Archive for the ‘Obama administration’ Category
Wall Street has had outsize influence with President Obama (Eric Holder as Attorney General; Mary Jo White as head of the SEC; and others), with great benefit to Wall Street. Pam Martens and Russ Martens report in Wall Street on Parade:
The problem with stereotyping Republicans is that when they are screaming from the rooftops about a legitimate fraud, Democrats don’t believe them — even when the evidence is overpowering that they are right.
For years now, Republicans have been screaming that the Dodd-Frank Wall Street Reform and Consumer Protection Act that was signed into law in 2010 by President Obama is a fraud on the public.
Few have examined Dodd-Frank’s failed promises as carefully as Wall Street On Parade. The legislation promised to rein in derivatives – it didn’t. It promised to end the future need for taxpayer bailouts of too-big-to-fail banks. It didn’t. It promised to institute the Volcker Rule to prevent banks from gambling with insured deposits. It didn’t. It promised to reform the practices of the ratings agencies that played a pivotal role in the 2008 collapse. It didn’t.
Dodd-Frank did two great things: it created the Consumer Financial Protection Bureau (CFPB) which has played a major role in exposing and disciplining companies that abuse consumers in areas like credit cards, auto loans, student loans, and mortgages. Dodd-Frank also created the Office of Financial Research in the U.S. Treasury Department – which has been sending out regular warnings that Wall Street is still adangerous, toxic brew of interconnectedness while putting a bright light on how the Fed is mismanaging its stress tests of the mega Wall Street banks.
But these two agencies which are valiantly working in the public interest are no match for how Wall Street has been allowed by the Obama administration to game the designed-to-be-gamed provisions of Dodd-Frank.
Take this morning’s news from Bloomberg News. . .
Note this, later in the column:
Wall Street is clearly counting on their heavy funding of Hillary Clinton’s campaign to put a friendly ear in the Oval Office, and at the Fed, Treasury and SEC, so it can individually apply for permanent exceptions to these and various other Dodd-Frank rules.
I never once thought those enormous payments to Hillary Clinton were for nothing more than her giving a speech.
By all means, read the whole thing. The Obama Administration has been remarkably considerate of Wall Street.
I’m sure the CIA would indeed comply: there’s no punishment at all for torturing people when the president orders it. That’s been well established under George W. Bush (the president who ordered that people be tortured) and Barack Obama (the succeeding president who made the decision that the torturers and those who ordered the torture would not be punished or even charged—indeed, quite a few received promotions, as did the CIA official who destroyed all the video evidence). I don’t see that there’s any “might” about it.
Here’s the article by Alex Emmons in The Intercept:
It is, of course, against the law for members of the government to torture people, and it’s quite explicit (as in the Convention Against Torture treaty that the US signed and ratified). That makes no difference. The precedent is that the US government can torture people and can block any legal action from the victims. That’s the takeaway, and that’s the direction the US has elected to go. And the GOP candidate for president has promised explicitly that he will inaugurate much more brutal torture programs, and his supporters seem to like it.
I think government torture is definitely a part of the US identity now.
Citigroup, After Blowing Itself Up With Derivatives in 2008, Now Has More Derivatives than 4,701 U.S. Banks Combined
Take a look at the worst cases:
Now how sharply the amount in derivatives falls off after the top 5. Those 5 are the ones that should be broken up and forced to reform.
The full chart is available at Wall Street on Parade in this article by Pam Martens and Russ Martens:
According to the Federal Deposit Insurance Corporation (FDIC), as of March 31, 2016,there were 6,122 FDIC insured financial institutions in the United States. Of those 6,122 commercial banks and savings associations, 4,701 did not hold any derivatives. To put that another way, 77 percent of all U.S. banks found zero reason to engage in high-risk derivative trading.
Citigroup, however, the bank that spectacularly blew itself up with toxic derivatives and subprime debt in 2008, became a 99-cent stock during the crisis, and received the largest taxpayer bailout in U.S. financial history despite being insolvent at the time, today holds more derivatives than 4,701 other banks combined which are backstopped by the taxpayer.
The total notional amount of derivatives sitting at Citigroup’s bank holding company is $55.6 trillion according to the March 31, 2016 report from the Office of the Comptroller of the Currency (OCC), one of the regulators of national banks. (See chart above.) Out of Citigroup’s total notional (face amount) exposure of $55.6 trillion in derivatives, $52 trillion of that is sitting at its insured depository institution, Citibank, which is still decidedly too-big-to-fail and would require a taxpayer bailout again in a collapse.
If you add in four other mega Wall Street banks (JPMorgan Chase, Goldman Sachs, Bank of America and Morgan Stanley) to Citigroup’s haul in derivatives, there is a staggering $231.4 trillion in derivatives or 93 percent of all derivatives in the entire FDIC banking universe of 6,122 banks and savings associations.
Didn’t the Obama administration tell the public that allowing these Frankenbanks to continue to gamble in derivatives while putting the U.S. economy and taxpayers at risk was going to end under his Dodd-Frank financial reform legislation passed in 2010? How could there have been meaningful reform of Wall Street if Citigroup and these other four banks are still holding a loaded gun to the taxpayers’ head?
Under the “Push-Out Rule” (Section 716 of the Dodd-Frank Wall Street Reform and Consumer Protection Act), insured banks were not going to be allowed to hold these derivatives when the rule was fully implemented in July 2015. The mega banks would have to “push-out” the derivatives to their uninsured affiliates so that the taxpayer wasn’t on the hook for future losses or bank implosions. But in December 2014, Citigroup was able to slip language into the must-pass spending bill that effectively repealed this critical Dodd-Frank provision and President Obama signed the bill into law.
According to OCC data, prior to Citigroup’s massive bailout in 2008, it held $41.3 trillion in notional derivatives as of March 31, 2008. Instead of regulators forcing the unruly bank to pare back its exposures, its tally today of $55.6 trillion shows it has been allowed to grow its derivative risks by 35 percent.
According to the General Accountability Office, this is how much Citigroup needed to remain afloat the last time it blew itself up: On October 28, 2008, Citigroup received $25 billion in Troubled Asset Relief Program (TARP) funds. Less than a month later, it was teetering again and received another $20 billion. But its capital moorings were so shaky that it simultaneously needed another $306 billion in government asset guarantees. And all of this disclosed money spigot came on top of the Federal Reserve secretly funneling to Citigroup over $2 trillion in cumulative loans over more than two years at interest rates frequently below 1 percent.
The official report on the financial crisis of 2008 from the Financial Crisis Inquiry Commission explained the interconnected nature of the derivatives crisis as follows: . . .
The US may not export terror, but it certainly seems to export repression if not oppression, training foreign police, security, and military forces not only in tactics but also in torture. Douglas Gillison, Nick Turse, and Moiz Syed report in The Intercept:
At 9:30 A.M. on a gray winter Monday, the State Department officials began certifying the names at a rate of one every two minutes and 23 seconds.
In rapid succession, they confirmed that 204 police officers, soldiers, sailors, and airmen from 11 countries had committed no gross human rights violations and cleared them to attend one of more than 50 training efforts sponsored by the U.S. government. The programs were taking place at a wide variety of locations, from Italy, Albania, and Jordan to the states of Louisiana and Minnesota.
Thirty-two Egyptians were approved for instruction in, among other things, Apache helicopter gunship maintenance and flight simulators for the Sikorsky UH-60 Black Hawk. Azerbaijanis were cleared for a U.S. Army course on identifying bio-warfare agents in Maryland and underwater demolition training with Navy SEALs in San Diego. Thirty-three Iraqis were certified to attend a State Department training session for bodyguards, held in Jordan. Bosnians were bound for Macedonia to prepare for deployment to Afghanistan. Ukrainian police were selected for peacekeeping training in Italy. Romanians would study naval operations in Rhode Island and counterterrorism in Skopje.
This was only the beginning of one day’s work of vetting security personnel for U.S. training. A joint investigation by The Intercept and 100Reporters reveals the chaotic and largely unknown details of a vast constellation of global training exercises, operations, facilities, and schools — a shadowy network of U.S. programs that every year provides instruction and assistance to approximately 200,000 foreign soldiers, police, and other personnel. The investigation exposes the geographic and political contours of a U.S. training system that has, until now, largely defied thorough description.
The data show training at no fewer than 471 locations in 120 countries — on every continent but Antarctica — involving, on the U.S. side, 150 defense agencies, civilian agencies, armed forces colleges, defense training centers, military units, private companies, and NGOs, as well as the National Guard forces of five states. Despite the fact that the Department of Defense alone has poured some $122 billion into such programs since 9/11, the breadth and content of this training network remain virtually unknown to most Americans.
The contours of this sprawling system were discovered by analyzing 6,176 diplomatic cables that were released by WikiLeaks in 2010 and 2011. While the scope of the training network may come as a surprise, the most astounding fact may be that it is even larger than the available data show, because the WikiLeaks cables are not comprehensive. They contain, for example, little information on training efforts in Colombia, the single-largestrecipient of U.S. training covered by the human rights vetting process that produced these records. Other large recipients of U.S. security assistance, such as Pakistan, are vastly underrepresented in the cables for reasons that remain unclear.
“What you have stumbled across is a systematic lack of strategic thinking, a systematic lack of evaluation, but a massive commitment of people and money and time in a growing number of countries,” said Gordon Adams, formerly a senior White House official for national security and foreign policy budgets. “I think the word ‘system’ is a misnomer. This is a headless system,” he said.
The investigation raises serious questions about U.S. government oversight, safeguards, and accountability. The investigation found:
- A global training network without any coherent strategy, carried out by scores of agencies and offices with no effective oversight, centralized planning, or a clear statement of objectives.
- The lack of any means of testing and evaluation, let alone a comprehensive way to count or track foreign trainees.
- Vetting procedures designed to weed out human rights abusers that examine trainees so rapidly that experts question their worth.
A Rand Corp. analysis from 2013 found that the Pentagon alone has 71 different authorities under which it provides foreign aid as a means of “building partner capacity,” or BPC — part of a system that the report criticized as akin to “a tangled web, with holes, overlaps, and confusions.” The Pentagon, for example, maintains no master list of the people it trains nor does it keep aggregate figures.
“The way we do security cooperation has been a patchwork that we’ve added to over and over,” said Rachel Kleinfeld, a senior associate at the Carnegie Endowment for International Peace and former member of the State Department’s Foreign Affairs Policy Board. “There are more than 180 authorities and scores of agencies working in these areas, and the way it has evolved over time has made it absolutely impossible for anyone to know what’s going on. … There really is no oversight.”
Details on the U.S. government’s training programs have long been lacking. In 2012, the Obama administration submitted a one-time report to Congress on foreign police training that covered just two fiscal years — and it was never made public. Annual disclosures by the State Department about foreign military training programs cover many volumes but are often vague and difficult to analyze, with information frequently missing or reported inconsistently. . .
David Dayen reports in The Intercept:
Eric Holder has long insisted that he tried really hard when he was attorney general to make criminal cases against big banks in the wake of the 2007 financial crisis. His excuse, which he made again just last month, was that Justice Department prosecutors didn’t have enough evidence to bring charges.
Many critics have long suspected that was bullshit, and that Holder, for a combination of political, self-serving, and craven reasons, held his department back.
A new, thoroughly-documented report from the House Financial Services Committee supports that theory. It recounts how career prosecutors in 2012 wanted to criminally charge the global bank HSBC for facilitating money laundering for Mexican drug lords and terrorist groups. But Holder said no.
When asked on June 8 why his Justice Department did not equally apply the criminal laws to financial institutions in the wake of the 2008 economic crisis, Holder told the platform drafting panel of the Democratic National Committee that it was laboring under a “misperception.”
He told the panel: “The question you need to ask yourself is, if we could have made those cases, do you think we would not have? Do you think that these very aggressive U.S. Attorneys I was proud to serve with would have not brought these cases if they had the ability?”
The report — the result of a three-year investigation — shows that aggressive attorneys did want to prosecute HSBC, but Holder overruled them.
In September 2012, the Justice Department’s Asset Forfeiture and Money Laundering Section (AFMLS) formally recommended that HSBC be prosecuted for its numerous financial crimes.
The history: From 2006 to 2010, HSBC failed to monitor billions of dollars of U.S. dollar purchases with drug trafficking proceeds in Mexico. It also conducted business going back to the mid-1990s on behalf of customers in Cuba, Iran, Libya, Sudan, and Burma, while they were under sanctions. Such transactions were banned by U.S. law.
Newly public internal Treasury Department records show that AFMLS Chief Jennifer Shasky wanted to seek a guilty plea for violations of the Bank Secrecy Act. “DoJ is mulling over the ramifications that could flow from such an approach and plans to finalize its decision this week,” reads an email from September 4, 2012 to senior Treasury officials. On September 7, Treasury official Dennis Wood describes the AFMLS decision as an “internal recommendation to ask the bank [to] plead guilty.” It was a “bombshell,” Wood wrote, because of “the implications of a criminal plea” and “the sheer amount of the proposed fines and forfeitures.” . . .
Eric Holder’s view of his job, near as I can tell, was to protect the finance industry as much as possible before he returned to his job at Covington & Burling to resume representing the industry in legal matters and to reap the benefits of a grateful Wall Street. Holder epitomizes the corruption of our government by moneyed interests.
The US military seems to be constantly seeking ways to expand its mission. In The Intercept Nick Turse reports on their success in Africa. (Click chart to enlarge.)
From east to west across Africa, 1,700 Navy SEALs, Army Green Berets, and other military personnel are carrying out 78 distinct “mission sets” in more than 20 nations, according to documents obtained by The Intercept via the Freedom of Information Act.
“The SOCAFRICA operational environment is volatile, uncertain, complex, and ambiguous,” says Brig. Gen. Donald Bolduc, using the acronym of the secretive organization he presides over, Special Operations Command Africa. “It’s a wickedly complex environment tailor-made for the type of nuanced and professional cooperation SOF [special operations forces] is able to provide.”
Equally complex is figuring out just what America’s most elite troops on the continent are actually doing, and who they are targeting.
In documents from a closed-door presentation delivered by Bolduc late last year and a recent, little-noticed question and answer with a military publication, the SOCAFRICA commander offered new clues about the shadow war currently being waged by American troops all across the continent.
“We operate in the Gray Zone, between traditional war and peace,” he informed a room of U.S., African, and European military personnel at the Special Operations Command Africa Commander’s Conference held in Garmisch, Germany, last November.
According to Bolduc’s 2015 presentation, SOCAFRICA is taking part in seven distinct operations, although he failed to elaborate further. Among the goals of these missions: to “enable friendly networks; disable enemy networks.”
The identities of most of those “enemy networks,” are, however, a well-kept secret.
Last fall, The Intercept revealed that Bolduc had publicly disclosed that there are nearly 50 terrorist organizations and “illicit groups” operating on the African continent. He identified only the Islamic State, al Shabaab, Boko Haram, al Qaeda in the Islamic Magreb, and the Lord’s Resistance Army by name or acronym, while mentioning the existence of another 43 groups. Despite repeated inquiries by The Intercept, however, neither the Department of Defense, U.S. Africa Command, nor SOCAFRICA would provide further information on the identities of any of the other organizations.
Recently, however, the Defense Department’s Africa Center for Strategic Studies — a research institution dedicated to the analysis of security issues in Africa — published a map listing “Africa’s Active Militant Islamist Groups.” In addition to usual suspects, it named 18 other terror organizations.
The Africa Center says that “group listings are intended for informational purposes only and should not be considered official designations.” It is, however, the most comprehensive list available from an agency or element within the Department of Defense and may shed light on Bolduc’s enemies list.
SOCAFRICA failed to respond to questions about that list or the names of its operations. . .