When Schumer found out that the Bush administration had agreed to lease several U.S. ports to a company bought by Dubai Port World, he went on the offensive, arguing that allowing foreign control of the country’s ports could increase terrorism. While the Port Authority and the administration initially supported Dubai Port World’s bid, Schumer and a group of senators eventually brokered a deal that allowed AIG to lease the space.Belson, Ken, “Port Authority Now Accepts Dubai Deal, Easing Debate,” New York Times, February 17, 2007(10)
From The Nation:Democratic Senator Chuck Schumer said: “The question that needs to be answered is whether or not they [Dubai] can be trusted to operate our ports in this post 9/11 world.”
“Should we be outsourcing our own security?”
Opponents of the deal are planning to lodge their protests at a Senate hearing planned for later this month.
New York Governor George Pataki and Maryland Governor Robert Ehrlich said they were investigating their options, including the possibility of cancelling port management contracts.
Defenders of the Dubai ports deal argue that rejecting it would be an insult to the Arab world. But if you look at it from a different angle, maybe we'd actually be doing our new found friends in the United Arab Emirates a favor. It is hard to imagine why on earth Dubai would want to manage six major American ports where less than 5 percent of cargo is inspected currently. What if, God forbid, terrorists, completely unconnected to Dubai, slipped a weapon of mass destruction through one of the ports Dubai manages? Has the emir of Dubai forgotten what happened to Saddam, who had no connection to 9/11?
WASHINGTON -- The proposal to allow a Dubai firm to manage six US ports has brought a striking reversal of roles in the politics of terrorism: Suddenly, Democrats are using insinuations and accusations to suggest that the Bush administration is being weak on security, while President Bush and allies are urging critics against assuming guilt by association
The port holdings in question were initially sold to Dubai Ports World by P & O Ports North America. After considerable concerns were raised in Washington, chiefly by Senator Schumer, about the process that initially approved the transfers of these ports and terminal operations to foreign ownership, Dubai Ports World agreed to sell off its U.S. acquisitions. In December, Dubai Ports World announced that it had struck a deal to sell the holdings to AIG Global Investment Group. The U.S. operations being sold include seaports and terminal operations in New York/New Jersey, Philadelphia, Baltimore, Miami, Tampa, Fla., and New Orleans. The Port Authority of New York/New Jersey, which owns the Port Newark Container Terminal slated to go to AIG, must give its consent to the transfer of the lease in order for the deal to close.
The tea party movement has blossomed into a powerful social phenomenon because it is leaderless—not directed by any one mind, political party or parochial agenda.
The criteria for membership are straightforward: Stay true to principle even when it proves inconvenient, be assertive but respectful, add value and don't taking credit for other people's work. Our community is built on the Trader Principle: We associate by mutual consent, to further shared goals of restoring fiscal responsibility and constitutionally limited government. These were the principles that enabled the Sept. 12, 2009 taxpayer march on Washington to be one of the largest political protests in the history of our nation's capital
The many branches of the tea party movement have created a virtual marketplace for new ideas, effective innovations and creative tactics. Best practices come from the ground up, around kitchen tables, from Facebook friends, at weekly book clubs, or on Twitter feeds. This is beautiful chaos—or, as the Nobel Prize-winning economist F.A. Hayek put it, "spontaneous order."
Decentralization, not top-down hierarchy, is the best way to maximize the contributions of people and their personal knowledge. Let the leaders be the activists who have the best knowledge of local personalities and issues. In the real world, this is common sense. In Washington, D.C., this is considered radical.
The big-government crowd is drawn to the compulsory nature of centralized authority. They can't imagine an undirected social order. Someone needs to be in charge—someone who knows better. Big government is audacious and conceited.
I agree about the grassroots being preferable to a top down organization, tie too much into one governing body and you leave yourself open to personalized attacks rather then policy disputes. Of course that didn't stop the left from stereotyping everyone anyway, but that is the nature of their tactics with anyone or any group from the get go.
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GAZA (Reuters) - Palestinian militants in the Gaza Strip fired two mortar bombs into Israel Tuesday, wounding two soldiers, the Israeli military said.Security officials in the ruling Hamas Islamist group that runs the Gaza Strip said after the incident that six Israeli tanks crossed into the territory and that one fired a shell at a house near the town of Khan Younis. No casualties were reported.
The army said the two soldiers were lightly wounded and taken to hospital for treatment.The mortar attack was launched a day after Israeli soldiers killed a militant who the army said was planting explosives along the Israel-Gaza border.
Republicans, fueled by record fundraising, are poised to win most of the state governorships in November, which would give them an advantage in congressional redistricting and a new pool of talent for national office.
Democrats now hold 26 of the 50 governorships, and 37 are on the ballot this year, the most ever. Stuart Rothenberg, a nonpartisan political analyst in Washington, says the Republicans should pick up at least eight new posts, giving them control of 32.
Such a sweep would have longer-lasting consequences than the more visible races for all 435 House seats and about one- third of the 100 Senate slots, and give Republicans momentum throughout the decade, because the governors will help redraw congressional and state legislative lines after the 2010 census.
“The next class of governors will have enormous power far into this decade,” said Paul Light, a professor at New York University’s Wagner School of Public Service. “It’s no wonder the parties are spending huge sums on these races.”
The Republican Governors Association, which is coordinating the campaigns, points to its fundraising numbers as evidence it has the advantage. The group has raised $58 million between Jan. 1, 2009, and June 30, 2010, compared with $40 million for the Democratic Governors Association, Internal Revenue Service filings show. Both groups say the amounts are records.
The charges against Kanefsky stem from those filed against the three former GE employees; Kanefsky’s firm was one of four unidentified investment-contract brokers mentioned in their indictment last month.
Kanefsky conspired with employees of financial firms identified only as Marketer A, Marketer B-1 and Marketer B-2 on investment contract deals from 1999 through 2006, according to a copy of the charges released by the Justice Department.
Court documents obtained by Bloomberg News and now under seal identified the employees as Steven Goldberg and Peter Grimm, two of the former GE workers charged last month. After leaving GE, Goldberg went to Financial Security Assurance Holdings Ltd., a former unit of Dexia SA.
Goldberg, Grimm and Dominick Carollo, their supervisor at GE, all pleaded not guilty to fraud and conspiracy charges on July 30.
‘Shave It’
The Kanefsky charges say he gave the marketers information about rivals’ bids, allowed them to change their bids after submitting them, and that he filed false certifications that such auctions were competitive.
Kanefsky’s actions allowed bidders to land the deals at “artificially determined or suppressed rates” that cost his government clients, according to the charges.In April 2005, for instance, Goldberg asked Kanefsky whether his bid for a contract was too high, according to the charges and the sealed court record. Kanefsky said that if it was, he would “shave it a little,” and later advised Goldberg to offer less than he was willing to in order to win. Goldberg cut his offer and won, according to the records.
It can't be good news for those awaiting trial that people keep throwing in the towel and agree to testify. As for Kanefsky, it appears his actions are quite serious:
According to the court documents, Kanefsky engaged in one fraud conspiracy from as early as October 2001 until at least November 2006, and in a second fraud conspiracy from as early as August 1999 until at least November 2006. In each conspiracy, Kanefsky gave co-conspirator providers information about the prices, price levels or conditions in competitors’ bids, a practice known as a “last look,” which is explicitly prohibited by U.S. Treasury regulations. Kanefsky also solicited and received intentionally losing bids for certain investment agreements and other municipal finance contracts. As a result of the bid manipulation, the co-conspirator providers won contracts at artificially determined price levels, which deprived municipal issuers of money and property.
According to both suits, traders on B of A’s muni derivatives trading desk knew ahead of time when the bank would be awarded a deal. They also understood that on some deals, a provider other than the bank would win, “but also knew that Bank of America would make it up on the deals where it was agreed that it would be the winning bidder.”
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.
Outrageous.
According to the charges filed today in U.S. District Court in New York City, Martin Kanefsky, a resident of Great Neck, N.Y., pleaded guilty to participating in two separate fraud conspiracies with companies that provide a type of contract, known as an investment agreement, to public entities throughout the United States, such as state, county and local governments and agencies.
These public entities were seeking to invest money from a variety of sources, primarily the proceeds of municipal bonds that they issued to raise money for, among other things, public projects. Kanefsky also pleaded guilty to one count of wire fraud.
According to the plea agreement, Kanefsky has agreed to cooperate with the ongoing investigation.
According to the court documents, Kanefsky engaged in one fraud conspiracy from as early as October 2001 until at least November 2006, and in a second fraud conspiracy from as early as August 1999 until at least November 2006.
In each conspiracy, Kanefsky gave co-conspirator providers information about the prices, price levels or conditions in competitors’ bids, a practice known as a “last look,” which is explicitly prohibited by U.S. Treasury regulations. Kanefsky also solicited and received intentionally losing bids for certain investment agreements and other municipal finance contracts.
As a result of the bid manipulation, the co-conspirator providers won contracts at artificially determined price levels, which deprived municipal issuers of money and property.
Department of JusticeOffice of Public AffairsFOR IMMEDIATE RELEASEThursday, August 12, 2010Former Owner and Chief Executive Officer of Financial Products and Services Firm Pleads Guilty for Role in Fraud Conspiracies Involving Proceeds of Municipal BondsWASHINGTON — The former owner and chief executive officer of a financial products and services firm pleaded guilty today for his participation in fraud conspiracies related to contracts for the investment of municipal bond proceeds and other related municipal finance contracts, the Department of Justice announced.
According to the charges filed today in U.S. District Court in New York City, Martin Kanefsky, a resident of Great Neck, N.Y., pleaded guilty to participating in two separate fraud conspiracies with companies that provide a type of contract, known as an investment agreement, to public entities throughout the United States, such as state, county and local governments and agencies. These public entities were seeking to invest money from a variety of sources, primarily the proceeds of municipal bonds that they issued to raise money for, among other things, public projects. Kanefsky also pleaded guilty to one count of wire fraud. According to the plea agreement, Kanefsky has agreed to cooperate with the ongoing investigation.
The department said in court papers that Kanefsky’s former company, located in Great Neck, was hired by public entities that issue municipal bonds to act as their broker and conduct what was supposed to be a competitive bidding process for the award of investment agreements. Major financial institutions, including banks, investment banks, insurance companies and financial services companies, are among the providers of investment agreements and other related municipal finance contracts. Competitive bidding for these agreements is the subject of regulations issued by the U.S. Department of the Treasury and is related to the tax-exempt status of the bonds.
According to the court documents, Kanefsky engaged in one fraud conspiracy from as early as October 2001 until at least November 2006, and in a second fraud conspiracy from as early as August 1999 until at least November 2006. In each conspiracy, Kanefsky gave co-conspirator providers information about the prices, price levels or conditions in competitors’ bids, a practice known as a “last look,” which is explicitly prohibited by U.S. Treasury regulations. Kanefsky also solicited and received intentionally losing bids for certain investment agreements and other municipal finance contracts. As a result of the bid manipulation, the co-conspirator providers won contracts at artificially determined price levels, which deprived municipal issuers of money and property.
The court documents also charge that Kanefsky and co-conspirators misrepresented to municipal issuers or their bond counsel that the bidding process was in compliance with U.S. Treasury regulations. This caused the municipal issuers to award investment agreements and other municipal finance contracts to providers that otherwise would not have been awarded the contracts if the issuers had true and accurate information regarding the bidding process. Such conduct caused municipal issuers to file inaccurate reports with the Internal Revenue Service (IRS) and thus placed the tax-exempt status of the underlying bonds in jeopardy.
Each of the fraud conspiracies for which Kanefsky is charged carries a maximum penalty of five years in prison and a $250,000 fine. The wire fraud charge carries a maximum penalty of 20 years in prison and a $250,000 fine. The maximum fines for each of these offenses may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
This is the fifth guilty plea to arise from an ongoing investigation into the municipal bonds industry, which is being conducted by the Antitrust Division’s New York Field Office, the FBI and IRS Criminal Investigation. The department is coordinating its investigation with the Securities and Exchange Commission, the Office of the Comptroller of the Currency and the Federal Reserve Bank of New York.
Three former employees of Rubin/Chambers, Dunhill Insurance Services Inc., also known as CDR Financial Products (CDR), a Beverly Hills, Calif.-based financial products and services firm that acted as a broker of investment agreements and other municipal finance agreements, have pleaded guilty to bid-rigging and fraud conspiracies in relation to the ongoing investigation. A former employee of another financial services company also pleaded guilty to bid-rigging and fraud charges in relation to the ongoing investigation.
As a result of the ongoing investigation, three former financial services executives were indicted on July 27, 2010, for participating in fraud schemes and conspiracies related to the bidding for investment agreements. In addition, CDR, two of its employees and one former employee were charged in October 2009 for participating in bid-rigging and fraud conspiracies and related crimes. The CDR trial is scheduled to begin on Sept. 12, 2011.
Today’s guilty plea is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.
Anyone with information concerning bid rigging and related offenses in any financial markets should contact the Antitrust Division’s New York Field Office at 212-264-0390 or visit www.justice.gov/atr/contact/newcase.htm, or the FBI at 212-384-5000.
Chase and BOA, where have we seen them before? Of course lets not forget its Democrats attached at the hip to these deals.The $750 million issue of certificates of participation was designed to close a $400 million gap in the DPS pension fund. It became a political issue in the weeks before Tuesday’s primary election victory by U.S. Sen. Michael Bennet over former Colorado House Speaker Andrew Romanoff.
An Aug. 5 story on the front page of the New York Times said Bennet and current superintendent Thomas Boasberg, who was chief operating officer at the time of the deal, convinced the school board to approve an “exotic” financing scheme that included interest-rate swaps insured by Assured Guaranty Municipal Corp. with liquidity from Dexia Credit Local, which has since exited the market. Dexia Group was the fourth-largest letter-of-credit provider in 2008, a record year for variable-rate debt with volume of $120 billion.
According to the Times, the deal has backfired on the district, which has already paid $115 million in interest and other fees. That’s at least $25 million more than it originally anticipated.Interest rates that were projected at 5% spiked to 8.59%, according to the Times, and now average about 7.12%.
To escape its 30-year commitment in the deal, the district would have to pay termination fees of $81 million or about 19% of its $420 million payroll.The Times article said: “Denver has paid about $9.7 million more in fees for its deal than it would have had it chosen a simpler transaction.”
JPMorgan was senior manager with RBC Capital Markets as financial adviser. Bank of America and RBC were also counterparties on two of the swaps.
The Times article questioned the timing of the derivatives deal in the spring of 2008 after the auction-rate securities market collapsed. The district deal was similar to auction-rate securities in that rates reset weekly. However, the Denver school deal was designed as a synthetic fixed-rate with the counterparties swapping variable-to-fixed rates.With the DPS deal suddenly a hot-button issue, the district and its board last week issued letters and statements contradicting much of the Times story.
Boasberg and DPS Board president Nate Easley Jr. said the district saved $20 million by doing the deal, instead of doing nothing, in a letter to constituents.
“DPS has been able to increase spending in the classroom to better serve our kids,” Boasberg and Easley said. “That additional investment in our classrooms is a direct result of the savings from the pension financing.”
In a separate letter with other board members, Easley called the 2008 deal “far from exotic,” saying it was structured exactly like a 2005 transaction completed before Bennet or Boasberg joined DPS.
U.S. Senator Michael Bennet, who was backed by President Barack Obama, won his party’s nomination in Colorado yesterday in what was a test of the White House’s influence among Democrats.
Bennet, 45, beat former Colorado House Speaker Andrew Romanoff, 43, who was endorsed by former President Bill Clinton. The split between the current U.S. chief executive and the past one helped spur nationwide interest in the primary contest.
Bennet will face Republican Ken Buck, 51, a favorite of Tea Party activists, in November’s general election. Analysts rate the race a tossup. Buck, a county prosecutor, yesterday defeated a primary opponent supported by the Republican Party’s national leadership.
In Connecticut, former World Wrestling Entertainment Inc. Chief Executive Officer Linda McMahon won the Republican U.S. Senate nomination, setting up a November match against Democrat Richard Blumenthal, the state’s attorney general.
Former Stamford Mayor Dan Malloy won the Democratic nomination for governor in Connecticut over businessman Ned Lamont, who ran unsuccessfully for the U.S. Senate in 2006. Malloy in November faces Tom Foley, a former U.S. ambassador to Ireland, who captured the Republican nomination in a three- candidate race.
WASHINGTON — Four major municipal market groups are urging the Treasury Department to issue guidance confirming that the existing regulatory framework on issue price for tax-exempt bonds also applies to Build America Bonds and stating that if issuers follow certain long-standing practices, they can be confident they are complying with the rules in this area.
The groups stressed there is an “urgent need” for such guidance in a letter sent late Friday to John Cross 3d, the Treasury’s associate tax legislative counsel.
The groups also provided the Treasury with an analysis of market data they said confirms that the “trading up” of bonds occurs in all markets, and is actually more extreme in the corporate market than in the BAB market. The letter does not use the term “flipping,” but trading up means the same thing: when bonds are issued at one price and then immediately traded at a higher price.
The letter is a follow-up to a meeting held last month between Treasury officials and representatives of the four groups —the Government Finance Officers Association, the National Association of Bond Lawyers, the Regional Bond Dealers Association, and the Securities Industry and Financial Markets Association.
Uncertainty surrounding issue price has gripped the BAB market in recent months, since the Internal Revenue Service began asking BAB issuers if they were following the pricing of their bonds — something issuers traditionally have not done.
That line of inquiry has led to concern among muni market participants that the IRS might require issuers to rely on the actual trading of their BABs to determine issue price, instead of allowing them to rely on underwriter certifications that there was a bona fide public offering of the bonds at the initial offering price and that it is reasonable for the issuer to expect a substantial amount of the bonds will be sold to the public at that price. This traditionally has been the way issue price has been established for tax-exempt bonds.
The controversy peaked after an IRS official said during a teleconference sponsored by NABL that the service could audit up to 50% of BAB issues. The IRS has since backed down from the remark, saying the actual number of audits is likely to be much smaller. But concerns about audits have driven the need for explicit guidance to assure issuers they are compliant.
Their have been warnings about the BAB's and if their is an a major element of "flipping" these investments it could lead to trouble in the market.
(CBO) Over the past few years, U.S. government debt held by the public has grown rapidly—to the point that, compared with the total output of the economy, it is now higher than it has ever been except during the period around World War II. The recent increase in debt has been the result of three sets of factors: an imbalance between federal revenues and spending that predates the recession and the recent turmoil in financial markets, sharply lower revenues and elevated spending that derive directly from those economic conditions, and the costs of various federal policies implemented in response to the conditions.
Further increases in federal debt relative to the nation’s output (gross domestic product, or GDP) almost certainly lie ahead if current policies remain in place. The aging of the population and rising costs for health care will push federal spending, measured as a percentage of GDP, well above the levels experienced in recent decades. Unless policymakers restrain the growth of spending, increase revenues significantly as a share of GDP, or adopt some combination of those two approaches, growing budget deficits will cause debt to rise to unsupportable levels.
For starters Obamcare was supposed to be a budget reducing machine that provided more for less, of course everyone (including its boosters) knew this was a pleasant fiction to be used a political point. And what are the chances of a "Greek" style debt crisis, closer then the political class wants to admit:
Beyond those gradual consequences, a growing level of federal debt would also increase the probability of a sudden fiscal crisis, during which investors would lose confidence in the government’s ability to manage its budget, and the government would thereby lose its ability to borrow at affordable rates. It is possible that interest rates would rise gradually as investors’ confidence declined, giving legislators advance warning of the worsening situation and sufficient time to make policy choices that could avert a crisis. But as other countries’ experiences show, it is also possible that investors would lose confidence abruptly and interest rates on government debt would rise sharply. The exact point at which such a crisis might occur for the United States is unknown, in part because the ratio of federal debt to GDP is climbing into unfamiliar territory and in part because the risk of a crisis is influenced by a number of other factors, including the government’s long-term budget outlook, its near-term borrowing needs, and the health of the economy. When fiscal crises do occur, they often happen during an economic downturn, which amplifies the difficulties of adjusting fiscal policy in response.
In response to this growing crisis, the CBO recommends tax increases, spending cuts, or a combination of the two. Obviously this goes back to the argument on what can produce revenue's over the long term quicker, considering the situation a tax increase right now is utterly crazy where as spending cuts to reduce waste, pork and corruption would go the longest way to righting this fiscal house.
WASHINGTON (Aug. 5, 2010) — It can't be shot, it can't be destroyed with a mortar or rocket-propelled grenade, and most of the time it can't even be seen. But corruption within police and military units is one of the biggest threats facing the Afghan national security forces.
During an Aug. 3 "DoD Live" bloggers roundtable, Coast Guard Capt. Steven Andersen, staff judge advocate for the anti-corruption office of NATO Training Mission Afghanistan and Combined Security Transition Command Afghanistan, discussed the commands' efforts in working with the Afghan government to build systems, processes and institutions that limit future opportunities for corruption.
But right now, Andersen said, they're still trying to identify problem areas in Afghan forces. It's difficult, he explained, because corruption can mean so many different things – it could be a company commander not paying his troops their full salary or it could be a fake roadblock used to shake down travelers for money or goods.
"There's no one magic result that's going to solve the whole corruption problem," he said. Andersen said he's been impressed with the willingness of some Afghan security forces members to stand up in the face of corruption, risking possible retribution by their corrupt counterparts, or worse, by insurgent groups such as the Taliban.
"There are certain concerns when any individual comes forward in any society to bring forward information about corruption or a crime being committed," he said. "Although those concerns exist, there are also some very courageous and somewhat inspiring Afghans in the police and the army who are actually standing up and making a stand against corruption and things that are going on in the ministry they know aren't right."
The best thing that can happen for Afghanistan is a cultural shift, Anderson said, and he added that he doesn't think it's a pipe dream or something on the distant horizon. It's not going to happen overnight, he acknowledged, but he said the shift already is in progress. "I do not subscribe to the theory that Afghans accept corruption," Anderson said. "I believe they tolerate it. I believe they tolerate it because, in some cases, there's no other way to get some things done. But I don't believe they accept it."
Andersen said he has spoken to many Afghans, and his assessment is that corruption is tolerated because of the unstable environment the country's been in for the past few decades. It's not an issue of changing morality or a sense of right and wrong in the culture, he said. The goal is to make Afghans aware that they don't need to tolerate bad behavior any more"I've talked to several individuals who have [had] religious education here, and they clearly say that their morals are not that different," he said. "You know, lying here is lying -- it's like lying in our country. Cheating here is like cheating, lying is like lying. There are some cultural differences, I think maybe, when it comes to nepotism and helping people get jobs and things like that. [An independent survey] asked people, you know, 'Do you think this is wrong?' and a majority of people say 'Yes.'"
But surveys don't always provide an accurate measure of corruption, Anderson noted. Many show skewed data, he explained, because they're based on perception and image, not necessarily first-hand experience.
"The police have a corruption problem, but sometimes I think it gets a little bit overblown by the surveys that are always looking at perceptions," Andersen said. "If I have a neighbor who tells me that their brother-in-law was shaken down by the police, then my perception of the police is that they are corrupt, although I might not have experienced it."
Leadership is changing the way is the Afghan security forces are run. For example, the new interior minister has been known to travel to remote police stations and show up with no announcement or fanfare, sometimes in the middle of the night, just to see how things are going, Andersen said. A "personal asset inventory" now is being used to make sure commanders aren't requesting money for eight policemen when they have only five in the unit.
Andersen said that kind of involvement from leadership will help immensely in weeding out the corrupt individuals who tarnish the entire service's reputation.
"It's not every police officer. It's not every army officer -- or every patrolman, or every NCO, every general. It's not. And that is one of the challenges," he said. .
KABUL, Afghanistan — President Hamid Karzai of Afghanistan has promised to root out corruption, but after one of his own top aides was arrested by American-supported antigraft units recently, he fired back by investigating the investigators and apparently seeking control over their actions.He convened a commission ultimately reporting that the anticorruption investigators were violating the human rights of suspects they arrested. Aides to the president also complained that they violated the nation’s sovereignty because of the American role in the investigations.
The controversy set up yet another serious divide between American officials and Mr. Karzai at a time when the Obama administration has made combating corruption in the Afghan government a major policy goal. Congress is withholding $4 billion in financing to Afghanistan over a case closely related to the arrest of Mr. Karzai’s aide.
At issue are two powerful anticorruption organizations set up in the Ministry of the Interior, initially with the president’s approval, known as the Major Crimes Task Force and the Sensitive Investigative Unit. American agencies, including the F.B.I. and the Drug Enforcement Administration, are extensively involved in the units.
They are self-contained, with their own lawyers, investigators, judges and even detention facilities. The arrangement was meant to insulate them from interference from other government agencies.
The Karzai aide, Mohammed Zia Saleh, head of administration for Afghanistan’s National Security Council, was arrested late in July. According to a Western official with knowledge of the case, the arrest came after investigators wiretapped Mr. Saleh soliciting bribes from the New Ansari Exchange, a money exchange operation, to impede an investigation into the company’s role in exporting large amounts of cash from the country.
Corruption as a means to maintain power is a slippery slope and usually ends badly. Of course their is a reason we are still in Afghanistan and corruption is nothing compared to this:
KABUL, Afghanistan — At least 10 medical personnel, including six Americans, were murdered in northern Afghanistan on Thursday, officials confirmed Saturday. A Taliban spokesman, reached by cellphone, claimed responsibility for the killings.
The bodies from the group, which had been on an expedition to bring eye care and other medical services to remote areas, were found shot to death in a mountainous area of Badakhshan Province, according to the provincial police chief, Aka Noor Kentoz.
The International Assistance Mission, a group that last month had a fund-raiser in Kabul for a medical expedition to Nuristan Province, said six of the dead were Americans, one was German and one was British. Dirk Frans, the executive director of the I.A.M., said the team was headed by Tom Little, an American opthamologist with four decades experience in Afghanistan and a fluent Dari speaker. Mr. Frans said the team numbered 12, including four Afghans, two of whom were killed.
The victims’ bodies were stripped of all belongings, making identification difficult and suggesting robbery as a motive. However, Taliban insurgents are known to be active in the area, and the attackers allowed at least one Afghan to leave the scene unharmed. The survivor, an Afghan driver named Saifullah, told police he was let go because he recited verses from the Koran.
The future of Afghanistan if we bug out.
The Denver schools essentially made the same choice some homeowners make: opting for a variable-rate mortgage that offered lower monthly payments, with the risk that they could rise, instead of a conventional, fixed-rate mortgage that offered larger, but unchanging, monthly payments.
The Denver school board unanimously approved the JPMorgan deal and it closed in April 2008, just weeks after a major investment bank, Bear Stearns, failed. In short order, the transaction went awry because of stress in the credit markets, problems with the bond insurer and plummeting interest rates.
Since it struck the deal, the school system has paid $115 million in interest and other fees, at least $25 million more than it originally anticipated.
To avoid mounting expenses, the Denver schools are looking to renegotiate the deal. But to unwind it all, the schools would have to pay the banks $81 million in termination fees, or about 19 percent of its $420 million payroll.
John MacPherson, a former interim executive director of the Denver Public Schools Retirement System, predicts that the 2008 deal will generate big costs to the school system down the road. “There is no happy ending to this,” Mr. MacPherson said. “Hindsight being 20-20, the pension certificates issuance is something that should never have happened.”
A spokesman at JPMorgan, which led the Denver deal, declined to comment. Royal Bank of Canada, which acted as the school system’s independent adviser even though it participated in the debt transaction, declined to comment. Denver school officials said that they had agreed to sign a conflict waiver with Royal Bank of Canada.
Denver isn’t the only city confronted with budgetary woes aggravated by esoteric financial deals that Wall Street peddled in the years before the credit crisis. Banks have said the deals were appropriate for the issuers and that no one could have predicted the broad financial collapse that put pressure on the transactions.
Still, some municipalities have found such arguments wanting and are pushing back.Last March, the Los Angeles City Council told its treasurer and city administrative officer to renegotiate interest-rate deals the city had used to try to lower its debt payments with the banks that sold them. “If they are unwilling to renegotiate, then those financial institutions should be excluded from any future business with the City of Los Angeles,” noted a report by the City Council.
In Pennsylvania, some school districts have unwound interest-rate deals, and the state’s auditor general, Jack Wagner, has urged other issuers to follow suit. “For the sake of Pennsylvania taxpayers, I call on the other school districts that have entered into similar swaps contracts to get out of these risky agreements as soon as they possibly can,” he said in a statement in February.
Considering Harvard under Larry Summers was burnt for a billion under these deals blaming the ignorance of locals is pretty thin. Its clear the local board was overawed by these financial houses and politicians saw easy money rather then balance their books.
Update:
I hadn't really connected the dots between Bennet and the Dem primary for the Senate, oh well it looks like another disaster connected to the Democrats.
With only five days left for Democrats to wrap up voting in their Senate primary race, The New York Times’ Gretchen Morgenson just dropped a bomb on the former frontrunner, embattled Sen. Michael Bennet.
Placed on its front page, and above the fold, the story, headlined “Exotic Deals Put Denver Schools Deeper in Debt,” will answer the question for many Colorado observers of whether a massive loan Bennet championed while superintendent at DPS was such a good idea.
For a politician down in the polls and already playing pushback against Andrew Romanoff’s vicious “Greed” ad, The Times’ before-the-jump summations of the DPS debt issuance must feel like body blows.
The Denver schools essentially made the same choice some homeowners make: opting for a variable-rate mortgage that offered lower monthly payments, with the risk that they could rise, instead of a conventional, fixed-rate mortgage that offered larger, but unchanging, monthly payments.
The Denver school board unanimously approved the JPMorgan deal and it closed in April 2008, just weeks after a major investment bank, Bear Stearns, failed. In short order, the transaction went awry because of stress in the credit markets, problems with the bond insurer and plummeting interest rates.
Since it struck the deal, the school system has paid $115 million in interest and other fees, at least $25 million more than it originally anticipated.
To avoid mounting expenses, the Denver schools are looking to renegotiate the deal. But to unwind it all, the schools would have to pay the banks $81 million in termination fees, or about 19 percent of its $420 million payroll.
John MacPherson, a former interim executive director of the Denver Public Schools Retirement System, predicts that the 2008 deal will generate big costs to the school system down the road. “There is no happy ending to this,” Mr. MacPherson said. “Hindsight being 20-20, the pension certificates issuance is something that should never have happened.”
Progressive writer and talk show personality extraordinaire David Sirota has seized the story and was already sending out e-mail alerts last night that connected the dots in ways Team Bennet is not going to appreciate.
“For months, (Andrew) Romanoff has been focusing attention on how Bennet’s huge corporate campaign contributions influence Bennet’s votes, and how Bennet’s time as a corporate raider raise serious questions about that age old question: Which side are you on?” Sirota concludes. “After this New York Times blockbuster, it sure doesn’t look like Bennet has a good answer to that query.”
(Your Spotted This Morning observer objects to the characterization of Bennet as a “corporate raider,” but that’s old news.)
To make his wisdom manifest, Sirota is leading his AM760 morning broadcast with guest Jeannie Kaplan (scheduled for 7:05, but they’ll have a podcast if you wish to catch it later), a member of the Denver Board of Education who is featured in the NYT piece. Though Kaplan supported the complex financing back in the day, she doesn’t anymore.
In short, it’s looking awfully like the stellar rise of Michael Bennet could be concluded by a party primary everyone expected him to win, as Felicia Sonmez writes in The Washington Post’s “The Fix” blog.
“I’ve never seen anything quite this disastrous,” said the source, who requested anonymity in order to speak candidly about the race. “They wasted money; they wasted time. (The Bennet campaign) let Andrew define this race.”
The operative added that while Romanoff is running as a crusader against PAC and lobbyist money, “the absurdity of it is that Andrew’s message is based on something that’s not accurate.”
“The only reason Andrew’s in this is frankly because of Bennet’s failures,” the operative said.
Democrats are attached at the hip to the muni-bond scandal, period!
(TNR)
Reporters Without Borders issued a tough communiqué “vigorously condemning the massive closure,” while the Committee to Protect Journalists called the government’s official justification for the move a “pretext to silence independent and critical voices.” And Amnesty International pronounced itself “extremely concerned at the deterioration in freedom of expression in Venezuela.” Similar shutdowns in past years badly damaged Chávez’s democratic credentials abroad, undermining his claim to be a brave reforming force within Latin America. So, the question is: Why does Chávez continue to tarnish his international reputation by forcibly silencing his critics?
The reason, quite simply, is that shutdowns work. They have forced Venezuela’s independent broadcast media into a defensive crouch, making their self-preservation contingent on their self-censorship.
Take the recent food crisis. Shortages of basic foodstuffs have been mounting in Venezuela over the last three years, with specific products disappearing from store shelves in succession. At times, chicken is impossible to find; weeks later, it may be milk that’s hard to get.
Against this backdrop, in late May, El Nacional, a Caracas daily, began investigating the discovery of food containers rotting away at Puerto Cabello,the nation’s main port. In all, some 75,000 tons of food are alleged to have gone to waste—food paid for with public money and delivered to government-run ports for distribution in government-run grocery outlets.
Clearly, Producción y Distribución Venezolana de Alimentos (PDVAL), the new state-owned food-importing conglomerate that Chávez had touted as an antidote to the iniquities of capitalist grocery shopping, is catastrophically mismanaging distribution. Cobbled together from the remnants of recently nationalized food companies, PDVAL’s government-appointed managers have neither the experience nor the training to keep 28 million people supplied with food. The results have been devastating: rising food prices, deepening shortages of key staples, and rows-upon-rows of rotting food containers sitting untouched as people find it increasingly hard to complete their weekly shopping.
On TV, the image of these containers would have been politically explosive. The story may even have had some traction on the radio. But the scandal is getting very little coverage through these popular outlets, and there’s been no public outcry to speak of.
Basically Chavez allows the electronic media nominal freedom with the understanding that they will be destroyed if they push stories harmful to him, in turn this leads to mass self-censorship.
SEOUL — South Korea kicked off one of its largest-ever naval exercises on Thursday in waters near a disputed western sea border with North Korea, despite the North’s threat to retaliate by attacking the South’s warships participating in the drill.
The exercises took place where a South Korean navy ship was blown in two in March, killing 46 sailors. South Korea blames North Korea for the sinking and demands an apology. The North denies involvement.
In an island near the site of the sinking of the warship Cheonan, South Korean marines fired their artillery in the first day of training aimed at searching and destroying enemy submarines, said officials the Office of Joint Chiefs of Staff in Seoul. Twenty-nine ships, such as submarines and destroyers, and 50 fighters, anti-submarine helicopters and other aircraft joined the operations.
Of course North Korea denies any involvement with the Cheonan.
(Economist) ISRAEL and Lebanon are both anxious to stop a lethal border incident on Tuesday August 3rd from mushrooming into a major confrontation at the height of the summer holiday season. Hence, say Israeli sources, both governments are cooperating with efforts by America and the UN to defuse tension along the border and contain Tuesday’s episode. An Israeli battalion commander was killed by Lebanese sniper fire in the incident and another officer seriously wounded. Two Lebanese soldiers and a journalist were killed by Israeli fire.Hizbullah, the radical Shiite movement in Lebanon, was not directly involved in the incident, the worst since the war between Israel and Hezbollah in 2006. But Hizbullah's leader, Sheikh Hassan Nasrallah, had warned in a speech on Tuesday night that his men would not stand by passively if the violence continued. Hizbullah had exercised “extreme restraint,” he said, in part because “we didn't want to be blamed for escalating tensions over the international tribunal on the murder of former Lebanese prime minister Rafik Hariri. We didn't want anyone to think we were motivated by Iranian or Syrian interests to spark conflict in the region.” A senior Israeli army source said that the incident, which he called “a planned provocation”, was indeed arranged by someone who did want to shift attention away from internal Lebanese tensions over the Hariri inquiry.
The same source insisted that all Israeli troops had remained on the Israeli side of the internationally agreed and demarcated border line throughout the incident. The Israeli security fence, equipped with sensors and cameras, runs some 20 yards inside the border line at the point of the incident. Israeli troops, aided by a truck with a crane mounted on it, were trimming a tree just over the fence—but inside the border—which obscured their line of vision. The source said Israel had informed UNIFIL, the UN force on the border, in advance of the “routine” pruning operation and UNIFIL had informed the Lebanese. The Israeli officers were shot, he said, while supervising the operation at a command post 200 yards away. The Israeli media called the shooting “an ambush”
(Christopher Hitchens) I was hugely impressed by the way that the boss scorned this overture. He essentially doubted the existence of al-Qaida, let alone reports of its attacks on the enemy to the north. "I don't know anything about Osama Bin Laden that doesn't come to me through the filter of the West and its propaganda." To this, Penn replied that surely Bin Laden had provided quite a number of his very own broadcasts and videos. I was again impressed by the way that Chávez rejected this proffered lucid-interval lifeline. All of this so-called evidence, too, was a mere product of imperialist television. After all, "there is film of the Americans landing on the moon," he scoffed. "Does that mean the moon shot really happened? In the film, the Yanqui flag is flying straight out. So, is there wind on the moon?" As Chávez beamed with triumph at this logic, an awkwardness descended on my comrades, and on the conversation.
CHICAGO, July 31 (UPI) -- Chicago is facing a budget shortfall of more than $654 million, but Mayor Richard M. Daley said he would not raise property taxes next year.Instead, officials will look at other options as a way to fund a proposed $6.3 billion city budget, the Chicago Tribune reported.
Pay hikes and increased healthcare costs contributed to a proposed budget increase of $207 million over the current year, the newspaper said.City officials are looking at several proposals to generate additional funding, including a plan to lease Midway Airport and tapping economic development funds that exist in special taxing districts.
Of course no one will tops the efforts of the worlds most famous Chicagoan.
(Bloomberg) As President Barack Obama thrashes Republicans for allowing “special interest takeovers of our elections,” his Democratic Party is benefiting from millions of campaign dollars brought in by lobbyists.
Lobbyists raised at least $1.5 million in the first six months of the year to help elect Democrats to the House, according to a report from the Democratic Congressional Campaign Committee. That was the most of any congressional fundraising committee and almost three times as much as the House Republican campaign committee took in from lobbyists.
While Obama criticizes the influence held by lobbyists in Washington, candidates rely on them to help fund increasingly expensive campaigns. Reports released yesterday show lobbyists also personally contributed to Democrats including House Speaker Nancy Pelosi of California and Senate Majority Leader Harry Reid of Nevada.
Fundraising helps lobbyists get in “on the main floor with the Democratic members of Congress as well as the White House,” said Craig Holman, who handles campaign finance issues for Public Citizen, a Washington advocacy group. “When it comes to negotiating legislation, they get to be key players.”
