Posts filed under 'Corruption, Fraud, Politics'
The Bank Fraud Circus Marches On: More Trouble Coming
Default Swap Reforms Roiled as Aiful Tests Settlement (Update1)
Link to original: http://www.bloomberg.com/apps/news?pid=20601109&sid=aANN.DJq5h1E#
By Abigail Moses and Shannon D. Harrington
Nov. 27 (Bloomberg) — Wall Street’s system for determining payments on derivatives linked to the debt of defaulted companies is showing cracks less than a year after securities firms changed practices to avoid “Draconian” regulation.
Credit-default swaps tied to Thomson SA, the Paris-based owner of film processor Technicolor Inc., paid some holders 30 percent less than those with contracts expiring a day later. In Japan, owners of swaps on Aiful Corp. haven’t been compensated, though one of its banks said the consumer lender skipped loan repayments. Dealers can’t agree whether to reimburse investors in Mexican cement maker Cemex SAB’s debt swaps.
Disparities are arising in spite of practices adopted in April and July to standardize settlements and curb risk in a market that exacerbated the worst financial crisis since the 1930s by contributing to the downfall of American International Group Inc. Analysts at Bank of America-Merrill Lynch, Barclays Capital and UniCredit SpA say changes are needed as dealers examine how to interpret existing rules to maintain investor confidence.
“The first cracks are being shown in the protocols,” said Edmund Parker, head of derivatives at Chicago-based law firm Mayer Brown LLP in London.
The rules are being tested as the global default rate rises. The rate for companies ranked below investment-grade reached the highest since the Great Depression in October and will peak at 12.5 percent next month, Moody’s Investors Service said Nov. 5.
Lawmaker Ammunition
Flaws in the system may provide ammunition to President Barack Obama and lawmakers who want to rein in derivatives, including credit-default swaps, which rise in price as investor confidence decreases and pay off when a borrower fails to adhere to its debt agreements.
Regulators demanded more transparency after the meltdowns 14 months ago of Lehman Brothers Holdings Inc. and AIG, two of the largest traders, froze credit markets and worsened the first global recession since World War II.
The swaps had been the world’s fastest-growing market, with contracts protecting against defaults on as much as $62 trillion at the end of 2007, almost 10 times the amount of the U.S. government’s debt outstanding, according to the International Swaps & Derivatives Association, a trade group based in New York. The swaps totaled less than $632 billion in 2001 and the figure is $26 trillion now.
Hedge fund manager George Soros has called the market “unsafe,” and billionaire investor Warren Buffett once likened the derivatives to “financial weapons of mass destruction.”
Revenue Stream
Banks are making changes to avoid stricter rules imposed by regulators, said Atish Kakodkar, a CreditSights analyst in New York.
“The risk of over-regulation is real,” Kakodkar said in a Nov. 15 research report. “Self-regulation in the credit derivatives market seems to be driven largely by the need to pre-empt any Draconian regulation.”
Five U.S. commercial banks, including JPMorgan Chase & Co., Goldman Sachs Group Inc. and Bank of America Corp., were on track to earn more than $35 billion this year trading unregulated derivatives contracts of all types as of August, according to data compiled by Bloomberg.
Credit-default swaps are derivatives, contracts with values derived from assets or events, including stocks, bonds, commodities, currencies, interest rates or the weather. Banks, hedge funds and insurance companies use the swaps to insure bonds and loans against default or to speculate on the creditworthiness of countries and companies.
Failure to Pay
If a borrower fails to adhere to its debt commitments, bondholders who own swaps get paid the debt’s face value in exchange for the bonds. Those that don’t own the underlying bonds get the face value in cash minus the debt’s current market value as determined by industry-run auctions where holders of the securities sell them to the highest bidders.
Dealers and investors standardized the contracts this year to make them easier to trade through clearinghouses, which act as buyers to sellers and sellers to buyers, preventing a single default tripping a domino-like financial system catastrophe.
As part of that effort, ISDA formed regional committees of 15 dealers and investors in March to make binding decisions on when contracts are triggered. The committees base decisions on publicly available information such as regulatory filings, press releases and news articles. Swaps usually are triggered by one of three events in most countries: bankruptcy, failure to pay or debt restructuring, including a reduction or postponement in principal or interest. Under the new rules, traders eliminated restructuring as a credit event in the U.S.
Successful Auctions
Traders successfully auctioned debt to settle contracts linked to 41 companies and Ecuador’s government this year, with about half of those happening since ISDA created the committees.
“The determinations committee provides one place where we can resolve a lot of these issues centrally,” said Athanassios Diplas, global head of counterparty portfolio management in New York for Frankfurt-based Deutsche Bank AG and co-chair of the ISDA panel that wrote the protocols. “Imagine if we were to face all of this in the world where we had to arbitrate potential disputes bilaterally. That would be complete chaos.”
The new protocols helped eased the market’s stigma, with the net amount of protection bought and sold rising to $2.6 trillion as of Nov. 13, the highest since at least February, Depository Trust & Clearing Corp. data show.
Credit-default swaps on the Markit iTraxx Crossover Index of 50 companies with mostly high-yield credit ratings has fallen to 558 basis points, from as much as 1,100 basis points in March, according to JPMorgan Chase & Co. prices.
Thomson provided the first test of the procedures for settling contracts triggered by a restructuring in Europe when it said in August it was deferring payments on $72.5 million of 6.05 percent private notes due this year.
Multiple Auctions
The system for restructurings uses multiple auctions that set different payouts based on swap expiration dates. Dealers couldn’t settle the Thomson contracts with simpler failure-to- pay procedures that produce one recovery value because they were unable to prove the electronics company defaulted.
Asked in a July conference call with investors whether Thomson still owed the money, Chief Executive Officer Frederic Rose responded, “Since I am not a qualified lawyer, I prefer not to answer that question.” Marine Boulot, a Thomson spokeswoman in Paris, declined to comment.
To determine the size of the payouts on contracts covering $2 billion in debt, bonds and loans were split by maturity date ranges into three so-called buckets and sold at auction.
Contracts that expired on June 20, 2012 — the first bucket’s latest date — sold for 96.25 percent of the face amount, meaning swap holders received 3.75 percent of the amount covered. Swaps expiring a day later paid 34.875 percent because the debt in that bucket went for 65.125 percent.
Too Few Securities
Holders of June 20 swaps covering 10 million euros in debt got 375,000 euros, while those with June 21 contracts received almost 3.5 million euros. Swaps that terminated after Oct. 24, 2014, paid the most, 36.75 percent.
The disparity was a result of too few securities in the first bucket to settle swaps, according to Matthew Leeming, a London-based strategist at Barclays. “An imbalance of supply and demand for the deliverables can affect the recovery rate,” he said in a note.
Because they were part of industry indexes, swaps referencing the company “dwarfed the amount of Thomson debt,” said Teo Lasarte, an analyst at Bank of America-Merrill Lynch in London.
The more swaps there are, the more investors with stakes in the contracts need bonds to settle them. About 81 million euros- worth of debt was auctioned from the first bucket, compared with 221 million euros and 148 million euros from the second and third, according to data released by auction administrators Markit Group Ltd. and Creditex Group Inc.
Sufficient Debt
Lasarte favors changing rules governing indexes so companies in them have enough debt available to produce settlement auctions that don’t cause distortions.
“To strengthen the robustness of this product, there are some issues to be solved,” said Tim Brunne, a UniCredit strategist in Munich.
Leeming of Barclays said in a report to clients that the Thomson settlement “raises questions regarding the future of restructuring as a credit event.”
Banks that bought contracts on loans to Kyoto-based Aiful aren’t being paid because ISDA’s determinations committee ruled that there isn’t sufficient evidence to trigger swaps as the company and its lenders hold confidential restructuring talks.
Suspended Payments
Aozora Bank Ltd., one of Aiful’s creditors, said in a statement to the ISDA committee that the company “suspended scheduled payments of loan principal to all of its lenders” on Sept. 30. The committee rejected the request on Oct. 19 because the protocols only allow it to consider “publicly available information.” If the “sole source” of that evidence bought or sold swaps, it isn’t deemed publicly available. Aozora has said it owns some Aiful swaps.
Katsuyuki Komiya, a spokesman for Aiful, declined to comment.
Contracts protecting a net $1.36 billion of Aiful’s debt were outstanding as of Nov. 6, more than any other Japanese company, according to New York-based DTCC. As much as $238 million more of Aiful’s debt is protected through credit swaps based on indexes in which the company is a member. Aiful is meanwhile seeking to secure a credit line from Sumitomo Trust & Banking Co., its main bank, two people familiar with the matter said.
Aiful Swaps
The value of Aiful credit-default swaps that mature in December plunged on speculation they may expire without being triggered. Contracts protecting 100 million yen ($1.2 million) of Aiful debt from default through Dec. 20 dropped to 10 million yen upfront, from 55 million yen on Oct. 15, according to a trader who asked not to be identified because the prices are private.
The Japanese Association of Turnaround Professionals, which is mediating Aiful’s so-called alternative dispute resolution process, is forming a group of bankers, lawyers and government officials to study whether talks between companies and creditors on rescheduling debt payments should trigger swap payouts, said Miyako Hara, an executive secretary for the trade group.
The ISDA determination committee was asked on Oct. 9 to rule that swaps linked to Monterrey, Mexico-based Cemex should be paid out after the company agreed with lenders to extend the maturity on about $15 billion of debt for five years.
After four weeks of deliberations, the committee was deadlocked, and the issue will now be decided by an arbitration panel set up by ISDA. The panel will rule in December.
Struggling With Debt
The biggest cement maker in the Americas has struggled to repay debt since shipments started dropping in the second- quarter of 2006, before it paid $14.2 billion in July 2007 for Australian rival Rinker Group Ltd. Cemex has $19.67 billion of debt, according to data compiled by Bloomberg, and is rated B by Standard & Poor’s, five steps below investment grade.
Cemex spokesman Jorge Perez declined to comment.
The cost of credit-default swaps on Cemex surged as high as 1,500 basis points in March, or $1.5 million a year to protect $10 million of debt for five years, according to CMA DataVision, as the price of its 900 million euros of 4.75 percent bonds due 2014 dropped to 38 cents on the euro.
Credit-default swaps are “not a perfect product,” said J. Paul Forrester, a Mayer Brown partner and co-head of its derivatives and structured products practice. “These are difficult questions, and unfortunately as we continue to use this product and explore it we’re going to find that it has these sorts of issues,” he said.
To contact the reporter on this story: Abigail Moses in London at Amoses5@bloomberg.net; Shannon D. Harrington in New York at sharrington6@bloomberg.net;
Last Updated: November 27, 2009 07:26 EST
Add comment November 30, 2009
Shelley Stark in the Vienna Review: No Law; No Crime
The greed and manipulation continue. Read what Shelley Stark, author of Hidden Treuhand: How Corporations and Individuals Hide Assets and Money (Universal Publishers) has to say about it now.
Link to the Vienna Review:
http://www.viennareview.net/shelley-stark-3173.html
Add comment November 29, 2009
AIG CEO Scarfs up 7 Million in Bonuses; new guy same pattern of bonuses!
What is wrong with these people….AIG and our alleged government oversight? This is outrageous! Anybody have any specific suggestions for how to apply pressure? -GFS
A reader sent the comment and article below.
———————————————————————————————————-
G. Florence,
It looks like the good citizens of this country are continuing to be taken for a ride on the public bailout money express train.
Article from the Miami Herald
AIG Approves Pay Package for CEO Benmosche
The Associated Press
NEW YORK — American International Group Inc. on Tuesday said it will go ahead with a previously announced pay package for its new CEO Robert Benmosche of $7 million in cash and stock.
Benmosche, who took over as CEO of the embattled insurer three months ago, will receive an annual salary of $3 million in cash and $4 million in AIG common stock under the pay agreement.
AIG is under close government scrutiny after receiving a bailout package worth up to $182.5 billion from the government in exchange for an 80 percent stake in the company. That bailout package also includes restrictions on compensation for the insurer’s 100 highest-paid employees.
Earlier this month, a Wall Street Journal report said Benmosche had threatened to leave his post as he struggled to deal with the heavy government oversight and restrictions on what the bailed-out company could pay employees.
Earlier this month Benmosche acknowledged frustrations with the oversight in a letter to employees but said he plans to stay on the job.
The Wall Street Journal reported online Tuesday that Benmosche signed a noncompete agreement, and reiterated at a board meeting his commitment to stay CEO. AIG didn’t immediately return calls for comment.
Benmosche, former CEO of MetLife Inc., took over as CEO in August, replacing Edward Liddy, who was appointed CEO after the government bailed out the insurer in September 2008. The CEO’s compensation deal was approved by Treasury Department pay czar Kenneth Feinberg.
In August, AIG said it was aware of potential conflicts of interest related to the hiring of Benmosche as its new CEO, and would deal with any conflicts as necessary.
AIG, which is selling off its business units to help repay the massive government loan, had been reportedly in talks with MetLife about a possible deal for all or part of one of AIG’s largest foreign life-insurance units. MetLife is the nation’s biggest life insurer by assets.
Benmosche, because of his former executive roles at MetLife from 1998 until 2006, remains a MetLife shareholder.
Under the pay agreement with AIG, Benmosche will also be eligible for a yearly performance-based bonus of up to $3.5 million in stock.
http://www.miamiherald.com/business/nation/story/1350379.html
Add comment November 29, 2009
More DoD Revolving Doors and Stealth Technology
Nick Schwellenbach at The Center for Public Integrity has written a very good article on the Defense Departments Revolving Doors. His article mentions the F-15 program. This is interesting because Boeing is currently proposing a Stealthy F-15 for sales overseas. I wonder if our new National Security Advisor and former Boeing Audit and Finance Committees Director General (ret.) Jones, will remove himself from any and all interest in the outcome of Boeing’s proposal to sell stealth technology abroad?
DEFENSE: Warnings About Revolving Door in Pentagon from Ex-Lobbyist Official
http://www.publicintegrity.org/blog/entry/1730/
Here is another related link: http://www.aviationweek.com/aw/generic/story_channel.jsp?channel=defense&id=news/Silent031709.xml William Lynn, new Deputy Secretary of Defense, former Raytheon Lobbyist, now revolving door user. To say I am disappointed in the Obama Administration would be a rather large understatement. -GFS
About F-15 and Added Stealth Technology:
Heavy Metal
Wednesday, April 15, 2009 @ 01:18PM
Boeing Proposes Stealthy F-15
Link to original Heavy Metal article:
http://www.victoriousopposition.com/index.php/site/category/heavy-metal/
Add comment October 28, 2009
National Security Advisor, James L. Jones: Bio’s Where’d Boeing Go?
Here is General James Logan Jones’s biographical statement from around December 4, 2008.
General James Logan Jones Jr. (born December 19, 1943) joined the board of directors of The Boeing Company on June 21, 2007. General (ret.) Jones serves on the company’s Audit and Finance Committees. He is also President-elect Barack Obama’s selection for National Security Advisor. He is the former Supreme Allied Commander, Europe (SACEUR) (2003–06), and the commander of the United States European Command (COMUSEUCOM) (2003–06. He served as the 32nd Commandant of the Marine Corps (July 1999–January 2003). Jones retired from the United States Marine Corps on February 1, 2007, after 40 years of service.
In 2007, Jones served as chairman of the Congressional Independent Commission on the Security Forces of Iraq, which investigated the capabilities of the Iraqi police and armed forces. In November 2007, he was appointed by the U.S. Secretary of State as special envoy for Middle East security.
Early career- In January 1967, Jones was commissioned a second lieutenant in the U.S. Marine Corps. Upon completion of Basic, he was ordered to the Republic of Vietnam where he served as a platoon and company commander with Golf Company, 2nd Battalion, 3rd Marines. While overseas, he was promoted to first lieutenant in June 1968.
Returning to the United States in December 1968, Jones was assigned to Marine Corps Base Camp Pendleton, California where he served as a company commander until May 1970. He then received orders to Marine Barracks, Washington, D.C. for duties as a company commander, serving in this assignment until July 1973. While at this post (December 1970) he was promoted to captain. From July 1973 until June 1974, he was a student at the Amphibious Warfare School, MCB Quantico, Virginia.
In November 1974, he received orders to report to the 3rd Marine Division in Okinawa, Japan, where he served as the commander of Company H, 2nd Battalion, 9th Marines until December 1975.
From January 1976 to August 1979, Jones served in the Officer Assignments Section at Headquarters Marine Corps, Washington, D.C. During this assignment, he was promoted to major in July 1977. Remaining in Washington, his next assignment was as the Marine Corps liaison officer to the United States Senate, where he served until July 1984. In this assignment, his first boss was John McCain, then a U.S. Navy captain. He was promoted to lieutenant colonel in September 1982.
Senior staff and command- He was selected to attend the National War College in Washington, D.C. Following graduation in June 1985, he was assigned to command the 3rd Battalion, 9th Marines, 1st Marine Division at Camp Pendleton, California from July 1985 to July 1987.
In August 1987, Jones returned to Headquarters Marine Corps, where he served as senior aide to the commandant of the Marine Corps. He was promoted to colonel in April 1988, and became the military secretary to the commandant in February 1989. During August 1990, Jones was assigned as the commanding officer of the 24th Marine Expeditionary Unity (24th MEU) at Marine Corps Base Camp Lejune, North Carolina. During his tour with the 24th MEU, he participated in Operation Provide Comfort in Northern Iraq and Turkey. He was advanced to brigadier general on April 23, 1992. General Jones was assigned to duties as deputy director J-3, U.S. European Command, Stuttgart, Germany on July 15, 1992. During this tour of duty, he was reassigned as chief of staff, Joint Task Force Provide Promise for operations in Bosnia-Herzegovina and Republic of Macedonia.
Returning to the United States, he was advanced to the rank of major general in July 1994 and was assigned as commanding general, 2nd Marine Division, Marine Forces Atlantic, MCB Camp Lejeune, North Carolina. General Jones next served as director, Expeditionary Warfare Division (N85), Office of the Chief of Naval Operations during 1996, then as the deputy chief of staff for plans, policies, and operations, Headquarters Marine Corps, Washington, D.C. He was advanced to lieutenant general on July 18, 1996. His next assignment was as the military assistant to the secretary of defense.
Commandant- On April 21, 1999, he was nominated for appointment to the grade of general and assignment as the 32nd Commandant of the Marine Corps. He was promoted to general on June 30, 1999, and assumed the post on July 1, 1999. He served as commandant until January 2003, turning over the reins to General Michael Hagee.
Among other innovations during his career as Marine Corps commandant, General Jones oversaw the Marine Corps’s development of MARPAT camouflage uniforms and the adoption of the Marine Corps Martial Arts Program. These replaced the woodland uniforms and the LINE combat system respectively.
General Jones assumed duties as the commander of U.S. European Command on January 16, 2003, and supreme allied commander Europe on January 17, 2003. He is the first Marine Corps general to serve as SACEUR/EUCOM commander.
The Marine Corps had only recently begun to take on a larger share of high-level assignments in the Department of Defense. As of December 2006, General Jones was one of five serving Marine Corps four-star general officers who outranked the current commandant of the Marine Corps (General James T. Conway) in terms of seniority and time in grade—the others being Chairman of the Joint Chiefs of Staff Peter Pace; former commandant Michael Hagee, commander of U.S. Strategic Command James E. Cartwright, and Assistant Commandant Robert Magnus.
As SACEUR, Jones led the Allied Command Operations (ACO), comprising NATO’s military forces in Europe from the Supreme Headquarters Allied Powers Europe, Mons, Belgium. General Jones relinquished command as SACEUR on December 7, 2006, and was succeeded by U.S. Army Gen. John Craddock.
General Jones stepped down as SACEUR on December 4, 2006, and retired from the Marine Corps on February 1, 2007.
Here is General James Logan Jones’s newest version (10-27-09) of his biographical statement (minus Boeing) found here:
https://slsp.manpower.usmc.mil/gosa/biographies/rptBiography.asp?PERSON_ID=133&PERSON_TYPE=General
Add comment October 28, 2009
James L. Jones, National Security Advisor: Who is Sanitizing his Bio Statements?
In previous posts I have questioned Obama’s appointment of former Boeing Director, James L. Jones, as his National Security Advisor. Formerly Jones’s bio statements glowingly reported his ties to the Boeing Company, his service as the Director (Board of Directors), serving on Boeing’s Audit and Finance Committees.
As more corruption involving Boeing in defense contracting becomes evident, it is interesting that someone would be making Boeing disappear from General Jones’s internet bios.
As evidenced by numerous news reports, Boeing’s troubling power and influence, and reports of unethical actions that appear to be taking place in DOD agencies, (including the Pentagon itself), related to Boeing’s influence, contracts, and relationships with Defense officials seem to be broadening in scope. What interesting timing. Anyone want to talk about the problems surrounding “revolving doors” now?
Add comment October 28, 2009
My What a Tangled Web of Deceit They Weave
New Rajaratnam Lawyer Dowd Represented McCain, Major Leagues
Link to original: http://www.bloomberg.com/apps/news?pid=20601103&sid=a5YLiSWRrUPw
By David Glovin, Cary O’Reilly and Thom Weidlich
Oct. 27 (Bloomberg) — John M. Dowd, the new criminal lawyer for Galleon Group hedge fund founder Raj Rajaratnam, made his reputation outside the courtroom as much as in it.
During more than 30 years as a lawyer, Dowd has represented U.S. Senator John McCain in an ethics investigation, ex-Justice Department aide Monica Goodling in a U.S. probe and former Arizona Governor Fife Symington in a bank fraud trial. The 225- page report he assembled for Major League Baseball in 1989 found 412 instances in which Pete Rose bet on the game, leading the sport to banish its career hits leader.
For Rajaratnam, the move to replace James Walden of New York’s Gibson, Dunn & Crutcher LLP with Dowd of Akin, Gump, Strauss, Hauer & Field LLP, means he’ll be relying on a Washington-based attorney to convince a Manhattan jury to acquit him if the case goes to trial. Andrew Weissmann, a former Justice Department attorney now at Jenner & Block LLP in New York, said Dowd is so good that he’ll have little difficulty connecting to local jurors.
“It’s a factor that you would consider,” Weissmann, who as a member of the Justice Department’s Enron Corp. Task Force dealt with Dowd during his representation of former executive David Delainey. “I think it’s more about the person than the location.”
“The difference between D.C. and New York, or New York and Chicago — it doesn’t matter,” said John Moustakas, a partner at Goodwin Procter LLP in Washington.
$20 Million Scheme
Rajaratnam, 52, was among six people charged in New York on Oct. 16 in a $20 million insider trading scheme that federal prosecutors called the biggest ever involving hedge funds. He was freed by a magistrate judge on a $100 million bond, of which $20 million had to be guaranteed.
According to prosecutors, tips to Rajaratnam came from insiders and others at hedge funds, investor relations firms and companies including Intel Corp., International Business Machines Corp., McKinsey & Co., and other companies whose shares were traded in the scheme. Prosecutors said they have wiretaps of Rajaratnam discussing the scheme.
Walden defended Rajaratnam in the early stages of the case, winning his release on bond after prosecutors asked a judge to jail him before the trial. In a statement yesterday, Walden said his firm had “laid a strong foundation for Mr. Rajaratnam’s defense.” The statement didn’t say why Dowd took over the case.
Dowd didn’t return phone and e-mail requests seeking comment yesterday.
Marine Captain
Dowd, 68, is a 1963 graduate of St. Bernard College and a 1965 graduate of Emory University’s law school. He was a captain in the U.S. Marine Corps and member of the Judge Advocate General Corps before joining the Justice Department as a lawyer in the tax division and as chief of the Organized Crime Strike Force, according to Akin Gump’s Web site.
“John’s experience is unimpeachable, and it will take that here,” Scott Fredericksen, a partner at Foley & Lardner in Washington, said in an interview. “The government has come out of the gates in very strong fashion with wiretaps. One would expect this case to go to trial, and John has the experience. He’s a fighter.”
Dowd’s clients have come from sports, government and the corporate boardroom.
In the late 1980s, Fay Vincent, Major League Baseball’s commissioner from 1989 to 1992, hired Dowd to look into gambling allegations against Rose, who began and ended his career as a player and manager with the Cincinnati Reds. Rose also played for the Philadelphia Phillies and Montreal Expos.
Dowd’s investigation finding that Rose wagered even on his own team cited phone and bank records and betting slips in Rose’s handwriting.
Yankees’ Owner
The next year, Dowd delivered a report to Vincent about New York Yankees owner George Steinbrenner’s dealings with an admitted gambler.
Dowd’s zealous defense of a client was on display during his representation of McCain, one of five senators who took contributions from savings and loan financier Charles Keating. They were later accused of seeking favors from regulators for him. The Senate Ethics Committee in 1991 cleared McCain of wrongdoing other than using poor judgment in going to a meeting set up to lobby regulators on Keating’s behalf.
“John is the only senator among all the senators that essentially threw Charlie Keating out of his office and broke off all relations with him,” Dowd told reporters last year as McCain, a Republican, was running for president.
‘Retribution and Intimidation’
Two years ago, Dowd defended Monica Goodling, who resigned as an aide to Attorney General Alberto Gonzales during a U.S. probe of her role in the firing of U.S. attorneys. No charges were brought against Goodling. Dowd at one point accused the Justice Department’s inspector general of engaging in “retribution and intimidation” in the case.
Other Dowd clients have included executives at Boeing Co. and Sunrise Senior Living Inc.
“Mr. Dowd has an enviable reputation as an investigator, earned both in the government and outside,” said John Moscow, a former prosecutor now with Baker & Hostetler LLP in New York. “He is being asked to represent a man whose words were tape recorded. This will be a challenging task.”
The case is U.S. v. Rajaratnam, 09-02306, U.S. District Court, Southern District of New York (Manhattan).
To contact the reporters on this story: David Glovin in New York federal court at dglovin@bloomberg.net; Cary O’Reilly in Washington at caryoreilly@bloomberg.net; Thom Weidlich in New York at tweidlich@bloomberg.net.
3 comments October 28, 2009