Tag: law

The battle over citizens’ right to privacy and the government’s mass collection of private data that has nothing to do with protecting the country from terrorist attacks, is coming to a head on June 1. That’s when the Patriot Act’s section 215, the provision of the act that the NSA used to authorize its bulk telephone metadata collection program, must either be renewed by congress or it expires. The problem is the lack of interest by the American public. In an extended segment of his HBO program, “This Week Tonight,” John Oliver found a subject that might pique their interest, “dick pics.” He presented his idea to Edward Snowden in a one on one exclusive interview.

So why all the trouble? In theory, Snowden’s revelations are old, they have proven to be either inaccessible or not titillating enough for the American public, and Oliver already covered the issue himself on the show in an interview with former NSA chief General Keith Alexander less than a year ago.

As it turns out, Oliver wasn’t satisfied. Using the June 1 expiration of controversial sections of the Patriot Act as a peg, Oliver decided to revive the conversation anew by highlighting one specific aspect of the surveillance issue that a majority of Americans could relate to.

And Sunday’s final product is earning Oliver plaudits across the Internet. In the interview, Oliver accomplishes several feats. He’s not only funny (Snowden apparently misses eating Hot Pockets, the sodium vehicle of the American freezer section), but also incisive and tough. [..]

But most notably of all, Oliver might finally have pinpointed a way to make the debate about surveillance accessible to a wide audience. By honing on one aspect of the government surveillance, the capacity for intelligence agencies to access “dick pics,” he captures the attention and summons the outrage of numerous passersby in a filmed segment in Times Square. Many of those interviewed can’t properly identify Edward Snowden or don’t quite recall what he had done, but all recoil at the thought of government access to intimate photography.

Thanks to John’s interview and the above viral video, which at this posting has

4,723,977 views, the movement to end mass surveillance has new life.

Privacy advocates experienced a major setback in November when a surveillance reform bill, the FREEDOM Act, died in a Senate procedural vote. But now they’re back, and with a new, simple question for Americans – Can they see your junk?

Playing off Oliver’s hilarious skit, one privacy activist built cantheyseemydick.com, which breaks down how each NSA program could be used to access private communications. Despite its flippant tone, the website offers simple explanations of complex programs that are difficult to understand.

On a more serious note, a new coalition of privacy groups led by the Electronic Frontier Foundation (EFF) today launched the Fight 215 campaign calling for an end to the NSA’s bulk collection of Americans’ phone records.

EFF activist Nadia Kayyali told TechCrunch the organizations launched the campaign today because of the impending deadline, but they were very excited about the Last Week Tonight with John Oliver skit and the attention it has already brought to surveillance reform.

With this campaign, the privacy advocates have taken a direct stance, end the bulk collection of Americans’ telephone records. [..]

Even with the new public attention on surveillance reform, privacy advocates face an uphill battle in Congress. Although surveillance reform is an issue that does not fall squarely on party lines, reform efforts in the Democratic-controlled Senate last year were thwarted primarily by Republican votes. Now Republicans control both chambers of Congress.

As the June 1 deadline approaches, no one in Congress has laid out a comprehensive plan to address government surveillance this year. Kayyali attributes the lack of action on the Hill to uncertainty.

“I think a lot of people, including people who want to see good legislation passed, weren’t certain where to start from,” Kayyali said. “It’s hard to say what Congress is thinking.”

As members look to form that plan, Kayyali hopes the new campaign will send them a clear message.

EEF and thirty other civil liberties organizations have launched a call in campaign, Fight 215. They will help connect you to your representatives to tell them to end mass surveillance.

Call Congress Now

Urge them to end mass surveillance under the Patriot Act.

What to say

Hi,

I’m one of your constituents, and I’m calling to urge you to end the NSA’s unconstitutional mass surveillance under the Patriot Act.

NSA surveillance illegally invades my privacy, along with millions of other innocent people, without making me safer.

Ending phone record surveillance is the first step to reining in surveillance abuses by the NSA. The time to put pressure on congress is now.

Cross posted from The Stars Hollow Gazette

There is a double standard when it comes to the Obama administration prosecuting individuals for leaking information under the Espionage Act of 1917. If you’re a general in the US military leaking information to a reprter or head of the CIA having an affair, it’s fairly safe to say that you won’t be prosecuted for espionage. The sweetheart deal that was given former CIA director and retired General David Petraeus is a prime example, not a day in jail and he is still in good graces with the White House. I guess when you know where all the bodies are buried you can get away with anything. But that doesn’t excuse the Obama administrations fervor for prosecution the whistleblowers who outed crimes and constitutional violations.

Obama’s war on whistleblowers leaves administration insiders unscathed

By Spencer Ackerman and Ed Pilkington, The Guardian

Five key political players enjoy ‘virtual impunity’ – while four lower-level figures are in prison or facing time

Since Barack Obama entered the White House in 2009, his government has waged a war against whistleblowers and official leakers. On his watch, there have been eight prosecutions under the 1917 Espionage Act – more than double those under all previous presidents combined.

And yet other apparent leaks have gone entirely unpunished or have been treated, as in the case of General David Petraeus, as misdemeanors. As Abbe Lowell, lawyer for one of the Espionage Act eight, Stephen Kim, has argued in a letter to the Department of Justice, low-level officials who lack the political connections to fight back have had the book thrown at them, while high-level figures have been allowed to leak with “virtual impunity”.

Lawyers for CIA Leaker Cite Selective Prosecution After Petraeus Plea Deal

By Peter Maas, The Intercept

Lawyers for Jeffrey Sterling, a former CIA official convicted earlier this year of leaking classified information to a New York Times reporter, have requested a reconsideration of his conviction because two former generals, David Petraeus and James Cartwright, have received far more lenient treatment for what they call similar offenses. [..]

In January, Sterling was convicted by a jury on nine criminal counts, including violations of the Espionage Act, for leaking classified information to Times reporter James Risen about a CIA effort to undermine Iran’s nuclear program. Sterling is to be sentenced in April and faces a maximum sentence of decades in jail. In a statement after the verdict was announced, Attorney General Eric Holder called the guilty verdict a “just and appropriate outcome.”

But the government is coming under increasing criticism for its uneven prosecution of leakers.

Earlier this month, Petraeus, who led U.S. forces in Iraq and Afghanistan and was the director of the CIA, reached an agreement with prosecutors in which he pleaded guilty to a single misdemeanor charge of mishandling classified information when he gave his lover and authorized biographer, Paula Broadwell, eight notebooks filled with highly-classified information about military plans and secret programs, covert agent names, and confidential discussions he had with senior officials including President Obama. Petraeus, who resigned from the CIA when his affair with Broadwell was revealed, also admitted to lying to the FBI, but he was not charged for that. The plea agreement calls for two years probation and a $40,000 fine but no jail time.

No charges have been filed against Cartwright even though it has been reported that federal prosecutors believe he leaked highly classified information to Times reporter David Sanger about a joint effort by the U.S. and Israel to cripple Iran’s nuclear centrifuges through a cyber-attack with a computer worm called Stuxnet. According to The Washington Post, the FBI has interviewed Cartwright on at least two occasions but has stopped short of indicting him.

National Security & Human Rights director Jesselyn Radack, who is also the lawyer for whistleblowers Edward Snowden, Thomas Drake and John Kiriakou, spoke with Democracy Now!‘s Amy Goodman and Aaron Maté about the White House’s double standard.

It’s OK if you’re a white general and know where all the bodies are.

It’s been nearly 5 years since two women in Sweden lodged charges of rape against Wikileaks founder Julian Assange. The Swedish prosecutors have been seeking his extradition from England to question him regarding the allegations but Mr. Assange fearing that this was a ploy to have him extradited to the United States where he would be arrested and prosecuted for leaking secret documents that exposed US covering up war crimes. Lawyers for Mr. Assange said that the Swedish prosecutors could question him in England and they believe that would end the matter. However the prosecutors, claiming it would be inadequate to question him in England, went to British court seeking extradition. Mr. Assange then sought asylum at the Ecuadoran embassy. Now, after over four years and time running out on the statute of limitations on charging him, the Swedish prosecutor has agreed to question Mr. Assange in England. Frustrated and tired, Mr. Assange’s response was “They could have done this long ago. What took them so long?” The answer is probably the salivating US justice and state departments who would love nothing more that to get him to a country that would extradite him to the US over the espionage charges.

Julian Assange to be questioned by Swedish prosecutors in London

By David Crouch, The Guardian

Lawyers for Wikileaks founder welcome prosecutor’s decision to interview Assange at Ecuadorian embassy in bid to break deadlock

Marianne Ny, who heads the investigation into accusations of rape, coercion and sexual molestation against Assange, made a formal request to interrogate him in the Ecuadorian embassy – the first sign of movement in a case that has been frozen since August 2012.

The prosecutor will also ask the UK government and Ecuador for permission to carry out the interviews at the embassy in London, where Assange has been staying for more than two-and-a-half years to avoid extradition to Sweden, from where he fears being handed over to the US to face espionage charges.

Ny said she had changed her mind because the statute of limitations on several of the crimes of which Assange is suspected runs out in August 2015. [..]

The British Foreign Office said in November it would welcome a request by the Swedish prosecutor to question Assange inside the Ecuadorian embassy. Ecuador’s government has also repeatedly stated that it approves of such a step. Assange has been wanted in Sweden since the accusations were made against him in August 2010.

His lawyers, who are currently appealing against his arrest warrant in Sweden’s highest court, have complained bitterly about the prosecutor’s refusal to travel to London to speak to him – an essential step under Swedish jurisprudence to establish whether Assange can be formally charged. [..]

The prosecutor’s apparent U-turn on Friday came just days after a supreme court judge in Stockholm wrote to the prosecutor general, directing him to give his opinion concerning Assange’s appeal, “especially regarding the investigatory procedure and the principle of proportionality”.

Further pressure on the prosecutor came in November when the appeal court, while rejecting Assange’s arguments, nonetheless directed sharp criticism at Ny for failing in her obligation to move the case forward.

It remains to be seen whether the charges of rape, that were brought by two women who were in a consensual relationship with Mr. Assange at the time, will result in an arrest warrant. There are a lot of questions about the women’s backgrounds and alleged connections with the CIA that would love to get their hands on Mr. Assange.  

Former Director of the CIA and four star general David H, Patraeus has reached a plea deal with the Department of Justice for passing classified information to his mistress in exchange for sexual favors. He will plea to one misdemeanor count of unauthorized removal and retention of classified material and a $40,000 fine. No jail time.

This is what he handed his girlfriend:

The Justice Department and Federal Bureau of Investigation alleged back in 2012 that Petraeus gave secret information to Paula Broadwell, but the seriousness of the information wasn’t clear until now.

While he was commander of coalition forces in Afghanistan, Petraeus “maintained bound, five-by-eight inch notebooks that contained his daily schedule and classified and unclassified notes he took during official meetings, conferences and briefings,” the U.S. Attorney’s Office for the Western District of North Carolina writes in a statement of fact regarding the case.

The notebooks had black covers with Petraeus’s business card taped on the front of each of them.

All eight books “collectively contained classified information regarding the identifies of covert officers, war strategy, intelligence capabilities and mechanisms, diplomatic discussions, quotes and deliberative discussions from high-level National Security Council meetings… and discussions with the president of the United States.”

The books also contained “national defense information, including top secret/SCI and code word information,” according to the court papers. In other words: These weren’t just ordinary secrets. This was highly, highly classified material.

Besides lying to the FBI twice, this man compromised lives of undercover operatives, the troops operating in the field and national security and all he gets is a slap on the wrist. Pater Maas, writing at The Intercept, says that this deal reveals a two tiered justice system for leaks. He cites the penalties handed down to other defendants who did far less than the general:

For instance, last year, after a five-year standoff with federal prosecutors, Stephen Kim, a former State Department official, pleaded guilty to one count of violating the Espionage Act when he discussed a classified report about North Korea with Fox News reporter James Rosen in 2009. Kim did not hand over a copy of the report – he just discussed it, and nothing else – and the report was subsequently described in court documents as a “nothing burger” in terms of its sensitivity. Kim is currently in prison on a 13-month sentence. [..]

In 2013, former CIA agent John Kiriakou pleaded guilty to violating the Intelligence Identities Protection Act by disclosing the name of a covert CIA officer to a freelance reporter; he was sentenced to 30 months in jail. Kiriakou’s felony conviction and considerable jail sentence – for leaking one name that was not published – stands in contrast to Petraeus pleading guilty to a misdemeanor without jail time for leaking multiple names as well as a range of other highly-sensitive information. [..]

In 2013, Army Private Chelsea Manning, formerly known as Bradley Manning, pleaded guilty to violating the Espionage Act by leaking thousands of documents to Wikileaks, and she was sentenced to 35 years in prison. Manning received a harsh sentence even though then-Defense Secretary Robert Gates said in 2010 that the leaks had only “modest” consequences.

In an interview at The Guardian, Pentagon Papers leaker, Daniel Ellsberg commented on Edward Snowden and former CIA analyst Jeffery Sterling:

The factual charges against [Edward Snowden] are not more serious, as violations of the classification regulations and non-disclosure agreements, than those Petraeus has admitted to, which are actually quite spectacular. [..]

Jeffrey Sterling, a former CIA officer, was also just convicted of leaking classified information to New York Times journalist James Risen last month, “having first revealed it to Congress, as I did”, according to Ellsberg. Sterling was convicted of felony counts under the Espionage Act, and faces sentencing at the end of April. Ellsberg says Sterling’s “violations of security regulations were in no way more serious than what Petraeus has now admitted to”, and that, while it’s too late to do anything about his conviction, the judge should take the Petraeus plea bargain into account at his sentencing.

“If disclosing the identities of covert agents to an unauthorized person and storing them in several unauthorized locations deserves a charge with a maximum sentence of one year,” Ellsberg said, “then Edward Snowden should face not more than that same one count.”

As in the past when those in power violate the law and lie to congress and the FBI there are little to no consequences. So much for the Obama administration’s respect for the rule of law.

Cross posted from The Stars Hollow Gazette

The International Business Times is reporting the New York Governor Andrew Cuomo has ordered the destruction of state government e-mails older than 90 days. Cuomo ordered this in the midst of a Federal investigation into public corruption.

In a memo obtained by Capital New York, Cuomo officials announced that mass purging of email records is beginning across several state government agencies. The timing of the announcement, which followed through on a 2013 proposal, is worth noting: The large-scale destruction of state documents will be happening in the middle of a sprawling federal investigation of public corruption in Albany. That investigation has been looking at state legislators and the Cuomo administration.

Cuomo’s move to purge state emails follows a similar move he made as state Attorney General. International Business Times confirmed that in 2007, he put in place a mass deletion policy for emails in the New York Attorney General’s office that were more than 90 days old, making it difficult for the public to know how — or whether — his office investigated bank fraud in the lead-up to the financial crisis of 2008. In the Cuomo administration’s announcement this week, the governor’s chief information officer, Maggie Miller, justified the new email purge as a cost-saving measure aimed at “making government work better.”

But former prosecutors and open-government advocates interviewed by IBTimes say the move seems designed to hide information.

According to the Capital News article, the memo (pdf) from Ms. Miller, a former Girls Scouts of America executive who was hired in December, was sent to agency heads of Friday. The article goes on tho site that over a dozen advocacy agencies sent a letter to the governor’s office (pdf) last month  arguing that the policy was out of step with federal guidelines and technologically unnecessary:

“In this era, government runs on email, and access to email and electronic records has become a cornerstone of public transparency. Our groups are very concerned that the administration’s June 2013 policy of using centralized software to automatically delete state employee emails after 90 days is resulting in the destruction of emails that are considered public records under New York’s Freedom of Information Law,” wrote the groups, which were organized by Reinvent Albany. “This policy was adopted without public notice or comment. Furthermore, we are extremely concerned that the inevitable destruction of email records under your 90-day automatic deletion policy directly undermines other public accountability laws like the False Claims Act.”

New York’s contract with Microsoft, which developed Office 365, allows for 50 gigabytes of e-mail storage per employee. Reinvent Albany estimated this would be enough to handle up to 30 years worth of messages. [..]

In addition to the federal seven-year standard, other states like Washington, Florida and Connecticut have retention periods of between two and five years. The Central Intelligence Agency recently proposed a three-year retention period for departing employees, and was criticized for not archiving messages for longer. Shorter retention periods are more common in corporations seeking to reduce their exposure in litigation, according to a memorandum compiled by Reinvent Albany (pdf).

After Cuomo abruptly ended his Moreland Commission that was investigating campaign finance and public corruption when it apparently got too close to his own office, US Attorney Prete Brarara began a federal probe into Albany. The timing of this order raises significant legal questions, according to Melanie Sloan, a former Clinton Justice Department official:

“This is potentially obstruction of justice,” she told IBTimes. “The only reason that the government destroys records is so no one can question what it is doing, and no one can unearth information about improper conduct. There’s no reason for New York not to preserve this information.”

Sloan said U.S. Attorney Preet Bharara, who is spearheading the Albany probe, could issue a letter to Cuomo ordering him to preserve all documents that could be relevant to the public corruption investigation. In May 2014, Bharara issued such a letter to state legislators. Bharara’s office declined to comment when asked by IBTimes if it had now issued a similar directive to Cuomo.

John Kaehny, the head of a coalition of transparency group called Reinvent Albany, said the purge order may be designed to circumvent obstruction of justice statutes that are designed to prevent deliberate document destruction.

“[The policy] may mean that you could never be accused of obstructing justice or destroying evidence because you could claim that the machine automatically deleted it,” he told IBTimes. “It creates a loophole and opportunity to destroy embarrassing emails.” [..]

Trevor Timm, executive director of the Freedom of the Press Foundation, says beyond questions about legality, the public should be concerned about how the policy may preclude journalists from reporting on state government.

“This policy will allow the Cuomo administration, in many cases, to delete newsworthy emails faster than reporters can even request them,” Timm said. “It looks like an attempt to avoid accountability.”

This lookng more and more like a cover up of Cuomo’s corruption ever since he was the state’s attorney general. Hopefully, he won’t get away with it.

In a 20 minute segment of HBO’s “Last Week Tonight,” host John Oliver lights up an industry giant, tobacco and how it uses the courts to suppress the laws of the poorest countries to restrict cigarette sales and inform their citizens of the health hazards of tobacco use. John also introduces a new mascot and a tee shirt, Jeff the Diseased Lung, for an adverting campaign

As Last Week Tonight host John Oliver notes early in his incredible, 20-minute examination of the global battle being fought over tobacco advertising, the smoking rate in the United States has dropped from 43 percent in 1965 to 18 percent today thanks to strict laws outlawing cigarette ads. With America largely kicking its smoking habit, the tobacco industry has been forced to make up the revenues abroad, leading to court battles in countries like Australia, Uruguay and Togo, one of the 10 poorest nations in the world.

Oliver’s takedown also focuses on the extreme lengths companies like Philip Morris International are going to place their products in the hands of the youth, including a Marlboro-sponsored kiosk outside an Indonesian school where teens can purchase a single cigarette for a dime.

Countries have responded to Big Tobacco’s unorthodox marketing with laws that allow government to place grotesque images of smoker’s lung and blackened teeth on cigarette packaging, but even those measures have resulted in threats of billion-dollar lawsuits from the tobacco giants in international court.

One such battle is being waged in Togo, where Philip Morris International, a company with annual earnings of $80 billion, is threatening a nation with a GDP of $4.3 billion over their plans to add the harsh imagery to cigarette boxes, since much of the population is illiterate and therefore can’t read the warning labels.

The tobacco industry derives much of its legal power from treaties like the World Trade Organization

That’s right, a company was able to sue a country over a public health measure through an international court. How the f*ck is that possible?

Apparently, PMI had dug up a treaty from 1993 that stated that Australia couldn’t seize Hong Kong-based companies’ properties, so before it started litigation, it moved its Australia business to its Hong Kong-based division and then sued claiming the property being seized was its trademarks on its cigarette packages.

But it wasn’t just PMI who came after Australia. Three countries – Honduras, the Dominican Republic, and Ukraine – also filed complaints with the World Trade Organization against Australia’s plain packaging law. However, it turns out, Ukraine has zero trade with Australia of any tobacco products. [..]

Not surprisingly, these complaints are fully backed by PMI, who will even cover some of the legal costs. But Big Tobacco doesn’t just go after big countries; the small South American country of Uruguay was also a target. Oliver points out that it’s a country we think so little about that the audience didn’t even notice he was deliberately highlighting the wrong country on a map to prove his point.

It is treaties like the WTO that harm struggling counties and the poorest populations around the world. President Barack Obama would like to further that harm with even bigger “free trade” like the Trans-Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (TTIP). These treaties will cause job losses, lower wages, higher drug prices, endanger the environment and food supplies. The treaties also would give companies, like Phillip Morris International, even more power to sue governments if those governments’ policies cause a loss of profits, undermining democracy. They are being negotiated in secret and the public only knows about them because Wikileaks released drafts of some of the worst clauses that it had acquired.

Cross posted from The Stars Hollow Gazette

After serving 23 months in federal prison for exposing the Bush administration’s torture program, former CIA analyst John Kiriakou told Democracy Now!‘s Amy Goodman he would do it again and called for the prosecution of CIA officers who tortured prisoners.

In 2007, Kiriakou became the first CIA official to publicly confirm and detail the agency’s use of waterboarding. In January 2013, he was sentenced to two-and-a-half years in prison. Under a plea deal, Kiriakou admitted to a single count of violating the Intelligence Identities Protection Act by revealing the identity of a covert officer involved in the torture program to a freelance reporter, who did not publish it. In return, prosecutors dropped charges brought under the Espionage Act. Kiriakou is the only official to be jailed for any reason relating to CIA torture. Supporters say he was unfairly targeted in the Obama administration’s crackdown on government whistleblowers. A father of five, Kiriakou spent 14 years at the CIA as an analyst and case officer, leading the team that found high-ranking al-Qaeda member Abu Zubaydah in 2002. [..]

In a wide-ranging interview, Kiriakou says, “I would do it all over again,” after seeing the outlawing of torture after he came forward. Kiriakou also responds to the details of the partially released Senate Committee Report on the CIA’s use of torture; argues NSA whistleblower Edward Snowden did a “great national service,” but will not get a fair trial if he returns to the United States; and describes the conditions inside FCI Loretto, the federal prison where he served his sentence and saw prisoners die with “terrifying frequency” from lack of proper medical care.

Cross posted from The Stars Hollow Gazette

It seems that since 2010, the US Department of Justice has known that one of the largest banks in Europe has been sheltering money for dictators and arms dealers, among others:

Banking Giant HSBC Sheltered Murky Cash Linked to Dictators and Arms Dealers

By Gerard Ryle, Will Fitzgibbon, Mar Cabra, Rigoberto Carvajal, Marina Walker Guevara, Martha M. Hamilton and Tom Stites, February 8, 2015, The International Consortium of Investigative Jouranlists

Team of journalists from 45 countries unearths secret bank accounts maintained for criminals, traffickers, tax dodgers, politicians and celebrities

Secret documents reveal that global banking giant HSBC profited from doing business with arms dealers who channeled mortar bombs to child soldiers in Africa, bag men for Third World dictators, traffickers in blood diamonds and other international outlaws.

The leaked files, based on the inner workings of HSBC’s Swiss private banking arm, relate to accounts holding more than $100 billion. They provide a rare glimpse inside the super-secret Swiss banking system – one the public has never seen before. [..]

These disclosures shine a light on the intersection of international crime and legitimate business, and they dramatically expand what’s known about potentially illegal or unethical behavior in recent years at HSBC, one of the world’s largest banks.

The leaked account records show some clients making trips to Geneva to withdraw large wads of cash, sometimes in used notes. The files also document huge sums of money controlled by dealers in diamonds who are known to have operated in war zones and sold gemstones to finance insurgencies that caused untold deaths.

These are some of the key findings the journalists found:

 

HSBC Private Bank (Suisse) continued to offer services to clients who had been unfavorably named by the United Nations, in court documents and in the media as connected to arms trafficking, blood diamonds and bribery.

   HSBC served those close to discredited regimes such as that of former Egyptian president Hosni Mubarak, former Tunisian president Ben Ali and current Syrian ruler Bashar al-Assad.

   Clients who held HSBC bank accounts in Switzerland include former and current politicians from Britain, Russia, Ukraine, Georgia, Kenya, Romania, India, Liechtenstein, Mexico, Lebanon, Tunisia, the Democratic Republic of the Congo, Zimbabwe, Rwanda, Paraguay, Djibouti, Senegal, Philippines and Algeria.

   The bank repeatedly reassured clients that it would not disclose details of accounts to national authorities, even if evidence suggested that the accounts were undeclared to tax authorities in the client’s home country. Bank employees also discussed with clients a range of measures that would ultimately allow clients to avoid paying taxes in their home countries. This included holding accounts in the name of offshore companies to avoid the European Savings Directive, a 2005 Europe-wide rule aimed at tackling tax evasion through the exchange of bank information.

If this seems all too familiar, that’s because it is. HSBC was fined $1.6 billion in June of 2013 after it reached an agreement with the US Department of Justice which resolved charges it enabled Latin American drug cartels to launder billions of dollars

HSBC was accused of failing to monitor more than $670 billion in wire transfers and more than $9.4 billion in purchases of U.S. currency from HSBC Mexico, allowing for money laundering, prosecutors said. The bank also violated U.S. economic sanctions against Iran, Libya, Sudan, Burma and Cuba, according to a criminal information filed in the case. [..]

Under a deferred prosecution agreement, the U.S. allows a target to avoid charges by meeting certain conditions — including the payment of fines or penalties — and by committing to specific reforms.

US government faces pressure after biggest leak in banking history

So just what was the Department of Justice and the IRS doing with this information about the bank and its clients? Apparently not much.

Confronted by the Guardian’s evidence, HSBC admitted wrongdoing by its Geneva-based subsidiary. “We acknowledge and are accountable for past compliance and control failures,” the bank said in a statement. The Swiss arm, the statement said, had not been fully integrated into HSBC after its purchase in 1999, allowing “significantly lower” standards of compliance and due diligence to persist. [..]

The 2012 settlement was overseen by Loretta Lynch, who was then US Attorney for the Eastern District of New York. Lynch is currently Barack Obama’s current nominee for attorney general.

At the time, the HSBC settlement was heavily criticised by both Republicans and Democrats for allowing the bank to escape criminal indictments and keep the charter which enables it to operate in the US. Lynch and other senior DoJ officials defended the deal, pointing out it committed HSBC to a five-year plan to stamp out money laundering and other illicit practices, an ongoing process that is being overseen by an independent, court-appointed monitor. [..]

The DoJ was under pressure to go beyond financial penalties – to bring criminal charges against HSBC or its bankers – in July 2012, after the Senate’s permanent subcommittee on investigations published its crushing 330-page report documenting how the bank’s lax anti-money laundering controls had been exploited by drug traffickers. [..]

The settlement proved controversial because it stopped short of criminally indicting the bank or its executives; lawmakers from both parties complained it revealed some Wall Street institutions were considered “too big to jail”. [..]

HSBC is now just over two years into its reform plan, and has been deemed to be complying with the terms of the settlement. However the court-appointed monitor, Michael Cherkasky, who oversees a team of banking investigators who review HSBC’s changes, has expressed some concern over the pace of reform. Cherkasky’s most recent assessment of HSBC’s ongoing efforts to clean up its act has once again concluded it could do better, according a recent report in the Wall Street Journal which cited people familiar with its findings.

CBS’s “60 Minutes” aired The Swiss Leaks a report by Bill Whitaker that examined “HSBC’s business dealings with a collection of international outlaws.”

The sickening part of this is the US Justice Department was well aware of this when they settled the HSBC’s drug laundering case in 2013. Also. HSBC is one of the institutions that is refusing to handle the money of legitimate marijuana businesses.

Nice going, Eric.

Finally accepting his untenable position to remain in office, tough guy, Representative Michael Grimm (R-NY11) has decided to resign his House seat sparing the people of Staten Island and Brooklyn the embarrassment of having a convicted felon representing them. Mr. Grimm spoke yesterday with House Speaker John Boehner (R-OH) who obviously laid out the grim options (pardon the pun).

House rules dictate that a member convicted of a crime for which a prison sentence of two years or more may be imposed should not participate in committee meetings or vote on the floor until winning re-election. The stricture could have left Mr. Grimm’s 11th district effectively disenfranchised until 2016.

After sources leaked the news of the resignation to The New York Daily News early Monday, Mr. Grimm released a statement at midnight that he had changed his mind and would not stay in Congress, stating that he would resign on January 5th.

New York Governor Andrew Cuomo will set a date for a special election.

The judge should throw the book at him for deceiving the voters and using his office as a bargaining chip for a lighter sentence, as expalained by Blake Zeff at Salon:

It will take some time, specifically until the announcement of his criminal sentence, to fully appreciate the snow job Michael Grimm just pulled on Staten Island voters. But we already know plenty enough to call it a criminal’s virtuoso parting heist.

Grimm, you’ll recall, ran for reelection last month as a two-term GOP incumbent in socially conservative Staten Island, with a 20-count indictment on his back. The charges, largely misunderstood by the voters (and media, for that matter), essentially amounted to this: He ran a restaurant some years back, and in an effort to skirt payroll taxes, paid workers under the table and submitted a fake payroll to the feds. He was then caught lying about it when a “real” payroll was discovered by prosecutors in his computer records.

This last part is important because it tells you what Grimm knew: he had lied to federal officers (a crime that never gets ignored), and they had the goods on him. In other words, he was very likely going to prison – and he knew it. [..]

The congressman was clearly never going to serve out his term, nor would he take his case to trial, as he had assured voters.

But he had a very good reason to convince voters otherwise.

If you’re headed to prison but want to cop a deal with the feds, you need a chip you can bargain in exchange for a lighter sentence. And for a politician, there are few chips more valuable than a seat you can resign. If Grimm lost his race last November, he’d have been a disgraced former congressman with no seat to give up and, likely, real prison time. If he won, he’d have the golden House seat to drop in exchange for – he hoped – leniency.

It is the NYT article best sums up the end of this sad affair:

Whoever takes Mr. Grimm’s seat will be unlikely to match his track record as a source of national fascination, or satire. A tough-talking politician with a clenched jaw and an intense stare, a fondness for dark-tailored suits and Brooklyn wine bars, Mr. Grimm brought with him a reputation for controversy, including the time – back in his law enforcement days – when he reportedly waved a gun around a Queens nightclub. He carried himself with a bravado that was on display until the end.

Mr. Grimm knew this was coming when he was indicted for tax evasion last April. Instead of admitting it then and withdrawing from the race, he decided to arrogantly stand his ground and lie about his guilt, bringing unwanted attention to Staten Island and, now, costing NY tax payers millions for a special election. Never mind the money that his supporters donated to his campaign, they should have seen the handwriting on the wall. The IRS and FBI do not bring these charges unless they can win. Remember Al Capone?

But too many Staten Island voters still love the tough guy image and swagger, hopefully this time they will make a better choice.

Cross posted from The Stars Hollow Gazette

In a predictable fashion, convicted felon and admitted liar, Representative Michael Grimm refused to resign from his seat representing Staten Island and part of Brooklyn in New York’s Congressional District 11.

Representative Grimm said he had no intention of stepping down. “Absolutely not,” he said.

He sounded equally resolute when he declared himself “guilty” to Judge Pamela K. Chen of United States District Court in Brooklyn, who accepted his plea and noted that it included his signing of a “statement of facts” in which he acknowledged committing perjury, hiring illegal immigrants and committing wire fraud.

Judge Chen then commanded Mr. Grimm to return to court for sentencing on June 8. Federal prosecutors, who along with the Federal Bureau of Investigation and Internal Revenue Service have investigated Mr. Grimm for years, are seeking a penalty of at least two years in prison. His lawyers, some of whom joined the proceedings via conference call from Florida, are asking for a more lenient sentence and will almost certainly recommend probation.

However, Judge Chen didn’t sound like she would be considering probation:

“Do you understand all of the possible consequences of your guilty plea?” she asked.

“I do, Your Honor,” he said.

Judge Chen warned that she could “depart upward or downward” from sentencing guidelines. Mr. Grimm said he understood, and also acknowledged that he had forfeited his right to appeal any sentence less than 33 months in jail.

Mr. Grimm still doesn’t have the decency to resign. Nor did 54% of Staten Island voters have the decency to reject him, even though it was clear in November that Mr. Grimm would at least be convicted of the tax evasion charge. The IRS rarely loses. Now, not only was he guilty of tax evasion but admitted that he lied and that the other charges were fact. How fitting that the red district of NYC should be represented by a Crook and a liar.

It took MSNBC’s Rachel Maddow two segments to highlight just how embarrassing this will be for the GOP to have a felon serving in congress and Sadly, the few options to pressure Mr. Grimm to resign.

Tuesday’s Rachel Maddow Show started off with a brief review of crimers in Congress. It’s not as long a list as you might think! She focuses on California Republican Jay Kim, who was convicted of campaign fraud in 1998 and became the first – and so far, only – member of Congress who walked its hallowed halls wearing a monitoring bracelet attached to his ankle. Kim’s estranged wife said he was “the most crime-committing person I know.” He lost his primary that year and soon became the footnote he was destined to be.

Actual felons in Congress are something of a rarity, Maddow notes, because of a reassuring human tendency to eventually do the right thing – either the convicted Congressturds resign or the voters pick someone else.

In a laughable editorial, the conservative Staten Island Advance Editorial Board, with its usual right wing slant that this was a political witch hunt, has suggested that Mr. Grimm to step down:

Just two months ago, the Staten Island Advance urged voters to elect Michael Grimm to a third term in the Congress.

That while he faced a 20-count federal indictment in connection with a health food restaurant he owned prior to entering political life.

Voters overwhelmingly agreed.

Today, we think Mr. Grimm would be right to step down from his position in the United States Congress. [..]

We have little doubt that legions of Mr. Grimm’s supporters will stand by him, and defend him.

But we also have little doubt that many on Staten Island are feeling their trust was misplaced and they were betrayed.

Over almost half a century, three different Staten Island representatives to the United States Congress have surrendered their better judgment, squandering their own significant talents that, in each instance, could have brought pride to our borough.

Instead, they brought embarrassment.

There are certain people who must be held to high standards in America. In recent months, we have seen so many examples of that. Police immediately come to mind. So does the mayor of New York.

People with whom we place our trust.

A United States congressman must be at, or certainly near, the top of that list.

Mr. Grimm the restaurateur didn’t let us down when he played fast and loose with the books. Mr. Grimm the Staten Island congressman did, when he played fast and loose with the truth.

This isn’t going away until Mr. Grimm goes away, hopefully, to prison where perhaps he’ll learn a little humility.

As David Dayen puts it, “it isn’t prison” but the consequences are at least a bit satisfying.

Finally, a Financial Executive Is Sacked for His Company’s Misdeeds

By David Dayen, The New Republic

Lets say you run a company whose misdeeds are splashed across the pages of the business section on an almost weekly basis. you might reasonably expect to be fired without delay. But then let’s stipulate that you’re in the financial service industry. Recent history suggest that you’ll be able to keep your job and your handsome bonus, and that even if law enforcement decide to penalize the company for improprieties, somebody else – like your shareholders – will pay those fines, leaving you to continue your charmed life unscathed.

William erbey, the billionaire chairman of the mortgage serving giant Ocwen, probably thought that would be his fate as well, but he didn’t anticipate the determination of New York Superintendent of Financial Services Benjamin Lawsky. On Monday, Lawsky announced that Erbey would step down from Ocwen and four related businesses, as part of the settlement of an investigation into the companies sad enduring legacy of ripping off homeowners.

The consequences for Erbey have been huge financial losses as Ocwen shares dropped 31% “after agreeing to a settlement that prevents it from acquiring mortgage-servicing rights until the company makes improvements to satisfy New York regulators.” The company must also provide $150 million for relief to homeowners and hire a monitor who will approve the appointment of two independent directors to Ocwen’s board and continue to oversee the business.

According to Forbes, poor Erbey is no longer a billionaire:

Erbey, according to Forbes’s Real Time Wealth Rankings for billionaires, lost over $300 million on Monday causing his net worth to fall to around $800 million and knocking him out of the billionaire ranks. He was worth as much as $2.5 billion in March when we published our annual listing of the world’s wealthiest. [..]

Forbes now calculates Erbey’s net worth at $802 million, as of late afternoon trading.

As Atrios said, “it’s sad that this is all we’ll get.”  

Up Date 6:00 PM ET: Rep/ Grimm announced that he will not resign his House seat despite now being a convicted felon and possibly facing up to 3 years in prison.

Up Date 3:00 PM ET 12/23/14: Rep. Micheal Grimm Brooklyn Federal Court to a count of felony tax fraud. He issued the plea before Judge Pamela K. Chen shortly after 1:30 PM ET.

His status in Congress and whether or not he resigns was not part of the plea deal.

He could face a worst-case scenario of 24 to 30 months in prison.

Sentencing was scheduled for June 8 at 10:30 a.m.

Sources told the press this afternoon that Staten Island’s Repubkican Representative Michael Grimm (NY-11) will plead guilty to a single felony count of tax evasion.

Mr. Grimm, a former Marine and agent with the Federal Bureau of Investigation who first ran for office as a law-and-order corruption fighter, is scheduled to appear in federal court in Brooklyn at 1 p.m. on Tuesday for a plea hearing, according to the docket sheet in his case, which provides no further detail.

He has said he would immediately resign if he were convicted. “If things don’t go my way, right? And I had to step down in January, then there will be a special election, and at least the people of Staten Island and Brooklyn can then have qualified candidates to choose from,” he told the radio talk-show host Geraldo Rivera in October.

After a lengthy investigation into allegations of campaign finance improprieties, federal prosecutors obtained a 20-count indictment in April charging Mr. Grimm with underreporting wages and revenue while he was running a restaurant on the Upper East Side of Manhattan called Healthalicious.

The charge carries a a penalty of up to three years in prison. However, as a first offender the judge may wave prison. Mr. Grimm has been very careful to couch his statements about stepping down if he was convicted. At his debate with Democratic Challenger Dominic Recchia, he was asked if he would resign if found guilty. He cautiously responded, “”Certainly, if I was not able to serve then of course I would step aside and there would be a special election.” If the judge is lenient, as many expect is likely, it would be up to the Republican led House to expel him.

Just prior to his latest legal predicament, Mr. Grimm displayed his bad temper when he threatened to throw NY-1 reporter, Michael Scotto, off the balcony of the Capitol Rotunda after President Barack Obama’s State of the Union address. After a lot of negative press he apologized to Mr. Scotto, who said he would not press charges.

From the New York Times article, Mr. Grimm’s troubles are not over. He is still under federal investigation for his campaign finances, the potential mob ties of one of his business associates and the illegal activities of another.

Mr. Grimm continues to be an embarrassment to the Republican Party and people he represents, even though many of them still support him. He should just resign and slink away.