Corporate Corruption News ArticlesExcerpts of Key Corporate Corruption News Articles in Media
A report this week showing rampant foreclosure abuse in San Francisco reflects similar levels of lender fraud and faulty documentation across the United States, say experts and officials who have done studies in other parts of the country. The audit of almost 400 foreclosures in San Francisco found that 84 percent of them appeared to be illegal, according to the study released by the California city. "The audit in San Francisco is the most detailed and comprehensive that has been done - but it's likely those numbers are comparable nationally," Diane Thompson, an attorney at the National Consumer Law Center, told Reuters. Across the country from California, Jeff Thingpen, register of deeds in Guildford County, North Carolina, examined 6,100 mortgage documents last year, from loan notes to foreclosure paperwork. Of those documents, created between January 2008 and December 2010, 4,500 showed signature irregularities, a telltale sign of the illegal practice of "robosigning" documents. Robosigning involves the use of bogus documents to force foreclosures without lenders having to scrutinize all the paperwork involved with mortgages. The practice was at the heart of the foreclosure scandal that led to a $25 billion settlement between the U.S. government and five major banks last week.
Note: For lots more from major media sources on the illegal foreclosures made by the biggest banks and financial firms, the collusion of government agencies, and more, see our "Banking Bailout" news articles.
Wall Street is its own worst enemy. It's busily shredding new regulations and making the public more distrustful than ever. The Street's biggest lobbying groups have just filed a lawsuit against the Commodities Futures Trading Commission, seeking to overturn its new rule limiting speculative trading in food, oil and other commodities. The Street makes bundles from these bets, but they have raised costs for consumers. In other words, a small portion of what you and I pay for food and energy has been going into the pockets of Wall Street. Just another redistribution from the middle class and the poor to the top. The Street argues that the commission's cost-benefit analysis wasn't adequate. Putting the question into the laps of federal judges gives the Street a huge tactical advantage because the Street has almost an infinite amount of money to hire so-called "experts" who will say benefits have been exaggerated and costs underestimated. But when it comes to regulating Wall Street, one big cost doesn't make it into any individual weighing: the public's mounting distrust of the entire economic system, generated by the Street's repeated abuse of the public's trust. Wall Street's shenanigans have convinced a large portion of America that the economic game is rigged. Wall Street has blanketed America in a miasma of cynicism.
Note: The author of this analysis, Robert Reich, is a former U.S. secretary of labor, is professor of public policy at UC Berkeley and the author of Aftershock: The Next Economy and America's Future. He blogs at www.robertreich.org.
Regulators and the world's $700 trillion derivatives industry are closely watching a legal battle that began in Britain ... and which will fuel a sea change in swaps payouts. Four cases, including one involving a unit of collapsed U.S. bank Lehman Brothers, are being presented in a five-day hearing at the UK Court of Appeal. All revolve around payouts under the derivatives industry's "master agreement", a framework contract. A bank that trades swaps with another bank typically has one master agreement which sets the terms for millions of transactions between them. The master agreement ... covers around 90 percent of off-exchange derivatives transactions. Under the agreement, Lehman's bankruptcy is considered a default. However, in the four cases before the court this week, the other party in the contracts elected not to terminate them because they would have had to pay out to the defunct bank.
Note: Like most reporting in the major media, this article trivializes the massive size of the derivatives market. $700 trillion is equivalent to $100,000 for every man, woman, and child in the world! Do you think the financial industry is out of control? For lots more powerful, reliable information on major banking manipulations, click here. For a powerful analysis of just how crazy things have gotten and with some rays of hope by researcher David Wilcock, click here.
The ascension of Mario Monti to the Italian prime ministership is remarkable for more reasons than it is possible to count. By imposing rule by unelected technocrats, [Italy] has suspended the normal rules of democracy, and maybe democracy itself. And by putting a senior adviser at Goldman Sachs in charge of a Western nation, it has taken to new heights the political power of an investment bank that you might have thought was prohibitively politically toxic. The European Central Bank ... is under ex-Goldman management, and the investment bank's alumni hold sway in the corridors of power in almost every European nation, as they have done in the US throughout the financial crisis. Even before the upheaval in Italy, there was no sign of Goldman Sachs living down its nickname as "the Vampire Squid", and now that its tentacles reach to the top of the eurozone, sceptical voices are raising questions over its influence. Simon Johnson, the former International Monetary Fund economist, in his book 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown, argued that Goldman Sachs and the other large banks had become so close to government in the run-up to the financial crisis that the US was effectively an oligarchy. At least European politicians aren't "bought and paid for" by corporations, as in the US, he says. "Instead what you have in Europe is a shared world-view among the policy elite and the bankers, a shared set of goals and mutual reinforcement of illusions." This is The Goldman Sachs Project. Put simply, it is to hug governments close.
Note: For revealing major media articles on key secret societies which manipulate global politics, click here. For deeply revealing reports from reliable major media sources on financial corruption, click here.
Washington, D.C. is a town that runs on inside information - but should our elected officials be able to use that information to pad their own pockets? Members of Congress and their aides have regular access to powerful political intelligence, and many have made well-timed stock market trades in the very industries they regulate. For now, the practice is perfectly legal, but some say it's time for the law to change. Few of them are doing it for the salary and all of them will say they are doing it to serve the public. But there are other benefits: Power, prestige, and the opportunity to become a Washington insider with access to information and connections that no one else has, in an environment of privilege where rules that govern the rest of the country, don't always apply to them. Most former congressmen and senators manage to leave Washington - if they ever leave Washington - with more money in their pockets than they had when they arrived. Congressional lawmakers have no corporate responsibilities and have long been considered exempt from insider trading laws, even though they have daily access to non-public information and plenty of opportunities to trade on it.
Note: According to a New York Times article, U.S. "Senators' stocks beat the market by 12 percent," while "the average household's portfolio underperformed the market by 1.44 per cent a year." To watch this revealing 15-minute piece on CBS 60 Minutes, click here. For key reports from reliable sources on government corruption, click here.
Bank of America Corp., hit by a credit downgrade last month, has moved derivatives from its Merrill Lynch unit to a subsidiary flush with insured deposits. Derivatives are financial instruments used to hedge risks or for speculation. They’re derived from stocks, bonds, loans, currencies and commodities, or linked to specific events such as changes in the weather or interest rates. Keeping such deals separate from FDIC-insured savings has been a cornerstone of U.S. regulation for decades, including last year’s Dodd-Frank overhaul of Wall Street regulation. Three years after taxpayers rescued some of the biggest U.S. lenders, regulators are grappling with how to protect FDIC-insured bank accounts from risks generated by investment-banking operations. “The concern is that there is always an enormous temptation to dump the losers on the insured institution,” said William Black, professor of economics and law at the University of Missouri-Kansas City and a former bank regulator. “We should have fairly tight restrictions on that.” Bank of America’s holding company -- the parent of both the retail bank and the Merrill Lynch securities unit -- held almost $75 trillion of derivatives at the end of June. That compares with JPMorgan’s deposit-taking entity, JPMorgan Chase Bank NA, which contained 99 percent of the New York-based firm’s $79 trillion of notional derivatives.
Note: Remember that the GDP of the entire world is estimated at around $60 trillion, less than JPMorgan or BofA own in derivatives. For an excellent article laying out the incredible risk this creates of a major economic collapse, click here. For more on the high risk and cost to taxpayers of BofA moving its massive amount of derivatives to its subsidiary, click here. For lots more from major media sources on the illegal profiteering of major financial corporations enabled by lax government regulation, click here.
The Defense Department, which has promised to publish a reliable account of how it spends its money by 2017, has discovered that its financial ledgers are in worse shape than expected and that it will have to spend billions of dollars in the coming years to make its financial accounting credible, the Center for Public Integrity reported [on October 13]. The U.S. military has spent more than $6 billion to develop and deploy new financial systems, but the effort has been plagued by significant added overruns and delays, defense officials told the CPI, a nonprofit investigative news organization. The Government Accountability Office said in a report last month that although the services can now fully track incoming appropriations, they still can't demonstrate that their funds are being spent as they should be. The Pentagon’s bookkeeping has come under increased scrutiny as Congress and the Obama administration have vowed to reduce the federal deficit. The department could face substantial cutbacks if a special bipartisan "supercommittee" can’t agree on a formula for reducing the deficit.
Note: For an essay by a top U.S. general revealing how wars are used to bring huge profits to the powerful elite of our world, click here. For lots more from reliable sources on government corruption, click here.
The American banking sector apparently is going to be vastly different when it finally emerges from the financial crisis that took hold more than three years ago. It is going to be significantly smaller, and the domination of a relative handful of behemoth institutions is going to increase. At the end of June, there were 7,522 commercial banks, down from 8,542 on Dec. 31, 2007. That is a decline of nearly 12 percent in just three and a half years. Of the more than 1,000 banks that disappeared, about 370 failed. But the rest of the decrease came through mergers and acquisitions as a decades-long pattern of consolidation continued. Most banks in the United States still are fairly small. The median size of a bank at the end of June, according to an analysis of statistics from the Federal Deposit Insurance Corp. was about $155 million in assets. That’s about an 18 percent increase since the end of 2007. But those numbers seriously skew the nature of the industry. Of the more than $13.6 trillion in assets held by banks at the end of June, nearly $9.4 trillion is in the hands of just 37 institutions, each with more than $50 billion in assets. And of that, $5.5 trillion is held by just four banks: JPMorgan Chase, Bank of America, Citibank and Wells Fargo. Each of those have more than $1 trillion in assets. In other words, the U.S. banking industry resembles a tall cake, with a very thick layer of icing on top.
Note: To learn how these same four banks and their holding companies hold over 90% of the $700 trillion derivatives market, click here. For many revealing reports from reliable sources on the concentration and centralization of financial power by a few megabanks, click here.
Twenty-five of the 100 highest-paid U.S. CEOs earned more last year than their companies paid in federal income tax, a pay study by a Washington think tank said [on August 31]. The Institute for Policy Studies said it also found many of the companies spent more on lobbying than they did on taxes. The institute compared CEO pay with current U.S. taxes paid, excluding foreign, state and local taxes that may have been paid, as well as deferred taxes, which can often be far larger than current taxes paid. The group's rationale was that U.S. taxes paid are the closest approximation in public documents to what companies may have actually written a check for last year. It said deferred taxes may or may not be paid. Among the companies topping the IPS list: •EBay, whose CEO John Donahoe made $12.4 million, but which reported a $131 million refund on its 2010 current U.S. taxes. •Boeing, which paid CEO Jim McNerney $13.8 million, sent in $13 million in federal income taxes and spent $20.8 million on lobbying and campaign spending. •General Electric, where CEO Jeff Immelt earned $15.2 million in 2010, while the company got a $3.3 billion federal refund and invested $41.8 million in its own lobbying and political campaigns.
Note: For lots more on corporate corruption from major media sources, click here.
The SEC has violated federal law by destroying the records of thousands of enforcement cases in which it decided not to file charges against or conduct full-blown investigations of Wall Street firms and others initially suspected of wrongdoing, a former agency official has alleged. The purged records involve major firms such as Goldman Sachs, Citigroup, Bank of America, Morgan Stanley and hedge-fund manager SAC Capital. At issue were suspicions of actions such as insider trading, financial fraud and market manipulation. A file closed in 2002 involved Lehman Brothers, the investment bank whose collapse fueled the financial meltdown of 2008, according to the former official. A file closed in 2009 involved suspected insider trading in securities related to American International Group, the insurance giant bailed out by the government at the height of the financial crisis. The allegations were leveled in a July letter to Sen. Charles E. Grassley (R-Iowa) from Gary J. Aguirre, a former SEC enforcement lawyer now representing a current SEC enforcement lawyer, Darcy Flynn. Flynn last year began managing SEC enforcement records and became concerned that records that were supposed to be preserved under federal law were being purged as a matter of SEC policy, Aguirre wrote.
Note: For more on this important news by Rolling Stone's Matt Taibbi, click here. For lots more from reliable sources on the criminal practices of Wall Street corporations which led to global economic recession and massive government bailouts, click here.
British government officials approached nuclear companies to draw up a co-ordinated public relations strategy to play down the Fukushima nuclear accident just two days after the earthquake and tsunami in Japan and before the extent of the radiation leak was known. Internal emails seen by the Guardian show how the business and energy departments worked closely behind the scenes with the multinational companies EDF Energy, Areva and Westinghouse to try to ensure the accident did not derail their plans for a new generation of nuclear stations in the UK. "This has the potential to set the nuclear industry back globally," wrote one official at the Department for Business, Innovation and Skills (BIS), whose name has been redacted. "We need to ensure the anti-nuclear chaps and chapesses do not gain ground on this. We need to occupy the territory and hold it. We really need to show the safety of nuclear." Officials stressed the importance of preventing the incident from undermining public support for nuclear power. Louise Hutchins, a spokeswoman for Greenpeace, said the emails looked like "scandalous collusion". "This highlights the government's blind obsession with nuclear power and shows neither they, nor the industry, can be trusted when it comes to nuclear," she said.
Federal regulators have been working closely with the nuclear power industry to keep the nation's aging reactors operating within safety standards by repeatedly weakening those standards, or simply failing to enforce them, an investigation by The Associated Press has found. Time after time, officials at the U.S. Nuclear Regulatory Commission have decided that original regulations were too strict, arguing that safety margins could be eased without peril. The result? Rising fears that these accommodations by the NRC are significantly undermining safety — and inching the reactors closer to an accident that could harm the public. Examples abound. When valves leaked, more leakage was allowed — up to 20 times the original limit. When rampant cracking caused radioactive leaks from steam generator tubing, an easier test of the tubes was devised, so plants could meet standards. Failed cables. Busted seals. Broken nozzles, clogged screens, cracked concrete, dented containers, corroded metals and rusty underground pipes — all of these and thousands of other problems linked to aging were uncovered. Not a single official body in government or industry has studied the overall frequency and potential impact on safety of such breakdowns in recent years, even as the NRC has extended the licenses of dozens of reactors.
Note: Read this detailed report in its entirety to see the amazing range of serious problems in the US nuclear industry which have systematically been covered up by the NRC. For lots more from reliable sources on government and corporate corruption, click here and here.
Goldman Sachs is bracing itself for what may be the most contentious annual meeting in the embattled investment bank's 142-year history. Angry shareholders, including a coalition of religious groups, are planning to call on Goldman's executives to justify the combined $69.6m (Ł42.4m) payday its top five executives received in 2010 and to answer questions about allegations that the bank misled clients and lied to Congress. The meeting comes amid mounting pressure on the bank. Earlier this week Eric Holder, the US attorney-general, confirmed that the justice department was investigating Goldman's role in the financial crisis following a withering report on the bank's role led by senators Carl Levin and Tom Coburn. The 650-page report "Wall Street and the Financial Crisis: Anatomy of a Financial Collapse," gave Goldman its own section titled "Failing to Manage Conflicts of Interest: A Case Study of Goldman Sachs." In July the bank paid $500m to settle charges brought by financial regulator the Securities and Exchange Commission (SEC) that it misled customers over complex sub-prime mortgage products it sold in 2007. The spotlight on executive pay could not come at a more sensitive moment for the bank. The bank's top five executives received cash and stock last year that was 13 times greater than the year before. Goldman's 2010 net revenues fell 13% and profits fell 37%. Goldman paid Blankfein close to $19m in compensation for 2010, almost double his award for the previous year.
Note: For lots more on the financial chicanery of Goldman Sachs and other major financial corporations that led to the global economic crisis and massive taxpayer bailouts of the firms, click here.
Analysts who reviewed complex mortgage bonds that ultimately collapsed and ruined the U.S. housing market were threatened with firing if they lost lucrative business, prompting faulty ratings on trillions of dollars worth of junk mortgage bonds, a Senate report said [on April 13]. The 639-page report by the Senate Permanent Subcommittee on Investigations confirms much of what McClatchy Newspapers first reported about mismanagement by credit ratings agencies in 2009. Credit rating agencies are supposed to provide independent assessments on the quality of debt being issued by companies or governments. Traditionally, investments rated AAA had a probability of failure of less than 1 percent. But in collusion with Wall Street investment banks, the Senate report concludes, the top two ratings agencies - Moody's Investors Service and Standard & Poor's - effectively cashed in on the housing boom by ignoring mounting evidence of problems in the housing market. Profits at both companies soared, with revenues at market leader Moody's more than tripling in five years. Then the bottom fell out of the housing market, and Moody's stock lost 70 percent of its value; it has yet to fully recover. More than 90 percent of AAA ratings given in 2006 and 2007 to pools of mortgage-backed securities were downgraded to junk status.
Note: For many key reports from major media sources illuminating how major financial corporations knowingly brought about the global financial crisis and profited from it, click here.
Christy Mack, the wife of Morgan Stanley Chairman John Mack, and Susan Karches, the widow of the company's former investment-banking division president, Peter Karches, are among the chief investors in a company that received $220 million in low-interest loans. The funds came from a federal bailout program that "virtually guaranteed them millions in risk-free income," according to the article ... "The Real Housewives of Wall Street," which appears in [Rolling Stone]. In 2009, Christy Mack and Susan Karches launched Waterfall TALF Opportunity, a company with a Cayman Islands address, although the two women did not seem "to have any experience whatsoever in finance." TALF stands for "Term Asset-Backed Securities Loan Facility." The federal aid they received "falls under a broader category of bailout initiatives designed" by Federal Reserve chief Ben Bernanke and Treasury Secretary Timothy Geithner. With an initial upfront investment of $15 million, Waterfall TALF received $220 million in cash from the Fed, most of which it used to purchase "student loans and commercial mortgages." The loans were set up so that the investors "would keep 100% of any gains on the deal while the Fed and the Treasury (read: the taxpayer) would eat 90% of the losses."
Note: We don't usually quote the New York Daily News, but as they were the only major media to report this important story, we've included it here. Why are the major media silent on this powerful information uncovered by U.S. Senator Bernie Sanders? For the full story on this, click here. For lots more from reliable sources on corruption in the government bailouts of the biggest banks, click here.
Do you know who really owns your mortgage? That question has become a nightmare for many homeowners since the invention of mortgage-backed securities. Yes, those were the exotic investments that sparked the financial collapse in this country. And they're still causing problems. As it turns out, Wall Street cut corners when it bundled homeowners' mortgages into securities that were traded from investor to investor. Now that banks are foreclosing on people, they're finding that the legal documents behind many mortgages are missing. So, what do the banks do? Some companies appear to be resorting to forgery and phony paperwork in what looks like a nationwide epidemic. Even if you're not at risk of foreclosure, there could be legal ramifications for a homeowner if the chain of title has been lost.
Note: Don't miss at the link above the most excellent, six-minute CBS video explaining more on this blatant deception and manipulation by many banks. You have to put up with a one-minute commercial shortly after the video starts. For lots more from reliable sources on the criminal practices of mortgage lenders, click here.
Scientists have created genetically modified cattle that produce "human" milk in a bid to make cows' milk more nutritious. The scientists have ... introduced human genes into 300 dairy cows to produce milk with [some of] the same properties as human breast milk. The scientists behind the research ... hope genetically modified dairy products from herds of similar cows could be sold in supermarkets. The research has the backing of a major biotechnology company. Genetically modified food has become a highly controversial subject and currently they can only be sold in the UK and Europe if they have passed extensive safety testing. The consumer response to GM food has also been highly negative, resulting in many supermarkets seeking to source products that are GM free. Helen Wallace, director of biotechnology monitoring group GeneWatch UK, said: "We have major concerns about this research to genetically modify cows with human genes. There are major welfare issues with genetically modified animals as you get high numbers of still births. There is a question about whether milk from these cows is going to be safe for humans and it is really hard to tell that unless you do large clinical trials like you would a drug, so there will be uncertainty about whether it could be harmful to some people. Ethically there are issues about mass producing animals in this way."
Note: For a powerful summary of the dangers of genetically modified foods, click here. And for other major media news articles exposing the serious risks and dangers of genetically modified foods, click here.
A consortium of U.S. organic farmers and seed dealers filed suit against global seed giant Monsanto Co. on [March 29], in a move to protect themselves from what they see as a growing threat in the company's arsenal of genetically modified crops. The Public Patent Foundation filed the suit on behalf of more than 50 organizations challenging the chemical giant's patents on its genetically modified seeds. The group is seeking a ruling that would prohibit Monsanto from suing the farmers or dealers if their organic seed becomes contaminated with Monsanto's patented biotech seed germplasm. Monsanto has filed scores of lawsuits and won judgments against farmers they claimed made use of their seed without paying required royalties. Many farmers have claimed that their fields were inadvertently contaminated without their knowledge, and the issue has been a topic of concern for not only farmers, but also companies that clean and handle seed. "This case asks whether Monsanto has the right to sue organic farmers for patent infringement if Monsanto's genetically modified seed should land on their property," said Dan Ravicher, executive director of PUBPAT. The suit also alleges that Monsanto's GMO seeds do more harm than good and claims the patents on genetically modified seed are invalid because they don't meet the "usefulness" requirement of patent law.
Note: For a powerful, quality documentary revealing the gross abuses of Monsanto which endanger public health, click here.
General Electric, the nation’s largest corporation, had a very good year in 2010. The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States. Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion. That may be hard to fathom for the millions of American business owners and households now preparing their own returns, but low taxes are nothing new for G.E. The company has been cutting the percentage of its American profits paid to the Internal Revenue Service for years, resulting in a far lower rate than at most multinational companies. Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore. G.E.’s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the world’s best tax law firm. Indeed, the company’s slogan “Imagination at Work” fits this department well. The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress. While General Electric is one of the most skilled at reducing its tax burden, many other companies have become better at this as well.
Carlos Lam, a Republican activist and Indiana deputy prosecutor, has resigned amid revelations that he sent an email calling for a fake attack on Wisconsin Governor Scott Walker designed to discredit union protesters. Walker, a Republican, was the target of protests for his efforts to roll back many union collective bargaining rights in his state. In a Feb. 19 email uncovered by the Wisconsin Center for Investigative Journalism, Lam apparently told Walker he had a "good opportunity" to win public sympathy with a "'false flag' operation." "If you could employ an associate who pretends to be sympathetic to the unions' cause to physically attack you (or even use a firearm against you), you could discredit the unions," read the email. Lam initially denied having sent the email. He [claimed] he had been shopping for a minivan with his family when it was sent, and suggested his email account had been infiltrated by his political enemies. Lam resigned as deputy prosecutor on Thursday morning, however, reportedly telling his boss he had indeed sent the email. Last month, another Indiana official -- Deputy Attorney General Jeff Cox - lost his job for calling on law enforcement to "use live ammunition" on Wisconsin protesters. Also in February, Walker was the victim of a prank call by a liberal journalist pretending to be billionaire conservative activist David Koch. When the journalist suggested planting people among the protesters to stir up trouble, Walker responded that "we thought about that" but added that he had decided against it.
Note: To learn more about the prevalence of "false flag" operations in politics with links to reliable, verifiable sources, click here. For more on this official's call for a false-flag attack, click here.
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