* THE SCAM WALL STREET LEARNED FROM THE MAFIA
How America’s biggest banks took part in a nationwide bid-rigging conspiracy – until they were caught on tape
By Matt Taibbi, Rolling Stone
[…] But this just-completed trial in downtown New York against three faceless financial executives really was historic. Over 10 years in the making, the case allowed federal prosecutors to make public for the first time the astonishing inner workings of the reigning American crime syndicate, which now operates not out of Little Italy and Las Vegas, but out of Wall Street.
The defendants in the case – Dominick Carollo, Steven Goldberg and Peter Grimm – worked for GE Capital, the finance arm of General Electric. Along with virtually every major bank and finance company on Wall Street – not just GE, but J.P. Morgan Chase, Bank of America, UBS, Lehman Brothers, Bear Stearns, Wachovia and more – these three Wall Street wiseguys spent the past decade taking part in a breathtakingly broad scheme to skim billions of dollars from the coffers of cities and small towns across America. The banks achieved this gigantic rip-off by secretly colluding to rig the public bids on municipal bonds, a business worth $3.7 trillion. By conspiring to lower the interest rates that towns earn on these investments, the banks systematically stole from schools, hospitals, libraries and nursing homes – from “virtually every state, district and territory in the United States,” according to one settlement. And they did it so cleverly that the victims never even knew they were being cheated. No thumbs were broken, and nobody ended up in a landfill in New Jersey, but money disappeared, lots and lots of it, and its manner of disappearance had a familiar name: organized crime. […]
[…] More interesting, though, were the stories about political payoffs. In 2001, CDR hired a consultant named Ron White, a Philadelphia bond attorney who happened to be the chief fundraiser for then-mayor John Street. CDR gave White two tickets to the 2003 Super Bowl in San Diego plus a limo – a gift worth $10,000. As his “guest,” White took Corey Kemp, the city treasurer for Philadelphia, who, 16 days later, awarded CDR a $150,000 contract to advise the city on swap deals. But that wasn’t the end of the gravy train: CDR doled out those swap deals to selected banks, who in return kicked back $515,000 to CDR for steering city business their way.
So a mere $10,000 bribe to a politician – a couple of Super Bowl tickets and a limo – scored CDR a total of $665,000 of the public’s money. If you want to know why Wall Street has been enjoying record profits, here’s your answer: Corruption is a business model that brings in $66 for every dollar you invest. […]
[…] Over the years, many in the public have become numb to news of financial corruption, partly because too many of these stories involve banker-on-banker crime. The notorious Abacus deal involving Goldman Sachs, for instance, involved a hedge-fund billionaire ripping off a couple of European banks – who cares? But the bid-rigging scandal laid bare in USA v. Carollo is a totally different animal. This is the world’s biggest banks stealing money that would otherwise have gone toward textbooks and medicine and housing for ordinary Americans, and turning the cash into sports cars and bonuses for the already rich. It’s the equivalent of robbing a charity or a church fund to pay for lap dances. […]
* THE FINANCIAL CRASH IN ICELAND IN 6 MINUTES ACCORDING TO ABC’s 20/20
In the early 21st century, Iceland experienced one of the most spectacular cycles of boom and bust in history.
For centuries, Iceland was a simple fishing society, largely shut off from mainland Europe. The people survived off the sheep in the meadows and the fish in the sea. For cultural sustenance they had elaborate sagas — intricate tales of fairies and goblins, heroes and ghosts — that would inspire J.R.R. Tolkien and other fantasy writers.
At the peak of Iceland’s boom, Stefan Alfsson left his fishing boat and started trading commodities for an investment bank. “We could do more,” he said. “I got a bigger house, bigger and more cars, better snowmobiles.”
Then a modern saga began to unfold — that of a nation of fishermen who became millionaires, only to lose it all and return to the seas.
* ICELAND: THE MOUSE THAT ROARED (BIRGITTA JONSDOTTIR)
* ACTIVIST CHURCHES BAIT IRS, BUT AGENCY WON’T BIT SO FAR
By Nanette Byrnes, Reuters
[…] The money involved is enormous. Combined, federal tax breaks on donations to churches and exemptions from state and local property taxes likely add up to something on the order of $25 billion in lost revenue each year.
Last year churches received $96 billion in tax-free contributions, according to estimates compiled by the Center on Philanthropy at Indiana University.
Unlike other types of charities, churches do not have to file financial statements with the government. There are only rough estimates of church endowment or investment income, which is also tax-free and believed to be larger than annual contributions.
Using tax data from the U.S. Congress’s Joint Committee on Taxation and data on giving to churches from the Indiana Center, a Reuters analysis found that tax breaks on church giving shaved $12 billion or so from total U.S. tax collections in 2011 and approximately $145 billion over the last decade.
The property tax break is probably even bigger. In their 2011 book “Politics, Taxes, and the Pulpit,” law professors Nina Crimm and Laurence Winer calculated that houses of worship received $12.7 billion in property tax exemptions on $685 billion of property in 2006, a figure large enough to have played a role in city and state budget deficits of recent years.
In big cities the numbers can be dramatic. New York City’s 9,500 churches, synagogues, and mosques, for example, will avoid $626.9 million in property taxes this year thanks to their tax-free status, according to the city’s Independent Budget Office. […]
[…] The IRS did not respond to Reuters questions about its enforcement activities in recent years, or explain why they seem to have ended abruptly in 2009. […]
* POLICE CLASH WITH PROTESTERS AT #MicCheckWallStreet MARCH ON 6-20-12
Video of a pots and pans (“casseroles”) march on 6/20/2012 in Seattle organized by #MicCheckWallStreet (http://miccheckwallst.org) protesting student debt and rising interest rates. Residents bang pots in solidarity. Police arrest someone. People yell at the cops arresting the person.
* PRISONS, PRIVATIZATION, PATRONAGE
By Paul Krugman, NYTimes
Over the past few days, The New York Times has published several terrifying reports about New Jersey’s system of halfway houses — privately run adjuncts to the regular system of prisons. The series is a model of investigative reporting, which everyone should read. But it should also be seen in context. The horrors described are part of a broader pattern in which essential functions of government are being both privatized and degraded.
First of all, about those halfway houses: In 2010, Chris Christie, the state’s governor — who has close personal ties to Community Education Centers, the largest operator of these facilities, and who once worked as a lobbyist for the firm — described the company’s operations as “representing the very best of the human spirit.” But The Times’s reports instead portray something closer to hell on earth — an understaffed, poorly run system, with a demoralized work force, from which the most dangerous individuals often escape to wreak havoc, while relatively mild offenders face terror and abuse at the hands of other inmates. […]
* I AM NOT MOVING – SHORT FILM – OCCUPY