April 9, 2016
(ZEROHEDGE) Nearly a decade since the housing bubble burst the dirty skeletons still emerge from the closet, and still nobody goes to jail.
In the latest example of how criminal Wall Street behavior leads to zero prison time and just more slaps on the wrist, overnight Warren Buffett’s favorite bank, Wells Fargo, admitted to “deceiving” the U.S. government into insuring thousands of risky mortgages. Its “punishment” – a $1.2 billion settlement of a U.S. Department of Justice lawsuit, the highest ever levied in a housing-related matter.
The settlement with Wells Fargo, the largest U.S. mortgage lender and third-largest U.S. bank by assets, was filed on Friday in Manhattan federal court. It also resolves claims against Kurt Lofrano, a former Wells Fargo vice president.
According to the settlement, Wells Fargo “admits, acknowledges, and accepts responsibility” for having from 2001 to 2008 falsely certified that many of its home loans qualified for Federal Housing Administration insurance.
According to Reuters, the San Francisco-based lender also admitted to having from 2002 to 2010 failed to file timely reports on several thousand loans that had material defects or were badly underwritten, a process that Lofrano was responsible for supervising.
According to the Justice Department, the shortfalls led to substantial losses for taxpayers when the FHA was forced to pay insurance claims as defective loans soured.
Wells Fargo is the latest bank in a long series of settlements which absolve banks of all their past bubble transgressions: numerous other lenders, including Bank of America Corp, Citigroup Inc, Deutsche Bank AG and JPMorgan Chase & Co, previously settled similar federal lawsuits.
Wells Fargo, however, held out – perhaps due to concerns how such a settlement would impact its core mortgage origination business (recall it is the biggest mortgage lender in the US) – until yesterday. Its payment is the largest in FHA history over loan origination violations.
Taking credit for this record wristslap was U.S. Attorney Preet Bharara in Manhattan who said in a statement that Friday’s settlement is a reproach for “years of reckless underwriting” at Wells Fargo. “While Wells Fargo enjoyed huge profits from its FHA loan business, the government was left holding the bag when the bad loans went bust,” Bharara added.
That, and also the record bailout of course.
Imagine how much they made before they paid the fine.
Sounded like a good money-maker to Buffett it seems.
Why 'The Boss' Won't Play North Carolina
Hillary and Bill and Paul Krugman Race to the Right to Stop the Bern
Clinton Makes Sure Reporters Can’t Hear What She Says At Fund Raiser
Best essay on the leading political issue of the day comes from one of the finest reporters in blogtopia, Sardonicky:
Her handlers are betting that Hillary will have more than enough time to quick-change into Glinda of Oz by the time the sands of the hour-glass settle and she can make quick work of Bernie Sanders through a barrage of insults and innuendo. They imagine that they can castigate the millions of millennials who support Bernie, but then magically herd them into Clinton's hot air balloon for her quick voyage back to the White House.
And she is making no bones about the fact that she can't take the Bern for one minute longer. Enough is enough, my pretties, of pretending that this is still a democracy and that your protests will make a lick of difference in the grand neoliberal scheme of things. So it's off with the expensive kid gloves for the big reveal of the boxing gloves that lie beneath, hand-tailored to fit even the most ham-fisted politician.
Now that the contest has finally reached the wealth inequality and consolidated media epicenter of the universe (New York), Hillary Clinton is calling in all her chits from her partners in the neoliberal disinformation biz, a/k/a The Great White Way.
Before the final tally of her Wisconsin defeat was even in, the Clinton machine was circulating the "damaging" transcript of Bernie Sanders's editorial board meeting with the tabloid "Daily News." Campaign publicists even helpfully highlighted the bits in which Bernie allegedly goofed in saying (correctly, it turns out) that the Treasury Department, under the president's direction, has the authority to break up the big banks. Tweet the faux-gaffes to your family and friends and then send us a buck, the Clintonoids begged.
"The Daily News," which also published an inflammatory front page accusing Bernie Sanders of throwing the Sandy Hook Massacre families under the bus, is owned by right wing billionaire neocon "thought leader" Mort Zuckerman. He and the Clintons have socialized together both in Manhattan and in the Hamptons, where Hillary penned her Hard Choices memoir in isolated plutocratic splendor between fund-raising gigs with the rich and famous.
If there is one thing that Hillary does extremely well, it is bringing extremely rich and famous people together for fun and profit. And that includes rich media moguls like Zuckerman, who donated generously to her family foundation before siccing his editorial henchmen against Bernie Sanders in a board meeting that sounded more like a semantic waterboarding.
. . . In the next several weeks, the consolidated corporate media - funded by the same banks, pharmaceutical giants, defense contractors and oil companies which fund Hillary Clinton - will be like a troupe of flying monkeys, in full unified attack mode against Bernie Sanders and his message of a revolution against corruption and the worst inequality since the Gilded Age.
"Politico" last year published a list of corporate media gifts to the Clintons. At the very top is Carlos Slim, chief shareholder of the New York Times Company, who forked over at least $5 million. Also in the multimillion-dollar range are James Murdoch of Fox News Corp; Newsmax, a conservative media group based in Florida; and Thomson Reuters.
Other donors are conservative publisher Richard Mellon Scaife; Abigail Disney; Howard Stringer, formerly a CEO at CBS and SONY; Bloomberg LP; Discovery Communications; George Stephanopoulos of ABC-/Disney; Time-Warner; AOL; HBO; Hollywood Foreign Press Association; Knight Foundation; Public Radio International; Turner Broadcasting; Comcast; NBC Universal; PBS; Politico owner Robert Albritton; AOL Huffington Post Media Group; the Hearst Corporation; PBS News Anchor Judy Woodruff; and the Washington Post Company.
Follow the money. The corporate media and democracy are antithetical to one another. As far as they are concerned, elections are a spectator sport in which you, the citizen, may participate once every two, four or six years by selecting one of the candidates they have chosen especially for you. Since they didn't choose Bernie Sanders, they are trying to destroy him.
And all indications - half mile-long lines at Sanders rallies, his improving poll numbers - simply reveal that the corporate media just aren't very good at what they do. They are abysmally failing at what Noam Chomsky has called the manufacture of consent.
Poor Paul. He's not getting any respite from the non-Bernie Bros either.
The Hillary team leaps into action. And you won't believe how much MSM money is being funneled her way.
09 April 16
Bernie or no Bernie, "Times" columnist Paul Krugman is wrong about the banks
aul Krugman wrote an op-ed in the "New York Times" today called "Sanders Over the Edge." He's been doing a lot of shovel work for the Hillary Clinton campaign lately, which is his right of course. The piece eventually devolves into a criticism of the character of Bernie Sanders, but it's his take on the causes of the '08 crash that really raises an eyebrow.
By way of making a criticism of the oft-repeated Sanders charge that the big banks need to be broken up, Krugman argues that banks were not "at the heart of the crisis."
This is Krugman's assessment of who was responsible:
"Predatory lending was largely carried out by smaller, non-Wall Street institutions like Countrywide Financial; the crisis itself was centered not on big banks but on 'shadow banks' like Lehman Brothers that weren't necessarily that big."
Forget about the Sanders-Clinton race, because it's irrelevant to the issue. Krugman is just wrong about this.
The root problem of the '08 crisis lay in a broad criminal fraud scheme in the mortgage markets. Real-estate agents fanned out into middle- and low-income neighborhoods in huge numbers and coaxed as many people as possible into loans, whether they could afford them or not.
Those loans in turn were bought up by giant financial companies on Wall Street, who chopped them up into a kind of mortgage hamburger.
Out of this hamburger, they made securities.
These securities were then sold to institutional investors like pension funds, unions, insurance companies and hedge funds.
In the typical scenario, the investors buying these toxic mortgage securities weren't told how risky the merchandise was.
Many thought they were investing in AAA-rated real estate, when in fact they were buying up the flimsy home loans of part-time janitors, manicurists, strawberry pickers, people without ID or immigration status, and so on.
There were two major classes of victims in this scheme: homeowners and investors.
About five million people went into foreclosure after the crash, and investor losses globally ran into the trillions.
It was an unparalleled event in the annals of white-collar crime.
Virtually the entire financial industry had a hand in this. The ratings agencies were complicit because they blessed a lot of these mortgage securities with high ratings when they knew they didn't deserve them.
Companies like AIG had a role because they created a kind of pseudo-insurance for these mortgage securities that disguised the risk they posed.
And Krugman is right that companies like Countrywide and First Century, the sleazy "mortgage originators" who sent teams of over-caffeinated real-estate hustlers into neighborhoods offering crooked loans, were primarily responsible for a lot of the street-level predatory lending.
But Krugman neglects to mention the crucial role that big banks played.
The typical arc of this scam went as follows: Giant bank lends money to sleazy mortgage originator, mortgage originator makes lots of dicey home loans, the dicey home loans get sold back to the bank, the bank pools and securitizes the loans, and finally the bank sells the bad merchandise off to an unsuspecting investor.
The criminal scenario that was most common was a gigantic bank buying up huge masses of toxic loans from a Countrywide or some other fly-by-night operation and knowingly selling this crap as a good investment to some investor.
We chronicled an example of this in "The $9 Billion Witness," the story of JP Morgan Chase whistleblower Alayne Fleischmann, who lost her job after trying to stop the bank from selling a parcel of bad mortgages.
JP Morgan Chase ended up saddled with a $13 billion settlement after it admitted to making "serious misrepresentations" to mortgage investors.
What's so baffling about Krugman's column is that there is a massive amount of documentary evidence outlining this behavior, committed by virtually every major bank in America.
There was a $7 billion settlement paid by Citigroup, which incidentally is the company that Bill Clinton originally repealed the Glass-Steagall Act to create. Citi admitted to hawking merchandise that violated their own internal credit guidelines.
Citi also bilked investors out of huge sums, and we know a great deal about its behavior because it too had a whistleblower, named Richard Bowen. Bowen sent the SEC over 1,000 pages documenting "fraud and false representations given to investors."
Wells Fargo's settlement is another blunt repudiation of Krugman's point, because in the case of Wells, the bank itself was engaging in predatory lending at the street level, not just selling crappy mortgages to investors.
Wells had to pay $175 million to settle charges of overcharging 4,000 minority homeowners in a case that saw evidence come out that the bank specifically targeted black customers (referred to in one office as "mud people") for "ghetto loans."
Let's not forget also that not only were the big banks intimately involved in the signature fraud of the era — the creation and repackaging of toxic mortgage loans — they were also involved in wide-ranging foreclosure abuses.
Companies like Bank of America, Citi, Wells Fargo and Chase ended up being stuck with an additional $25 billion settlement just for the tawdry document-fudging "robosigning" scheme that helped accelerate the foreclosure crisis.
And did Krugman miss the other headlines from this era?
Did he miss HSBC being nailed for laundering hundreds of millions of dollars for Central and South American drug cartels? How about the money-laundering scandals involving Chase, the British Bank Standard Chartered, the German Commerzbank AG and others, in which banks washed cash for crooks and rogue states?
And did he miss the LIBOR rate-rigging scandal that forced the likes of Barclays, UBS, Rabobank, the Royal Bank of Scotland, and Deutsche Bank to pay massive settlements for manipulating interest rates?
How about the Forex manipulations that led to still more settlements for the likes of Goldman, BNP Paribas, HSBC and Barclays?
Krugman would likely argue that all those little things like laundering money for narco-terrorists, monkeying with world interest rates, and systematic cheating in the currency markets had nothing to do with the crash.
He would technically be correct in this. But the entire argument for breaking up the banks, which incidentally didn't originate in the Senate with Bernie Sanders or even Elizabeth Warren but with Ohio's Sherrod Brown and then-Delaware Sen. Ted Kaufman, was conceived with the idea that leaving over-large banks intact invited not only the potential for future bailouts, but future regulatory problems.
As MIT economist Simon Johnson pointed out in 2010, these institutions have become so big that they can confront and defy the government.
Moreover the failure to punish the banks for the great mortgage frauds of the crisis years left all of these companies with the knowledge that the authorities were afraid to aggressively enforce the law, for fear of disrupting a fragile economy.
When UBS and HSBC escaped with slap-on-the-wrist settlements for the LIBOR and money-laundering offenses, respectively, Sherrod Brown redoubled his efforts to break up the banks, insisting that these episodes proved these companies were now too big to be regulated. By 2013, Brown said, it was clear that "these megabanks are out of control."
The call to break up the banks is not some socialist clarion call to end capitalism. (Well, it might be from Bernie, but not from everyone.)
In fact, it's just the opposite. The lessons of the crash era are that these megabanks have grown beyond the organic controls of capitalism. They were so big and so systemically important in '08 that the government could not let them go out of business.
This alone was an argument for breaking them up. The banks emerged from '08 with the implicit backing of the federal government. They became quasi-state entities, almost immune to failure. Not just Bernie Sanders worried about this. Voices as diverse as Louisiana Republican David Vitter and Krugman's own New York Times editorial board have argued for hard caps on bank size.
What's happened in more recent years, with LIBOR and the money-laundering scandals and Forex and the London Whale episode and so on, is that these firms also proved too "systemically important" to regulate and prosecute.
They grew too big not only for capitalism, but for criminal law.
When a company is not only too big to fail, but too big to prosecute, it's too big to exist. Krugman may believe otherwise, but he shouldn't pretend that others – including his own paper – don't have legitimate concerns.
08 April 16
When did he suddenly cease to be a gifted politician?
ere's a question for the poli-sci folks here in the shebeen: When did Bill Clinton become such a fcking political maladroit?
His godawful answers to the folks from the Black Lives Matter movement who showed up to heckle him — and whose points, however raucously made, were damn good ones — turned an uncomfortable moment into (at least) a two-day story. It also opened wide the question of how much damage he had to do in order to hold off the worst impulses of his political opposition in the 1990s. Or, more simply, how sharp were the edges of that triangle, and who got cut the deepest?
There always have been tales from the inside about his quick trigger, which certainly was on display Thursday when the BLM folks came to call.
"I don't know how you would characterize the gang leaders who got 13-year-old kids hopped on crack and sent them out on the street to murder other African-American children," he said, shaking his finger at a heckler as Clinton supporters cheered, according to video of the event. "Maybe you thought they were good citizens. She [Hillary Clinton] didn't…You are defending the people who kill the lives you say matter," he told a protester. "Tell the truth."
First of all, "hopped up on crack"? Who are you? Jack Webb? Second, many of the people in BLM weren't even born when Clinton signed the 1994 crime bill — an act, we should note, for which he has already apologized — but they grew up watching their brothers and uncles and parents get hauled off for preposterously long sentences. The movement arose because of the unwarranted killing of black people by law enforcement, and by crackpot vigilantes like George Zimmerman, not because the BLM members felt tender toward drug kingpins. And, not for nothing, but even drug kingpins deserve fair trials and equitable sentences under the law.
(Also, Clinton is going to have to fight for space on this particular fainting couch with the newly resurrected Andrew Sullivan, who went on Chris Matthews show Wednesday night and decided that Ta-Nehisi Coates was a Marxist, or some such crapola. Welcome back, Andrew.)
There's no question that the 1994 law exploded the country's prison population. (That a great deal of that explosion occurred at the state level is beside the point. A Democratic president helped point the way — again, as Clinton already has acknowledged.) There's no question that it helped establish the ludicrous disparity in sentences for crack cocaine as opposed to the powdered variety, a disparity that fell most heavily on African-American defendants.
A lot of the law enforcement abuses — militarized policing, no-knock warrants, asset forfeiture — that so many people deplore today had their roots in the 1984 Omnibus Crime Bill signed by Ronald Reagan. Those trends accelerated behind Clinton's bill a decade later. And if you believe, as I do, that the "war" on drugs was the template for the subsequent abuses of the "war" on terror, then Bill Clinton has a few things for which he should be called to account, and yelling "Soft on murder!" from a public platform is no way to do that.
Bill Clinton remains one of the most gifted politicians of my lifetime. And it is true that he did a great job holding back the worst excesses of Gingrichism during his term of office — including that exercise in Gingrichism that sought to deprive him of said office. But this is the second election in a row in which he is turning out to be one of his wife's clumsiest surrogates. I would make the modest suggestion to him that This Is Not About You. If you want to defend your record, write another massively unreadable book. If you want someone to defend your record ably, ask your wife. She seems to know how to do it best.
Read the rest of the essay at the title link above.
Paul Craig Roberts
On Friday the Bureau of Labor Statistics reported that there were 215,000 new jobs in March.
John Williams of ShadowStats.com reports that these “new jobs” result from the the Birth-Death model that “artificially inflates headline month-to-month payroll gains with add-factors that currently average well in excess of 200,000 jobs per month.”
In other words, the jobs are the product of a model’s assumption that unreported new start-ups created 200,000 more jobs than unreported business failures lost.
To look at the jobs report in a different way, assume March did bring 215,000 new jobs and ask, “which sectors had jobs gains?” The answer is the same as has been the case since I began years ago reporting on the payroll jobs report:
Retail trade accounts for 47,700 of the jobs.
Health care and social assistance account for 44,000 of the jobs.
Waitresses and bartenders account for 24,800 of the jobs.
Manufacturing lost 29,000 jobs.
Part-time jobs without benefits comprise a rising percentage of US employment.
In the 21st century the main source of corporate profits has been lower labor costs achieved by offshoring US jobs and by bringing in lower-paid foreigners on work visas. This practice stopped the growth of US real median family income.
Federal Reserve policy kept consumer demand alive by expanding consumer credit, which substituted a rise in consumer indebtedness for the missing growth in consumer income.
Today the growth of consumer credit is limited by the absence of income growth to service the debt.
In short, corporations maximized short-run profits by ruining their domestic consumer market along with the personal income and sales tax base for government.
It is unclear that this extraordinary mistake can be unwound.
As GHWB moves closer to his story's end, some documentation needs to be finally entered into the public record.
Russ Baker of "WhoWhatWhy" has prepared the ground.
Introduction by Russ Baker
Orlando Letelier was an exiled former Chilean diplomat. He had served in the socialist government of Salvador Allende, who, in 1973, was overthrown in a US-backed coup. The notorious dictator Augusto Pinochet took over. Letelier was seized, tortured and imprisoned. He was released a year later as a result of international pressure. He was invited to Washington, DC where he became a senior fellow at the Institute for Policy Studies, the director of the Transnational Institute, and a professor at American University.
More important, he became the leading voice of the Chilean resistance — and thanks to his lobbying, he prevented several loans from being awarded to the Pinochet regime.
On the morning of September 21,1976, Orlando Letelier was driving to work with his assistant, Ronni Moffitt, and her husband when a bomb went off under his car. It blew off the bottom half of his body and severed both legs; flying shrapnel severed the larynx and carotid artery of Ms.Moffitt who was in the passenger seat. Both died soon after.
At the time, George H.W. Bush was CIA director. And as Peter Dale Scott asserts in the excerpt below, the CIA, a Latin American assassination apparatus, and international drug dealing were all bound up together.
Sound like fiction? Well, where do you suppose fiction writers get their ideas?
This is Part 2 of a multi-part series. Please go here to see Part 1.
Excerpt from American War Machine: Deep Politics, the CIA Global Drug Connection, and the Road to Afghanistan ( Rowman & Littlefield Publishers, 2014), Introduction. Deep History and the Global Drug Connection:
Drugs, the State, and the Letelier Assassination
A serious manifestation of sanctioned violence – or, if you will, of a mysterious deep force – was the 1976 assassination of former Chilean diplomat Orlando Letelier on the streets of Washington. This was a covertly arranged deep event, an event in which key facts were certain from the outset to be suppressed, an event that mainstream information systems failed to discuss candidly, and an event that earned for those few scholars who have studied it the derisive label of “conspiracy theorists.”
In the nearly 40 years since, some basic facts about the Letelier assassination have slowly come to light. Those facts are, for the most part, no longer contested.
It is now known that Letelier was killed on orders from the Chilean intelligence agency DINA, with the aid of a supranational collaborative assassination apparatus, Operation Condor, which the CIA helped to create.(14)
We shall look more closely at Condor and its drug connections in this book. What is particularly relevant here is that DINA, Condor, and the Cuban Americans who were involved in Letelier’s assassination were all also involved in drug trafficking.
There were American aspects to the killing as well as Chilean ones.(15) Shortly before the murder, secretary of state Kissinger blocked a proposed urgent State Department warning to Latin American Condor states not to engage in assassinations.(16)
Two days after the killing, CIA Director George H. W. Bush received a memo reporting the speculation (which proved to be accurate) “that, if Chilean Govt did order Letelier’s killing, it may have hired [Miami] Cuban thugs to do it.”(17) Yet for weeks after the killing, the U.S. press ran stories that – as The New York Times put it – the FBI and CIA “had virtually ruled out the idea that Mr. Letelier was killed by agents of the Chilean military junta.”(18)
The CIA had evidence in its files against DINA when the FBI went to meet with Bush about CIA cooperation on the Letelier murder probe. But Bush did not turn over those files, making him arguably guilty of obstructing justice.(19)
I agree with author John Prados that in all this, the CIA was complicit in DINA’s and Condor’s terrorism:
The reluctance of U.S. authorities to investigate links between the Letelier assassination and DINA is a measure of the collusion at that point between Washington and Chile. Condor became in effect a terrorist network. . . . Through its actions in Chile the Central Intelligence Agency contributed to the inception of this horror. . . . In particular there is clear evidence that the Letelier assassination could have been prevented but was not.(20)
Even in the best accounts of the Letelier assassination, the drug aspect of the killing is usually ignored. Yet, as we shall see, the Cuban Nationalist Movement, from which Letelier’s Cuban assassins were picked, was reported to be financing itself through drug smuggling organized by DINA.(21) That the U.S. government covered up a drug-financed assassination in its own capital is another fact I continually repress from my own mind, even though I have twice written about it in the past. It is one more clue to a larger pattern easily repressed, that is, of recurring drug traffic involvement in CIA-related assassinations.
The continuous U.S. involvement in the global drug network, one of the main themes explored in this book, is a destructive pattern that persists to this day. In the next chapter, I shall argue that it is not a self-contained activity, extrinsic to the basic sociopolitical structure of America, but an integral cause and part of a larger war machine, an apparatus with a settled purpose fixed on achieving and maintaining global American dominance.
Deep Events and Illegally Sanctioned Violence
I call the Letelier murder a deep event because the involvement of protected covert assets made it an event that would, at least initially, be covered up rather than exposed by the mainstream American media. Furthermore, the forces underlying it were too deeply interwoven with backdoor intelligence operations to be promptly resolved by the normal procedures of law enforcement.
It was thus an example of sanctioned violence, by which I mean that at all stages the perpetrators were protected by others in higher authority. It does not mean it was affirmatively approved in advance by Americans (on this point I have no information).
Many Americans are at least dimly aware that we have had a number of similar deep events involving this form of sanctioned violence in the past half century. Some of these – including the murders of John F. Kennedy, Martin Luther King Jr., and Robert Kennedy – have had significant structural influence on the subsequent evolution of American political history. I have argued in The Road to 9/11 that we should consider the attack of 9/11 as yet another example of a deep event, another chapter in our nation’s deep history.
The problem of illegally sanctioned and protected violence — violence regularly suppressed from our consciousness — is not necessarily attributable to the state as we normally think of it. We do not know if any state was directly involved in the recent unexplained murder of an Italian banker, Roberto Calvi, who was related to scandals at the Vatican Bank. It has even been argued that Pope John Paul I was murdered by those involved in these same scandals. But where there is cover-up, as in the Calvi case, the murderers have profited from a state connection.(22)
Inside the United States, the CIA’s involvement with sanctioned violence is inseparable from the occasional resort to the violence of organized crime by U.S. business. There is a long history here – from the use of violent gangs by fruit companies in the nineteenth century and in newspaper circulation wars soon thereafter; to the use of mobsters to combat labor unions by Andrew Carnegie, Henry Ford, and others; to the corrupt takeover of unions in the transport, garment, hotel, and entertainment industries; and possibly to the death in a plane crash of United Auto Workers leader Walter Reuther.(23)
The politically minded rich, or what I have called the overworld, have reasons that ever occur to those of lesser means to tolerate mob violence. At a minimum, they are often not unhappy to see municipal law enforcement in cities like Chicago or New Orleans weakened by mob corruption.
Frequently they will turn to the same elements, on a local or national level, to influence corrupt legislators themselves. And sometimes they will turn to mob violence to achieve their own private political goals, with more impunity abroad in banana republics but occasionally also at home.
This history has never been properly written. But organized crime’s role in corrupting politics and politicians served the purpose of business interests who wished, on occasion, to do the same. When the CIA came to use mobsters for violence — such as John Roselli, Sam Giancana, and Santos Trafficante in the attempted assassination of Fidel Castro — they too turned to the same resources.(24)
In so doing, they made the same drug connections that older multinational firms like American and Foreign Power had made before them around the world — a classic example being the lease on a Havana racetrack that in 1937 was granted to Meyer Lansky by the National City Bank of New York (now Citibank).(25)
I conclude from these business examples that in studying the politics of violence, we should look at the entire template of unrecognized or deep power that maintains a violent status quo in our society, a template that embraces bureaucracies, intelligence agencies, business and even media.
The drug traffic itself is part of this wider template and a recurring factor in our deep history. So, too, is that part of the overworld that launders drug money or hires criminals for its private needs.
Many ordinary people, in an extraordinary number of urban locations, are more governed in their daily lives by their debts to local drug traffickers than by their debts to the public state. They know that if they fail to pay their taxes, they face fines or even prison. But if they fail to meet a drug debt, someone, perhaps a loved one, may be killed.
_ _ _ _ _ _ _
I read Kim Philby's memoirs and was impressed then (as well as now) with his clarity of thought as to his membership in the ruling class and the privileges it entails.
Talk about "white" privilege.
Everyone should read that book to improve their own mental clarity (and understanding) of real privilege.
Mark Crispin Miller
April 6, 2016
April 6, 2016
Exclusive: “Deny everything,” British traitor Kim Philby said, explaining how the powerful can bluff past their crimes, a truism known to George H.W. Bush when he denied charges of his own near treason in the October Surprise case, writes Robert Parry.
By Robert Parry
A recently discovered lecture by the late British traitor Kim Philby contains a lesson that may help explain how George H.W. Bush could bluff and bluster his way past mounting evidence that he and other Republicans conspired in 1980 to block release of 52 U.S. hostages in Iran and thus ensure Ronald Reagan’s election, an alleged gambit that bordered on treason itself.
In a speech in East Berlin in 1981 – just aired by the BBC – the Soviet double-agent Philby explained that for someone like himself born into what he called “the ruling class of the British Empire,” it was easy to simply “deny everything.” When evidence was presented against him, he simply had to keep his nerve and assert that it was all bogus. With his powerful connections, he knew that few would dare challenge him.
“Because I was born into the British governing class, because I knew a lot of people of an influential standing, I knew that they [his colleagues in Britain’s MI-6 spy agency] would never get too tough with me,” Philby told members of East Germany’s Stasi. “They’d never try to beat me up or knock me around, because if they had been proved wrong afterwards, I could have made a tremendous scandal.”
That’s why growing evidence and deepening suspicions of Philby’s treachery slid by while he continued spying for the Soviet Union. He finally disappeared in January 1961 and popped up several months later in Moscow, where he lived until his death in 1988.
Though the circumstances are obviously quite different, Philby’s recognition that his patrician birth and his powerful connections gave him extraordinary protections could apply to George H.W. Bush and his forceful denials of any role in the Iran-Contra scandal – he falsely claimed to be “out of the loop” – and also the October Surprise issue, whether the Reagan-Bush dealings with Iran began in 1980 with the obstruction of President Jimmy Carter’s negotiations to free 52 U.S. Embassy hostages seized by Iranian radicals on Nov. 4, 1979.
Carter’s failure to secure the hostages’ release before the U.S. election, which fell exactly one year later, doomed his reelection chances and cleared the way for Reagan and the Republicans to gain control of both the White House and the Senate. The hostages were only released after Reagan was sworn in as President on Jan. 20, 1981, and as Bush became Vice President.
We now know that soon after the Reagan-Bush inauguration, clandestine U.S.-approved arms shipments were soon making their way to Iran through Israel. An Argentine plane carrying one of the shipments crashed in July 1981 but the incriminating circumstances were covered up by Reagan’s State Department, according to then-Assistant Secretary of State for the Middle East Nicholas Veliotes, who traced the origins of the arms deal back to the 1980 campaign.
This hard-to-believe reality – that the tough-guy Reagan-Bush administration was secretly shipping weapons to Iran after Tehran’s mullahs had humiliated the United States with the hostage crisis – remained a topic for only occasional Washington rumors until November 1986 when a Beirut newspaper published the first article describing one clandestine shipment. That story soon expanded into the Iran-Contra Affair because some of the arm sales profits were diverted to the U.S.-backed Nicaraguan Contra rebels.
For Bush, the emergence of this damaging scandal, which could have denied him his own shot at the White House, was time to test out his ability to “deny everything.” So, he denied knowing that the White House had been secretly running a Contra resupply operation in defiance of Congress, even though his office and top aides were in the middle of everything. Regarding the Iran arms deals, Bush insisted publicly he was “out of the loop.”
Behind closed doors where he ran the risk of perjury charges, Bush was more forthcoming. For instance, in non-public testimony to the FBI and the Iran-Contra prosecutor, “Bush acknowledged that he was regularly informed of events connected with the Iran arms sales.” [See Special Prosecutor’s Final Iran-Contra Report, p. 473]
But Bush’s public “out of the loop” storyline, more or less, held up going into the 1988 presidential election. The one time when he was directly challenged with detailed Iran-Contra questions was in a live, on-air confrontation with CBS News anchor Dan Rather on Jan. 25, 1988.
Instead of engaging in a straightforward discussion, Bush went on the offensive, lashing out at Rather for allegedly ambushing him with unexpected questions. Bush also recalled an embarrassing episode when Rather left his anchor chair vacant not anticipating the end of a tennis match which was preempting the news.
“How would you like it if I judged your career by those seven minutes when you walked off the set in New York?” Bush asked testily. “How would you like that?”
Fitting with Philby’s observation, Bush’s bluster won the day. Much of the elite U.S. media, including Newsweek where I was working at the time, sided with Bush and slammed Rather for his sometimes forceful questioning of the patrician Bush.
Having put Rather in his place and having put the Iran-Contra issue to rest – at least as far as the 1988 campaign was concerned – Bush went on to win the presidency. But the history still threatened to catch up with him.
October Surprise Mystery
The October Surprise case of 1980 was something of a prequel to the Iran-Contra Affair. It preceded the Iran-Contra events but surfaced publicly in the aftermath of the Iran-Contra disclosures. This earlier phase slowly came to light when it became clear that the U.S.-approved arms sales to Iran did not begin in 1985, as the official Iran-Contra story claimed, but years earlier, very soon after Reagan and Bush took office.
Also, in the wake of the Iran-Contra Affair, more and more witnesses surfaced describing this earlier phase of the scandal, eventually totaling about two dozen, including former Assistant Secretary of State Veliotes; former senior Iranian officials, such as President Abolhassan Bani-Sadr and Defense Minister Ahmad Madani; and intelligence operatives, such as Israeli intelligence officer Ari Ben-Menashe and a CIA-Iranian agent Jamshid Hashemi. Many of these witnesses were cited in a PBS documentary that I co-wrote in April 1991, entitled “The Election Held Hostage.”
After the documentary aired – and amid growing public interest – pressure built on Congress to open a new inquiry into this prequel, but President Bush made clear that his reaction would be to “deny everything.”
On May 3, 1991, at a White House press availability, Bush was asked about reports that he had traveled to Paris in October 1980 to personally seal the deal on having the 52 hostages released only after the election – as Israeli intelligence officer Ben-Menashe had described.
“Was I ever in Paris in October 1980?” a clearly annoyed Bush responded, repeating the question through pursed lips. “Definitely, definitely, no.”
Bush returned to the October Surprise topic five days later, his anger still clearly visible: “I can only say categorically that the allegations about me are grossly untrue, factually incorrect, bald-faced lies.”
Yet, despite Bush’s anger – and despite “debunking” attacks on the October Surprise story from the neoconservative New Republic and my then-former employers at Newsweek – the House and Senate each started investigations, albeit somewhat half-heartedly and with inadequate resources.
Still, the congressional October Surprise inquiries sent Bush’s White House into panic mode. The President, who was expecting to coast to reelection in 1992, saw the October Surprise issue – along with the continued Iran-Contra investigation by special prosecutor Lawrence Walsh – as threats to his retention of power.
By fall 1991, the Bush administration was pulling together documents from various federal agencies that might be relevant to the October Surprise inquiry. The idea was to concentrate the records in the hands of a few trusted officials in Washington. As part of that process, the White House was informed that there appeared to be confirmation of a key October Surprise allegation.
In a “memorandum for record” dated Nov. 4, 1991, Associate White House Counsel Paul Beach Jr. wrote that one document that had been unearthed was a record of Reagan’s campaign director William J. Casey traveling to Madrid, Spain, a potentially key corroboration of Jamshid Hashemi’s claim that Casey had met with senior Iranian emissary Mehdi Karrubi in Madrid in late July and again in mid-August 1980.
The U.S. Embassy in Madrid’s confirmation of Casey’s trip had gone to State Department legal adviser Edwin D. Williamson, who was responsible for assembling the State Department documents, according to the memo. Williamson passed on word to Beach, who wrote that Williamson said that among the State Department “material potentially relevant to the October Surprise allegations [was] a cable from the Madrid embassy indicating that Bill Casey was in town, for purposes unknown.”
The significance of this confirmation of Casey’s trip to Madrid can hardly be overstated. The influential October Surprise debunking stories – ballyhooed on the covers of Newsweek and The New Republic – hinged on their joint misreading of some attendance records at a London historical conference which they claimed proved Casey was there and thus could not have traveled to Madrid. That meant, according to the two magazines, that the CIA’s Iranian agent Jamshid Hashemi was lying about arranging Casey’s two meetings with Karrubi in Madrid.
In their double-barreled shoot-down of the October Surprise story, Newsweek and The New Republic created a Washington “group think,” which held that the October Surprise case was just a baseless “conspiracy theory.” But the two magazines were wrong.
I already knew that their analyses of the London attendance records were inaccurate. They also failed to interview key participants at the conference, including historian Robert Dallek who had looked for Casey and confirmed to me that Casey had skipped the key morning session on July 28, 1980.
But 1991 was pre-Internet, so it was next to impossible to counter the false reporting of Newsweek and The New Republic, especially given the powerful conventional wisdom that had taken shape against the October Surprise story.
Not wanting to shake that “group think,” Bush’s White House withheld news of the Williamson-Beach discovery of evidence of Casey’s trip to Madrid. That information was neither shared with the public nor the congressional investigators. Instead, a well-designed cover-up was organized and implemented.
The Cover-up Takes Shape
On Nov. 6, 1991, two days after the Beach memo, Beach’s boss, White House Counsel C. Boyden Gray, convened an inter-agency strategy session and explained the need to contain the congressional investigation into the October Surprise case. The explicit goal was to ensure the scandal would not hurt President Bush’s reelection hopes in 1992.
At the meeting, Gray laid out how to thwart the October Surprise inquiry, which was seen as a dangerous expansion of the Iran-Contra investigation where some of prosecutor Walsh’s investigators also were coming to suspect that the origins of the Reagan-Bush contacts with Iran traced back to the 1980 campaign.
The prospect that the two sets of allegations would merge into a single narrative represented a grave threat to George H.W. Bush’s political future. As assistant White House counsel Ronald vonLembke, put it, the White House goal in 1991 was to “kill/spike this story.” To achieve that result, the Republicans coordinated the counter-offensive through Gray’s office under the supervision of associate counsel Janet Rehnquist, the daughter of the late Chief Justice William Rehnquist.
Gray explained the stakes at the White House strategy session. “Whatever form they ultimately take, the House and Senate ‘October Surprise’ investigations, like Iran-Contra, will involve interagency concerns and be of special interest to the President,” Gray declared, according to minutes. [Emphasis in original.]
Among “touchstones” cited by Gray were “No Surprises to the White House, and Maintain Ability to Respond to Leaks in Real Time. This is Partisan.” White House “talking points” on the October Surprise investigation urged restricting the inquiry to 1979-80 and imposing strict time limits for issuing any findings, the document said.
In other words, just as the Reagan administration had insisted on walling off the Iran-Contra investigation to a period from 1984-86, the Bush administration wanted to seal off the October Surprise investigation to 1979-80. That would ensure that the public would not see the two seemingly separate scandals as one truly ugly affair.
Meanwhile, as Bush’s White House frustrated the congressional inquiries with foot-dragging, slow-rolling and other obstructions, President Bush would occasionally lash out with invective against the October Surprise suspicions.
In late spring 1992, Bush raised the October Surprise issue at two news conferences, bringing the topic up himself. On June 4, 1992, Bush snapped at a reporter who asked whether an independent counsel was needed to investigate the administration’s pre-Persian Gulf War courtship of Iraq’s Saddam Hussein.
“I wonder whether they’re going to use the same prosecutors that are trying out there to see whether I was in Paris in 1980,” the clearly peeved President responded. “I mean, where are we going with the taxpayers’ money in this political year? I was not in Paris, and we did nothing illegal or wrong here” on Iraq.
At another news conference at the world environmental summit in Brazil, Bush brought up the October Surprise case again, calling the congressional inquiries “a witchhunt” and demanding that Congress clear him of having traveled to Paris.
Taking their cue from the President, House Republicans threatened to block continued funding for the inquiry unless the Democrats agreed that Bush had not gone to Paris. Although Bush’s alibi for the key weekend of Oct. 18-19, 1980, was shaky, with details from his Secret Service logs withheld and with supposedly corroborating witnesses contradicting each other, the Democrats agreed to give Bush what he wanted.
After letting Bush off the hook on Paris, the inquiry stumbled along inconclusively with the White House withholding key documents and keeping some key witnesses, such as Bush’s former national security adviser Donald Gregg, out of reach.
Perhaps more importantly, the Casey-Madrid information from Beach’s memo was never shared with Congress, according to House Task Force Chairman Lee Hamilton, who I interviewed about the missing material in 2013.
Whatever interest Congress had in the October Surprise case faded even more after Bush lost the 1992 election to Bill Clinton. There was a palpable sense around Official Washington that it would be wrong to pile on the defeated President. The thinking was that Bush (and Reagan) should be allowed to ride off into the sunset with their legacies intact.
So, even as more incriminating evidence arrived at the House task force in December 1992 and in January 1993 – including testimony from French intelligence chief Alexander deMarenches’s biographer confirming the Paris meeting and a report from Russia’s duma revealing that Soviet intelligence had monitored the Republican-Iranian contacts in 1980 – it was all cast aside. The task force simply decided there was “no credible evidence” to support the October Surprise allegations.
Trusting the Suspect
Beyond the disinclination of Hamilton and his investigators to aggressively pursue important leads, they operated with the naïve notion that President Bush, who was a prime suspect in the October Surprise case, would compile and turn over evidence that would prove his guilt and seal his political fate. Power at that level simply doesn’t work that way.
After discovering the Beach memo, I emailed a copy to Hamilton and discussed it with him by phone. The retired Indiana Democratic congressman responded that his task force was never informed that the White House had confirmation of Casey’s trip to Madrid.
“We found no evidence to confirm Casey’s trip to Madrid,” Hamilton told me. “The [Bush-41] White House did not notify us that he did make the trip. Should they have passed that on to us? They should have because they knew we were interested in that.”
Asked if knowledge that Casey had traveled to Madrid might have changed the task force’s dismissive October Surprise conclusion, Hamilton said yes, because the question of the Madrid trip was key to the task force’s investigation.
“If the White House knew that Casey was there, they certainly should have shared it with us,” Hamilton said. Hamilton added that “you have to rely on people” in authority to comply with information requests.
Therein, of course, lay the failure of the October Surprise investigation. Hamilton and his team were counting on President Bush and his team to bring all the evidence together in one place and then share it with Congress, when they were more likely to burn it.
Indeed, by having Bush’s White House gather together all the hard evidence that might have proved that Bush and Reagan engaged in an operation that bordered on treason, Hamilton’s investigation may have made it impossible for the historical mystery ever to be solved. There is a good chance that whatever documentary evidence there might have been, it doesn’t exist anymore.
After discovering the Beach memo, I contacted both Beach and Williamson, who insisted that they had no memory of the Casey-to-Madrid records. I also talked with Boyden Gray, who told me that he had no involvement in the October Surprise inquiry, although I had the minutes to the Nov. 6, 1991 meeting where he rallied Bush’s team to contain the investigation.
I also filed a Freedom of Information Act request to have the records of the U.S. Embassy in Madrid searched for the relevant cable or other documents regarding Casey’s trip, but the State Department said nothing could be found.
So, the question becomes: Did Bush’s loyal team collect all the raw documents in one place, not so they could be delivered to Congress, but rather so they could be removed from the historical record permanently, thus buttressing for all time the angry denials of George H.W. Bush?
Surely, someone as skilled in using power and influence as former President Bush (the elder) would need no advice from Kim Philby about how to use privilege and connections to shield one’s guilt. That, after all, is the sort of thing that comes naturally to those who are born to the right families, attend the right schools and belong to the right secret societies.
George H.W. Bush came from the bosom of the American ruling class at a time when it was rising to become the most intimidating force on earth. He was the grandson of a powerful Wall Street banker, the son of an influential senator, and a director of the Central Intelligence Agency. (Along the way, he attended Yale and belonged to Skull and Bones.)
Indeed, Poppy Bush could probably have given Kim Philby lessons on how to brush off suspicions and cover up wrongdoing. Still, Philby’s insight into how the powerful and well-connected can frustrate the investigations and questions of lesser citizens is worth recalling: “Deny everything.”
[For the newest compilation of evidence on the October Surprise case, see Robert Parry’s America’s Stolen Narrative.]
(Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated Press and Newsweek in the 1980s. You can buy his latest book, America’s Stolen Narrative, either in print here or as an e-book (from Amazon and barnesandnoble.com).)
All hail William Casey?
by Jason Leopold
April 6, 2016
What do the movies "Argo" and "Zero Dark Thirty" have in common with the novel The Devil's Light by Richard North Patterson; Bravo's "Top Chef Covert Cuisine;" the USA Network cable series "Covert Affairs;" the History Channel documentary "Air America: The CIA's Secret Airline;" and the BBC documentary "The Secret War on Terror?"
They all received "support" from the CIA's Office of Public Affairs (OPA), the division that interacts with journalists and acts as the liaison with the entertainment industry._ _ _ _ _ _ _
The CRASH unit at the LAPD’s Rampart Division devolved into a criminal organization unto itself by the mid-'90s, if not earlier.
In a little more than a year starting in March 1997, Officer Kevin Gaines was shot by an undercover cop when he allegedly threw gang signs and pulled a gun, Officer David Mack robbed a Bank of America for more than $700,000 and Officer Rafael Perez stole six pounds of cocaine from an evidence room. Officers from the unit, some of whom moonlighted as security for Death Row Records, are alleged to also have been involved in the murder of the Notorious B.I.G.
Perez flipped in exchange for a reduced sentence when he was popped with the drugs and testified against dozens of fellow officers, accusing them of beating up suspects, lying on police reports — and falsifying evidence. Perez himself confessed to framing four gang members for a 1996 shooting. As a result, 24 officers were eventually convicted of some type of wrongdoing and more than 100 convictions were overturned. Investigations from the scandal continue to this day.
. . . The LAPD’s notorious scandals also foreshadowed the gradual unmasking of examples of racially abusive policing nationwide, such as the officer killings of Walter Scott in South Carolina and Laquan McDonald in Chicago — both of which were recorded on video. Fuhrman has remained both involved and unswayed, defending the officer who shot and killed Michael Brown in Ferguson as a Fox News pundit and telling the New York Post that Simpson played the victim card “just because he was a black athlete.”
So while Clark was convinced the evidence against Simpson was overwhelming, she couldn’t erase the fact that it had been handled by the almost cartoonish personification of a corrupt cop at a time when people certainly had a right to be suspicious about the way the LAPD treated suspects of color. After all, their worst fears were confirmed just a few years later, when Perez’ testimony came out.
Obviously, there’s a very good chance that Fuhrman did not frame Simpson, but we know now — and plenty of people certainly suspected then — that the LAPD was certainly capable of planting evidence in the mid-1990s. And in Fuhrman, Cochran could not have asked for a more perfect distillation of the type of officer who one might imagine doing that. If the profile fits, you understand why they’d acquit.
Humorous late-breaking news?
But not an April Fool's joke, no matter the ensuing laughter.
Read the entire article here.
Max and Stacy take the current political jive apart.
And put it back together before the perpetrators begin the shuffle off to jail.
(Has Cameron resigned yet?)
We discuss mysterious, unexplained creatures – like offshore havens all around us, the very fabric of the British economy. In the second half, Max interviews John Kim of SmartknowledgeU.com about the latest in the gold market.