taxes were for $6,595 for the 2010 tax year and another for $9,409 for the 2010-11 tax years.

“That’s an awful lot of taxes for a baby sitter. Are you sure he’s not running a day care?” joked Maryland tax attorney Jeffrey Katz.

He said the numbers don’t add up. In Maryland, unemployment taxes are capped at about $1,150 a year per employee, Katz said, so Orr would have to go through more than five baby sitters in one year to reach $6,500 in back taxes for one year.

[snip]

Orr said he doesn’t know why the tax bills were so high. The same baby sitter has watched his two children for a couple of years, arriving in the morning and leaving in the afternoon. No former employee has filed for jobless benefits, Orr said.

There is no way this lien is about Orr’s single nanny, who has never filed for jobless benefits.

Either Orr has far more staff members than he let on–more even than five, given that he hasn’t been laying them off. Which would itself be notable for a guy who is about to lay off a bunch of Detroit workers.

Or the lien is for something else entirely, and Orr just invented the nanny story because it’s the convenient excuse rich people always use for being tax deadbeats.

Governor Snyder is begging the press to move on now, so I’m guessing he has a pretty good sense that the nanny is just a cover story and that, at a minimum, Orr will soon have to admit he’s not just a tax deadbeat but also a fibber.

But the underlying excuse for the lien sure seems like it might be relevant to Orr’s fitness to fire a bunch of Detroit workers.

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WikiLeaks Will Be Nothing Compared to FinCENLeaks

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According to Reuters, the Treasury Department is planning on expanding access to FinCEN reports — which include Suspicious Activity Reports from over 25,000 financial institutions — to the intelligence community, including CIA.

The Treasury document outlines a proposal to link the FinCEN database with a computer network used by U.S. defense and law enforcement agencies to share classified information called the Joint Worldwide Intelligence Communications System.

[snip]

More than 25,000 financial firms – including banks, securities dealers, casinos, and money and wire transfer agencies – routinely file “suspicious activity reports” to FinCEN. The requirements for filing are so strict that banks often over-report, so they cannot be accused of failing to disclose activity that later proves questionable. This over-reporting raises the possibility that the financial details of ordinary citizens could wind up in the hands of spy agencies.

There’s so much to say about this batshit crazy plan…

First, when I made fun of John Brennan’s confirmation vow, people assured me CIA doesn’t operate in the US. Maybe not. But now they have free access to all this data on Americans.

And remember that DOJ, as far back as 2002, argued it was legitimate to use FISA to collect information on crimes the government could use to coerce people into becoming informants. Imagine how much easier that will be with access to people’s bank irregularities.

Finally, think of the security nightmare here. While I doubt anyone is going to leak a whole database of FinCEN data to WikiLeaks (though how much fun would that be?!?!), I can imagine a lot of people might avail themselves of this access to profit off the financial information. Maybe that’s how CIA will fund their ops, instead of (or inaddition to?) drug running: profiting off sensitive financial information.

There’s a whole slew of reasons why this is a bad idea. Which is precisely why it is bound to be pushed through regardless.

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James Clapper Sneaks Climate Change — But Not Bankster Speculation — Into His Threat Assessment

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You wouldn’t know it by looking at his written statement, which lists Cyber, Terrorism and Transnational Crime, Counterintelligence, and Counterspace before it lists Natural Resource Insecurity, but water and food insecurity was actually the first threat Director of National Intelligence James Clapper described in today’s Worldwide Threat Hearing.

That said, in his spoken statement, he didn’t utter the words “climate change.”

Though those words do appear in the written statement, as a subcategory of resource scarcity, as follows:

Food security has been aggravated partly because the world’s land masses are being affected by weather conditions outside of historical norms, including more frequent and extreme floods, droughts, wildfires, tornadoes, coastal high water, and heat waves. Rising temperature, for example, although enhanced in the Arctic, is not solely a high-latitude phenomenon. Recent scientific work shows that temperature anomalies during growing seasons and persistent droughts have hampered agricultural productivity and extended wildfire seasons. Persistent droughts during the past decade have also diminished flows in the Nile, Tigris-Euphrates, Niger, Amazon, and Mekong river basins.

Note: the head of our intelligence community seems to have missed that “persistent droughts” have not only diminished flows in the Nile, Tigris-Euphrates, Niger, Amazon, and Mekong river basins. Last year’s drought also diminished flows right here in the US, in the Missouri-Mississippi basin.

I guess somehow the US is exempt from climate change, intelligence folks?

I’m glad Clapper got climate change in his statement, I’m glad he put water and food scarcity at the front of his presentation (last year just water scarcity appeared in his written statement). But if we’re going to treat climate change merely as one underlying factor contributing to resource scarcity, perhaps we should also look at bankster speculation, which is increasingly recognized as a key driver of rising food costs. Food speculation, after all, is something we can do a great deal to fix, here in the US. But we have refused to do so, choosing instead to deal with the instability that results.

Ah well, baby steps, people. The Director of National Intelligence just implicitly said that climate change and resource scarcity is the most urgent problem facing us. I’ll take it.

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Carl Levin Takes on Tax Cheats and Dark Money in Retirement Statement

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Carl Levin, a pretty old but very healthy 78, but relatively young given MI’s very old Congressional delegation, announced his retirement today.

I don’t always agree with Levin. But he is one of the smartest, most effective (when he wants to be) Senators in the Senate. I will miss having him represent me in DC.

I expect Gary Peters will replace Levin.

I’m just as interested in how Levin will go out. Here’s most of his statement:

I have decided not to run for re-election in 2014.

This decision was extremely difficult because I love representing the people of Michigan in the U.S. Senate and fighting for the things that I believe are important to them.

As Barbara and I struggled with the question of whether I should run again, we focused on our belief that our country is at a crossroads that will determine our economic health and security for decades to come. We decided that I can best serve my state and nation by concentrating in the next two years on the challenging issues before us that I am in a position to help address; in other words, by doing my job without the distraction of campaigning for re-election.

Here are some of those issues. Years of bipartisan work by the Permanent Subcommittee on Investigations that I chair have shed light on tax avoidance schemes that are a major drain on our treasury. The huge loss of corporate tax receipts caused by the shift of U.S. corporate tax revenue to offshore tax havens is but one example of the egregious tax loopholes that we must end. Thirty of our most profitable companies paid no taxes over a recent three year period although they had over $150 billion in profits.

Tax avoidance schemes that have no economic justification or purpose other than to avoid paying taxes may be legal but they should not be. These schemes add hundreds of billions of dollars to the deficit. They lead to cuts in education, research, national security, law enforcement, infrastructure, food safety and other important investments in our nation. And they add to the tax burden of ordinary Americans who have to pick up the slack and accelerate the economic inequality in our country. I want to fight to bring an end to this unjustified drain on the Treasury.

Second, I want to ensure that the manufacturing renaissance that has led Michigan’s economic comeback continues. We’ve made progress in building the partnerships we need to help U.S. manufacturers succeed, but the next two years will be crucial to sustaining and building on that progress.

A third item I want to tackle is a growing blight on our political system that I believe I can help address: the use of secret money to fund political campaigns. Our tax laws are supposed to prevent secret contributions to tax exempt organizations for political purposes. My Permanent Subcommittee on Investigations needs to look into the failure of the IRS to enforce our tax laws and stem the flood of hundreds of millions of secret dollars flowing into our elections, eroding public confidence in our democracy.

Finally, the next two years will also be important in dealing with fiscal pressures on our military readiness. As Chairman of the Senate Armed Services Committee, I am determined to do all I can to address that issue. I also believe we need to pursue the rapid transfer of responsibility for Afghan security to the Afghans. And, as our troops come home, we must do a better job of caring for those who bear both the visible and invisible wounds of war.

These issues will have an enormous impact on the people of Michigan and the nation for years to come, and we need to confront them. I can think of no better way to spend the next two years than to devote all of my energy and attention to taking on these challenges.

Carl Levin has said his priorities in the next two years will include finding a way to tax the rich and prevent the rich from stealing our elections. Having made the decision he will not need those rich donors to fund his reelection, he will have significant flexibility to piss them off.

Levin has never been known to shy away from pissing people off in any case.

May Senator Levin go out in style, taking on those rich looters who are gutting our country.

 

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Once Again, Lying to Courts to Protect Banks Goes Unpunished

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This story — about how Occupy Wall Street protestor Michael Premo beat an assaulting an officer charge when his lawyers found video evidence to disprove the NYPD’s claims — might make you believe in justice.

Except for this. Premo’s lawyers first went to the cops for video, knowing they had tons of officers deployed with cameras during the protests. They found the cop who had relevant video. And … he apparently lied in court about whether he had that video.

Prosecutors told them that police TARU units, who filmed virtually every moment of Occupy street protests, didn’t have any footage of the entire incident. But [Premo’s lawyer Meghan] Maurus knew from video evidence she had received while representing another defendant arrested that day that there was at least one TARU officer with relevant footage. Reviewing video shot by a citizen-journalist livestreamer during Premo’s arrest, she learned that a Democracy Nowcameraman was right in the middle of the fray, and when she tracked him down, he showed her a video that so perfectly suited her needs it brought a tear to her eye.

For one thing, the video prominently shows a TARU cop named Bosco, holding up his camera, which is on, and pointing at the action around the kettle. When Premo’s lawyers subpoenaed Bosco, they were told he was on a secret mission at “an undisclosed location,” and couldn’t respond to the subpoena. Judge Robert Mandelbaum didn’t accept that, and Bosco ultimately had to testify [Correction: Bosco didn’t take the stand; he had to appear at the District Attorney’s office for a meeting with Maurus and prosecutors. Judge Mandelbaum accepted that Bosco would likely say on the stand what he said in the meeting, and didn’t require him to testify.] Bosco claimed, straining credibility, that though the camera is clearly on and he can be seen in the video pointing it as though to frame a shot, he didn’t actually shoot any video that evening.

Bosco almost certainly lied. The NYPD clearly lied, repeatedly.

And yet there’s no hint they’ll be charged with obstructing justice.

While you’re reflecting on that, remember what the cops were doing (funded, in part, by JP Morgan Chase $4.6 million donation to the NYPD Foundation). They were making sure that a bunch of hippies could not continue to engage in a highly visible challenge to bank power, and certainly not in the banks’ turf around Wall Street.

Sure, OWS did not present as significant a financial threat as preventing banks from foreclosing on homes they did not hold the proper paperwork on — the threat that robosigners lied under oath to combat. But they did present an ideological threat to the banks.

And here we are, again finding people — cops! — lying in court to protect the banks. And here we are, once again, finding those liars go unpunished.

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Lanny Breuer Enters the Free Agent Market

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Sheesh. Lanny Breuer sure seems to need — and be able to demand — frequent fellations from the press.

The latest version comes from an excerpted interview with the NYT. Much of it covers familiar ground, with Lanny asserting that, really, he shares the public outrage about the banksters, then suggesting it was the USA Attorneys, not him, who chose not to prosecute them.

Q. You agreed to go on “60 Minutes” and “Frontline” to discuss the lack of crisis cases. Why open yourself to such scrutiny?

A. People have been asking legitimate questions about what happened in the wake of the financial crisis, and they deserve answers. Someone had to go on television to explain the Justice Department’s point of view, and it was appropriate that, as head of the criminal division, I would do it.

Q. But federal prosecutors in New York and elsewhere also played big roles in the crisis cases. Why you?

A. As you point out, the U.S. attorneys don’t report to me, but someone had to tell the public how hard prosecutors across the department have been investigating these cases. I was willing to talk about these issues, to continue to talk about them in the face of criticism, and I’m still willing to talk about them.

As with the earlier versions of this lame excuse, neither Lanny nor the interviewer mentions the larger task forces (like the foreclosure fraud one) where Lanny was a central player in not prosecuting banksters, nor do they mention Lanny’s past descriptions of talking to experts and CEOs before making decisions on not indicting banksters.

But the lame excuse also comes with a new twist.

Q. Given that you’ve taken a beating on crisis cases, what is your legacy here?

A. The criminal division is now at the center of criminal law enforcement, both in prosecutions and policy. I don’t think that was ever the case before.

The very next question — at least as excerpted — after reporting Lanny dodging any direct responsibility for not prosecuting banksters, Ben Protess records Lanny claiming credit for putting the Criminal Division solidly at the center of criminal law enforcement — or lack of enforcement, in the case of the banksters.

Not responsible. Responsible, In four lines or less.

The only news in this article, as far as I can see, is this exchange.

Q. What’s next?

A. I’m probably going to take a few months off. I’m also going to start talking to law firms and the like and make a decision about where I’m going to go.

Q. The interviews are just a formality, right? The legal world assumes you’re heading back to Covington & Burling.

A. I love Covington. But I’m going to look at Covington; I’ll look at other firms. It’s certainly not a formality.

The man who just finished 4 hard years of not prosecuting any banksters is going to shop around and perhaps may not return to his former spooked up, corporatist, but not necessarily the most bank focused firm.

Lanny’s gonna see how much helping banksters avoid prosecution is worth.

Free agency riches: It’s not just for sports figures anymore.

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Obama’s Treasury Department: Our Sanctions Regime Is SEKRIT

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Screen shot 2013-02-20 at 12.48.34 PMTreasury’s Office of Foreign Assets Controljust sent out its invite for a symposium helping the Financial Industry learn about how to comply with sanctions. The symposium will include the following:

The Financial Symposium will feature a Keynote Address by OFAC Director Adam Szubin and presentations by key OFAC personnel on topics such as:

  • Changes to the Iranian Transactions and Sanctions Regulations, NDAA and CISADA
  • Enforcement guidelines and enforcement actions
  • SDN List updates and information on the designation process
  • Securities and Insurance
  • Licensing procedures and guidance
  • Compliance with U.S. economic and trade sanctions

In addition to formal presentations, OFAC staff will be available throughout the day for individual questions and ad hoc roundtable discussion on issues unique to the financial industry.

It’s actually fairly important that the sanctions regime be well-publicized. Not only does it help ensure compliance from any entity that might be considered liable. But that’s what gives it legitimacy: not just the fact that sanctions and their rationale appear well thought out (if you believe Iranians should have no access to medical devices and dental equipment, that is), but also that sanctions are somewhat fairly applied (which they’re not).

Apparently, Obama’s Treasury Department doesn’t see it this way.

 The event is closed to press.

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