Financial Entitlement in the US


Robert Lenzner, Forbes —

Don’t blame David Sokol’s  craving to make a fortune  and become a philanthropist on Warren Buffett’s understandable confidence  that  his leading heir-apparent would do nothing to embarass him and Berkshire Hathaway.

It was  David Sokol’s personal responsibility to tell Buffett on January 25th latest  that he  owned 96,000 shares of Lubrizol worth $10 million that, excuse me , he had  purchased  the first week of January, 2011, ahem, just 18 days before the Jan. 25th  decision to go ahead and  negotiate for Lubrizol.

Then, Buffett would have realized he had to reveal this stock activity in the merger materials, which was going to be an embarassment– even if he had ordered  Sokol to sell the shares before ANY negotiations.

This  is not an issue of corporate governance, that mushy concept that obfuscates what you should be born with– an ingrained sense of what is right and what is wrong.  Unfortunately, our celebrity culture has placed a priority on public excess, the insatiable need to be richer than the next guy,  keep up with the private equity billionaires, the hip-hop entrepreneurs with diamonds in their ear lobes, the Donald Trumps of the world.

Read today about the Fannie Mae and Freddie Mac execs who were paid multiple  millions personally and presided over public  losses of billions. It’s  time to pull “The Rich And The Super Rich, A Study of  Money & Power And Who Really Owns America” out of the bookcase and  remind  myself of  the prevailing culture.

The Oscar-winning  documentary “Inside Job,” is deep-down a narrative of the insidious culture of financial entitlement, an invisible virus  at work  in the culture.  Cut the school budget, layoff policemen, cannibalize  training programs for the unemployed, don’t make GE pay any taxes etc. is  the dark side of the  culture of  financial entitlement.

Here  are some of the many examples of the virus at work in our recent history. The leading investment banker who  is also chairman of the investment bank’s regulator who buys shares of the investment bank at a  depressed price during the financial crisis  with full insight as to public  policy support for the  institution, and never has his wrist slapped.  Supported by his former  partner, who once held a high cabinet post, who assured me there  w as nothing wrong in taking advantage of inside knowledge to make an extra buck or two.

The  leading executive of a  public-private housing finance institution who brags to me that she got out just in time without being stained by the  crisis, her extraordinary small fortune  intact.

The phenomenon of a leading  bank, JP Morgan Chase allowing  $100 billion to be transferred back and forth between  the crook of the century, Bernie Madoff and another major client of the bank.  Or my alma mater, Goldman Sachs letting a  hedge fund  maven client pick out the lousy mortgages to go short  in a public offering.  Or Credit Suisse having to pay a fine of $535 million to  the government for violating the  sanctions against  doing business with knave nations  like Iran and the Sudan.

Just have a look at hedge fund biggie Raj Rajaratnam, blithley protesting  his innocence  of criminality  in the  biggest inside information trial ever, despite 19 guilty pleas  by others caught in his dishonest web.  Absurd.

Soldiers responsibile for slaughter get court martialed


According to the Globe & Mail’s website:

A 22-year-old soldier accused of taking a lead role in a brutal plot to murder Afghan civilians faces a military trial Wednesday in a case that involves some of the most serious criminal allegations to arise from the U.S. war in Afghanistan.

Spc. Jeremy Morlock, of Wasilla, Alaska, has agreed to plead guilty to three counts of murder, one count of conspiracy to commit assault and battery, and one count of illegal drug use in exchange for a maximum sentence of 24 years, said Geoffrey Nathan, one of his lawyers.

His client is one of five soldiers from Joint Base Lewis-McChord’s 5th Stryker Brigade charged in the killings of three unarmed Afghan men in Kandahar province in January, February and May 2010. Mr. Morlock is the first of the five men to face a trial, known in the military as a court-martial — which Mr. Nathan characterized as an advantage.

“The first up gets the best deal,” he said by phone Tuesday, noting that even under the maximum sentence, Mr. Morlock would serve no more than eight years before becoming eligible for parole.

According to a copy of the plea agreement, Mr. Morlock has agreed to testify against his co-defendants. In his plea deal, Mr. Morlock said he and others slaughtered the three civilians knowing that they were unarmed and posed no legitimate threat.

He also described lobbing a grenade at the civilian in the January incident while another soldier shot at him, and then lying about it to his squad leader.

The court-martial comes days after a German news organization, Der Spiegel, published three graphic photos showing Mr. Morlock and other soldiers posing with dead Afghans. One image features Mr. Morlock grinning as he lifts the head of a corpse by its hair.

Army officials had sought to strictly limit access to the photographs due to their sensitive nature. A spokesman for the magazine declined to say how it had obtained the pictures, citing the need to protect its sources.

Mr. Morlock told investigators the murder plot was led by Staff Sgt. Calvin Gibbs, of Billings, Montana, who is also charged in the case. Mr. Gibbs maintains the reasons behind the killings were legitimate.

Mr. Nathan said Mr. Morlock’s mother and hockey coach are among the witnesses who might testify on his behalf in court. He indicated the defence would argue that a lack of leadership in the unit contributed to the killings.

“He’s really a good kid. This is just a bad war at a bad time in our country’s history,” Mr. Nathan said. “There was a lack of supervision, a lack of command control, the environment was terrible. In his mind, he had no choice.”

After the January killing, platoon member Spc. Adam Winfield, of Cape Coral, Florida, sent Facebook messages to his parents saying that his fellow soldiers had murdered a civilian and were planning to kill more. Mr. Winfield said his colleagues warned him not to tell anyone.

Mr. Winfield’s father alerted a staff sergeant at Lewis-McChord, which is south of Seattle, but no action was taken until May, when a witness in a drug investigation in the unit also reported the deaths.

Mr. Winfield is accused of participating in the final murder. He admitted in a videotaped interview that he took part and said he feared the others might kill him if he didn’t.

Also charged in the murders are Pvt. 1st Class Andrew Holmes of Boise, Idaho, and Spc. Michael Wagnon II of Las Vegas.

Seven other soldiers in the platoon are charged with lesser crimes, including assaulting the witness in the drug investigation, drug use, firing on unarmed farmers and stabbing a corpse.

Afghan civilians slaughtered for sport


 

 

US Soldiers pose with their victims’ bodies

As reported by the U.K. Guardian’s Jon Boone:

The face of Jeremy Morlock, a young US soldier, grins at the camera, his hand holding up the head of the dead and bloodied youth he and his colleagues have just killed in an act military prosecutors say was premeditated murder.

Moments before the picture was taken in January last year, the unsuspecting victim had been waved over by a group of US soldiers who had driven to his village in Kandahar province in one of their armoured Stryker tanks.

According to testimony collected by Der Spiegel magazine the boy had, as a matter of routine, lifted up his shirt to reveal that he was not hiding a suicide bomb vest.

That was the moment Morlock, according to a pre-arranged plan, threw a grenade at the boy that exploded while other members of the rogue group who called themselves the “kill team” opened fire.

They would later tell military investigators that the boy, a farmer’s son, had threatened them with the grenade.

The pictures include a similar photograph of a different soldier posing with the same victim and a photograph of two other civilians killed by the unit.

There was no sign on Monday of the anticipated public outrage. But withAfghanistan on holiday for the Persian new year celebrations, and media outlets initially unable to get hold of the images, anger may yet build.

The US ambassador to Afghanistan, Karl Eikenberry, recently confided to officials that he feared it might trigger the same kind of scandal as that at Abu Ghraib in Iraq, where images of prisoners being abused by US soldiers sparked anti-American protests.

For weeks the US government has been working to pre-empt any outrage, with top officials, including the US vice president Joe Biden, in talks with Hamid Karzai, the Afghan president.

Despite being a setback in the propaganda war between the western coalition and its insurgent enemies, Nato will be relieved that for the time being only a tiny sample of a total collection of roughly 4,000 images and video clips have found their way into the public domain.

The publication of the photos will also mark the ultimate disgrace of the group of young US soldiers, who are currently facing military justice for killing innocent civilians for sport and mutilating their bodies by cutting off fingers and ripping out teeth to keep as trophies.

Morlock has turned on his former colleagues, agreeing to testify against them in return for a reduced jail sentence. Some of the activities of the group are already public, with 12 men currently on trial in Seattle for their role in the killing of three civilians. Morlock has told investigators that Staff Sergeant Calvin Gibbs was the ringleader. In videotaped evidence, he has said Gibbs would pick out a possible target with a comment such as: “You guys wanna wax this guy or what?”

Gibbs, if found guilty, could receive a life sentence.

Hans-Ulrich Stoldt, a spokesman for Der Spiegel, said the magazine had other, more graphic photos.

“We published three but not others, and we even pixilated those we did print so that the victims could not be identified,” Stoldt said. “We needed to document [the accusations] in some form, and were as restrained as possible.”

Warning offered post-Mubarak’s abrupt departure


El Tahrir Square 1

A demonstrator painting a milestone in Egyptian history. Photo credit: Mohamed Abd El-Salam

An important reminder was offered today in light of the rapid changes taking place in Egypt. While the protesters celebrate their success at ousting Mubarak, the Associated Press (AP) suggest caution now that Egyptian military have dissolved the Parliament and suspended the constitution.

According to the AP article, the director of the non-governmental organization Egyptian Initiative for Personal Rights Hossam Bahgat states that the country has entered uncharted legal ground. Bahgat stated that, “’In the absence of a constitution, we have entered a sort of ‘twilight zone’ in terms of rules, so we are concerned,” he said. “We are clearly monitoring the situation and will attempt to influence the transitional phase so as to respect human rights.’”

With the Parliament gone and no constitution in place, as asked for by the demonstrators, the military potentially has more power then when Mubarak was in office. Under Mubarak, the country was under a perpetual state of emergency which helped him monopolize his power. Now that there is no constitution, Egypt is under martial law which means that the military can create any law and enforce them in military tribunals.

While the military has so far responded to the desires of the people and the situation seems optimistic, there is cause for concern. The demonstrators have also asked that the emergency laws that have been in place for the past 30 years be repealed. On this particular issue, the military is utterly silent and has failed to take any action.

The military’s failure to address this issue is confirmed by Al Jazeera. James Bays, a correspondent for the paper, says that, “‘one thing that wasn’t in that communique that protesters have asked for, was the repeal of emergency laws.’”   In addition he says that the military council has, “’taken on the role of the presidency and the prime minister and the other ministers carry out their orders.’”

Some protestors appear to share Bahgat’s concerns because they promised to remain in Tahrir Square until all of their requests have been met. Safwat Hegazi, who helped to organize the demonstrations, asserts that, “’If the army does not fulfil our demands, our uprising and its measures will return stronger.’”

Hegazi’s statement is a testament to the Egyptian people’s dedication and commitment to a more open government. With this in mind, there remains the strong potential that more mass demonstrations are in Egypt’s future.

Race for 1st Middlesex district turns bitter


With just 13 days left before the state’s primary, the candidates for the 1st Middlesex district state senate seat are lobbing bigger accusations against each other. On Monday, the Doherty campaign released a statement against Donoghue stating that she is a hypocrite when it comes to illegal immigration.

According to the flier, Donoghue willingly accepted a case against an individual, Lilliana Rivera, who was supposedly indicted for conspiracy to create and sell alien registration receipts and social security cards. The document goes on farther to state Donoghue was fundamental to Rivera receiving a substantially reduced sentence. The effect is that Donoghue is portrayed not only as soft on illegal immigration, but someone who misleads the public.

On its face, the Doherty campaign’s assertions are alarming to say the least. Factually, the campaign’s claims against Donoghue are half-truths.

The first claim: The flier seemed to indicate that Rivera was a key player in creating the forged alien registration receipts and social security cards.

One of the statements made was that Rivera was indicted for the federal charges of conspiracy to produce and sell false alien registration receipts and social security cards. To support this claim, the flier included a copy of a federal court’s filing for the case. The filing describes, in detail, the role of each person involved in the operation. It even lays out the offenses the individuals were charged with, of which Rivera was one out of two people indicted.

The document, which the Donoghue campaign says isn’t accurate, details the specific charges that Rivera faced. Though Rivera was found to be a part of the operation, she was found to play a minimal role. Namely, Rivera’s role was to transport the fake ids from the people who created them to the people who would buy them. In regards to specific offenses, she was charged with possession and transportation of falsified documents.

This information was verified by Conor Yunits, spokesman for the Donoghue campaign. According to Yunits, Rivera was forced to transport the ids because one of the people involved abused her. “Rivera got involved because one of the people who created the ids was her boyfriend. She was in an abusive relationship with him and he forced her to transport the ids. Rivera eventually sought a restraining order against her boyfriend.”

The second claim: that Donoghue willingly accepted the case when she could have refused.

Looking at the court document alone, it makes mention that the lead attorney was Donoghue and that she was retained. In legal speak, a retained lawyer is an attorney that been paid to take a case.

Yunits explained that wasn’t true. “Eileen speaks Spanish and was often assigned to cases to where one of the parties involved didn’t speak English. Rivera didn’t know a lot of English, so Eileen was appointed to the case. She only represented Rivera and not the individuals who actually forged the documents.”

What seems particularly odd is that the listed firm Donoghue was supposed to have been working for at the time, Gallagher & Cavanaugh, didn’t exist when the case was being processed.

The third claim: that Donoghue was responsible for Rivera’s reduced sentence.

The court document shows that Rivera was charged with possession and transportation, which are outlined in 18 U.S.C. 1546 (a) and 1028 (a) (2). In reading the text of 18 U.S.C. 1546 (a), a person who knowingly possesses false alien registration receipt cards or other documents can be fined, imprisoned or both.  According to the same section, a person can’t be imprisoned for more than 10 years for this violation if the offense wasn’t committed to facilitate international terrorism or drug trafficking. A person charged with transporting such documents can’t be imprisoned for more than 15 years, according to the terms of 18 U.S.C. 1028 (b).  It is also possible to be fined under this statute. Under both sections, no one can receive a higher sentence unless the offense was completed in order to commit international terrorism or drug trafficking.

The attached document included with the flier makes no mention of either terrorism or drug trafficking in list of charges against Rivera.

Notice that both of these sections of the United States Code establish maximum sentencing limits for these offenses. With that in mind, it’s possible that Rivera was given a lesser sentence because she wasn’t a major player. Or maybe her lesser sentence has something to do with the fact that the U.S. Attorney General, as evidenced by the included court document, dropped one of the charges against Rivera.

Why Rivera got a lesser sentence is murky at best given the court document is possibly inaccurate and nearly 20 years old at this point.

“This is another attempt by the Chris Doherty campaign to smear Eileen Donoghue’s name and reputation. Eileen worked hard to ensure 6th Amendment rights for everyone when she was an attorney,” remarked Yunits.

Local attorney files suit over 9 North Road construction


On Wednesday, Richard McClure took a stance against the Epsilon Group by finding new causes to go to court. McClure’s charges came two days after the Chelmsford Board of Selectmen (BoS) voted in favor of the project, claiming that the construction doesn’t violate a 1978 preservation restriction. The August 25th filing of the case was also the deadline to revoke the building permit for the construction.

This is the latest of line of a grand total of four suites against the Epsilon’s group project. At least one of the cases was willingly dropped by the plaintiffs. This was due to the fact the BoS refused to meet for a vote while there was a case pending in the courts. After the case was dropped, the BoS eventually scheduled a meeting—a mere 48 hours before the town’s deadline to repeal the Eliopoulos’s permit.

In the current case, McClure states that “…there were improper, invalid, and absent approvals by required boards and improper notice of public hearings by those boards.” The suite also calls the permits, “…’whimsical, capricious, arbitrary, unconstitutional and unlawful.’”

Chelmsford BoS cower under threat of lawsuit


On August 23rd, the Chelmsford Board of Selectman (BoS) held a town meeting to vote on the construction proposal for 9 North Road and whether it violated a preservation restriction. Though the selectmen seemed contemplative throughout the meeting, their composure appeared lost after the Epsilon’s lawyer forewarned of a lawsuit should the BoS repeal their permit.

What makes this project so controversial is due to a preservation restriction that was created in 1978. The Epsilon group, which represents the Eliopoulos family, claims that restriction doesn’t bar all construction. The group also claims that the intentions of the restriction and the 1978 BoS are not only immaterial, but inapplicable to the project. Specifically, the Epsilon group focuses its argument on Articles 2 and 6 of the restriction. These sections require that any construction be “barnlike” in appearance, that all construction not exceed 55% of the total land area, and that the owners have a limited right to develop the land, respectively.

Such bold statements were probably a smack in the face for former selectman, John W. Carson. Carson, who was on the BoS in 1978, adamantly spoke out against the project at the meeting. According to Carson, he and the other two surviving selectman that signed the restriction crafted the measure in order to preserve the open land as a public park. Carson’s argument relies on Articles 5, 7 and 8 of the restriction. The sections maintain that the land is to be maintained as a park, that all structures are to be small, and that all buildings must match the architecture of the Emerson barn.

The board’s 2 to 1 vote in favor of the project was met with resounding outrage from the dozens of citizens that attended the meeting. Though there was support for the construction, it seemed to have been overwhelmed by the public’s opposition.