All Entries Tagged With: "corporate crime"

When drug makers’ profits outweigh penalties

Prosecutor Michael Loucks remembers clearly when attorneys for Pfizer, the world’s largest drug company, looked across the table and promised it wouldn’t break the law again. ¶ It was January 2004, and the lawyers were negotiating in a conference room on the ninth floor of the federal courthouse in Boston, where Loucks was head of the health-care fraud unit of the U.S. Attorney’s Office. One of Pfizer’s units had been pushing doctors to prescribe an epilepsy drug called Neurontin for uses the Food and Drug Administration had never approved. ¶ In the agreement the lawyers eventually hammered out, the Pfizer unit, Warner-Lambert, pleaded guilty to two felony counts of marketing a drug for unapproved uses. New York-based Pfizer agreed to pay $430 million in criminal fines and civil penalties, and the company’s lawyers assured Loucks and three other prosecutors that Pfizer and its units would stop promoting drugs for unauthorized purposes. ¶ What Loucks, who was acting U.S. attorney in Boston until November, didn’t know until years later was that Pfizer managers were breaking that pledge not to practice off-label marketing even before the ink was dry on their plea.

On the morning of Sept. 2, 2009, another Pfizer unit, Pharmacia & Upjohn, agreed to plead guilty to the same crime. This time, Pfizer executives had been instructing more than 100 salespeople to promote Bextra — a drug approved only for the relief of arthritis and menstrual discomfort — for treatment of acute pain of all kinds.

For this new felony, Pfizer paid the largest criminal fine in U.S. history: $1.19 billion. On the same day, it paid $1 billion to settle civil cases involving the off-label promotion of Bextra and three other drugs with the United States and 49 states.

Full Story: When drug makers’ profits outweigh penalties – washingtonpost.com.

Cigna Gives $110.9 Million Compensation Package To Ex-CEO

The insurance giant Cigna last year gave compensation packages worth more than $120 million to two executives who left the company, according to a filing with the SEC on Friday.

The vast majority of that total went to former chairman and CEO H. Edward Hanway who left his post with a retirement package worth $110.9 million — which included $18.8 million in executive compensation for 2009, as well as a healthy pension plan, deferred compensation and stock options.

With more than $19 billion in revenues reported in 2008, Cigna remains one of the most profitable insurers in the country. Though, unlike some of its competitors, it does not appear to have raised premiums on customers in an effort to improve somewhat sagging recent profits.

Full Story: Cigna Gives $110.9 Million Compensation Package To Ex-CEO.

15 Executives Who Get Paid Millions To Deny You Health Care Coverage

The business model of American health insurers is basically: try to get healthy customers as clients, and then resist as long as possible when it comes to paying out claims.

That’s actually not an indictment or a criticism.

It’s just the way our system works, and it’s screwed up.

Whatever you feel about Obamacare, you probably think our current system needs reform in some sense.

Below we present the posterboys of the problem. Top healthcare CEOs making millions, leading companies that deny you coverage.

Full Story: 15 Executives Who Get Paid Millions To Deny You Health Care Coverage.

Federal Reserve Must Disclose Bank Bailout Records

The Federal Reserve Board must disclose documents identifying financial firms that might have collapsed without the largest U.S. government bailout ever, a federal appeals court said.

The U.S. Court of Appeals in Manhattan ruled today that the Fed must release records of the unprecedented $2 trillion U.S. loan program launched primarily after the 2008 collapse of Lehman Brothers Holdings Inc. The ruling upholds a decision of a lower-court judge, who in August ordered that the information be released.

The Fed had argued that it could withhold the information under an exemption that allows federal agencies to refuse disclosure of “trade secrets and commercial or financial information obtained from a person and privileged or confidential.”

Full Story: Federal Reserve Must Disclose Bank Bailout Records (Update3) – Bloomberg.com.

Bernanke footnote: Fed wants end to ‘minimum reserve requirements’

In the footnotes of a speech U.S. Federal Reserve Bank Chairman Ben Bernanke would have given to the House Financial Services Committee on Feb. 10, lies a unique and startling disclosure.

Hosted on the Federal Reserve’s own servers, the written testimony of the bank’s chairman explains in plain text what expanding the Fed’s powers will do.

“The Federal Reserve believes it is possible that, ultimately, its operating framework will allow the elimination of minimum reserve requirements, which impose costs and distortions on the banking system,” footnote number nine, at the bottom of the page, explains without additional qualification.

Sen. Chris Dodd (D-CT), who is not running for reelection, is currently pushing a financial reform bill that would grant the Fed unprecedented new powers to regulate financial markets, including insurance companies and small lenders, under the auspice of forcing such firms to lessen their exposure to risky investments.

Full Story: Bernanke footnote: Fed wants end to ‘minimum reserve requirements’ | Raw Story.

WellPoint Failed To Deliver Tens Of Millions Of Dollars It Promised To Help Uninsured Americans

Health insurance companies have always claimed that they support “affordable, high-quality health care for every American” and are supportive of health care reform efforts and not simply concerned with their profits. To try to project this image of compassion for the uninsured, WellPoint Inc. — which recently came under fire for planning double-digit rate hikes in at least eleven states — pledged three years ago to use its charitable foundation to spend $30 million to assist the uninsured receive care.

A new investigative report by the Los Angeles Times finds that WellPoint’s foundation has completely failed to meet its promise of spending $30 million to help the uninsured. Rather, the company spent $6.2 million — a paltry 11 percent of what the company promised:

WellPoint’s public records indicate that from 2007 to 2009 the foundation gave less than $6.2 million in grants targeted specifically at helping uninsured Americans get access to coverage and care — barely one-fifth of what was promised and just 11% of the charity’s total giving over the last three years.

Full Story: Think Progress » WellPoint Failed To Deliver Tens Of Millions Of Dollars It Promised To Help Uninsured Americans.

The Big Short Is a Bit Short in Missing the Reasons for the Crisis

Danny Schecter,  -

The Big Short Is A Bit Short In Missing The Reasons for The Crisis: Michael Lewis’s Delusion Thesis vs Senator Kaufman’s Case for Crime

It’s the number one book in the county. Every day, Michael Lewis’s The Big Short is getting B I G G E R, no doubt because he is so mediagenic, conversational and likes to laugh with the hosts who interview him about his findings.

On Sunday, he laughed with Steve Kroft on 60 Minutes when the two bantered on about how about stupid it all was and why so many smart people drank the Kool Aid. The story he tells has no hard edges really…it’s about “delusion,” Wall Street deluding us all and then each other.

The idea of delusions feeds a psychological and cultural analysis of bankers cut off from the world, focused on their own pocket books and believing their own hype. It is in this sense Shakespearian—the stuff of drama, not calculation. What a web we weave when first we practice to deceive, to quote Sir Walter Scott.

Full Story: The Big Short Is a Bit Short in Missing the Reasons for the Crisis | BuzzFlash.org.

Goldman Is to Greece What Merrill Was to Enron

Did big banks break the law during our recent global debt-fuelled boom? The usual answer is: no – they just took advantage of loopholes and captured regulators. The world’s biggest banks are widely supposed to be too sophisticated to be tripped up by the legal system.

But is this really true? The new Valukas report on Lehman suggests there are grounds for civil action, i.e., people can sue for damages. News reports give no indication of potential criminal charges, but this may change soon. The hiding of Lehman’s true debt levels – through the so-called “Repo 105″ structure – is strikingly reminiscent of how Enron’s balance sheet was disguised through fake asset “sales” (as Senator Kaufman now points out).

And, of course, the people who ended up facing criminal charges and – in some prominent cases – going to jail, included not only Enron executives, but also responsible bankers from Merrill Lynch (see The Smartest Guys in the Room, Chapter 13). Arthur Anderson, Enron’s accountant, was also effectively broken by the scandal. It is a serious crime for professional advisers and financiers to assist in securities fraud.

Full Story: Simon Johnson: Goldman Is to Greece What Merrill Was to Enron.

Goldman’s Great Greek Swindle and the American Blowback

Goldman’s epic swindle may topple Greece and even the European Union. Wall Street’s stranglehold on the U.S. is equally dangerous.

You’ve heard this crappy joke before. Financial vampire squid Goldman Sachs games billions on the books for a prestigious client, hiding its lack of real value, while both continue to lucratively trade on false data. Time passes, Goldman retracts its feeding tube, the prestigious client implodes, and the collateral damage escalates. Cue the cruel laugh track.

The client this time? Greece, where Goldman executed a currency swap worth billions, without reporting it of course. The collateral damage? The euro, and perhaps the entire European Union, depending on how the house of cards falls. But to be fair, Goldman couldn’t have done it alone.

“The European Union bureaucrats that are driving the system wanted their own empire,” economist Paul Craig Roberts, one-time assistant U.S. Treasury secretary in the Reagan administration, told AlterNet. “So the European Union was expanded into financially weaker states, which can no longer print money to cover their debts as they all use the euro. What Goldman Sachs did for the Greek government was to help hide the size of the Greek debt, since European Union membership requires maintaining a fairly low deficit-to-GDP ratio.”

Full Story: Goldman’s Great Greek Swindle and the American Blowback | Economy | AlterNet.

Wall Street Collapse A Story Of ‘Mass Delusion’ (VIDEO)

It may be tempting to think Wall Street is full of criminals who got off easy during the financial crisis.

But bestselling author Michael Lewis cautions against such an easy conclusion.

“I think the story is much more interesting than that,” he said during an interview on CBS’s 60 Minutes. “I think it’s a story of mass delusion.”

The former bond trader is releasing a book this week called The Big Short: Inside the Doomsday Machine. According to CBS, the result of his 18-month investigation attempts to explain, “how some of Wall Street’s finest minds managed to destroy $1.75 trillion of wealth in the subprime mortgage markets.”

Full Story: Michael Lewis: Wall Street Collapse A Story Of ‘Mass Delusion’ (VIDEO).

OPS:  This guy is just trying to keep the peasants from grabbing their pitchforks and torches.  This is a propaganda campaign to make the people on Wall Street NOT appear to be as evil as they are.

Michael Lewis 60 Minutes Interview: Wall Street Bonuses ‘A Very Elegant Form Of Theft’ (VIDEO)

Michael Lewis, author of one of the defining books about Wall Street excess, “Liar’s Poker,” told 60 Minutes that bonuses at banks bailed out by the government are akin to “a very elegant form of theft.”

[The big banks] have access to a zero percent loan in virtually unlimited quantities from the Federal Reserve. You can take that money and reinvest it in Treasury bonds or government agency securities and you will get the spread and you could do it over and over. You’re essentially borrowing from the government … and taking a cut.

Really what’s going on is the people on the top of the firm want to make a lot of money and if they’re going to make a lot of money, they have got to pay the people under them a lot of money

WATCH:

Full Story: Michael Lewis 60 Minutes Interview: Wall Street Bonuses ‘A Very Elegant Form Of Theft’ (VIDEO).

Price of Lockheed’s F-35 fighter soars by 50%

Cost/plane seen over 50 pct higher than nine years ago

• * Cost growth comes despite efforts to reform program
• * Air Force to formally notify Congress, begin review (Adds ‘too big to fail’ in 3rd paragraph, Lockheed and GAO comments)

WASHINGTON, March 11 (Reuters) – The average cost of Lockheed Martin Corp’s (LMT.N) F-35 Joint Strike Fighter, the Pentagon’s costliest arms purchase yet, will soar more than 50 percent above what was projected when its development began nine years ago, the Pentagon’s top arms buyer told Congress.

The U.S. Air Force is set to formally notify Congress that the program has crashed through a key cost-containment threshold that will force a thorough review, Ashton Carter, undersecretary of defense for acquisition, said on Thursday.

But the net impact of such a notification may be minimal since the program is widely said by U.S. officials to be too big to fail. Washington has no other way to replace aging warplanes like Lockheed’s F-16 and the program is a linchpin of fighter modernization for several U.S. allies.

Full Story: UPDATE 2-Price of Lockheed’s F-35 fighter soars | Reuters.

Health Insurance Industry Spin: Funding Attack Ads And Newt Gingrich Is Consistent With Supporting Reform

In September, ThinkProgress reported that, despite its public support for health care reform, the insurance industry was engaged in a “duplicitous” campaign to undermine the effort. Recently, the National Journal confirmed our reporting by revealing that six of the top health insurance corporations had secretly pumped up to $20 million dollars into the U.S. Chamber of Commerce for a $100-million-dollar attack ad campaign against health reform last year. This week, insurers purchased a new round of attack ads, again with millions laundered through the Chamber.

It’s not just the Chamber. As we have detailed, the health insurance industry also funds Newt Gingrich’s lobbying firm, which has helped to draft health legislation for Republican lawmakers — including bills aimed at deregulating the health insurance market — and advises GOP leaders on ways to kill reform.

Yesterday at the annual conference for America’s Health Insurance Plans (AHIP), the lobbying juggernaut for the health insurance industry, the industry again falsely claimed that it is fully behind health reform. ThinkProgress spoke to industry spokesman Robert Zirkelbach, who refused to acknowledge any other attack groups the industry may be funding. He also oddly claimed that funding attack ads and Gingrich is somehow consistent with the industry’s promise “to play, to contribute and to help pass health-care reform”:

Full Story: Think Progress » Health Insurance Industry Spin: Funding Attack Ads And Newt Gingrich Is Consistent With Supporting Reform.

The Business Roundtable: The Most Powerful Corporate Business Club Most Americans Have Never Heard of

The Business Roundtable, an organization representing Fortune 500 CEOs, is at the heart of the Economic Elite’s power center.

DeGraw writes in the introduction to his report:

“It has now become evident to a critical mass that the Republican and Democratic parties, along with all three branches of our government, have been bought off by a well-organized Economic Elite who are tactically destroying our way of life. The harsh truth is that 99% of the US population no longer has political representation. The US economy, government and tax system is now blatantly rigged against us.Current statistical societal indicators clearly demonstrate that a strategic attack has been launched and an analysis of current governmental policies prove that conditions for 99% of Americans will continue to deteriorate. The Economic Elite have engineered a financial coup and have brought war to our doorstep. . . and make no mistake, they have launched a war to eliminate the US middle class.”

***

Part III: Exposing Our Enemy: Meet the Economic Elite

I don’t view the Economic Elite as a small group of men who meet in secrecy to control the world. They do feature elements of conspiracy and are clearly composed of secretive organizations like the Bilderberg Group — this is not a conspiracy theory, this is a conspiracy fact – but as a whole the Economic Elite are primarily united by ideology. They’re made up of thousands of individuals who subscribe to an ideology of exploitation and the belief that wealth and resources need to be concentrated into the fewest hands possible (theirs), at the expense of the many.

That being said, there are some definite lead players in this group and it is important that we are not too vague and expose the individuals who publicly lead them. Focusing on the fundamental structure of the US economy, we have people like Hank Paulson, Tim Geithner, Ben Bernanke, Robert Rubin, Larry Summers, Alan Greenspan, Lloyd Blankfein, Jamie Dimon, John Mack, Vikram Pandit,and  John Thain.

Full Story: The Business Roundtable: The Most Powerful Corporate Business Club Most Americans Have Never Heard of | Economy | AlterNet.

Study Debunks Insurers’ Explanation for Exorbitant Rate Hikes

The pro-health care reform group Health Care for America Now has released a study (pdf) that contradicts insurance companies’ claims that their recent, exorbitant rate hikes were driven by increases in the cost of medical care. The study shows that over the last eight years premiums have almost doubled, while medical inflation only increased by 40 percent. HCAN found that insurance companies are raising their rates more than 20 percent faster than the amount they are paying out to doctors, and twice as fast as their underlying costs of medical care are rising. In short, insurance companies are hiking premium prices much more quickly than their costs are increasing. HCAN also found that insurance companies are spending the extra money on perks. For example, Anthem spent $27 million on 103 executive retreats to locations like Hawaii in 2007 and 2008 alone. From 2000 to 2008, insurance companies spent $716.4 billion of their premium dollars on administrative costs, salaries for their CEOs, and investor profit — practically enough to fund the entire health reform bill.

Study in pdf

Full Story: Study Debunks Insurers’ Explanation for Exorbitant Rate Hikes | Center for Media and Democracy.

Lehman Brothers Hid Borrowing, Examiner Says

It is the Wall Street equivalent of a coroner’s report — a 2,200-page document that lays out, in new and startling detail, how Lehman Brothers used accounting sleight of hand to conceal the bad investments that led to its undoing.

Every member of congress when they are elected, puts their hand on the bible and swears to uphold the constitution of the United States.

Bart Stupak has violated his oath of office and the Conference of Catholic Bishops violated their tax exempt status regarding the Stupak amendment in the healthcare bill and both should be punished appropriately. The question is will anyone have the guts to do it?

Stupak's arrogance in inviting representatives of the Conference of Catholic Bishops to write legislation regarding the abortion amendment, violates the first amendment to the constitution.

Full Story: Lehman Brothers Hid Borrowing, Examiner Says – NYTimes.com.

Inside Alan Greenspan’s nightmare

Mark Weisbrot

News that wages are rising in China is greeted with dread by those who share Greenspan’s unwarranted fear of rising inflation

Alan Greenspan had a dream, or rather a nightmare. Greenspan seems to have woken up in a cold sweat one morning in fear that the period of “disinflationary pressures” that had kept inflation low since the 1990s was about to end. This was 2007, when he published his autobiographical economic treatise, The Age of Turbulence. Despite his well-known love for economic data, and poring over the latest reports from every statistical agency, he did not realise that he was sitting on a housing bubble of epic proportions. Not seeing the bubble (he also missed the prior stock market bubble that accumulated and burst on his watch, causing the 2001 downturn), he could not know that it would soon collapse and cause a very ugly recession, in which inflation would be irrelevant.

This by itself should be enough to question the wisdom of central bankers, since the evidence for both of these world-historic asset bubbles was blindingly obvious once they had reached a certain size. But Greenspan’s nightmare is scary for other reasons, some of which will become increasingly relevant as the world economy recovers.

As Greenspan details in his book, the reason for his nightmare is that the world was depleting its stock of hundreds of millions of unemployed people, including those of the former Soviet Union and also in rural China. In other words, “too many” of them had become employed, and this was allowing for wages of factory workers in China to rise. So long as China had a huge mass of unemployed, wages were held in check, and – according to Greenspan – competition from low-wage production there held down wages in the rest of the world, including even rich countries like the United States. All good! Until the nightmare started.

Full Story: Inside Alan Greenspan’s nightmare | Mark Weisbrot | Comment is free | guardian.co.uk.

GMAC Bailout Could Cost Taxpayers $6.3 Billion, Says Watchdog

The Treasury Department sank billions into auto finance giant GMAC Inc. without an exit strategy or proof the company was viable – a decision that could cost taxpayers $6.3 billion, a new watchdog report says.

The government said the $17.2 billion bailout was a necessary step to save troubled automakers General Motors and Chrysler. GMAC provides critical financing to auto dealers, who borrow to finance their fleets until the cars can be sold to consumers.

Yet GMAC faced far fewer conditions than the bailed-out automakers, the report says. When the automakers were rescued, they were forced into bankruptcy. Shareholders lost their investments, creditors took a hit and executives were forced to detail plans for making the companies viable.

Full Story: GMAC Bailout Could Cost Taxpayers $6.3 Billion, Says Watchdog.

OPS: New Rule – The Sr Management and Board of Directors of any Corporations that requires a government bailout receives an automatic 10 year jail sentence (no parole, no pardons)

Senators Target Wall Street, With Goldman Sachs In Mind

A quintet of Democratic senators introduced legislation Wednesday to specifically prohibit investment maneuvers that have been likened to “selling a car with faulty brakes and then buying an insurance policy on the buyer of those cars”.

Senators Jeff Merkley (Ore.), Carl Levin (Mich.), Sherrod Brown (Ohio), Ted Kaufman (Del.) and Jeanne Shaheen (N.H.) are pushing the Obama administration’s proposal to rein in banks’ Wall Street-like practices, such as trading securities for their own profit, while they enjoy the protections afforded by U.S. taxpayers through deposit insurance and access to cheap funds courtesy of short-term loans from the Federal Reserve. Their legislation also attempts to sever the ties between banks and largely unregulated hedge funds and private equity funds — firms that invest and bet for the benefit of their investors.

Those two proposals try to resurrect the wall between Main Street banking and Wall Street trading, a Depression-era reform that was torn down during the Clinton administration. After excessive risk-taking by Wall Street culminated in the worst economic crisis since the Great Depression, necessitating hundreds of billions of dollars in a taxpayer-funded bailout, top economists and Wall Street veterans have come out in favor of at least partially restoring that divide.

Full Story: Senators Target Wall Street, With Goldman Sachs In Mind.

FDA says Basic Food Flavors knew plant was contaminated with salmonella

The company at the heart of a growing recall of processed foods knew that its plant was contaminated with salmonella but continued to make a flavoring and sell it to foodmakers around the country, according to inspectors at the Food and Drug Administration.

Managers at Basic Food Flavors of Las Vegas learned on Jan. 21 that samples taken a week earlier from their Nevada facility tested positive for salmonella, a potentially deadly bacterium, but they kept shipping their product to foodmakers, according to FDA inspection records.

The company makes hydrolyzed vegetable protein, or HVP, a flavor enhancer used in a wide variety of processed foods, from potato chips to sweet and sour tofu. The additive, which comes as a powder or a paste, is mixed into foods to give them a meaty or savory flavor — similar to the use of monosodium glutamate.

Full Story: FDA says Basic Food Flavors knew plant was contaminated with salmonella – washingtonpost.com.

A Consumer Bill Gives Exemption on Payday Loans

Senator Bob Corker, the Tennessee Republican who is playing a crucial role in bipartisan negotiations over financial regulation, pressed to remove a provision from draft legislation that would have empowered federal authorities to crack down on payday lenders, people involved in the talks said. The industry is politically influential in his home state and a significant contributor to his campaigns, records show.

The Senate Banking Committee’s chairman, Christopher J. Dodd, Democrat of Connecticut, proposed legislation in November that would give a new consumer protection agency the power to write and enforce rules governing payday lenders, debt collectors and other financial companies that are not part of banks.

Late last month, Mr. Corker pressed Mr. Dodd to scale back substantially the power that the consumer protection agency would have over such companies, according to three people involved in the talks.

Full Story: Draft on Payday Rules Loses a Provision – NYTimes.com.

Hank Paulson’s Memoir: The Inside Job

a masterpiece of misdirection and disinformation.

If you’ve read, are reading, or plan to read Andrew Ross Sorkin’s Too Big To Fail, you also need to pick up a copy of Hank Paulson’s memoir, On The Brink. Sorkin has the bankers’ story, in sordid yet compelling detail, of how they received the most generous bailout in the world financial history during fall 2008 — and set us up for great problems to come. Paulson tells us why, when, and how exactly he let them get away with this.

Hank Paulson does not, of course, intend to be candid. As I review in detail on The New Republic’s The Book site this morning, On The Brink is actually a masterpiece of misdirection and disinformation.

But still, he gives it all away — and if any details remain obscure, check them in Sorkin. Paulson honestly believes that the financial sector as constructed is productive, makes sense, and should continue to operate in roughly its current form.

Full Story: Simon Johnson: Hank Paulson’s Memoir: The Inside Job.

Fed Audit Bitterly Opposed By Treasury

The Treasury Department is vigorously opposed to a House-passed measure that would open the Federal Reserve to an audit by the Government Accountability Office (GAO), a senior Treasury official said Monday. Instead, the official said, the Treasury prefers a substitute offered by Rep. Mel Watt (D-N.C.), and would like to see it enacted as part of the Senate bill.

The Watt measure, however, while claiming to increase transparency, actually puts new restrictions on the GAO's ability to perform an audit.

Secretary Tim Geithner, Assistant Treasury Secretary Alan Krueger and Gene Sperling, a counselor to the secretary, held a briefing Monday with new media reporters and financial bloggers during which they discussed the Fed audit and other topics. Under the briefing's ground rules, the officials could be paraphrased but not quoted, and the paraphrase could not be connected to a specific official.

Full Story: Fed Audit Bitterly Opposed By Treasury.

Consumer Groups Urge Regulation of Nonbank Financial Institutions – NYTimes.com

While much of the Congressional debate over consumer financial protection has focused on banks, lawmakers have been grappling behind the scenes over whether and how to regulate payday lenders, debt collectors, check-cashing outlets, title and installment lenders and even pawnbrokers.

Many of these companies primarily take aim at lower-income customers, and consumer advocates say the companies are far less regulated than banks.

Oversight of such companies has been left largely to the states. The Federal Trade Commission has brought fewer than 25 lawsuits in the last five years against mortgage originators, payday lenders and debt collectors, officials said. It has only 70 staff members to cover about 10,000 such companies nationwide, and does not have the authority to conduct compliance exams, as bank regulators do.

Full Story: Consumer Groups Urge Regulation of Nonbank Financial Institutions – NYTimes.com.

Insurers Set To Raise Prices, Walk Away From Consumers: Goldman Report

The market concentration for health insurance is so monopolized in some areas that insurance companies are willing to raise prices and lose customers in an effort to improve their bottom line, a leading insurance broker told Wall Street analysts on Wednesday.

In a conference call organized by Goldman Sachs Global Investment Research, Steve Lewis, a highly regarded broker at the world’s third largest insurance broker, Willis, painted a picture of the health insurance market in which employers seem likely to be priced out of coverage.

Noting that “price competition” between insurers was “down from a year ago,” Lewis relayed that “incumbent carriers seem more willing th

Full Story: Insurers Set To Raise Prices, Walk Away From Consumers: Goldman Report.

Wall Street Helped to Mask Debt Fueling Europe’s Crisis

Wall Street tactics akin to the ones that fostered subprime mortgages in America have worsened the financial crisis shaking Greece and undermining the euro by enabling European governments to hide their mounting debts.

As worries over Greece rattle world markets, records and interviews show that with Wall Street’s help, the nation engaged in a decade-long effort to skirt European debt limits. One deal created by Goldman Sachs helped obscure billions in debt from the budget overseers in Brussels.

Even as the crisis was nearing the flashpoint, banks were searching for ways to help Greece forestall the day of reckoning. In early November — three months before Athens became the epicenter of global financial anxiety — a team from Goldman Sachs arrived in the ancient city with a very modern proposition for a government struggling to pay its bills, according to two people who were briefed on the meeting.

The bankers, led by Goldman’s president, Gary D. Cohn, held out a financing instrument that would have pushed debt from Greece’s health care system far into the future, much as when strapped homeowners take out second mortgages to pay off their credit cards.

Full Story: Wall Street Helped to Mask Debt Fueling Europe’s Crisis.

Consumer Agency Within Fed Seen as Victory for Banking Industry

For consumer advocates, housing a new agency to protect Americans from financial-product abuse within the Federal Reserve would be a defeat after lobbying for an independent body. For banks, it would represent a victory.

Barney Frank, Chairman of the House Financial Services Committee, called a Senate plan to house the proposed Consumer Financial Protection Agency at the Fed “a joke.” Shielding consumers from harmful financial products is “the most conspicuous failure by the Fed,” Frank said in an interview yesterday.

Banks say placing the agency with the Fed alleviates their concern that an independent entity would ignore the health of the financial system. Consumer advocates say it’s a mistake because the Fed didn’t succeed in curbing abuses during the subprime lending boom that contributed to the worst financial crisis since the Great Depression.

Full Story: Consumer Agency Within Fed Seen as Victory for Banking Industry – Bloomberg.com.

What Are Banks Doing with Their Depositors’ Money?

There have been numerous reports about the sharp decline in bank lending since the beginning of the financial crisis. The Wall Street Journal, for example, on Wednesday reported in an article entitled “Lending Falls at Epic Pace” that last year’s decline in lending is the biggest since 1942. It also provided the following chart to clearly make its point.

So if the banks are not making loans, what are they doing with depositor money?

Well, they are still lending, but not to businesses and consumers.  They are lending to the federal government.

Banks don’t lend directly to the federal government of course, but buying US government paper accomplishes the same thing in the end.  Depositor money is sent to the federal government, ether directly when banks purchase newly issued government paper or indirectly when they purchase US government paper from others, who in turn have used their dollars to purchase this paper.

Full Story: What Are Banks Doing with Their Depositors’ Money?.

Apple admits using child labour

Apple has admitted that child labour was used at the factories that build its computers, iPods and mobile phones.

At least eleven 15-year-old children were discovered to be working last year in three factories which supply Apple.

The company did not name the offending factories, or say where they were based, but the majority of its goods are assembled in China.

Full Story: Apple admits using child labour – Telegraph.

Hedge-Fund Assets Offshore Exempt From Reporting Rule

U.S. investors don’t have to report large holdings in offshore hedge funds and private-equity firms this year under disclosure rules designed to detect offshore tax evasion and money laundering, the Internal Revenue Service said.

The IRS announcement followed the issuance of proposed regulations yesterday by the Financial Crimes Enforcement Network, a Treasury agency, that effectively spare fund investors from a June 30 deadline to report offshore accounts that exceed $10,000. Failure to file the Report of Foreign Bank and Financial Accounts, or FBAR, when required can result in penalties that exceed the value of the account.

In a notice today, the IRS said it “will not apply its enforcement authority adversely in the case” where people are invested in foreign hedge funds or private-equity funds “with respect to that account for calendar year 2009 and earlier calendar years.”

Full Story: Hedge-Fund Assets Offshore Exempt From Reporting Rule (Update1) – Bloomberg.com.

AIG Q4 Earnings: Insurer Lost $8.87 Billion, May Need More Government Money

AIG said Friday it lost $8.87 billion in the fourth quarter as its general insurance business remained weak and the company ran up expenses from paying back government loans.

The troubled insurer also said in an annual regulatory filing that it may need additional support from the government. However, AIG has included such warnings in past filings with the Securities and Exchange Commission.

The fourth-quarter results were an improvement from the $61.7 billion AIG lost in the year ago period, but they were worse than analysts expected. They also followed two straight profitable quarters.

Full Story: AIG Q4 Earnings: Insurer Lost $8.87 Billion, May Need More Government Money.

What Microsoft knows and keeps about you, abusing DMCA & kicking Cryptome… Oppss!

As the Patriot Act comes up for reauthorization by Congress, it’s time to reflect on the immense powers Americans have ceded to the government and potential for abuse by federal, state and local authorities. Last year, an FBI Inspector General report has excoriated the FBI Communications Analysis Unit for abusive warrantless surveillance of perhaps thousands of innocent people. FBI Director Robert Mueller promised Congress the FBI will be take steps to stop the abuses cited in the Inspector General’s report.

“The FBI’s use of exigent letters… circumvented, and in many cases violated, the requirements of the Electronic Communications Protection Act statute,” according to the report, which was referencing a leading federal wiretap law.

The global Internet and telecommunications infrastructure provides massive information on almost each and every person on the planet. In a twisted way, the only ones fortunate enough to maintain true privacy are the poorest of the poor in armpits of the world. If one has a cell phone no matter where they are on the planet, they could be subjected to the vast surveillance powers of states. But one power truly stands out — the all encompassing reach and technological capabilities of the US National Security Agency. If you want to be secure, don’t use a phone, a computer, credit card or any other technologically linked system because it guarantees that big brother will find you if they want to.

Full Story: City Brights: Yobie Benjamin : What Microsoft knows and keeps about you, abusing DMCA & kicking Cryptome… Oppss!.

Citibank Shuts Down Gay Entrepreneur’s Bank Account Over Blog’s Content

Jason Goldberg is the CEO of a company called Fabulis, which is developing a website, iPhone app and social media application targeted at gay men. His company — which is at least his third start-up — is funded by investors including The Washington Post and the venture capitalist Allen Morgan, and they just launched their beta version this month. You would think he would be the kind of customer Citi would want — but Citi decided otherwise after a compliance officer reviewed his site and decided that a social networking application for gay men was “objectionable.”

Without notifying Goldberg or anyone at Fabulis, Citi shut down their bank accounts for objectionable content on Fabulis’ blog, though it refused to specify which content. After hours of phone calls, several articles and a threat to take their banking elsewhere, Citi finally called Goldberg to say that the three Citi employees who had decided Goldberg’s social networking site was objectionable were “wrong to have said what they said.” Note that the bank did not say they were wrong to have suspended his account without notification, or to have flagged his blog as objectionable because it talks about the gay-themed (but not pornographic) company that he is starting, but just that the three employees statements to him were wrong.

In fact, what they told Goldberg was likely right out of an employee handbook, if the phrasing is anything to go by: “Content was not in compliance with Citibank’s standard policies.”

Full Story: Citibank Shuts Down Gay Entrepreneur’s Bank Account Over Blog’s Content « The Washington Independent.

Blackwater used shell company to defraud US government | Raw Story

Jeremy Scahill:

Blackwater set up a shell company to “defraud the government” by leading it to believe it wasn’t contracting with the notorious security contractor, investigative journalist Jeremy Scahill says.

“In Afghanistan, they set up this shell company, Paravant, in collaboration with mammoth war giant Raytheon, which held the prime contract” for training Afghan security forces, Scahill told MSNBC’s Rachel Maddow.

“And they set up this contract to try to hide the fact that the Pentagon was once again hiring Blackwater, this firm that’s been under investigation by practically every federal entity in the United States,” Scahill continued. “It’s a shell company that was used to essentially defraud the government by convincing the Army that Blackwater was not getting the contract, but this company Paravant.”

Full Story: Scahill: Blackwater used shell company to defraud US government | Raw Story.

Documents Reveal Anthem Blue Cross Manipulated Data to Justify Massive Rate Hike

Internal documents show one of the country’s largest for-profit health insurers, in an effort to maintain profits, manipulated data to justify a rate increase on individual premiums in California this year by as much as 39 percent.

At a closely watched Congressional hearing Wednesday, Rep. Henry Waxman, the Democratic chairman of the House Energy and Commerce Committee, blasted WellPoint Inc. executives for publicly stating that the country’s economic turmoil and rising health care costs was the reason its Anthem Blue Cross subsidiary intended to move forward with a massive rate increase in California when the company’s own documents say otherwise.

Waxman said the company “may have manipulated its actuarial assumptions to keep its medical loss ratio (MLR), a key measure reviewed by California regulators, ‘flat.’”

Full Story: t r u t h o u t | Documents Reveal Anthem Blue Cross Manipulated Data to Justify Massive Rate Hike.

Bribes Let Tomato Vendor Sell Tainted Food

Robert Watson, a top ingredient buyer for Kraft Foods, needed $20,000 to pay his taxes. So he called a broker for a California tomato processor that for years had been paying him bribes to get its products into Kraft’s plants.

The check would soon be in the mail, the broker promised. “We’ll have to deduct it out of your commissions as we move forward,” he said, using a euphemism for bribes.

Days later, federal agents descended on Kraft’s offices near Chicago and confronted Mr. Watson. He admitted his role in a bribery scheme that has laid bare a startling vein of corruption in the food industry. And because the scheme also involved millions of pounds of tomato products with high levels of mold or other defects, the case has raised serious questions about how well food manufacturers safeguard the quality of their ingredients.

Full Story: Bribes Let Tomato Vendor Sell Tainted Food | Business | TheLedger.com.

Joseph Stiglitz: Bankers Made Reckless Bets on the Economy, Knowing Taxpayers Were Going to Pick up the Tab

The Nobel Prize-winning economist argues the banking industry “failed in their core societal function,” helping lead to the great economic crash of ‘08.

Nobel Prize-winning economist Joseph Stiglitz has served as the Chairman of President Bill Clinton’s Council of Economic Advisers and Chief Economist for the World Bank. He has been a persistent critic of free-market economics, whose recent book Freefall: America, Free Markets, and the Sinking of the World Economy (W. W. Norton & Co., 2010) traces the roots of the financial crisis and details the government’s flawed response. Dr. Stiglitz discussed the crash of ‘08 in an interview with AlterNet economics editor Zach Carter.

Zach Carter: How did we get here?

Joseph Stiglitz: Well, there are so many pieces that contributed to our getting here that it’s hard to distill into something simple, but the bottom line is that the banks acted recklessly in their lending, in their gambling, in their management of risk. They made bad judgments about credit worthiness. In a sense, they failed their core societal function of allocating capital and managing risk. They misallocated capital and they mismanaged the risk. What I tried to do with the book is peel back the onion and ask – this is not the way capitalism supposed to work – why did things happen so badly?  And here there are a number of factors. One of them was that the bankers had the incentive to engage in short-sighted behavior and excessive risk-taking. You have to ask, “Why is that?” And the answer has to do with problems of corporate governance and a host of other problems that I try to delineate in the book.

Full Story: Joseph Stiglitz: Bankers Made Reckless Bets on the Economy, Knowing Taxpayers Were Going to Pick up the Tab | Economy | AlterNet.

Internal WellPoint e-mails reveal company increased premiums to maintain higher profits.

Today, during a hearing before the House Energy and Commerce Health Subcommittee, Reps. Bart Stupak (D-MI) and Henry Waxman (D-CA) questioned WellPoint CEO Angela Braly about the company’s proposed rate increases in California’s individual health insurance market. The congressmen read from a series of internal company emails which revealed that WellPoint was rising premiums simply to increase its profits:

– “The average increase is 23 percent and is intended to return California to a target profits of 7 percent, versus 5 percent this year.” [WellPoint email, October 7, 2009]

– “We’re asking for premiums that would put us $40 million favorable…if we get the increases on time, we will see an opt gain upside of $30 million downgrades and rate cap.” [WellPoint email, November 2, 2009]

– “[W]e needed to reach agreement on filing strategy quickly — specifically in the area of do we file wth a cushion allowed for negotiations.” [WellPoint email, 10/24/2009]

Watch a compilation:

Full Story: Think Progress » Internal WellPoint e-mails reveal company increased premiums to maintain higher profits..

Geithner’s Gotta Go

By MIKE WHITNEY -

How Goldman Sachs and AIG Got Top Dollar for Worthless Assets

Would it be wrong to take out a $1,000,000 policy on your wife and then put strychnine in her double-tall nonfat mocha?

Not if you are Goldman Sachs it wouldn't. In fact–according to an article on today's Bloomberg News–that's exactly what they did. They slapped together $17.2 billion in garbage CDOs and then insured the hell out of them with credit default swaps (CDS) issued by AIG. As soon as the CDS blew up, G-Sax collected 100 cents on the dollar for their ingenuity. (G Sax received $14B altogether)

Richard Teitelbaum's excellent article “Secret AIG Document Shows Goldman Sachs Minted Most Toxic CDOs ” is a must read for anyone who wants a peak into the sleazy underworld of high finance and the Ponzi scamsters who run it.

“Representative Darrel Issa, the ranking Republican on the House Committee on Oversight and Government Reform, placed into the hearing record a five-page document itemizing the mortgage securities on which banks such as Goldman Sachs Group Inc. and Societe Generale SA had bought $62.1 billion in credit-default swaps from AIG.

Full Story: Mike Whitney: Geithner’s Gotta Go.

Max Keiser With Karl Denninger Discuss How the Banker Crooks Hid the Debt

Max Keiser also speaks to The Market Ticker’s Karl Denninger about CDOs, synthetic CDOs and hiding Greek debt.

Health Insurance 39% Rate Hike Will Go Forwards, Says Anthem Blue Cross.

About 150 physical therapists and patients protested outside the offices of Anthem Blue Cross California today, while company executives faced lawmakers up in Sacramento, who grilled them about their planned rate hike for individual policy holders of up to 39%.

Anthem is the largest health insurer in California. The proposed change would affect about 700,000 people. Anthem's remaining 7.3 million customers in California are covered by employer-sponsored plans and would not be affected

Due to take effect on March 1st, Anthem agreed to postpone the increase to May 1st, and said today that it plans to go forward with the rate hikes.

Today Kate Turbitt walked the picket line outside Anthem Blue Cross offices in Woodland Hills today alongside the physical therapist she cannot afford anymore.

Full Story: Health Insurance Rate Hike Will Go Forwards, Says Anthem Blue Cross. | NBC Los Angeles.

Pfizer’s Ghostiwritten Journal Articles

But one look at the US National Library of Medicine database shows the bogus, ghostwritten papers Wyeth (now Pfizer) planted in medical journals in a ghostwriting scandal that reached Congress last year, still stand unretracted.

“Is there an association between hormone replacement therapy and breast cancer?” asks an unretracted article in the Journal of Women’s Health, 1998 Dec;7(10):1231-46–a question a fourth grader could answer.

The “author” William T. Creasman, MD, neither wrote or initiated the article but was suggested by Jeff Solomon of Wyeth, according to documents posted on the University of California, San Francisco’s Drug Industry Document Archive (Dida) http://dida.library.ucsf.edu.
Full Story: Scoop: Pfizer’s Ghostiwritten Journal Articles.

Coal industry challenges of safety violations swamp system

Coal operators in Kentucky and other states have dramatically increased challenges to federal citations for safety violations in the past few years — swamping the appeals process.

Some members of Congress contend that the vast backlog of cases under review — more than 15,000 — is the result of potentially unsafe mines gaming the system to stay in business.

“This growing backlog indicates that certain mine operators are abusing their right to challenge a violation,” said Rep. George Miller, D-Calif., chairman of the House Education and Labor Committee, which is scheduled to hold a hearing Tuesday on the issue.“These appeals are clogging the system and putting miners in danger.”

In Kentucky, 80 percent of 536 high-dollar fines for the “significant and substantial” safety violations — the most serious kind — are being contested by the mine operators, according to federal Mine Safety and Health Administration records. Some citations are more than two years old.

Full Story: Coal industry challenges of safety violations swamp system | courier-journal.com | The Courier-Journal.

Wall Street Bonuses Up 17%, Profits Could Hit ‘Unprecedented’ Level, Says NY State Comptroller Thomas DiNapoli

Wall Street bonuses were up 17 percent to over $20 billion in 2009, the year taxpayers bailed out the financial sector after its meltdown, New York state Comptroller Thomas DiNapoli said Tuesday.

Total compensation at the largest securities firms grew beyond that figure and profits could surpass what he calls an unprecedented $55 billion last year, DiNapoli said. That’s nearly three times Wall Street’s record increase, a rate of growth that is boosted in part by the record losses in 2008 of nearly $43 billion, the Democrat said.

“Wall Street is vital to New York’s economy, and the dollars generated by the industry help the state’s bottom line,” said DiNapoli. “But for most Americans, these huge bonuses are a bitter pill and hard to comprehend. … Taxpayers bailed them out, and now they’re back making money while many New York families are still struggling to make ends meet.”

Full Story: Wall Street Bonuses Up 17%, Profits Could Hit ‘Unprecedented’ Level, Says NY State Comptroller Thomas DiNapoli.

Secret AIG Document Shows Goldman Sachs Minted Most Toxic CDOs

When a congressional panel convened a hearing on the government rescue of American International Group Inc. in January, the public scolding of Treasury Secretary Timothy F. Geithner got the most attention.

Lawmakers said the former head of the New York Federal Reserve Bank had presided over a backdoor bailout of Wall Street firms and a coverup. Geithner countered that he had acted properly to avert the collapse of the financial system.

A potentially more important development slipped by with less notice, Bloomberg Markets reports in its April issue. Representative Darrell Issa, the ranking Republican on the House Committee on Oversight and Government Reform, placed into the hearing record a five-page document itemizing the mortgage securities on which banks such as Goldman Sachs Group Inc. and Societe Generale SA had bought $62.1 billion in credit-default swaps from AIG.

Full Story: Secret AIG Document Shows Goldman Sachs Minted Most Toxic CDOs – Bloomberg.com.

OPS: SO, now lets put all of the GS Execs in jail – right?

Banks Pressure Customers on Overdraft Fees

For many households trying to improve their finances, tossing out pitches from the bank has become almost automatic. But in recent weeks, Chase has been fanning special letters out to consumers with an offer that it urges them not to refuse.

“Your debit card may not work the same way anymore, even if you just made a deposit. Unless we hear from you,” the message, emblazoned in large red type, warns. “If you don’t contact us, your everyday debit card transactions that overdraw your account will not be authorized after August 15, 2010 — even in an emergency,” with “even in an emergency” underlined for emphasis.

As the government cracks down on the way banks charge fees for overspending on debit cards, the industry is mounting an aggressive campaign aimed at keeping billions of dollars in penalty income flowing into its coffers. Chase and other banks are preparing a full-court marketing blitz, which is likely to include filling mailboxes with various aggressive and persuasive letters, calling account holders directly, and sending a steady stream of e-mail to urge consumers to keep their overdraft service turned on.

Full Story: Banks Pressure Customers on Overdraft Fees – NYTimes.com.

Citigroup Warns Customers It May Refuse To Allow Withdrawals

The image of banks locking their doors to keep customers from making withdrawals during a bank run is what immediately came to mind when we heard that Citigroup was telling customers it has the right to prevent any withdrawals from checking accounts for seven days.

“Effective April 1, 2010, we reserve the right to require (7) days advance notice before permitting a withdrawal from all checking accounts. While we do not currently exercise this right and have not exercised it in the past, we are required by law to notify you of this change,” Citigroup said on statements received by customers all over the country.

What’s going on? It seems that this is something of an error. The seven day notice policy only applies to customers in Texas, Ira Stoll reports at The Future of Capitalism. It was accidentally included on customer statements nationwide.

“Whatever the explanation, it doesn’t exactly inspire confidence in Citi,” Stoll writes. “But it’s hard to believe a bank would be sending out a notice like that on its statements.”

Full Story: Citigroup Warns Customers It May Refuse To Allow Withdrawals.

OPS:  There will probably be other Mega-banks that will do this too.  Maybe it’s time to Move Your Money, while you still can. Here are some success stories

Wall Street’s War Against Main Street America

Prof. Michael Hudson -

Former Treasury Secretary Hank Paulson wrote an op-ed in The New York Times, (Feb. 16)[1] outlining how to put the U.S. economy on rations. Not in those words, of course. Just the opposite: If the government hadn’t bailed out Wall Street’s bad loans, he claims, “unemployment could have exceeded the 25 percent level of the Great Depression.” Without wealth at the top, there would be nothing to trickle down.

The reality, of course, is that bailing out casino capitalist speculators on the winning side of A.I.G.’s debt swaps and CDO derivatives didn’t save a single job. It certainly hasn’t lowered the economy’s debt overhead. But matters will soon improve, if Congress will dispel the present cloud of “uncertainty” as to whether any agency less friendly than the Federal Reserve might regulate the banks.

Mr. Paulson spelled out in step-by-step detail the strategy of “doing God’s work,” as his Goldman Sachs colleague Larry Blankfein sanctimoniously explained Adam Smith’s invisible hand. Now that pro-financial free-market doctrine is achieving the status of religion, I wonder whether this proposal violates the separation of church and state. Neoliberal economics may be a travesty of religion, but it is the closest thing to a Church that Americans have these days, replete with its Inquisition operating out of the universities of Chicago, Harvard and Columbia.

Full Story: Wall Street’s War Against Main Street America.

Airport Security: Welcome to Scannergate

Terror Scares A Boon for Security Grifters

Call them what you will: bottom feeders, corporate con-men, flim-flam artists, peddlers of crisis, you name it.

You can’t help but marvel how enterprising security firms have the uncanny ability to sniff-out new opportunities wherever they can find, or manufacture, them.

After all, nothing sells like fear and in “new normal” America fear is an industry with a limitless growth potential.

While Republicans and Democrats squabble over who’s “tougher” when it comes to invading and pillaging other nations (in the interest of “spreading democracy” mind you), a planetary grift dubbed the “War on Terror,” waiting in the wings are America’s new snake-oil salesmen.

Welcome to Scannergate!

With airport security all the rage, companies that manufacture whole body imaging technologies and body-scanners stand to make a bundle as a result of last December’s aborted attack on Northwest Airlines Flight 253.

Like their kissin’ cousins at the Pentagon, poised to bag a $708 billion dollar windfall in the 2011 budget, securocrats over at the Department of Homeland Security (DHS) stand to vacuum-up some $56.3 billion next year, a $6 billion increase.

Full Story: Airport Security: Welcome to Scannergate.

The NYT, a Mexican Billionaire, and JP Morgan Chase

This is a scandalous story, involving one of the world’s largest banks, a powerful federal judge, and two Mexican telecom giants. Under any other circumstances, the business section of the Times would be expected to cover it, as the Journal and Bloomberg have. Yet as of Saturday midday, I cannot find a single mention of any aspect of this case, anywhere in the physical New York Times

A little more than a year ago, when the Mexican billionaire Carlos Slim increased his stake in the New York Times Company (NYT), I wrote “I pity the Times Mexico bureau chief who has to tiptoe through who is and isn’t out of favor with the paper’s new sugar daddy.” Now we have a very clear example of how the Times treats Slim within its pages; it’s not pretty, and the journalistic compromise can be seen well beyond Mexico.

For the last several days, bloggers and many business news outlets have been revealing truly astounding details from a court case involving J.P. Morgan Chase (JPM) and two large Mexican telecom companies, one of which is Slim’s. Blogger Felix Salmon at Reuters was one of the earliest to cover this at length; his summary of the case gets right to the heart of it:

JP Morgan took one of its longest-standing clients in Mexico — Grupo Televisa — and tried to hand all of its secrets over to its biggest rival, Carlos Slim. And the way it tried to do that was by selling Slim a loan larded up with covenants which would essentially force Televisa to reveal any and all information to the holder of the debt.

via The NYT, a Mexican Billionaire, and JP Morgan Chase

Direct action protests against Genetic Modification(GM) of food

Direct action protests against Genetically modification of food – from thrashing crops to going naked  (spanish subtitles) Monsanto

Science of Profit, Corporate Takeover of Science, Wake Up America #2

What influence has corporations and big Pharma had on science and government regulations via the FDA, NIH and CDC? Big money and conflicts of interest have changed the face of science and health care in America….more

Full Story YouTube – Science of Profit, Corporate Takeover of Science, Wake Up America #2.

Pharma corruption of medical science

Beatrice Golomb highlights pharma corruption at the science network. She presents Data from NIH, FDA and JAMA including a meta analysis which reveals that orchestrated pharma strategies disguise bad science to appear positive and certain. An example of multiple orchestration of conflict of interest, is charles Nemeroff now sacked from emory university.

Unfortunately the reaction by most working scientists to this manipulation is drawn out often with nothing happening. Shock first, a period of recovery followed by denial, then perhaps action years later. This gives pharma plenty of time to devise new manipulation strategies.

Beatrice a high status researcher, says it is now very difficult to judge the work of other scientists in regards to medical products. It's not the scientists that are fault, but what happens to their work afterwards.

for an up to date article on this Click Here

Matt Taibbi: Wall Street’s Bailout Hustle

Goldman Sachs and other big banks aren’t just pocketing the trillions we gave them to rescue the economy – they’re re-creating the conditions for another crash

On January 21st, Lloyd Blankfein left a peculiar voicemail message on the work phones of his employees at Goldman Sachs. Fast becoming America’s pre-eminent Marvel Comics supervillain, the CEO used the call to deploy his secret weapon: a pair of giant, nuclear-powered testicles. In his message, Blankfein addressed his plan to pay out gigantic year-end bonuses amid widespread controversy over Goldman’s role in precipitating the global financial crisis.

The bank had already set aside a tidy $16.2 billion for salaries and bonuses — meaning that Goldman employees were each set to take home an average of $498,246, a number roughly commensurate with what they received during the bubble years. Still, the troops were worried: There were rumors that Dr. Ballsachs, bowing to political pressure, might be forced to scale the number back. After all, the country was broke, 14.8 million Americans were stranded on the unemployment line, and Barack Obama and the Democrats were trying to recover the populist high ground after their bitch-whipping in Massachusetts by calling for a “bailout tax” on banks. Maybe this wasn’t the right time for Goldman to be throwing its annual Roman bonus orgy.

Not to worry, Blankfein reassured employees. “In a year that proved to have no shortage of story lines,” he said, “I believe very strongly that performance is the ultimate narrative.”
Full Story Wall Street’s Bailout Hustle : Rolling Stone.

Did Lobbyists Push Off Regulation of BPA?

The Milwaukee Journal Sentinel reported last weekend that the Environmental Protection Agency delayed regulation of the controversial chemical A – known as BPA – just eight days after industry lobbyists met with White House officials and “aggressively pleaded its case that BPA should not be flagged for greater regulation.”

Hundreds of studies have linked the chemical, which lines most food and beverage cans, to a litany of health problems, including cancer. Last month, the Food and Drug Administration reversed its 2008 conclusion that BPA was safe for everyone. (That decision, the Journal Sentinel reported previously in its series on BPA [4], was based on two studies paid for by the chemical industry.) And the National Toxicology Program has also expressed concern about BPA’s effect on fetuses and children, after analyzing 700 studies.

On Dec. 30, the EPA – which, the Journal Sentinel noted, has “a broader regulatory reach [than the FDA] when it comes to chemicals” – produced its list of chemicals that would be subject to stricter regulation. BPA was not on it, which surprised some, given that EPA Administrator Lisa Jackson has publicly singled out BPA as high on her list of chemicals deserving tougher regulation. Now the agency says “it won't develop a tougher regulatory plan for the chemical for at least two years” (in the words of the Journal Sentinel).

Full Story On The Hill: Did Lobbyists Push Off Regulation of a Controversial Chemical?.

Health Insurers More Grotesquely Greedy Than Wall Street Bankers

Jim Hightower

The great thing about Corporate America is that competition is always fierce for the national title of greediest.

By gollies, the top executives of health insurance corporations are not giving up without a fight! To paraphrase every high school football coach who ever lived, “When the going gets ugly, the ugly get going.”

During the past several months, the Barons of Wall Street had established themselves as the vilest and most reviled corporate team in the land. They’ve been lavishing bonuses on themselves even as their firms continue to benefit from government bailout measures and even as ordinary Americans continue to struggle with the economic collapse caused by the bankers’ arrogance and avarice. Wall Streeters were widely considered a shoo-in to take the coveted Corporate Greedhead Trophy this year — but, holy cow, what a comeback bid we’re now seeing from the Giants of Insurance!

Let’s recap their amazing charge: Last week, the news broke that America’s five largest health insurance companies (United Health, Wellpoint, Aetna, Humana and Cigna) had scored record profits in 2009, totaling $12.2 billion. This was a stunning 56 percent hike over the previous year, a drive made all the more impressive by the fact that these gains came during the worst economic downturn since the Great Depression.

Full Story Health Insurers More Grotesquely Greedy Than Wall Street Bankers | | AlterNet.

Anthem To Delay Insurance Rate Hike Amid Criticism

Health insurer Anthem Blue Cross will postpone its much-criticized plan to raise rates for some California residents who buy insurance on their own, after reaching a deal Saturday with state regulators.

Anthem’s planned rate hike, which the state estimates would affect about 700,000 customers, averaged 25 percent and would have been as high as 39 percent for some.

Anthem Blue Cross of California, based in Thousand Oaks, agreed to postpone the increase from March 1 until May 1 so California could have outside experts review the company’s complex and detailed plan filing, including data on the medical costs it expects to incur.

The California Department of Insurance had been working with Anthem since mid-November to get more information about the increase, Insurance Commissioner Steve Poizner said. He wanted to have experts comb through the company’s figures to confirm the new rates comply with a 2006 state law that insurers spend 70 cents of every premium dollar on medical care

Full Story Anthem To Delay Insurance Rate Hike Amid Criticism.

Monsanto ‘faked’ data for approvals claims its ex-chief

The debate on genetically modified (GM) brinjal variety [eggplant] continues to generate heat. Former managing director of Monsanto India, Tiruvadi Jagadisan, is the latest to join the critics of Bt brinjal, perhaps the first industry insider to do so.

Jagadisan, who worked with Monsanto for nearly two decades, including eight years as the managing director of India operations, spoke against the new variety during the public consultation held in Bangalore on Saturday.

On Monday, he elaborated by saying the company “used to fake scientific data” submitted to government regulatory agencies to get commercial approvals for its products in India.

The former Monsanto boss said government regulatory agencies with which the company used to deal with in the 1980s simply depended on data supplied by the company while giving approvals to herbicides.

Full Story Monsanto ‘faked’ data for approvals claims its ex-chief « Wake-up Call.

Issuer of 79.9% Interest Rate Credit Card Defends Its Product

APR Shocks Many, but Issuer Says They Are Pricing for the Risk

If you have bad credit in the new era of credit card regulation, be prepared to pay — dearly — for the privilege of using credit. That’s the message underlying recent credit card offers that feature jaw-dropping interest rates of up to 79.9 percent.

The sky-high rates may be a sign of things to come in the market for so-called subprime credit cards as issuers who lend to the riskiest of borrowers try to figure out how to stay in business and comply with the new credit card reform law.

“We need to price our product based on the risk associated with this market and allow the customer to make the decision whether they want the product or not,” according to a statement issued by Miles Beacom, CEO of Premier Bankcard, the South Dakota credit card marketer that mailed test offers in September and October featuring 79.9 percent and 59.9 percent annual percentage rates (APRs) on cards with $300 credit limits. Premier markets credit cards issued by First Premier Bank.

Full Story issuer-of-79.9-interest-rate-credit-card-defends-its-product: Personal Finance News from Yahoo! Finance.

Max Keiser – Exposing Corruption

Hollywood filmmaker Oliver Stone has said Western bankers enabled Hitler to carry out his atrocities during World War two. Keiser report reveals that similar schemes still go on today with U.S. banks financing terrorists as well as Wall Street bonuses. Watch the full 13th episode later on RT.

Report: Top five insurers made $12 billion in profits last year, dropped 2.7 million people

With health reform floundering, Democrats have renewed their attacks on the insurance industry and a new report out today hopes to bolster their case that insurance company practices need to be reigned in. The report finds that the top five largest for-profit insurance companies increased their profits by $12.2 billion last year while dropping coverage for 2.7 million Americans.

As a group, WellPoint, Aetna, UnitedHealth Group, Humana and Cigna saw their profits jump 56 percent in 2009 up $4.4 billion over the previous year, according to the report. Four out of five companies saw profits increase while insuring fewer people. Cigna increased earnings by 346 percent while UnitedHealth shed 1.7 million beneficiaries. Aetna, which increased its membership and percentage of premiums spent on medical care, was the only company to see less income in 2009 than 2008.

“Increasing your profits, dropping people is a specific corporate strategy,” said Richard Kirsch of Health Care for America Now, the progressive coalition that prepared the report. “What the big health insurance companies do to please Wall Street denies affordable health insurance to millions of Americans, millions more Americans every year.”

Full Story Report: Top five insurers made $12 billion in profits last year, dropped 2.7 million people – Live Pulse – POLITICO.com.

Top five health insurers posted 56 percent profit gains in 2009

If no health care overhaul passes Congress, health insurers may be in for a windfall — and one far larger that most Americans probably realize.

According to a study by a pro-health reform group published Thursday, the nation’s largest five health insurance companies posted a 56 percent gain in 2009 profits over 2008. The insurers including Wellpoint, UnitedHealth, Cigna, Aetna and Humana, which cover the majority of Americans with insurance.

The insurers’ hefty profit gains came even as 2.7 million more Americans lost their insurance coverage due to the declining economy.

Full Story Top five health insurers posted 56 percent profit gains in 2009 | Raw Story.

WellPoint Rate Hike: Insurer Blames ‘Demographics’ For 39% Premium Increase In California

Health insurer WellPoint blames a shift in demographics and rising medical costs for its planned 39 percent rate hike for some California customers.

In a memo obtained by The Associated Press, WellPoint Inc. tells Health and Human Services Secretary Kathleen Sebelius that because of the weak economy, healthy people are dropping coverage or buying cheaper plans. The decline in premium revenue means there’s less money to cover claims from sicker customers who are keeping their coverage. That resulted in a 2009 loss for the unit. The insurer says its 2010 rates aim to cover the shortfall expected from the continuation of that trend.

“When the healthy leave and the sick stay, that is going to dramatically drive up costs,” Brian Sassi, who heads WellPoint’s consumer business unit, said in an interview with The Associated Press.

Full Story WellPoint Rate Hike: Insurer Blames ‘Demographics’ For 39% Premium Increase In California.

Parents of five-year old sue health insurance company

A health insurance provider is under fire for refusing to pay for a treatment that might save a young boy’s life.

Five-year-old Kyler VanNocker of Pennsylvania is ailing from a lethal childhood cancer known as neuroblastoma, and his insurer HealthAmerica is refusing to pay for the only known treatment that can save his life, reports Ronnie Polaneczky for the Philadelphia Daily News.

In response, VanNocker’s parents Paul and Maria have filed a lawsuit against the insurance company claiming its alleged decision to refuse coverage for their son is based on “a biased, self-serving misreading and misinterpretation” of his medical records and their own policies.

Full Story Parents of five-year old sue health insurance company | Raw Story.

Democrats and Republicans watched over corporate rape of US

Chris Hedges -

American journalist and Pulitzer winner Chris Hedges told RT the United States has developed a new form of corporate totalitarianism.

“We have to break the back of the consumer economy,” Hedges said. “70 percent of our economy is driven by consumption. We have to cripple our money flow to the extent that we can build a popular movement that counters the corporate rape of the country that is furthered both by the Democrats and the Republicans – the better off we’ll be. Many people are disillusioned by Obama and quite rightly so. But whether that means that they will take the active step to step outside the system and to fight, that is unknown.”

Full Story Democrats and Republicans watched over corporate rape of US – journalist – RT Top Stories.

Chevron hires twelve public relations firms to discredit indigenous Indians in Ecuador

In response to an environmental lawsuit filed against the oil giant, Chevron has fortified its defenses with at least twelve different public relations firms whose purpose is to debunk the claims made against the company by indigenous people living in the Amazon forests of Ecuador. According to them, Chevron dumped billions of gallons of toxic waste in the Amazon between 1964 and 1990, causing damages assessed at more than $27 billion.

The company is being criticized by people and organizations from across the social and political spectrum for its unethical behavior in regards to the case. Originally filed in U.S. federal district court back in 1993, the lawsuit was eventually moved to courts in Ecuador at Chevron's behest. Having initially lauded Ecuador's legal system in an effort to have the case moved there, Chevron later changed its mind and began attacking the system when that system found the company liable for damages.

Shareholders are also upset with Chevron for its gross mismanagement of the case in which it has sidestepped the rule of law and employed guerilla-style tactics in a last ditch effort to fend off an unfavorable ruling. Part of this includes hiring Hill & Knowlton, the same firm that represented the tobacco industry during its indictment over tobacco causing cancer, to perform the same task concerning toxic oil contaminants.

Full Story Chevron hires twelve public relations firms to discredit indigenous Indians in Ecuador.

AIG-GATE: The World’s Greatest Insurance Heist – Ellen Brown

Each day brings more revelations of efforts of the NY Fed and Goldman Sachs to hide the details of the criminal conspiracy of the AIG bailout. . . . This is a real crisis on the scale of Watergate

Rumor has it that Timothy Geithner is on his way out as Treasury Secretary, due to his involvement in the AIG scandal that is now unraveling in hearings before the House Oversight and Reform Committee. Bob Chapman writes in The International Forecaster:

Each day brings more revelations of efforts of the NY Fed and Goldman Sachs to hide the details of the criminal conspiracy of the AIG bailout. . . . This is a real crisis on the scale of Watergate. Corruption at its finest.

But unlike the perpetrators of the Watergate scandal, who wound up looking at jail time, Geithner evidently has a golden parachute waiting at Goldman Sachs, not coincidentally the largest recipient of the AIG bailout. At least that is the rumor sparked by an article by Caroline Baum on Bloomberg News, titled “Goldman Parachute Awaits Geithner to Ease Fall.” Hank Paulson, Geithner’s predecessor, was CEO of Goldman Sachs before coming to the Treasury. Geithner, who has come up through the ranks of government, could be walking through the revolving door in the other direction.

Full Story Web of Debt – AIG-GATE: THE WORLD’S GREATEST INSURANCE HEIST.

Dean Baker: The Big Bank Theory

How government helps financial giants get richer

Wall Street bankers, along with the rest of the players in the financial industry, like to think of themselves as swashbuckling capitalists. They battle cutthroat competition with one hand and oppressive government bureaucracy with the other. In reality, the financial industry is deeply dependent on the government. Far from the rugged, go-it-alone types they wish they were, they are more like well-dressed, coddled adolescents. And this is true in good times and bad.

The industry’s dependency takes five main forms:

• an explicit safety net provided by government deposit insurance;

• an implicit safety net provided by “too big to fail”;

• a special privilege of being the only untaxed casino;

• an open invitation to raid state and local governments for fees;

• a right to change contract terms after the fact.

These dependencies are entrenched, and, despite loud protests to the contrary, the removal of government from the financial sector is not really on the agenda. The issue up for debate is not the virtues of the free market versus government regulation. The industry wants government regulation, just not in a way that curtails its profits.

In thinking about regulation, then, we need a fuller appreciation of the industry’s dependency on government. This will not tell us what to do, but it should open the door to a debate about regulatory reform that takes up the real question: will regulation be structured in a way that advances the public interest or in a way that allows the financial sector to profit at society’s expense?

Full Story Boston Review — Dean Baker: The Big Bank Theory.

Leaked Memo – How To Protect Banks & Screw Taxpayers!

AIG Bonuses In 2010 Total $100 Million

White House Pay Czar: Bonuses Are ‘Outrageous’ But Legal

American International Group Inc. is set to pay out about $100 million in a fresh round of bonuses to employees of its financial products division, the unit whose risky bets helped sink the company leading to a $180 billion government bailout, according to reports published Tuesday.

AIG agreed to cut the retention bonuses by $20 million but will still hand out $100 million Wednesday, The New York Times reported, citing people with knowledge of the negotiations.

The Washington Post, also citing people familiar with the situation, said the retention payments are for employees at the division who agreed to accept 10 to 20 percent less than AIG had initially promised them two years ago. In return, they are getting their money more than a month ahead of schedule.

Full Story AIG Bonuses In 2010 Total $100 Million.

We’ve All Been Reamed!

It’s S&L all over again – only worse

Mike Whitney  -

The reappointment of Fed chairman Ben Bernanke means that the opportunity for change has passed and the reform movement is dead. It means that and that derivatives trading, off-balance sheet operations, securitization, dark pools and high frequency trading will go on much as they have before. It means that the public will continue to be gouged so that a handful of Wall Street sharpies can rake in obscene profits using complex “financial innovations” and over-leveraged debt instruments. It means that the entire system will continue to be put at risk to protect the interests of investment banks and hedge funds. It means that the subsidies, the preferential treatment, and the bailouts will continue to fuel populist rage and exacerbate deepening divisions in society. It means that the status quo has been preserved and that it’s “business as usual”.

No reform movement will succeed as long as Bernanke is at the Fed. He’s an agent of the big banks and a Wall Street loyalist. He’s also the author of “Too Big To Fail”, the controversial theory which provides unlimited state support for financial institutions that are deemed too large or interconnected to fail. TBTF means that capitalism’s vital market clearing function can avoided if one is rich or powerful enough. Bernanke repealed capitalism to save his friends.

The Fed’s role in the housing fiasco, goes way beyond Alan Greenspan’s low interest rates which ignited the frenzy of speculation that led to the crash. It’s clear now, that both Greenspan and Bernanke knew that the multi-trillion dollar credit expansion, was based on mortgages to applicants who had no way of repaying the money they had borrowed. It was a complete scam. Recent testimony by FDIC chairman Sheila Bair before the Financial Crisis Inquiry Commission (Jan 14, 2010) provides many of the details. Naturally, Bair’s testimony has been ignored by the media.

Full Story We’ve All Been Reamed! | The Smirking Chimp.

The Coal Ash Industry Manipulated EPA Data

The coal ash industry manipulated reports and publications about the dangers of coal combustion waste, reports Public Employees for Environmental Responsibility (PEER). The group stated that the Environmental Protection Agency allowed the multibillon-dollar coal ash industry to have virtually unfettered access to the EPA during the Bush administration and now under President Obama.

As a result of the industry's formal relationship with the EPA, insiders were allowed to edit and ghostwrite publications and official reports on the effects of coal waste. The documents obtained by PEER indicate that the coal ash industry “watered down official reports, brochures and fact-sheets to remove references to potential dangers” of coal ash waste. Additionally, the so-called “environmental benefits” of coal ash were repeatedly aggrandized.

“For most of the past decade, it appears that every EPA publication on the subject was ghostwritten by the American Coal Ash Association,” stated PEER Executive Director Jeff Ruch, whose group examined thousands of coal industry and EPA communications. “In this partnership it is clear that industry is EPA's senior partner.”

Full Story t r u t h o u t | The Coal Ash Industry Manipulated EPA Data.

US banks face insider trading probe

Allegations centre on Tarp announcements

Neil Barofsky, the special inspector-general overseeing the US government’s financial rescue efforts, is to probe allegations of insider trading among bank executives and their associates.

Eight of the largest banks in the US received between $2bn and $25bn in October 2008 under a programme to prop up the financial system led by Hank Paulson, then Treasury secretary.

Dozens more institutions followed and Mr Barofsky, who examines the troubled asset relief programme, is looking into whether information improperly made its way to trading rooms during a feverish period in which the government and banks were frequently exchanging information.

Full Story FT.com / US / Economy & Fed – US banks face insider trading probe.

FED GAVE Banks Access to $23.7 TRILLION DOLLARS NOT $700 Billion!

The good stuff begins at about 1 min in

Goldman Sachs and the $100 million question

Goldman Sachs, the world’s richest investment bank, is facing a potential political storm over how much it pays its chief executive, Lloyd Blankfein.

Bankers in Davos for the World Economic Forum (WEF) told The Times they understood that Mr Blankfein and other top Goldman bankers outside Britain were set to receive some of the bank’s biggest-ever payouts, in defiance of President Obama’s attempt to shame banks into cutting bonuses. “This is Lloyd thumbing his nose at Obama,” said a banker at one of Goldman’s rivals.

Mr Blankfein took home his biggest bonus so far in 2007, when he was paid $67.9 million. Goldman’s profits last year were $1.8 billion higher than in 2007. This leaves the bank with a justification to pay him even more although payouts will be made in shares rather than cash to make them more politically palatable. Some rival bankers claim Mr Blankfein could receive up to $100 million, though even a much lower figure could prove politically explosive.

Full Story Goldman Sachs and the $100 million question – Times Online.

Secret Banking Cabal Emerges From AIG Shadows

The idea of secret banking cabals that control the country and global economy are a given among conspiracy theorists who stockpile ammo, bottled water and peanut butter. After this week’s congressional hearing into the bailout of American International Group Inc., you have to wonder if those folks are crazy after all.

Wednesday’s hearing described a secretive group deploying billions of dollars to favored banks, operating with little oversight by the public or elected officials.

We’re talking about the Federal Reserve Bank of New York, whose role as the most influential part of the federal-reserve system — apart from the matter of AIG’s bailout — deserves further congressional scrutiny.

Full Story Secret Banking Cabal Emerges From AIG Shadows: David Reilly – Bloomberg.com.

Goldman Sachs Profits Hit $4.8B, Pay Up 47 Percent

Goldman Sachs Group Inc. said Thursday it earned $4.79 billion in the fourth quarter as the bank’s trading business again outdistanced the rest of the financial industry

The company rewarded its employees with $16.2 billion in salaries and bonuses for 2009, up 47 percent from the previous year but still lower than many had expected.

Goldman said Wednesday it earned $8.20 a share in the last three months of the year as fixed income, commodities and currency trading buoyed its profits for the third straight quarter. Analysts surveyed by Thomson Reuters predicted Goldman would earn $5.20 a share.

Full Story Goldman Sachs Profits Hit $4.8B, Pay Up 47 Percent.

Will The Banks Win Again? Bailout Watchdog Rallies Support For Consumer Protection Agency

‘We Cannot Let Families Lose Again’  -

The battle in the Senate over a proposed consumer financial protection agency is the final show-down between banks and American families, bailout watchdog Elizabeth Warren wrote to supporters Monday night.

The outcome “will show whether we are going to let the industry continue to write the rules — to keep the cops off the beat — or whether the financial crisis actually changed something.”

Senate Banking Committee Chairman Christopher Dodd (D-Conn.) is said to be considering dropping the proposed independent agency from the Senate’s financial reform bill.

Full Story Will The Banks Win Again? Bailout Watchdog Rallies Support For Consumer Protection Agency.

Rachel Maddow Show- Naomi Klein on the Bank Bailouts.

Ethics and Corporate Scandals: How Much Do You Really Know?

What is ethics? When do we cross the line between right and wrong and who determines when that line is crossed? Ethics can be defined as moral philosophy. It is basically “the discipline concerned with what is morally good and bad, right and wrong. The term is also applied to any system or theory of moral values or principles”

(Ethics, Encyclopedia Britannica Online, 2000). When we apply the concept of ethics to business the scope broadens. Business ethics is “the study and evaluation of decision making by businesses according to moral concepts and judgments” (Business ethics, The Columbia Encyclopedia, 2007). In this paper I will be discussing business ethics, including three common misunderstandings, one major taboo of corporate social responsibility discourse, and give examples of two major corporation scandals, Enron and WorldCom.

When you think of the words business and ethics you usually don’t relate the two. This is due to three misunderstandings. The first is that morality and profits just do not mix. If you make money then you are considered successful but you have to become corrupt to make money. The second misconception is that all ethical problems can be solved in a simplistic manner and that the problems are always either right or wrong. There is no in between. When we assume this concept is true, we tend to ignore the gray area in between and as a result, ignore the fact that soul-searching might me necessary to come to a decision about an ethical problem. The third misunderstanding is that ethics is following a set of regulations or rules. When we think about it, the legal issue might not be related to the moral issue or just the opposite. (Lamberton & Minor-Evans, 2007).

Full Story Ethics and Corporate Scandals: How Much Do You Really Know? – Associated Content – associatedcontent.com.

Wall St. Weighs Legal Challenge to Proposed Bank Tax

Wall Street’s main lobbying arm has hired a top Supreme Court litigator to study a possible legal battle against a bank tax proposed by the Obama administration, on the theory that it would be unconstitutional, according to three industry officials briefed on the matter.

In an e-mail message sent last week to the heads of Wall Street legal departments, executives of the lobbying group, the Securities Industry and Financial Markets Association, wrote that a bank tax might be unconstitutional because it would unfairly single out and penalize big banks, according to these officials, who did not want to be identified to preserve relationships with the group’s members.

The message said the association had hired Carter G. Phillips of Sidley Austin, who has argued dozens of cases before the Supreme Court, to study whether a tax on one industry could be considered arbitrary and punitive, providing the basis for a constitutional challenge, they said.

Full Story Wall St. Weighs Legal Challenge to Proposed Bank Tax – NYTimes.com.

IMF to Haiti: Freeze Public Wages

Richard Kim, The Nation -

Since a devastating earthquake rocked Haiti on Tuesday–killing tens of thousands of people–there’s been a lot of well-intentioned chatter and twitter about how to help Haiti. Folks have been donating millions of dollars to Wyclef Jean’s Yele Haiti (by texting “YELE” to 501501) or to the Red Cross (by texting “HAITI” to 90999) or to Paul Farmer’s extraordinary Partners in Health, among other organizations. I hope these donations continue to pour in, along with more money, food, water, medicine, equipment and doctors and nurses from nations around the world. The Obama administration has pledged at least $100 million in aid and has already sent thousands of soldiers and relief workers. That’s a decent start.

But it’s also time to stop having a conversation about charity and start having a conversation about justice–about recovery, responsibility and fairness. What the world should be pondering instead is: What is Haiti owed?

Haiti’s vulnerability to natural disasters, its food shortages, poverty, deforestation and lack of infrastructure, are not accidental. To say that it is the poorest nation in the Western hemisphere is to miss the point; Haiti was made poor–by France, the United States, Great Britain, other Western powers and by the IMF and the World Bank.

Full Story IMF to Haiti: Freeze Public Wages.

Johnson & Johnson Accused of Drug Kickbacks

Johnson & Johnson paid kickbacks to the nation’s largest nursing home pharmacy to increase the number of elderly patients taking the antipsychotic Risperdal and several other medications, according to a complaint filed Friday by the office of the United States attorney in Boston.

The payments violated the federal anti-kickback statute and led Omnicare, a pharmacy company specializing in dispensing drugs to nursing home residents, to submit false claims to Medicaid, the complaint charged.

The government’s civil complaint joins a whistle-blower suit against Johnson & Johnson brought by two former employees of Omnicare, which has headquarters in Covington, Ky.

Full Story Johnson & Johnson Accused of Drug Kickbacks | HeraldTribune.com | Sarasota Florida | Southwest Florida’s Information Leader.

Obama is right to clobber Wall Street

FT   Editorial –

The American public dreams of putting bankers on trial. The hearings of the Financial Crisis Inquiry Commission, which started this week, are a spectacle that comes close to that fantasy. With camera flashes firing, the bankers’ journeys to take the stand have had the drama of the “perp walk”. The quasi-defendants were quizzed, among other things, on the White House’s new plan, revealed this week, for a $90bn tax on banks.

The proposal is political. That much is clear from the timing. The administration announced it ahead of bank bonus season. With US unemployment continuing to rise, the spectacle of Wall Street plutocrats reporting multimillion dollar earnings from bailed-out companies will trigger geysers of rage. This policy should soothe and exploit that popular anger.

Full Story FT.com / Comment / Editorial – Obama is right to clobber Wall Street.

H&M’s ‘Brand Integrity’: Destroying Surplus Winter Clothes in New York Instead of Donating Them to the Needy

Perfectly good shirts, sweaters and pants and winter jackets are ripped up and trashed instead of going to the city’s huge poor population.

In a story that should have us all railing against the cancer of capitalism, it recently came to the attention of many, thanks to the New York Times, that ubiquitous fashion retailer H&M has apparently been destroying perfectly usable unsold clothing, in the middle of winter, in a city where one third the population is poor.

“Gloves with the fingers cut off,” “warm socks,” “cute patent leather Mary Jane school shoes, maybe for fourth graders, with the instep cut up with a scissor,” and “men’s jackets, slashed across the body and the arms” are among the items recently described by one New York resident to Times reporter Jim Dwyer as being among the countless pieces of merhandise purposely ruined and rendered unwearable, piled in trash bags behind the Herald Square location in Manhattan.

The article met with much outrage — “H&M” topped the Trending Topics list on Twitter — and shortly thereafter, H&M announced that that it would stop the practice and would “instead donate the garments to charities.”

Full Story H&M’s ‘Brand Integrity’: Destroying Surplus Winter Clothes in New York Instead of Donating Them to the Needy | PEEK | AlterNet.

Kucinich Subcommittee Findings Triggered Expanded Enforcement

Congressman Dennis Kucinich, who is Chair of the House Domestic Policy Subcommittee, announced on Wednesday, January 13th, that “the Securities and Exchange Commission’s (SEC) decision to file charges against Bank of America (BofA) for its failure to disclose mounting losses at Merrill Lynch was a response to finding made during the Kucinich subcommittee’s 9-month investigation of the merger.”

Kucinich’s Domestic Policy Subcommittee held five joint hearing on the matter with the Oversight and Government Reform Committee.

Subcommittee investigators found several potential violations of securities laws. On December 10, 2009, the Kucinich subcommittee staff sent a memo to majority members on the Oversight Committee and the Domestic Policy Subcommittee outlining potential legal violations committed in the BofA/Merrill Lynch merger. During the fifth Congressional hearing on the subject, Mr. Robert Khuzami, the Director of the Division of Enforcement at the SEC, agreed that SEC would investigate the potential violations.

Full Story kucinich.us – Kucinich Subcommittee Findings Triggered Expanded Enforcement.

Geithner: Bailed Out AIG ‘Absolutely’ Right To Pay Banks Top Dollar (VIDEO)

Tim Geithner believes that bailed out insurer AIG was “absolutely” right to pay other bailed out Wall Street firms 100 cents on the dollar for their toxic credit default swaps. Geithner also believes that there was no other option.

CNBC’s John Harwood interviewed the treasury secretary about the new tax on banks, AIG payments, bank bonuses, and the New York Fed’s decision to advise AIG to keep quiet about the payments.

During the interview, Geithner maintained that even as Chief of the New York Fed, he was not involved in the decision to advising AIG to keep details of the payments private.

Full Story Geithner: Bailed Out AIG ‘Absolutely’ Right To Pay Banks Top Dollar (VIDEO).

JP Morgan reports $3.27 billion profit

Banking giant JP Morgan Chase reported on Friday a big jump in net profit to 3.27 billion dollars in the fourth quarter of 2009, highlighting renewed health in the troubled sector.

The New York-based financial giant doubled its profits for the full year to 11.7 billion dollars, and quadrupled the numbers put up in the fourth quarter of 2008.

The results highlight a return to health in the banking sector after more than a year of crisis, but were expected to fuel public resentment over hefty profits and compensation of firms bailed out by the government and at a time when much of the US economy continues to struggle and unemployment remains high.

Full Story JPMorgan reports big jump in profits – Yahoo! News.

Wall Street’s payout for 2009: $145 billion

Banks poised to start fearmongering campaign about Obama’s bailout fee

If you still needed statistical proof that the folks on Wall Street have become entirely detached from reality in the wake of the massive taxpayer-funded bailout of their colossal mistakes, here it is.

The 38 largest financial institutions on Wall Street will pay out a total of $145.85 billion in compensation for 2009, an 18 percent increase over 2008 and “slightly more than in the record year of 2007,” the Wall Street Journal reports.

Full Story Wall Street’s payout for 2009: $145 billion | Raw Story.

Watch BofA CEO Defend Lavish Exec Bonuses

Bank Of America CEO Moynihan: ‘No Disconnect’ Between Lavish Exec Bonuses And The Crumbling Economy (VIDEO)

ABC News caught up with the nation’s top banking CEOs after they left Congress’s financial hearings and the contrite attitude they displayed to Congress regarding their role in bringing the U.S. economy to the brink was nowhere to be seen when reporter Jonathan Karl asked them about extravagant bonuses.

Bank of America CEO Brian Moynihan told Karl that he saw “no disconnect” between lavish bonuses for executives at bailed out banks during a very tough economic climate for the average American.

Morgan Stanley chairman John Mack , despite foregoing his own bonus, cryptically defended giving bonuses to his executives: “You have got to the deal with them, or I will deal with them.”

JP Morgan CEO Jamie Dimon wouldn’t answer.

WATCH:

Full Story Bank Of America CEO Moynihan: ‘No Disconnect’ Between Lavish Exec Bonuses And The Crumbling Economy (VIDEO).

Financial Crisis Commission Testimony, Day 2: Read The Latest Updates

FINANCIAL CRISIS INQUIRY COMMISSION UPDATES:

The Financial Crisis Inquiry Commission held its second day of hearings in Washington today. (Watch the hearing live here.) Today’s witnesses include Attorney General Eric H. Holder, Jr., Assistant AG Lanny A. Breuer, FDIC Chair Sheila C. Bair, SEC Chair Mary L. Schapiro and several state attorneys general and officials.

Click here to read HuffPost coverage of yesterday’s hearing featuring Goldman Sachs CEO Lloyd Blankfein, Bank Of America CEO Brian Moynihan, Morgan Stanley Chairman John Mack, JPMorgan Chase CEO Jamie Dimon and several banking experts.

UPDATE 9:47 A.M.:

The head of the panel didn’t waste any time asking the nation’s top law enforcement official about a 2004 FBI statement that the mortgage fraud “epidemic” could be contained.

Full Story Financial Crisis Commission Testimony, Day 2: Read The Latest Updates.

Goldman admits ‘improper’ actions in sales of securities

Goldman Sachs’ chief acknowledged Wednesday that the investment bank engaged in “improper” behavior in 2006 and 2007 when it made huge bets on a housing downturn while peddling as safe more than $40 billion in securities backed by risky U.S. home loans.

Lloyd Blankfein, Goldman’s chairman and chief executive, made the surprising concession at the opening hearing of the Financial Crisis Inquiry Commission, a 10-member panel that Congress created to investigate and lay out for the public the causes of the worst financial crisis since the Great Depression.

Blankfein and senior officers of three other of the nation’s most prominent banks told the panel that serious flaws in their risk models and business practices contributed to Wall Street’s meltdown and the massive taxpayer bailouts that followed. The commission also heard testimony that the banks and quasi-government mortgage giant Fannie Mae recklessly took on as much as 95 times more risk than they could cover, and that Wall Street excels “at pulling the wool over the eyes of the American people.”

Full Story Goldman admits ‘improper’ actions in sales of securities | McClatchy.

Chamber of Commerce Offers More of the Same

With the predictability of a clock, U.S. Chamber of Commerce President Tom Donohue extolled the virtues of “free trade” in his group’s annual State of American Business Address, telling the audience that expanded trade is the Chamber‘s number one priority for 2010.

“Washington is sitting on pending trade agreements with South Korea, Colombia, and Panama,” he said, according to a transcript of his remarks. “If we fail to pass them, we will not only miss opportunities to create new jobs — we will lose existing jobs.”

Donohue claimed that failure to strike a deal with South Korea alone could result in the loss of 350,000 American jobs. Many, however, believe that a deal with South Korea could be a devastating blow for the beleaguered American automobile industry. In 2008, U.S. automakers sold just 7,000 American vehicles in South Korea, or less than one percent of the entire market. South Korean automakers Hyundai and Kia, by comparison, sold 53,000 vehicles in the U.S. in October 2009, according to Bloomberg News.

Full Story Chamber of Commerce Offers More of the Same | Economy In Crisis.

House subpoenas AIG documents from NY Fed, Geithner

A congressional panel Wednesday subpoenaed documents on the US Federal Reserve bailout of insurance giant AIG in 2008, including from Timothy Geithner, the former New York Fed chief and current Treasury secretary.

Representative Edolphus Towns said his House Oversight and Government Reform Committee was seeking information on payments made to AIG counterparties — major global banks including Goldman Sachs, Morgan Stanley, Barclays, Bank of America, Deutsche Bank, and Societe Generale.

The panel seeks emails, phone logs and meeting notes from the New York Fed and Geithner, among others, on the discussions held ahead of the bailout decision.

Full Story House subpoenas AIG documents from NY Fed, Geithner – Yahoo! News.

Health Insurers Funded Chamber Attack Ads

AHIP President Karen Ignagni. Despite promises to the White House that the major health insurance companies would play nice on healthcare, they quietly pushed funds to third-parties for ads attacking reform. "There's no question that AHIP has quietly solicited monies from their members which were funneled over to the chamber for their ads," said a source. The total donated by the health insurers, according to one estimate, was as much as one-quarter of the chamber's total health care advertising budget.

Just as dealings with the Obama administration and congressional Democrats soured last summer, six of the nation's biggest health insurers began quietly pumping big money into third-party television ads aimed at killing or significantly modifying the major health reform bills moving through Congress.

That money, between $10 million and $20 million, came from Aetna, Cigna, Humana, Kaiser Foundation Health Plans, UnitedHealth Group and Wellpoint, according to two health care lobbyists familiar with the transactions. The companies are all members of the powerful trade group America's Health Insurance Plans.

The funds were solicited by AHIP and funneled to the U.S. Chamber of Commerce to help underwrite tens of millions of dollars of television ads by two business coalitions set up and subsidized by the chamber. Each insurer kicked in at least $1 million and some gave multimillion-dollar donations.

Full Story Health Insurers Funded Chamber Attack Ads – Under The Influence – Under the Influence.

GeithnerGate: Obama’s Treasury Sec. Should Get the Boot and Let’s Take Our Money Back Too | Corporate Accountability and WorkPlace | AlterNet

By all means, let’s fire Geithner — and let’s also target Wall Street as a whole.   Also: MSNBC Host Dylan Ratigan’s case against Geithner.

Cover-up revelations keep coming about Timothy Geithner’s secret assistance to AIG. The latest show that he urged AIG not to disclose how it would be shoveling money to Goldman Sachs and other large financial institutions by paying off its credit default swaps at par value instead of much less.

More than $60 billion changed hands that shouldn’t have if Geithner had played hard ball. Therefore, the charge is that Geithner should be bounced because he was protecting the banks’ interests ahead of the public interest. He may also have protecting himself during his confirmation hearings.

Ok, string him up. But what about recapturing the loot?

Full Story GeithnerGate: Obama’s Treasury Sec. Should Get the Boot and Let’s Take Our Money Back Too | Corporate Accountability and WorkPlace | AlterNet.

Counterparty On, Garth!

Matt Taibbi  -

Targeting an industry whose political deafness has vexed his administration, President Barack Obama is weighing recovering tax dollars from government-rescued financial institutions with a levy.

The proposed levy could put Obama on the popular side of public opinion that is decidedly against Wall Street and angry over shortfalls in a $700 billion bank bailout fund.

A senior administration official said Monday that Obama would seek modifications to the law that sent billions in bailout money in 2008 and 2009 to a flailing Wall Street that was approaching collapse. The government official spoke on the condition of anonymity to discuss the president's thinking.

One has to wonder whether Goldman Sachs and Lloyd Blankfein are finally having their come-to-Jesus moment today. It seems an awful lot like the Obama administration is seriously considering going after bailout monies given out last year, almost certainly involving counterparty payments made to banks like Goldman via the AIG bailout.

via FOXNews.com – Source: Obama Considering Tax on Rescued Banks.

Full Story Counterparty On, Garth! – Matt Taibbi – Taibblog – True/Slant.

Federal Reserve Seeks to Protect U.S. Bailout Secrets

The Federal Reserve asked a U.S. appeals court to block a ruling that for the first time would force the central bank to reveal secret identities of financial firms that might have collapsed without the largest government bailout in U.S. history.

The U.S. Court of Appeals in Manhattan will decide whether the Fed must release records of the unprecedented $2 trillion U.S. loan program launched after the 2008 collapse of Lehman Brothers Holdings Inc. In August, a federal judge ordered that the information be released, responding to a request by Bloomberg LP, the parent of Bloomberg News.

“This case is about the identity of the borrower,” said Matthew Collette, a lawyer for the government, in oral arguments today. “This is the equivalent of saying ‘I want all the loan applications that were submitted.’”

Full Story Federal Reserve Seeks to Protect U.S. Bailout Secrets (Update1) – Bloomberg.com.

Cuomo Demands Bank Bonus Data: New York Attorney General Wants Details From 8 Bailed-Out Banks

New York Attorney General Andrew Cuomo on Monday pressed the nation’s eight biggest banks to reveal how much they plan to pay out in employee bonuses for 2009.

Cuomo told reporters that he also wants to know how the size of the banks’ bonus pool would have been affected if the banks hadn’t received a taxpayer rescue at the height of the financial crisis in late 2008.

The fact-finding effort comes as Wall Street banks this month prepare to hand out near-record compensation for last year’s performance. Several banks earned huge profits in 2009, aided by billions in government bailout funds and a rebounding stock market.

Full Story Cuomo Demands Bank Bonus Data: New York Attorney General Wants Details From 8 Bailed-Out Banks.

Wall Street Will Be Back For More

Chris Hedges  -

Corporations, which control the levers of power in government and finance, promote and empower the psychologically maimed. Those who lack the capacity for empathy and who embrace the goals of the corporation—personal power and wealth—as the highest good succeed. Those who possess moral autonomy and individuality do not. And these corporate heads, isolated from the mass of Americans by insular corporate structures and vast personal fortunes, are no more attuned to the misery, rage and pain they cause than were the courtiers and perfumed fops who populated Versailles on the eve of the French Revolution. They play their games of high finance as if the rest of us do not exist. And it is a game that will kill us.

These companies exist in a pathological world where identity and personal worth are determined solely by the perverted code of the corporation. The corporation decides who has value and who does not, who advances and who is left behind. It rewards the most compliant, craven and manipulative, and discards the losers who can’t play the game, those who do not accumulate wealth or status fast enough, or who fail to fully subsume their individuality into the corporate collective. It dominates the internal and external lives of its employees, leaving them without time for family or solitude—without time for self-reflection—and drives them into a state of perpetual nervous exhaustion. It breaks them down, especially in their early years in the firm, a period in which they are humiliated and pressured to work such long hours that many will sleep under their desks. This hazing process, one that is common at corporate newspapers where I worked, including The New York Times, eliminates from the system most of those with backbone, fortitude and dignity.

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