Why do I keep pushing Hidden Treuhand, Shelley Stark’s new book, on all of you?

 Someone wrote and asked me that today.  First I want to assure you that I am not being paid one penny in fees, nor have I received any gifts or even any non-profit organization sponsored trips to Lichtenstein for talking about this book.  (If you’ve been reading my blog for a while, you’ll get the humor intended.)

The author, Shelley Stark is not a relative, business associate or long time friend.  In fact, I’ve never met her in person.  When she wrote her first article for Truthout while completing her research and writing of Hidden Treuhand, I wrote about her article and upcoming book in my blogs.  When I read what she had to say, a light went on for me, as suddenly I could see how the Hidden Treuhand could be used for the benefit of greedy individuals or corporations.  As you know I’ve been keeping my radar on to alert for greedy and corrupt corporations.  

Shortly before the book was published Ms. Stark saw my blog on the Internet and contacted me to ask f I would like to write about her book, with her permission.  I suspected this was a very important book and am convinced of that now that it is published and I’ve had a chance to thoroughly read it.  So I agreed to help her bring her book to the attention of my readers.  We have become better acquainted though emails and the sharing of information and articles over the Internet spanning from the US to Europe, where Ms. Stark currently resides.  She continues to be committed to trying to help right the terrible wrongs committed against individuals and groups of citizens with the use of these financial manipulation instruments, Hidden Treuhands. 

If you are paying any attention to the news, you will be able to make connections between what is being reported, in some cases only surface coverage reporting, and what Ms. Stark is trying to raise an alarm about.  We are all affected by this kind of fraud and greed.  It is not going to be easy to get it addressed.  Even those in our government in charge of oversight are lackluster in their motivation to learn about and go after this kind of crime, even though there are a couple of notable instances in the news now. 

I would like to see this change.  I would imagine many of you would also.  That is why it is important that everyone read this book.  What we don’t know will certainly have the ability to hurt us in this arena.  Thank you for paying attention.  GFS

Hidden Treuhand may be purchased at Amazon.Com and Barnes and Noble.  You may also find it on the shelves of your public library. 

Add Depth to Your Understanding of Our Financial Crisis and Corruption

What is wrong with these people….AIG and our alleged government oversight?  This is outrageous!

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

Please read this book: 

 

Hidden Treuhand is available at Amazon.com and Barnes and Noble.  It is a must read.  There is too much most of us don’t understand about what is going on beneath the financial crisis and the widespread corruption we are experiencing.

What I Wish the Obama Administration Would Do More Strenuously

And this is only part of this frustrating, confounding and pathetic tale.  At first I thought perhaps Obama was just a bit naive regarding the depth of the corruption and control that industry seems to have over our government and its workings. 

But recently I have had to reluctantly concede, that Obama and his administration seem only to be mirror clones to the former Bush Administration as far as covering up corruption within the government and defense contractors.  I note the apparent relationship particularly between one large aerospace company that has way too many lobbyists and too much influence in how government oversight is done with at least the past two administrations and many of the appointed people serving in various federal agencies and the Pentagon.

 There is so much good old boy/revolving door/quid pro quo going on, there appears to be  no hope, in spite of the legions of whistleblowers being snuffed out figuratively for trying to report the unethical and criminal behavior and get it legitimately addressed.  These whistleblowers can’t get anyone to do their jobs and to help bring these cases and the miscreants to justice.  Justice isn’t even working right after the blood bath during the Bush administration.  It isn’t even possible in most cases to get complaints of improper business dealings, including giving away or selling our cutting edge defense design and  materials to those who are not our friends reputably investigated, much less prosecuted.  Those who stand up and try to do their jobs are persecuted and watch their careers and lives decimated. 

For instance, in spite of the emergence of whistleblowers who have uncovered massive financial crime including elements overseas because of the convoluted banking relationships with countries which do not have the same laws we do, which has contributed to our national economic meltdown, few if any federal oversight employees are interested enough to even read Shelly Stark’s new book, Hidden Treuhand.  (available through Amazon.com and at Barnes and Noble.   Things are in a real state.  If you want to see what I am talking about keep monitoring this blog and find yourself a copy of Ms. Stark’s book. 

 It is apparent that those who value money or profits at the expense of everything else including the national and economic security of the citizens and taxpayers of the United States, and the futures of our children are way more powerful than most of us would have believed.  GFS

———————————————————————————————————

The Land Mines Obama Won’t Touch

Friday 11 December 2009

by: Bill Moyers and Michael Winship, t r u t h o u t | Op-Ed

Many people are troubled that Barack Obama flew to Oslo to receive the Nobel Peace Prize so soon after escalating the war in Afghanistan. He is now more than doubling the number of troops there when George W. Bush left office.

The irony was not lost on the president and he tried to address it in his Nobel acceptance speech. “I am responsible for the deployment of thousands of young Americans to battle in a distant land,” he said. “Some will kill. Some will be killed. And so I come here with an acute sense of the cost of armed conflict – filled with difficult questions about the relationship between war and peace, and our effort to replace one with the other.”

Granted, there’s a gap here between the rhetoric and the reality. But there’s always been something askew about the Nobel Peace Prize, in no small part because it’s given in the name of the man who invented dynamite, one of the most powerful and destructive weapons in the human arsenal. It was rumored that after Alfred Nobel brought his version of Frankenstein into the world, he was torn by guilt over his creation, his shame said to have intensified when a French newspaper prematurely ran his obituary with the headline, “The Merchant of Death Is Dead.” The article vilified him as a man “who became rich by finding ways to kill more people faster than ever before.”

What’s more, until the end of his life he corresponded with a woman named Bertha von Suttner, who had briefly worked as his secretary. Many believe that Nobel was moved by a powerful antiwar book she had written titled “Lay Down Your Arms.” Whatever his reasons, when his will created the Nobel Prizes he specifically included among them a prize for peace. Von Suttner became one of its first recipients.

After Nobel’s death, events turned grim, as if to mock him further. The arms race exploded beyond anything he could have imagined. From the coupling of science and the military came ever more ingenious weapons of destruction that would take even more lives in ever more horrible ways. One of the most insidious was the land mine, that small, explosive device filled with shrapnel that burns or blinds, maims or kills. Triggered by the touch of a foot or movement or even sound, more often than not it’s the innocent who are its victims – 75 to 80 percent of the time, in fact.

As a weapon, variations of land mines have been around since perhaps as early as the 13th century, but it was not until World War I that the technology was more or less perfected, if that can be said of weapons that mangle and mutilate the human body, and their use became common. The United States has not actively used land mines since the first Gulf War in 1991, but we still possess some 10 million to 15 million of them, making us the third largest stockpiler in the world, behind China and Russia. Like those two countries, we have refused to sign an international agreement banning the manufacture, stockpiling and use of land mines. Since 1987, 156 other nations have signed it, including every country in NATO. Amongst that 156, more than 40 million mines have been destroyed. Just days before Obama flew to Oslo to make his Nobel Peace Prize speech, an international summit conference was held in Cartagena, Colombia, to review the progress of the treaty. The United States sent representatives and the State Department says our government has begun a comprehensive review of its current policy.

Last year 5,000 people were killed or wounded by land mines, often placed in the ground years before, during wars long since over. They kill or blow away the limbs of a farmer or child as indiscriminately as they do a soldier. But still we refuse to sign, citing security commitments to our friends and allies, such as South Korea, where a million mines fill the demilitarized zone between it and North Korea. Twelve years ago, at the time the treaty was first put into place, the Nobel Peace Prize was jointly awarded to the International Campaign to Ban Landmines and Jody Williams, an activist from Vermont who believes that by organizing into a movement, ordinary people can matter. She proved it, despite the stubborn refusal of her own country’s government to do the right thing.

Last week, Jody Williams condemned America’s continuing refusal to sign the treaty as “a slap in the face to land mine survivors, their families, and affected communities everywhere.”

The Nobel Committee said that part of the reason it was giving the Peace Prize to President Obama was for his respect of international law and his efforts at disarmament. And twice in his Nobel lecture, the president spoke of how often more civilians than soldiers die in a war. Then he said this: “I believe that all nations, strong and weak alike, must adhere to standards that govern the use of force. I, like any head of state, reserve the right to act unilaterally if necessary to defend my nation. Nevertheless, I am convinced that adhering to standards strengthens those who do, and isolates – and weakens – those who don’t.” And still the land mine treaty goes unsigned by the government he leads. Go figure.

They just want you to go away….

FAA Whistleblower: “They don’t want you to be part of the solution; they want you to go away.”

“After 25 years at Dallas-Fort Worth Airport, an air-traffic controller who blew the whistle on Federal Aviation Administration misconduct is quitting.

Anne Whiteman started reporting problems 12 years ago at the airport – including an incident in which two planes came within 300 feet of each other – and has suffered continual harassment since, including physical assault, isolation, and even a death threat.

Twice her claims were substantiated by Office of Special Council investigations (OSC), but the harassment only increased to include claims of drug abuse, not showing up to work on time, and fraud. The OSC is the federal agency charged with protecting federal employee whistleblowers.

Whiteman even emailed new FAA director Randy Babbit in May of this year, shortly after his appointment. He did not respond.

Saying that the FAA finally won, Whiteman resigned last week. She had been offered a new position, only to have the opportunity withdrawn. Whiteman now believes that there is no accountability at FAA, and that “they don’t want you to be part of the solution; the want you to go away.”

The FAA responded in a statement that they are reaching out to whistleblowers.”

 

 

From GAP:  http://whistleblower.typepad.com/all_things_whistleblower_/2009/09/faa-whistleblower-they-dont-want-you-to-be-part-of-the-solution-they-want-you-to-go-away.html

 

 

Isn’t that the truth and in more agencies than just the notably corrupted FAA.  The Federal workplace is becoming littered with the abused, the damaged, the tired and disheartened “good people” whose only crime was wanting to do their jobs ethically and well, you know the job they were hired to do, the job they were trained to do, (at least in the old days when federal employees actually were allowed to get the training they needed to become good at their jobs). 

 

And in industry it is no better. 

 

I wish more people would speak up.  If we made a paper chain out of the resume’s of these people who’ve sacrificed their careers and more to try to do right, we’d cover the nation via I-90 by now.  I am thinking that what a retired investigator told me some time ago, that the only way to get change is to publicly humiliate the wrongdoers,  may be correct.  Any one who wishes to speak up is invited to do so here!  -GFS

Hidden Treuhand: Crime Without Visible Law

HIDDEN TREUHAND: NO LAW, NO CRIME

by Shelley Stark

   ‘Treuhand’ is a German language term that refers to a ‘legal trust’. Conversely, a hidden ‘Treuhand’ is completely non-transparent, only somewhat legal, and operates covertly. Hidden ‘Treuhand’ is used to hide the beneficial ownership and control of any asset, located anywhere in the world, by owning the asset through a corporate structure. When the corporate structure is created with a hidden ‘Treuhand’, a lawyer/trustee is the listed shareholder. The real shareholder’s identity remains anonymous in all business dealings. According to Prof. Dr. Sol Picciotto, emeritus professor at Lancaster University and a senior advisor to the Tax Justice Network, there is a close link between tax avoidance dealings in offshore tax havens and the speculation that has fuelled the current financial crisis. He states: “large multinationals are as much financial as business entities, they have freedom to devise complex financial structures, and financial institutions such as banks, even more so: in recent surveys by the US Government Accountability Office and the Tax Justice network, the largest user of tax havens in every country was a bank”.

   Hidden Treuhand is made and in use especially in Austria, Liechtenstein, Luxemburg, Switzerland, and Germany, in part because they all share the same basis of law. These European countries are set apart from the rest of the world in the way they foster the availability and especially the protection of hidden ‘Treuhand’.

   Lawyers are often called upon to act as a ‘trustee’ in a hidden ‘Treuhand’. There is no law regulating hidden ‘Treuhand’. There exists only law specifying that the lawyer cannot divulge any secrets pertaining to the client. The hidden ‘Treuhand’ is not so much protected by law as it protected by lawyers. If questioned, the lawyer will simply evoke attorney-client privilege. At that point, the law protects the lawyer.

   This is how it works: a notary public notarizes the names of all shareholders and registers them in the public corporate register. Anybody wishing not to be evident in this public registry engages a lawyer to represent his shares or ownership. Anonymity is insured because only the lawyer’s name will be notarized and visible in the corporate registry. The true beneficiary’s name is not notarized or publically evidenced in any form. The private contract, known as a hidden ‘Treuhand’, documents the arrangement between the lawyer and client, and only they are privy to its contents.

   There is no regulation of the Treuhand industry and yet, the Treuhand contract enjoys great protection by law. The Austrian Lawyers’ Chamber has taken great steps to alleviate any fear of embezzlement by a lawyer through a Treuhand contract registration process. The registration is optional, and was constructed to ensure beneficiaries that the asset held in a Treuhand contract is accessible only to the parties involved in the Treuhand contract, while providing banks assurances that the responsible parties are accountable.

   It is easily understood why guidelines for administrating hidden beneficiaries and assets would be desirable. The hidden ‘Treuhand’ operates in obscurity: clients do not outwardly appear to own their assets and the practice is not regulated by law. It is easy to imagine that the secretiveness afforded this covert world might eventually stumble onto problems such as embezzlement of a beneficiary’s property by a lawyer. The secretive aspects of hidden ‘Treuhand’ require too much trust from clients, leading to the need for lawyers themselves to regulate that which the law does not and cannot regulate.

   In the early 1990s, Wild West cavalier Treuhand activities gave way to multiple cases of embezzlement and threatened to destroy the institution of Treuhand in Austria. The client’s anonymity was used against the client to embezzle property much to the chagrin of banks financially involved. The activities of some lawyers provoked outrage from banks to the extent these institutions were threatening the Austrian legal community. Banks caught in the fray, forced the legal community to take action to ensure both clients and lending institutions that embezzlement by lawyers would cease to occur.

   The answer to how this dilemma was solved is detailed in a legal brief written in 1996 by a Viennese lawyer, and the current Vice President of the Lawyers’ Chamber, Dr. Gerhard Horak. If lawyers are going to create hidden ‘Treuhands’, keep them as flexible as possible, and yet not actually have the legal authorities involved, then lawyers themselves would have to find a way to regulate their colleagues.

   Dr. Horak writes: “accumulated abuse and embezzlement by lawyers…caused great consternation among private investors and financial lending institutions, provoking hesitation to commission lawyers with trust activities. This development and ensuing lack of trust especially affected younger colleagues in the legal profession, who were unable to convince clients in the Treuhand business sector that they were worthy of the necessary trust for Treuhand transactions.”

   As problems mounted and the actions of lawyers came under further scrutiny, the desire for a more effective means of securing Treuhand activities increased, forcing a seminar to be held in Salzburg in 1995 to avert further damage. Dr. Horak claims: “Earlier attempts (only tentative) by the Chamber of Lawyers to intervene by regulating Treuhand was strictly declined at the time by colleagues under the dogma and allusion of freedom within the legal profession to make contracts as they like.”

   The response from the Austrian legal community was the creation of the ‘Treuhand handbook’—an agreed upon set of guidelines drawn up by the Lawyers’ Chamber and a registration system.

   Their goal was to offer clients the highest possible security and efficient control regarding Treuhand transactions while maintaining complete freedom to arrange contracts and operate as flexible as possible. “Within the scope of these maxims, we pushed to take action although we didn’t like to (not in our interests) and subsequently developed the legal trust handbook for guidance,” said Dr. Horak. Clearly, the legal profession in Austria did not like the idea of guidelines and felt it was not in their interest. The actions taken by the Vienna Bar Association assured clients that complete anonymity and security could be achieved simultaneously.

   The Vienna Bar Association purchased a special computer system to be supervised only by qualified lawyers for registering Treuhand contracts and beneficiaries. It was considered by many in the legal community to be an unfortunate necessity that any control of trusteeships by lawyers would be necessary. Dr. Horak noted: “The Lawyers’ Chamber knows that the legal trusteeship handbook is a tightly fitting corset.  The wearing of this corset is much easier for all of us if the noted ‘confidentiality crisis’ could be ended.”

   There are several very interesting points involved in the registration of a Treuhand. Firstly, participation by either the lawyer or the client is optional. Secondly, if the client opts for registration, the client can be assured of maintaining control without being present because the lawyer has to keep the trusteeship files in a way that all orders that have to be carried out are evident in the file.

   The third point is that even an “anonymous Treuhand contract,” or hidden ‘Treuhand’, can be registered. Dr. Horak’s brief states: “In case of controlling “anonymous” trusteeships, the control is restricted to the inspection of the trusteeship index, where the trusteeship is only evident by a sequential registered number.”

   Lastly, this scandal tells us something else about Treuhand activities: clients could not even turn to tax records as a means of getting their property back. In essence, Dr. Horak’s brief proves that hidden ‘Treuhand’ facilitates tax evasion and that the Austrian legal community is painfully aware of this fact. The Austrian Legal Chamber acknowledges the existence of anonymous or hidden ‘Treuhand’ and provides special conditions and security for the client, whereby the client’s beneficial ownership of an asset can be registered under a number much like an anonymous Swiss bank account.

   Banking secrecy only protects money from public knowledge, but a registered hidden ‘Treuhand’ offers the beneficial owner security and secrecy for the assets that are capable of producing equally secret income.

   Treuhand contracts are secretive and function without the slightest transparency, and yet they are fully protected by law. A leading Austrian bank confirmed that all contractual Trusteeships (with some exceptions) must be wound up over the Lawyer’s Treuhand Book as of July 1, 2000. The ‘some exceptions’ include registration of contracted hidden ‘Treuhands’ such as “anonymous Treuhands.” 

   The law does not regulate hidden ‘Treuhand’, so lawyers formed a regulating system themselves. The reason for creating the guidelines and voluntary regulations was to keep lawfully binding regulations from being imposed on the industry and yet maintain the freedom to make contracts that reflect the will of the parties without losing the cooperation of the banks. The lack of lawfully binding regulation offers a Wild West land of opportunity for those that can conceive of a business plan that would be made more advantageous when the identity of the true benefactors is completely concealed from public knowledge. The legal community acknowledges that in effect, a true legal framework is nonexistent, yet simultaneously specifies a framework based on trust law.

   There are some obvious perks in the Treuhand relationship to be realized by both the lawyers and their clients. Perks range from tax avoidance to outright tax evasion for both because neither one need declare income that cannot be traced. In this way, these lawyers/quasi trustees have created a thriving cottage industry for themselves. Moreover, it is an industry for which the lawyers themselves are the first line of defense. These lawyers have created secret legal structures despite efforts from the international community to work within and enforce the rule of law as practiced in democratic societies.

   The phenomenon of the hidden ‘Treuhand’, when combined with banking secrecy and globalization, is no longer confined only to Austria, Switzerland, Liechtenstein, and Luxemburg. Due to globalization, these countries are able to impact economies outside their borders. For example, Germany is unable to keep taxable income from leaving Germany and becoming bunkered in Liechtenstein, Luxemburg, Switzerland, or Austria.

   High net worth individuals and corporations from all over the world come to these jurisdictions not just to evade taxes, but also to create a hidden ‘Treuhand’ that hides their beneficial ownership of an asset in another country.

   The key role played by the hidden ‘Treuhand’ is to prevent transparency regarding economic activities, not just beneficial ownership. These economic activities need not be confined to Europe; in fact, via the corporation, these activities have a global scope. As a result, non-transparent economic activities are encouraged. As a result of law and the lack of law, there is no means to disclose the secrets a Treuhand is meant to hide. In effect, the hidden ‘Treuhand’ is a black box. 

Shelley Stark is the author of Hidden Treuhand: How Corporations and Individuals Hide Assets and Money, published by Universal-Publishers.  Available direct from Universal -Publishers or through Amazon and Barnes and Noble.  

To learn more about Hidden Treuhand and how it is impacting the world economy and your financial security, please put this in your browser: http://www.universal-publishers.com/book.php?method=ISBN&book=1599429292

Out of Proportion: Our Government Oversight Agencies have lost it completely!

The Heartland Of Corrupt Contracts Won’t Do Business With Acorn

 

Link to original:  http://prorev.com/2009/10/heartland-of-corrupt-contracts-wont-do.html

 

 

Jeremy Scahill, Common Dreams - On Tuesday night, US Undersecretary of Defense Shay Assad, the Pentagon’s top contracting official, sent a memo to the commanders and directors of all branches of the military instructing them to cease all business with the embattled community organization ACORN and to take “all necessary and appropriate” steps to prevent future contracts with the organization. Assad’s brief memo contained the two-page guidelines issued October 7 by Peter Orszag, the director of the Office of Management and Budget. Orszag’s guidelines were issued following the passage of Congressional legislation aimed at “defunding ACORN.”

Orszag’s guidelines were sent on October 7 to “the heads of Executive Departments and Agencies” and instructed them to “immediately commence all necessary and appropriate steps” to comply with the terms of the Defund ACORN Act. These include: no future obligation of funds, suspension of grant and contract payments and no funding of ACORN and its affiliates through Federal grantees or contractors. “Your agency should take steps so that no Federal funds are awarded or obligated” to ACORN, wrote Orszag.

While the DoD memo sent by Assad is basically a formality initiated by Orszag’s guidelines to all federal agencies, it is nonetheless remarkable given that ACORN is not a Defense Department contractor. According to an ACORN spokesperson, the group has not received Pentagon funds, nor has the community group even considered applying for such funds. . .

While the DoD sends out memos regarding an organization that it does not contract with, the Pentagon currently does business with a slew of corporate criminals whose billions of dollars in annual federal contracts make the $53 million in government funds received by ACORN over the past 15 years look like, well, acorns. The top three government contractors-all of them weapons manufacturers-committed 109 acts of misconduct since 1995, according to the Project on Oversight and Government Reform. In that period, Northrop Grumman, Lockheed Martin and Boeing paid fines or settlements totaling nearly $3 billion. In 2007 alone, the three companies won some $77 billion in federal contracts. There has been no letter sent around to federal agencies instructing them to cancel contracts with these companies that have ripped off taxpayers and engaged in a variety of fraudulent activities with federal dollars.

Also, it is not just the Defense Department that continues to hire corporations with real rap sheets. Contracting fraud and abuse is a corrupt cancer that permeates the federal bureaucracy. Overall, the top 100 government contractors make about $300 billion a year in federal contracts. Since 1995, they have paid a total of $26 billion in fines to settle 676 cases stemming from fraud, waste or abuse. According to the 2008 Corporate Fraud Task Force Report to the President, “United States Attorneys’ offices opened 878 new criminal health care fraud investigations involving 1,548 potential defendants. Federal prosecutors had 1,612 health care fraud criminal investigations pending, involving 2,603 potential defendants, and filed criminal charges in 434 cases involving 786 defendants. A total of 560 defendants were convicted for health care fraud-related crimes during the year.” Last month, the pharmaceutical giant Pfizer settled a series of cases, including Medicaid fraud and illegally marketing banned drugs, in what the Department of Justice said is “the largest civil fraud settlement in history against a pharmaceutical company.” The company has also been ordered to pay a criminal fine of $1.195 billion, “the largest criminal fine ever imposed in the United States for any matter,” according to the DoJ. . .

If the law is to be applied equally, then Peter Orszag should be firing off memos instructing all federal agencies to cease business and cancel contracts with massive financial institutions, weapons manufacturers, mercenary firms and pharmaceutical companies. Given the incredible government reliance on corporations, particularly in the defense industry and in the wars in Iraq and Afghanistan, don’t hold your breath waiting for such a memo on DoD stationary any time soon.

DCAA: only the tip of a very corrupted iceberg

Originally published 04:45 a.m., October 5, 2009, updated 03:50 p.m.,

October 5, 2009

Pentagon auditor deemed serial failure

 

 

Shaun Waterman THE WASHINGTON TIMES

 

Some members of Congress are so disturbed by failures and malfeasance

described in a recent government report that they are considering

removing the agency that audits hundreds of billions of dollars in

Defense Department contracts from Pentagon supervision.

 

One legislator said he felt physically sickened by the report.

 

The lawmakers were reacting to findings by the Government

Accountability Office (GAO), the investigative arm of Congress, about

the Defense Contract Auditing Agency (DCAA).

 

The agency, which last year was responsible for ensuring that

taxpayers got good value for more than a half-trillion dollars in

defense contracts, revised audits to curry favor with contractors,

promoted a supervisor responsible for such revisions to a top position

and rushed through other audits out of fear that the work would be

outsourced if employees took too much time, the GAO said.

 

“Unbelievable problems at Def Contrctng Agncy [sic],” Sen. Claire

McCaskill, Missouri Democrat, wrote on her Twitter account just before

a recent hearing on the report. “Top of my head is about to pop off.”

 

“I read a summary of the GAO report last night and quite frankly got

sick,” said Sen. Tom Coburn, Oklahoma Republican, adding that he would

not use all his allotted time for questions because he was “a little

bit too upset to go where I really want to go.”

 

“Each and every audit that GAO reviewed for this report was out of

compliance with auditing standards,” said Sen. Joe Lieberman,

Connecticut independent and chairman of the Homeland Security and

Governmental Affairs Committee. The DCAA “has a unique role,” as a

steward of taxpayer dollars, and consequently “needs to have

independence. It needs to stand up to pressures from both agencies and

contractors,” he said. “Perhaps it’s time for us to consider

separating DCAA from the Department of Defense and … making it an

independent auditing agency.”

 

The flaws identified by the GAO “allow contractors to overbill the

government in some cases for millions of dollars,” said the committees

ranking Republican, Sen. Susan Collins of Maine.

 

Calling the DCAAs performance “completely unacceptable,” she noted

that when the agency failed, “the fallout can cascade throughout the

system and ultimately shortchange our troops in the field.”

 

Pentagon officials told the hearing that the GAO investigation

examined audits conducted years ago and that a series of remedial

measures already had been implemented, including a new oversight

committee of all the service comptrollers.

 

Robert Hale, the undersecretary of defense who serves as the

departments comptroller and chief financial officer, and the official

to whom the DCAA currently reports, said it might take time for the

reforms to show results and argued against any change in the agencys

status.

 

Nonetheless, Ms. Collins declared her “frustration” – a sentiment

widely shared by lawmakers at the hearing.

 

In one case, DCAA officials had attempted an audit of a major U.S.

defense contractor doing reconstruction work in Iraq. The contractor

was not named in the report, but a person familiar with the

investigation told The Washington Times that it was Parsons Corp., a

Pasadena, Calif.-based engineering firm whose work in the past has

been criticized as shoddy.

 

The GAO report said the firm did almost $900 million of U.S.

government contracting in 2004, the year the audit started, a

quarter-billion dollars worth of it in Iraq.

 

Two years after the DCAA began a review, in 2006, Stuart Bowen,

special inspector general for Iraq reconstruction, pledged to

investigate all of the $1 billion worth of contracting Parsons had

done in Iraq, after evidence emerged about unfinished and substandard

work. Last year, he released a report charging that the firm had been

paid $142 million for canceled reconstruction projects.

 

The initial DCAA audit identified eight serious deficiencies in the

firms billing system. But after the contractor objected, a supervisor

ordered DCAA staff to delete some of the documents the audit had

generated and revise others, the GAO found. When the final audit was

published, five of the eight deficiencies had been removed altogether

and the other three downgraded to suggestions, meaning the firm got a

“clean” audit rating.

 

That supervisor was subsequently promoted to become the quality

assurance manager for the DCAAs Western region, serving as the last

line of quality control over thousands of audits every year -

including many that ended up being questioned by the GAO – a

circumstance Ms. Collins called “devastating” to morale at the agency.

 

Erin Kuhlman, Parsons vice president for corporate relations, said the

company would not comment on the findings.

 

The GAOs top forensic accountant, Gregory Kutz, told lawmakers that

his staff had found a “lack of independence” at the DCAA, which had a

“production-focused culture resulting in part from flawed metrics …

intended to show that they could do their work faster and cheaper than

public accounting firms,” partly because it feared its work might

otherwise be outsourced.

 

“Taking time to find and address issues was discouraged,” he added,

concluding that “thousands of good auditors [are] trapped in a broken

system” at the agency.

 

The GAO said that, in the short term, Congress could legislate to

provide the agency with the same budgetary and legal independence that

inspector generals have.

 

“This change could strengthen leadership, independence and

transparency,” Mr. Kutz said.

 

In the longer term, he said, lawmakers could consider elevating the

agency to a “component agency” of the Department of Defense, reporting

directly to the Pentagons powerful deputy secretary; or even moving it

outside the department altogether, creating an independent audit

agency.

 

Mr. Hale, the Pentagon comptroller, told the hearing that the

administration opposed any such move.

 

Instead, he said, officials were working to strengthen the agencys

independence within the department, boosting resources and improving

oversight by establishing a special committee of defense auditors to

look at the agency’s work.

 

DCAA Director April Stephenson told lawmakers that the agency hoped to

hire 700 more people for training over the next three years and had

already “completely revamped” its quality assurance processes.

 

Mr. Hale pointed out that the audits reviewed by GAO and the inspector

general “were completed three to five years ago,” and that officials

had begun implementing corrective actions late last year, after the

problems were first identified by a DCAA whistleblower.

 

But he acknowledged that the effects of those reforms might not be visible.

 

“It took us years to get into this problem. It may take several years

for the full benefit of these actions to be realized,” Mr. Hale said.

Select House Members Urge Clampdown on Exec. Pay

Yes, the American public is more than determined to bring all of this corruption and greed to an end!  -GFS

——————————————————————————–

Pelosi, Frank Urge Clampdown on Executive Pay

Link:  http://www.truthout.org/081309F?n

Wednesday 12 August 2009

by: Silla Brush  |  Visit article original @ The Hill
House Financial Services Committee Chairman Barney Frank with House Speaker Nancy Pelosi. (Photo: Reuters)

    House Democrats are urging the Obama administration to clamp down on corporate pay at seven large companies that rely on billions of dollars in federal bailout money.

    Speaker Nancy Pelosi (D-Calif.) and Financial Services Committee Chairman Barney Frank (D-Mass.) said Wednesday they are concerned about reports that the firms continue to pay lavish bonuses.

    In a letter to the administration, Pelosi and Frank said that the government “should make absolutely certain that financial institutions will never again play Russian roulette with the American taxpayers.”

    The seven companies are due to report on Thursday to the administration on how they will pay their top 25 executives. Kenneth Feinberg, the administration’s compensation czar, will then rule on the pay plans within 60 days.

    Feinberg’s role was established after AIG’s plans to pay $165 million in bonuses touched off more than a week of national debate and outcry over corporate pay. AIG has received roughly $180 billion in bailout aid.

    ”This dangerous imbalance between rewarding risk and forgiving mistakes is what Congress and the American people are determined to bring to an end,” Pelosi and Frank wrote in the letter.

    The seven companies are: Citigroup, Bank of America, General Motors, Chrysler, GMAC, Chrysler Financial and AIG. The firms have received hundreds of billions of dollars in combined taxpayer aid.

    Pelosi and Frank also suggest that the compensation plans could “set standards for compensation planning that establish industry norms.”

Just Blame Karl Rove: Failed Justice = Failed Oversight

Oversight Failures and Failure to Prosecute Crimes?  Rove get’s significant share of the blame. 

Federal Oversight employees have been living in hell for nearly a decade.  Just try to do your job, when doing your job gets in the way of the greedy, the partisan, and the corrupt who finance political campaigns of those who are supposed to be representing the American voters and tax payers, but who would rather curry favor with their campaign funders. 

 

Keep in mind that even if the oversight agents, inspectors, investigators in the field are not being sabotaged by appointed and/or corrupted managers, as they attempt to do their jobs and complete their agency missions, having no one willing to PROSECUTE in the agency IG’s and OIG’s as well as the Justice Department in general, pretty much blocks any oversight enforcement.  And truth be told, we have lots of proof ethical federal oversight employees have been sabotaged all across the federal government and suffered vast retribution just for trying to do their jobs. (Anyone out there monitoring the growing number of  whistleblower complaints?)  It’s been a bad decade. 

 

The lack of anyone willing to prosecute, preceded by the harassment of investigators and auditors so they can not properly investigate and prepare their initial cases, has been the bane of most oversight employees for the past 8 years.  It has nearly brought our government to its knees. 

 

There are signs that some clean up and clean out of that which has brought about this troubling environment is starting.   But it is going to be a nasty job, as some of those appointed by the last administration with marching orders to politicize and manipulate oversight to be sure it would not inconvenience or endanger certain greedy corporations and individuals, who were friendly with the Bush/Cheney administration, made end runs for regular Civil Service Jobs before the changeover to the Obama administration was complete. 

 

So, these same folks who brought you corrupted and failed oversight agencies, IG’s, OIG’s, Attorney General, and Office of the U.S. Attorney’s, (Remember Alberto Gonzales, Paul J. McNulty, and some others before him?)  When Justice Dept. fails, no agency or individual oversight agent, inspector or investigator can successfully do his or her job. 

 

Here are some recent revelations regarding Mr. Rove’s contributions to these problems. 

-GFS

 

 

Rove “Driving Force” Behind US Attorney Firings

Thursday 13 August 2009

by: Jason Leopold, t r u t h o u t | Report

 

 

    Political adviser Karl Rove and other officials inside George W. Bush’s White House pushed for the firing of a key federal prosecutor because he wasn’t cooperating with Republican plans for indicting Democrats and their allies before the 2006 election, according to internal documents and depositions.

    The evidence was released Tuesday and turned over to a special prosecutor by House Judiciary Committee Chairman John Conyers. It contradicts claims by Rove and other senior Bush administration officials that the White House played only a minimal role in the firing of David Iglesias and eight other US attorneys who were deemed by a Justice Department official as not “loyal Bushies.”

    In a recent interview with The New York Times and The Washington Post, Rove downplayed his role in the firings, saying he only acted as a “conduit” for complaints that Republican Party officials and GOP lawmakers sent to him about the federal prosecutors. The documents tell a different story.

    The documents reveal that Rove, his White House aides and then-White House counsel Harriet Miers actively participated in the decision to oust New Mexico US Attorney David Iglesias because Republicans had wanted him to bring charges against Democrats regarding alleged voter fraud and other issues. Iglesias refused to do that.

    According to Miers’s closed-door testimony to the House Judiciary Committee, a “very agitated” Rove phoned her from New Mexico, apparently in September 2006, and told her that Iglesias was “a serious problem and he wanted something done about it.”

    At the time of the phone call, Rove had just met with New Mexico Republican Party officials angry at Iglesias, who was refusing to proceed with voter fraud cases because he felt the evidence was weak and because pre-election indictments would violate Justice Department guidelines.

    Miers said she responded to Rove’s call by getting on the phone to Deputy Attorney General Paul McNulty and passing along the message that Rove “is getting lots of complaints.” Miers added, “it was a problem.” About one month later, Iglesias was added to the list of US attorneys to be removed.

    But the documents show that White House dissatisfaction with Iglesias over his resistance to bringing politically motivated cases against Democrats had been building for more than a year. On June 28, 2005, Scott Jennings, one of Rove’s aides, sent an e-mail to Tim Griffin, another Rove aide, asking what could be done to remove Iglesias.

    ”I would really like to move forward with getting rid of NM US ATTY,” Jennings wrote, complaining that “Iglesias has done nothing” on prosecuting voter fraud cases and adding: “We’re getting killed out there.”

 

    “Driving Force”

    In a statement on Tuesday of this week, accompanying the release of more than 5,000 pages of documents – including transcripts of the recent interviews with Rove and Miers – Conyers said the revelations warrant further inspection by special prosecutor Nora Dannehy, who has spent nearly a year conducting a criminal probe into the firings.

    ”After all the delay and despite all the obfuscation, lies, and spin, this basic truth can no longer be denied: Karl Rove and his cohorts at the Bush White House were the driving force behind several of these firings, which were done for improper reasons,” Conyers said.

    A Justice Department watchdog report concluded last year that a majority of the prosecutor firings were politically motivated. The US attorney in Little Rock, Arkansas, was pushed out, so Rove’s aide, Tim Griffin, could be given the job. But – in the face of the growing scandal – Griffin bowed out.

    For months, Rove and Miers had dodged Congressional subpoenas seeking their testimony in the matter, citing George W. Bush’s broad claims of executive privilege. But the Obama administration brokered a deal that had Rove and Miers testify behind closed doors.

    Besides the Bush White House pressure for ousting Iglesias, powerful New Mexico Republicans also weighed in.

    In October 2006, a month before the midterm elections that cost Republicans control of Congress, an e-mail chain started by Rep. Heather Wilson (R-New Mexico) faulted Iglesias for not using his office in a manner that would help Wilson in her reelection campaign.

    Wilson’s e-mail included a news report about an FBI probe of Rep. Curt Weldon (R-Pennsylvania) as an example of criminal investigations proceeding close to election day.

    Steve Bell, chief of staff to New Mexico Sen. Pete Domenici, forwarded the e-mail to Jennings at Rove’s White House shop, with a note saying it “seems like other U.S. attorneys can do their work even in election season. And the FBI has already admitted they have turned over their evidence [in a federal corruption probe] to the [U.S. Attorney] in [New Mexico] and are merely awaiting his action.”

    Jennings then passed along the e-mail to Rove, saying Iglesias was “shy about doing his job on [Patricia] Madrid,” a Democratic Congressional candidate who would lose the 2006 election to Wilson by only 800 votes.

    Last year, Wilson told Justice Department watchdogs investigating the US attorney purge that the context of her e-mail was more of a “heads up” to the recipients. She said that if she were asked by reporters about an FBI investigation into Madrid, she would confirm it. Madrid was New Mexico’s former attorney general who was involved with a political action committee that was allegedly under scrutiny.

 

    Domenici’s Intervention

    Domenici also intervened, personally lobbying Bush’s top aides to fire Iglesias, according to the documents. Between September 2005 and April 2006, Domenici called Attorney General Alberto Gonzales three times to complain about Iglesias’s handling of voter fraud and corruption probes and to ask that he be fired.

    Gonzales testified to Congress that he did not recall Domenici ever making such a request. Gonzales resigned in August 2007 amid political fallout from the prosecutor-firing scandal.

    On October 4, 2006, Domenici also called Deputy Attorney General McNulty, “expressing concern about Iglesias’s lack of fitness for the job of U.S. Attorney.”

    At one point, according to Rove’s testimony, Domenici wanted to speak with President Bush to press his case, but Rove talked him out of it. However, in October 2006, the senator personally asked Bush’s chief of staff Josh Bolten to replace Iglesias, according to White House phone logs and e-mails.

    In Congressional testimony, Iglesias said he also received telephone calls from Domenici and Wilson in October 2006 inquiring about the timing of an indictment against former state Sen. Manny Aragon, a Democrat, and other Democrats who were involved in a courthouse construction project.

    Domenici’s interventions prompted a Senate Ethics Committee investigation, which resulted last year in a letter of reprimand for creating an “appearance of impropriety.” Special prosecutor Dannehy is probing possible obstruction of justice charges against Domenici and his former aide Steve Bell.

    Dannehy secured the testimony last April of Scott O’Neal, the assistant FBI special agent in charge of the Albuquerque field office, who reportedly informed Domenici or his aide Bell about the status of the FBI’s investigation of alleged Democratic wrongdoing, according to legal sources who requested anonymity because of secrecy surrounding the probe.

    In an interview, former US Attorney Iglesias said the briefing to Domenici and/or Bell, if it did take place, would be significant because it would have required approval from himself or his former colleagues who never received a formal request from O’Neal or his FBI superiors.

    The US attorney’s manual states that “personnel of the Department of Justice shall not respond to questions about the existence of an ongoing investigation or comment on its nature or progress, including such things as the issuance or serving of a subpoena, prior to the public filing of the document.”

 

    Rove’s Fingerprints

    Regarding Tuesday’s revelations, Iglesias said he had long suspected that Rove’s “fingerprints were all over this.”

    In an interview with me two years ago, Iglesias said he believed “somewhere on an RNC computer – on some server somewhere – there’s an e-mail from Karl Rove stating why we need to be axed.” He added that he believed a “smoking gun” would eventually surface and lead directly to Rove and blow the scandal wide open.

    ”The e-mail timing [in October 2006] corroborates what I suspected,” Iglesias said Tuesday. Domenici and other New Mexico Republican Party officials “wanted me to file indictments and [Wilson] would benefit. They wanted to use me and my office as a political tool.”

    Iglesias said Dannehy has access to “a lot of the facts” and “there still may be obstruction of justice charges” filed. He added, “I can’t believe Gonzales did not know what was going on,” suggesting that the former attorney general may be one of Dannehy’s targets.

    Domenici retired from the Senate and Wilson also left Congress in 2009 after unsuccessfully seeking the Republican nomination to fill Domenici’s seat, which is now held by Democratic Sen. Tom Udall.

    Deputy Attorney General McNulty testified before Congress in February 2007 that the prosecutor firings were “performance related,” though that testimony also now appears to be in question.

    Documents released by the Justice Department showed that Gonzales and McNulty participated in an hour-long meeting with Gonzales’s chief of staff, Kyle Sampson, who compiled the list of prosecutors to be fired, a group he famously designated as not “loyal Bushies.”

    The documents, along with Rove’s and Miers’s testimony, contradict numerous public statements made by White House spokespersons Tony Snow and Dana Perino in the aftermath of the December 2006 firings. Snow and Perino insisted that the White House did nothing wrong and didn’t oust prosecutors for political reasons.

    Yet, upon being informed in November 2006 via e-mail of the plan to fire the US attorneys, Perino responded: “Someone get me the oxygen can!” When told the firings included some US attorneys who were actively investigating GOP lawmakers alleged to be involved in corruption, Perino added: “Give me a double shot – I can’t breathe.”

    The newly released documents also show that Kansas City US Attorney Todd Graves was removed in a deal between the White House and Sen. Kit Bond of Missouri that appears to have been personally approved by Rove.

    According to the documents, Bond agreed to lift his hold on an Arkansas judge nominated to the Eighth Circuit federal appeals court in exchange for Graves’s firing. A December 21, 2005, e-mail sent by White House lawyer Fred Klingler to Miers stated that “Karl is fine” with the proposal

 

 

Miers Told House Panel of ‘Agitated’ Rove
Bush White House Counsel Said Adviser Called U.S. Attorney a ‘Serious Problem’

 

Link:  http://www.washingtonpost.com/wp-dyn/content/article/2009/08/11/AR2009081102104.html?wpisrc=newsletter&wpisrc=newsletter&wpisrc=newsletter

By Carrie Johnson
Washington Post Staff Writer
Wednesday, August 12, 2009

The dismissal of U.S. Attorney David C. Iglesias of New Mexico in December 2006 followed extensive communication among lawyers and political aides in the White House who hashed over complaints about his work on public corruption cases against Democrats, according to newly released e-mails and transcripts of closed-door House testimony by former Bush counsel Harriet Miers and political chief Karl Rove.

A campaign to oust Iglesias intensified after state GOP officials and Republican members of the congressional delegation apparently concluded that he was not pursuing the cases against Democrats in a way that could help then-Rep. Heather A. Wilson (R) in a tight reelection race in New Mexico, according to interviews and Bush White House e-mails released Tuesday by congressional investigators. The documents place the genesis of Iglesias’s dismissal earlier than previously known.

The disclosures mark the end of a 2 1/2 -year investigation by the House Judiciary Committee, which sued to gain access to White House documents in a dispute that challenged the Bush administration’s claims of executive power.

House Judiciary Chairman John M. Conyers Jr. (D-Mich.) on Tuesday characterized the role of Bush White House figures in the firing of Iglesias and eight other U.S. attorneys as improper.

“Under the Bush regime, honest and well-performing U.S. attorneys were fired for petty patronage, political horse-trading, and, in the most egregious case of political abuse of the U.S. attorney corps — that of U.S. attorney Iglesias — because he refused to use his office to help Republicans win elections,” Conyers said.

In a statement Tuesday, Rove asserted that he “never sought to influence the conduct of any prosecution” and did not decide which prosecutors were fired. He also accused Democrats of making “false accusations and partisan innuendoes.”

An attorney for Miers did not return calls seeking comment, but Miers told House investigators that the prosecutors were not fired for improper reasons.

In their testimony in June and July, both Miers and Rove said they could not recall key incidents, according to the transcripts. In the course of her 10-hour deposition, Miers said she could not recall events almost 150 times. Rove said he received hundreds of e-mails a day, so “asking me to remember replies is like asking me to remember a raindrop in a thunderstorm.”

The House panel focused most of its attention on Iglesias, a rising star in New Mexico who came to displease his political patrons. Miers told investigators that Rove called her in September 2006, “agitated” about the slow pace of public corruption cases against Democrats and weak efforts to pursue voter-fraud cases in the state. In the call, Miers said, Rove described Iglesias as a “serious problem” and said he wanted “something done” about it. Miers testified that she called then-Deputy Attorney General Paul J. McNulty to pass along the concerns.

According to e-mails and interviews with people familiar with the investigation, GOP figures in New Mexico thought that if Iglesias pursued public corruption cases against Democrats, it could help Wilson in her run for reelection.

A mid-October 2006 e-mail chain that began with Wilson indirectly criticized Iglesias for not bringing public corruption prosecutions in the run-up to the midterm elections. Attached was a news report about an FBI investigation of then-Rep. Curt Weldon (R-Pa.).

The same day, Steve Bell, chief of staff to then-Sen. Pete V. Domenici (R-N.M.), e-mailed Rove’s deputy, Scott Jennings, to say that it “seems like other U.S. attorneys can do their work even in election season. . . . And the FBI has already admitted they have turned over their evidence to the USA in NM and are merely awaiting his action.”

Jennings forwarded the messages to Rove, saying, “Steve Bell sent this email . . . essentially saying that the US Attorney in PA has no trouble going after Weldon, so why should the US Attorney in New Mexico be shy about doing his job on [Patricia] Madrid.” Madrid was Wilson’s Democratic opponent in the 2006 congressional race.

A few weeks after this e-mail, Iglesias’s name was placed on the final firing list.

In a telephone interview Tuesday, Wilson said her October 2006 e-mail dealt with an unrelated subject and had nothing to do with the U.S. attorney in New Mexico and cases he might have been pursuing against Democrats.

“My e-mail is only one sentence long and does not relate in any way” to Iglesias, Wilson said. “In early October 2006, we made a strategic decision to campaign on national security and competence,” not public corruption.

In a follow-up statement, Wilson said that the House findings were “incorrect in several important respects” and that investigators had “failed to inquire about or review basic facts.”

Domenici — who accepted a Senate ethics reprimand last year for calling Iglesias to ask about the timing of prosecutions before the 2006 election — pursued his complaints at the highest levels of the government, according to the testimony. The longtime senator, who has since retired, wanted to contact President George W. Bush directly, Rove testified to the House panel. But Rove told investigators that he “discouraged” the senator, who went on to phone White House Chief of Staff Joshua B. Bolten in October 2006, according to White House call logs.

Meanwhile, federal prosecutor Nora R. Dannehy continues to probe whether false-statements or obstruction-of-justice charges could be lodged against anyone in connection with the dismissals and previous congressional testimony under oath about them.

In 2007, Attorney General Alberto R. Gonzales and his deputy D. Kyle Sampson resigned, in part because of the political furor over the prosecutor dismissals.

The plan to fire U.S. attorneys raised alarm bells among some in the Bush White House days after the dismissal list arrived from the Justice Department in late 2006. Deputy press secretary Dana Perino told White House colleagues in e-mails that she needed “an oxygen tank” and a “double shot” of air after aides reported that some of the prosecutors had been conducting politically sensitive investigations of Republicans at the time of their dismissal.

U.S. Attorney Paul Charlton of Arizona had been moving toward an indictment of then-Rep. Rick Renzi (R) in that state, while Carol Lam in San Diego had expanded her probe of Rep. Randall “Duke” Cunningham (R-Calif.) to include another Republican congressman from that state as well as former CIA operative Kyle “Dusty” Foggo. Cunningham and Foggo since have been convicted of crimes. Renzi has been indicted and awaits trial.

Despite allegations by Democrats, the House investigation did not uncover smoking-gun documents or testimony showing that Lam and Charlton were removed as part of a broader effort to interfere with investigations of prominent Republicans. Rove told lawmakers: “I know they would not enter into the president’s thinking at all. Because I know how he felt about both Duke Cunningham and Rick Renzi’s behavior.”

 

Probe shows Rove played key role in firing U.S. attorneys

Link:  http://www.mcclatchydc.com/227/story/73463.html

By Marisa Taylor | McClatchy Newspapers

WASHINGTON — Karl Rove and other top officials in the George W. Bush White House were deeply involved in pushing for the ouster of several U.S. attorneys, notably including one in New Mexico, according to testimony and e-mails that the House of Representatives Judiciary Committee released Tuesday.

Sworn testimony from former White House Counsel Harriet Miers revealed that Rove considered former U.S. Attorney David Iglesias of New Mexico a “serious problem” and “wanted something done about it” because of complaints about politically sensitive investigations that Iglesias had mounted. Miers said that she couldn’t recall whether Rove specifically demanded Iglesias’ firing during a 2006 conversation, but Iglesias was fired later that year.

 

Miers’ testimony and e-mails between White House officials contradict Rove’s assertion that he was merely a passive “conduit” to the Justice Department for complaints from Republican operatives and wasn’t himself an advocate for the administration’s eventual ouster of nine U.S. attorneys.

In sworn closed-door testimony to the House Judiciary Committee in July, Rove continued to distance himself from the decision to push out certain prosecutors. He recalled a proposal to fire some or all of them in late 2004, but denied that he’d come up with a plan to have it done and rejected the suggestion that he had a direct role.

 

“My view was this is a decision that had to be made at the Justice Department,” Rove said, according to a transcript of his sworn testimony.

 

House Judiciary Chairman John Conyers, D-Mich., issued a statement that said: “After all the delay and despite all the obfuscation, lies and spin, this basic truth can no longer be denied: Karl Rove and his cohorts at the Bush White House were the driving force behind several of these firings, which were done for improper reasons.”

 

Iglesias, too, said Tuesday that the e-mails confirmed his suspicions that Rove was more directly involved in his December 2006 firing than he’d acknowledged.

“That was just spin,” he said of Rove’s claim that he’d merely passed along complaints from Republican operatives in New Mexico and had no active role. “The e-mails and testimony confirm my worst fears that the true basis for not only my removal but for several of my colleagues was improper political reasons.”

In a statement released Tuesday afternoon, Rove again denied that he’d sought to influence any of the prosecutors’ investigations.

 

“I played no role in deciding which U.S. attorneys were retained and which (were) replaced,” his statement said.

 

Rove, who said the documents’ release showed that allegations against him “have proved utterly groundless,” urged the public to read the documents rather than rely on “partisans selectively quoting testimony or excerpting e-mail messages.”

The committee’s release of more than 700 pages of transcripts and 5,000 pages of White House and Republican National Committee e-mails on these subjects marks the end of the House investigation into the U.S. attorneys’ firings.

The e-mails reveal more details about the political sources of the White House’s dissatisfaction with Iglesias and other prosecutors.

 

In e-mails, Rove’s then-aide Scott Jennings repeatedly pressed the issue with his boss and other White House officials. In a June 2005 e-mail, he told former Bush campaign operative Tim Griffin that he’d “really like to move forward with getting rid” of Iglesias because of the New Mexico prosecutor’s handling of allegations about Democratic voter fraud. Griffin, who later replaced ousted Arkansas U.S. Attorney Bud Cummins, was favored for the job by Rove and other White House officials.

 

In a 2005 e-mail, Rove urged another White House official to “keep pushing” for Griffin. “I want him on the team,” Rove wrote.

 

The e-mails also confirmed that former Missouri U.S. Attorney Todd Graves was forced to leave because staffers for U.S. Sen. Kit Bond, R-Mo., wanted him out, not because of professional misconduct. Bond issued a statement Tuesday denying involvement in Graves’ firing.

 

In another 2005 e-mail, then-White House lawyer Richard Klingler said “Karl is fine” with the plan to remove Graves in a deal struck with Bond, which Bond previously has denied making.

 

The Justice Department’s inspector general and Office of Professional Responsibility later found Graves’ removal to be “inappropriate.”

 

U.S. Attorney Nora Dannehy, a special prosecutor, continues to investigate whether any former administration officials involved in the firings violated the law. The House Judiciary Committee forwarded the material collected during its more than two-year investigation to Dannehy “to assist in her effort to determine whether federal criminal charges are appropriate and to pursue any such charges,” Conyers’ statement said.

An Interesting Story About Drug Company Profits

The Hidden Truth Behind Drug Company Profits

Link:  http://www.truthout.org/080509K

Wednesday 05 August 2009

by: Johann Hari  |  Visit article original @ The Independent UK
At Kasturba Gandhi Hospital in Mumbai, a man waits for a swine flu test. (Photo: AP)

 

    Ring-fencing medical knowledge is one of the great grotesqueries of our age.

    This is the story of one of the great unspoken scandals of our times. Today, the people across the world who most need life-saving medicine are being prevented from producing it. Here’s the latest example: factories across the poor world are desperate to start producing their own cheaper Tamiflu to protect their populations – but they are being sternly told not to. Why? So rich drug companies can protect their patents – and profits. There is an alternative to this sick system, but we are choosing to ignore it.

    To understand this tale, we have to start with an apparent mystery. The World Health Organisation (WHO) has been correctly warning for months that if swine flu spreads to the poorest parts of the world, it could cull hundreds of thousands of people – or more. Yet they have also been telling the governments of the poor world not to go ahead and produce as much Tamiflu – the only drug we have to reduce the symptoms, and potentially save lives – as they possibly can.

    In the answer to this whodunnit, there lies a much bigger story about how our world works today.

    Our governments have chosen, over decades, to allow a strange system for developing medicines to build up. Most of the work carried out by scientists to bring a drug to your local pharmacist – and into your lungs, or stomach, or bowels – is done in government-funded university labs, paid for by your taxes.

    Drug companies usually come in late in the process of development, and pay for part of the expensive, but largely uncreative final stages, like buying some of the chemicals and trials that are needed. In return, then they own the exclusive rights to manufacture and profit from the resulting medicine for years. Nobody else can make it.

    Although it’s not the goal of the individuals working within the system, the outcome is often deadly. The drug companies who owned the patent for Aids drugs went to court to stop the post-Apartheid government of South Africa producing generic copies of it – which are just as effective – for $100 a year to save their dying citizens. They wanted them to pay the full $10,000 a year to buy the branded version – or nothing. In the poor world, the patenting system every day puts medicines beyond the reach of sick people.

    This is where the solution to the swine flu mystery comes in. Ordinary democratic citizens were so disgusted by the attempt to deprive South Africa of life-saving medicine that public pressure won a small concession in the global trading rules. It was agreed that, in an overwhelming public health emergency, poor countries would be allowed to produce generic drugs. They are the exact same product, but without the brand name – or the fat patent payments to drug companies in Switzerland or the Cayman Islands.

    So under the new rules, the countries of the poor world should be entitled to start making as much generic Tamiflu as they want. There are companies across India and China who say they are raring to go. But Roche – the drug company that owns the patent – doesn’t want the poor world making cheaper copies for themselves. They want people to buy the branded version, from which they receive profits. Although not obliged to, they have licensed a handful of companies in the developing world to make the treatment – but they have to pay for license, and they can’t possibly meet the demand.

    And the WHO seems to be backing Roche – against the rest of us. They are the ones best qualified to judge what constitutes an overwhelming emergency, justifying a breaching of the patent rules. And their message is: Don’t use the loophole.

    Professor Brook Baker, an expert on drug patenting, says: “Why do they behave like this? Because of direct or indirect pressure from the pharmaceutical companies. It’s shocking.”

    What will be the end-result? James Love, director of Knowledge Economy International, which campaigns against the current patenting system, says: “Poor countries are not as prepared as they could have been. If there’s a pandemic, the number of people who die will be much greater than it had to be. Much greater. It’s horrible.”

    The argument in defence of this system offered by Big Pharma is simple, and sounds reasonable at first: we need to charge large sums for “our” drugs so we can develop more life-saving medicines. We want to develop as many treatments as we can, and we can only do that if we have revenue. A lot of the research we back doesn’t result in a marketable drug, so it’s an expensive process.

    But a detailed study by Dr Marcia Angell, the former editor of the prestigious New England Journal of Medicine, says that only 14 per cent of their budgets go on developing drugs – usually at the uncreative final part of the drug-trail. The rest goes on marketing and profits. And even with that puny 14 per cent, drug companies squander a fortune developing “me-too” drugs – medicines that do exactly the same job as a drug that already exists, but has one molecule different, so they can take out a new patent, and receive another avalanche of profits.

    As a result, the US Government Accountability Office says that far from being a font of innovation, the drug market has become “stagnant”. They spend virtually nothing on the diseases that kill the most human beings, like malaria, because the victims are poor, so there’s hardly any profit to be sucked out.

    We all suffer as a result of this patent dysfunction. The European Union’s competition commissioner, Neelie Kroes, recently concluded that Europeans pay 40 per cent more for their medicines than they should because of this “rotten” system – money that could be saving many lives if it was redirected towards real health care.

    Why would we keep this system, if it is so bad? The drug companies have spent more than $3bn on lobbyists and political “contributions” over the past decade in the US alone. They have paid politicians to make the system work in their interests. If you doubt how deeply this influence goes, listen to a Republican congressman, Walter Burton, who admitted of the last big health care legislation passed in the US in 2003: “The pharmaceutical lobbyists wrote the bill.”

    There is a far better way to develop medicines, if only we will take it. It was first proposed by Joseph Stiglitz, the recent Nobel Prize winner for economics. He says: “Research needs money, but the current system results in limited funds being spent in the wrong way.”

    Stiglitz’s plan is simple. The governments of the Western world should establish a multi-billion dollar prize fund that will give payments to scientists who develop cures or vaccines for diseases. The highest prizes would go to cures for diseases that kill millions of people, like malaria. Once the pay-out is made, the rights to use the treatment will be in the public domain. Anybody, anywhere in the world, could manufacture the drug and use it to save lives.

    The financial incentive in this system for scientists remains exactly the same – but all humanity reaps the benefits, not a tiny private monopoly and those lucky few who can afford to pay their bloated prices. The irrationalities of the current system – spending a fortune on me-too drugs, and preventing sick people from making the medicines that would save them – would end.

    It isn’t cheap – it would cost 0.6 per cent of GDP – but in the medium-term it would save us all a fortune because our health care systems would no longer have to pay huge premiums to drug companies. Meanwhile, the cost of medicine would come crashing down for the poor – and tens of millions would be able to afford it for the first time.

    Yet moves to change the current system are blocked by the drug companies and their armies of lobbyists. That’s why the way we regulate the production of medicines across the world is still designed to serve the interests of the shareholders of the drug companies – not the health of humanity.

    The idea of ring-fencing life-saving medical knowledge so a few people can profit from it is one of the great grotesqueries of our age. We have to tear down this sick system – so the sick can live. Only then we can globalise the spirit of Jonas Salk, the great scientist who invented the polio vaccine, but refused to patent it, saying simply: “It would be like patenting the sun.”