Tag: corruption

On Wednesday in the early morning hours in Zurich, Switzerland, at a five star hotel, there were six phone calls made by the concierge to six rooms telling the occupants: “Sir,” the concierge said in English, “I’m just calling you to say that we’re going to need you to come to your door and open it for us or we’re going to have to kick it in.” How polite.

The hotel, which overlooks Lake Zurich, provided an unlikely setting for the apprehension of six global soccer executives who were arrested on corruption charges and now face extradition to the United States. The operation took less than two hours and was strikingly peaceful – no handcuffs, no guns drawn. It also involved an unusual use of a bedsheet.

Raids in the United States are typically led by armed SWAT team members wearing bulletproof vests and helmets, but the Swiss took a more subtle approach. Rather than storming into the executives’ rooms and hauling them out in their pajamas, the officers waited for the men to come to the door and then gave them a chance to get dressed and pack their bags.

The officers appeared to lead the officials out one by one, through several exits, including a side door, the hotel’s garage and, in one case, the main entrance.

Thus started the arrests of six global soccer executives on corruption charges. The indictments were brought by the US Justice Department stemming from an FBI and IRS investigation into the business practices of FIFA, the world governing body of the world’s most popular sport. soccer.

The Justice Department, F.B.I. and I.R.S. described soccer’s governing body in terms normally reserved for Mafia families and drug cartels, saying that top officials treated FIFA business decisions as chits to be traded for personal wealth. One soccer official took in more than $10 million in bribes, Attorney General Loretta E. Lynch said.

The schemes involving the fraud included the selection of South Africa as the host of the 2010 World Cup; the 2011 FIFA presidential elections; and several sports-marketing deals. [..]

The Department of Justice indictment names 14 people on charges including racketeering, wire fraud and money laundering conspiracy. In addition to senior soccer officials, the indictment also named sports-marketing executives from the United States and South America who are accused of paying more than $150 million in bribes and kickbacks in exchange for media deals associated with major soccer tournaments. [..]

The promise that the investigation would continue raised the specter of more arrests, but officials would not comment on whether they were investigating Sepp Blatter, the FIFA president and the man widely regarded as the most powerful person in sports. One federal law enforcement official said Mr. Blatter’s fate would “depend on where the investigation goes from here.” [..]

United States law gives the Justice Department wide authority to bring cases against foreign nationals living abroad, an authority that prosecutors have used repeatedly in international terrorism cases. Those cases can hinge on the slightest connection to the United States, like the use of an American bank or Internet service provider.

Switzerland’s treaty with the United States is unusual in that it gives Swiss authorities the power to refuse extradition for tax crimes, but on matters of general criminal law, the Swiss have agreed to turn people over for prosecution in American courts.

What Esquire’s Charlie Pierce said:

Here and overseas, the entire corporate universe is shot through with metastatic corruption and crime. It is an essential part of the business model almost everywhere, from Wall Street offices to the pitch at Wembley. FIFA’s corruption is more than an endemic phenomenon. FIFA was simply one corrupt enterprise working with and through hundreds of other corrupt enterprises. There are governments, and there are communications empires, and there are all manner of companies advertising their wares — the “corporate partners” of a claque of brigands. If you did business with the crooks of FIFA, you’re a crook, too. There’s no way to avoid it. All of them are guilty. All of them are responsible. All of them are complicit in the corruption in the spotlight today, and in the death of anonymous workers in Qatar whose names they don’t even know. The whole goddamn corporate universe is begging for a gigantice RICO indictment.

It seems the Justice Department is capable of investigating and obtaining indictments against officials of an organization whose business practices have been described as “byzantine and impenetrable,” why can’t the DOJ do the same for the bankers of JPMorgan Chase, HSBC, Citibank, Bank of America, et al? It apparently is not that hard, Loretta.

Cross posted from The Stars Hollow Gazette

Illinois Republican Representative Aaron Shock, he of the Downton Abbey office, announced his resignation from the House of Representatives after questions about his finances and high spending life style.

Schock’s spending came under scrutiny after a Washington Post report highlighted the Republican’s newly redecorated office, allegedly modeled after the popular British period drama “Downton Abbey.” The report noted that the office’s decorator, Annie Brahler, remodeled the office for free, sparking an ethics complaint against the congressman.

Schock ultimately repaid $40,000 for the redecoration, but the initial story set off a series of reports on the 33-year-old congressman’s lavish spending habits. Subsequent reports detailed a taxpayer funded weekend in New York for his staffers, a dozen charter flights worth over $40,000 on donors’ planes and $24,000 in campaign funds spent on concerts and events, including a sold-out Katy Perry concert.

Other reports raised questions over Schock’s relationships with donors. In February, a complaint was filed against Schock over the alleged sale of his home to a campaign donor for a significant profit. And earlier this week, the Chicago Tribune reported that multiple Schock donors were directly involved in a 2014 property deal in which the congressman paid one donor for a commercial property, and then took out out a mortgage for that property from a bank run by other donors.

When Rep. Shock was first elected in 2008, he was the youngest member of congress. He is currently the third youngest.

In another development, the ex-girlfriend and fund raiser for convicted felon former Rep. Michael Grimm (R-NY11), was sentenced to three months in jail. Diana Durand, 48, plead guilty last September to violating campaign finance law. Despite the recommendation of the prosecutors for no jail time, Federal Judge Sterling Johnson Jr disagreed.

Ms. Durand pleaded guilty in September to using straw donors to illegally contribute more than $10,000 to Grimm’s 2010 congressional campaign. Kaplan had asked for no prison time, noting that she’s the single mother of a 16-year-old son.

Prosecutors did not object to that request, but U.S. District Judge Sterling Johnson Jr. had other plans Tuesday.

“This is a very perplexing case, as all sentences are,” he said, adding, “I think that a custodial sentence is necessary.”

Johnson gave no other explanation for the sentence — three months, followed by a year of supervised release and a $10,000 fine. Ms. Durand is slated to surrender to U.S. Marshals in Texas, where she lives, on May 1.

Ms. Durand was also accused of giving illegal funds to Rep. Shock. Nor does this bode well for Mr. Grimm who is to be sentenced June 10.

Illinois Governor Bruce Rauner (R) has five days to notify the county clerk of the vacancy and the state must hold a special election for Rep. Snock’s empty seat within 115 days. The special election for the NY-11 vacancy is May 5.

Ah, the young ans the restless.

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.

Cross poated from The Stars Hollow Gazette

Last year, after the New York State legislature failed to pass campaign finance and a year riddled with corruption scandals, New York State Governor Andrew Cuomo empaneled an “independent” commission to pursue misconduct among public officials and make recommendations to changes to the state’s election and campaign fund-raising laws. The 25 member Moreland Commission was created last July to restore public trust in government. But nine months later, Gov. Cuomo shut it down. The governor claimed that with “the passage of new tougher laws on bribery and  corruption, and improved enforcement of election law”, the commission was no longer needed.

That didn’t satisfy government watch dogs or some lawmakers. Nor did it satisfy Preet Bharara, US Attorney for the Southern District of New York, whose investigations had led to the commissions formation. According to the New York Times, Mr. Bharara contacted two of the commission’s three chairs, William J. Fitzpatrick and Milton L. Williams Jr. His suspicion was that Gov. Cuomo had shut down the commission for political expediency and because the commission’s investigation was getting to close to his office. It now appears that Mr. Bharara has really good instincts.

This week the New York Times broke with this extensive report:

With Albany rocked by a seemingly endless barrage of scandals and arrests, Gov. Andrew M. Cuomo set up a high-powered commission last summer to root out corruption in state politics. It was barely two months old when its investigators, hunting for violations of campaign-finance laws, issued a subpoena to a media-buying firm that had placed millions of dollars’ worth of advertisements for the New York State Democratic Party.

The investigators did not realize that the firm, Buying Time, also counted Mr. Cuomo among its clients, having bought the airtime for his campaign when he ran for governor in 2010.

Word that the subpoena had been served quickly reached Mr. Cuomo’s most senior aide, Lawrence S. Schwartz. He called one of the commission’s three co-chairs, William J. Fitzpatrick, the district attorney in Syracuse.

“This is wrong,” Mr. Schwartz said, according to Mr. Fitzpatrick, whose account was corroborated by three other people told about the call at the time. He said the firm worked for the governor, and issued a simple directive:

“Pull it back.”

The subpoena was swiftly withdrawn. The panel’s chief investigator explained why in an email to the two other co-chairs later that afternoon.

“They apparently produced ads for the governor,” she wrote.

The pulled-back subpoena was the most flagrant example of how the commission, established with great ceremony by Mr. Cuomo in July 2013, was hobbled almost from the outset by demands from the governor’s office.

Despite Gov, Cuomo’s denial and protestations that it was his commission to dismiss, Mr Bharara is taking over where the commission’s investigations. The lengthy article is a must read.

MSNBC’s Rachel Maddow roasted Gov. Cuomo in an extended segment that included an interview with Thomas Kaplan one of the three authors who wrote the NYT’s article.

The governor’s travails also caught the attention of The Daily Show‘s Jon Stewart

Gov. Cuomo’s Democratic Primary opponent Fordham University law professor Zephyr Teachout has called for the governor to resign should these allegations prove true.

Also complicating his headaches, Gov. Cuomo had some of the commission members sworn in as deputy state attorneys general by State Attorney General Eric Schneiderman that calls into question his assertions that he had a right to interfere with the commission. Quite similar to late President Richard M. Nixon’s Saturday Night Massacre when he ordered the independent special prosecutor Archibald Cox fired after Mr. Cox issued subpoenas asking for copies of taped conversations recorded in the Oval Office and authorized by Nixon as evidence.

Gov. Cuomo does have a lot of questions to answer and so far his answers have fallen very short.

Cross posted from The Stars Hollow Gazette

After over a two year investigation in campaign finance corruption, Representative Michael Grimm (R-NY11) was indicted on Monday, with charges including mail, wire, and healthcare fraud, filing false tax returns, perjury, and employing undocumented immigrants. Grimm, with a history of bad behavior made headlines most recently when he threatened to throw a NY1 reporter, Michael Scotto, off the balcony of the Capitol rotunda when he lost his temper over Scotto’s commentary.

The district that Grimm represents, Staten Island and part of Brooklyn, was hard hit by super storm Sandy in October 2011 and is still has not fully recovered due much to the lax distribution of funds by New York City, a problem that newly elected Mayor Bill De Blasio is working quickly to remedy. Grimm is also, or was, a climate change denier. In episode 3 of the Showtime series on climate change, “Years of Living Dangerously,” Grimm sat down with MSNBC’s Chris Hayes to discuss the devastation, recovery and climate change. In that segment which was taped in August 2012, Grimm revealed that he had changed his mind about climate change and said that the storm was a major factor in his decision. However, he also said that there is nothing that he could do to change the conversation in the House.

This was news to his constituents since since Grimm has consistently voted with his Republican colleagues to block any climate change solutions. He even told Hayes “I don’t think the science is there to tell us what’s causing it…. I don’t want to get into the political debate of what’s causing it.” Ironically, the segment aired on Sunday, the day before Grimm surrendered to authorities to face the 20 count indictment.

Monday night, Hayes revisited his interview with Rep. Grimm where the conversation turned to the environment.

After all this Grimm is not resigning his house seat and he is still the GOP nominee for that district. But even if the Staten Island GOP wanted to replace him, they are hard pressed to try and their choice to replace him is  a former congressman whose career ended with a DUI arrest that exposed an affair, Vito Fossella. If you thought the Republicans in the midwest and south were ignoramuses, you haven’t been to Staten Island, the last stronghold for the GOP in New York City.

Grimm’s constituents deserve better. They deserve someone who will stand up and fight for them.

Wired.com, in a July 26, 2013 piece by David Cravats, details that not-very-surprising fact that those congressional representatives who received the largest political donations from defense contractors voted last week, 217 to 205, to oppose cuts to NSA’s phone-spying dragnet budget.   Those who opposed the cuts, and thus the “Amash amendment” received 122% more defense contractor funds than those who voted against it, with one Democratic exception of Representative Dennis Moran of Virginia.

An analysis done by the Berkeley non-profit, MapLight for Wired showed that Defense contractor donations averaged $41,635 from the pot, whereas House members who voted to repeal authority averaged $18,765 for the previous two year period.

The only really surprising fact is how very little the defense contractors had to pony-up to buy their contractor-collusive representative over the two year period:  $12.97 million.

In contrast to the billions of dollars these big corporations make each year from their defense contracts in the surveillance industry, the going price for representatives is trifling low.  (Of course, undoubtedly some representatives with committee assignments critical to surveillance budget issues do undoubtedly get lucrative extra perks in the form of post-term jobs, many as lobbyists, should they leave Congress, but still the cost of doing business with friendly congressional representatives is  virtually a rounding error in their corporate budgets.  

Cross posted from The Stars Hollow Gazette

One of the latest MSM fixations has been an incident that occurred last year during a Republican junket to Israel. A nighttime swim in the Sea of Galilee by some members of the delegations turned embarrassing when the FBI found the Rep. Kevin Yoder (R-Kan.) took his dip in the sea sans his suit. Oh my! A coed swim with one naked man is now national news. But the question by the press should have been, why was the FBI investigating this trip. Surely, they weren’t interested in who was taking off their clothed and skinny dipping. It turns out that the FBI was only interested in one member of that group and the investigation had nothing to do with that representative’s participation in that incident, clothed or otherwise.

The focus of the FBI is Staten Island’s freshman Tea Party backed House Representative Michael Grimm. The 42 year old former FBI agent who bears a striking resemblance to Rep. Paul Ryan and the other Tea Party clones has been under investigation by the FBI and a federal grand jury investigation into his 2010 campaign finances. The FBI was looking into Mr. Grimm’s side trip to Cyprus that was sponsored by the Cyprus Federation of America.

But FBI agents were actually interested in Grimm’s failure to file paperwork related to his trip to Cyprus following his Israeli junket, which had been paid for by the Cyprus Federation of America. The president of that company was arrested on federal corruption charges in June. Grimm had reported the Israel trip in his initial filing in May but did not list the trip to Cyprus until he amended it in June, one day after Cyprus Federation of America’s president was arrested.

FBI agents may have asked questions about “who went into the water that night, and whether there was any impropriety,” as Politico reported, but sources indicated the dip in the water certainly wasn’t the FBI’s central focus. [.]

Grimm, a former FBI agent, has been the subject of plenty of attention from federal authorities over the past year. On Friday, one of Grimm’s top fundraisers was arrested for allegedly lying about the source of a loan on immigration documents. That man, an Israeli named Ofer Biton, traveled around the New York area with Grimm in 2010 to raise money for his congressional campaign. At least four of Grimm’s 2010 campaign workers have been questioned by the FBI. Federal prosecutors have also interviewed several donors, according to the New York Times.

But heck, what’s more interesting, an skinny dipping congressman or an investigation into possible corruption by a congressman? I think we all know the answer to that.