MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT No Criminal Prosecutions of Wall Street
The Department of Justice is doing it again, going after another financial institution for cratering the US economy by trying to fine them, without holding anyone criminally responsible. This time, according to a New York Times (NYT) editorial, it is Standard & Poors, who is blamed for giving inflated credit ratings to financial companies that were on extremely shaky footing leading up to the 2008 crash.
According to the NYT editorial board:
The financial crisis could never have happened without the credit-ratings agencies issuing stellar ratings on toxic mortgage securities that inflated the bubble. Before the Justice Department filed civil fraud charges this week against Standard & Poor’s, the nation’s largest credit-ratings agency, it seemed as if the entire ratings industry — which reaped record profits in the boom years — was going to escape, unrepentant and unpunished. That may now change.
But the underlying problem — a lack of proper regulation of the industry — remains unresolved. Nearly three years after the passage of the Dodd-Frank financial reform law, there is no sign that federal regulators are willing to propose, let alone finalize, tough rules to reform the agencies. Worse, regulators have repeatedly asserted legal positions that shield the agencies from investor lawsuits, despite questions of misrepresentation, negligence and fraud in the rating of mortgage investments.
Still, the suit against S.&P. and its parent, McGraw-Hill Companies, is a move toward accountability. It alleges that, from September 2004 through October 2007, S.&P. “knowingly and with the intent to defraud, devised, participated in, and executed a scheme to defraud investors” in certain mortgage-related securities, and that the agency falsely represented that its ratings “were objective, independent, uninfluenced by any conflicts of interest.”
What sets the case apart is that the government brought the case rather than water down a settlement to suit S.&P.’s demands. The government originally sought a penalty in excess of $1 billion and an admission to a least one count of fraud. When S.&P. balked, the government sued and now is seeking a $5 billion penalty. Too often, the government has accepted settlements with fines that are too small compared with the harm done and allowed the defendants to neither admit nor deny the charges.
As BuzzFlash at Truthout has pointed out again and again and again, the Department of Justice (DOJ), however, has not pursued any criminal charges (they prosecute using civil statutes) against Wall Street honchos, not a one. And, as we have repeatedly noted, the fines that they levy are nothing more than a federal street tax on likely criminal activity on a multi-trillion dollar scale.
MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT US War on Drugs Is About Hemispheric Hegemony
Readers of Truthout know that the site ran a ten part series last year: Truthout on the Mexican Border. The last installment of a very complicated journalistic journey into the dark underside of US Latin America policy concluded, "How the Militarized War on Drugs in Latin America Benefits Transnational Corporations and Undermines Democracy."
The Latin America-watch website "UpsideDownWorld" offers analysis of a recent report with this headline, "US Spends $20 Billion Over 10 Years on Increasingly Bloody Drug 'War' in Latin America; Rejects Drug Policy Reform." "UpsideDownWorld" describes the Associated Press investigation:
The article, authored by Pulitzer-prize winning reporter Martha Mendoza, describes how the U.S. has “spent more than $20 billion [BuzzFlash on Truthout believes $20 billion is on the extreme low end of actual expenditures] in the past decade” and deployed U.S. army, marine and navy troops to support a heavily militarized campaign to fight drug trafficking throughout the region. The fact that the efforts have been accompanied by soaring violence – with, for example, 70,000 Mexican lives lost in the last six years [actually it is likely to have exceeded a death toll of 120,000 under former President Calderon through the end of his term last November, as detailed in a Truthout article, "Fueled by War on Drugs, Mexican Death Toll Could Exceed 120,000 As Calderon Ends Six-Year Reign" – doesn’t seem to trouble the U.S. officials in charge of implementing U.S. drug policy internationally. In fact, they seem to consider spikes in violence to be a sign that the “strategy is working.”
William Brownfield who heads the State Department’s Bureau of International Narcotics and Law Enforcement Affairs, told Mendoza that “the bloodshed tends to occur and increase when these trafficking organizations… come under some degree of pressure.”
In the "Truthout on the Mexican Border series," I described how Brownfield testified before Congress offering a whack-a-mole defense of the failed war on drugs south of the border. He never indicated that the drug war could be won, just that it could be moved around. (After Mexico, Brownfield predicted drugs would come through the Caribbean.) There is no indication that drug trafficking to the United States is decreasing. All the United States facilitates is moving the route around of how the drugs cross into the US.
MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT
The Sandy Hook massacre was a horrifying result of the collateral damage that results when a gun industry combines with psychologically paranoid white guys to dominate politics at the federal and state level. Like almost all mass shootings that ignite national dismay and outrage, the perpetrator in Newtown was white as well as the victims.
BuzzFlash at Truthout praised President Barack Obama for finally standing up to the gun lobby after the Connecticut massacre ( "President Obama Puts His Life on the Line for Gun Control.") It takes some courage, because as I heard – in some variation -- from politician after politician in my years advocating for gun control, "Mark, listen, let me be frank, these guys crowd into your home district office and curse and threaten you and you realize, 'Hey, they've got guns.' And you know they will vote the way the NRA tells them, while gun control is not a single vote issue for those who support it."
Remember, it's not just the "crazies" or the "bad guys" that fire off their guns and kill people. For every "crazy" and "criminal," look at articles about shootings – or watch coverage on your local "knife and gun club" television evening news -- and you'll as frequently, if not more often, find an account of a neighbor who when asked about the shooter, comments something akin to, "He was always very nice to me and my dog, although he generally kept to himself. He was a quiet man, a good neighbor."
MARK KARLIN, EDITOR FOR BUZZFLASH AT TRUTHOUT Obama's Choice: Who Shall Live and Who Shall Die?
For months, the White House has been leaking how President Obama "carefully" reviews a kill list (assassination) of alleged terrorists (and who knows what other troublemakers end up on the potential target list?). Off-the-record comments (and some on the record) are meant to reassure Americans that the president doesn't take the authorization of kills (with the attendant "collateral damage" of civilians and children if a drone strike) lightly, but seriously contemplates who ends up dead as a sanctioned hit.
As has been repeatedly noted by commentators not dazzled by the assumption of extra-judicial death warrants, it is perplexing and dismaying that a Harvard Law School grad who taught constitutional law at the University of Chicago is showing such a lethal disregard for the nation's fundamental legal document.
Deciding who shall live and who shall die is generally a power attributed to Gods in most religions; or one can go back to history before the birth of states founded on democracy, when tyrants and monarchs held absolute powers.
The authority Obama has assumed without any legislative or court permission goes well beyond the Bush/Cheney torture protocol; this is a kill list, not just a rendition order. The condemning of a person to death without due legal process, without habeas corpus, violates the Constitution in the most fundamental way. In doing so, Obama is undercutting and eroding the most basic guarantee in our legal system, at a time when the tide, ironically, is turning against capital punishment in the US.
A Washington Post article today that reveals a hither-too classified document that adds a chilling corroboration of what has until now only been the subject of strategic leaks (for which we might add, no one has been prosecuted because these classified leaks are meant to enhance President Obama's image as a tough guy):
MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT Iceland, the Last Hope for Transparent Democracy?
Truthout recently posted an article, "With New Constitution, Post-Collapse Iceland Inches Toward Direct Democracy."
It was a detailed report on how Iceland is on the verge of potential revolution in adopting a populist constitution, while ensuring a transparent government and true freedom of the press. It is not certain that Iceland's new burst of freedom and rejection of the managerial class will succeed, but the promise is exhilarating, according to journalist Sam Knight, writing for Truthout:
Now, Iceland is making headlines for more positive reasons: activists there are in the process of advancing some of the strongest freedom of information laws and journalist protections in the world, and the Icelandic economy, while still beset by problems, is significantly outperforming other crisis-stricken countries.
Most recently, on October 20, a remarkable constitution - written by an elected council with help from the public - took a step closer toward ratification after it was approved in a referendum by a 2-1 margin.
Before the changes are signed into law, the draft must be approved by the Althingi, Iceland's Parliament, approved again by referendum and finalized once more by the legislature after a fresh parliamentary election in April.
Uncertainty is swirling around the status of the constitution, however. Those opposed to it - primarily right-wingers - claim that the 48.9 percent turnout for October's vote doesn't lend the document legitimacy. There is also fear among the constitution's supporters in Parliament that some of their colleagues are trying to abrogate the public's influence by altering the document's content instead of offering the technical revisions they were given the mandate to make.
"I truly believe that our democracies have been hijacked by bureaucrats," said Parliamentarian Birgitta Jónsdóttir, a self-described "realist-anarchist" elected after the Kitchenware Revolution protests which ensued following the 2008 financial crisis and forced the long-ruling conservative government to resign in 2009.
"I don't want the new constitution to be plagued with their language, but the language of the people," she insisted in a Skype conversation with Truthout. "Their time is over. They just can't get over it."
Knight also noted:
"Political parties, liberally oiled by interested parties, no doubt - as they were by the bankers - have managed to thwart the popular will in Parliament," Gylfason said.
"The constitutional bill aims to correct the situation," he added.
In short, Iceland stands on the cusp of possibly becoming the vibrant "horizontal" democracy that the United States trumpets with cliches, but suppresses through an ossified financial/political ruling elite.
MARK KARLIN, EDITOR OF TRUTHOUT AT BUZZFLASH Supreme Court
Yesterday, we wrote a piece on the long-term and devastating impact of the right-wing GOP increasing control over the federal judiciary. It is a toxic impact that will last for decades, as Chief Judge of the Court of Appeals for the District of Columbia Circuit David Sentelle has shown.
The BuzzFlash at Truthout commentary, "Republican Federal Judge David Sentelle: How the GOP Has Packed the Courts With Partisan Hacks," explains a bit of background on how Sentelle has carried out GOP political objectives through the federal courts since 1985 – and since 1987 on the DC appellate court in a way that has negatively changed the course of US history.
As further background on the Republican federal bench coup (remember it resulted in on a Supreme Court mandated stolen election in 2000), BuzzFlash is reaching back into its early days and providing some context through David Brock, now head of Media Matters.
In 2002, BuzzFlash was one of the foremost promoters of a repentant David Brock. At that time, Brock had written a mea culpa book, "Blinded by the Right: The Conscience of an Ex-Conservative," recounting how he had been a journalistic hit man for the extreme right. Indeed, Brock had been instrumental in igniting the Whitewater and Troopergate stories as a means for the Republicans to pursue the eventual impeachment of Bill Clinton. Brock "reported" for the American Spectator, a right wing attack publication largely financed by Richard Mellon Scaife, who was sort of a one man Koch Brothers in the '90s.
In short, Brock was a key scribe for what was known as "The Arkansas Project," the right wing financed effort to drive Bill Clinton from office despite being elected by the voters of America for two terms. Brock called it a "contract on Clinton" that included his early articles about Paula Jones that stirred up the Ken Starr lynch mob after the Whitewater findings -- the original purpose of the independent counsel -- ended with the exoneration of the Clintons, who had actually lost money on the deal.
MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT David Sentelle, Partisan Judicial Hack
The hijacking of the federal judiciary by the Republican Party – through the appointment of aggressive partisan judges combined with preventing votes on nominations by Democratic presidents – is the hidden cancer on US government. The sudden nixing of recess appointments last week by a DC appellate court panel of three Republican-appointed judges (in this case Obama filling empty National Labor Relations Board (NLRB) seats and appointing Richard Cordray to chair the Consumer Financial Protection Bureau (CFPB) during a recess to circumvent endless Republican sabotage in the Senate) is symbolic of the macro-subversion of justice through manipulation of the federal bench, including, of course the Supreme Court.
It should be remembered, for those who have forgotten, that almost no legal scholars or analysts – conservative or liberal – thought that the Supreme Court would rule on the 2000 presidential ballot recount dispute in Florida. But Antonin Scalia, the exhaustively partisan hack who impresses people with his intellectually sounding illogical and unconstitutional blather, stopped the recount faster than you can say "stolen election."
Then he went onto gather his partisan five votes to permanently halt the recount in an act of Republican hypocrisy usurping states' rights that was limited, in the opinion of the felonius five, to apply only to the one case of – in effect -- appointing George W. Bush as president.
Enter David Sentelle, Chief Judge of the Court of Appeals for the District of Columbia Circuit. Not only is the DC appellate court the most powerful in the land, it is essentially the pre-trial hearing ground for government cases before they reach the Supreme Court (if the Supreme Court chooses to hear an appeal).
MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT Treasury Department
During the Bush presidencies, we thought that DC had turned into a Republican version of the Yale Secret Society "Skull and Bones" (which the Bush's had a dynastic membership in), in which the few inside players in government and finance protect and enrich each other – not to mention remain unaccountable for illegal governmental actions.
But as BuzzFlash at Truthout has reported again and again, the Obama administration – through the Department of Justice (DOJ), Treasury Department, Securities and Exchange Commission, and assorted other executive branch agencies and departments – has frequently applied a double standard to the masters of the universe when it comes to the rule of law and financial gain.
The BuzzFlash at Truthout commentaries dealing with the Washington DC government/Wall Street insider club are too many to mention, but our most recent critiques were "The Covington & Burling Trio Overseeing the Department of Justice Criminal Division: An Injustice" and "Consigliere Lanny Breuer, Head of the DOJ Criminal Division, Leaves Without Prosecuting One Made Man on Wall Street."
If you are a member of the masters of the universe secret society – the smug, career opportunist, ultra-rich governing/corporate class – you have something akin to a bullet proof vest at your disposal, only it is a prosecution proof garment that keeps you from going to jail for financial misconduct, while the guy who cashes three bum checks gets life in prison in some states.
(Photo: Joe W. Campbell)
MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT Law gets dumb about smartphones
The Atlantic provides more evidence that the government is more interested in granting corporations monopolies than having them compete in a vibrant free market.
According to the Atlantic article headline, "It Is Now a Crime to Unlock Your Smartphone." That's right, as of Saturday, your smartphone cannot be switched by you to another carrier. In fact it will be a felony, with a huge potential jail sentence and possible humongous fines. As the Atlantic laments, "These laws serve to protect the interests of a few companies and create and maintain barriers to entry."
Indeed they do. In this case, for regulatory reasons derived from the Digital Millennium Copyright Act (DMCA), this legal obstruction of the theoretical free market and potential punishment of individual consumers is being instigated by the Library of Congress, of all places:
Until recently it was illegal to jailbreak your own iPhone, and after Saturday it will be illegal to unlock a new smartphone, thereby allowing it to switch carriers. This is a result of the exception to the DMCA lapsing. It was not a mistake, but rather an intentional choice by the Librarian of Congress, that this was no longer fair use and acceptable. The Electronic Frontier Foundation among other groups has detailed the many failings of the DMCA Triennial Rulemaking process, which in this case led to this exception lapsing.
The intrusion of the mega-corporations into fixing the rules to prevent competition and consumer choice should have, as the Atlantic notes, Republicans in an uproar – but Capitol Hill Republicans (as is the case with many Dems on the Hill) are not really pro-free market; they are pro monopolizing corporations.
MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT
Let's start here, with a question from the website Wall Street Parade:
The public, and Congress, have a pressing need to question how a law firm that was cited by a U.S. District Court, an Appellate Court and the U.S. Supreme Court as playing a central role in coordinating the illegal activity of Big Tobacco – activity that callously harmed the health and welfare of both children and adults, ended up sending three of its lawyers to the top slots at the Nation’s highest law enforcement office.
Both Eric Holder, the U.S. Attorney General, and Lanny Breuer, the Assistant Attorney General for the Criminal Division were Covington & Burling partners before they joined the Justice Department. Dan Suleiman, who also worked at Covington and Burling, became the new deputy chief of staff and counselor to Lanny Breuer on July 16 of this year. Since 2008, employees of Covington & Burling have contributed $347,951 to President Obama’s campaigns.
In the past, Covington & Burling's clients have included Monsanto, Union Pacific, Merck, Warner-Lambert, Eli Lilly, Turner Broadcasting, IBM, General Motors, BankBoston Corporation, Morgan Stanley, Bank of America, Blackwater (Xe), Chiquita Bananas (in which Eric Holder defended the company against a lawsuit brought by families of individuals slain by Colombian paramilitary groups receiving money from Chiquita), the Southern Peru Copper Company (accused of human rights violations and pollution) among a bevy of other mega-financial and corporate entities.
Among this list, it is important to remember that Covington & Burling received a lacerating critique from a federal judge in 2006 for its long-term representation of the Tobacco Institute and Philip Morris. Judge Gladys Kessler of the U.S. District Court for the District of Columbia reprimanded attorneys for not just representing Big Tobacco, but for taking part in a conspiracy to deceive the public and regulators: