AIG

Connecticut AG Subpoenas AIGers For Testimony On Bonuses

Zachary Roth | March 20, 2009, 5:58PM

This could be good.

Not content with letting New York Attorney General Andrew Cuomo hog the spotlight, his Connecticut counterpart, Richard Blumenthal, has subpoenaed several AIG employees, incluing CEO Ed Liddy, to testify about those bonuses, totaling $165 million, at a legislative hearing March 26th.

Said Blumenthal in a statement:

Now living off supersized taxpayer-paid bonuses, these AIG employees have a moral and legal obligation to appear at this legislative hearing and disclose details about corporate compensation to employees," said Blumenthal in a written statement.

AIG Financial Products, the unit that caused the company's collapse and got those bonuses, is absed in Wilton, Connecticut.

These hearings should be more good theater, but it's worth asking: given that Liddy has already testified, and Cuomo will likely soon release the names of the bonus recipients, what more pertinent information will AIG employees be able to provide? Guess we'll find out...

AIG

Cuomo Has Names Of AIG And Merrill Bonus Recipients

Zachary Roth | March 20, 2009, 4:13PM

It looks like Andrew Cuomo holds all the cards. He now has in hand the names of the recipients of both of the corporate payouts that have provoked all that populist rage lately.

A judge earlier this week ruled that Bank of America had to turn over the list of names of the 200 highest-paid Merrill Lynch bonus recipients, that the New York Attorney General has been seeking. According to reports, B of A, which now owns Merrill, did so yesterday.

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AIG

Cassano Lawyer Repped WorldCom

Zachary Roth | March 20, 2009, 3:03PM

Earlier today, we told you that in the view of one expert, some of the allegations about former AIGFP chief Joe Cassano echo those in the WorldCom case from earlier this decade, which ultimately sent former CEO Bernie Ebbers to jail -- in particular the charge, made in at least one investor lawsuit, that Cassano obstructed the work of his firm's auditors.

And it turns out that there's another parallel with the WorldCom case. Cassano's lawyer, white-collar crime expert Joseph Warin of Gibson, Dunn, and Crutcher, was hired by WorldCom in 2003 to conduct an internal investigation into allegations that it re-routed long-distance phone calls in order to get out of paying billions of dollars in fees owed to other companies.

That's a different charge from the one that felled Ebbers. Still, could it be another small sign that this whole AIGFP saga is going to take its place in the pantheon of high-profile white-collar fraud cases?

And while we're on the subject of Warin, here's another fun fact. In 2004, Washingtonian magazine compiled a list titled "Who to Call When You're Under Investigation." Guess who was on there.

Sounds like Cassano is a Washingtonian reader.

AIG

Expert: Allegation That Cassano Blocked Auditor Is "Analogy To Obstructing Justice"

Zachary Roth | March 20, 2009, 1:11PM

We've told you about allegations from AIGFP's internal auditor, Joseph St. Denis, that the unit's leader, Joseph Cassano deliberately thwarted St. Denis' effort to do his job. And according to one expert we just spoke to, those allegations, if borne out, could put Cassano in serious jeopardy.

To review: In a letter to congressional investigators, St. Denis claimed that Cassano repeatedly prevented him from participating in the process in which AIGFP valued its assets -- a crucial piece of the accounting puzzle St. Denis was hired to put together. According to St. Denis, Cassano told him in September 2007 (a time when evidence of the assets' exposure to the subprime mortgage mess was mounting): "I have deliberately excluded you from the value of the [credit default swaps] because I was concerned you would pollute the process." In addition, around the same time, Cassano berated St. Denis for pointing out accounting irregularities in a target company's hedge accounts. Cassano created a new organizational structure for AIGFP which isolated him from AIG proper, significantly reducing his influence. St. Denis resigned soon after, citing Cassano's moves as the reason.

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AIG

The Rise And Fall Of AIG's Financial Products Unit

Zachary Roth and Ben Buchwalter | March 20, 2009, 9:36AM

As we delve into the back-story behind the collapse of AIG, we thought it might be useful to lay out some key factual information about the firm's Financial Products unit, known as AIGFP, whose disastrous credit default swaps brought the company to its knees. How and when did AIG Financial Products get started? Who ran it, and from where? How did it get into credit default swaps, and what exactly are they, anyway? And how did this group of derivatives traders eventually wind up bringing down one of the most admired financial firms in the world?

So here's a rundown of some of the key developments in AIGFP's tumultuous history -- many gleaned from a superb three-part December 2008 Washington Post series on the unit (parts 1, 2, and 3):

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The Daily Muck

The Daily Muck

Ben Buchwalter | March 20, 2009, 9:16AM

Four former Abu Ghraib prisoners can sue CACI - the defense contractor responsible for their containment, a federal judge ruled Thursday. The alleged torture victims were held at the military prison in Iraq, which has been widely accused of using harsh interrogation tactics after disturbing images of torture surfaced in 2004, before being released without charges. The Arlington, VA-based defense contractor claimed immunity from prosecution, but U.S. District Judge Gerald Bruce Lee said he would not accept its claim that interrogation oversight ensured that torture could not have occurred. (Associated Press)

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AIG

Cassano's Lawyer Is White Collar Crime Expert

Zachary Roth | March 19, 2009, 6:31PM

We've told you that Joe Cassano, who ran the AIG unit that made those credit default swaps, has hired a lawyer in connection with an ongoing Justice Department investigation.

And from the looks of the lawyer in question, Cassano is taking the charges very seriously indeed.

F. Joseph Warin, who works out of the Washington, DC office of the prestigious Los Angeles-based law firm Gibson, Dunn, & Crutcher, is, according to his bio, a former assistant US Attorney who specializes, perhaps unsurprisingly, in white collar crime and securities enforcement, and chairs the firm's White Collar Defense and Investigations Practice Group*.

Investigators are reported to be examining, in particular, whether Cassano and other AIG execs committed fraud by intentionally making misleading public statements about the firm's level of exposure to losses on its credit default swaps.

Warin didn't return a call from TPMmuckraker. But his assistant asked, unprompted, whether we were calling about Cassano.

Sounds like he's getting a lot of calls.

*This sentence has been corrected from an earlier version, which incorrectly reported that Gibson, Dunn is based in Washington, DC.

AIG

AIG Gives Names Of Bonus Recipients To Cuomo

Zachary Roth | March 19, 2009, 4:50PM

New York Attorney General Andrew Cuomo has received the names of the AIGers who got bonuses, and is weighing whether to release those names, his office has announced.

Cuomo had subpoenaed AIG for the names. Yesterday, the firm's CEO, Ed Liddy, declined to tell Congress he would cooperate with the subpoena, citing concerns about the safety of employees whose names were released.

Cuomo's full statement follows after the jump....

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AIG

Is Cassano Vulnerable To Fraud Charges That Felled Ebbers, Lay?

Zachary Roth | March 19, 2009, 2:51PM

Yesterday we laid out some preliminary evidence that AIG execs -- led by Joseph Cassano, who ran the firm's financial products unit -- may have committed criminal fraud in connection with those credit default swaps that brought the company down. And as we noted, federal investigators have been probing that very question.

A former federal fraud prosecutor confirmed to TPMmuckraker today that criminal fraud occurs when someone willfully misstates the facts about a company's position in any public statement -- such as an SEC filing, an earnings release, a presentation to investors, or even a press conferences -- and when there's a clear financial motive for doing so. The former prosecutor further confirmed that the facts of the AIG case as currently known -- in which Cassano and other AIG execs made what turned out to be incorrect public statements, which had the effect of concealing from investors the company's true exposure to losses on its swaps -- could potentially lead to such charges, but declined to go further without access to the details of the investigation.

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Bailout

Bailout IG: "Who Knew What, When, And Why" On AIG Bonuses?

Zachary Roth | March 19, 2009, 1:06PM

Neil Barofsky, the special inspector general for the bailout, told Congress this morning that he'll probe the AIG bonuses -- including what role the Treasury Department played.

In words that may send a chill up Tim Geithner's spine with their invocation of Watergate, Barofsky, asked specifically by Republicans about the Treasury Secretary's role, said his probe would seek to find out "who knew what, when and why," in regard to the bonuses.

He continued:

Preliminary information we have seen indicates that the TARP contract between AIG and Treasury that was entered into back in November specifically contemplated the payment of bonuses and retention payments to AIG employees, including AIG's senior partners.

Barfosky added that he'd work with Justice Department, as well as the office of New York Attorney General Andrew Cuomo, who is probing the bonuses, to look at ways that the money can be returned to taxpayers.

Bailout

Report: Citi To Spend Around $10 Million On New Office For Pandit, Others

Zachary Roth | March 19, 2009, 12:19PM

This should go down well.

Citigroup, which has gotten $45 billion in bailout money, plans to drop around $10 million on constructing new offices for CEO Vikram Pandit and other execs, Bloomberg reports, after examining documents filed with the New York City Department of Buildings.

It sounds like the new offices will be pretty sweet:

Plans and instructions for the bank's contractors, on file with the city, specify the installation of at least one Sub-Zero Inc. refrigerator and icemaker in the renovated space, along with "premium grade" millwork and Madico Inc. "Safety Shield 800" blast-proof window film. The project encompasses 17 private offices, each with space for administrative assistants, as well as two conference rooms and open areas with "soft seating," according to the plans.

Former Merrill CEO John Thain has been widely slammed for spending $1.2 million on a 2007 redecoration of his office suite - the same year his company suffered massive losses and needed to be rescued by Bank of America*.

As for Pandit, in January he canceled an order for a corporate jet after it drew outrage, and later told Congress:

I get the new reality and I'll make sure Citi gets it as well.

* This sentence has been corrected from an earlier version.

AIG

Cuomo: I'll Release Names Of AIG Bonus Recipients

Zachary Roth | March 19, 2009, 10:23AM

It hasn't gotten much attention, but New York Attorney General Andrew Cuomo said yesterday that he'd publicly release the names of the AIG bonus recipients, reports the New York Times.

Cuomo is investigating the payouts, as well as those made by Merrill Lynch and several other Wall Street firms. He issued a subpoena for the AIG names earlier this week.

His declaration followed the news that a court has ruled that Bank of America, which owns Merrill, must give him the names of the Merrill recipients. That ruling suggests that Cuomo will likely also get the AIG names. AIG lawyers had referred frequently to the Merrill case this week, and had delayed giving Cuomo the names pending the outcome of that case.

Yesterday, AIG CEO Edward Liddy declined to assure Congress he would cooperate fully with Cuomo's probe, citing concern for the physical safety of employees who received bonuses, were their names to be made public.

Bank of America

Court: B of A Must Reveal Names Of Merrill Bonus Recipients

Zachary Roth | March 19, 2009, 9:52AM

While we've all been focused on those AIG bonuses, there's been a major development in the Wall street bonus saga that seemed, a week ago, like the ultimate in outrageous corporate behavior.

A court ruled yesterday that Bank of America will have to turn over to New York Attorney General Andrew Cuomo the names of the Merrill Lynch employees who received a total of $3-4 billion in bonuses. Bank of America, which since the start of the year has owned Merrill, had been resisting giving Cuomo the information.

Cuomo said he could release the names as soon as today.

Merrill approved the bonuses last December under then-CEO John Thain, on an accelerated schedule, apparently to ensure they went into effect before the firm came under the control of B of A.

The Daily Muck

The Daily Muck

Ben Buchwalter | March 19, 2009, 9:46AM

It seems Fannie Mae missed the memo: massive bonuses are out of style. The mortgage finance company plans to pay four top executives retention bonuses of $1 million each, more than double the amount paid out last year, according to a document filed with the SEC. Like bonuses paid to executives of Merrill Lynch and AIG, the payments are controversial because Fannie Mae recently received billions of dollars in federal aid and was essentially taken over by the government in September. Fannie Mae said that financial regulators approved the bonuses because keeping top employees "was essential to ensure our viability through 2010." (Associated Press)

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AIG

Who Asked Senator Dodd To Defang Anti-Bonus Provision?

Justin Elliott | March 18, 2009, 7:23PM

Who in the Obama Administration pushed to weaken a key anti-bonus provision in the stimulus bill last month? Sen. Chris Dodd, who wrote the provision -- and ultimately agreed to defang it -- isn't saying.

Ever since the AIG story broke, we've heard about the company's binding contracts as a key barrier to the government blocking bonuses to AIG executives.

It turns out that a provision in the stimulus, which passed in February, prohibits the government from blocking any bonuses that were part of contracts agreed to before February 11. That provision has taken on new relevance this week because it would complicate any government effort to claw back the AIG bonuses.

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AIG

Did Cassano And AIG Commit Fraud?

Zachary Roth | March 18, 2009, 5:57PM

AIG chief Edward Liddy endured his anticipated ritual flaying today by Capitol Hill lawmakers angered by those bonuses. But, as Josh has been writing about over at TPM, there's mounting evidence that some current and former AIG execs could have much more to fear than angry questions from Gary Ackerman when all is said and done.

Since at least June 2008, the Justice Department has been investigating (sub. req.) whether AIG intentionally -- and criminally -- overstated the value of its credit default swaps, hiding its dire position from investors and government regulators. Joseph Cassano -- who during the period at issue ran AIG's financial products unit, AIGFP, which made those disastrous swaps, out of a London office -- has reportedly hired a lawyer in connection with that investigation. Britain's Serious Fraud Office is said to be on the case as well.

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AIG

Liddy: We'll Try To Cooperate With Probe -- But No Promises!

Zachary Roth | March 18, 2009, 4:15PM

Here, despite the efforts of Rep. Gary Ackerman, AIG CEO Liddy resists saying that he'll cooperate fully with Andrew Cuomo's investigation into those bonuses...

AIG

AIG Hate Mail

Zachary Roth | March 18, 2009, 3:27PM

Arguing that disclosing the names of the AIGers who got bonuses could put them at physical risk, CEO Ed Liddy reads some of the angrier mail he's been getting lately:

Barney Frank appears unimpressed.

AIG

Cassano's Million Dollar A Month Contract

Zachary Roth | March 18, 2009, 12:41PM

Here's that agreement that Joseph Cassano signed with AIG in March 2008, which gave him a $1 million a month consulting contract, after he had run the company into the ground.

AIG

Congress Releases AIG Bonus Contracts

Zachary Roth | March 18, 2009, 12:31PM

Barney Frank's House Financial Services committee has released the contract that governed those AIG bonuses. We've posted it here.

No names are given, but you can see the terms of the payments.

The Daily Muck

The Daily Muck

Ben Buchwalter | March 18, 2009, 9:06AM

As outrage swells around massive bonuses paid to executives of bailed out financial institutions, Rep. Edolphus Towns (D-NY) wrote a letter Tuesday to Bank of America CEO Ken Lewis requesting more transparency on $3.62 billion in bonuses paid to Merrill Lynch executives. Reviewing the record on these bonuses, the House Committee on Oversight and Government Reform will investigate whether Merrill intentionally deceived regulators. Merrill, which has been owned by B of A since January, claimed in a letter on November 24 that it had not made decisions on bonuses. But subsequent testimony given to New York Attorney General Andrew Cuomo shows that Merrill approved bonuses on November 11. (Reuters)

Felipe E. Sixto, a former aide to President George W. Bush, will be sentenced today for embezzling $579,247 from Center for a Free Cuba, a government-funded nonprofit organization.

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AIG

2003 Lawsuit Suggests AIG Wasn't Always So Careful To Honor Bonus Deals

Zachary Roth | March 17, 2009, 6:35PM

Since the AIG bonus brouhaha broke over the weekend, the hobbled insurance giant has essentially been claiming it had to make the payments because not doing so could have created a "defalt event," potentially exposing taxpayers to losses of hundreds of billions down the road.

That may or may not be a legitimate argument (most experts seem to be saying "not"). But it's worth noting that just a few short years ago, there was a case in which AIG wasn't quite so fastidious about honoring bonus agreements with its employees.

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Bradley Schlozman

DOJ: We're Reviewing Decision Not To Prosecute Schlozman

Justin Elliott | March 17, 2009, 5:03PM

The Bradley Schlozman saga might have some life left in it, yet.

The Justice Department is reviewing a decision made earlier this year under the Bush Administration not to charge Schlozman, the former official who was found by an Inspector General report to have made false statements to the Senate about whether he considered political affiliations in hiring.

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AIG

Investor Lawsuit: Cassano Hid AIG Losses

Zachary Roth | March 17, 2009, 4:44PM

More from the Joseph Cassano files, which are proving to be very interesting indeed.

According to an SEC filing made this month by AIG, a company shareholder in January filed a lawsuit charging Cassano with concealing his financial product unit's massive losses. Cassano stepped down as the head of the unit -- which made the credit default swaps that drove AIG into the ground -- last year.

Here's the full relevant portion of the filing:

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AIG

Under Cassano, Troubled AIG Unit Was Charged With Major Securities Law Violation

Zachary Roth | March 17, 2009, 4:21PM

We've been doing a little digging into Joseph Cassano, who until last year ran AIG's financial products unit, known as AIGFP. That's the unit, of course, whose staffers just got $165 million in bonuses despite undertaking those credit default swaps that helped bring the company down. And it was under Cassano that those deals were made.

As we noted earlier, the FBI and British authorities have lately been probing AIGFP. But it looks like under Cassano, the unit has been in criminal investigators' crosshairs before.

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AIG

Since Last Fall, US And UK Launched Fraud Probes Into AIG

Zachary Roth | March 17, 2009, 2:31PM

Here's a point that's worth remembering amid the furor over those AIG bonuses: law enforcement agencies on both sides of the Atlantic have begun investigations into the company in recent months -- and those probes appear to be ongoing.

Last September, when the financial crisis began in earnest, following the collapse of Lehman Brothers, several news outlets reported (via Nexis) that the FBI had launched an investigation into potential fraud at four of the firms at the center of the collapse: Lehman, Fannie Mae, Freddie Mac ... and AIG. Subsequent reports have suggested that the AIG piece is focused on the financial products unit (AIGFP), where the losses that led to the firm's collapse mostly occurred.

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AIG

Seventy-Three AIG-ers Got More Than $1 Million Each In Bonuses

Zachary Roth | March 17, 2009, 1:54PM

We're learning a bit more about the breakdown of those AIG bonuses -- thanks to New York Attorney General Andrew Cuomo.

In a letter sent to House Financial Services chair Barney Frank, Cuomo, who is probing the awards, wrote that seventy-three members of AIG's financial products unit were paid more than $1 million each.

And get this: Though the payments were called "retention" bonuses, 11 of those 73 millionaires, including one who got $4.6 million, are no longer even at AIG.

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AIG

Cassano: AIG Finance Staffers Are "Generally Well-Compensated," So They Don't Get Severance Pay

Zachary Roth | March 17, 2009, 12:31PM

So we know that it was AIG's financial products unit that engaged in those disastrous credit default swaps that helped bring the company to its knees last fall. And it's staff from that same unit that the firm just paid bonuses to last week, setting off a tidal wave of fury across the country.

That unit, based in London and Connecticut, was led until last year by Joseph Cassano, who negotiated a $1 million-a-month retainer when he left (AIG says it has since terminated that arrangement).

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The Daily Muck

The Daily Muck

Ben Buchwalter | March 17, 2009, 9:12AM

Former Chicago Streets and Sanitation Commissioner Al Sanchez is on trial for promoting politically motivated hiring practices to fill the Streets Department's payrolls. Witnesses in the ongoing hiring fraud trial testified that the city's electric bureau did not even consider applicants without political connections. The electric bureau's personnel liaison, Hugh Donlan, was very clear about where interviewers should file ratings forms for non-political applicants. "I'd put it in the garbage," he said. Prosecutors are charging Sanchez with mail fraud and funneling jobs to workers in the city's Hispanic Democratic Organization. (Chicago Tribune)

Former Pennsylvania senator Vincent Fumo was convicted Monday on 137 counts of fraud and obstruction of justice. Prosecutors said that Fumo inappropriately used more than $2 million in senate resources and $1.5 million from civic organizations. Prosecutors will seek a jail sentence of more than ten years. As part of the lengthy corruption trial, Fumo testified for six complete days, sometimes comparing his crimes to misdemeanors such as spitting on the sidewalk. (Associated Press)

The Justice Department announced Monday that it would withhold a set of 100 unclassified documents containing government allegations and evidence against detainees held at a military prison in Cuba. Although the documents themselves are unclassified, prosecutors say that classified information which could be of value to enemies abroad slipped in. Attorneys of the detainees criticized this decision for significantly complicating their work as hearings approach. And three news organizations say that this is an inappropriate strategic move to keep information from the public. A federal judge will review the matter on March 26. (Washington Post)

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Torture

Torture Confirmed by ICRC Report

Ben Buchwalter | March 16, 2009, 11:24AM

In the past few years, the evidence suggesting that the Bush administration approved torture to question al Qaeda suspects has been overwhelming to say the least. But there have still been few historical accounts to confirm that torture was used, so every new addition to the record of abuse in the War of Terror is important. The latest and most authoritative addition comes from the International Committee for the Red Cross in an article in the New York Review of Books by Mark Danner, a journalism professor and New Yorker contributor.

Danner obtained a 2007 confidential ICRC report from an unnamed source indicating the use of torture to question al Qaeda suspects at secret CIA prisons, and focusing on three suspects who were treated especially harshly: Abu Zubaydah, Khaled Shaik Mohammed, and Walid Bin Attash.

The ICRC report stresses that in each case, suspects were stripped naked, deprived of food, and forced into painful positions for prolonged periods of time.

Abu Zubaydah, a suspected associate of Osama bin Laden, experienced perhaps the most gruesome questioning. He was refused solid food, water boarded, and subjected to long questioning sessions in his cell. Remembering his questioning, Zubaydah said:

Two black wooden boxes were brought into the room outside my cell. One was tall, slightly higher than me and narrow. Measuring perhaps in area [3 1/2 by 2 1/2 feet by 6 1/2 feet high]. The other was shorter, perhaps only [3 1/2 feet] in height. I was taken out of my cell and one of the interrogators wrapped a towel around my neck, they then used it to swing me around and smash me repeatedly against the hard walls of the room. I was also repeatedly slapped in the face....

I was then put into the tall black box for what I think was about one and a half to two hours. The box was totally black on the inside as well as the outside.... They put a cloth or cover over the outside of the box to cut out the light and restrict my air supply. It was difficult to breathe. When I was let out of the box I saw that one of the walls of the room had been covered with plywood sheeting. From now on it was against this wall that I was then smashed with the towel around my neck. I think that the plywood was put there to provide some absorption of the impact of my body. The interrogators realized that smashing me against the hard wall would probably quickly result in physical injury."

Zubaydah was later forced into this box and water boarded, repeatedly led to believe that he would suffocate. During the week he endured this harsh questioning, Zubaydah ate little more than Ensure diet drinks. He said that the torture only stopped because a doctor intervened.

Zubaydah was told that he was the first to be tortured in this way, "so no rules applied. It felt like they were experimenting and trying out techniques to be used later on other people."

Khaled Shaik Mohammed, the key mastermind of the 9/11 attacks, was also subjected to harsh questioning tactics. But he specifies that he was never threatened with death. In fact, interrogators said they would not let him die, but that they would bring him to the "verge of death and back again."

I was kept for one month in the cell in a standing position with my hands cuffed and shackled above my head and my feet cuffed and shackled to a point in the floor. Of course during this month I fell asleep on some occasions while still being held in this position. This resulted in all my weight being applied to the handcuffs around my wrist resulting in open and bleeding wounds. [Scars consistent with this allegation were visible on both wrists as well as on both ankles.] Both my feet became very swollen after one month of almost continual standing. ...

The beatings became worse and I had cold water directed at me from a hose-pipe by guards while I was still in my cell. The worst day was when I was beaten for about half an hour by one of the interrogators. My head was banged against the wall so hard that it started to bleed. Cold water was poured over my head. This was then repeated with other interrogators. Finally I was taken for a session of water boarding.

Walid Bin Attash, who was involved in attacking U.S. targets in 1998 and 2000, was also refused solid food and deprived of sleep.

I do not remember for exactly how many days I was kept standing, but I think it was about ten days.... During the standing I was made to wear a diaper. However, on some occasions the diaper was not replaced and so I had to urinate and defecate over myself. I was washed down with cold water everyday.

Danner came to a few key conclusions after reading the ICRC report: most importantly, the Bush administration approved torture in its questioning of al Qaeda suspects as early as 2002. And everyone in the administration, including President Bush, knew it was happening.

Danner says that it is unclear exactly how successful these tactics were in gathering key information about potential terrorists. But one key comment from Khaled Shaik Mohammed indicates that the information is worthless. In the worst moments of torture, Mohammed says he "gave a lot of false information in order to satisfy what I believed the interrogators wished to hear in order to make the ill-treatment stop." This information undoubtedly "wasted a lot of their time and led to several false red-alerts."

The Daily Muck

The Daily Muck

Ben Buchwalter | March 16, 2009, 9:15AM

The International Committee of the Red Cross concluded in a 2007 report that the Bush administration used torture to question al-Qaeda suspects. The report, obtained by journalism professor Mark Danner, says that captives were taken "to the verge of death and back" in secret CIA prisons. The Washington Post reports that the ICRC's account is the most authoritative to date that shows the Bush administration repeatedly violated international law. (Washington Post)

Fearing she will flee the country, federal investigators plan to freeze $93 million of Ruth Madoff's assets, the New York Post reported Sunday. According to a source close to the investigation, the SEC will ask to freeze Madoff's funds because they were likely acquired dishonestly. Mrs. Madoff has denied any wrongdoing associated with her husband's $50 billion Ponzi scheme. But she was implicated because she withdrew $15.5 million immediately before her husband was arrested in December and recently purchased $1 million of jewelry in defiance of a court order. Though Mrs. Madoff has agreed to a voluntary asset freeze, the deal is not legally binding. (Reuters)

The government of Switzerland announced Friday that it would reform its definition of tax evasion to help other nations pursue citizens who dodge taxes with the help of Swiss banks. Since Switzerland did not define tax evasion as a crime until this announcement, it has become a haven for one third of the world's $7 trillion in hidden offshore funds. This is a blow to the Swiss bank UBS, which is accused of helping international investors avoid taxes from their home countries and has hidden behind Swiss law to justify its refusal to disclose the names of approximately 33,000 U.S. tax evaders. (New York Times)

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