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Amy Stroupe: BB&T Whistleblower ‘Vindicated’ By Court Ruling, To Be Rehired

April 2, 2010

RALEIGH, N.C. — BB&T Corp. must rehire a former company investigator who says she was fired after exposing a $100 million North Carolina development scam, an administrative law judge said in a ruling released Friday. Judge Jeffrey Tureck said in his decision that Amy Stroupe should be reinstated to her position with back pay because of protection afforded by whistleblower laws. Stroupe said that she hopes to return to the job. “I feel so happy and vindicated,” she said. “This has been an almost three-year ordeal. It’s been tough. I feel so happy that the judge was able to see the truth in all this.” Cynthia Williams, a BB&T spokeswoman, said the company believes the ruling is erroneous and does not accurately reflect what occurred. “BB&T adamantly denies doing anything wrong and will be filing an appeal in this matter,” she said. Stroupe says she contacted the FBI in 2007 about a development scam in the mountains of North Carolina because the Winston-Salem-based bank refused to take action on it. Investigators now say the Village of Penland development was a Ponzi scheme, and Tureck said in his ruling that the bank was “aiding” the fraud by making loans to investors in the community. Five people have pleaded guilty to federal criminal charges in connection with the case. The project began to unravel when a BB&T official in the Shelby office became suspicious that an employee who recently transferred to the branch was making too many Penland loans. He asked Stroupe to look into it. But after Stroupe discovered the scheme, she said company officials didn’t want to hear about it. Several banks helped finance the project, and BB&T lent more than $20 million to investors. “They want to ignore the bad and just look at the good,” Stroupe said. “I felt like I was talking to a brick wall. I was jumping up and down and screaming, trying to get somebody’s attention, and I felt like I was being ignored.” Stroupe filed a whistleblower lawsuit after being fired over what the judge deemed “one or two essentially minor issues.” “Accordingly, I find that BB&T has failed to support by clear and convincing evidence that it would have taken the same adverse employment action absent Stroupe’s protected activity,” Tureck wrote. ___ Associated Press Writer Mitch Weiss contributed to this report from Charlotte.

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Lloyd Chapman: Federal Investigation Finds Corporate Giants Received Billions in Small Business Funds

March 24, 2010

The Small Business Administration Office of Inspector General (SBA IG) has released the latest in a series of investigations, which found billions in federal small business contracts have been diverted to corporate giants. The SBA IG investigation found that the SBA itself awarded federal small business contracts to large businesses. Report 10-08 uncovered that during fiscal year (FY) 2008 the SBA awarded more than 30 percent of its contracts to large businesses, and 92 percent of the contract actions contained blatant errors. Additionally, the report found that during FY 2009 the percentage of misleading data jumped to a record 97 percent. Since 2003, more than a dozen federal investigations have found the SBA played a key role in the diversion of billions of dollars a month in federal small business contracts to large businesses around the world. In

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Mexico Tourism Drops as Drug Gangs, Economy Rain on Spring Breakers’ Party

March 18, 2010

By Thomas Black and Andres R. Martinez March 18 (Bloomberg) — Mexican tourism revenue may decline for a second year as violent clashes between drug gangs and a weak U.S. job market threaten to spoil its spring break party. Cancun and Acapulco hotels are seeing a smaller-than-normal influx of college-age revelers this month after recent reports of bloodshed, tour operators there said. Acapulco’s tourism marketing agency predicts the number of spring breakers will drop 30 percent this year to 17,500, said Piquis Rochin, director of international promotions for the organization. “The economic crisis is still hurting us a little bit, and we’ve been affected by so much news about violence in Mexico,” Rochin said in a telephone interview from Acapulco. Mexico’s push to draw tourists, the third-biggest source of dollar inflows after oil and remittances , is getting harder as violence connected to drug trafficking persists. Mexico’s international tourism fell for the first time in a decade last year amid a weak economy and a swine-flu scare, bringing in $11.3 billion compared with $13.3 billion in 2008. In Acapulco, where Viacom Inc. ’s MTV channel is hosting an event this week, 32 people were killed during the three days ended March 15. The slaying of three people tied to the U.S. consulate in Ciudad Juarez last week drew condemnation from President Barack Obama . “Whenever the U.S. government makes a statement it somehow affects us because we are a Mexico destination,” said Marina Colunga, public relations director for JW Marriott in Cancun . Violence may cut economic growth by 1 percentage point by reducing tourism and investment, said Gabriel Casillas , chief Mexico economist with JPMorgan Chase & Co. in Mexico City. Last year, tourists who traveled beyond the border region spent an average of $732 per visit, according to the central bank. Airport Operators Shares in Mexican airport operators Grupo Aeroportuario del Pacifico SAB, Grupo Aeroportuario del Sureste SAB and Grupo Aeroportuario del Centro Norte SAB dropped when trading resumed after the Juarez killings as investors bet the news would discourage travel. The State Department reported at least 77 homicides of U.S. citizens in Mexico last year. The agency’s online database doesn’t specify the circumstances of the killings or say whether the victims were involved in the drug trade. The University of California, Los Angeles urged students this week to avoid travel to border cities. The Texas Department of Public Safety issued a similar warning March 4. Some University of Arkansas students canceled their trips to Mexico after “their parents told them not to go,” said Steve Voorhies, a university spokesman. State Department Warning The State Department advises U.S. citizens to avoid unnecessary travel to three northern Mexico states and says visitors must be cautious in border cities. While well-known tourist areas generally are safe, the violence in Mexico has increased, according to a March 14 advisory . “Cartels and associated criminal elements have retaliated violently against individuals who speak out against them or whom they otherwise view as a threat,” the advisory said. Chris Lang, a third-grade teacher in Los Angeles, said he is considering backing out of a planned trip to Guadalajara later this year. “I just read the U.S. State Department Web site, which gave a crime breakdown of Mexico,” he said by e-mail. “I’m worried about the situation there.” Death Rate Drug-gang killings have left 2,049 dead this year, according to El Universal newspaper , a rate that would top last year’s total of more than 6,000. At least 110 people were killed last weekend, according to Reforma newspaper. In Juarez, across the Rio Grande from El Paso, Texas, the March 13 shooting deaths of a U.S. consulate employee, Lesley Enriquez, her husband, Arthur Redelfs, and the husband of a Mexican employee at the consulate spurred headlines worldwide. Gunmen chased two vehicles from the birthday party of a consulate employee’s child and opened fire, killing the three and wounding at least two children. The FBI said the attackers may have hit the wrong party and probably weren’t targeting Americans, the Associated Press reported. Enriquez, 35, was four months pregnant when she died, CNN reported. Calderon’s press office didn’t immediately return calls for comment. Speaking in Ciudad Juarez on March 16, Calderon said both the U.S. and Mexico are responsible for drug violence. “This is a bi-national problem, with a common origin, which is drug consumption in the United States, and the criminal element associated with it,” he said. Drop in Visitors Spring breakers are planning trips to Panama City, Florida, and other U.S. beaches as they opt for cheaper destinations amid a weak U.S. job market, said Christina Ferraro, an event organizer for travel service StudentCity . In Acapulco, 190 miles south of Mexico City on the Pacific coast, the number of spring breakers handled by StudentCity dropped 45 percent from last year. Cancun has fared better, with spring breakers traveling with StudentCity down 30 percent from a year ago, Ferraro said. The U.S. unemployment rate of 9.7 percent is weighing more on tourism than the violence is, Ferraro said. Most of the violence “is definitely outside the tourist area,” Ferraro said. “The war is not with tourists or Americans.” Tourism is likely to rise this year even after getting off to a slow start because last year’s downturn was so severe, Casillas said. International tourism hasn’t dropped in two consecutive years since Mexico began keeping records in 1980. Colunga, the public relations director for Marriott in Cancun, said the hotel is attracting travelers with prices as much as 20 percent below where they were before the swine-flu scare last year. “At the end of year we hope to be back on track,” she said. “Cancun is located in a very separate area from these specific cities where violence is giving the Mexican government a hard time.” To contact the reporter on this story: Thomas Black in Monterrey at tblack@bloomberg.net ; Andres R. Martinez in Mexico City at amartinez28@bloomberg.net

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Lloyd Chapman: Obama Administration Destroys Incriminating Contracting Data

March 15, 2010

In March of 2005, the Small Business Administration (SBA) Office of Inspector General found large businesses had fraudulently represented themselves as small businesses to illegally receive federal small business contracts. Report 5-16, stated large businesses had committed fraud by making “false certifications,” and “improper certifications.” ( http://www.asbl.com/documents/05-16.pdf ) On Friday, March 12, the General Services Administration (GSA) destroyed all of the information that had been used in that investigation. Since 2003, over a dozen federal investigations have found that Fortune 500 firms have received federal small business contracts. In 2004, the SBA Office of Advocacy found large businesses had received federal small business contracts fraudulently through what they referred to as “vendor deception.” As a result of the deletion of the data it will be significantly more difficult, if not impossible, for federal investigators to conduct investigations into fraud and abuse in federal small business contracting programs. Despite public outcry over the proposed changes, the GSA has eliminated the data under the guise of upgrading the system and making it easier to search. The American Small Business League (ASBL) maintains that the GSA eliminated the data to destroy evidence, which clearly shows that some of the nation’s largest contractors, primarily in the defense and aerospace industry, have committed felony federal contracting fraud. Section 16(d) of the Small Business Act prescribes a penalty of up to 10 years in prison, a $500,000 fine per occurrence and debarment from federal contracting programs for such abuses. In February of 2008, the ASBL sued the SBA for the release of the names of Fortune 500 firms and other large businesses that had received billions of dollars in federal small business contracts. The SBA withheld the information until directed to release it by United States District Judge Marilyn H. Patel. In the court’s ruling Patel stated, “The court finds it curious the SBA’s argument that it does not ‘control’ the very information it needs to carry out its duties and functions.” ( www.asbl.com/documents/26-2.pdf ) At some point in the near future it is going to be clear that the GSA destroyed evidence of hundreds of billions of dollars in fraud. I think Congress and the FBI need to investigate the GSA’s role in this matter. When it does come out that evidence of fraud was destroyed, the GSA officials responsible need to be prosecuted.

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Terror Suspect Najibullah Zazi Said to Plan Guilty Plea in New York Plot

February 22, 2010

By Patricia Hurtado Feb. 17 (Bloomberg) — Mohammed Wali Zazi , the father of Najibullah Zazi , charged with plotting to bomb New York City landmarks, will be released from jail in two days if he posts a $50,000 bond, a federal magistrate judge said. The elder Zazi, who was arrested in Denver in September along with his son, was indicted Feb. 1 for conspiring to obstruct a federal grand jury investigation into terrorism. Prosecutors said the father destroyed or hid eyeglasses, masks, liquid chemicals and containers sought as part of a probe into the son’s alleged scheme. “He intends to fight the case and we ask the public to withhold judgment until the facts are revealed,” his lawyer, Deborah Colson, said after court today. U.S. Magistrate Judge Steven Gold in Brooklyn, New York, said Zazi could be released Feb. 19 after his wife and daughter sign the bond and post $20,000 in cash. When he’s released, Zazi must wear an electronic monitoring bracelet on his ankle at all times, Gold said. He’s allowed to leave his home in Aurora, Colorado, for work or religious observances, or to visit his lawyer or doctor. Otherwise, the magistrate said, the only place he’s allowed to travel outside Colorado is the Eastern District of New York, which includes the New York City boroughs of Queens, Brooklyn and Staten Island, as well as Long Island. Gold also prohibited Zazi from having contact with his son or with three other people who weren’t identified in court. Cash, Gold Seized FBI agents had seized $14,500 in cash and gold during a search of the elder Zazi’s home, Assistant U.S. Attorney David Bitkower said today in court. The money will be returned to him, Bitkower told Gold. Last week, prosecutors described Mohammed Zazi as a danger to the community when he was arraigned in court and pleaded not guilty. Today they consented to his release and declined to comment when asked about it after court. The defendant was directed to return to court March 2 for an appearance before U.S. District Judge Raymond Dearie . Mohammed Zazi faces as long as 20 years in prison if convicted, according to the office of Brooklyn U.S. Attorney Benton Campbell . The younger Zazi, an Afghan immigrant who once lived in Queens, New York, and worked as an airport shuttle-van driver in Denver until his arrest, was charged last year with training at an al-Qaeda terrorist camp and conspiring to detonate an improvised explosive device in New York around the anniversary of the Sept. 11, 2001, terrorist attacks. He, too, has pleaded not guilty. Najibullah Zazi and three unidentified associates bought components for explosive devices from July to September, the U.S. said in a conspiracy indictment unsealed on Sept. 24. The cases are U.S. v. Najibullah Zazi, 09-CR-663; U.S. v. Mohammed Wali Zazi, 10-CR-0060, U.S. District Court, Eastern District of New York (Brooklyn). To contact the reporter on this story: Patricia Hurtado in federal court in Brooklyn, New York, at pathurtado@bloomberg.net .

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Paul Helmke: Guns And Starbucks: Espresso Shots, Not Gunshots

February 8, 2010

What would your reaction be if you and your kids walked into the local Starbucks and, while contemplating the choice between a latte and a mocha cappuccino, you noticed several fellow customers had semi-automatic pistols and ammunition magazines hanging from their hips ? This scenario has become more than a flight of imagination. In several communities in California, and elsewhere, it has become reality. Welcome to the ” open carry ” movement, an effort by “gun rights” extremists to foist their interpretation of the Second Amendment on the rest of us by openly carrying handguns in public places. While virtually all states have at least some minimal restrictions on the carrying of concealed weapons, few states do anything to regulate the “open carry” of firearms. Particularly in the Bay Area in Northern California, “open carry” adherents have been gathering in Starbucks and other coffee shops and restaurants — their semi-automatic pistols and revolvers in plain view — apparently to make an ideological statement. The sight of such gun-toters in Starbucks reminds us of the incidents last summer, when anti-Obama protestors appeared at political events and “town hall meetings” with handguns and assault rifles openly strapped to their bodies — including events attended by President Obama himself . The “open carry” folks view this as “normalizing” their self-defined “right” to carry guns with them at all times wherever they please, regardless of its impact on public safety. But what about the rights of everyone else who wishes to be free from lethal weapons in public places, except for trained law enforcement? Surveys show that the presence of more guns in a community does not make people safer, or feel safer; indeed, it has the opposite effect. Studies show that the more guns there are, the more gun violence there is in that location. In addition, 80 percent of those who don’t own guns say they would feel less safe if more people in their community acquired guns; only eight percent would feel safer. Even among gun owners, roughly equal proportions would feel less safe if more people had guns versus those who would feel more safe. Take the reaction of one coffee shop customer in San Ramon, California when faced with a group of pistol packers: “I’m scared. I’m getting out of here. They say they want to make a statement. What’s wrong with a T-shirt?” The “open carry” gatherings provoked an immediate reaction from Californians who were appalled that coffee shops and restaurants would allow guns on their premises. At least two national chains have responded responsibly. For example, Peet’s Tea & Coffee stated that its policy “is not to allow customers carrying firearms in our stores” unless they are uniformed law enforcement officers. It also indicated that it would post a notification of that policy in all its stores and would call the local police for assistance should a customer display a firearm in the future. After being alerted by local chapters of the Brady Campaign about a scheduled “open carry” meeting at one its Northern California stores, California Pizza Kitchen issued a statement that it “does not allow guests other than uniformed officers to display firearms in our restaurants” because of its concern “that the open display of firearms would be particularly disturbing to children and their parents.” But now we come to Starbucks. When asked about the company’s policy on the “open carry” of firearms in its stores, its Customer Relations Department responded to the Brady Campaign’s California chapters that “Starbucks does not have a corporate policy regarding customers and weapons; we defer to federal, state and local laws and regulations regarding this issue.” Here’s the problem with that answer: generally speaking – and certainly in California – businesses have the right to bar guns on their premises. It is their property and, just as they can prohibit entry by people with bare feet, they can do the same for people with guns. Despite its response, Starbucks clearly does have a policy and it is one that should be deeply disturbing to the vast majority of its customers. Starbucks has apparently chosen to allow civilians to carry semi-automatic pistols and possibly even assault weapons into its stores. Such a policy is disturbing to law enforcement officials as well as Starbucks patrons. As a San Mateo County Sheriff’s Lieutenant put it, “Open carry advocates create a potentially very dangerous situation,” because when police respond to a “man with a gun” call, they have no idea what the intentions of the gun carrier are and “the result could be deadly.” If a mistake in judgment or perception results in a shooting at a Starbucks, will the company still have no “corporate policy regarding customers and weapons”? This is no idle consideration. Just this past September, at a picnic hosted by “open carry” activists at a Michigan state park, a gun activist was charged with reckless use of a firearm after he unintentionally fired his semi-automatic handgun in a parking lot. Then there was the California “open carry” activist in December who was arrested for carrying his .357 magnum revolver near a school , complaining, “I just can’t see what I did wrong.” Even more disturbing was the man – ” of high interest to the FBI because of his alignment with violent demonstrators at abortion clinics ” – who was arrested for possession of a semi-automatic handgun which he was carrying openly outside a North Carolina abortion clinic last October. As these and other incidents show, the “open carry” movement clearly has implications beyond Starbucks. It is part of a broader campaign, led by the National Rifle Association, to force guns into every corner of American society by “normalizing” the carrying of guns in public places, openly and concealed. The gun pushers want an America where there is nowhere that you and your family can go to be free from guns. As just one example, the same lawyer who won the U.S. Supreme Court case two years ago which declared a Second Amendment right to have a gun in your home for self defense, has filed a new lawsuit seeking to force localities to allow civilians to carry guns on the streets. The “open” carrying of guns is just the visible tip of the “guns everywhere” iceberg. The gun lobby’s clout in state legislatures has forced consideration of dangerous proposals to allow people to legally carry concealed weapons into bars , churches , workplace parking lots , airports , parks , college campuses and elsewhere. While most states do not require any permit, license or training of any kind to carry a semi-automatic pistol openly, the NRA assures us that those who have permits to carry concealed weapons are all ” law-abiding citizens ” whose gun-toting behavior protects the rest of us. Since May, 2007, however, these “law-abiding citizens” have killed at least 117 people , including nine law enforcement officers. During that same period, they have committed eleven mass shootings. So, Starbucks, what will it be? Like Peets Tea & Coffee, will you do the socially responsible thing and stand up for the rights of families and children to be free from guns when they visit your coffee shops? Or will you take the chance that there will be more than just shots of espresso being served up in your stores? If you think Starbucks is wrong here, sign our petition today: http://act.credoaction.com/campaign/starbucks_guns/?rc=brady Sign our petition to tell Starbucks to keep guns out of its stores: http://act.credoaction.com/campaign/starbucks_guns/?rc=brady

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Underwear Bomber Got Worst Treatment Law Allows: Ann Woolner

February 4, 2010

Commentary by Ann Woolner Feb. 5 (Bloomberg) — For those who think it an outrage that Federal Bureau of Investigation agents Mirandized the Christmas Day underwear bomber 50 minutes into his chat with agents, I have two words for you. Richard Reid . With a shoe containing partly burned explosives, Reid had been removed from a flight from Paris that landed at Boston’s Logan airport for maybe five minutes when agents advised him he had the right to remain silent. The right stems from a 1966 U.S. Supreme Court ruling that said under the Fifth Amendment, people can’t be coerced into confessions. The Reid case was little more than three months after the terrorist attacks of Sept. 11. No one can accuse officials then of deluding themselves with a Sept. 10 mentality. And for anyone who considers it weak-kneed to prosecute Umar Farouk Abdulmutallab as a common criminal rather declare him an enemy combatant and haul him to a military tribunal, here are two more words: Bush, Cheney. The previous administration always prosecuted suspected terrorists captured on U.S. soil in federal district court. Some 300 people have been tried there on terrorism-related charges, convicted and sentenced to spend a chunk of their lives in U.S. prisons. That is far more efficient than military tribunals, which have handled only three cases to conclusion in the past nine years, all of them involving people picked up overseas. As for advising the suspect of his right to clam up, longstanding FBI rules require Miranda warnings whenever a suspected terrorist is taken into custody in the U.S., according to Attorney General Eric Holder . Long-standing means prior to the Obama administration. Inherently Correct I mention this not because I consider the Bush-Cheney policy inherently correct. But it underscores how transparently partisan, devoid of substance and fear-baiting Republicans are when they claim that the handling of the Christmas Day episode proves the Obama administration is dangerously naive about terrorism. No one complained about Reid being handled like a shoplifter. You would never know it now to hear the rhetoric, but the previous administration demonstrated repeatedly that if you want to punish terrorists with hefty sentences and do it relatively swiftly, U.S. district court is where they need to go, not a military tribunal. However counterintuitive, the point is proven by comparing results. Read on for that. And just because a terrorist is told he has the right to remain silent, it doesn’t mean he will. Like several other accused terrorists who were Mirandized, Abdulmutallab has been talking his head off. Real Bungling There is plenty of real bungling when it comes to Abdulmutallab, to be sure. The terrorist-watch system proved ill-equipped in basic ways. And don’t get me started about the government’s failure to take seriously his father’s warnings. Yes, it would have been nice if Holder had consulted National Intelligence Director Dennis Blair about how he was handling Abdulmutallab. But you have to wonder about an intelligence chief who told Congress that he would have called in the High-Value Detainee Interrogation Group to do the questioning. That team, whose job it is to question terrorists abroad, not at home, hadn’t been set up by Christmas Day, anyway. Intelligence Community Holder says the FBI “informed its partners in the intelligence community,” and none “objected” to handling Abdulmutallab as a criminal. The same thing happened in subsequent talks with Obama and “senior members” of his national security team, Holder said in a letter to Republican senators. Bush administration protocol makes the attorney general the decider, by the way. I understand why lots of Americans find it incomprehensible that cherished constitutional rights are going to people out to destroy us, bent on murdering as many innocents as possible. It seems crazy to treat them as criminals and tell them they can keep quiet. An exception to the rule allows agents to forgo the Miranda warning if they have reason to believe the suspect knows about some attack that is about to occur. It took the FBI 50 minutes to determine that there was no such ticking bomb in Abdulmutallab’s case. Having No Choice As for handling people captured within our borders, the government has no choice but to enforce their rights. When the Bush administration tried to deny Jose Padilla counsel, a federal judge in New York said no. That was Michael Mukasey , who went on to become Bush’s last attorney general. Military commissions haven’t only proven themselves to be slow because of court challenges that prompted revisions; they also haven’t been especially tough. The three convictions from tribunals brought sentences fairly light compared with federal court punishments, according to an analysis by the Center for American Progress. And the widely held belief that “lawyering up” is synonymous with shutting up just isn’t true. Sometimes the threat of prosecution, complete with the Miranda warning, acts as leverage to persuade the suspect to spill his guts. Abdulmutallab’s chattiness post-Miranda points up that little-appreciated fact about the criminal justice system. Bringing his family over helped persuade him, it’s true. So, surely, did the weight of evidence against him. He was caught, after all, with a wad of deadly powder packed into his underwear which he tried to ignite, and we have witnesses to say so. Abdulmutallab failed at downing the plane. But he succeeded at igniting a partisan firestorm in Washington. But then, how hard is that? ( Ann Woolner is a Bloomberg News columnist. The opinions expressed are her own.) Click on “Send Comment” in sidebar display to send a letter to the editor. To contact the writer of this column: Ann Woolner in Atlanta at awoolner@bloomberg.net .

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Al-Qaeda Is Likely to Attempt U.S. Attack Within Six Months, Senators Told

February 2, 2010

By Chris Dolmetsch Feb. 2 (Bloomberg) — Al-Qaeda is likely to attempt a terrorist attack in the U.S. within the next three to six months, U.S. intelligence officials told a Senate panel in Washington. National Intelligence Director Dennis Blair told the Senate Intelligence Committee that an attempted attack is “certain” within that time frame. Blair was responding to a question from the panel’s chairwoman, California Democratic Senator Dianne Feinstein , during an annual assessment of threats to the U.S. The other four officials to testify before the panel today agreed with Blair when questioned by Feinstein: Central Intelligence Agency Director Leon Panetta , FBI Director Robert S. Mueller , Lieutenant General Ronald L. Burgess, director of the Defense Intelligence Agency, and John Dinger, acting assistant secretary of state for the Bureau of Intelligence and Research. “I think that tells us something very clearly,” Feinstein said. Al-Qaeda is changing its methods to avoid detection as it becomes more difficult for the group to conduct large attacks, Panetta told the panel. The terrorist group is relying more on homegrown terrorists to stage smaller plots in their own countries and trying to inspire so-called “lone wolves,” he said. “My greatest concern and what keeps me awake at night is that al-Qaeda and its terrorist allies and affiliates could very well attack the United States in our homeland,” Panetta testified. To contact the reporter on this story: Chris Dolmetsch in New York at cdolmetsch@bloomberg.net

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U.S. Will Keep Its Civilian Teams in Afghanistan Long After Troops Leave

January 21, 2010

By Indira A.R. Lakshmanan Jan. 22 (Bloomberg) — President Barack Obama ’s military surge in Afghanistan will be matched by a commitment to keep a large number of U.S. government employees there well after troops leave, according to a new State Department report. “While our combat mission in Afghanistan is not open-ended, we will remain politically, diplomatically and economically engaged in Afghanistan and Pakistan for the long-term to protect our enduring interests in the region,” according to the report released yesterday by Secretary of State Hillary Clinton and the office of Richard Holbrooke , the U.S. special representative for Afghanistan and Pakistan. Afghan President Hamid Karzai says he wants to persuade Taliban insurgents to stop fighting by offering money and jobs through a program funded by the international community. The plan will be discussed when the U.K. hosts a conference Jan. 28 on improving Afghanistan’s economy, institutions and security forces, Karzai told the British Broadcasting Corp. yesterday. The State Department’s 30-page “Afghanistan and Pakistan Stabilization Strategy” says the U.S. will focus on rebuilding Afghanistan’s agricultural capacity, countering extremist propaganda, improving governance and reintegrating militants into society. It comes after Obama in early December announced he would send 30,000 more U.S. troops to Afghanistan this year, with a target date to start a withdrawal in mid-2011. Civilian Force The report calls for a 20 percent to 30 percent boost in staffing beyond the 1,000 U.S. civilians now assigned to work in Afghan ministries and the U.S. mission. The U.S. civilian force includes diplomats, development and agriculture specialists, and agents for the FBI, the Drug Enforcement Agency, Treasury and Homeland Security. “Our civilian effort must be sustained beyond our combat mission so that Afghanistan does not become a failed state and safe haven for al-Qaeda,” according to the report. “Our focus is building the capacity of Afghan institutions to withstand and diminish the threat posed by extremism, and to deliver high-impact economic assistance, especially in the agricultural sector – to create jobs, reduce the funding that the Taliban receives from poppy cultivation, and draw insurgents off of the battlefield,” it said. Also yesterday, U.K. Foreign Secretary David Miliband said he expects more than 60 nations to set clear priorities and make generous pledges at next week’s London conference. Economic Development Miliband, testifying at a hearing of the U.S. Senate Foreign Relations Committee in Washington, said the priorities include economic development, reconciliation of militants and a gradual transfer of security responsibilities to Afghan forces. “The definition of success is clear: It is not to kill or capture every member of the Taliban. It is to ensure the government of Afghanistan is able to secure its territory against a weakened insurgency, and deny al-Qaeda the space to operate,” Miliband told the panel. Testifying before the same panel, Holbrooke said he was heartened on his latest trip to Kabul to see the Afghan capital “in a better position than it’s been at any time” since he began his current job a year ago. Obama on Dec. 1 said he would increase U.S. troop levels in Afghanistan to around 100,000 in an effort to beat back a persistent extremist threat. He said a troop withdrawal in mid- 2011 would depend on ground conditions. The administration has said it will need about $30 billion to finance 30,000 additional troops for Afghanistan. To contact the reporter on this story: Indira Lakshmanan in Washington at ilakshmanan@bloomberg.net

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Madoff’s Minions: An Illustrated Guide

January 20, 2010

Bernie Madoff swore he’d acted alone when he pleaded guilty to his $65 billion Ponzi scheme. It was a preposterous claim, so why, more than a year later, isn’t more of his inner circle behind bars? Neither the FBI nor the US Attorney’s Office is talking. But for some of these Madoff enablers, the vacation on the investors’ dime may not last forever.

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Financial Crisis Commission Testimony, Day 2: Read The Latest Updates

January 14, 2010

FINANCIAL CRISIS INQUIRY COMMISSION UPDATES: The Financial Crisis Inquiry Commission held its second day of hearings in Washington today. (Watch the hearing live here .) Today’s witnesses include Attorney General Eric H. Holder, Jr., Assistant AG Lanny A. Breuer, FDIC Chair Sheila C. Bair, SEC Chair Mary L. Schapiro and several state attorneys general and officials. Click here to read HuffPost coverage of yesterday’s hearing featuring Goldman Sachs CEO Lloyd Blankfein, Bank Of America CEO Brian Moynihan, Morgan Stanley Chairman John Mack, JPMorgan Chase CEO Jamie Dimon and several banking experts. UPDATE 12:20 P.M. – SEC CHIEF: THE SEVEN FACTORS THAT CREATED THE FINANCIAL CRISIS: In her prepared remarks today, SEC chair Mary Schapiro weighed in on what she thinks caused the financial crisis. Calling these “interconnected and mutually reinforcing causes,” Schapiro cited the following: The rise of mortgage securitization (a process originally viewed as a risk reduction mechanism) and its unintended facilitation of weaker underwriting standards by originators and excessive reliance on credit ratings by investors; A wide-spread view that markets were almost always self-correcting and an inadequate appreciation of the risks of deregulation that, in some areas, resulted in weaker standards and regulatory gaps; The proliferation of complex financial products, including derivatives, with illiquidity and other risk characteristics that were not fully transparent or understood Perverse incentives and asymmetric compensation arrangements that encouraged significant risk-taking; Insufficient risk management and risk oversight by companies involved in marketing and purchasing complex financial products; and A siloed financial regulatory framework that lacked the ability to monitor and reduce risks flowing across regulated entities and markets. Read Schapiro’s full testimony here . UPDATE 11:47 A.M. – FDIC CHAIR ATTACKS WALL ST. PAY One of country’s top financial regulators drew a direct link Thursday between the lack of adequate consumer protection and pay on Wall Street to foreclosures on Main Street. Compensation was for “short-term results” which created “perverse incentives for risky behavior,” said Sheila Bair, chair of the Federal Deposit Insurance Corporation. “The crisis has shown that most financial-institution compensation systems were not properly linked to risk management,” Bair said in written remarks before the panel created to investigate the roots of the financial crisis, the Financial Crisis Inquiry Commission. “Formula-driven compensation allows high short-term profits to be translated into generous bonus payments, without regard to any longer-term risks.” Which is interesting, Bair noted, given the fact that many investments and financial instruments are actually structured to be held for the long term. “Many derivative products are long-dated, while employees’ compensation was weighted toward near-term results,” she said. “These short-term incentives magnified risk-taking.” The mortgage market also fell victim to this short-termism. “The standard compensation practice of mortgage brokers and bankers was based on the volume of loans originated rather than the performance and quality of the loans made,” Bair said in her written remarks. “From the underwriters’ perspective, it was not important that consumers be able to pay their mortgages when interest rates reset, because it was assumed the loans would be refinanced, generating more profit by ensuring a steady stream of customers.” Here’s more from Bair: “The long-tail risk posed by these products did not affect mortgage brokers and bankers incentives because these mortgages were sold and securitized,” she said. “The lack of a downside in these compensation schemes ultimately hurt both those who could not pay their risky mortgages and the economy.” That, combined with the lack of adequate consumer protection, Bair said, has had “toxic” effects. She told the panel that foreclosures are occurring at a rate of nearly three million a year, and that 15 million homeowners owe more on their mortgage than the house is worth. UPDATE 9:47 A.M.: The head of the panel didn’t waste any time asking the nation’s top law enforcement official about a 2004 FBI statement that the mortgage fraud “epidemic” could be contained. Phil Angelides, the chair of the Financial Crisis Inquiry Commission, asked Attorney General Eric Holder whether the Justice Department had conducted any reviews of the agency’s performance since the FBI told Congress in 2004 that the nation was suffering from an “epidemic” of mortgage fraud. Back then, the FBI warned it could lead to another savings-and-loan debacle, but was confident it could contain the problem from mushrooming. Holder said he was “not familiar myself with that statement.” But, he added, “we will review what Justice has done since that time.” The S&L crisis in the late 1980s eventually cost about $150 billion. The current crisis is expected to far exceed that. UPDATE 9:30 A.M.: The Federal Bureau of Investigation is investigating more than 2,800 cases of mortgage fraud, Attorney General Eric Holder told a bipartisan panel investigating the roots of the financial crisis. It’s a 400 percent increase from just five years ago, Holder said. In 2004, the FBI warned of an “epidemic” of mortgage fraud . In fact, the agency said it could contain it from mushrooming .

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Fighter Jets Escort California-Bound AirTran Plane Over Unruly Passenger

January 8, 2010

By Mary Jane Credeur Jan. 8 (Bloomberg) — Two U.S. F-16 fighter jets escorted an AirTran Holdings Inc. plane that was diverted after a passenger verbally abused a flight attendant and locked himself in the lavatory, the carrier and the military said. The Federal Bureau of Investigation said the man was being interviewed, without identifying him. Flight 39 landed in Colorado Springs, Colorado, at about noon local time while en route to San Francisco from Atlanta, said Tad Hutcheson , an AirTran spokesman. The captain of the Boeing Co. 737 jet chose to divert and “work the problem on the ground rather than in the air,” Hutcheson said. No injuries were reported on the plane, which was carrying 132 passengers and 5 crew members. The North American Aerospace Defense Command launched two F-16 jets after it “became aware of a disturbance on the plane,” said John Cornelio, a spokesman. Hutcheson said the attendant reported that “a male passenger was disruptive and failing to obey instructions, he was behaving as though he was intoxicated.” The plane was checked with police dogs and was slated to depart for San Francisco, he said. No determination has been immediately made about whether to file charges, said Kathleen Wright, a spokeswoman for the FBI in Denver. The person was “disruptive” and may have “placed hands on one of the flight attendants,” Wright said. AirTran, which is based in Orlando, Florida, is the ninth- largest U.S. carrier and has its biggest hub in Atlanta. Missile-equipped F-16s were on “hot alert” in October when Flight 188 by Delta Air Lines Inc.’s Northwest unit overshot the Minneapolis airport after the pilots became distracted while using their laptop computers to discuss crew scheduling procedures. To contact the reporter on this story: Mary Jane Credeur in Atlanta at mcredeur@bloomberg.net

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Abdulmutallab Pleads Not Guilty to Criminal Charges in Christmas Bomb Plot

January 8, 2010

By Steven Raphael and Andrew M. Harris Jan. 8 (Bloomberg) — Umar Farouk Abdulmutallab , the man accused of trying to destroy a Northwest Airlines plane carrying 290 people on Christmas Day, pleaded not guilty to U.S. criminal charges. The 23-year-old Nigerian entered his plea today before U.S. Magistrate Judge Mark Randon in Detroit. As the flight approached the city’s airport, Abdulmutallab ignited his pants leg and a wall of the plane while trying to detonate a mixture of explosives he smuggled aboard, according to prosecutors. In a hearing that took less than five minutes, Abdulmutallab, wearing a white T-shirt, beige pants and black- and-white shoes, told the judge he understood the charges against him. The U.S. intelligence community’s failure to interdict the plot prompted President Barack Obama yesterday to order federal agencies to set clearer lines of responsibility for following up on leads on terrorist threats, to streamline criteria for adding names to watch lists, and to tighten airport security measures. After Abdulmutallab tried to trigger an explosion on Flight 253 from Amsterdam, passengers and crew restrained him until the aircraft landed, prosecutors said. Indicted on Jan. 6, Abdulmutallab is accused of attempting to use a weapon of mass destruction, attempted murder, willfully trying to wreck an aircraft, placing a destructive device upon an aircraft and faces separate counts of possessing and using a firearm in furtherance of a crime of violence. Possible Life Term “The charges that Umar Farouk Abdulmutallab faces could imprison him for life,” U.S. Attorney General Eric Holder said in a Jan. 6 statement announcing the indictment. The U.S. Central Intelligence Agency said it learned about Abdulmutallab in November when his father, the former chairman of First Bank of Nigeria Plc , went to the U.S. Embassy in Nigeria to seek help in finding him. Abdulmutallab was on the government’s Terrorist Identities Datamart Environment list, which names about 550,000 individuals with possible terrorist links. He hadn’t been moved from the so- called TIDE database to a terrorism watch list, or to the “selectee” list of about 14,000 names that triggers additional screening at airports, or to the “No Fly” list of about 4,000 names, according to Janet Napolitano , the U.S. Secretary of Homeland Security. U.S. lawmakers questioned why Abdulmutallab’s visa allowing him to travel to the U.S. wasn’t revoked after he was first linked to terrorist groups. Al-Qaeda Training Evidence indicates that Abdulmutallab was trained and equipped by a Yemeni group affiliated with al-Qaeda, the president said. On board the Northwest jet, Abdulmutallab went into the bathroom for 20 minutes, came out and covered himself with a blanket and then tried to set off the explosive device, FBI Agent Theodore Peissig said in an affidavit filed Dec. 26 with a criminal complaint in Detroit. Passengers, who reported hearing noises similar to firecrackers, noticed Abdulmutallab’s pants leg and an airplane wall on fire, according to the affidavit. They subdued the suspect and put out the blaze, Peissig said. A passenger took a melted and smoking syringe from Abdulmutallab, according to Peissig. Remnants of a syringe were later found by investigators, he said. The bomb, composed of pentaerythritol tetranitrate, or PETN, and triacetone triperoxide, or TATP, and other ingredients was designed to allow Abdulmutallab to detonate it at a time of his own choosing, according to the indictment. Smaller Attacks Stephen Flynn , who served as lead homeland security policy adviser for Obama’s transition team following his 2008 election, said U.S. efforts to disrupt al-Qaeda and its affiliates since the Sept. 11, 2001, terrorist attacks have forced those groups to resort to smaller scale plots, including the one attributed to Abdulmutallab and a similar shoe-bomb attempt by Richard Reid in 2001. Many of the newer al-Qaeda recruits are “self- radicalized” and open to the group’s message, said Flynn, who predicted more such suicide-bomber attacks. “There’s limits to what the government can do,” said Flynn, noting that it was passengers who subdued Abdulmutallab and Reid and who stopped the United Airlines Flight 93 hijackers from reaching their Sept. 11 target. “The first defenders and first responders are going to be you and me in the wrong place at the wrong time.” The case is U.S. v. Abdulmutallab, 10-cr-20005, U.S. District Court, Eastern District of Michigan (Detroit). To contact the reporters on this story: Andrew M. Harris in Detroit at aharris16@bloomberg.net ; Steven Raphael in Southfield, Michigan at sraphael5@bloomberg.net .

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FBI Arrests Two Men in New York City Bomb Plot, Terrorism Investigation

January 8, 2010

By Patricia Hurtado (Corrects spelling of name to Medunjanin in second paragraph.) Jan. 8 (Bloomberg) — Two men were arrested as part of a probe into an alleged terrorist plot targeting New York that was foiled last year, a spokesman for the Federal Bureau of Investigation’s New York office said. Adis Medunjanin and Zarein Ahmedzay were placed under arrest early today, the FBI’s James Margolin said in a phone interview. Both are expected to appear before a federal judge in Brooklyn later today, said Robert Nardoza , a spokesman for Brooklyn U.S. Attorney Benton Campbell . Nardoza declined to say what charges the men would face. The men were arrested in connection with Najibullah Zazi, an Afghan man who authorities said trained at an al-Qaeda terrorist camp. Zazi and two other men were arrested in September over an alleged plot to detonate a bomb in New York around the anniversary of the Sept. 11 terrorist attacks. Authorities said Zazi had purchased components to make an improvised bomb and carried instructions for an incendiary device on a laptop computer. Attorneys for Medunjanin and Ahmedzay couldn’t immediately be reached for comment. To contact the reporter on this story: Patricia Hurtado in New York at pathurtado@bloomberg.net

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AP: Ponzi Busts Nearly Quadrupled In 2009

December 28, 2009

(AP — CURT ANDERSON) – It was a rough year for Ponzi schemes. In 2009, the recession unraveled nearly four times as many of the investment scams as fell apart in 2008, with “Ponzi” becoming a buzzword again thanks to the collapse of Bernard Madoff’s $50 billion plot. Tens of thousands of investors, some of them losing their life’s savings, watched more than $16.5 billion disappear like smoke in 2009, according to an Associated Press analysis of scams in all 50 states. While the dollar figure was lower than in 2008, that’s only because Madoff — who pleaded guilty earlier this year and is serving a 150-year prison sentence — was arrested in December 2008 and didn’t count toward this year’s total. In all, more than 150 Ponzi schemes collapsed in 2009, compared to about 40 in 2008, according to the AP’s examination of criminal cases at all U.S. attorneys’ offices and the FBI, as well as criminal and civil actions taken by state prosecutors and regulators at both the federal and state levels. The 2009 scams ranged in size from a few hundred thousand dollars to the $7 billion bogus international banking empire authorities say jailed financier Allen Stanford orchestrated, as well as the $1.2 billion scheme they say was operated by disbarred Florida lawyer Scott Rothstein. Both have pleaded not guilty. While enforcement efforts have ramped up — in large part because of the discovery of Madoff’s fraud, estimated at $21 billion to $50 billion — the main reason so many Ponzi schemes have come to light is clear. “The financial meltdown has resulted in the exposure of numerous fraudulent schemes that otherwise might have gone undetected for a longer period of time,” said Lanny Breuer, assistant attorney general for the U.S. Justice Department’s criminal division. A Ponzi scheme depends on a constant infusion of new investors to pay older ones and furnish the cash for the scammers’ lavish lifestyles. This year, when the pool of people willing to become new investors shrank and existing investors clamored to withdraw money, scams collapsed across the country. “Some portion of the investors in the Ponzi scheme always get the short end of the stick and do not get paid,” said Elizabeth Nowicki, a former Securities and Exchange Commission attorney who now teaches law at Boston University. Even those who say they did their homework before investing ended up losing everything. A retired Air Force sergeant, Tom Annis searched the Internet for red flags like complaints or lawsuits involving Minneapolis-based host Patrick Kiley after hearing about his investment on a weekly Christian radio show called “Follow The Money.” Finding none, the 63-year-old from Jacksonville, Fla., invested his $270,000 nest egg — money that has since evaporated after federal regulators shut down what they’ve called an elaborate, $190 million Ponzi scheme. “I tried to do my level of due diligence,” Annis said. “How could I be duped like this after years of investing?” Ponzi schemes, named for infamous swindler Charles Ponzi, are extremely simple: Investors attracted by promises of high profits are paid with money from an ever-increasing pool of new investors, with the scammer skimming off the top. Sometimes the investments are at least partially legitimate but more often are completely fictional. There’s no reserve fund for lean times, or for when droves of investors start demanding their money. Ponzi himself was an Italian immigrant who concocted a scheme in 1919 involving bogus investments in postal currency. He cheated thousands of people out of $10 million, eventually going to jail for wire fraud before being deported back to Italy in 1934. Eighty years after his scheme, federal statistics paint the picture of a Ponzi nation: _The FBI opened more than 2,100 securities fraud investigations in 2009, up from 1,750 in 2008. The FBI also had 651 agents working in 2009 on high-yield investment fraud cases, which include Ponzis, compared with 429 last year. _The SEC this year issued 82 percent more restraining orders against Ponzi schemes and other securities fraud cases this year than in 2008, and it opened about 6 percent more investigations. Ponzi scheme investigations now make up 21 percent of the SEC’s enforcement workload, compared with 17 percent in 2008 and 9 percent in 2005. _The Commodity Futures Trading Commission filed 31 civil actions in Ponzi cases this year, more than twice the 2008 amount. Many of the 2009 cases have yet to head to trial. In its tally, the AP counted schemes in which prosecutions were initiated or in which regulators filed civil cases in 2008 and 2009. The Justice Department does not have totals of how many people were convicted in Ponzi schemes for either year, or for previous years. Experts believe the recession was the main reason for the collapse of so many Ponzi schemes, though the Madoff case brought greater regulatory scrutiny and heightened public awareness. More people are inclined to raise questions when things don’t look right. “We do get a lot more questions from investors now,” said Denise Voigt Crawford, Texas Securities Comissioner. “They are really worried about Ponzi schemes. That’s a good thing.”

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Nomi Prins: Feminomics: Women Reformers Motivated by a No Tolerance Rule

December 18, 2009

From an economic standpoint, will 2010 be the year of the woman? As part of the Roosevelt Institute’s ongoing ‘Feminomics’ series, running on the New Deal 2.0 blog, I was asked to reflect on women’s changing roles in the economy. Here’s my take on how women are prepared to stand up to male nonsense on Wall Street. Eleanor Roosevelt once said, “Do what you feel in your heart to be right — for you’ll be criticized anyway.” I think the corollary to that statement is “Do not tolerate what you feel in your heart to be wrong, for you’ll be living with the consequences of your silence.” Back in 2002, when I quit Wall Street, I followed Eleanor’s words. At the pinnacle of a financial career, I was faced with the prospect of completely selling my soul to Goldman Sachs, and doing whatever it took to make partner and attain ridiculous wealth. It was an existence of actual physical races against men far more monetarily ambitious than myself, to the door of then-division head, Lloyd Blankfein, to take credit for anything I could. The alternative was quitting, becoming a journalist, and regaining my life, real-world perspective, and moral compass. I chose the latter and have never regretted it. During the past year, the financial sector has done a lot of wrong. First, it nearly self-destructed. Then it engaged with a set of Washington elites to extract trillions of dollars of public funds to ease its pain. Now, it’s posting record bonuses on the back of that assistance, in a disgustingly entitled manner, as if its profits are based on sheer skill, rather than federal aid, accounting tricks, and regulatory indifference. What’s missing from this reckless scenario? Women. No woman has ever run a major Wall Street firm nor the Federal Reserve, the NY Federal Reserve, or the Treasury Department. No woman was at the head of the largest corporate scandals or failures. Men ran the companies that imploded last fall and it was three men (Bernanke, Geithner and Paulson) that ran the areas that doled out most of multi-trillion dollar big bank bailout and subsidization funds. Men, as big bank CEOs, received the aid and went on to amass mega bonuses for themselves and their minions. No woman asked the board for $10 million in bonuses as the firm was posting a $27 billion loss like Merrill Lynch’s John Thain did. No woman denied their firm needing federal subsidies, like JPM Chase CEO, Jamie Dimon or Goldman Sachs CEO, Lloyd Blankfein did, as they took TARP money anyway, while forgetting the rest of the federal assistance they got. No woman said her firm was doing “God’s Work” when confronted with outsized post-bailout bonuses payments. Of course, women weren’t in the position of running these firms, so how could they have presided over their problems? Perhaps the attainment of such positions requires the shedding of a certain ethical code. But, the question is, would the massive bailout of the financial sector have occurred, had women been at its helm? Indeed, Davos economists this year speculated that the presence of more women on Wall Street might have averted the downturn. There’s still time to heed their warnings. Would a woman have tolerated an act deregulating the most dangerous derivative instruments? Not if former Commodity Futures Exchange head, Brooksely Borne, who spent three years warning former Fed Chairman Alan Greenspan and other power-men about the problems of deregulation had any say. Would a woman have better monitored and questioned the money streaming from Washington to Wall Street? One did, chair of the Congressional Oversight Panel, Elizabeth Warren sent former Treasury Secretary, Hank Paulson a letter, asking him basic questions like, “Is Treasury imposing reforms on financial institutions that are taking taxpayer money?” Yet, the Treasury’s answers were “non‐responsive or incomplete.” And it was a woman, FDIC chair Sheila Bair that pushed for a mortgage plan that would have helped homeowners rather than the banks that caused the crisis. Going back to the scandals that opened this decade, it was three female whistleblowers that adorned the cover of Time magazine as 2002 persons of the year; Sherron Watkins, former Vice President of Enron, Colleen Rowley from the FBI, and WorldCom’s Cynthia Cooper for exposing the misdeeds of their respective organizations. Of course, it is not just women that question corporate fraud or widespread financial risk. But for the most systemically compromising and expensive breaches of ethics and restraint, it has been women who have fought against the barrier of male nonsense to shine a light and an alarm. This post originally appeared on New Deal 2.0 .

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AlliedBarton Security Services Appoints Chris Swecker to Board of Directors

December 14, 2009

CONSHOHOCKEN, PA–(Marketwire – December 14, 2009) – AlliedBarton Security Services, www.AlliedBarton.com , the industry’s premier provider of highly trained security personnel, announces the appointment of Chris Swecker, Esq., a retired Assistant Director at the Federal Bureau of Investigation (FBI), to the Board of Directors of AlliedBarton’s parent company, Allied Security Holdings LLC. Chris Swecker served 24 years with the FBI before retiring as Assistant Director of the FBI’s Criminal Investigative Division. His tenure with the FBI included serving as Acting Executive Assistant Director with responsibility for nine FBI divisions encompassing over half the FBI’s total resources. Swecker also served as the FBI’s On Scene Commander in Iraq where he led a team of FBI Agents examining counter-intelligence and terrorism matters. Following his career with the FBI, Swecker was Corporate Security Director for Bank of America where he led

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Senate Passes $1.1 Trillion Spending Bill

December 13, 2009

WASHINGTON — The Senate on Sunday passed a $1.1 trillion spending bill with increased budgets for vast areas of the federal government, including health, education, law enforcement and veterans’ programs. The more-than-1,000-page package, one of the last essential chores of Congress this year, passed 57-35 and now goes to President Barack Obama for his signature. The weekend action underlined the legislative crush faced by Congress as it tries to wind up the year. After the vote, the Senate immediately returned to the debate on health care legislation that has consumed its time and energy for weeks. Senate Democrats hope to reach a consensus in the coming days on Obama’s chief domestic priority. The spending bill combines six of the 12 annual appropriation bills for the 2010 budget year that began Oct. 1. Obama has signed into law five others. The final one, a $626 billion defense bill, will be used as the base bill for another catch-all package of measures that Congress must deal with in the coming days. Those include action to raise the $12.1 trillion debt ceiling and proposals to stimulate the job market. The spending bill passed Sunday includes $447 billion for departments’ operating budgets and about $650 billion in mandatory payments for federal benefit programs such as Medicare and Medicaid. Those programs under immediate control of Congress would see increases of about 10 percent. The FBI gets $7.9 billion, a $680 million increase over 2009; the Veterans Health Administration budget goes from $41 billion to $45.1 billion; and the National Institutes of Health receives $31 billion, a $692 million increase. All but three Democrats voted for the bill, while all but three Republicans opposed it. Democrats said the spending was critical to meet the needs of a recession-battered economy. “Every bill that is passed, every project that is funded and every job that is created helps America take another step forward on the road of economic recovery,” Senate Majority Leader Harry Reid, D-Nev., said after the vote. Republicans decried what they called out-of control spending and pointed to an estimated $3.9 billion in the bill for more than 5,000 local projects sought by individual lawmakers from both parties. The Citizens Against Government Waste said those projects included construction of a county farmer’s market in Kentucky, renovation of a historic theater in New York and restoration of a mill in Rhode Island. Sen. John McCain, R-Ariz., a longtime critic of such projects, said it was “shameful” that so many had found their way into the legislation. Most Americans, he said, were watching football and not the Senate debate, adding, “If they knew what we are about to pass ….” The legislation also contains numerous items not directly related to spending. It provides help for auto dealers facing closure, ends a ban on funding by the District of Columbia government for abortions and allows the district to permit medical marijuana, lets Amtrak passengers carry unloaded handguns in their checked baggage and permits detainees held at Guantanamo Bay to be transferred to the United States to stand trial, but not to be released. The bill also approves a 2 percent pay increase for federal workers. With the Senate concentrating on health care, attention on the upcoming jobs plan shifts to the House. The defense bill that will be the basis for the package normally enjoys wide bipartisan support, but Republicans, and some fiscally conservative Democrats, are unhappy with the prospect of another jolt of deficit-swelling spending. Congress must soon raise the debt ceiling, now at $12.1 trillion, so the Treasury can continue to borrow, and Democratic leaders are eyeing a new figure close to $14 trillion, pushing the issue past next November’s election. But a bipartisan group in the Senate says a higher ceiling should be tied to creation of a task force on deficit reduction, and House Democratic moderates say their votes could depend on winning a “pay-as-you-go” law requiring that new tax cuts or spending programs don’t add to the deficit. Sen. Mark Warner, D-Va., on CNN’s “State of the Union,” favored a deficit task force. He said he didn’t “see how this process where everybody kind of lards on is going to actually ever come to an end unless we finally have the discipline to do a straight up-or-down vote across the board on revenues and spending cuts.” Proposals to put people back to work include tax breaks for new company hires, small business tax breaks, public works spending and federal aid to states. Congress is also likely to extend measures, included in the $787 billion stimulus act last February, that provide jobless payments and health insurance subsidies for the unemployed. ___ On the Net: Information on the bill, H.R. 3288, can be found at http://thomas.loc.gov

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Hasan in Contact With Anti-American Imam Before Shootings, Official Says

November 10, 2009

By Justin Blum and Jeff Bliss Nov. 10 (Bloomberg) — Intelligence agencies detected communications between a Muslim religious leader in Yemen known for his anti-American views and Major Nidal Malik Hasan , the suspect in the Nov. 5 shootings at a Texas Army base that left 13 dead, a U.S. official said. The communications, which started last year and continued this year before the attack, didn’t prompt a formal investigation by the U.S. because there was nothing to indicate the messages posed a threat, the official said yesterday. Hasan’s communications were with Anwar al Awlaki, who moved to Yemen after holding the post of imam at a Falls Church, Virginia, mosque where Hasan previously worshipped, according to the official. The communications were intercepted as part of an investigation unrelated to Hasan, said the official, who spoke on condition of anonymity because the probe is continuing. There is nothing to indicate Hasan acted with conspirators or under the direction of anyone else in the shootings at Fort Hood, U.S. investigators said separately at a briefing for reporters in Washington yesterday. Hasan, who hasn’t been charged, likely will be tried in military proceedings, the officials said at the briefing. Lawmakers are asking if authorities missed signs that Hasan, 39, was dangerous. Senator Susan Collins of Maine, the senior Republican on the Senate homeland security committee, said the panel could hold a hearing as early as next week on what motivated Hasan. “We have not received any definitive information at this point, so it’s impossible to assess whether this was a lone wolf who self-radicalized or whether he was radicalized through contacts with other Islamists,” she told reporters in Washington yesterday. Military Record Investigative officials said at the briefing Hasan had communicated about 10 to 20 times with an individual overseas since last year. They declined to name the person. The communications were shared with a U.S. terrorism task force that includes representatives from multiple federal agencies. The communications prompted a review of Hasan’s military record, which turned up no indication he was a danger, the officials said. Under U.S. rules, the officials said they had no cause to open a formal investigation. Intelligence agencies determined that Hasan’s communications were consistent with research he was conducting, the officials said. He served as an Army psychiatrist and at one point had been examining post-traumatic stress. The Federal Bureau of Investigation and the Army are investigating last week’s shootings. Hasan’s Condition Hasan was in critical though stable condition yesterday, recovering from gunshot wounds he sustained in the attack, said Maria Gallegos, a spokeswoman for Brooke Army Medical Center in San Antonio. Representative Pete Hoekstra of Michigan, the senior Republican on the House Intelligence Committee , in a Nov. 7 letter asked the heads of the FBI and U.S. intelligence agencies to preserve all information related to the shootings. “I have been made aware of information from the intelligence community that suggests the possibility that serious issues exist with respect to the performance of U.S. intelligence agencies,” Hoekstra wrote. In the letter, Hoekstra said he was “troubled” he hadn’t been provided specific information on the case he had asked for. Silvestre Reyes , chairman of the House Intelligence Committee, said it is premature to criticize the government’s actions. “I am disappointed that some have rushed to the news media with unfounded information in order to gain headlines,” Reyes, a Texas Democrat, said in a statement. The U.S. is probing ties between Hasan and al Awlaki, who was an imam at Dar Al Hijarah Islamic Center, the mosque in Virginia, a U.S. official said. A Web posting purportedly from al Awlaki praised the shooting at Fort Hood. Calling Hasan “a hero,” the posting said, “Nidal opened fire on soldiers who were on their way to be deployed to Iraq and Afghanistan. How can there be any dispute about the virtue of what he has done?” To contact the reporters on this story: Justin Blum in Washington at jblum4@bloomberg.net ; Jeff Bliss in Washington jbliss@bloomberg.net .

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Tom Gregory: Goldman Sachs: Man Bites Dog, Americans Bleed

November 8, 2009

(Rooters) Washington D.C. Man Bites Dog! In a bold-faced brazen move against their master, on Friday the Obama administration rejected a proposal by Goldman Sachs to buy as much as $1 billion in tax credits from Fannie Mae, saying the deal would have amounted to a net loss for taxpayers. “It is our view that the proposed sale would result in a loss of aggregate tax revenues that would be greater than the savings,” said an administration official who was hurriedly moving his family under the FBI’s witness protection program. Goldman Sachs had proposed to pay cash for Fannie Mae’s tax credits, which are tied to investments in affordable housing. The government-controlled mortgage-finance company cannot use any credits, because its losses have wiped out any tax liability for the foreseeable future. Goldman executives had argued that the deal would provide much-needed capital to Fannie Mae, which it could use to finance additional low-income housing. Goldman could then re-package and short these future-foreclosures providing new securities to sell to the two remaining competitors it has been unable to take down. “We just don’t understand the government’s opposition to Goldman making money” said a Spectre spokesman on behalf of their wholly-owned subsidiary. “Don’t they know who we are?”

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Ropes & Gray’s Cutillo, Patent Lawyer, Accused of Fueling Insider Trading

November 6, 2009

By Linda Sandler and Carlyn Kolker Nov. 6 (Bloomberg) — When Bain Capital LLC said it would buy 3Com Corp. for 44 percent more than the stock price, one unexpected beneficiary was Arthur Cutillo , an associate at the Ropes & Gray LLP law firm advising the private-equity company, according to the FBI. Cutillo owned part of a 75,000-share 3Com stake bought using information he passed on ahead of the 2007 deal in exchange for kickbacks, according to court documents accusing the lawyer of securities fraud. The stock was sold at a profit before Boston-based Bain, whose affiliates run $60 billion in assets, backed away from the deal, the FBI said in a criminal complaint. Cutillo, 33, was one of 14 people charged yesterday as part of a probe of an alleged $20 million insider-trading scheme. Cutillo, one of those arrested yesterday, “fueled” the fraudulent trades by a ring led by Zvi Goffer , founder of Incremental Capital LLC, by selling nonpublic information about mergers his law firm advised on, prosecutors alleged. “That’s the ultimate betrayal of trust,” said Peter Henning , a legal ethics professor at Wayne State University Law School in Detroit and a former federal prosecutor. “The cornerstone of the legal profession is the attorney-client privilege; what you say to your lawyer is sacrosanct. If it happened, there couldn’t be any clearer violation of legal ethics rules.” Cutillo, a 2005 graduate of Villanova University law school, leaked information about at least four acquisitions or bids in 2007, according to a criminal complaint filed by the FBI. Cutillo gave the information to a friend, New York lawyer Jason Goldfarb, 31, who passed along the tips to Goffer, the FBI said. The Firm’s Clients Ropes & Gray’s clients in the transactions, Bain Capital and TPG Capital, are among the best-known private-equity firms. TPG Capital is a buyout group of TPG, based in Fort Worth, Texas, which is run by David Bonderman and James Coulter , with $45 billion in assets under management. Besides the 3Com deal, Ropes & Gray that year advised Silver Lake and TPG Capital on their purchase of Avaya Inc. , which offered shareholders a 28 percent premium over the trading price 10 days earlier, prosecutors said. The firm again provided advice to TPG Capital when the company bought Axcan Pharma Inc. for 28 percent more than the trading price. They also advised on the failed purchase of Alliance Data Systems Corp. by client Blackstone Group. Cutillo provided tips on all four, according to a civil complaint by the U.S. Securities and Exchange Commission, which sued him. Cutillo, with a master’s and a bachelor’s degree in chemical engineering, was an intellectual property litigator for Ropes & Gray, according to a biographical sketch on the firm’s Web site . IP Experts The firm’s intellectual property attorneys, who are experts on patent, trademark and copyright law, provided advice on due diligence and technical aspects of mergers and acquisitions, according to the site. The deals included Bain’s planned 3Com purchase and Silver Lake and TPG’s $8 billion acquisition of Avaya, two deals that Cutillo is accused of providing tips on, according to the site and prosecutors. IP attorneys can gain access to confidential deal documents if they advise on these transactions, M&A lawyers say. “The people on the front lines are the M&A lawyers, but in the background are all these other practice areas, including IP, who are also essential to the deal,” said Brian Hoffmann , an M&A attorney at law firm Clifford Chance LLP . Calls to Cutillo’s home in Ridgewood, New Jersey, weren’t answered and Cutillo’s phone number at Ropes & Gray was disconnected. “Disappointed” “We are deeply disappointed to learn about this situation, which suggests an extreme breach of this person’s duty of trust to our clients and to the firm,” Ropes & Gray said in a statement. The firm is cooperating with prosecutors, it said. Bain spokesman Alex Stanton and Owen Blicksilver , a TPG spokesman, declined to comment. Goffer worked at the brokerage Schottenfeld Group LLC, at the time of the alleged insider trades in 2007, prosecutors said. He later moved to Galleon Group, whose founder Raj Rajaratnam was accused Oct. 16 of being the leader of another insider-trading ring. Goffer paid tipsters like Cutillo for information on mergers and acquisitions, and gave them pre-paid mobile phones to try to avoid detection, taking a page from drug dealers’ tactics, the government said. Confidential Source Knowledge of Cutillo’s role in the Goffer ring was garnered from a “confidential source” wearing a hidden recording device, intercepted phone calls, phone records and other means, prosecutors said. Toll records and pen register data from June to October 2007 showed frequent calls had been made between phones used by Cutillo and Goldfarb, including “days of significance” relating to 3Com , prosecutors said. Intercepted phone calls confirmed Cutillo’s role in leaking inside information. Early in 2008, Goffer asked Goldfarb to get information on whether the 3Com deal would close. Goldfarb referred in the conversation to Cutillo as “Artie.” The criminal case is U.S. v. Goffer, 09-mag-02438, U.S. District Court, Southern District of New York (Manhattan). To contact the reporters on this story: Carlyn Kolker in New York at ckolker@bloomberg.net ; Linda Sandler in New York at lsandler@bloomberg.net .

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Video: Razzano Expects More Arrests on Galleon Insider Trading: Video

November 5, 2009

Nov. 5 (Bloomberg) — Frank Razzano, a partner at Pepper Hamilton LLC, talks with Bloomberg’s Matt Miller and Carol Massar about charges against 14 people in an alleged insider trading scheme tied to Galleon Group. Zvi Goffer, a former Galleon employee, and Craig Drimal, who worked at the Manhattan firm’s offices, were arrested today, the FBI said. Goffer, the alleged ringleader of the scheme and founder of Incremental Capital LLC, paid his tipsters for information on mergers and acquisitions, and gave them pre-paid mobile phones to avoid detection, the government said. (Source: Bloomberg)

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Counterterror Efforts by U.S., States Helping to Blunt Threat, Obama Says

October 20, 2009

By Edwin Chen Oct. 20 (Bloomberg) — President Barack Obama said the combined work of federal, state and local law-enforcement authorities are helping to make “real progress” in blunting the terrorist threat facing the U.S. The president toured New York’s Joint Terrorism Task Force headquarters today and told workers there, “The record of your service is the attacks that never took place.” The task force brings together the work of the Federal Bureau of Investigation and New York’s police department in the city that was ground zero for the Sept. 11 attacks. There are similar offices in 100 cities nationally, most of them established after the 2001 terrorist strike on the U.S., according to the FBI . The New York office was established in 1980. “You’re showing what focused and integrated counterterrorism really looks like,” Obama said. “I pledge that I will stay as focused on this mission as you are.” Obama was seeking to highlight the improved sharing of information among federal, state and local law-enforcement agencies since Sept. 11 and remind the public that the threat from terrorism remains. Homeland Security Secretary Janet Napolitano said earlier this month that authorities are tracking suspected al-Qaeda sympathizers in the U.S. In September, U.S. authorities indicted Najibullah Zazi, 24, an Afghan immigrant and former Denver airport shuttle-van driver, on federal terrorism conspiracy charges. They said bomb- making instructions were found on a laptop computer in his rental car that he drove from Colorado to New York. To contact the reporter on this story: Edwin Chen in New York City at Echen32@bloomberg.net

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Lloyd Chapman: Alabama Congressman Parker Griffith Epitomizes Everything that is Wrong with Government

September 30, 2009

Huntsville Alabama Congressman Parker Griffith (D-AL-5) is claiming that he accidentally included language in his new bill, H.R. 3558, which would allow some of his largest campaign contributors and their subsidiaries to receive billions of dollars in government small business contracts. In an article published in the Florence, Alabama based Times Daily newspaper, Congressman Griffith stated the language in the bill that would have allowed his two top campaign contributors, Boeing and Northrop Grumman, to continue to hijack federal small business contracts were “unintended consequences.” ( http://www.timesdaily.com/article/20090930/ARTICLES/909305008/1011/NEWS?Title=Griffith-Bill-needs-more-work ) The American Small Business League (ASBL) uncovered the blatant and colossal loophole for corporate giants immediately after reading the exceedingly short, 283-word legislation. Congressman Griffith’s claim that he really meant to write a piece of legislation to help small businesses, but accidently included language that would divert billions of dollars in federal small businesses contracts to Fortune 500 firms and their subsidiaries is ludicrous. He is either a moron or a liar. Apparently the same person that writes Congressman Griffith’s legislation must also be writing his excuses. It’s amazing how accident-prone Washington bureaucrats are when it comes to giving small business contracts to Fortune 500 firms. The SBA has been claiming that every day for the last ten years Fortune 500 firms get federal small business contracts accidentally through “data entry errors” and “miscoding.” I guess Congress would also claim “unintended consequences” when it passed the Comprehensive Test Program, which helps major Pentagon contractors cheat small businesses by removing the reporting function and any penalties for non-compliance with small business goals. Parker Griffith’s H.R. 3558 is just the most recent example of a crooked politician being bribed by big business to pass legislation that will fill their pockets at the expense of the middle class. Congressman Griffith is a Randy “Duke” Cunningham wannabe that would have succeeded had it not been for the diligent work of the ASBL’s staff. Like Cunningham, who is now serving 8-years in prison for conspiracy to commit bribery, mail fraud, wire fraud and tax evasion; Congressman Griffith appears to have an extremely cozy relationship with Fortune 500 defense contractors in his district. You would think if Congressman Griffith was telling the truth, and his bill did “unintentionally” contain language that would hurt small businesses as opposed to helping them, he might be grateful to the ASBL for pointing it out. He accused us of seeking “notoriety” as opposed to our goal of shining the light on another piece of anti-small business legislation from another crooked politician doing the bidding of big business. Quite the contrary, my goal is not to gain notoriety for the ASBL or myself, my goal is to gain notoriety for Huntsville Alabama Congressman Parker Griffith. I want to make Parker Griffith the poster boy for dishonest slime balls in Washington that think they can pass legislation to make their fat cat campaign contributors rich by cheating small businesses and the middle class. It is no coincidence that virtually all of the nation’s largest defense contractors are major contributors to the House Small Business Committee. Gee, I wonder if that would explain why over a dozen federal investigations found that hundreds of billions of dollars in federal small business contracts have been diverted to those same Fortune 500 defense contractors and Congress has never passed a single piece of legislation to stop it. I know Congressman Griffith’s staff is reading everything I am writing on this subject, so let me say this to Congressman Griffith and his staff. I meant to write a really complimentary piece about you, but I unintentionally wrote this piece calling you a lying crook, a moron and a slime ball politician that should be investigated by the FBI for bribery. OOPS.

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FBI Criminal Probe Into BofA-Merrill Deal Has Been Active For Six Months

September 19, 2009

The FBI in Charlotte and the U.S. Justice Department are among the multitude of agencies investigating Bank of America Corp.’s acquisition of Merrill Lynch & Co., a knowledgeable source told the Observer Friday.

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FBI, New York Police Raid Queens Homes in Terror Probe; Congress Briefed

September 14, 2009

By Patricia Hurtado Sept. 14 (Bloomberg) — U.S. law enforcement agents and New York City police raided several locations in New York City as part of a joint terrorism investigation, a police department official said. The officer, a Sgt. Rodriguez who declined to give his first name, said the city is assisting the federal probe and declined further comment. Dave Cardona, special agent in charge of the FBIâ€™s criminal division, confirmed there is a federal investigation. To contact the reporter on this story: Patricia Hurtado in New York at pathurtado@bloomberg.net

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Violent Crime in U.S. Fell in 2008, Second Straight Annual Drop, FBI Says

September 14, 2009

By Justin Blum Sept. 14 (Bloomberg) — Violent crime in the U.S. declined for the second year in a row in 2008, dropping 1.9 percent, according to the FBI. All four categories of violent crime surveyed by the Federal Bureau of Investigation — forcible rape, murder, robbery and aggravated assault — declined in 2008, according to data released today. Property crime declined by 0.8 percent compared with 2007. There were an estimated 1.38 million violent crimes in the U.S. last year, the FBI said. Murder and non-negligent manslaughter declined 3.9 percent. The FBI released preliminary data on the 2008 crime rate in June. To contact the reporter on this story: Justin Blum in Washington at jblum4@bloomberg.net

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Coast Guard’s Potomac Training Exercise Raises Alarm on 9/11 Anniversary

September 11, 2009

By Jeff Bliss and Justin Blum Sept. 11 (Bloomberg) — The U.S. Coast Guard sent gunboats to the Potomac River in Washington today as part of a training exercise on the eighth anniversary of the Sept. 11 attacks, prompting the FBI and other law enforcement agencies which hadnâ€™t received advance notice to race to the scene. The exercise was conducted about the time President Barack Obama was at a Sept. 11 ceremony at the Pentagon, which required crossing the river on a nearby bridge. The training prompted media reports of a possible incident on the river, including a report on CNN that shots were fired at another boat. There was no gunfire, though weapons were mounted on the front of several of the Coast Guard boats, said Petty Officer Second Class Nathan Henise. A top Coast Guard official defended the exercise at a news conference. What took place was a â€œlow-profile training exercise that goes on every day,â€ Vice Admiral John Currier said. There was â€œno reason for specific notificationâ€ to other agencies, he said. Currier and White House press secretary Robert Gibbs faulted the news media for rushing out with reports based on partial information picked up over Coast Guard radio frequencies. â€˜Unnecessarily Alarmedâ€™ â€œIf anyone was unnecessarily alarmed, based on erroneous reporting that denoted that shots had been fired, I think everybody is, everybody is apologetic of that,â€ Gibbs said. The media has a responsibility â€œto ensure that we may not get this story first, but we may be the first ones to get it right.â€ Currier said other agencies reacted to the media reports which were based on intercepted radio transmissions. He said it would be routine for Coast Guard officers involved to start their transmission by saying they were conducting a drill. Law enforcement agencies including the Federal Bureau of Investigation and U.S. Park Police sent officers to the river, which forms the western boarder of Washington and passes near the Pentagon and other federal buildings. â€œFBI was not notified, and when we heard it on the news we responded the way we would to any incident,â€ said Katherine Schweit , a spokeswoman for the FBIâ€™s Washington Field Office . Lieutenant Michael Libby of the Park Police, which has jurisdiction over federal areas on shore, said officers responded to the scene, initially unaware that it was a training exercise. Flights Halted The Federal Aviation Administration stopped flights from nearby Ronald Reagan Washington National Airport, an FAA spokeswoman said. â€œWe stopped departures from National Airport from about 10:08 to 10:30,â€ spokeswoman Diane Spitaliere said. She wouldnâ€™t say how they were informed of the situation, only that it was done â€œout of an abundance of caution.â€ She added that the FAA wasnâ€™t told of the exercise beforehand. The Standard & Poorâ€™s 500 Index erased a gain of 0.4 percent after CNN reported the Coast Guard had fired on a boat. Stocks resumed their advance after the Coast Guard said it was a training exercise. â€œThe market got spooked,â€ said Edward Craig , head of U.S. equity trading at Jefferies & Co. in New York. â€œItâ€™s just heightened sensitivity because of the date. Any type of news such as that is going to make the market jump one way or the other. I think itâ€™s a calendar thing rather than anything of substance.â€ Flyover Incident The incident was reminiscent of the April 27 flyover of New York by one of the planes used as Air Force One and a fighter escort. That exercise, involving low-flying jets over New York Harbor, rattled windows and prompted office workers to flee high-rise buildings out of concern it was a repeat of the Sept. 11 attacks. An Obama administration aide who authorized the flight resigned and the Defense Department said the exercise wasnâ€™t properly reviewed. Gibbs said the capital is safer because of such training exercises and that it wasnâ€™t analogous to the Air Force One training incident. To contact the reporters on this story: Jeff Bliss in Washington at jbliss@bloomberg.net ; Justin Blum in Washington at jblum4@bloomberg.net

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Madoff Financial Exec To Plead Guilty In NY: Feds

August 8, 2009

NEW YORK — Federal prosecutors expect the former chief financial officer for disgraced financier Bernard Madoff to plead guilty Tuesday to criminal charges. Frank DiPascali, long rumored to be cooperating with authorities, agreed to enter the plea in federal court in Manhattan, prosecutors said Friday in a letter to a judge. The charges were not specified. A phone call to DiPascali’s attorney, Marc Mukasey, was referred to a law firm spokeswoman who declined to comment. Earlier Friday, prosecutors filed a one-page notification with the court that they would charge DiPascali. Such a filing usually means that there’s a plea deal and that the defendant is cooperating. Madoff, 71, pleaded guilty earlier this year to charges that his secretive investment advisory business was a multibillion-dollar Ponzi scheme run at least since the early 1990s. The fraud demolished the life savings of thousands of people, wrecked charities and shook confidence in the U.S. financial system. The former Nasdaq chairman was sentenced in June to 150 years in prison. Customers have described DiPascali, 52, as their main contact with the firm. He was the person whom they spoke with if they had questions about their accounts or wanted to add or withdraw money. He also has a long history with Madoff: Both come from the same part of Queens. His first job was as Madoff’s assistant. He went on to hold titles in the 1980s that included director of research and director of options trading. He became the firm’s chief financial officer in 1996 – a post he held until the firm’s collapse. Madoff has insisted that he acted alone, and only one other person – his accountant – has been charged during the seven-month investigation. But Madoff’s brother and sons, who ran a trading operation under the same roof, large investors and other insiders have come under intense scrutiny, and the FBI has said it expects more arrests before it concludes the probe. Bradly Simon, a former federal prosecutor now in criminal defense, said it’s likely DiPascali has been giving investigators inside information from the start on other potential defendants. After Madoff’s arrest late last year, DiPascali “suddenly dropped out of sight,” Simon said. “It’s obvious that they got to him early.” The probable plea deal, he added, signals “more indictments are coming, and probably quite soon.”

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Australian Police Foil Suicide Attack Plot on Army Base, Arrest 4 Suspects

August 4, 2009

By Ed Johnson Aug. 4 (Bloomberg) — Australian police said they arrested four men with links to a Somali Islamist group in dawn counterterrorism raids, thwarting a plot to carry out a suicide attack on a military base. The men, held in the southeastern state of Victoria, aimed to storm an army barracks in western Sydney with automatic weapons and kill as many soldiers as possible, said Tony Negus, acting chief commissioner of the Australian Federal Police .

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Australian Police Foil Suicide Attack Plot on Army Base, Arrest Four Men

August 3, 2009

By Ed Johnson Aug. 4 (Bloomberg) — Australian police said they thwarted an alleged Somali-linked plot to carry out a suicide attack on a military base, arresting four men in early morning raids. The men, arrested in the southeastern state of Victoria, aimed to storm a defense installation with automatic weapons and kill as many soldiers as possible, said Tony Negus, acting chief commissioner of the Australian Federal Police

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Australian Police Foil Terrorism Plot, Say Men Planned to Attack Army Base

August 3, 2009

By Gemma Daley Aug.

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Eric Dezenhall: "Corruption Shtick" in the Garden State

July 29, 2009

When last week’s sweeping FBI roundup netted a handful of venal New Jersey politicians and kidney-pilfering, Prada handbag-counterfeiting rabbis, Governor John Corzine let loose with an equally sweeping condemnation: “Any corruption is unacceptable – anywhere, anytime, by anybody. The scale of corruption we’re seeing as this unfolds is simply outrageous and cannot be tolerated.” This kind of blanket judgment may be all right from a moral and civic perspective, but, to borrow from another politician’s recent gaffe, Corzine “acted stupidly” by ignoring the sensitivities of the small-but-needy constituency to which I belong: Novelists, screenwriters and satirists whose livelihoods depend upon New Jersey being faithful to its core tenets of slapstick mendacity. If Manhattan brought us “radical chic,” the Turnpike brought us “corruption shtick.” We writers need material, primarily that which validates archetypes because we prefer to traffic in existing prejudices, not baffle our audience with too much irony and nuance.

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FBI Field Office Coming to Charlotte

July 27, 2009

A joint venture of Highwoods Properties and USAA Real Estate Co. is building a $45 million field office for the Federal Bureau of Investigation (FBI)

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Mayors of Hoboken, Secaucus Are Arrested in U.S. Public-Corruption Probe

July 23, 2009

By David Voreacos July 24 (Bloomberg) — The mayors of Hoboken, Ridgefield and Secaucus, New Jersey, and five rabbis were among 44 people charged by the U.S.

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Mayors of Hoboken, Secaucus, Rabbis Arrested in U.S. Money-Laundering Case

July 23, 2009

By David Voreacos July 23 (Bloomberg) — The mayors of Hoboken and Secaucus, New Jersey, and several rabbis were among at least 30 people arrested today as part of a public corruption and money- laundering investigation by U.S. authorities. Hoboken Mayor Peter Cammarano, 32, and Secaucus Mayor Dennis Elwell, both Democrats, Jersey City Council President Mariano Vega Jr., and State Assemblyman Daniel Van Pelt, a Republican from Ocean Township, were among those arrested by the Federal Bureau of Investigation.

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