The Obama administration signaled Monday that it would release Aymen Saeed Batarfi, a Yemeni prisoner held at Guantanamo Bay, as part of President Obama's promise to empty the controversial detention facility within a year. Batarfi's lawyers say he was arrested while on a humanitarian mission, but Justice Department prosecutors allege that he participated in a major al Qaeda battle as more than a humanitarian worker. (Associated Press)
Immigration courts are too backed up to provide speedy trials for tens of thousands of immigrants, according to a USA Today study released this weekend. Based on a review of court cases between 2003 and 2008, the study found that almost 90,000 accused illegal immigrants had to wait at least two years to have their case heard before a judge and 14,000 had to wait nearly five years. A spokesman for the American Immigration Lawyers Association said that U.S. immigration courts, which only employ 224 judges, simply do not have enough resources. San Francisco immigration judge Dana Marks told USA Today, "you could have a case that would take an hour (to hear). But I can't give you that hour of time for 14 months." (USA Today)
Among the hullabaloo surrounding the AIG retention bonus scandal, one thing is certain: speaking before Connecticut lawmakers Thursday, AIGFP exec Stephen Blake did not bend to public opinion. Blake defended the insurance company's $165 million in retention bonuses which have drawn the scorn of taxpayers following the government's $182.5 billion bailout of AIG. "The program did what it was supposed to do, and that was to retain employees," he said. While defending the bonuses, though, he affirmed that no rewards went to individuals who made credit default swaps, which are largely responsible for AIG's failure. (Associated Press)
He fought the law, and he lost. Faron White, a former north Alabama police officer, pleaded guilty Wednesday to stealing $60,000 from the police department where he was a sergeant, feigning his abduction, and fleeing to Las Vegas. White faked an elaborate struggle in his Alabama office to divert would-be pursuers but was found only three days later in Sin City. White, who was once named officer of the year by the Decatur Police Department, also said that a former citizen volunteer from the organized crime unit that he supervised aided his escape plan. White faces up to ten years in prison and a fine of $250,000. (Associated Press)
A judge will allow a lawyer for Chrissy Mazzeo to continue to collect evidence in connection to Mazzeo's civil lawsuit against Nevada Governor Jim Gibbons. Mazzeo, a Las Vegas cocktail waitress, accused Gibbons of assaulting her in a parking lot after a night of drinking at a Vegas bar. Though Gibbons was cleared of sexual assault charges by a police investigation, Mazzeo claims that her reputation and constitutional rights were harmed when Gibbons allegedly covered up a the 2006 assault. Gibbons' lawyer Pat Lundvall said that this would amount to nothing more than a waste of time because the suit lacks legitimate federal claims. (Las Vegas Sun)
The IRS has challenged a set of offshore tax deals set up by the now-infamous AIG Financial Products, according to court records. AIG essentially helped U.S. companies benefit from foreign tax laws for isolated tax payments through offshore banks it owned. Last year, AIG paid $61 million in disputed taxes to the government but now requests a refund, according to the lawsuit. Some of the same companies also made credit default swaps with AIG. IRS Commissioner Douglas Shulman said that the tax transaction "really perverts the foreign tax credit." (Wall Street Journal)
Alaska Governor Sarah Palin said Friday that she owes more than $500,000 in legal fees to her Anchorage-based lawyer Thomas van Flein for work defending her on ten lawsuits, which she did not name. But Palin specified that the lawsuits start with "the politically motivated Troopergate probe," in which Palin was accused of pressuring a state official to fire a state trooper embroiled in a personal dispute with the Palin family. Palin also said that she could not use public funds to pay her lawyer because "to do so could itself violate state law," but she might establish a legal fund to help pay the debt. (Anchorage Daily News)
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)
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)
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.
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)
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)
Sir Allen Stanford's alleged $8 billion Ponzi scheme doesn't only affect his American investors. In the Antiguan election this week, voters chose between the ruling party and the opposition, which welcomed the Texas financier to Antigua twenty years ago. The economy is the central issue in the election, as Antigua's Stanford International Bank was shut down by Caribbean regulators due to the Stanford fallout.* Prime Minister Baldwin Spencer says his opponent, Lester Bird, tried to "literally give away Antigua and Barbuda to Allen Stanford." In 2006, Byrd used his power as a former Prime Minister to nominate Stanford for a knighthood.* Election results are expected today. (Associated Press)
Sam Zell, the chairman and CEO of the newspaper conglomerate Tribune Co. hired a high-profile lawyer to represent him in an interview with the U.S. Attorney's office about possible connections to former governor Rod Blagojevich, the company said Wednesday. Zell's lawyer, Anton Valukas, specializes in white collar crime and has represented law firm Jenner & Block in a number of major cases. Among other charges, federal prosecutors have accused Blagojevich and his chief of staff John Harris of threatening to withhold public support from the sale of Wrigley Field, which is owned by Tribune Co., if the company did not fire members of the Chicago Tribune editorial board. (Chicago Tribune)
A report released by the Government Accountability Office today says Medicare home services spending increased 44 percent over five years due partially to fraud and abuse. Medicare home care services include visits by nurses and physical therapists for Medicare patients. Some lawmakers say that lax oversight enabled providers to take advantage of the system to bill for services they did not provide. Chuck Grassley, the top Republican on the Senate Finance Committee, harshly criticized Medicare oversight as it currently stands. "There's no excuse for Medicare officials neglecting payment problems," the Iowa senator told USA Today. The GAO report recommends implementing criminal background checks on home services providers to reduce cases of fraud. (USA Today)
Investigating whether Arizona policemen discriminate against Latinos while enforcing immigration laws, the House Judiciary Committee will call Arizona Sheriff Joe Arpaio to testify. Arpaio has become a hero of the anti-immigration movement for leading for a three-year crackdown on illegals in Arizona, which has included controversial tactics like occasional crime sweeps in mostly Hispanic neighborhoods. Arpaio claims that the hearings, chaired by Rep. John Conyers (D-MI) are politically motivated. "They want to keep putting the pressure on me, hoping that I go away," he said. "And that is not going to happen." (Arizona Republic)
Speaking before a House appropriations subcommittee Wednesday, SEC head Mary Schapiro warned that the SEC might be forced to make significant operations cuts if Congress didn't increase its funding The SEC was embarrassed this year by multiple failures to prevent several major alleged frauds. "I do not believe it would be wise for the SEC to retrench during such perilous times in our markets," she said. Schapiro asked the committee to make available $17 million from previous budgets that went unspent. (Washington Post)
Howard Richman, a former executive at the medical pharmaceutical company Biopure, pleaded guilty Wednesday to pretending to have cancer to dodge investigations into an alleged fraud. He even admitted to impersonating a doctor in a call to investigators to dodge the trial. Richman faked the illness to avoid an SEC investigation into whether Biopure executives lied to investors about the status of a blood substitute called Hemopure. After clinical trials, the FDA rejected the drug due to safety concerns, but Biopure told investors that the deal had been approved.(Associated Press)
Texas state lawmakers considered a GOP-backed bill Tuesday that would require voters to present photo identification at the polls, what Democrats call "a modern-day poll tax" because it disproportionately impacts minorities. Republicans claim that this law is necessary to prevent voter fraud, but have offered little evidence that such fraud is a problem. Dems, in the minority, called Attorney General Greg Abbott -- who spent $1.4 million probing voter fraud claims without finding a single vote -- to testify. But, backed by a GOPer, Abbott didn't show up. (Dallas Morning News)
New York Attorney General Andrew Cuomo is investigating whether the massive bonuses paid to Merrill Lynch executives were designed in part to give traders and incentive to mark down their shares, the Financial Times reports. That might suggest that B of A pressured Merrill to understate its fourth quarter earnings in order to make the companies subsequent gains under B of A appear larger. (Reuters)
E-mails released Monday indicated a number of previously unknown links between the Chicago-based Tribune Co. and the Governor Rod Blagojevich. Tribune Co. retained Marc Ganis as a sports business consultant to work with the Blagojevich administration to broker the sale of Wrigley Field. Ganis spoke to Blagojevich chief of staff John Harris about the declining state of the Chicago Tribune and openly expressed his desire for a spot on the 2016 Olympic Committee. Federal agents also allege that members of the Blagojevich administration pressured Nils Larson, an executive vice-president of Tribune Co., to fire members of the Tribune editorial board in exchange for the Governor's assistance in the sale of Wrigley Field. (Chicago Tribune)
The Texas Senate will decide today whether voters should be required to present photo identification at the polls. Texas Republicans argue that this is a necessary step to protect against voter fraud, but have produced little evidence that such fraud is a significant problem. Democrats criticize the measure, which will have an undue impact on minorities and the elderly, both key Democratic constituencies. Laws requiring photo identification at the polls have been approved in seven states, but State Sen. Eliot Shapleigh (D-El Paso) said that its only an effort by Republicans to scare off "enough eligible elderly, disabled, blacks and Hispanics to stay in power four more years, plain and simple." (Chron.com)
New York Attorney General Andrew Cuomo said in a letter Monday that he would continue to seek information on bonuses that Merrill Lynch paid to its employees. In a recent interview, Bank of America's CEO Ken Lewis refused to reveal information about these bonuses. But Cuomo maintains that as a recipient of bailout funds, B of A is obligated to disclose how they spent taxpayer money. Refusal to do so, he said, "fuels distrust and cynicism at a most sensitive time." (New York Times)
Documents released by a group of California Democrats indicate that they received thousands of dollars worth of gifts from lobbyists the day after Gov. Arnold Schwarzenegger declared California's fiscal emergency last December. Lobbyists for lawyers, firefighters and carpenters hosted a two-day retreat to influence lawmakers on California's budget passed in February. The lobbyists also paid for international travel, tickets to sporting events, and tens of thousands of dollars in restaurant tabs. The L.A. Times reports that each of the lobbyists' goals was represented in the budget. (L.A. Times)
A federal grand jury indicted a former high-ranking NASA official Friday for using a government position for his own profit. After playing an important role in George W. Bush's 2000 campaign, Courtney Stadd served as NASA's chief of staff and White House liaison until 2003. The indictment charges Stadd, after being named as "special government employee" for NASA in 2005, with diverting $9.6 million earmarked for earth science to one of his clients, Mississippi State University's GeoResources Institute. If convicted, Stadd could face 15 years in prison. (Washington Post)
Employees of Allen Stanford's companies won't avoid the fallout from his $8 billion Ponzi scheme, a court-appointed lawyer confirmed this weekend. The U.S. receiver assigned to oversee Stanford Financial Group announced he would lay off 1,000 employees immediately and without severance packages. Only 15 percent of the firm's current employees will remain to help draw down operations. A federal judge also froze the assets of 12,000 Stanford investors effective Monday. (Associated Press)
FDA scientists expressed concern this week about the recent approval of Menaflex, a device that treats a variety of knee injuries. The scientists claimed that the FDA approved Menaflex without proper clinical trials under fast-track rules that "apply to products that are similar to already-existing products." But FDA sources told the Wall Street Journal that Menaflex does not mirror any pre-existing knee treatment available in the United States and should have been considered more carefully. A former head of the FDA said that this is indicative of a fast-track system for the $200 billion per year industry that "has gotten out of control." (Wall Street Journal)
A federal grand jury indicted Bruce Karatz, the former CEO of real estate company KB Home, on Thursday for manipulating stock options to earn more than $230 million in three years. The indictment estimated that the backdating made Karatz's stock options $1.63 to $4.56 more valuable per share. Karatz has already paid a fine of $20 million to KB Home and the federal government for backdating stock options between 1999 and 2006. If convicted of all twenty counts of fraud and making false statements, Karatz will face 415 years in prison. (LA Times)
Darrell Dochow, an official at the Office of Thrift Supervision, retired quietly last Friday while under investigation for fraud. The U.S. Inspector General claims that Dochow allowed IndyMac to deceive its investors by reporting an $18 million deposit in a March 2008 financial disclosure document though the funds were not transferred until May. IndyMac filed for bankruptcy protection four months later. To investigators, writes ABC News, Dochow's retirement shows "how cozy government regulators have become with the banks and savings and loans they are supposed to be checking on." (ABC News)
The FEC will instiute a new fundraising rule designed to reduce the impact of lobbyists on elected leaders. Effective March 19, the rule requires PACs to disclose the names of lobbyists who collect contributions of more than $16,000 (sub. req.) from multiple sources. Currently, lobbyists can curry favor with lawmakers by collecting bundles of political contributions from personal and professional contacts. Disgruntled lobbyists tell Roll Call that they plan to dodge the restriction by hosting fundraisers registered under the names of multiple co-hosts, who could each raise $15,000. (Roll Call)
U.S. lawmakers suffered a minor setback Wednesday in their ongoing effort to close offshore tax havens. Mark Branson, an executive at the powerful Swiss bank UBS, apologized to a Senate subcommittee for helping Americans dodge taxes but he refused to disclose the names of the estimated remaining 33,000 U.S. clients accused of evading taxes with the help of UBS. Branson argued that he could not cooperate because full disclosure would violate Swiss criminal law, and told lawmakers, "the IRS is attempting to resolve this diplomatic dispute in a courtroom, which is neither productive, nor proper." (Associated Press)
The Treasury Department Inspector General reported on Wednesday that bank regulators knew in 2002 about financial instability at several banks owned by First National Banking Holding Co. but failed to act before it was too late. Those banks - in Arizona, California and Nevada - crashed last year because their management favored "growth and profits over appropriate risk management," according to the audit report. This follows the IG's criticism last month of the U.S. Office of Thrift Supervision for their insufficient oversight of IndyMac bank. In each of these cases, the IG's actions indicate the potential for increased government regulation of financial institutions. (Financial Week)
Franklin D. Raines, a prominent Democratic businessman, took advantage of a special program reserved for friends of a former Countrywide Financial CEO, claims Representative Darrell Issa (R-CA). Issa released documents Wednesday which indicate that Raines, the former CEO of Fannie Mae, received discounts including a 4.125 percent rate on his mortgage compared to the 5.1 percent prevailing rate for comparable loans. Raines also did not have to pay application or processing fees common for Countrywide's ordinary clients, according to Issa's documents. (Washington Post)
The infamous Allen Stanford hired a lawyer Tuesday to defend him against SEC charges that he defrauded investors out of $8 billion. The Dallas-based lawyer, Charles Meadows, specializes in tax litigation and white collar crime. The SEC has accused Stanford and two top aides of orchestrating a Ponzi scheme that it called a "massive ongoing fraud." We'd advise Meadows to keep a receipt. (Reuters)
Lawmakers are stepping up their efforts to go after offshore taxhavens. An executive of UBS, Mark Branson, will appear before the Senate Permanent Subcommittee on Investigations today. Reuters reports that the Subcommittee, chaired by Sen. Carl Levin (D-MI), will urge Branson to disclose the names of American investors accused of dodging U.S. taxes. Last month, UBS admitted to protecting clients from U.S. taxes and agreed to turn over 19,000 names to U.S. investigators, who are seeking information on nearly 52,000 concealed UBS clients. (Reuters)
Former California Republican Party Chairman Duf Sundheim received $900,000 in salary and benefits during the 2007-2008 election cycle, according to reports filed with the IRS. Sundheim received this money, including more than $43,000 per month for medical and automobile expenses, while launching the 527 political group California Republicans Aligned for Tomorrow. Sundheim's earnings drew criticism from state Republicans, including the former chairman of CRAFT, Jon Fleischman, who said, "It would appear from these filings that the sole purpose of CRAFT is to pay Sundheim's salary." (Sacramento Bee)
Lobbyists are scouring the recently passed $787 billion stimulus bill for opportunities to leverage tax breaks for their corporate clients. President Obama was elected promising to scale back the powerful reach of lobbyists in Washington. But Arthur "Jerry" Kremer, a Long Island lobbyist, says that business continues to thrive. With an increase in government spending, Kremer's clients in business and government "just feel they need somebody to speak in a louder voice for them." (Newsday)
Peter Kurer, the Chairman of UBS, sat on a committee in 2002 that is being accused of conspiring to defraud the U.S. government of tax revenue. Prosecutors believe that the "high level" executive committee knowingly withheld information relating to taxpayers' personal accounts. Though Kurer was not specifically named, the government report pinpointed UBS executives who "occupied positions at the highest levels of management." Other UBS executives, including Senior Executive Raoul Weil have already been charged. (Financial Week)
Former Vice President Dick Cheney must give a deposition in a trial involving an Iraq war protester who was arrested after confronting Mr. Cheney at the Beaver Creek ski resort in Colorado in 2006, ruled a federal judge on Monday. Steven Howards has sued five of Cheney's secret service agents, claiming that he was arrested for assault despite doing nothing more than harshly criticizing Cheney over the Iraq war. Until Monday, Cheney's lawyers had successfully argued that his deposition was not necessary. (New York Times)
Chutzpah Alert! In a footnote to a court filing, Bernard Madoff claimed that his wife should be allowed to keep nearly $70 million worth of assets, including the couple's Upper East Side penthouse, arguing that they aren't related to his alleged fraud, reports the Wall Street Journal. The claim was in response to a federal judge's move to has modify a prior order, allowing prosecutors to seek seizure of Madoff's assets. (CNBC)
A Dutch company that contracted with the US government to fill the nation's Strategic Petroleum Reserve has ties to the Iraqi oil-for-food scandal. Vitol Holding BV paid a fine of $17.5 million after pleading guilty in 2007 to paying kickbacks to Saddam Hussein's government in 2001-2002. The company also has had dealing with Iran, which potentially puts it in violation of the Iran Sanctions Act. A bipartisan group of lawmakers has called on Energy Secretary Steven Chu to review and perhaps cancel Vitol's contracts. (The Wall Street Journal)
Members of the House Defense Appropriations Subcommittee have received contributions totaling $7.8 million from the lobbying firm PMA and its clients since 1998, according to a study by the Center for Responsive Politics. Subcommittee chair John Murtha (D-PA) has taken the most -- almost $2.4 million. PMA, which was founded by a former Murtha aide, saw its Virginia offices raided by the FBI in November of 2008, in connection with a federal probe into whether it gave political contributions in return for earmarks for its clients. (Center for Responsive Politics)
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