Issuu on Google+

U.S. Judge Asks: Why Haven’t The Financial Executives Been Prosecuted? Michael Hiltzik Los Angeles Times January 3, 2013

As the five-year statute of limitations approaches for the wrongdoing that bequeathed us the Great Recession, the question of why no high-level executives have been prosecuted becomes more urgent. You won't find a better, more incisive discussion of the question than the one by U.S. District Judge Jed Rakoff of New York in the current issue of the New York Review of Books. Rakoff, 70, is the right person to raise the issue. He's a former federal prosecutor in Manhattan, where he handled business and securities fraud. A Clinton appointee, he's been on the bench for more than 17 years. It's unsurprising to find Rakoff emerging as a critic of the government's hands-off treatment of Wall Street and banking big shots in the aftermath of the financial crisis: He's never shown much patience for the settlements in which the Department of Justice and the Securities and Exchange Commission allow corporations and executives to wriggle out of cases by paying nominal penalties and promising


not to be bad in the future. These are known as "consent decrees." In 2009, he tossed a $33-million SEC settlement of a white-collar case with Bank of America, calling it "a contrivance designed to provide the S.E.C. with the facade of enforcement and the management of the Bank with a quick resolution of an embarrassing inquiry." The parties later agreed to a higher fine and stricter terms. And in 2011 he rejected a $285-million consent decree Citigroup entered with the SEC. That rejection is still being pondered by a federal appeals court. In his new essay, Rakoff takes particular aim at the government's habit of prosecuting corporations, but not their executives -- a trend we railed against earlier this year. "Companies do not commit crimes," Rakoff observes; "only their agents do...So why not prosecute the agent who actually committed the crime?" He's witheringly skeptical of prosecutions of corporations, which usually yield some nominal fines and an agreement that the company set up an internal "compliance" department. "The future deterrent value of successfully prosecuting individuals far outweighs the prophylactic benefits of imposing internal compliance measures that are often little more than window-dressing." Rakoff's at his best when analyzing why the government has stopped pursuing individuals and taken the easy route of settling with corporations. He notes that this is a recent trend: In the 1980s, the government convicted more than 800 individuals, including top executives, in the savings-and-loan scandal, and a decade later successfully prosecuted the top executives of Enron and WorldCom. He dismisses the Department of Justice rationale that proving "intent" to defraud in the financial crisis cases is difficult: There's plenty of evidence in the public record that banking executives knew the mortgage securities they were hawking as AAA were junk. He doesn't buy the excuse that criminal prosecutions involving major financial firms might have damaged the economy -- no one has ever contended that a big firm would collapse just because its high-level executives were prosecuted. And he notes that the government doesn't dispute that some of these executives may be guilty -- it just comes up with excuses for not prosecuting. Why? Rakoff posits that there are several reasons for the lack of prosecutions. One is that the FBI and SEC are both understaffed because of budget cuts, and in the FBI's case with the diversion of much of its workforce to anti-terrorism efforts after 9/11. And he speculates that the government may feel abashed at its own complicity in the crisis, arising from the easing of financial and mortgage regulations over the years. Rakoff's piece has elicited some predictable push-back from the Department of Justice, where a spokesman scoffed that he "does not identify a single case where a financial executive should have been charged, but wasn't." This is a cynical defense at best, since the DOJ knows well that for Rakoff to have prejudged a case by naming names would have been a flagrant breach of judicial ethics. Indeed, Rakoff takes pains to disavow any opinion about whether criminal fraud was committed "in any given instance." But he does point out that evidence of fraudulent behavior is not hard to find -- the final report of the Financial Crisis Inquiry Commission headed by former California Treasurer Phil Angelides brims with documented examples. What's been lacking, Rakoff finds, is the political will and government resources to bring individuals before the bar of justice. Although millions of Americans are still suffering the financial consequences of the crisis, Rakoff suggests that the failure of the justice system may do even more lasting damage to the fabric of American society. His warning should be heeded, before it's too late.


U.S. Car Makers Report Disappointing December Sales BBC News January 3, 2014 General Motors (GM) has reported a fall in car sales in December in what was a disappointing month for US car makers. GM shares fell 2.4% after it reported a 6.3% fall in sales compared with December 2012. Ford and Chrysler both reported rising sales, but not the increases that industry analysts were expecting. Chrysler sold 161,000 cars and trucks in December, up 5.7% on the same period in 2012 and Ford reported a 1.8% rise in December sales. Slow December Analysts said that poor weather in parts of the US kept customers away from dealerships in December. "At the very beginning of the month the pace of buying was slow because there were so many storms around the country," said Edmunds.com senior analyst Michelle Krebs. Continue reading the main story

“Start Quote Trucks on the road are even older than cars on the road� Michelle Krebs Edmunds.com "Now what we're seeing is some of the automakers are stretching their December deals into January." Kurt McNeil, vice president, of US sales for GM, said: "December started a little slow but sales were stronger later in the month, especially in the week between Christmas and New Year." Meanwhile Ford said that a four-day weekend for Thanksgiving late in November may have brought forward sales that would have fallen in December. For Chrysler the Jeep brand continued to be a strong performer with a 34% rise in sales last month. With a 9% rise in annual sales, 2013 was the strongest year for Chrysler since 2007. "Our Jeep and Ram truck brands had a strong finish led by the all new 2014 Jeep Cherokee and the


Ram pickup truck," said Reid Bigland, head of US sales. Truck boost Overall, sales in 2013 were strong for the big three Detroit car manufacturers, who were helped along by strong sales of their truck offerings.

Truck sales in 2013 were particularly strong as car markers introduced new models Truck sales tend to increase in relation to home sales, which were strong for much of the year as the US economic recovery spurred long-delayed housing activity. "Trucks on the road are even older than cars on the road," said Ms Krebs. She added: "There are lots of new products: Chrysler came out with a new Ram pick-up truck, GM introduced its new trucks this fall and Toyota had a new Tundra model" which further enticed consumers. Toyota reverses However, Toyota, the third biggest player in the US market, didn't do as well as the US manufacturers. It saw sales in December decline by 1.7% from a year ago to 190,843. Analysts had been expecting Toyota to report rising sales. But 2013 is expected to be the best year for US auto market since 2007, with total annual sales of about 15.6 million. That would be a strong recovery from 2009 when sales fell to 10.4 million during the depths of the recession.


Americans Spent $7.45B in 3 Years Helping Other Countries Deal With ‘Climate Change’ Patrick Goodenough CNS News January 3, 2014 American taxpayers spent $7.45 billion to help developing countries cope with climate change in fiscal years 2010 through 2012, according to a federal government report submitted to the United Nations on a subject that Secretary of State John Kerry described as “a truly life-and-death challenge.” That sum of $7.45 billion, which reached more than 120 countries through bilateral and multilateral channels, met President Obama’s “commitment to provide our fair share” of a collective pledge by developed nations to provide a total of nearly $30 billion in “fast start finance” (FSF), the report stated. The pledge was made at a Dec. 2009 U.N. climate conference in Copenhagen, and the FSF funding aims to support developing countries adapt to and cope with phenomena blamed on climate change, such as droughts and rising sea levels. - See more at: http://www.cnsnews.com/news/article/patrick-goodenough/americans-spent-745b-3years-helping-other-countries-deal-climate#sthash.1CUIQbqC.dpuf “International assistance for climate change continues to be a major priority for the United States,” the administration said in its “Climate Action Report,” submitted to the U.N. Framework Convention on Climate Change (UNFCCC) on Wednesday. It noted that since the U.S. ratified the convention in 1992, its international climate funding had increased from “virtually zero” to an average of $2.5 billion each year in the 2010-2012 FSF period. “During the period, average annual appropriated climate assistance increased fourfold compared with 2009 funding levels,” the report said. “U.S. climate assistance has increased in the context of an overall increasing foreign assistance budget.” According to UNFCCC data, of the $7.45 billion in U.S. funding, $4.7 billion was congressionallyappropriated assistance while development finance and export credit support accounted for a further $2.7 billion of public money. It’s time to ‘do what our faiths require of us’ In a cover letter accompanying the report, Kerry underlined the high priority the administration – and himself personally – accords to the issue. “Climate change is one of the most urgent and profoundly complex challenges we face,” he wrote. “That’s why, everywhere I travel as Secretary of State – in every meeting, here at home and across the more than 280,000 miles I’ve traveled since I raised my hand and took the oath to serve in this office – I have made this issue a top priority.”


Without directly mentioning those scientists and others who question the “consensus” on climate change, Kerry reiterated his view that the science is incontrovertible and implied that anyone arguing otherwise lacked “conscience or common sense.” “Today, all the scientific evidence is telling us that we cannot afford to delay the reckoning with climate change,” he said. “With each passing day, the case grows more compelling and the costs of inaction grow beyond anything that anyone with conscience or common sense should be willing to contemplate.” Kerry pointed to the most report by the U.N. Intergovernmental Panel on Climate Change (IPCC), released last September, and summed it up as follows: “Bottom line: Climate change is real, it’s happening now, and human beings are the cause.” (The report’s actual wording was, “It is extremely likely that human influence has been the dominant cause of the observed warming since the mid-20th century.” The language was somewhat stronger than the previous IPCC report, in 2007, which asserted that global warming was “very likely” man-made.) “In the face of these risks and these warnings, it is time for all of us to do what the science tells us we must, to do what our faiths require of us, and to do what our fragile planet demands of us: It’s time to take strong action to combat a truly life-and-death challenge,” Kerry stated.


Much more to come FSF programs funded by the U.S. cover a wide range, including helping Peru and Nepal to deal with glacier-related risks, working on making Mozambique’s coastal cities more resilient to “sea level rise and other climate change stresses,” and assisting Pakistan to address its power shortage, reduce greenhouse gas emissions and its reliance on fossil fuel. The funding directed to the FSF channel in 2010-2012 is a drop in the bucket compared to what is to come. At that same 2009 conference in Copenhagen the U.S. and other developed nations in a longerterm commitment undertook to set up a $100 billion-a-year Green Climate Fund by 2020. The money is meant to come from public and private sources. “The United States is prepared to work with other countries toward a goal of jointly mobilizing $100 billion a year by 2020 to address the climate change needs of developing countries,” then-Secretary of State Hillary Clinton said at Copenhagen. “We expect this funding will come from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources of finance.” Since the GCF was launched in 2011 few nations have begun to direct money to its coffers (as of June 30, 2013 it had received just $7.5 million, from seven European countries plus South Korea, Japan and Australia.) But officials want that to change this year, as UNFCCC executive secretary Christiana Figueres made clear while speaking at the opening of the GCF’s new headquarters in South Korea on Dec. 4. “Governments now have a crucial tool at their disposal to leverage billions in finance for developing counties to green their economies and increase their resilience to the inevitable effects of climate change,” she said. “As soon as the final modalities are clarified in 2014, governments must capitalize the fund. This is essential so that developing countries know that the developed world will deliver on its promise to help the poor and vulnerable gain access to the finance and technology they need.” In the report sent to the UNFCCC this week the administration outlined its commitment in mobilizing public and private funding in working towards the GCF goal. “Maintaining a strong core of public climate finance is essential, and the United States intends to maintain its commitment to climate change as an important component in the U.S. assistance budget,” it said. “Private investment will inevitably play an increasingly important role as developing countries put mitigation and adaptation policies and actions into place. The nation is working to combine its significant, but finite, public resources with targeted, smart policies to mobilize maximum private investment into climate-friendly activities.” Americans Spent $7.45B in 3 Years Helping Other Countries Deal With ‘Climate Change’ VIDEO BELOW http://www.cnsnews.com/news/article/patrick-goodenough/americans-spent-745b-3-yearshelping-other-countries-deal-climate

INFOWARS.COM BECAUSE THERE'S A WAR ON FOR YOUR MIND


U.S. Judge Asks: Why Haven’t The Financial Executives Been Prosecuted?