Tag Archives: Corruption

Iraq Reconstruction: A Theft Bigger Than Madoff

By PATRICK COCKBURN:

“In what could turn out to be the greatest fraud in US history, American authorities have started to investigate the alleged role of senior military officers in the misuse of $125bn (£88bn) in a US -directed effort to reconstruct Iraq after the fall of Saddam Hussein. The exact sum missing may never be clear, but a report by the US Special Inspector General for Iraq Reconstruction (SIGIR) suggests it may exceed $50bn, making it an even bigger theft than Bernard Madoff’s notorious Ponzi scheme.

‘I believe the real looting of Iraq after the invasion was by US officials and contractors, and not by people from the slums of Baghdad,’ said one US businessman active in Iraq since 2003.

In one case, auditors working for SIGIR discovered that $57.8m was sent in ‘pallet upon pallet of hundred-dollar bills’ to the US comptroller for south-central Iraq, Robert J Stein Jr, who had himself photographed standing with the mound of money. He is among the few US officials who were in Iraq to be convicted of fraud and money-laundering.

Despite the vast sums expended on rebuilding by the US since 2003, there have been no cranes visible on the Baghdad skyline except those at work building a new US embassy and others rusting beside a half-built giant mosque that Saddam was constructing when he was overthrown. One of the few visible signs of government work on Baghdad’s infrastructure is a tireless attention to planting palm trees and flowers in the centre strip between main roads. Those are then dug up and replanted a few months later.

Iraqi leaders are convinced that the theft or waste of huge sums of US and Iraqi government money could have happened only if senior US officials were themselves involved in the corruption. In 2004-05, the entire Iraq military procurement budget of $1.3bn was siphoned off from the Iraqi Defense Ministry in return for 28-year-old Soviet helicopters too obsolete to fly and armored cars easily penetrated by rifle bullets. Iraqi officials were blamed for the theft, but US military officials were largely in control of the Defense Ministry at the time and must have been either highly negligent or participants in the fraud.

American federal investigators are now starting an inquiry into the actions of senior US officers involved in the program to rebuild Iraq, according to The New York Times, which cites interviews with senior government officials and court documents. Court records reveal that, in January, investigators subpoenaed the bank records of Colonel Anthony B Bell, now retired from the US Army, but who was previously responsible for contracting for the reconstruction effort in 2003 and 2004. Two federal officials are cited by the paper as saying that investigators are also looking at the activities of Lieutenant-Colonel Ronald W Hirtle of the US Air Force, who was senior contracting officer in Baghdad in 2004. It is not clear what specific evidence exists against the two men, who have both said they have nothing to hide.

The end of the Bush administration which launched the war may give fresh impetus to investigations into frauds in which tens of billions of dollars were spent on reconstruction with little being built that could be used. In the early days of the occupation, well-connected Republicans were awarded jobs in Iraq, regardless of experience. A 24-year-old from a Republican family was put in charge of the Baghdad stock exchange which had to close down because he allegedly forgot to renew the lease on its building.

In the expanded inquiry by federal agencies, the evidence of a small-time US businessman called Dale C. Stoffel who was murdered after leaving the US base at Taiji north of Baghdad in 2004 is being re-examined. Before he was killed, Mr Stoffel, an arms dealer and contractor, was granted limited immunity from prosecution after he had provided information that a network of bribery – linking companies and US officials awarding contracts – existed within the US-run Green Zone in Baghdad. He said bribes of tens of thousands of dollars were regularly delivered in pizza boxes sent to US contracting officers.

So far, US officers who have been successfully prosecuted or unmasked have mostly been involved in small-scale corruption. Often sums paid out in cash were never recorded. In one case, an American soldier put in charge of reviving Iraqi boxing gambled away all the money but he could not be prosecuted because, although the money was certainly gone, nobody had recorded if it was $20,000 or $60,000. . . .

In many cases, contractors never started or finished facilities they were supposedly building. As security deteriorated in Iraq from the summer of 2003 it was difficult to check if a contract had been completed. But the failure to provide electricity, water and sewage disposal during the US occupation was crucial in alienating Iraqis from the post-Saddam regime. . . .” (Read more from counterpunch.org)

Firms defraud government but get new US contracts

“WASHINGTON – Companies that defrauded the United States and jeopardized American lives received new government work despite rulings designed to stop them from receiving federal contracts, government investigators report.

Payments went to a company whose president tried to sell nuclear bomb parts to North Korea, a company that jeopardized lives on the aircraft carrier USS John F. Kennedy, and a seller of body armor that the Air Force said was defective.

The companies were on a government database of 70,000 individuals and businesses suspended or barred by various U.S. agencies from receiving government contract work.” (Read more from news.yahoo.com)

Pathetic and funny until you realize this is OUR money the government is wasting. We should all quit our productive jobs and work for the crooks. We’ll all live off the printing press, and taxes on the few suckers who don’t have government jobs.

Rahm, our knuckle-cracking, perk-receiving, tax-avoiding, fraud-committing Chief of Staff

“Rahm Emanuel: ‘The Second Most Powerful Person In The Country’
Earlier this month, Barack Obama was meeting with House Speaker Nancy Pelosi and other lawmakers when Rahm Emanuel, his chief of staff, began nervously cracking a knuckle.

Mr. Obama then turned to complain to Mr. Emanuel about his noisy habit.

At which point, Mr. Emanuel held the offending knuckle up to Mr. Obama’s left ear and — like an annoying little brother — snapped off a few special cracks.” (Read more from huffingtonpost.com)

“Rahm’s Rent Is Just The Tip Of The Ethics Iceberg
NYPost — NEWS broke last week that Rahm Emanuel, now White House chief of staff, lived rent- free for years in the home of Rep. Rosa De Lauro (D-Conn.) – and failed to disclose the gift, as congressional ethics rules mandate. But this is only the tip of Emanuel’s previously undislosed ethics problems. . . . Emanuel is a multimillionaire, but lived for the last five years for free in the tony Capitol Hill townhouse owned by De Lauro and her husband, Democratic pollster Stan Greenberg.

During that time, he also served as chairman of the Democratic Congressional Campaign Committee – which gave Greenberg huge polling contracts. It paid Greenberg’s firm $239,996 in 2006 and $317,775 in 2008. (Emanuel’s own campaign committee has also paid Greenberg more than $50,000 since 2004.) . . . Some experts suggest that it was also taxable income: Over five years, the free rent could easily add up to more than $100,000. . . .

Emanuel served on the Freddie Mac board of directors during the time that the government-backed lender lied about its earnings, a leading contributor to the current economic meltdown. The Federal Housing Enterprise Oversight Agency later singled out the Freddie Mac board as contributing to the fraud in 2000 and 2001 for “failing in its duty to follow up on matters brought to its attention.” In other words, board members ignored the red flags waving in their faces. . . . Emanuel was paid more than $260,000 for his Freddie “service.” Plus, after he resigned from the board to run for Congress in 2002, the troubled agency’s PAC gave his campaign $25,000 – its largest single gift to a House candidate.” (Read more from informationclearinghouse.info)

Healthcare and our Ever-Expanding Government

Our government, which already directly employs a seventh a America’s labor force (22 million people), is doing what government does best. It is growing – in size, cost and invasiveness.

Its growth into the healthcare industry is particularly interesting to me because of the enthusiasm with which so many of my liberal friends welcome it.

There exist little-known, little-discussed health rules buried in the recently-passed 1,100-page “stimulus” bill – the one which was forced to a vote in the House twelve hours after it’s midnight release, which not a single Congressman read, and which had been made available to lobbyists, but not Congressional staffers.

There are so many things economically and morally reprehensible about the Obama administration’s attempts at creating wealth from a printing press, one struggles to keep up even with something as important as healthcare.

Bloomberg news recently reported:

“The bill’s health rules will affect ‘every individual in the United States’ (445, 454, 479). Your medical treatments will be tracked electronically by a federal system. Having electronic medical records at your fingertips, easily transferred to a hospital, is beneficial. It will help avoid duplicate tests and errors.

But the bill goes further. One new bureaucracy, the National Coordinator of Health Information Technology, will monitor treatments to make sure your doctor is doing what the federal government deems appropriate and cost effective. The goal is to reduce costs and ‘guide’ your doctor’s decisions (442, 446). . . . According to [former Senator] Daschle, doctors have to give up autonomy and ‘learn to operate less like solo practitioners.’ . . .

Hospitals and doctors that are not ‘meaningful users’ of the new system will face penalties. ‘Meaningful user’ isn’t defined in the bill. That will be left to the HHS secretary, who will be empowered to impose ‘more stringent measures of meaningful use over time’ (511, 518, 540-541).”

Central planning doesn’t work. One consequence will be that when centrally-planned healthcare becomes corrupt and ineffective (and it will), we won’t be allowed to quit. Our money will continue to be taken away to support something we don’t want – much like with foreign wars, domestic spying, and all the other ways America’s 22 million federal employees find meaning in their lives.

The best thing government can do is let us keep our money. In a free society, states, neighborhoods, communities, churches, families can socialize or they can not. The effectiveness of different bureaucracies will determine their fate. In Obama’s socialist society, we must all give our wealth to the centrally-planned bureaucracy regardless of whether it serves our needs.

A second consequence will be the rhetorical argument for continued government expansion into our private lives. Once government is paying for our healthcare, regardless of the fact their using our money to do it, they’ll eventually claim dominion over our diets and health-related habits.

Last year, Japan’s government began mandatory tape tests for their subjects . . . er . . . citizens, in the name of controlling healthcare costs. Financial penalties are imposed on local governments and employers who fail to meet the government’s vision of a healthy society.

In the United States, the arguments will be similar. Everything will be blamed – smokers, obesity, greedy businessmen, solar radiation – before the pundits ever cast a scrutinizing eye on government inefficiency.

Here’s another prediction: more government will be proposed as a solution.

(An abbreviated version of this blog entry appears in The Press Citizen)

Lobbyists, not Congressional staffers were allowed to read the “stimulus” bill

It’s like the great Frederic Bastiat (1801 – 1850) wrote in his legendary essay “The Law.”

The law is perverted! The law – and, in its wake, all the collective forces of the nation – the law, I say, not only diverted from its proper direction, but made to pursue one entirely contrary! The law become the tool of every kind of avarice, instead of being its check! The law guilty of that very iniquity which it was its mission to punish!

In the wake of the injustice described by Bastiat, the people revolted. They assembled guillotines.

Paul Bedard of USNew’s Washington Whispers reported:

“We’re receiving E-mails from Capitol Hill staffers expressing frustration that they can’t get a copy of the stimulus bill agreed to last night at a price of $789 billion. What’s more, staffers are complaining about who does have a copy: K Street lobbyists. E-mails one key Democratic staffer: “K Street has the bill, or chunks of it, already, and the congressional offices don’t. So, the Hill is getting calls from the press (because it’s leaking out) asking us to confirm or talk about what we know—but we can’t do that because we haven’t seen the bill. Anyway, peeps up here are sort of a combo of confused and like, ‘Is this really happening?'” Reporters pressing for details, meanwhile, are getting different numbers from different offices, especially when seeking the details of specific programs.” (Read more from usnews.com)

See Also, Ron Paul Discusses Stimulus on CNN American Morning 02/16/2009:

SEC stonewalls congress, Madoff tipster fears for safety

The crooks are in charge.

“WASHINGTON – House lawmakers on Wednesday accused the Securities and Exchange Commission of impeding their probe into how the agency failed to uncover the alleged $50 billion fraud perpetrated by Bernard Madoff.

The clash between lawmakers and high-ranking SEC officials came at a hearing after the whistleblower in the case, Harry Markopolos, said he had feared for his physical safety and would turn over new evidence to the agency showing the alleged Ponzi scheme mastermind had not acted alone. . . .

He plans to present his findings to the SEC’s inspector general on Thursday. If proven, they would substantiate the assertions of many analysts that the alleged fraud was far too large for Madoff to have conducted alone. . . .

In loud, angry exchanges, lawmakers threatened to issue subpoenas to SEC officials to compel their testimony.

[Rep. Paul Kanjorski, D-Pa., the House Financial Services subcommittee’s chairman,] accused the agency of impeding the panel’s investigation, calling it an ‘abuse of authority.’

It was a blistering escalation of criticism of the SEC, which has been blasted by lawmakers and investor advocates over its failure to discover Madoff’s alleged $50 billion Ponzi scheme, despite the credible allegations brought to it over years. Against the backdrop of the worst financial crisis since the 1930s, lawmakers of both parties are calling for a shake-up of the agency.” (Read more from news.yahoo.com)

These stories are important in the argument against those who propose more government as a solution to our problems. The SEC worked hand-in-hand with Madoff. The best solution to the problem is to keep the money in our pockets and in our paychecks, instead of sending it to DC to fund criminal operations like the SEC.

Watch the shocking testimony of whistle-blower Harry Markopolos:

Banksters ‘used corporate credit cards to pay for prostitutes’

“Kristin Davis who ran one of the city’s biggest escort agencies claims that prominent bankers and businessmen paid for her prostitutes with corporate credit cards. . . [She] alleges that prosecutors in the Manhattan District Attorney’s office decided not to pursue any of them even though she provided evidence.

Davis, who admitted charges last year of running a prostitution business employing more than 100 women, told ABC News that the men included a senior executive of a top media company, a banker who spent $41,600 and the chief executive of one of America’s largest private equity firms.” (Read more from telegraph.co.uk)

Bail them out?

YES WE CAN!!!

The Goldman Sachs “secret handshake”

“My antennas first started twitching when Timothy Geithner was first nominated for the position of Secretary of Treasury. Those of you who have read my previous posts may remember Tim as the former President of the New York Fed, and also as a member of the Group of Thirty (G-30). I wrote an article that detailed the power of the New York Fed, and noted that the Chairman of the Board, Stephen Friedman, is a GS capo. I failed to mention in that article the name of the President of the NY Fed, but by now everyone is familiar with Mr. Geithner. I made the point that the NY Fed was effectively under the control of the GS gangstas.

As if to prove my point, no sooner does Tiny Tim [Notice the resemblance? I wonder if he can play “Tiptoe through the Tulips” on the ukelele?] become Treas-Sec of the US than he appoints a GS insider to be his Chief of Staff. This might have gone unnoticed outside Washington circles except that the person in question, Mark Patterson, was not just any GS lackey. No, he was a high-profile lobbyist for GS. Which led to questions about the Obama pledge to reduce the influence of lobbyists in his administration. Not to worry because Tim has got this one covered.” (Read more from futurenewstoday.blogspot.com)

Bailout Blues

It is our duty as patriots to ridicule and expose this crime. The last act of any government is to loot the treasury. They are robbing us blind!

Getting Theirs Cuts Both Ways on Wall Street
“Executives and rank-and-file workers argue that lawmakers and others who complain about bonuses do not understand how this industry works. Bonuses, Wall Streeters say, are a crucial part of total compensation . . . . “Bonuses are down, and the salaries are not enough for these people. They can’t live on $150 to $180,000, so they haven’t saved any money. They put it on credit lines and at bonus time, they thought they’d pay it off.”” (Read more from nytimes.com)

AP: 9 in 10 execs at bailout banks remain on job
“Bosses whose banks made risky loans are now counted on to save system. . . . Even top executives whose banks made such risky loans they imperiled the economy have been largely spared any threat to their jobs, as Washington pumped billions in taxpayer money into the companies.” (Read more from msnbc.msn.com)

UN crime chief: Was the bailout the largest drug money laundering operation in history?
“United Nations’ crime and drug watchdog has indications that money made in illicit drug trade has been used to keep banks afloat in the global financial crisis, its head was quoted as saying on Sunday.” (Read more from correntewire.com)

U.N. crime chief says drug money flowed into banks (Read more from iht.com)

General Motors to Invest $1 Billion in Brazil Operations — Money to Come from U.S. Rescue Program (Read more from laht.com)

Citi Field or Bailout Ballpark?
“Two Congressmen are urging Treasury to force Citigroup to pull out of its $400 million naming rights deal for the Mets’ new stadium.” (Read more from money.cnn.com)

Why Obama’s stimulus will fail

“Never let a serious crisis go to waste. What I mean by that is it’s an opportunity to do things you couldn’t do before.” ~White House Chief of Staff Rahm Emanuel

Nothing Temporary About This Stimulus Spending
“Pushing for deficit spending as part of his own economic stimulus package in 1971, President Richard Nixon famously told ABC News, “I am now a Keynesian in economics.” Increasingly, it seems that everyone on Capitol Hill is adopting Nixon’s economic views . . . but a thousand times worse. Where Nixon wanted to deficit spend by mere billions, President Barack Obama wants to deficit spend in the trillions.

Keynesian theory, suddenly back in style, holds that government can stimulate economic growth by temporarily increasing government spending. Problem is, there was nothing temporary about increases in government spending under Nixon — and there is nothing temporary about the trillion dollars in new spending being debated in Congress.

Speaker Nancy Pelosi (D-CA) yesterday told Politico: “Yes, we wrote the bill. Yes, we won the election.” The House bill perfectly demonstrates how the left is using the economic stimulus bill as cover to accomplish its long-held desire to permanently increase the size of the federal government, with little or no benefit to the American taxpayer.

Today’s top six disastrous highlights are:

1. Medicaid Bailout
2. Medicaid Expansion
3. Family Planning Loophole
4. Education Bailout
5. Education Shopping Spree
6. New Jobs?

. . . .

It’s time to wake up. This stimulus bill is nothing but the permanent implementation of the pet projects of the House and Senate. And that is exactly why Speaker Pelosi doesn’t want you to know what’s in it, and certainly doesn’t want it to be debated. “We’re on our timetable.” she said unapologetically yesterday.” (Read more from blog.heritage.org)

Global Worries Over U.S. Stimulus Spending
“DAVOS, Switzerland — Even as Congress looks for ways to expand President Obama’s $819 billion stimulus package, the rest of the world is wondering how Washington will pay for it all. Few people attending the World Economic Forum question the need to kick-start America’s economy, the world’s largest, with a package that could reach $1 trillion over two years. But the long-term fallout from increased borrowing by the United Stated government, and its potential to drive up inflation and interest rates around the world, seems to getting more attention here than in Washington.” (Read more from nytimes.com)

A 40-Year Wish List
““Never let a serious crisis go to waste. What I mean by that is it’s an opportunity to do things you couldn’t do before.” So said White House Chief of Staff Rahm Emanuel in November, and Democrats in Congress are certainly taking his advice to heart. The 647-page, $825 billion House legislation is being sold as an economic “stimulus,” but now that Democrats have finally released the details we understand Rahm’s point much better. This is a political wonder that manages to spend money on just about every pent-up Democratic proposal of the last 40 years.

We’ve looked it over, and even we can’t quite believe it. There’s $1 billion for Amtrak, the federal railroad that hasn’t turned a profit in 40 years; $2 billion for child-care subsidies; $50 million for that great engine of job creation, the National Endowment for the Arts; $400 million for global-warming research and another $2.4 billion for carbon-capture demonstration projects. There’s even $650 million on top of the billions already doled out to pay for digital TV conversion coupons.

In selling the plan, President Obama has said this bill will make “dramatic investments to revive our flagging economy.” Well, you be the judge. . . . By our estimate only $90 billion out of $825 billion, or about 12 cents of every $1, is for something that can plausibly be considered a growth stimulus. And even many of these projects aren’t likely to help the economy immediately. As Peter Orszag, the President’s new budget director, told Congress a year ago, “even those [public works] that are ‘on the shelf’ generally cannot be undertaken quickly enough to provide timely stimulus to the economy.”” (Read more from online.wsj.com)

Unreal!… Stimulus Includes Government Plan to Crush New Cars
“Democrats want to include a new car crushing plan in the “stimulus” bill where the government would buy new cars and trucks that obtain less than 18 mpg and crush them.” (Read more from gatewaypundit.blogspot.com)

Me: See Hazlitt’s broken window fallacy.

Three Reasons a Spending ‘Stimulus’ Is a Bad Idea
“1) The private sector—not public spending—drives growth. Economic growth comes by individuals and entrepreneurs operating in free markets, not by Washington spending and regulations. Massive spending hikes in the 1930s, 1960s, and 1970s all failed to increase economic growth rates.
2) Giving money to states does not increase growth. Increasing federal borrowing to keep state taxes from rising is like running up a Visa card balance to keep the Mastercard balance from rising.
3) Highway spending does not create jobs. It merely transfers jobs and income from one part of the economy to another. As Heritage Foundation expert Ronald Utt has explained, “The only way that $1 billion of new highway spending can create 47,576 new jobs is if the $1 billion appears out of nowhere as if it were manna from heaven.” (Read more from askheritage.org)