Iraqi's Take Lead in Reconstruction

A worker at the Anzio logistics site on Contingency Operating Base Basra, Iraq, bends rebar to be used in the placement of housing trailers for U.S. troops Nov. 14. The work at the site is being overseen and planned by an Iraqi facilities engineering team.

The country has come so far and our media has essentially put a blackout on events that its nice to see stories like this:

by Sgt. Benjamin R. Kibbey

MND-South

BASRA, Iraq (Nov. 20, 2009) – A Basra, Iraq, native brings 50 years of experience as an architect, a master’s degree and a resume that reads like a travel guide ranging across Europe and the Middle East and even Japan to his job as leader of the Iraqi facilities engineering team here.Abrahim M. Oda al-Timimi leads six other Iraqi electrical, civil and mechanical engineers hired to take over the job of the U.S. Air Force’s facilities engineering team.


Timini’s team will oversee quality assurance and control for all facilities, utilities and construction on the base in a capacity that’s the military equivalent of city planners. And the small city that is Contingency Operating Base Basra is more complex than many would guess. The base has full sewage, water and electrical systems, roadways that are constantly being adapted and improved, and any number of ongoing construction projects.

Good work.

Honduras Votes Today:Update Porfirio Lobo Wins

Update:

TEGUCIGALPA, Honduras — Porfirio Lobo, a longtime conservative politician, appeared to have won on Sunday in the Honduran presidential election, which many hoped could help the country emerge from the crisis caused by last summer’s coup and end its isolation.The electoral tribunal said Sunday night that Mr. Lobo had 52 percent of the vote, with almost two-thirds of the votes counted. That gave him a margin of more than 16 percentage points over his main opponent, Elvin Santos. Shortly before midnight, Mr. Santos conceded, Reuters reported.

Considering its been months since Zeleya's removal and he is now refusing to accept any elections, the next decision will be whether to accept this election as legitimate or continue the crisis. Considering the confused response from the Obama admin its anyone's guess what will happen next:

TEGUCIGALPA, Honduras — Rony Gómez will stay home when Hondurans go to the polls on Sunday to elect a new president, five months after the military and Congress ousted the last one. “I won’t vote,” he said. “It would be endorsing the coup.”

The question is how many Hondurans feel like Mr. Gómez, a 40-year-old street vendor and former soldier. Manuel Zelaya, the deposed president, condemns the elections as illegal, and predicts a low turnout that will show that he still enjoys popular support.

But the de facto government that has run the country since the coup last summer argues that the elections — scheduled long before the country’s turmoil began — are the only way to end the political crisis and move on. A large turnout would prove that most Hondurans agree.

Many people here, weary of what they refer to as “the situation,” and worried as the economy spirals downward, say they do plan to vote. “That’s how the transition starts,” said Moisés Bados Castellano, 67, a retired accountant and farmer. “We need democracy in this country.”

Of course this all began with the power grab by Zeleya months ago:

And behind Zeleya was the dangerous thug Chavez who managed to rattle the saber over the issue even while his eft wing allies in the International community tried to provide him and Zeleya with support.

More from CNN:

Tegucigalpa, Honduras (CNN) -- About 30,000 police officers and soldiers were set to be deployed across Honduras on Sunday for a presidential election that is being viewed in starkly different terms inside the country.Those who support ousted President Manuel Zelaya, who was forced from office in a coup in June, are urging citizens to stay home.

They say that participating in the polls is tantamount to legitimizing the de facto government of Roberto Micheletti, who replaced Zelaya.The current government, on the other hand, sees the election as a means to end months of international isolation. The coup, widely condemned worldwide, cut off foreign aid to the Central American nation and dealt a blow to its economy.Micheletti's administration is hoping the international community will recognize whoever emerges the winner of the race.

May it be peaceful

The Economist Looks At Climategate

An interesting article and one that tries to comprehend what could be one of the greatest scandals in the history of humanity:

“WHAT is truth?” That was Pontius Pilate’s answer to Jesus’s assertion that “Everyone that is of the truth heareth my voice.” It sounds suspiciously like the modern argument over climate change.

A majority of the world’s climate scientists have convinced themselves, and also a lot of laymen, some of whom have political power, that the Earth’s climate is changing; that the change, from humanity’s point of view, is for the worse; and that the cause is human activity, in the form of excessive emissions of greenhouse gases such as carbon dioxide. A minority, though, are sceptical. Some think that recent, well-grounded data suggesting the Earth’s average temperature is rising are explained by natural variations in solar radiation, and that this trend may be coming to an end. Others argue that longer-term evidence that modern temperatures are higher than they have been for hundreds or thousands of years is actually too flaky to be meaningful.

Such disagreements are commonplace in science. They are eventually settled by the collection of more data and the invention of more refined (or entirely new) theories. Arguments may persist for decades; academics may—and often do—sling insults at each other; but it does not matter a great deal because the stakes are normally rather low.

As soon as the left adopted phrases like "denier" or turned warming into one of their ludicrous litmus tests on who is good or bad, the debate went from the normal give and take into something far more sinister. For me personally, it was the exploitation of Katrina by Al Gore to make an "unproven connection" as the starting point of my skepticism. What strikes me the most about the whole debate was that I am quite willing to trust the scientists, but I am sure as heck not going to trust politicians and interest groups who clearly have ulterior motives in regards to our money and freedoms. As for the Economist, well they are getting there:

This newspaper believes that global warming is a serious threat, and that the world needs to take steps to try to avert it. That is the job of the politicians. But we do not believe that climate change is a certainty. There are no certainties in science. Prevailing theories must be constantly tested against evidence, and refined, and more evidence collected, and the theories tested again. That is the job of the scientists. When they stop questioning orthodoxy, mankind will have given up the search for truth. The sceptics should not be silenced.(Emphasis Mine)

Its a start.

David Rubin Name 9th Most Outrageous CEO by Forbes

Oh well, between Alabama, a host of other states, the AIG connections, the non\exoneration of bill Richardson, the whole black box deals scandal, and now the indictments, yes I can see how he made the list:

David Rubin (No. 9) was busy rigging auctions, according to the Department of Justice. In October prosecutors indicted Rubin, the chief executive of CDR Financial Products, a municipal bond brokerage, on conspiracy and fraud charges. According to the indictment, Rubin's firm rigged auctions that help determine which banks get the lucrative business of assisting governments in raising money. The prosecutors contend that participating banks kicked a portion of their profits back to Rubin, who denies the allegations. Like everyone on this list who has been indicted but not yet found guilty, he of course must be presumed innocent until proven guilty. But also like all the rest, he has gotten himself into a heap of ugly trouble in any event.

It testifies to Rubin's ability to stay out of the public eye that even in this list Forbes couldn't dig up a photo of him!

New York Running Out of Money

With state revenues collapsing across the country and our governor wisely chasing out millionaires, is this any surprise?

ALBANY — New York State is running out of cash.

Without a budget deal, New York will be left with just $36 million in the bank by the end of December, according to current projections. And the money will last that long, officials say, only if the state chooses to fully exhaust its emergency reserves by tapping several billion dollars’ worth of temporary loans from its rainy-day fund and short-term investments.

For weeks, Gov. David A. Paterson has invoked the shrinking amount of available cash in an effort to provoke the Legislature to deal with the state’s $3.2 billion budget deficit. So far, the specter of such dire fiscal outcomes has been greeted with what amount to legislative shrugs, chiefly in the recalcitrant State Senate.The stalemate in Albany is familiar, of course, and there are many lawmakers and experts who predict that the Legislature will act at the 11th hour, as it has before, to avoid the worst damage.

But with no end in sight to the negotiations, state officials are beginning to reckon with what could be an unprecedented cash crisis. And many say that even if the current deficit is closed, the state is at considerable risk going forward — less able, for instance, to borrow money because of worsening credit ratings and ill prepared for far more severe deficits ahead.

At least we are not California.

Happy Thanksgiving

To one and all, enjoy the day and appreciate friends, family, and the USA.

A Look at the 9 Counts Against CDR Financial Products

A very good break down of the the 9 counts from nmpolitics and Dennis Kintigh:

The CDR indictment

The actual indictment is 39 pages long. The beginning has a very useful background section that explains the role of “brokers” in the issuance of municipal bonds.Towns, school districts, housing authorities and other government agencies, referred to as “issuers,” raise money for specific projects by selling bonds. These bonds are loans the agency will pay off over time. The money raised by selling these bonds is spent over time. The “issuers” will routinely invest the unneeded proceeds to earn money.

Think of it like getting a home improvement loan to cover numerous repairs, and you put the money in a savings account until you need to move it to your checking account. These “savings account” investments are done with financial institutions like banks and insurance companies, who are called “providers.” The individuals who represent these “providers” are called “marketers.”

“Brokers” like CDR are supposed to get the best deal for the “issuers” by getting multiple offers from numerous “providers” as bids submitted by “marketers.” In a perfect world, a number of “marketers” send in sealed bids promising specific returns on investments to the “broker.” The “broker” then opens the bids and picks the “provider” offering the best deal.

The federal grand jury indictment charges that CDR (the “broker”) rigged the bids with corrupt “providers” through crooked “marketers.” “Issuers” were cheated out of a fair return on the taxpayer’s money, while CDR and their cronies got kickbacks, the indictment alleges.

It is claimed in the indictment that this scheme started back in 1998 and was ongoing until at least November 2006. The first count listed in the indictment is “restraint of interstate trade and commerce,” which addresses the bid-rigging allegation.

Counts 2 and 3 are conspiracy. “Conspiracy” is an agreement to commit an illegal act. Such an agreement is a crime in itself if some action occurred to fulfill the agreement, an “overt act.” Because it is an ongoing criminal enterprise, events that occur outside the statute of limitations can be presented at trial. The government must prove the agreement existed and that an “overt act” was committed (unless it’s a drug crime).

Count 2 alleges an agreement between CDR and a company only identified as “Provider A.” The overt acts allegedly involve CDR executives and “Marketer A,” the indictment says. Phone calls and events that occurred in late October 2003 are listed in the indictment.

Count 3 alleges a similar scheme involving “Provider B,” Marketers B-1 and B-2 and a “state housing agency.” This count identifies a phone call from New Mexico on May 20, 2004, as an overt act. Although reference is made to a “state housing agency” together with a call from New Mexico, there is nothing in the indictment that links this call to the ongoing Region III Housing Authority investigation and the indictment of former State Rep. Vincent “Smiley” Gallegos.

Marketer A, B-1 and B-2 are not identified, and this is usual because they are probably cooperators who have cut a deal. The identity of Marketer A, B-1, B-2 and Provider A and B will be known prior to trial. The identities of the victim “issuers” also are not revealed because that could lead to figuring out who is cooperating.

Counts 4, 5 and 6 are “Wire Fraud,” which means money allegedly was transferred electronically across state lines to further this criminal plan.Count 7 alleges “false statements” by Zarefsky to the FBI in November 2006.

Two points here are:

• Never lie to the FBI. It’s a crime, even if you’re not under oath.

• This alleged criminal act was committed in late November 2006, which places the conspiracy well within the five-year statute of limitations and allows the prosecutors to bring in all of the alleged criminal acts that occurred six, seven or more years ago.

Count 8 alleges interfering with administration of internal revenue laws. One of the acts presented in this count refers to a “state housing agency” and a phone call on May 19, 2004.Finally, Count 9 alleges “Fraudulent Bank Transactions” in which the kickbacks to the CDR executives were concealed.

For the record CDR may be a key player, but the big fish in the financial houses as well as many of the politicians involved (with the exception of Langford) have managed to dodge the bullet so far. For a Look at the actual indictment from the US district Court, check here.

State Revenues Still Dropping

Not that the fed is doing any better.

From the Bond Buyer:

WASHINGTON — Tax revenues continued to fall in the July-to-September quarter of 2009 — the fourth consecutive quarter of decline — for all 44 states that reported their third-quarter results to the Rockefeller Institute of Government, according to its preliminary report released yesterday. Surprising revelations in the report include California’s relatively moderate year-over-year declines.

No states were spared from the recession’s drag on tax collections, the Rockefeller report said. All states reported losses, but Alaska suffered the most overall compared with last year, while the fiscally ailing California actually fared better than many states.

Overall state tax revenues fell nearly 11%, to $119.7 billion from $134 billion, compared with the same quarter last year. The worst-hit region for overall revenue was the Southwest, which saw a 21.5% total decline. The Southeast fared best, with an 8.1% drop. For states, Alaska had a 52.4% decline in overall revenue, followed by Vermont at 31.6% and Oklahoma at 28.4%. New Hampshire reported a mere 1.3% dip.

Personal income tax made up nearly 40% of revenue that states did collect, the report said. Even so, those revenues fell 11.4%, representing $6.7 billion of lost revenue. Every state that reported personal income taxes saw a decline in that category, and 21 of them reported double-digit drops. Alabama and Indiana had the worst numbers for third-quarter personal income taxes, dropping 26.7% and 20.3%, respectively

Alaska has been hit financially by fluctuations in the oil market and the largest drop was found in corporate taxes.

A Break in the Minnesota Terror Case

Definite good news after what happened to Hassan and other children who were exploited to die in Somalia:

Federal prosecutors in Minneapolis unsealed charges Monday against eight people as part of a widening inquiry into the recruitment of men to fight with a militant Islamist group in Somalia.The charges are part of an broad investigation of about 20 young men – most of them refugees from Somalia who settled near Minnesota’s Twin Cities – who are accused of returning to the unstable African country to fight with the Shabaab, a group affiliated with Al Qaeda.

The case attracted national attention after of the men, Shirwa Ahmed, became the first known American suicide bomber in 2008 when he blew himself up in Somalia, and at least two others have died in armed conflict.The indictments accuse some of the men of providing financial support for people traveling to Somalia to aid terrorism, and training and fighting with Shabaab. Since July, charges against 14 people have been unsealed, four of whom have pleaded guilty.

Among those charged is Mahamud Said Omar, a Somali citizen and permanent United States resident, who authorities contend “conspired with others to provide financial assistance as well as personnel to terrorists.” He is also accused of visiting a Shabaab safe house and donating hundreds of dollars to purchase AK-47 rifles for men from Minneapolis. The U.S. has requested his extradition from the Netherlands, where he is in custody.

Two brothers of Mr. Omar, who live in Minneapolis, told The Associated Press after his arrest earlier this month that he did not have extremist leanings or much religious conviction, and that he did not have enough money to send to terrorists.Seven other defendants have yet to be apprehended and are believed to be outside the country.

The Exploited

Burhan Hassan, in 2005, after having received a certificate from the Abubakar mosque in Minneapolis. When he went missing, he was a senior in high school. By all accounts, he was a good student and was supposed to graduate on time in May. His mother wanted him to go to medical school. He disappeared Nov. 4, calling his mother two days later to say he was in Somalia. Courtesy of Osman Ahmed

.

Times Notices US Drowning in Debt

Is Obama alone responsible for this, of course not. Has he exacerbated the problems to levels almost unbelievable, heck yeah! as for what next:

Treasury officials now face a trifecta of headaches: a mountain of new debt, a balloon of short-term borrowings that come due in the months ahead, and interest rates that are sure to climb back to normal as soon as the Federal Reserve decides that the emergency has passed.

Even as Treasury officials are racing to lock in today’s low rates by exchanging short-term borrowings for long-term bonds, the government faces a payment shock similar to those that sent legions of overstretched homeowners into default on their mortgages.

With the national debt now topping $12 trillion, the White House estimates that the government’s tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically. Other forecasters say the figure could be much higher.

In concrete terms, an additional $500 billion a year in interest expense would total more than the combined federal budgets this year for education, energy, homeland security and the wars in Iraq and Afghanistan.The potential for rapidly escalating interest payouts is just one of the wrenching challenges facing the United States after decades of living beyond its means.

The surge in borrowing over the last year or two is widely judged to have been a necessary response to the financial crisis and the deep recession, and there is still a raging debate over how aggressively to bring down deficits over the next few years. But there is little doubt that the United States’ long-term budget crisis is becoming too big to postpone.

Necessary? Like the GM takeover or bailout money being funneled to the likes of Maxine Water's family or various banks that have been involved in shady financial transactions. Happy note, this doesn't even factor in the entitlement disasters about to unfold. Oh I almost forgot Obama has tried to save money:

An American Soldier

From Centcom:

Pvt. John Stafinski fires his M249 SAW at insurgents in Kunar province. Stafinski, a native of Seville, Ohio, and his unit engaged in a three-hour gun battle with insurgent fighters in Kunar's Waterpur Valley, Nov. 3. Stafinski is an infantryman with Company C, 2nd Battalion, 12th Infantry Regiment, 4th Infantry Division, based out of Fort Carson, Colo.

Birmingham Weekly Looks at the Muni-Bond Scandal

A good take down of the whole scandal with a focus on Jefferson County, it even manages to include the fact that the muni-bond scandal has managed to spread to Europe:. It would be nice to have seen the role of AIG in there, but they do a good take down of Chase, who settled with the SEC the other day for the obvious reasons that this scandal could severely damage that bank, as the article points out the Italian government has seized all of Chase's assets in Italy until the matter is cleared up in court.

First, the public corruption trial of Larry Langford proved that at least one firm, Blount Parrish & Co., acted as a sort of Wall Street bagman, locking banks into work with the county in exchange for millions in fees for no real work. Portions of those fees then went to Langford, who served as county commission president and chairman of the finance committee.

Second, the county’s swap advisor, CDR Finance Products, was indicted on federal charges that it rigged similar deals. Federal prosecutors have accused CDR of colluding with banks to inflate fees in exchange for more lucrative business. The indictment does not accuse CDR of acting improperly in Jefferson County, but the association has been conspicuous.

Third, after years of investigation, the Securities and Exchange Commission finally filed suit against JPMorgan Securities and two of its bankers, Douglas MacFaddin and Charles LeCroy. According to the lawsuit, which the county cribs from heavily, LeCroy and MacFaddin conspired with Jefferson County commissioners to direct millions in fees for bogus work to the commissioners’ pet bankers. These bankers never really did any work, and on at least one occasion, LeCroy and MacFaddin struggled to concoct a bogus title for these bankers in the public disclosures.

Little did LeCroy and MacFaddin know at the time, but they were suspects in a federal corruption investigation. Federal investigators probing public corruption in Philadelphia had wiretaps on the bankers’ phones. Recorded conversations among the two bankers and some of their coworkers suggest blatant acceptance of and participation in public corruption here in Jefferson County and possibly elsewhere.

In 2005, LeCroy pleaded guilty to two counts of wire fraud in connection to public corruption in Philadelphia. He has since spent time in prison and been released.Some believe that the bankers were part of a much wider and prolific scheme to hopscotch the country, selling municipalities on these complex derivatives and risky debt instruments. Indeed, the same bankers involved in Jefferson County performed similar services in Pennsylvania, Georgia, New Mexico and even elsewhere in Alabama.

Retired investigators have told the media about a massive multi-agency investigation into JPMorgan and CDR, but that investigation has yet to result in any indictments other than CDR. Were an investment bank, such as JPMorgan, to be an indicted, it could lose its securities licenses in most, if not all, states. Were JPMorgan to be indicted, it could pose an unthinkable threat to the bank itself and, in turn, the economy.

Elsewhere in the world, prosecutors are not letting the bank’s precarious circumstances keep them from pursuing legal action. In Milan, Italy, prosecutors are accusing JPMorgan, among other banks, of engaging in practices conspicuously similar to what transpired in Jefferson County. Public officials there are accused of conspiring with investment bankers to sell the city derivatives it didn’t need, swaps that created a tumultuous debt structure. The Italian government has seized JPMorgan’s assets in that country until the matter has been settled in court.

The European , as detailed here was of of interest because many of the same financial institutions as seen here in the US were involved in very similar black box deals that ended up going south. As for impact, its nice to see media organizations detailing the national implications of the muni-bond scandal.

Bill Richardson's Connected to Another Pay for Play Allegation

Great thing Richardson was non\exonerated for his role in the muni-bond scandal, its not like there is a pattern of abuse here or anything:

Hassan Nemazee is a longtime Democratic moneyman who has raised campaign donations for folks like President Barack Obama and Hillary Clinton. Last August Nemazee was arrested and later accused of perpetrating a $292 million Ponzi scheme in which he created bogus collateral to borrow from Bank of America, Citibank and HSBC, causing his political friends to return his money or send it to charity.

Nemazee pleaded not guilty to the bank fraud charges, but it may be unsettling for New Mexico citizens to now learn that a New York firm that Nemazee partly owns has a four-year contract to manage $200 million of New Mexico public money. And both before and after the firm Carret Asset Management got the contract in 2007, Nemazee and others connected with it gave campaign contributions to New Mexico Gov. Bill Richardson. The contract with the State Investment Council, which oversees $12 billion in trust funds from oil and gas leasing fees, has so far yielded $1.7 million in fees for Carret.

In regards to CDR financial products and Richardson, it was alleged that CDR donated hundreds of thousands of dollars to Richardson and affiliated groups in return for favoritism in winning government deals in regards to Richardson's GRIP program, which appears quite similar to what happened with Nemazee. For the Record Nemazee gave thousands to Richardson but also managed to be the National Finance Chairman of Hillary Clinton. For more on this from TPM read here.

General Electric and the Muni-Bond Scandal

Who would of think the "green" energy company that gives us the wonderful news channel known as MSNBC wold have been linked the muni-bond scandal? A scandal defined by corruption, bribes, and economic devastation, I tell you what is the world coming to. The companies involved were a unit of GE and a FSA subsidiary of Belgian bank Dexia SA and have been accused of rigging municipal deals:

From Bloomberg News:

Trinity Funding Co., owned by General Electric Capital Corp., and Financial Security Assurance Holdings Ltd. were two of four unidentified companies in the Oct. 29 indictment of CDR Financial Products Inc., its founder, David Rubin, and two executives, according to the people, who spoke on the condition of anonymity because they weren't authorized to do so publicly. Trinity and FSA weren't charged.

Two of the unidentified companies paid CDR to win agreements from local governments that hired Rubin's adviser firm from 2002 to 2004, disguising kickbacks by paying his company to broker swaps with two unnamed financial institutions, according to the indictment............

The Securities and Exchange Commission, which also is conducting an investigation into bid-rigging of municipal investment contracts, has notified at least seven firms, including GE Capital and FSA, that they face civil lawsuits in a parallel investigation.GE and FSA have disclosed receiving so-called Wells notices from the SEC, giving them an opportunity to say why regulators shouldn't bring a civil action. GE said in a filing last year that the investigation related to bidding by former employees and that the firm disagreed with the SEC's recommendation to file suit.

(Basically UBS AG and Bank of America Corp. have also been contacted about the issue. In a nutshell CDR is being accused of many of the allegations that have followed it around the county From the, my words)

The government's charges against CDR center on its involvement with two unidentified firms. One, called Provider B, is a group of financial-services companies that is part of a corporation with headquarters in Connecticut, according to the federal indictment. The state is home to General Electric Co. The second, Provider A, is a "group of financial-services companies located -- or controlled by those -- in Manhattan," the indictment said.

Tip of the iceberg.

An Interesting Look At the Sacramento Lawsuit and the Muni-Bond Scandal

An interesting report from MyBankTracker that clarifies some of the information involved in the Sacramento Lawsuit:

What are Municipal Derivatives?

Municipal derivatives are unregulated financial products, the value of which are based on the value of underlying assets, rates or indexes, in this case of municipal products. Derivatives create short term securities out of these longer term risk assessments; for example, stock options are derivatives, because their value is based upon the underlying value of the stocks the option is based upon.

The lawsuit claims that the banks engaged in price fixing and accepted kickbacks disguised as fees from bidder who were in return promised that they would be winners in the derivative auctions. The case comes as a result of a three year investigation into bid-rigging in the municipal derivatives market. Included in the suit are more than a dozen other banks, as well as CDR Financial Products, Inc., a California based derivative investment advisory firm.

More Money, More Problems

This lawsuit comes at a particularly bad time for Bank of America, just as the investigations into its controversial Merrill Lynch deal seemed to be losing steam. In addition, the added controversy of an antitrust lawsuit is bound to make the search for a new CEO to replace Ken Lewis even more difficult than it already is. Many have suggested that the difficulty in finding a replacement is due to the stigma that Bank of America has been receiving due to a controversy over its lack of disclosure concerning the details of the Merrill Lynch acquisition, and this case will not relieve any of the public scrutiny for the corporation.

Of course the fact that these were allegedly black box deals is the heart of the problem from an earlier post:

The Municipal Bond Scandal that Bloomberg markets exposed in 2006 with their story Broken Promises is emblematic of a culture of corruption that exists in the Democratic party. Using the poor and needy as an excuse, CDR Financial Products along with several other businesses including J.P.Morgan Chase and AIG, teamed up with significant elements of the Democratic party in a nationwide scheme that routinely left parts of this country devastated.


Pay for Play is a misnomer, in reality that is only half the equation. Yes the bribery of Democrat politicians is an offense all by itself. But even more threatening were the black box deals and financial schemes using the municipal bond market as a means to pilfer millions of dollars. The deals were opaque by nature and complicated by design. In short they involve insurance companies, banks, and CDR floating municipal bonds for local government agencies with the purpose of funding improvements, but with the real goal of merely of enriching the companies .
A summary of black box deals:

Step 1:Issuer sells Millions in Municipal Bonds to finance civic improvements
Step2 :Financial firms make millions in fees from bonds Sales (Some have secret agreements to make more from investment gains and insurance)
Step 3: Cities buy back bonds from investors, citizens get nothing.
Step 4: IRS says the agreement cheats taxpayers, demands a tax penalty to keep the bonds tax exempt.

With the end result of these deals being political and economic disasters like Jefferson County Alabama. On a related note, Larry Langford is trying to get another day in court, good luck with that.

Baghdad Zoo Comes Back to Life

A small but significant story from a place that has all but dropped off the radar of our news media:

The Al-Zawraa park containing the zoo -- once the largest in the Middle East -- now teems with families on Fridays.A sharp fall in overall violence in Iraq over the past 18 months and the withdrawal of U.S. troops from city centers in June has restored a tentative normality to the daily lives of many Iraqis. Attacks by insurgents, including massive suicide bombings in which dozens die, remain common, however.

"When security improved, we started to live our normal lives again after a dark period of violence," said teacher Basima Abbas, visiting the zoo with her children. "We want to live normal lives like everyone else in the world."The Zawraa Park is guarded inside by special police units assigned to government facilities. Visitors are frisked for weapons while bags and picnic baskets are checked for explosives. During holidays, all roads leading to the park are closed.

FEELING SAFE

The measures have persuaded people that the park is safe.In 2005, around 200,000 people visited the park over the three or four-day Muslim festival of Eid. But this year, 3 million Iraqis from all over the country swarmed into its 400 acres during the holiday at the start of October, said Abu al-Lail.

"I expect the number of visitors to the park by the end of the year will number 8 million, from all Iraqi cities," he said. The numbers could not be verified.Visitors to the zoo pay a small fee, equivalent to around 40 U.S. cents. The animals -- which include lions, tigers, monkeys and ostriches -- are kept in new cages and appear well-fed. A small train carries families around the park.

The surging popularity of the zoo and park have prompted park officials to ask the government to return 350 acres of land that had been swallowed up by the Green Zone, a district of government offices and embassies once controlled by U.S. forces.

Good Work

Another Assassination in Putin's Russia

Another victim seeking Justice in Putin's Russia:

MOSCOW (AP) -- Russian prosecutors say an anti-hate crimes campaigner has been shot and killed in Moscow.The Prosecutor General's Investigative Committee says the man killed Monday was an active campaigner against neo-Nazi groups.

It said in a statement Tuesday that investigators are looking into the victim's activities as a possible motive behind the killing.It said the 26-year old man was killed in the entrance of his apartment building with a shot to the head. RIA Novosti news agency identified the victim as Ivan Khutorskoi.

Chase To Be Sued By Jefferson County Alabama

Not a surprise considering Chase has all but conceded on the issue with the SEC and considering the damage the swap deals have done the County is going to need all the help it could get. Add this to the class action suit as well the filings by Sacramento and you have the making of huge legal headaches for some of the biggest players in the Muni-Bind industry:

BIRMINGHAM, Ala. — Alabama's most populous county filed suit Friday blaming Wall Street powerhouse JPMorgan Chase and others for the financial disaster that brought it to the brink of what would be the largest municipal bankruptcy in U.S. history.The suit, filed in state court by Jefferson County, contends JPMorgan Securities Inc., JPMorgan Chase Bank, former Birmingham Mayor Larry Langford and dozens of other defendants were part of a conspiracy to generate huge fees through a series of deals called rate swaps.

The deals were supposed to help the county manage debt from a massive sewer renovation but instead generated huge fees and crippled the county's finances, according to the complaint."These transactions provided no value to the county or its citizens and created an inherently flawed financial structure that imploded within just a few years," said the complaint, which seeks an unspecified amount in damages.

The lawsuit also names Montgomery-based investment banker Bill Blount and lobbyist Al LaPierre, both of whom pleaded guilty to bribing Langford in deals that generated $7.1 million in fees for Blount's company, Blount Parrish & Co., which also is a defendant in the case.

The complaint parallels testimony in the recent criminal trial of Langford, who was convicted on 60 counts and removed from office. It also is similar to the federal government's civil complaint against JPMorgan Chase, which agreed to a more than $700 million settlement last week.JPMorgan Chase issued a statement calling the county's lawsuit "meritless."

"Meanwhile, we continue to work to achieve a responsible restructuring of Jefferson County's financial affairs," it said.Jefferson County is struggling to avoid filing what would be the largest municipal bankruptcy ever over some $3.2 billion in debt linked to deals dating back seven years. The county's interest payments skyrocketed during the global financial crisis, and it can no longer afford them.

Of course if Rubin and associates are found guilty one can expect a dam burts of litigation against the deals they put together.

Chavez Lost his Mind

The man runs a country:

CARACAS (Reuters) - Venezuela's President Hugo Chavez says he will join a team of Cuban scientists on flights to "bomb clouds" to create rain amid a severe drought that has aroused public anger due to water and electricity rationing.

Chavez, who has asked Venezuelans to take three-minute showers to save water, said the Cubans had arrived in Venezuela and were preparing to fly specially equipped aircraft above the Orinoco river.

"I'm going in a plane; any cloud that crosses me, I'll zap it so that it rains," Chavez said at a ceremony late on Saturday with family members of five Cubans convicted of spying in the United States.

His incompetence and communist policies are what should be zapped.

Obama Warns On Protectionism While Blocking Free Trade Deals

Classic Obama, argue against protectionism at the at same time his admin is maintaining protectionist policies as a sop to the left and the Unions:

Obama went straight to an APEC dinner after arriving around 7:00 a.m. EST (1200 GMT) in Singapore, where leaders wore long-sleeved linen shirts reflecting the local Malay-Chinese culture, underscoring a tradition to don shirts from the host country at the summit's main dinner party.Although Obama proclaimed his faith in open markets, the sniping of regional leaders ahead of his arrival underlined the challenge he faces to convince them it's more than lip service.

After taking office in January, the U.S. president focused first on a huge stimulus to the economy and then on a domestic agenda that so far has included little attention to trade.

Open markets? By the way Obama is now our first Ocean President:

Calling himself "America's first Pacific President," the Hawaii-born Obama signaled in Tokyo a commitment to the region, but with no specifics on how to re-invigorate his trade agenda.

And of course the obligatory attack on the Bush Admin:

"I know that the United States has been disengaged from these organizations in recent years. So let me be clear: those days have passed ... the United States expects to be involved in the discussions that shape the future of this region, and to participate fully in appropriate organizations."

3 more years of this.

Charles Krauthammer Calls it On Gitmo

Terrible:

Obama Post-Pones Free Trade Deals Over health Care

That's great, add an Afghanistan non/decision and you have a white house so petrified of offending its base that it won't make a choice lest it disrupt the support of the left:

SINGAPORE (AP) -- Trade agreements with South Korea, Colombia and Panama won't be put before Congress until it grapples first with President Barack Obama's pressing legislative goals, the U.S. commerce secretary said Friday.

Commerce Secretary Gary Locke said Obama has an ambitious high-priority legislative agenda focusing on health care, financial regulation and alternative energy.''Trade agreements are going to have to wait,'' he said at a luncheon hosted by the American Chamber of Commerce in Singapore. ''Right now, the administration is focused on a very aggressive and very tight legislative agenda.''

The lack of progress on a trade agreement likely will be a sore point during Obama's stop in Seoul next week during an eight-day trip to Asia that began Thursday in Japan and will also take him to Singapore and China.

South Korea and the U.S. did $84.8 billion in bilateral trade in 2008, making Washington South Korea's fourth-biggest trading partner after China, the European Union and Japan. The 27-nation EU is the largest foreign investor in South Korea, with $98.4 billion in trade last year.

In 2007, South Korea and the U.S. signed a deal to slash tariffs and other barriers to trade. However, the deal has yet to be ratified by U.S. lawmakers amid concerns about South Korea's automobile market.

How fragile is the vaunted Obama coalition that he can't offend them over a no-brainer like a free trade deal with South Korea?

More Legal Headaches for CDR Financial Products and the Finance Industry

The SMUD can join the list of groups looking for some recompense for deals gone south:

The Sacramento Municipal Utility District sued Goldman Sachs, Morgan Stanley and 45 other financial firms Thursday in Sacramento federal court for allegedly rigging bids in bond-derivatives markets and defrauding the utility.SMUD joined at least six city and county governments in California that already have filed similar lawsuits arising from a federal investigation made public in 2006. Many other public entities around the country have joined in lawsuits seeking class-action status.

The SMUD filing is the first to name Goldman Sachs as a defendant, according to lawyers working with the utility.The litigation deals with bond-related financial instruments often used by local and state governments and other public entities when financing projects such as power plants.

After money is raised through a bond sale, but before it is spent on a project, it is often invested in municipal derivatives to earn a return. Another type of derivative is used to help public entities hedge against shifts in interest rates on variable-rate bonds. In both cases, competitive bidding is supposed to ensure the best possible return.

SMUD's suit – like those filed elsewhere – alleges that brokers, banks and insurance companies agreed to fix bids on municipal derivative contracts so public entities received lower rates of return than they would have in a truly competitive market."These are very sophisticated investment vehicles, but the scheme was very simple," said Nanci Nishimura, a partner at Cotchett, Pitre and McCarthy, a Burlingame-based law firm working with SMUD on the suit.

To be frank this article does as good a job explaining how these deals were supposed to work, as for CDR:

In late October, the U.S. Department of Justice indicted three current and former officials at Beverly Hills-based CDR Financial Products Inc., one of the defendants in the SMUD suit. The officials are charged with participating in the type of bid-rigging alleged in the SMUD suit. A statement on CDR's Web site calls the charges "completely baseless."

Bank of America, which purchased Merrill Lynch last year, announced in 2007 that it had agreed to cooperate with the ongoing federal investigation in exchange for amnesty concerning its role in the municipal derivatives markets.

Bank of America of course is quickly turning into the center of the investigation.

Gold Over 1,000 to Stay?

Gee I wonder why:

Nov. 11 (Bloomberg) -- Gold won’t fall below $1,000 an ounce again after rising 27 percent this year to a record as central banks print money to help fund budget deficits, said Marc Faber, publisher of the Gloom, Boom & Doom report.

The precious metal rose to all-time highs in New York and London today as the dollar weakened. The Dollar Index, a gauge of value against six other currencies, has declined 7.9 percent this year and today fell to a 15-month low. News last week of bullion purchases by the Indian and Sri Lankan governments raised speculation that other countries would follow suit.

Of course we all suffer, except for the influence peddlers at the top.

6 Months Jail Time Reccomended for Mary Buckelew

I would imagine LaPierre and Blount are hoping to get as lenient a package:

BIRMINGHAM, AL (WBRC) - Former Jefferson County commissioner Mary Buckelew could get six months in prison for obstruction of justice. Today federal prosecutors asked for a six month sentence and $30 thousand dollar fine for Buckelew, who admitted lying to a grand jury investigating county bond deals.Buckelew pled guilty and cooperated in the investigation of former commissioner and Birmingham Mayor Larry Langford, who was recently convicted on corruption charges. Sentencing is Thursday.

Along with Blount and La Pierre she played a role in convicting Larry Langford over the Jefferson county swap disaster.

Mary Buckelew

Blount and LaPierre to be Sentenced

Having agreed to testify against Langford in exchange for leniency, they played a key role in his conviction over the swaps disaster that is still plaguing Jefferson county:

BIRMINGHAM, Ala.—- The sentencings for investment banker Bill Blount and lobbyist Al LaPierre have been set for January 7, 2010 in Tuscaloosa.Both men pleaded guilty in a federal bribery case against former Birmingham Mayor Larry Langford.A jury convicted Langford two weeks ago in a scheme in which prosecutors claimed Langford accepted $235,000 in bribes from Blount and LaPierre in exchange for helping them win Jefferson County bond business.

Bill Blount’s sentencing has been set for January 7, 2010.

Lobbyist Al LaPierre accepts plea deal with federal government.

Marines Assist Yemen Government

Staff Sgt Jeffrey S. Ray, a Drill Instructor at MCRD Parris Island S.C., speaks to a delegation of military officers from Yemen via translator, during their orientation of recruit training hosted by Marine Corps Forces Central Command. The visit outlined how the United States, a partner nation, conducts comprehensive training programs and demonstrates the Marine Corps’ commitment to being a long-term partner in security cooperation.

It sounds like the Yemeni government needs the help:

PARRIS ISLAND, S.C. (Nov. 3, 2009) – A delegation of military officers from Yemen arrived in the United States recently for an orientation of Marine Corps enlisted and officer training programs and education systems at several Marine Corps installations on the East Coast.


The delegation of six Yemen military officers included branches of their counter terrorism service, coast guard, and army special forces. The orientation was coordinated and sponsored by Marine Corps Forces Central Command, Theatre Security Cooperation division.


“These types of engagements are key in the fight against terrorism,” said Lt.Col. Robert Young, MARCENT TSC chief coordinating officer. “It’s important to strengthen relationships in the region, and that’s just what this does.”
Yemen is strategically located at the entrance to the Red Sea, continued Young. Geographically, the nation is in a crucial position in the multi-national, anti-piracy effort. The Marine Corps and its partners are committed to promoting security, stability, and our mutual interest in the region.


The intent of this orientation visit was to familiarize the Yemeni military officers with formal training programs currently in use by the United States Marine Corps. Support to Yemeni military officer training is likely to increase the effectiveness of this partner’s military force.


“The goal of this visit is to see what Marines are doing here, and how they are doing it,” said 2ndLt Ammar Yahya Abdullah Alansi, a Yemeni Coast Guard Officer. “Through this visit, we can see what training tools and programs we do not have and what we might incorporate within our limited budget. ““Yemen has a vested interest in fighting terrorism and extremism on the Arabian Peninsula and any help we can provide to advance their efforts is well worth our time,” Young said. “It’s good to have friends in Yemen.”


Incidents of piracy and armed robbery against vessels in the territorial waters and the high seas in the region constitute a threat to international peace and security in the region. The Marine Corps and coalition partners are working together to detect, deter, disrupt and suppress pirate activity.

Considering the unstable nature of the area, Yemen which had been divided into two only 20 years ago, is ripe for Al Qaeda and affiliated groups. For the record the Fort Hood Shooter's radical contact is now hiding in Yemen:

The imam whom Major Hasan made contact with is an American citizen born in New Mexico to Yemeni parents. He wrote on Monday on his English-language Web site that Major Hasan was “a hero.” The cleric said, “He is a man of conscience who could not bear living the contradiction of being a Muslim and serving in an army that is fighting against his own people.”

Mr. Awlaki added, “The only way a Muslim could Islamically justify serving as a soldier in the U.S. Army is if his intention is to follow the footsteps of men like Nidal.”After the Sept. 11 attacks, Mr. Awlaki was quoted as disapproving of such violence and was portrayed as a moderate figure who might provide a bridge between Islam and Western democracies. But since leaving the United States in 2002 for London and later Yemen, Mr. Awlaki has become, through his Web site, www.anwar-alawlaki.com, a prominent proponent of militant Islam.

“He’s one of the most popular figures among hard-line, English-speaking jihadis around the world,” said Jarret Brachman, the author of “Global Jihadism” and a terrorism consultant to the government.Mr. Brachman said Mr. Awlaki was especially appealing to young Muslims who are curious about radical ideas but not yet committed. “He’s American, he’s funny, and he speaks in a very understandable way,” Mr. Brachman said.

In 2000 and 2001, Mr. Awlaki served as an imam at two mosques in the United States frequented by three future Sept. 11 hijackers. Khalid al-Midhar and Nawaf al-Hazmi attended the Rabat mosque in San Diego, where Mr. Awlaki later admitted meeting Mr. Hazmi several times but “claimed not to remember any specifics of what they discussed,” according to the report of the national Sept. 11 commission.

David Rubin Gets his First Day in Court

With 9 charges over his head and some of the banks already settling with the SEC, its the beginning of a long and in all likelihood tough trial for Rubin:

David Rubin, founder of CDR Financial Products Inc., and two colleagues on Friday pleaded not guilty to securities fraud and other charges stemming from an alleged conspiracy to rig bids for municipal investment agreements and derivatives contracts for kickbacks.A federal magistrate judge in Manhattan set bail for Rubin at far less than U.S. attorneys ­requested.

In remarks that likely foreshadow the arguments that will be made against the charges, Michael McGovern, a partner at Ropes & Gray LLP representing Stewart Wolmark, CDR’s former chief financial officer and managing director, claimed that the government’s portrayal of CDR as an entity at the center of a massive bid-rigging conspiracy is far-fetched.

The case is the first to be brought in the Justice Department’s widespread probe of anticompetitive practices in the muni market, under which 30 to 40 firms and a number of individuals were subpoenaed for information.But McGovern asked, if there’s a widespread conspiracy, why did the government not name individuals from any other firms? He also suggested that a five-year statute of limitations will lead to the removal of some of the charges.

He said the limitation was never meant to run after the interest on bonds expires, which could be 30 years after issuance.Saying she did not want to try the case at arraignment, Rebecca Meiklejohn, the lead Justice Department attorney on the case, nevertheless warned the government has “a very strong case” based on multiple witnesses who agreed to plead guilty and testify against CDR, including former employees who worked with the defendants. She also said the government has hundreds of documents and recorded conversations that support its arguments.

Meiklejohn sought bail of about $25 million for Rubin, arguing that the government believes he owns far more than the $15 million to $20 million in assets his attorneys have reported, and that he is a flight risk.Meiklejohn told the judge that the government is “ignorant” of the full scope of Rubin’s assets. She warned that he may have multiple passports because he is a naturalized American citizen and noted that he often flies to Israel, as recently as last month, where he appears to own a house and visit a son.

After all was said and done, Rubin will be releases on 5 million bail with 250,000 posted up front with more tied to his holdings in California, and his associates received even more lenient arrangements.

The Proper View of the Democrats Health Care Vote

Arrests Made in Killing of Anastasia Baburova

An older but tragic story. The Killing of Anastasia Baburova, a bright idealistic reporter who refused to sell out. as well as the killing of Stanislav Markelov was one of the great crimes that has occurred in recent memory. (Not for nothing these are the people who should have gotten the Nobel Peace Prize). Now are those arrested patsies, or

MOSCOW — Two young people identified as ultranationalists will face charges in the January shooting that killed a crusading lawyer and a reporter, an attack that cast a pall over Russia’s dwindling circle of human rights activists.

Prosecutors on Thursday announced the arrest of Nikita Tikhonov and Yevgenia Khasis, both in their 20s, who appeared in court with black hoods over their heads. The chief of Russia’s Federal Security Service, Aleksandr Bortnikov, said that the suspects were identified during a crackdown on extremist groups in Moscow, and that the killer had confessed.

The attack on the lawyer, Stanislav Markelov, and the reporter, Anastasia Baburova, was brazen even by Moscow standards. As the two victims left a daytime news conference a few blocks from the Kremlin, a masked man ran up behind them and shot Mr. Markelov, 34, in the head at point-blank range. He then fatally shot Ms. Baburova, a 25-year-old reporter trainee who hadbeen interviewing Mr. Markelov, and escaped into a crowded subway station.

After a briefing on the arrests, Russia’s president, Dmitri A. Medvedev, said ultranationalist attacks “are not simply grave crimes, but crimes which have great resonance in society.” He said he was pleased that the case had been solved in such a short time — around 10 months after the shootings — and hoped that “such reports will come regularly.”

And who were the alleged killers, by all accounts ultra-nationalists with numerous connections to various fascist groups that populate Russia and have received backing from the Putin Government for the past decade.

Honduran Deal Falls Apart

Oh Zeleya, now what are you going to do. For that matter what is the United States going to do since confusion has defined the Obama admin's reaction to these events:

TEGUCIGALPA (Reuters) - An agreement to end a four-month political crisis in Honduras collapsed early on Friday after two rival leaders failed to form a unity cabinet to heal the damage from a June coup.Ousted President Manuel Zelaya declared the pact dead just a week after it was signed and called on Hondurans to boycott presidential elections this month because de facto leader Roberto Micheletti moved to form a new government without him.

The rival leaders had agreed to form a so-called unity and reconciliation cabinet by Thursday, but they then clashed over who would lead the cabinet until Congress decided whether or not to reinstate Zelaya."It's absurd what they are doing, trying to mock all of us, the people who elected me and the international community that supports me. We've decided not to continue this theater with Mr. Micheletti," Zelaya said.

Earlier, Zelaya declined to name any members to the cabinet that was supposed to be formed and Micheletti said he was going ahead without them."We've completed the process of forming a unity government ... It represents a wide spectrum despite the fact that Mr. Zelaya did not send a list of representatives," Micheletti said in a televised speech to Hondurans.

Now what?

Thought and Prayers for the Victims in Fort Hood

Not much to say that hasn't been said. Its a horrendous crime and may justice be done to bastards who carried it out.

Chase Settles with SEC over Jefferson County Swaps

An interesting development but not a surprising one. Considering the conviction of Langford on bribery charges and the collapse of the financial collapse of the county. Considering the PR nightmare and further legal problems, settling was most likely the smart move. .

NEW YORK -- J.P. Morgan Securities Inc. on Wednesday settled charges with the Securities and Exchange Commission for two former managing directors' alleged roles in an unlawful payment scheme that enabled them to win business involving municipal-bond offerings and swap-agreement transactions with Jefferson County, Ala.

J.P. Morgan Securities, a unit of J.P. Morgan Chase & Co., will pay a penalty of $25 million, make a payment of $50 million to Jefferson County, and forfeit more than $647 million in claimed termination fees.

The settlement comes as the SEC is examining municipal investment contracts. Jefferson County has faced credit-rating downgrades and possible bankruptcy after its investments in over-the-counter derivatives. Even after the $50 million payment and cancellation of the swap termination fees, Jefferson County still faces a $3.2 billion sewer debt burden. The county -- which includes Birmingham, the state's largest city -- has spent nearly two years trying to refinance the debt after its aggressive financing strategies and use of interest-rate swaps backfired amid widespread credit-market problems.

The settlement with J.P. Morgan is the latest chapter an often-adversarial and sometimes litigious saga that has pitted the county against its creditors, Wall Street underwriters and bond insurers. Along the way, the county has received payment extensions from its creditors and counterparties in its effort to avert bankruptcy. Should an actual default be declared, it would be the largest in municipal-bond history. J.P. Morgan said in a statement: "The charges relate principally to municipal derivatives transactions that occurred six and seven years ago. J.P. Morgan has since discontinued that business."

Lawyers for the two former managing directors, Charles LeCroy and Douglas MacFaddin, said they will challenge the SEC's allegations at trial. "We think the complaint is overstating the SEC's jurisdiction and the character of permissible business practices as fraudulent," said Lisa Mathewson, Mr. LeCroy's attorney, who runs her own practice in Philadelphia

LeCroy was the man who later went on to Gulf Breeze Florida and who helped orchestate they sewar swaps that all but destroyed Jefferson County Alabama. Considering his alleged role in black box deals and how sweeping the damage has been, don't expect to much from his challenge to the SEC in court. In related news the Jefferson County Commission is pushing claims against many of the players who orchestrated these deals as a means to repair some of the financial damage.

Langford Rejected Plea Deal

Oh well, life is about choices and one can speculate that the charismatic Langford convinced himself he could pull one more rabbit out of the hat, either that really believed all of the payoffs and kickbacks were okay:

Larry Langford rejected a plea deal with federal prosecutors that would have given him just a few years in prison, defense attorney Glennon Threatt said this morning.
Threatt, appearing on WJLD radio's Morning Talk this morning, told radio host Gary Richardson that rumors of a plea offer were true.


"He maintained that he wasn't guilty and Larry got angry," Threatt said on 1400 AM and 104.1 FM. Threatt said the former Birmingham mayor refused terms of the deal that required him to admit abusing his power as an elected official.Threatt said he believed Langford could have received less than five years in prison under the deal.

Isn't his conviction vindication for Alice Martin? In other news Langford may have dug the hole deeper with his rant after conviction:

Federal judges can increase a criminal defendant's sentence for a lack of remorse or to promote respect for the law, and Langford was hardly contrite during his statements to reporters just moments after his trial ended with a sweeping rebuke last week.

Langford mischaracterized the evidence against him more than once, claiming two main witnesses testified they never gave him anything. The two men actually told of showering Langford with checks, clothes and jewelry worth thousands.

Langford was just getting started. He went on for about 20 minutes, blaming racism and the media for his conviction. He accused jurors of sleeping during the trial and failing to look at the evidence. He said the government was out to get him.

"Hitler wasn't treated this bad," Langford's wife, Melva, said."Jeffrey Dahmer wasn't treated this bad," added Langford.Glennon F. Threatt Jr., one of two defense attorneys for the ex-mayor, fears the rant could mean additional time behind bars for Langford.

"I don't want it to because he is my client. But if I were a federal judge I would not want people out there saying the system is racist and they were treated worse than Hitler," Threatt said.

Langford, 63, faces what Threatt said is a likely sentence of 12 to 15 years imprisonment after being convicted on 60 felony charges including bribery, fraud, conspiracy, money laundering and filing false tax returns. He's already agreed to forfeit $241,000 because of the conviction.

Guilty on 60 counts.

A Class Action Lawsuit, an Informant, Bank of America, and the Muni-Bond Scandal

The massive class action lawsuit which was tossed out earlier in the year, is moving forward again. This is at the same time as the criminal investigation into CDR and could spell serious trouble into the 2.8 trillion dollar muni-bond industry, the fact that there was an informant who appears to have detailed the information as well as taped some of the players could blow the lid off the whole scam.

From the Bond Buyer:

WASHINGTON — Court documents filed in class action and other lawsuits by issuers’ lawyers who were briefed by attorneys at Bank of America — the one firm that is cooperating with the Justice Department’s antitrust probe in return for indemnity from criminal charges — present a disturbing picture of alleged widespread collusion between dozens of firms involved with municipal investment contracts and derivatives.

Relying largely on information from a confidential witness at Bank of America called CW, the lawsuits provide something of a play-by-play primer on routines among certain firms in the reinvestment and derivatives business. The winners of bids for the contracts in the sector were ­determined in advance, traders used verbal cues to rig bids, some firms intentionally submitted losing bids, and several firms received “last looks” that allowed them to compare competing bids and alter their own to win.

The suits also rely in part on extensive audiotapes that B of A made available to the Justice Department. The issuer attorneys did not have access to the tapes but received detailed descriptions of some of their contents from the bank’s attorneys.

In addition, one of the suits notes that Charles Anderson, the former field operations manager for the Internal Revenue Service’ tax-exempt bond office, said: “I have listened to tape recordings of bankers talking to each other saying, 'This law firm or lawyer will go along, they know what’s going on, they’ll give us an opinion.’ It might take a little time to unwind it all, but I think we’ve only seen the tip of the iceberg.”

The class action lawsuit that Baltimore and other issuers filed against dozens of firms, and five separate suits filed against many of the same firms by Los Angeles and other issuers in California, are pending before the United States District Court for the Southern District of New York in Manhattan. They allege that a significant portion of the industry was involved in bid-rigging and anti-competitive behavior that led to last week’s federal indictment of Beverly Hills, Calif.-based CDR Financial Products Inc., its founder David Rubin, and a current and a former employee at the firm.

According to reports, pay for play was so endemic that top executives were angry if it bid winners weren't pre-ordained:

The “unlawful pre-selection practice” was so widespread that Phillip Murphy, the former managing director of B of A’s muni derivatives department, “expressed dissatisfaction if the CW did not know who would win a trade before it was bid.” The collusive practices continued after Murphy left the bank to become a principal at Winters & Co. in 2002, the Hausfeld suit said.

The cw is the confidential wittness who apparently got in pretty damn deep:

The CW, who discovered the alleged collusive conduct after he joined Bank of America’s muni derivatives trading desk in April of 1999, “learned that his was a business about doing favors, generating referrals for brokers, and getting favors in return,” according to the Hausfeld and Cotchett suits. He got his job on the recommendation of executives from IMAGE, the firm he was assigned to work with by Murphy and Douglas Campbell, a former sales team manager at B of A. He also closely worked with Martin Stallone, a managing director at IMAGE.

The CW and other members of the bank’s trading desk used various verbal cues to rig bids, the suits said. One approach used by the CW was to ask if the bank’s bid was “a good fit,” according to the Hausfeld suit. But the conspirators allegedly used several additional code phrases to communicate their desire to be pre-selected as the winner of a particular auction, including: “We really want this deal” or “We want to get in on this rate,” or “I can do better, I want this bid.”

The code word “axe” was also allegedly commonly used to refer to a contract provider’s interest in winning a deal.Firms allegedly also put in sham bids that they knew would not win for business they did not want.

I would assume the sham bids were part of the conspiracy to provide a veneer of competitvness even though key players would have known ahead of time who was going to win what. Perhaps this is a bit of cliche, but this informatnt who went undercover, recorded conversations, detailed secret deals sounds like a scene right out of the movies.