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Bailout Funding Wall Street Bonuses,
AIG Rescue Failing, Mortgage Fraud
Revealing News Articles
November 7, 2008

Dear friends,

Below are key excerpts of important news articles you may have missed. These articles include revealing information on the use by Wall Street banks of the government bailout funds to pay huge bonuses to their executives, experts' fears that the government rescue of American International Group (AIG) is failing, a whistleblower's account of mortgage fraud at Wamu, and more. Each excerpt is taken verbatim from the major media website listed at the link provided. If any link fails to function, click here. Key sentences are highlighted for those with limited time. By choosing to educate ourselves and to spread the word, we can and will build a brighter future.

With best wishes,
Tod Fletcher and Fred Burks for PEERS and WantToKnow.info

Waxman Seeks Bank Data On Use of Bailout Funds
October 29, 2008, Washington Post
http://www.washingtonpost.com/wp-dyn/content/article/2008/10/28/AR2008102803483.html

Congressional investigators yesterday demanded that the nation's nine largest banks prove they are not using an emergency infusion of $125 billion in taxpayer funds to lavish their executives with wealthy bonuses. "I question the appropriateness of depleting the capital that taxpayers just injected into the banks through the payment of billions of dollars in bonuses, especially after one of the financial industry's worst years on record," [Rep. Henry A. Waxman (D-Calif.), chairman of the House Committee on Oversight and Government Reform,] wrote in a letter to the banks. Lawmakers across the political spectrum want to ensure that the government's bailout program results in increased lending, not bigger paydays for executives. But a new study suggests that financiers are still bullish about their bonuses. More than two-thirds of Wall Street professionals are expecting a bonus this year, and 36 percent are anticipating a larger bonus than last year, according to a survey by eFinancialCareers, a career networking company. "Some experts have suggested that a significant percentage of this compensation could come in year-end bonuses and that the size of the bonuses will be significantly enhanced as a result of the infusion of taxpayer funds," Waxman said. In his letter to the banks, Waxman asked them to provide detailed data on compensation packages since 2006, as well as the projected salaries and bonuses for the rest of the year. The request was sent to Bank of America, Bank of New York Mellon, Citigroup, Goldman Sachs, J.P. Morgan Chase, Merrill Lynch, Morgan Stanley, State Street, and Wells Fargo.

Note: For extensive coverage of continuing revelations about the Wall Street bailout, click here.

White House defends money for banks
October 30, 2008, Washington Post
http://www.washingtonpost.com/wp-dyn/content/article/2008/10/30/AR2008103002287.html

Under fire from Democrats and Republicans alike, the White House ... defended giving billions of bailout dollars to banks that plan to reward shareholders and executives -- or even buy other banks. Allowing banks to engage in such normal business activities actually could help loosen lending and revive the sagging economy, said Ed Lazear, chairman of the Council of Economic Advisers. He said the administration would not impose any conditions on banks beyond those required when Congress created the bailout program, which authorized the government to buy stock in financial institutions. Lazear was put before the cameras in the White House briefing room amid a rising chorus of complaints from lawmakers about the latitude that banks will have when they receive bailout money from Washington. That bailout was originally sold by the administration as a plan for the government to purchase toxic mortgage-based assets from financial institutions, to get them off their books and inspire the resumption of normal lending. After passage, though, the administration decided the better course would be to devote $250 billion into buying ownership stakes in banks. With taxpayers' money flowing into their vaults, banks are going ahead with paying dividends to shareholders, giving bonuses to top executives and acquiring competitors. Lawmakers are asking why banks with the money to do those things need taxpayer-funded help. The rescue legislation included some limits on executive compensation, considered weak by many. And while it does not allow institutions receiving the money to increase dividends, it does not prevent them from paying those dividends.

Note: For extensive coverage of continuing revelations about the Wall Street bailout, click here.

Banks Owe Billions to Executives
October 31, 2008, The Wall Street Journal/wealthbulletin.com
http://www.wealth-bulletin.com/home/content/3352363539/

Financial giants getting injections of federal cash owed their executives more than $40 billion for past years' pay and pensions as of the end of 2007, a Wall Street Journal analysis shows. The government is seeking to rein in executive pay at banks getting federal money. But overlooked in these efforts is the total size of debts that financial firms receiving taxpayer assistance previously incurred to their executives, which at some firms exceed what they owe in pensions to their entire work forces. The sums are mostly for special executive pensions and deferred compensation, including bonuses, for prior years. Some examples: $11.8 billion at Goldman Sachs Group Inc., $8.5 billion at J.P. Morgan Chase & Co., and $10 billion to $12 billion at Morgan Stanley. Few firms report the size of these debts to their executives. In most cases, the Journal calculated them by extrapolating from figures that the firms do have to disclose. Most firms haven't set aside cash or stock for these IOUs. They are a drag on current earnings and when the executives depart, employers have to pay them out of corporate coffers. [Such] liabilities grew especially high in the financial industry, with its tradition of lavish pay. The liabilities are an essentially hidden obligation. Even when the debts to their executives total in the billions, most companies lump them into "other liabilities"; only a few then identify amounts attributable to deferred pay.

Note: For extensive coverage of continuing revelations about the Wall Street bailout, click here.

Effectiveness of AIG's $143 Billion Rescue Questioned
November 3, 2008, Washington Post
http://www.washingtonpost.com/wp-dyn/content/article/2008/11/02/AR2008110202150.html

A number of financial experts now fear that the federal government's $143 billion attempt to rescue troubled insurance giant American International Group may not work, and some argue that company shareholders and taxpayers would have been better served by a bankruptcy filing. The Treasury Department leapt to keep AIG from going bankrupt on Sept. 16, and in the past seven weeks, AIG has drawn down $90 billion in federal bailout loans. But some key AIG players argue that bankruptcy would have offered more structure and greater protections during a time of intense market volatility. Echoing some other experts, Ann Rutledge, a credit derivatives expert, ... said she ... fears that the government is papering over the problem with a quick fix that was not well planned. "What we see now are a lot of games by the government to keep these institutions going with a lot of cash," she said. "This is to fill holes in companies' balance sheets, and they're trying to hold at bay the charges that our financial system is insolvent." As AIG has rapidly eaten through the loan money, the Fed has twice expanded its original $85 billion bailout -- which itself was the largest government bailout of a private company in U.S. history. Earlier last month, the Fed ... gave AIG $38 billion more in credit for securities lending to try to keep the firm from drawing down its first Fed loan too quickly. Then on Thursday, the Fed agreed to let AIG borrow $20 billion from a larger commercial paper bailout fund it had set up days earlier for all institutions that lend money to each other. If the company had filed for Chapter 11 bankruptcy protection, AIG could have frozen the crippling collateral calls.

Note: For extensive coverage of continuing revelations about the Wall Street bailout, click here.

Was There a Loan It Didn't Like?
November 2, 2008, New York Times
http://www.nytimes.com/2008/11/02/business/02gret.html

As a senior mortgage underwriter, Keysha Cooper was proud of her ability to spot fraud and other problems in a loan application. But as a senior mortgage underwriter at Washington Mutual during the late, great mortgage boom, Ms. Cooper says she found herself in a vise. Brokers squeezed her from one side, her superiors from the other, she says, and both pressured her to approve loans, no matter what. "At WaMu it wasn't about the quality of the loans; it was about the numbers," Ms. Cooper says. "They didn't care if we were giving loans to people that didn't qualify. Instead, it was how many loans did you guys close and fund?" When underwriters refused to approve dubious loans, they were punished, she says. In February 2007 ... the pressure became intense. WaMu executives told employees they were not making enough loans and had to get their numbers up, she says. "They started giving loan officers free trips if they closed so many loans, fly them to Hawaii for a month," Ms. Cooper recalls. "One of my account reps went to Jamaica for a month because he closed $3.5 million in loans that month. If a loan came from a top loan officer, they didn't care what the situation was, you had to make that loan work," she says. One loan file was filled with so many discrepancies that she felt certain it involved mortgage fraud. She turned the loan down, she says, only to be scolded by her supervisor. Ms. Cooper says that her bosses placed her on probation for 30 days for refusing to approve the loan and that her team manager signed off on the loan.

Note: For lots more on corporate corruption from reliable sources, click here.

Attorney general's private trips have cost taxpayers
October 31, 2008, Miami Herald/McClatchy Newspapers
http://www.miamiherald.com/news/politics/AP/story/750332.html

Attorney General Michael Mukasey has taken personal trips on government jets almost every weekend since he took office less than a year ago at a cost to taxpayers of more than $155,800, Justice Department and Federal Aviation Administration travel records show. Mukasey took so many trips to his home in New York on FAA, FBI or Drug Enforcement Administration planes that he was outside Washington a third or more of February, May, July, August and September. From November 2007 to September 2008, he traveled to New York 45 times, according to the records, which were released in late October in response to open records requests that McClatchy filed nine months ago. Mukasey traveled with his wife on 17 of the trips, and eight of them were with four or five other relatives. Mukasey reimbursed the government a total of $15,246 for all of his trips, based on round-trip coach fares, as he's required to do by government travel regulations. However, the cost of operating the Gulfstream G5s, Cessna Citations and de Havilland Dash 8-100s that Mukasey uses is tens of thousands of dollars more. For example, the attorney general reimbursed the Justice Department $128.80 for a round-trip ticket to New York. The actual cost to the government, according to the department: $4,021.32. Mukasey's personal trips appear to outpace those of other officials who are required to travel on government jets. During the same time period, Defense Secretary Robert Gates took fewer than six personal trips, and he also reimbursed the government at coach fares.

Note: For revealing reports on government corruption from major media sources, click here.

Treasury could bail out any industry
October 30, 2008, San Francisco Chronicle/Associated Press
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/10/30/BU1D13QM6S.DTL

As the list of ailing companies seeking government help grows, it is anybody's guess where the Treasury Department's largesse will stop. The $700 billion bailout bill is so vague that virtually any U.S. company could be eligible for government help. While the capital infusions announced this month will be directed only to banks, Treasury spokeswoman Brookly McLaughlin confirmed that the law allows the department to create other rescue programs "open to a broader set of financial institutions." As the bill is written, "financial institutions" don't have to be banks or financial entities. In theory, any company could declare itself a financial institution and ask the Treasury Department to grant it temporary aid if its rescue is deemed "necessary to promote financial market stability." "Talk about the barn doors being left open - it's like they left off the walls and roof, too," said Bert Ely, an independent banking consultant. He suggested that under the bill, an airline could transfer future revenue streams into a subsidiary and ask the government to buy shares in that new "financial institution." Representatives of the auto, insurance and other industries are already seeking government help, indicating they think they qualify because of their financing units. Airlines and home builders are lobbying for government help to prop them up through the economic downturn - either under the bailout bill or some other legislation. And if insurance and auto lobbyists succeed in their efforts to tap the bailout money, experts said other industries will probably follow.

Note: For extensive coverage of continuing revelations about the Wall Street bailout, click here.

BPA Ruling Flawed, Panel Says
October 29, 2008, Washington Post
http://www.washingtonpost.com/wp-dyn/content/article/2008/10/28/AR2008102803406.html

The Food and Drug Administration ignored scientific evidence and used flawed methods when it determined that a chemical widely used in baby bottles and in the lining of cans is not harmful, a scientific advisory panel has found. In a highly critical report ... the panel of scientists from government and academia said the FDA did not take into consideration scores of studies that have linked bisphenol A (BPA) to prostate cancer, diabetes and other health problems in animals when it completed a draft risk assessment of the chemical last month. The panel said the FDA didn't use enough infant formula samples and didn't adequately account for variations among the samples. Taking those studies into consideration, the panel concluded, the FDA's margin of safety is "inadequate". The panel is part of the Science Board, a committee of advisers to the FDA commissioner, and was set up to review the FDA's risk assessment of BPA. Many of the studies that the panel said the FDA ignored were reviewed by the National Toxicology Program, which concluded in September that it had "some concern" that BPA can affect brain and behavioral development in infants and small children. Officials at FDA, which regulates the chemical's use in plastic food containers, bottles, tableware and the plastic linings of food cans, accepted some of the criticism in the report. "FDA agrees that due to the uncertainties raised in some studies relating to the potential effects of low doses of bisphenol-A that additional research would be valuable," said spokeswoman Judy Leon. The agency has commissioned new research on BPA.

Note: For many important reports on health issues from reliable sources, click here.

U.S. Air Force investigates Gitmo war court director
October 25, 2008, Miami Herald
http://www.miamiherald.com/news/miami-dade/breaking-news/story/741796.html

The Air Force is investigating a top official in the Guantanamo war crimes trials following complaints that he inappropriately sought to influence the prosecution of cases. Defense lawyers and human rights groups have accused Air Force Brig. Gen. Thomas Hartmann, who supervised the prosecution of enemy combatants at Guantanamo Bay until he was reassigned last month, of lacking neutrality and pushing for premature prosecutions to rally public support for the tribunals. Air Force Maj. David Frakt, a military defense lawyer who has represented several Guantanamo detainees, said the probe was launched after he and others alerted authorities about possible ethical violations by Hartmann. Frakt said that he informed his superiors in July of concerns regarding Hartmann's "unprofessional conduct" and "lack of candor," and that the investigation could result in professional sanctions and might give some detainees grounds to challenge actions that Hartmann took in cases against them. Hartmann was removed as legal adviser for the Guantanamo trials in September. He continues to oversee the tribunals in his new post, but is not directly involved with prosecutors. Military judges have already barred him from participating in three Guantanamo trials, saying he lacked impartiality and aligned himself too closely with prosecutors. The investigation is proof that serious questions remain about the tribunals' fairness, said Jennifer Daskal, a lawyer for Human Rights Watch, which has lobbied on behalf of the detainees. "The Department of Defense has absolutely refused to clean house."

Note: For many disturbing reports on threats to civil liberties from major media sources, click here.

Blacklight Power bolsters its impossible claims of a new renewable energy source
October 21, 2008, New York Times
http://www.nytimes.com/external/venturebeat/2008/10/21/21venturebeat-blacklight...

Ask nearly any physicist if it's possible for a hydrogen atom to enter a lower energy state than the ground, or resting, state they hold in nature, and you're likely to get an unequivocal "no". But a tiny company in New Jersey called Blacklight Power has been disputing that assumption for over a decade, and of late, making gad-fly claims that its founder says will overturn the accepted scientific order. Blacklight's claims have a special significance: If they're true, there's a source of cheap, clean energy that can be easily tapped anywhere in the world. Blacklight is now saying that it has physical proof of its energy generator, verified by an independent university lab. Its "hydrino" theory isn't put forth by a single crackpot; instead, the company employs a good handful of high-level scientists who would presumably rebel if the idea was totally false. It has also taken over $60 million in venture funding. Despite a hearty rejection by the scientific mainstream, and being ignored for years on end, its founder, Randell Mills, has plugged on. Now an engineering team at Rowan University ...has come forward with results from its own tests of the Blacklight process. Tests conducted in sealed chambers, and measured with a device called a calorimeter, show a heat reaction from a substance provided by Blacklight far beyond anything anticipated. "We've been able to regularly reproduce these results and we believe any research lab could do the same," Peter Jansson, the faculty member heading the experiments, [said].

Note: For a seven-minute video demonstrating this amazing new energy source, click here. See list with links by clicking here. Exciting news!

Urban Farming
April 20, 2008, New York Times
http://www.nytimes.com/2008/04/20/magazine/20Live-a-t.html?pagewanted=3

Jules Dervaes and three of his adult children live on one-fifth of an acre in Pasadena, Calif., a block away from a multilane highway. On this tiny sliver of land, they manage to be mostly self-sufficient. "This is our form of protest," says Dervaes, who is 60, "and this is our form of survival." The family harvests 6,000 pounds and more than 350 separate varieties of fruits, vegetables and edible flowers annually. They brew the biodiesel fuel that powers the family car. Solar panels on their roof reduce energy bills to as little as $12 a month. Goats, chickens, ducks and two rescued cats are in residence. Red wiggler worms turn the kitchen and garden waste into compost, which is then recycled back into the garden. Dervaes's father worked for Standard Oil, but his son took a markedly different path. Dervaes moved into his current Pasadena home in 1985 – temporarily, he thought. As the years passed and his hopes of relocating to the country were delayed, he "decided that he wanted to see how much we could grow here," says his 33-year-old daughter, Anais. The family generates cash for their limited expenses by selling produce to local restaurants. Though Dervaes and his children are accustomed to the neighbors' strange looks at their crowded lot, the local chefs don't seem to share the skepticism. "They'll call me in the morning and pick the amount that I need for that night," says Jim McCardy, who owns Marstons, a restaurant in Pasadena. "The flavor is just incredible."

Note: A full-length documentary is being made of this wonderful family. To watch an engaging two-minute trailer, click here. See their highly popular website at http://www.pathtofreedom.com.

Man with suicide victim's heart takes own life
April 6, 2008, MSNBC/Associated Press
http://www.msnbc.msn.com/id/23984857

A man who received a heart transplant 12 years ago and later married the donor's widow died the same way the donor did, authorities said: of a self-inflicted gunshot wound. No foul play was suspected in 69-year-old Sonny Graham's death at his Vidalia, Ga., home, investigators said. He was found Tuesday in a utility building in his backyard with a single shotgun wound to the throat. Graham, who was director of the Heritage golf tournament at Sea Pines from 1979 to 1983, was on the verge of congestive heart failure in 1995 when he got a call that a heart was available in Charleston. That heart was from Terry Cottle, 33, who had shot himself. Grateful for his new heart, Graham began writing letters to the donor's family to thank them. In January 1997, Graham met his donor's widow, Cheryl Cottle, then 28, in Charleston. "I felt like I had known her for years," Graham told The (Hilton Head) Island Packet for a story in 2006. "I couldn't keep my eyes off her. I just stared." In 2001, Graham bought a home for Cottle and her four children in Vidalia. Three years later, they were married. From their previous marriages, the couple had six children and six grandchildren scattered across South Carolina and Georgia. Sonny Graham's friends said he would be remembered for his willingness to help people. "Any time someone had a problem, the first reaction was, 'Call Sonny Graham,' " said Bill Carson, Graham's friend for more than 40 years. "It didn't matter whether you had a flat tire on the side of the road or your washing machine didn't work. He didn't even have to know you to help you."

Note: For further intriguing reports from reliable sources which illuminate the nature of reality, click here.


Special note:
For an exciting new movement among the youth of generation we, don't miss the five-minute video and beautiful website at http://www.gen-we.org. And for those interested in an incisive 30-minute critique of the current financial situation, click here. You might not know that violent crime rates in the U.S. dropped over 50% between 1994 and 2005. Check out the U.S. Department of Justice reports on this by clicking here and here. Why doesn't good news like this get more coverage?

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Bailout Funding Wall Street Bonuses, AIG Rescue Failing, Mortgage Fraud