Archive for April, 2010


I am hearing from a lot of people who are dealing with the same old same old in government, particularly defense, and in the work they do in some defense contractors.  There appears to be just as much corruption, fraud, waste and abuse going on as before.  And unfortunately, there is no miraculous change in how oversight is being managed, and in the poor leadership that seems to be endemic in both government and industry as of late.  More whistleblowers are still being created and whistleblowers are still suffering retribution and every other kind of abuse for caring enough to try to stand up to wrongdoers.  I am extremely disappointed that the political change does not seem to have had a reparative effect on government and business.  GFS

 

 

 

Justice Department Putting New Focus on Combating Corporate Fraud

By Carrie Johnson
Washington Post Staff Writer
Thursday, February 12, 2009; A06

Ten years ago, a Justice Department official drafted a set of guidelines for prosecuting corporate crime. Little noticed at the time, the strategy ultimately transformed the way prosecutors pursue corrupt businesses — by exhorting them to hire their own investigators and share the results with the government in exchange for leniency in plea deals.

The memo’s author was Eric H. Holder Jr., who has become the nation’s attorney general at the same time that a financial crisis is putting pressure on prosecutors to hold businesses accountable for fraud.

“I want to see people prosecuted,” Senate Judiciary Committee Chairman Patrick J. Leahy (D-Vt.) said yesterday at a hearing that examined the Justice Department’s handling of corporate corruption.

Senators from both parties are advocating that more federal resources be devoted to investigating business fraud, pointing out that such prosecutions plunged after the Sept. 11, 2001, attacks, when more than 2,000 FBI agents were diverted to protect national security.

Justice Department and FBI officials committed anew to weeding out fraud in the marketplace, telling lawmakers that they are looking into more than 530 cases of alleged corporate malfeasance. Among them are 38 investigations of name-brand businesses and financial institutions involved in the financial crisis, including American International Group, Countrywide Financial, Fannie Mae and Freddie Mac.

FBI Deputy Director John S. Pistole said the bureau is “doing a complete scrub of all resources” to ensure that enough agents are assigned to corporate investigations.

Prompted by the government’s bank bailouts and mounting taxpayer anger, Democrats have introduced two bills in recent weeks to fund the hiring of more agents and prosecutors to combat mortgage fraud and financial wrongdoing.

Any government crackdown on financial malfeasance is likely to tap into corporate resources, given the drain of years-long investigations on tight federal budgets. Many of the Justice Department’s largest ongoing fraud inquiries appear to be months if not years from reaching their targets, lawyers said yesterday. It is far easier for department officials to deputize companies to hire law firms and bear the cost of investigations of themselves. The companies are encouraged to turn over the results to the government, along with evidence against employees complicit in accounting fraud or other schemes.

That strategy has alienated some judges who argue that employers have sacrificed individuals to secure better deals for their companies. It also could rile lawmakers who already have put the Justice Department on notice about protecting employee rights.

While President Obama has decried corporate greed and fraud in recent weeks and during the presidential campaign, it is too early to know how his administration will approach such cases, and Holder has been difficult to read.

“We’re not going to go out on any witch hunts, and yet we’ll drill down and see” what evidence exists of fraud and other crimes, the attorney general told reporters after being sworn in last week.

Holder’s experience on both sides of the courtroom adds to interest in the legal community about how he will tackle the issue.

A decade ago, after Holder, who was deputy attorney general at the time, heard persistent complaints from corporate defense lawyers, he enlisted a group of government lawyers to draft guidelines for prosecutors handling business cases. The Holder memo instructed lawyers to take into account a company’s cooperation with authorities in deciding whether to bring an indictment. The government wields substantial leverage in negotiations, because even the threat of criminal charges can put some companies out of business, as happened to accounting firm Arthur Andersen more than six years ago.

In 2001, Holder left government and moved into a lucrative career in private law practice, conducting investigations for companies and then sharing the results with prosecutors in exchange for leniency.

Holder is not the only senior Justice Department official with experience defending corporate America. David W. Ogden, who is nominated to serve as the department’s second in command, represented media companies, government contractors and technology firms while in private practice. And Lanny A. Breuer, the nominee to lead the department’s criminal division, defended a host of businesses and individuals.

New Justice Department officials are still considering their options for policing corporate fraud. Among the questions is whether to create a national task force to standardize decisions about what criminal charges and prison sentences to pursue in cases against employees at mortgage companies and financial institutions, said Rita M. Glavin, acting chief of the department’s criminal division.

But authorities appear to sense that interest in the issue is peaking as the economy suffers. Ogden told senators at his confirmation hearing last week that on his watch, the department would undertake a “strong, law enforcement response” to crime on Wall Street.

“Serving jail time may well be an appropriate result, and it could be a deterrent in the future,” he said.

Link to original:  http://www.washingtonpost.com/wp-dyn/content/article/2009/02/11/AR2009021103674.html?wpisrc=newsletter&wpisrc=newsletter&wpisrc=newsletter

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I am hearing from a lot of people who are dealing with the same old same old in government, particularly defense, and in the work they do in some defense contractors.  There appears to be just as much corruption, fraud, waste and abuse going on as before.  And unfortunately, there is no miraculous change in how oversight is being managed, and in the poor leadership that seems to be endemic in both government and industry as of late.  More whistleblowers are still being created and whistleblowers are still suffering retribution and every other kind of abuse for caring enough to try to stand up to wrongdoers.  I am extremely disappointed that the political change does not seem to have had a reparative effect on government and business.  I am also disappointed the many of the appointments made by our current administration, as it seems to perpetuate the problems and the poor judgment of the last administration.  GFS

 

 

 

Watchdogs Undermined by Political Appointees

Congress to Reasses Office Created to Rein in Executive Branch

By Matthew Blake 02/11/2008

Illustration by: Matt Mahurin

The inspectors general for 64 federal agencies are the government’s frontline against waste, fraud and abuse. It sounds like a salutary public service. But the performances and experiences of inspectors general vary alarmingly and now Congress is reassessing an office created after Watergate to rein in the executive branch.

In two weeks, the Senate will debate the Inspector General Reform Act of 2007, according to aide for Sen. Claire McCaskill (D-Mo.), a bill co-sponsor. Meanwhile, the House Committee on Oversight and Government Reform collected a survey last week from the majority of inspectors general, listing the recommendations they have made during the Bush administration that have gone unimplemented.

The Senate legislation—the House passed a Reform Act in November—would “ensure that IGs remain autonomous and operate independent of the agencies they oversee,” said Beth Petite Lavine, spokeswoman for Sen. Charles Grassley (R-Ia.) a bill co-sponsor. The oversight committee is looking at what happens when the agencies allow the investigations but ignore the findings.

Both efforts are part of a sentiment expressed by Democrats and Republicans in Congress who focus on oversight as well as by analysts who study the federal bureaucracy: the White House-appointed leadership at federal agencies is undermining the watchdogs. “This is a crisis,” argued Kenneth Gold, director of Georgetown University’s Government Affairs Institute, “The IG’s power has diminished.”

Beverley Lumpkin, an investigator for the non-profit Project on Government Oversight, agrees. But she emphasizes it’s more than a blame-Bush situation. “Things are not much worse in the Bush administration,” Lumpkin said, “It’s been a problem for 20 years. Administrations take advantage of the fact that agency heads control so much.”

Advocates for inspector general reform argue that there are essentially three ways the office of inspector general has been politicized and consequently lost its bite. The first is the matter of a rogue inspector general stonewalling his own staff’s investigations. In the past year, six inspectors general have been investigated by a committee of their peers for allegations like stopping staff investigations on administration political appointees, cutting back on staff while giving themselves a raise and abusive treatment of employees.

The most well-known case is that of the State Department IG, Howard “Cookie” Krongard. Krongard resigned shortly after deceiving the House Committee on Oversight and Government Reform about knowing whether his brother was on the Blackwater advisory board. Blackwater was one of several State Department contractors Krongard had ordered his staff to stop investigating.

While Secretary of State Condoleeza Rice didn’t seem to mind that Krongard stopping investigations, agency heads have taken action on IG’s who started them. The CIA’s John Helgerson appears to be the latest IG to be undermined in this way. Helgerson issued scathing reports on issues like the intelligence agency failing to anticipate 9/11 and the agency’s disregard for humane interrogation practices. So the Central Intelligence Agency turned the tables last October, and started investigating Helgerson on the premise of helping him do his job better.

Last week with no public explanation, the CIA director, Gen. Michael Hayden, announced the appointment of an ombusdman for Helgerson. “This is especially troubling,” said Brian Miller, inspector general of the General Services Administration, “because it may tend ultimately to subvert the independence of inspectors general.”

Miller knows about going up against an agency head. GSA Administrator Lurita Doan told Miller last year that he was terrorizing employees by scrutinizing whether they were getting the best deal on the $56 billion worth of contracts purchased by GSA. Doan subsequently wrote an e-mail to GSA regional administrators stating, “Everyone now understands we have challenges with our OIG. … This is going to require a lot of work to fix and I’m going to need your help.”

“Psychologically it is extremely hard for people who take their jobs seriously and want to improve GSA to work in a climate where the agency head is openly hostile to the duties those people must perform,” said David Farley, a spokesman for the GSA’s office of inspector general.

Doan also took the extraordinary step of reducing Miller’s budget. One key provision of the Senate legislation, according to McCaskill’s aide, is that inspectors general would be able to send their budget proposal straight to Congress and the White House. Another key provision would set up an “integrity council,” independent of the White House, with the ability to discipline IG’s not aggressively investigating their agencies.

The legislation doesn’t tackle the third obstacle to effective IG’s, when the agency is simply looking the other way. That was the problem Clark Kent Ervin experienced as the first inspector general of the Department of Homeland Security. “This administration has tended more to ignore recommendations than to actively fight or obstruct investigations,” Ervin said.

Sen. John F. Kerry may have cited Ervin’s scathing audits during the 2004 presidential campaign, but DHS ignored them. After publicly feuding with the White House, Ervin left in December 2004.

Still, a good deal of work by inspector generals is implemented. Roll Call newspaper reported last year that IG’s provided the government $9.9 billion in potential savings from audit recommendations and $6.8 billion in investigative recoveries. And some IG’s are neither thwarting investigations nor being thwarted. “Everyone in town agrees that Glenn Fine at the Justice Department and Earl Devaney at Interior are great,” said Lumpkin, of the Project of Government Oversight.

Lumpkin added that the public doesn’t know about the work of a lot of other good ones because the administration is interfering with it. And this, she said, “is a problem that’s reached it’s boiling point.”

10-13-08

 

I am hearing from a lot of people who are dealing with the same old same old in government, particularly defense, and in the work they do in some defense contractors.  There appears to be just as much corruption, fraud, waste and abuse going on as before.  And unfortunately, there is no miraculous change in how oversight is being managed, and in the poor leadership that seems to be endemic in both government and industry as of late.  More whistleblowers are still being created and whistleblowers are still suffering retribution and every other kind of abuse for caring enough to try to stand up to wrongdoers.  I am extremely disappointed that the political change does not seem to have had a reparative effect on government and business.  GFS

This is a very interesting piece that I thought I’d post again.  Visit Alternet and see what else they’ve got going there:  http://www.alternet.org

http://www.alternet.org/story/54093/

 

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Twenty Things You Should Know About Corporate Crime

By Russell Mokhiber, AlterNet
Posted on June 16, 2007, Printed on October 13, 2008
http://www.alternet.org/story/54093/

The following is text from a speech delivered by Russell Mokhiber, editor of Corporate Crime Reporter to the Taming the Giant Corporation conference in Washington, D.C., June 9, 2007.

20. Corporate crime inflicts far more damage on society than all street crime combined.

Whether in bodies or injuries or dollars lost, corporate crime and violence wins by a landslide.

The FBI estimates, for example, that burglary and robbery — street crimes — costs the nation $3.8 billion a year.

The losses from a handful of major corporate frauds — Tyco, Adelphia, Worldcom, Enron — swamp the losses from all street robberies and burglaries combined.

Health care fraud alone costs Americans $100 billion to $400 billion a year.

The savings and loan fraud — which former Attorney General Dick Thornburgh called “the biggest white collar swindle in history” — cost us anywhere from $300 billion to $500 billion.

And then you have your lesser frauds: auto repair fraud, $40 billion a year, securities fraud, $15 billion a year — and on down the list.

19. Corporate crime is often violent crime.

Recite this list of corporate frauds and people will immediately say to you: but you can’t compare street crime and corporate crime — corporate crime is not violent crime.

Not true.

Corporate crime is often violent crime.

The FBI estimates that, 16,000 Americans are murdered every year.

Compare this to the 56,000 Americans who die every year on the job or from occupational diseases such as black lung and asbestosis and the tens of thousands of other Americans who fall victim to the silent violence of pollution, contaminated foods, hazardous consumer products, and hospital malpractice.

These deaths are often the result of criminal recklessness. Yet, they are rarely prosecuted as homicides or as criminal violations of federal laws.

18. Corporate criminals are the only criminal class in the United States that have the power to define the laws under which they live.

The mafia, no.

The gangstas, no.

The street thugs, no.

But the corporate criminal lobby, yes. They have marinated Washington — from the White House to the Congress to K Street — with their largesse. And out the other end come the laws they can live with. They still violate their own rules with impunity. But they make sure the laws are kept within reasonable bounds.

Exhibit A — the automobile industry.

Over the past 30 years, the industry has worked its will on Congress to block legislation that would impose criminal sanctions on knowing and willful violations of the federal auto safety laws. Today, with very narrow exceptions, if an auto company is caught violating the law, only a civil fine is imposed.

17. Corporate crime is underprosecuted by a factor of say — 100. And the flip side of that — corporate crime prosecutors are underfunded by a factor of say — 100.

Big companies that are criminally prosecuted represent only the tip of a very large iceberg of corporate wrongdoing.

For every company convicted of health care fraud, there are hundreds of others who get away with ripping off Medicare and Medicaid, or face only mild slap-on-the-wrist fines and civil penalties when caught.

For every company convicted of polluting the nation’s waterways, there are many others who are not prosecuted because their corporate defense lawyers are able to offer up a low-level employee to go to jail in exchange for a promise from prosecutors not to touch the company or high-level executives.

For every corporation convicted of bribery or of giving money directly to a public official in violation of federal law, there are thousands who give money legally through political action committees to candidates and political parties. They profit from a system that effectively has legalized bribery.

For every corporation convicted of selling illegal pesticides, there are hundreds more who are not prosecuted because their lobbyists have worked their way in Washington to ensure that dangerous pesticides remain legal.

For every corporation convicted of reckless homicide in the death of a worker, there are hundreds of others that don’t even get investigated for reckless homicide when a worker is killed on the job. Only a few district attorneys across the country have historically investigated workplace deaths as homicides.

White collar crime defense attorneys regularly admit that if more prosecutors had more resources, the number of corporate crime prosecutions would increase dramatically. A large number of serious corporate and white collar crime cases are now left on the table for lack of resources.

16. Beware of consumer groups or other public interest groups who make nice with corporations.

There are now probably more fake public interest groups than actual ones in America today. And many formerly legitimate public interest groups have been taken over or compromised by big corporations. Our favorite example is the National Consumer League. It’s the oldest consumer group in the country. It was created to eradicate child labor.

But in the last ten years or so, it has been taken over by large corporations. It now gets the majority of its budget from big corporations such as Pfizer, Bank of America, Pharmacia & Upjohn, Kaiser Permanente, Wyeth-Ayerst, and Verizon.

15. It used to be when a corporation committed a crime, they pled guilty to a crime.

So, for example, so many large corporations were pleading guilty to crimes in the 1990s, that in 2000, we put out a report titled The Top 100 Corporate Criminals of the 1990s. We went back through all of the Corporate Crime Reporters for that decade, pulled out all of the big corporations that had been convicted, ranked the corporate criminals by the amount of their criminal fines, and cut it off at 100.

So, you have your Fortune 500, your Forbes 400, and your Corporate Crime Reporter 100.

14. Now, corporate criminals don’t have to worry about pleading guilty to crimes.

Three new loopholes have developed over the past five years — the deferred prosecution agreement, the non prosecution agreement, and pleading guilty a closet entity or a defunct entity that has nothing to lose.

13. Corporations love deferred prosecution agreements.

In the 1990s, if prosecutors had evidence of a crime, they would bring a criminal charge against the corporation and sometimes against the individual executives. And the company would end up pleading guilty.

Then, about three years ago, the Justice Department said — hey, there is this thing called a deferred prosecution agreement.

We can bring a criminal charge against the company. And we will tell the company — if you are a good company and do not violate the law for the next two years, we will drop the charges. No harm, no foul. This is called a deferred prosecution agreement.

And most major corporate crime prosecutions are brought this way now. The company pays a fine. The company is charged with a crime. But there is no conviction. And after two or three years, depending on the term of the agreement, the charges are dropped.

12. Corporations love non prosecution agreements even more.

One Friday evening last July, I was sitting my office in the National Press Building. And into my e-mail box came a press release from the Justice Department.

The press release announced that Boeing will pay a $50 million criminal penalty and $615 million in civil penalties to resolve federal claims relating to the company’s hiring of the former Air Force acquisitions chief Darleen A. Druyun, by its then CFO, Michael Sears — and stealing sensitive procurement information.

So, the company pays a criminal penalty. And I figure, okay if they paid a criminal penalty, they must have pled guilty.

No, they did not plead guilty.

Okay, they must have been charged with a crime and had the prosecution deferred.

No, they were not charged with a crime and did not have the prosecution deferred.

About a week later, after pounding the Justice Department for an answer as to what happened to Boeing, they sent over something called a non prosecution agreement.

That is where the Justice Department says — we’re going to fine you criminally, but hey, we don’t want to cost you any government business, so sign this agreement. It says we won’t prosecute you if you pay the fine and change your ways.

Corporate criminals love non prosecution agreements. No criminal charge. No criminal record. No guilty plea. Just pay the fine and leave.

11. In health fraud cases, find an empty closet or defunct entity to plead guilty.

The government has a mandatory exclusion rule for health care corporations that are convicted of ripping off Medicare.

Such an exclusion is the equivalent of the death penalty. If a major drug company can’t do business with Medicare, it loses a big chunk of its business. There have been many criminal prosecutions of major health care corporations for ripping off Medicare. And many of these companies have pled guilty. But not one major health care company has been excluded from Medicare.

Why not?

Because when you read in the newspaper that a major health care company pled guilty, it’s not the parent company that pleads guilty. The prosecutor will allow a unit of the corporation that has no assets — or even a defunct entity — to plead guilty. And therefore that unit will be excluded from Medicare — which doesn’t bother the parent corporation, because the unit had no business with Medicare to begin with.

Earlier, Dr. Sidney Wolfe was here and talked about the criminal prosecution of Purdue Pharma, the Stamford, Connecticut-based maker of OxyContin.

Dr. Wolfe said that the company pled guilty to pushing OxyContin by making claims that it is less addictive and less subject to abuse than other pain medications and that it continued to do so despite warnings to the contrary from doctors, the media, and members of its own sales force.

Well, Purdue Pharma — the company that makes and markets the drug — didn’t plead guilty. A different company — Purdue Frederick pled guilty. Purdue Pharma actually got a non-prosecution agreement. Purdue Frederick had nothing to lose, so it pled guilty.

10. Corporate criminals don’t like to be put on probation.

Very rarely, a corporation convicted of a crime will be placed on probation. Many years ago, Consolidated Edison in New York was convicted of an environmental crime. A probation official was assigned. Employees would call him with wrongdoing. He would write reports for the judge. The company changed its ways. There was actual change within the corporation.

Corporations hate this. They hate being under the supervision of some public official, like a judge.

We need more corporate probation.

9. Corporate criminals don’t like to be charged with homicide.

Street murders occur every day in America. And they are prosecuted every day in America. Corporate homicides occur every day in America. But they are rarely prosecuted.

The last homicide prosecution brought against a major American corporation was in 1980, when a Republican Indiana prosecutor charged Ford Motor Co. with homicide for the deaths of three teenaged girls who died when their Ford Pinto caught on fire after being rear-ended in northern Indiana.

The prosecutor alleged that Ford knew that it was marketing a defective product, with a gas tank that crushed when rear ended, spilling fuel.

In the Indiana case, the girls were incinerated to death.

But Ford brought in a hot shot criminal defense lawyer who in turn hired the best friend of the judge as local counsel, and who, as a result, secured a not guilty verdict after persuading the judge to keep key evidence out of the jury room.

It’s time to crank up the corporate homicide prosecutions.

8. There are very few career prosecutors of corporate crime.

Patrick Fitzgerald is one that comes to mind. He’s the U.S. Attorney in Chicago. He put away Scooter Libby. And he’s now prosecuting the Canadian media baron Conrad Black.

7. Most corporate crime prosecutors see their jobs as a stepping stone to greater things.

Spitzer and Giuliani prosecuted corporate crime as a way to move up the political ladder. But most young prosecutors prosecute corporate crime to move into the lucrative corporate crime defense bar.

6. Most corporate criminals turn themselves into the authorities.

The vast majority of corporate criminal prosecutions are now driven by the corporations themselves. If they find something wrong, they know they can trust the prosecutor to do the right thing. They will be forced to pay a fine, maybe agree to make some internal changes.

But in this day and age, in all likelihood, they will not be forced to plead guilty.

So, better to be up front with the prosecutor and put the matter behind them. To save the hide of the corporation, they will cooperate with federal prosecutors against individual executives within the company. Individuals will be charged, the corporation will not.

5. The market doesn’t take most modern corporate criminal prosecutions seriously.

Almost universally, when a corporate crime case is settled, the stock of the company involved goes up.

Why? Because a cloud has been cleared and there is no serious consequence to the company. No structural changes in how the company does business. No monitor. No probation. Preserving corporate reputation is the name of the game.

4. The Justice Department needs to start publishing an annual Corporate Crime in the United States report.

Every year, the Justice Department puts out an annual report titled “Crime in the United States.”

But by “Crime in the United States,” the Justice Department means “street crime in the United States.”

In the “Crime in the United States” annual report, you can read about burglary, robbery and theft.

There is little or nothing about price-fixing, corporate fraud, pollution, or public corruption.

A yearly Justice Department report on Corporate Crime in the United States is long overdue.

3. We must start asking — which side are you on — with the corporate criminals or against?

Most professionals in Washington work for, are paid by, or are under the control of the corporate crime lobby. Young lawyers come to town, fresh out of law school, 25 years old, and their starting salary is $160,000 a year. And they’re working for the corporate criminals.

Young lawyers graduating from the top law schools have all kinds of excuses for working for the corporate criminals — huge debt, just going to stay a couple of years for the experience.

But the reality is, they are working for the corporate criminals.

What kind of respect should we give them? Especially since they have many options other than working for the corporate criminals.

Time to dust off that age-old question — which side are you on? (For young lawyers out there considering other options, check out Alan Morrison’s new book, Beyond the Big Firm: Profiles of Lawyers Who Want Something More.)

2. We need a 911 number for the American people to dial to report corporate crime and violence.

If you want to report street crime and violence, call 911.

But what number do you call if you want to report corporate crime and violence?

We propose 611.

Call 611 to report corporate crime and violence.

We need a national number where people can pick up the phone and report the corporate criminals in our midst.

What triggered this thought?

We attended the press conference at the Justice Department the other day announcing the indictment of Congressman William Jefferson (D-Louisiana).

Jefferson was the first U.S. official charged with violating the Foreign Corrupt Practices Act.

Federal officials alleged that Jefferson was both on the giving and receiving ends of bribe payments.

On the receiving end, he took $100,000 in cash — $90,000 of it was stuffed into his freezer in Washington, D.C.

The $90,000 was separated in $10,000 increments, wrapped in aluminum foil, and concealed inside various frozen food containers.

At the press conference announcing the indictment, after various federal officials made their case before the cameras, up to the mike came Joe Persichini, assistant director of the Washington field office of the FBI.

“To the American people, I ask you, take time,” Persichini said. “Read this charging document line by line, scheme by scheme, count by count. This case is about greed, power and arrogance.”

“Everyone is entitled to honest and ethical public service,” Persichini continued. “We as leaders standing here today cannot do it alone. We need the public’s help. The amount of corruption is dependent on what the public with allow.

Again, the amount of corruption is dependent on what the public will allow.”

“”f you have knowledge of, if you’ve been confronted with or you are participating, I ask that you contact your local FBI office or you call the Washington Field Office of the FBI at 202.278.2000. Thank you very much.”

Shorten the number — make it 611.

1. And the number one thing you should know about corporate crime?

Everyone is deserving of justice. So, question, debate, strategize, yes.

But if God-forbid you too are victimized by a corporate criminal, you too will demand justice.

We need a more beefed up, more effective justice system to deal with the corporate criminals in our midst.

Russell Mokhiber is the editor of Corporate Crime Reporter.

© 2008 Independent Media Institute. All rights reserved.
View this story online at: http://www.alternet.org/story/54093/

National Whistleblowers Center

3238 P Street NW

Washington, D.C. 20007

http://www.whistleblowers.org

FOR MORE INFORMATION, CONTACT:

Lindsey M. Williams (202) 342-1903

lmw@whistleblowers.org

FOR IMMEDIATE RELEASE

UBS Whistleblower Bradley Birkenfeld Files

Official Clemency Petition on Tax Day

Washington D.C. April 15, 2010. Today, Bradley Birkenfeld, the whistleblower who exposed the $20 billion illegal UBS tax fraud scheme, filed a direct appeal to President Barack Obama and an official petition requesting clemency. The petition, which is now available online, calls on the president to immediately commute Mr. Birkenfeld’s 40-month prison sentence to time served. Mr. Birkenfeld is currently incarcerated in the Schuylkill County federal prison.

After filing the petition for clemency, Mr. Birkenfeld’s attorney Dean Zerbe said:

“When the government cannot stop offshore tax evasion, it is the honest American taxpayer who has to foot the bill. President Obama can change this. He can pardon Mr. Birkenfeld on tax day and send a message to the world that the U.S. is serious about cracking down on bank secrecy, encouraging whistleblowers and stopping tax fraud.”

In the letter to President Obama attorneys for Mr. Birkenfeld, Stephen M. Kohn, Executive Director of the National Whistleblowers Center and Dean Zerbe, former counsel for the Senate Finance Committee, stated:

“We appeal to you today, the day that honest Americans must pay their taxes, with the hope that you will help correct a severe injustice…Every day Mr. Birkenfeld remains in prison undermines trust in the tax system and is a step backward in the fight against corruption.”

The National Whistleblower Center has initiated an international letter writing campaign, asking that letters and emails in support of Mr. Birkenfeld be sent to President Obama and the Pardon Attorney. 

Links:

Letter to President Obama Requesting Executive Clemency

Clemency Petition

International Letter Writing Campaign

Photo of Bradley Birkenfeld, courtesy of the National Whistleblowers Center

Carrots, Eggs & Coffee

A carrot, an egg, and a cup of coffee…You will never look at a cup of coffee the same way again.

A young woman went to her mother and told her about her life and how things were so hard for her. She did not know how she was going to make it and wanted to give up, She was tired of fighting and struggling. It seemed as one problem was solved, a new one arose.

Her mother took her to the kitchen. She filled three pots with water and placed each on a high  fire. Soon the pots came to boil. In the first she placed carrots, in the second she placed eggs, and in the last she placed ground coffee beans. She let them sit and boil; without saying a word.

In about twenty minutes she turned off the burners. She fished the carrots out and placed them in a bowl. She pulled the eggs out and placed them in a bowl. Then she ladled the coffee out and placed it in a bowl. Turning to her daughter, she asked, ‘ Tell me what you see.’

‘Carrots, eggs, and coffee,’ she replied.   

Her mother brought her closer and asked her to feel the carrots. She did and noted that they were soft. The mother then asked the daughter to take an egg and break it. After pulling off the shell, she observed the hard-boiled egg. 

Finally, the mother asked the daughter to sip the coffee. The daughter smiled as she tasted its rich aroma. The daughter then asked, ‘What does it mean, mother?’

Her mother explained that each of these objects had faced the same adversity: boiling water.

Each reacted differently. The carrot went in strong, hard, and unrelenting. However, after being subjected to the boiling water, it softened and became weak. The egg had been fragile. Its thin outer shell had protected its liquid interior, but after sitting through the boiling water, its inside became hardened. The ground coffee beans were unique, however. After they were in the boiling water, they had changed the water.

‘Which are you?’ she asked her daughter. ‘When adversity knocks on your door, how do you respond? Are you a carrot, an egg or a coffee bean?

Think of this: Which am I? Am I the carrot that seems strong, but with pain and adversity do I wilt and become soft and lose my strength?

Am I the egg that starts with a malleable heart, but changes with the heat? Did I have a fluid spirit, but after a death, a breakup, a financial hardship or some other trial, have I become hardened and stiff? Does my shell look the same, but on the inside am I bitter and tough with a stiff spirit and hardened heart?

Or am I like the coffee bean? The bean actually changes the hot water, the very circumstance that brings the pain. When the water gets hot, it releases the fragrance and flavor. If you are like the bean, when things are at their worst, you get better and change the situation around you.

When the hour is the darkest and trials are their greatest do you elevate yourself to another level? How do you handle adversity? Are you a carrot, an egg or a coffee bean?

May you have enough happiness to make you sweet, enough trials to make you strong, enough sorrow to keep you human and enough hope to make you happy.  

The happiest of people don’t necessarily have the best of everything; they just make the most of everything that comes along their way. The brightest future will always be based on a forgotten past; you can’t go forward in life until you let go of your past failures and heartaches.

When you were born, you were crying and everyone around you was smiling.

Live your life so at the end, you’re the one who is smiling and everyone around you is crying.

You might want to send this message to those people who mean something to you (I JUST DID); to those who have touched your life in one way or another; to those who make you smile when you really need it; to those who make you see the brighter side of things when you are really down; to those whose friendship you appreciate.

Former Bush Appointee to Plead Guilty to Contempt of Congress

Thursday 22 April 2010

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

A former Bush administration official who headed an obscure office within the White House that protects whistleblowers and enforces anti-discrimination laws was charged Thursday with criminal contempt of Congress.

Scott Bloch, director of the Office of Special Counsel (OSC) from 2004 to 2008, withheld “pertinent” information from the House Oversight and Government Reform Committee, which had been investigating allegations he abused his position and destroyed evidence, according to court papers filed in US District Court in Washington, DC.

Bloch failed to answer truthfully questions raised by Congressional investigators about why he hired the private computer company, Geeks on Call, to “scrub” his office computer and the computers of two OSC employees during the height of an investigation into allegations he retaliated against employees and dismissed whistleblower cases without fully examining them.

“On or about December 6, 2007, in the District of Columbia and elsewhere, the United States House of Representatives Committee on Oversight and Government Reform (“House Oversight Committee”), requested that defendant Bloch provide a transcribed interview regarding his reported use of the private computer repair company Geeks On Call to delete files on OSC-issued computers in or about December of 2006 using a process known as a ‘seven level wipe,'” according to a two-page court filing known as an “information,” which is released publicly when a person under investigation is about to plead guilty to charges.

Bloch told Congressional investigators he had no intention of destroying governmental information from the computers. Rather, he told The Wall Street Journal in an interview three years ago that he called private computer technicians to his office on December 18 and December 21, 2006 because he was trying to “eradicate a virus that had seized control of his computer.”

A receipt reviewed by the Journal said “the total charge was $1,149,” which Bloch paid for using his government credit card. But the receipt didn’t mention a computer virus.

According to Thursday’s court filing, federal prosecutors did not believe Bloch’s story and concluded that he “unlawfully and willfully did make default by refusing and failing to state fully and completely the nature and extent of his instructions that Geeks On Call perform ‘seven level wipes’ on his OSC-issued computers as well as the OSC-issued computers of two non-career OSC appointees in or about December of 2006.”

Debra S. Katz, an attorney who represents organizations that provide support to whistleblowers, said she was not satisfied with the outcome of the case.

“After five years of obstructing this investigation, destroying evidence and retaliating against his own conscientious employees, he is now going to be permitted to plead guilty to one misdemeanor; that’s not sufficient,” Katz told The Associated Press. Still, Katz noted, “the inspector general at the Office of Personnel Management – which has been investigating this for five years -will now be in a position to issue its investigative report on Scott Bloch’s misconduct.”

Federal law enforcement agents raided Bloch’s home and office in May 2008 and seized computer files and documents. At the time, he was under investigation by the inspector general in the White House’s Office of Personnel Management.

According to a February 2007 report in The Washington Post, Bloch was accused of retaliating “against underlings who disagreed with his policies – by, among other means, transferring them out of state – and tossed out legitimate whistle-blower cases to reduce the office backlog.”

“Since he took the helm in 2004, staffers at the OSC, a small agency of about 100 lawyers and investigators, have accused him of a range of offenses, from having an anti-gay bias to criticizing employees for wearing short skirts and tight pants to work,” the Post reported.

While Bloch was under scrutiny, he had also been handed the task of investigating the role Karl Rove played in the firing of former New Mexico US Attorney David Iglesias, one of nine federal prosecutors fired in December 2006.

Iglesias filed a Hatch Act complaint in April 2007 with Bloch’s office, alleging Rove and other top Bush administration officials may have broken the law by orchestrating his firing because he refused to initiate politically motivated prosecutions.

The complaint was dismissed. Bloch was forced to resign in October 2008.

Last September, Talking Points Memo reported that Bloch received a law license in 2008 “after the staff of a DC court didn’t notice that he is under criminal investigation by the FBI – and failed to flag that fact to the Committee on Admissions, despite extensive documentation provided by Bloch.”

Since Bloch’s resignation, the OSC has been without a leader. President Barack Obama has not appointed anyone to head the office, despite a campaign pledge to fill the vacancy with a staunch advocate for whistleblowers’ rights.

Advisory Board

Carol Haave

Ms. Carol Haave joins the Board of I3 after leaving the Department of Homeland Security as the Assistant Secretary for International Affairs. Preceding that position, she served as the Deputy Assistant Secretary of Defense for Security and Information Operations and later became the Deputy Under Secretary of Defense for Counterintelligence and Security.

Ms. Haave has many years of experience in security, intelligence, military operations and technology. Formerly the President of Sullivan Haave Associates, Ms. Haave successfully transitioned the Defense Advanced Research Projects Agency (DARPA) and advanced government technologies into the armed forces during military conflict. She has participated in numerous Defense Science Boards and has aided the National Defense Panel in looking at alternative futures for the Department of Defense.

History of Ideal Innovations

Ideal Innovations, Inc. (I3) is a northern Virginia based consulting firm providing cutting-edge technological, scientific, engineering and security solutions to Government and private industry.  Ideal Innovations has grown from two employees at its founding in 1998 to a current staff of over 300 employees.  I3 headquarters are based in Arlington, Virginia, along with additional personnel working throughout the northern Virginia area, West Virginia, Texas, and overseas in Iraq and Afghanistan.

The company was established in response to the US government’s urgent need for specialized, responsive technology consulting in areas directly affecting the health and safety of deployed forces and US citizens. Today, I3’s highly skilled subject matter experts quickly provide innovative solutions in the areas of biometrics, forensics, improvised explosive device (IED) defeat, advanced armor solutions, database and software engineering and training.

Link to Original Ideal Innovations site announcement:  http://www.idealinnovations.com/whoWeAre/advisoryboard.asp?id=22

Carol Haave, formerly self stated founder of Sullivan (and Haave) Associates and frequent Revolving Door par ticipant has made a career out of jumping back and forth from government (often oversight agency) positions to corporate (often defense contractors) positions and back again.  I think she may be a record holder in jumping back and forth this decade.  See her most recent affairs below: 

Carol Haave’s new business association:  http://www.summacorp.com/

Carol Haave’s Employment and Business Ties Information:  http://www.zoominfo.com/Search/ReferencesView.aspx?PersonID=271490886