Tag Archives: Madoff

American Sheep, and British Bulldogs

So it’s April Fools Day, and as soon as we woke up this morning, the joke was on us. Today, the U.S. Department of Justice, more specifically newly appointed Attorney General, Eric Holder, has decided “in the interest of justice to dismiss the indictment” against recent 7-time convicted felon, ex-Senatorial Representative for Alaska, Ted “Tubes” Stevens. (Great nickname! Click to find out where it comes from) Justice? This must be a joke, right?

Wrong! [Full story as reported by Nina Totenberg of NPR here.]

 Apparently, the blame for this falls completely on the backs of the U.S. prosecutors in the case, as constant delays in Stevens’ sentencing were caused by numerous charges of prosecutorial misconduct. The genius prosecutors that were working for the DOJ and won the conviction case, did so by “concealing evidence that would have helped Stevens’ defense team,” according to FBI special agent, Chad Joy, who was also working on the case. This past February, Politico.com reported on this story and the DOJ’s decision to remove this prosecution team, led by chief prosecutor, Brenda Morris, and DOJ head of Public Integrity, William Welch. The two, along with two other lawyers from the Department of Justice, were held in contempt by the judge, Hon. Emmet Sullivan, “for failure to comply with his orders,” John Bresnahan writes.

This clip explains the circumstances of the current situation with the Stevens case, based on a great scene from the movie My Cousin Vinny. When Vincent LaGuardia Gambini (Joe Pesci) learns from his girlfriend, Mona Lisa Vito, (Marisa Tomei) – I love those names! – that although he may think that he convinced the prosecutor to share the files he had about the case, it’s written in a law book (that Vinny apparently neglected to read fully) that it’s illegal for the prosecutor not to share his files about the case. “It’s called disclosure, Dickhead!” Classic movie! I certainly suggest seeing it, if by some crazy circumstance you haven’t already. However, this scene in contrast with the announcement today by A.G. Eric Holder, shows why even though after watching the movie, one may not like the character of the prosecutor, D.A. Jim Trotter, III (Lane Smith,) at least he still has a great amount of integrity due to his unwillingness to use any real lowdown, dirty tactics, so he and Vinny could have a fair fight between litigators. Unfortunately, the government appointed public officials running this real life and very controversial case couldn’t muster up quite as much honor or integrity.


Now the entire case is dismissed, and the 7, count ‘em, 7 felony convictions that “Tubes” should be awaiting sentencing for, are as void as a Wachovia Bank Card. In legal terms, this case is stated as “People v. Stevens,” but that is contrary to the reality of the role of each player. “People” in this phrase, actually refers to “The Government,” and “Tubes” is actually a representative of the masses that make up overall society, also known as “The People,” so the way it’s stated, the names and roles are reversed. In order for the legal terminology to make logical sense, the correct phrasing should really be “Government v. Stevens”. Looking at it this way, would you say that today’s action is a case of “The People,” (Stevens) winning over “The Government,” or did “The Government” win over “The People”?

On the surface it would certainly seem as if the former is true, and “The People” beat “The Government.” But when you get down into the specifics of what make this such a controversial case, Stevens himself is a government official and therefore really a representative of “The Government”, not “The People,” and his actions in this case embody the essence of the very corruption that is currently ravaging our Government from within. His conviction and a harsh sentencing would have been a clear signal to the other crooked, corrupt government officials out there – and they are numerous – that they should probably clean up their acts, or risk the same fate. Now that Stevens went through trial, and was proven guilty, and proven guilty of seven felony counts at that…he’s gonna get off with not even a slap on the wrist!


It is obvious why this will rightfully anger many, but what provokes more anger for me is the lack of a true response from the masses, The People, of this country so loud that our government has no choice but to hold Stevens accountable, despite whatever missteps may have taken place during the trial. Give him his right to a re-trial. At least that way, we would get another shot at doing things right and actually have a chance at making the convictions stick this time around. At least then we wouldn’t be doing what we normally do, which is sweeping the corruption under the rug and trying to hide it as quickly as possible, so as not to awaken the sleeping Giant embodied in the power of the outraged and unified masses. By dismissing the case entirely, the Department of Justice, and Eric Holder, have all but guaranteed that old Teddy “Tubes” may never be held accountable for his crimes. What’s more important, however, is that this dramatically increases the perceived sense of safety from prosecution that government officials may feel if they decide to continue this type of unethical, immoral, illegal activity.

Now, although there seems to be a buzz about it online, (as there is with everything) I feel more of an overwhelming sense of the indifference of The People about not just this, but everything these actions taken by the DOJ represent; Billions of tax-payer dollars going to the very banks and institutions that got us and the rest of the world into this global mess, bailouts for Wall Street but not Main Street, corporate slavery and unequal compensation, one hand washes the other, look-the-other-way, good-old-boy politics as usual no matter how illegal, and all other despicable business and political practices that have gone unchecked and unregulated for too long…And it’s all been coming straight from the top of our society, our own U.S. Government, for years!

“You lead from the front. If [a regulator] is not aggressive and competent [in attacking and investigating violations] the organization cannot succeed. Everything comes from the top.”
-Harry Markopolos, 2/4/09. House Financial Services Subcommittee Hearing on Madoff Investigation (video)

I’m sure that some of the more left-leaning media heads will be ranting and raving along these similar lines as myself on their shows tonight, and I’m sure FixedNews, (as Keith Olbermann likes to say) probably won’t even report on it, or they’ll celebrate it and try to sell it to you as the superficial victory of “The People” winning over “The Government,” mentioned earlier. But at the end of the day, by next week, this whole thing won’t even be an afterthought. And by next month, there won’t even be any sign of it in the headlines. The whole story will be lost to the Black Hole of American Indifference, where United States Representatives who are caught blatantly violating the very laws and ethics they are sworn to uphold, can get off easily and become a celebrity or a columnist, making more money and enjoying more fame than they ever did previously.

 I’m sure that even Dick Fuld, especially since it turns out that he didn’t actually get punched in the face, is still living in the lap of luxury right now, when compared to the rest of the country!


Meanwhile, across the pond, “The People” of London have dubbed today “Financial Fools Day”, and have taken to the streets, fucking shit up, to demonstrate their outrage with the current state of their economy and government. Parliament, police officers, and especially bankers out there are all scared to death right now of what “The People” will do next.

“What country can preserve its liberties, if its rulers are not warned from time to time that their people preserve the spirit of resistance?”

-Thomas Jefferson

Viva La Resistance!


Manipulation of Law Over Morals and Ethics

In his Senate hearing on his decade long quest for justice, Harry Markopolos seized the opportunity to reveal himself as a true patriot, populist, and Authentic American Hero in his sweeping indictment of the joke of a financial regulatory system that has exposed itself in the wake of this economic crisis. In a modern day “David vs. Goliath,” tale, Mr. Markopolos told Congress how he and a handful of industry executives and insiders were in affect committing career (and possibly literal) suicide in attempting to go after not just the monster now known today as Bernard Madoff, but the entire financial regulatory Gestapo that controls the wealth of our great nation

If nothing else is apparent from the findings of Harry Markopolos and his league of extraordinary gentleman, it should be that the “Wild West” nature by which the SEC, the NASD, and FINRA (“Regulators! Mount up!”) operates, in collusion with the very organizations they are charged with regulating, is by far the greatest factor in the systemic risk chained to the ankle of our economy as our society sinks deeper into these uncharted waters. Rep. Alan Grayson of the 8th District of Florida, has an excellent exchange with Mr. Markopolos during the Senate hearing, when he essentially poses to Harry to explain the concept of “capture.” “It’s basically when the regulator is in bed with the industry they proport to regulate and do not regulate the industry. In fact, they consider the industry the clients, not the public citizens,” Markopolos explains.

There it is ladies and gentleman. All the complicated mathmatical calculations, financial products, swaps, CDO’s, derivatives trading and analysis, risk models, connections between housing, banking, and insurance industries, and Main Street companies like Robin’s Book Store in Philadelphia, and The Republic Windows and Doors Company out in Chicago…forget about all of that, it’s just the details. Too many Americans, and too much of society is not educated enough to even wrap their heads around the bare bones of how these devastating events shape our current stance, let alone the details. However, the current season of 24 on Fox makes at least the concept of capture easy to understand and easy to explain. If you’ve been watching, you know Jack Bauer (Markopolos) and the old CTU team is working “Palin”/”rogue” right now, because they know that the current threat to America(fraud) goes all the way up to those with power(the regulators) in the President’s Cabinet(SEC,NASD,FINRA, etc.). Even the bad guys at the top don’t know the identities of the other bad guys on their level or above, so that the entire atmosphere is steeped in suspicion of everyone’s intents and a “cover-your-own-ass” mentality. Now, applying this to our Regulatory situation, Markopolos, like Bauer and Tony, had been “whisteblowing” and shedding light on the threat, the fruad, for years. But after being ignored time after time, it’s no surprise that he figured the very process set up for handling the threat, the regulatory system, was clogged and cluttered with individuals who were either too stupid, young, and naive to see a threat themselves, or so caught up in the status quo – that Markopolos himself attributes to a “code of silence” among industry insiders and regulators alike – that being charged with the responsibility of making sure this type of fraud doesn’t happen, although it might feel nice for the soul, does not amount to a good enough paycheck for them to take that responsibility seriously.

When asked what other organizations could be charged with participating in “capture,” Markopolos is quick to name the FDA along with the SEC. He suggests incentivizing the compensation structure of the regulatory bodies, and making it similar to that of the financial industry. With this type of structure, the philosophy is that anyone working for the regulators will not allow themselves to be stopped or hindered, and will run over people that present themselves as barriers in their investigations of fraud like a “bulldozer,” if they knew their paychecks might get a nice boost. Regulators like Meaghan Cheung, the New York Division SEC Branch Chief, might have paid attention to the chief executive of midsize, Boston based, Equity-Derivatives trading business when he walked through her door in 2000, with volumes of provocative information revealing what has become the largest and longest fraud scheme in American History…so far.

Markopolos also offered his insight in the arena of human intelligence gathering, which the workers at the regulators sorely lacked. “When they [the regulators] come in to inspect a firm, they are led to conference room, they meet the compliance staff, and they are fed controlled pieces of paper. That’s what they do, they inspect pieces of paper, because they’re too untrained to realize what to look for on the financial end. All they’re looking for is the pieces of paper.” He goes on to say that if they actually probed the company’s, and spoke with the various workers, traders, executives, and salesmen, and asked them, “Do you see anything fraudulent going on? Is there anything going on here I should know about?” then that would have, and still would go a long way towards accomplishing what the SEC was created to accomplish. As far as Markopolis is concerned, the SEC did not ask these questions nor make any real attempt at gathering any information on questionable companies, “because they were afraid the answer[s] would be ‘Yes.'” That would have meant more mountains of work for the regulators, which brings us back to their incentive and motivation…not enough. Combine that with the fact that Bernard Madoff, as a former chairman of the entire NASDAQ Stock exchange and the amount of respect and power gleamed in the “white swan” public view by holding that powerful a position within the industry, and there is almost no incentive for any one regulator to investigate anything other than how they themselves can capitalize somehow, and join the club. It’s that same view of power that “sophisticated investors” scammed by Madoff allowed to lull them into such a sense of safety in the very idea of having their money managed by a man with such financial clout, that they didn’t feel they had to pay attention to or investigate how they were making such high returns, so consistently, even though the investments they were making were labelled as “high risk” investments.  This obliviousness and drunken greed is an attitude that pervades American society, and it is the “systemic risk” that we as a society must fully recognize and deal with if we are going to have any chance of passing this planet on to future generations.

Harry Markopolos, and others like him (Pat Tillman, Dalton Fury, Robert Baer –  real men that have put their lives on the line to defend the fabric of this nation’s security and safety, so that we can rise and sleep soundly “under the blanket of the very freedom that [they] provide,”) represents what is best in the Spirit of America. It is not only that they, and countless others who remain nameless, have put themselves in harms for us, but that they have excercised their own freedom in informing us what happened, and been through serious ordeals just in trying to do that. They are the real John McClain’s, Jack Bauer’s, and Solid Snake’s, that have worked within the system and gotten so fed up with the amount of “friendly fire” they’ve received in the form of inaction and outright stonewalling by the very agencies and governments for which they’ve worked, that they’ve realized they can’t trust anyone, and have to “go rogue” on their quests to safeguard us, the American public, from real terror.

And that very real terror that we are currently experiencing is coming from within. It is being perpetrated on us by the very leaders that are sworn to protect us. It is “capture” at the highest order, and it is the embrace of greed based politics and principles that is the only thing that has trickled down to the public like a cancerous disease. We have to wake up and let our government know, the way we did this November, that enough is enough. We have to maintain the interest, and continue to grow the amount of involvement we have, in simply knowing exactly what our elected officials are doing and how they are “representing” us. Remember, just because a guy gets elected, it doesn’t automatically make him a good leader. Let’s make sure we are electing proven leaders, and not admitted sex offenders, like some of our current officials, who shall remain nameless and should stay out of controversy if they don’t want people bringing up their previous sexual indiscretions.


Lastly, let’s wake up and realize the reality that taxes are extremely difficult for even tax professionals to get right all of the time. The media is spending too much time talking about the current Administration Appointees and their tax records from 2001. Who cares? Taxes are like parking tickets. There are those who deliberately take advantage of the fact that it’s a parking ticket, therefore a minor infraction, doesn’t have to be paid immediately, and so they don’t mind getting them and therefore keep getting them. Then it spirals out of control as they “forget” to pay the tickets, and before they know it, they’re getting their car towed and they owe the local government a lot of money. Now, the tax equivalent of a person or a public official that exhibits this behavior would probably be Senator Ted Stevens. He was indicted for using his position and accepting bribes among other things, but basically, had he reported these “gifts” he received from these “questionable” people or organizations on his taxes – either as personal spending or what have you – things could have been totally different for this now tarnished elder of the Senate. (Not saying that would have been the moral thing to do, but if you’re gonna accept bribes, wouldn’t you at least try to cover your tracks as best as possible, or slow down the process of your capture in any way?)

Then there are those who when they get parking tickets, it’s few and far between, so since it’s not as routine for them as for the previous example, it’s understandable that they might forget to make a payment for that ticket. To round it all out, there are of course those people that pay a parking ticket as soon as they get it, no matter how frequent an occurrence, but the group in the middle, the understandably forgetful group, is the group I would place most people in with parking tickets and taxes. We screw up on our own taxes from time to time, forget this rule and that, (or more likely don’t know it in the first place) and sometimes it’s in our favor, and sometimes not, but there’s no deliberate manipulation of any tax code involved in how we go about doing our taxes. It’s unfortunate that Tom Daschle had to withdraw from the position of Secretary of Health and Human Services, although I think it was the noble thing to do to take one for Team Obama. I place him in this group of understandably forgetful tax infraction holders. I myself owed New York City taxes after I thought I was done for 2008, but my accountant screwed up on the city taxes. Does that make me any more or less trustworthy that I chose to go to the same accountant I have for 3 years with no problems to get my taxes done? I think not. I have a friend that found out, also in last year’s tax season, that he was owed about $10,000 more in deductible income. Does that make him or his tax professional business or tax guru’s that have a leg up on the entire franchise? I think not. More likely, it means that single tax professional he went to on that very day was a more focused, harder worker than average. But it means nothing about the character or the integrity of my friend, the person that went to that professional for a service. Wake up people, please!