Fuck You To Jamie Dimon & His Plaintive Wail For The 1%

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Pardon me for the Taibbi like insolence, but this is just fucking amazing. While most Americans are struggling to stay alive, employed, and their families fed and in their homes, much less celebrate a decent Christmas, the 1% Masters Of The Universe have gotten together for a group bitchfest of elitist assholes:

Jamie Dimon, the highest-paid chief executive officer among the heads of the six biggest U.S. banks, turned a question at an investors’ conference in New York this month into an occasion to defend wealth.

“Acting like everyone who’s been successful is bad and because you’re rich you’re bad, I don’t understand it,” the JPMorgan Chase & Co. (JPM) CEO told an audience member who asked about hostility toward bankers. “Sometimes there’s a bad apple, yet we denigrate the whole.”

Dimon, 55, whose 2010 compensation was $23 million, joined billionaires including hedge-fund manager John Paulson and Home Depot Inc. (HD) co-founder Bernard Marcus in using speeches, open letters and television appearances to defend themselves and the richest 1 percent of the population targeted by Occupy Wall Street demonstrators.

Uh, fuck you Jamie Dimon and to the plaintive wail of the skimming, raping moneychangers.

Oh, and in case you had any question on what side of the 1%/99% divide Barack Obama and his Administration are on, yet another answer was given today with the announcement of their proposed selection for the critical “independent” seat on the Federal Deposit Insurance Corporation (FDIC):

The Obama administration is considering nominating Jeremiah Norton, an executive director for JPMorgan Chase’s investment bank, to sit on the FDIC’s board of directors.

Who is Jeremiah Norton? Well, as this quote states, he executive director of the investment banking shop and one of Obama’s buddy, Jamie Dimon’s, right hand men. Oh, and before that, Norton was former Goldman Sachs honcho Henry Paulson’s right hand man in the Bush Treasury Department and assisted Paulson in getting Goldman Sachs a backdoor bailout through AIG.

And, remember, if Barack Obama has to replace Turbo Tax Timmeh Geithner, Jamie Dimon is near the top of the list of replacements thought to be on the White House’s list.

So, while OWS is out protesting and the majority of citizens are falling deeper in despair and many losing their homes and hopes, and Barack Obama duplicitously coos about feeling the pain of the 99%, this is what is going on where the rubber meets the actual road.

PS: Digby has pounded Dimon on this as well if you want more searing criticism.

The Next Round of Looting

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Here are three data points that will make you cranky.

First, the New Bottom Line has taken the bonus pool data the big banks have released from the first three quarters of this year to estimate what they’ll be for the year. They are:

Next, here’s Bank of America’s stock ticker for the day:

It just closed under $5 for the day.

To put that into perspective, BAC’s stock ticker for the year:

And here’s a list of the top holders of BAC stock. It shows that JPMorgan Chase and Citi are the 6th and 7th largest owners of BAC stock, and between those two big bonus recipients and Goldman Sachs, they own over 4% of BAC’s stock. {Update: Though almost all of that was in index funds they hold for their clients.]

You see, you might look at the impending demise of BAC and wonder why its banksters merit any bonus this year. You might argue that awarding any bonuses amounted to looting what was left of the company the banksters had already almost finished looting.

But then you’d see that over 30% of the owners of BAC are similarly suited MOTUs. That goes a long way to explaining why they’ll get away with it. (Yes, I also need to look at PAC donations, which probably explains the rest of it.)

How to Indefinitely Detain Jamie Dimon

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Kagro X and I were engaging in a little thought experiment on Twitter to show how easy it would be to solve our dangerous bankster problem by indefinitely detaining them.

It turned out to be pretty easy to do. Here’s how.

First, before you indefinitely detain a bankster, you need to show either that he is,

A person who was part of or substantially supported al-Qaeda, the Taliban, or associated forces that are engaged in hostilities against the United States or its coalition partners, including any person who has committed a belligerent act or who has supported such hostilities in aid of such enemy forces.

Or, you need to show he has supported (using the Iraq AUMF that we’re keeping around to make sure the President’s authority isn’t limited to just al Qaeda),

another international terrorist group that the President has determined both (a) is in armed conflict with the United States and (b) poses a threat of hostile actions within the United States;

Now, making that case with Jamie Dimon is very easy to do, because his company, JP Morgan Chase, has materially helped Iran. We have several pieces of proof it has done so. First, there’s the Treasury Report showing that JPMC:

  • Gave a $2.9 million loan on December 22, 2009 to the Islamic Republic of Iran Shipping Lines, which the Office of Foreign Assets Control has found to be involved in WMD proliferation
  • Advised and confirmed a $2,707,432 letter of credit on April 24, 2009, in which the underlying transaction involved a vessel identified by OFAC as blocked due to its affiliation with the same Iranian shipping line
  • Processed nine wire transfers between April 27, 2006 and November 28, 2008, which totaled $609,308, some of which involved sanctioned Iranian and terrorist entities
  • Transferred 32,000 ounces of gold bullion valued at approximately $20,560,000 to benefit a sanctioned Iranian bank on May 24, 2006

We need no further proof that JPMC has done these things. Not only has JPMC admitted to them, but as Janice Rogers Brown has made clear, we cannot question the Executive Branch’s intelligence reports, so all of OFAC’s claims must be accepted as true for the purposes of indefinite detention. And all of that illegal support for Iran happened while Jamie Dimon was President of JPMC.

But there may even be proof–enough, anyway, to satisfy Rogers Brown–that JPMC materially supported an attempt to deploy a WMD in a terrorist attack on American soil. As I have shown, the bank account to which Manssor Arbabsiar transferred almost $100,000 as downpayment for the alleged Quds Force plot to assassinate Saudi Ambassador Adel al-Jubeir was probably a Chase account. And that affidavit should be enough. The FBI, after all, is an intelligence agency. And Janice Rogers Brown does not find redactions–even much more extensive ones–to in any way impair the reliability of Administration claims to justify indefinite detention.

In other words, the Administration has provided sufficient proof that JPMC materially supported Iran to the tune of at least $23 million in illegal financial transactions.

Now, if Chase is indeed the bank that accepted the downpayment for the Scary Iran Plot, we need no further basis to indefinitely detain Jamie Dimon. After all, the government’s Amended Complaint (from the FBI, an intelligence agency whose reports we cannot question) asserts that Abdul Reza Shahlai was the mastermind behind the Scary Iran Plot, and at the time of the plot, he had already been sanctioned as a supporter of the insurgency in Iraq. That was based on a questionable intelligence report, admittedly, but Janice Rogers Brown says we cannot consider such problems. So if Chase did, indeed, play a role in the Scary Iran Plot, then that’s all we need to indefinitely detain Jamie Dimon as head of the entity that materially supported that terrorist attack.

But even if Chase wasn’t involved in the Scary Iran Plot, the Executive Branch can still indefinitely detain Jamie Dimon. After all, the Executive Branch has been claiming that Iran was harboring al Qaeda since 2003. In addition, an official Executive Branch report–a September 12, 2009 diplomatic cable–includes the following hearsay claim, made by Saudi Arabia’s then Minister of the Interior, now the Crown Prince, Nayif bin Abdulaziz:

Iran has hosted Saudis (all Sunnis) — including Osama bin Laden’s son Ibrahim — who had contacts with terrorists and worked against [Saudi Arabia]

And Janice Rogers Brown has said that so long as it appears in an official government document, any hearsay problem is overcome. And as recent reporting makes clear, there’s even some evidence that Iran was at least aware of, and in some ways facilitated, the 9/11 plot itself. That assertion is based on NSA reports which, as official government documents, would meet Rogers Brown’s standard for claims supporting indefinite detention.

All of which would seem to reach the bar of making Iran a force associated with al Qaeda. I don’t necessarily buy these reports, mind you, but again, it’s not for me to question these official government records. And helping such an associated force access $23 million of funding sure seems to qualify as “substantial support.”

Now let me be clear. I don’t advocate indefinitely detaining Jamie Dimon–or anyone else either, particularly not American citizens, no matter how loathsome or dangerous to the United States. But given that our country maintains it is more important to “incapacitate” terrorists and those who support them than to punish those who did trillions of dollars of damage to our economy, we may well have to treat Jamie Dimon as a material supporter of terrorism to get some justice.

And Jamie? If I were you I would report to an Embassy or some other official government office right away, as the government claims Anwar al-Awlaki should have. Because while Obama seems uninterested in indefinitely detaining American citizens, he has been known to kill those he claimed were particularly dangerous.

Robert Mueller Reveals Counterterrorism Intelligence Techniques Being Used to Combat Healthcare Fraud

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We’ve long known that many of the techniques used to combat terrorism derived from the drug war. We’ve known that law enforcement agencies around the country are adopting counterterrorism techniques–and even PATRIOT Act tools–in regular law enforcement.

Robert Mueller just explained that the FBI is taking lessons learned in its counterterrorism intelligence techniques to combat healthcare fraud.

The comment was in response to a question from Amy Klobuchar. She noted that MN has pretty good success at cracking down on healthcare fraud, but inquired about “hot spots” in healthcare fraud.

Mueller responded by lauding the lessons FBI has learned in counterterrorism, then said [these are my notes–I’ll check his exact quote later], “building an intelligence infrastructure across the country allows us to see where … they’re going to go to next,” implying that they were using intelligence techniques to figure out where new healthcare fraud networks were going to pop up next.

Now, as Josh Gerstein noted on Twitter, FBI used the kind of administrative subpoenas now used to combat terrorism before they were used for terrorism. But Mueller’s comment seemed to suggest far more: I assume, given his reference to intelligence networks, FBI is using informants and the like to infiltrate suspected healthcare fraud networks.

I’m all in favor of making sure Medicare and Medicaid money goes to healthcare. But isn’t the use of intelligence networks in the healthcare industry rather invasive?

What If We Scrubbed Wachovia Like We Did the Lebanese Canadian Bank?

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I’ll have several things to say about Jo Becker’s story on the big Hezbollah money laundering ring. For the moment, I’m most interested in how Treasury Department authorities uncovered the ring: by first declaring Lebanese Canadian Bank a money launderer, providing reason to break it up. When an affiliate of Société Générale agreed to buy the bank, they also agreed to scrub its money laundering accounts. To do so, it specifically had someone beyond the Big Four accounting firm that had “overlooked” the accounts in the past scrub the books, including bringing in John Ashcroft.

As part of its own agreement with Treasury officials, Lebanon’s Central Bank set up a process to scrub the books. But compliance officers at S.G.B.L.’s French partner, Société Générale, were skeptical of the Central Bank’s choice of investigators. One of them, the local affiliate of the international auditing firm Deloitte, had presumably missed the drug-related accounts the first time around, when it served as the Lebanese Canadian Bank’s outside auditor.

And, according to people knowledgeable about Lebanese banking, the central bank’s on-the-ground representative had been recommended to that post by Hezbollah.

As an extra step, to reassure wary international banks, the chairman of S.G.B.L.,  Antoun Sehnaoui, commissioned a parallel audit, with the help of Société Générale’s chief money-laundering compliance officer. And to make sure that his bank did not run afoul of Treasury officials by inadvertently taking on dirty assets, he also hired a consultant intimately familiar with the Patriot Act provision used to take the bank down: John Ashcroft, the former attorney general whose Justice Department wrote the law.

And then it investigated (presumably using pattern analysis) each and every account at the bank.

Initially, the auditors looked only at records for the past year. As they began combing through thousands of accounts, they looked for customers with known links to Hezbollah. They also looked for telltale patterns: repeated deposits of vast amounts of cash, huge wire transfers broken into smaller transactions and transfers between companies in such wildly incongruous lines of business that they made sense only as fronts to camouflage the true origin of the funds.

Each type of red flag was assigned a point value. An account with 1 or 2 points on a scale to 10 was likely to survive. One with 8 or 9 cried out for further scrutiny. Ultimately, the auditors were left with nearly 200 accounts that appeared to add up to a giant money-laundering operation, with Hezbollah smack in the middle, according to American officials. Complex webs of transactions featured the same companies over and over again, most of them owned by Shiite businessmen, many known Hezbollah supporters. Some have since been identified as Hezbollah fronts.

So effectively, they took a bank known to ignore money laundering controls and took it apart, piece by piece, to see all the money laundering it had sheltered.

Compare how the US dealt with Wachovia, which was involved in laundering a far greater chunk of money for drug cartels: $363 billion.

US authorities partly became aware Wachovia was helping cartels launder money when they captured a plane in 2006. In addition, the DEA first noted their role in launder Casas de Cambio money in 2005, and a British whistleblower had identified signs that same year.

But it’s clear that by 2007 officials from top regulators were aware of the problems.

Late in 2007, Woods attended a function at Scotland Yard where colleagues from the US were being entertained. There, he sought out a representative of the Drug Enforcement Administration and told him about the casas de cambio, the SARs and his employer’s reaction. The Federal Reserve and officials of the office of comptroller of currency in Washington DC then “spent a lot of time examining the SARs” that had been sent by Woods to Charlotte from London.

“They got back in touch with me a while afterwards and we began to put the pieces of the jigsaw together,” says Woods. What they found was – as Costa says – the tip of the iceberg of what was happening to drug money in the banking industry, but at least it was visible and it had a name: Wachovia.

But the prosecution of Wachovia wasn’t initiated until after Wells Fargo took it over in 2008. Which means Treasury could have insisted on the same process–an examination of a bank with known problems with money laundering to find all of its criminal clients.

It’s possible Treasury did–or is still doing that. Read more →

Government Establishes Task Force to Combat HAMP Scams, But Not Foreclosure Scams

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Treasury, SIGTARP, and the Consumer FInancial Protection Board just formed a task force to fight HAMP fraud.

Mind you, they’re not aiming to fight the fraud servicers engage in–that is, using HAMP as a way to get force homeowners to stop paying their mortgages and then using that “default” as a means to tack on fees and ultimately foreclose.

Nope, our government is going to fight other fraudsters.

SIGTARP, the CFPB, and Treasury investigate mortgage modification schemes, among other things, in which companies charge struggling homeowners a fee in exchange for false promises of lowering the homeowner’s mortgage debt or payments through HAMP, a foreclosure prevention program funded by the Troubled Asset Relief Program (TARP) and administered by the U.S. Department of the Treasury.

omeowners struggling to make their mortgage payments should beware of con artists and scams that promise to save their homes and lower their mortgage debt or payments.
If you are struggling to pay your mortgage and are seeking a mortgage modification, keep the following tips in mind:

  • You can apply to the federal Home Affordable Modification Program (HAMP) on your own or with free help from a housing counselor approved by the U.S. Department of Housing and Urban Development (HUD).  Applying to the program is always FREE.  For more information on how to apply, call the Homeowner’s HOPE™ Hotline at 1-888-995-HOPE (1-888-995-4673) or visit www.MakingHomeAffordable.gov.
  • Only your mortgage servicer has discretion to grant a loan modification.  Therefore, no third party can guarantee or pre-approve your HAMP mortgage modification application.
  • Beware of anyone seeking to charge you in advance for mortgage modification services – in most cases, charging fees in advance for a mortgage modification is illegal.
  • Paying a third party to assist with your HAMP application does not improve your likelihood of receiving a mortgage modification.  Accordingly, beware of individuals or companies that ask you for payment and tout success rates or claim to be “experts” in HAMP.
  • If an individual or company claims to be affiliated with HAMP or displays a seal or logo representing the U.S. government in correspondence or on the Web, you should check the connection by calling the Homeowner’s HOPE™ Hotline.
  • Beware of individuals or companies that offer money-back guarantees.
  • Beware of individuals or companies that advise you as a homeowner to stop making your mortgage payments or to not contact your mortgage servicer.

Financially troubled homeowners can avoid scams by working with a HUD-approved housing counselor to understand their options and to apply for assistance.  Assistance from HUD-approved housing counselors is free, and homeowners can reach them by calling the Homeowner’s HOPE™ Hotline at 1-888-995-HOPE (1-888-995-4673) or by visiting www.MakingHomeAffordable.gov.

Meanwhile, the government is trying to settle with servers for their fraud.

I’m not angry that the government is trying to protect struggling homeowners. But they’ve badly misjudged where the biggest threat lies.

Jed Rakoff to SEC: Do you think I’m a tool?

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Judge Jed Rakoff has rejected the SEC’s proposed wrist slap of Citibank for selling mortgage-backed securities it knew to be of poor qualify.

Effectively, what he did was join this complaint with SEC’s complaint–filed at the same time as they filed the proposed Citi settlement–against a Citi employee, Brian Stoker, in which the SEC explicitly alleged that Citi knew what it was doing when it dealt shitty securities it intended to short. By doing so, Rakoff imposed the same trial process on this complaint as on Stoker. Effectively, he’s saying, “If you’re prepared to prove that Stoker knew what he was doing in selling shitty MBS, you’re prepared to prove that Citi did too.”

But the rest of his ruling focuses more generally on his demand that the SEC stop treating him–and federal judges generally–as tools of their efforts to cover over corporate crime. When he uses “tool” in this passage, I couldn’t help thinking he mean tool both literally, but also in the derogatory sense.

Without multiplying examples, it is clear that before a court may employ its injunctive and contempt powers in support of an administrative settlement, it is required, even after giving substantial deference to the views of the administrative agency, to be satisfied that it is not being used as a tool to enforce an agreement that is unfair, unreasonable, inadequate, or in contravention of the public interest. [my emphasis]

After showing that Citi changed its mind, once it became clear Rakoff would be judging the issue, about the standard for judicial review in such cases,

In its original Memorandum in support of the proposed Consent Judgment, filed before the case had been assigned to any judge, the S.E.C. expressly endorsed the standard of review set forth by this Court in its Bank of America decisions, i.e., “whether the proposed Consent Judgment … is fair, reasonable, adequate, and in the publc interest.”

[snip]

In its most recent filing in this case, however, the S.E.C.
partly reverses its previous position and asserts that, while the Consent Judgment must still be shown to be fair, adequate, and reasonable, “the public interest … is not part of [the] applicable standard of judicial review.”

Rakoff then went on to argue that fact finding was necessary to serve the public interest, repeating his angry language about being used by the SEC.

Purely private parties can settle a case without ever agreeing on the facts, for all that is required is that a plaintiff dismiss his complaint. But when a public agency asks a court to become its partner in enforcement by imposing wide-ranging injunctive remedies on a defendant, enforced by the formidable judicial power of contempt,3 the court, and the public, need some knowledge of what the underlying facts are: for otherwise, the court becomes a mere handmaiden to a settlement privately negotiated on the basis of unknown facts, while the public is deprived of ever knowing the truth in a matter of obvious public
importance.

3 The Second Circuit has described the contempt power as “among the most formidable weapons in the court’s arsenal.”

At which point he really starts to vent.

An application of judicial power that does not rest on facts is worse than mindless, it is inherently dangerous. The injunctive power of the judiciary is not a free roving remedy to be invoked at the whim of a regulatory agency, even with the consent of the regulated. If its deployment does not rest on facts–cold, hard, solid facts, established either by admissions or by trials–it serves no lawful or moral purpose and is simply an engine of oppression.

Read more →

Geithner’s Duplicitous Efforts to Reinforce the Oligarchy

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Bloomberg’s blockbuster story–showing that the Fed was dumping $7.77 trillion into the same banks that Treasury was claiming were solvent to qualify them for TARP–shows a number of different things. It focuses on the $13 billion in profits the banks made off of massive secret loans from the Fed.

The 190 firms for which data were available would have produced income of $13 billion, assuming all of the bailout funds were invested at the margins reported, the data show.

More importantly, IMO, the Bloomberg piece also shows how Ben Bernanke, TurboTax Timmeh Geithner, and Hank Paulson used secrecy to get DC’s bureaucracy–both Congress and Executive Branch officials–to push through his preferred plan to prop up the TBTF banks.

They did this in two ways: first, by keeping details of the Fed’s massive lending secret from the people implementing TARP.

The Fed initially released lending data in aggregate form only. Information on which banks borrowed, when, how much and at what interest rate was kept from public view.

The secrecy extended even to members of President George W. Bush’s administration who managed TARP. Top aides to Paulson weren’t privy to Fed lending details during the creation of the program that provided crisis funding to more than 700 banks, say two former senior Treasury officials who requested anonymity because they weren’t authorized to speak.

This meant the Fed could hide the fact that the six biggest banks were basically insolvent, and should have been wound down rather than propped up with a strings-free TARP.

The Treasury Department relied on the recommendations of the Fed to decide which banks were healthy enough to get TARP money and how much, the former officials say. Read more →

Is the Government Hiding Chase’s Cooperation in the Scary Iran Plot?

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As I noted in this post, earlier this month, the government unsealed the redacted first complaint in the Scary Iran Plot. I will do a post summarizing the differences between the original and amended complaint later (short version: in a number of ways seeing both complaints weakens their case slightly against Quds Force).

But in this post, I want to suggest–and this is speculation–that the secrecy about the complaint may serve, in part, to protect JP Morgan Chase.

Read more →

Some Pigs Money Launderers Are More Equal Than Other Pigs Money Launderers

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Treasury is going to ratchet up sanctions against Iran today, designating it as a primary money laundering concern.

he Treasury Department plans to designate Iran as an area of “primary money laundering concern” on Monday, a U.S. official said, a move allowing it to take steps to further isolate the Iranian financial sector.

[snip]

The decision — which the official said was to be announced by Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner on Monday — appeared designed as a warning about the risks of dealing with Iran’s financial institutions.

Maybe if the government would actually punish those who traded with Iran–like JP Morgan Chase–rather than imposing fines but then funneling them more money than the fines, it would have an effect on entities dealing with Iran’s financial institutions?

More importantly, the Treasury Department must think “money launderer” means something different than I understand it to mean. Because these guys are still operating as a favored financial jurisdiction for Americans and American companies.

A small group of Cayman Islands “jumbo directors” are sitting on the boards of hundreds of hedge funds as demand for independent directors booms in the Caribbean tax haven.

At least four individuals hold more than 100 non-executive directorships each, and 14 have more than 70 – each worth as much as $30,000 a year.

One has been listed as on the boards of 567 Cayman entities, almost all of which were hedge funds.

So long as we allow Cayman Islands and the hedgies to set up a kind of dangerous hybrid, where the hedgies themselves get to make sure the Cayman banks operate “ethically” as they launder the hedgies money, whatever concern we try to muster about Iran will ring false.

But I guess that’s increasingly par for the course.