It is very important to not lose a grasp on right and wrong in this new environment of fraud and deceit....your government is in fact allowing fraud and deceit to rule. We also want to remember that we still have the power to go back and prosecute and claw-back these trillions in fraudulent profits. I read every day of large numbers of law students joining the ranks of the unemployed and talk with my Progressive lawyer friends about recruiting a new generation of justice lawyers. I myself will be taking the bar exam to fight -------join me! We don't have to sit back and let criminality take hold of our nation.
Take note that the ACLU has been silent on much of what has happened....the NAACP seems strangely silent to me, as are the labor leaders as I've said before.......we need people for justice to take hold of these organizations and we need to be guarded by these organization's activities today. ACLU MARYLAND AND EDUCATION REFORM? WE ARE WATCHING YOUR FAILURE TO ADVOCATE CIVIL JUSTICE AND PROTECT PUBLIC EDUCATION!
I spoke with a young woman in the march in Baltimore who had come from New York. She was in the education field so I told her my story about charters and privatizing education....she sees it she says...but what are the choices...our public schools are bad. I explained the difference between a democratic public education that teaches civics, political rights, and open government as opposed to vocational schooling that deliberately focuses on job skills training having none of the above. I said to the young lady-----you wouldn't be shouting 'THIS IS WHAT DEMOCRACY LOOKS LIKE' if we lose democratic, public education. She said 'you know----they don't say anything about that in the schools in New York'.......YOU HAD BETTER BELIEVE THERE'S A REASON FOR THAT! WE NEED AN APP FOR THAT!
Below you'll see examples of open fraud and government neglect.......third world traits.
Police turn protesters away from Inner Harbor pavilions United Workers target mega-mall owner, General Growth Properties, for its "poverty wages" in a four-mile march.
Fern Shen May 20, 2012 at 11:11 am Baltimore Brew
Baltimore police blocking a group trying to march outside Harborplace to protest worker pay and conditions there.
Categories Before protesters arrived at Baltimore’s Inner Harbor yesterday to call attention to working conditions and “poverty wages” for the workers who cook, chop, clean, dish-wash and bus tables there, one of them waited to talk to a reporter.
“They treated us like machines – like we didn’t have any emotions or needs,” said Raquel Rojas, a former Cheesecake Factory line cook, standing with leaders of the group organizing the protest, Baltimore-based United Workers.org.
As Rojas spoke in Spanish, her words translated by a member of the group, Baltimore police could be seen in small clusters around the pavilions.
There were also plain-clothed security guards, apparently hired by mega-mall owner General Growth Properties (GGP). At points, they locked the pavilion doors, letting puzzled pedestrians through individually.
United Workers has been pressing GGP, Cordish Companies (manager of the Power Plant attractions) and other firms that own or operate property at the city’s tourist waterfront to make tenants pay a living wage and support education and health care for workers and their families.
United Workers won a “living wage” for some contract workers at the Baltimore Orioles’ Camden Yards a few years ago.
Baltimore police at Harborplace yesterday. (Photo by Fern Shen)
Saying that GGP has not replied to the group’s letters, they organized yesterday’s march to “Occupy the GGP.”
Chicago-based GGP has not responded to a message seeking comment from The Brew.
Rojas said the $9-per-hour job at Cheesecake Factory making pizzas and salads actually paid less because of her employer’s practices.
The 44-year-old said the restaurant changed the schedule without telling her and refused to pay her for $1,400 of work.
After she got sick (“I had mono”), they “punished me” and reduced her hours, she claimed.
Cheesecake Factory: No Comment
United Workers said such practices are widespread at restaurant and other tourist-oriented establishments at the Inner Harbor.
Cheesecake Factory senior manager Connie Fogle said she could not comment. She referred a reporter to the company’s corporate office, where a message has not yet been returned.
“With this kind of pay one job is not enough – I have had to work two or three jobs,” Rojas said. “I have two children and three grandchildren who depend on me.”
The group also singled out Chipotle located at the Pratt Street pavilion.
It called on the Mexican-styled grill (which lauds its advocacy of “local food”) to improve the wages and conditions for farm workers in its supply chain.
Four-Mile March
When about 125 protesters arrived at the Inner Harbor – singing “This Little Light of Mine” and carrying signs that said “Respect For All” and “Dignity” – they moved in a long line, past tourists.
They had started four miles away, in west Baltimore, walking through Mondawmin Mall (also owned by General Growth Properties) and marching down Pennsylvania Avenue and other streets to downtown Baltimore.
United Workers, who started their protest march miles away, arrive at the Inner Harbor. (Photo by Fern Shen)
Climbing up the outside steps of the Light Street Pavilion, they used open air walkways to cross Light Street and proceed through McKeldin Square.
Police: “This is Private Property”
But when they attempted to circle back and cross Light Street at ground level and take their protest near or in the Pratt Street Pavilion, Lieutenant Anthony Proctor stopped them.
“You need a permit to be here,” he said.
“What if we just we want to go onto the pavement?” asked Nathaniel Norton, an attorney with the Legal Aid Bureau of Baltimore, pointing to the area between the pavilions, pretty much the center of Baltimore waterfront tourism.
The group marched down Pennsylvania Avenue on their way to the Harbor. (Photo by Fern Shen)
“That’s private property . . . My understanding is they don’t want you here,” Lt. Proctor said.
He directed them to the front of the GGP-owned Gallery Mall, back from the water on the other side of Pratt Street.
Lt. Proctor said the protest would be “disruptive” and distract attention from the entertainers who perform at the waterfront spot.
Norton said police were “preventing them from exercising their First Amendment rights.”
The protesters retreated to the corner of Pratt and Light streets, in front of the Gallery, and continued their protest.
_________________________________________________________
I SPOKE EARLIER ABOUT UNDER ARMOUR'S RECEIPT OF BUSINESS TAX CREDITS TO BUILD IN AFFLUENT HARBOR ENTERPRISE ZONE.....BILLION DOLLAR COMPANY GETTING TAX BREAKS BUILDS A MUCH NEEDED ATHLETIC FIELD.....IN AN AFFLUENT NEIGHBORHOOD AND AS THE NUMBER ONE CONTRIBUTOR......DONATES TO NON-PROFIT GRANTING AGENCIES WHO FUNNEL EVEN MORE BACK INTO THE SAME NEIGHBORHOODS......THEY ARE LAUGHING ALL THE WAY TO YOUR GOVERNMENT COFFERS! AS CARL STOKES, CHAIR OF THE FINANCE COMMITTEE GIVING ALL THIS LARGESSE.....THE CITY HAS PLENTY OF MONEY....IT COULD EASILY FUND ITS SCHOOLS----WE THANK HIM FOR THAT STATEMENT!
City panel closes meeting over Under Armour financing
Mark Reutter May 21, 2012 at 4:59 pm Baltimore Brew
Categories The Baltimore Board of Finance today closed its monthly meeting to the press and public in order to discuss $35 million in tax increment financing for the proposed expansion of Under Armour’s Locust Point headquarters.
Steve Kraus, clerk of the board and chief of the city’s bureau of treasury management, invoked an exemption to Maryland’s Open Meetings Act that allows public meetings to be closed when disclosure of financial or proprietary information would injure a private party.
Kraus said today’s presentation to the board by the Baltimore Development Corp. (BDC) involved “issues related to financing sensitive in nature.”
Mayor Stephanie Rawlings-Blake is backing a plan to use city TIF bonds to pay up to $35 million in infrastructure improvements in and around the Tide Point offices of the sports-apparel maker.
These would include a new athletic field for Under Armour employees and nearby residents, a biking and walking trail to connect Tide Point to Fort Avenue, relocating a syrup storage unit and upgrading streets, including an extension of Key Highway.
Under Armour proposes to build 550,000 square feet of new buildings as part of its expansion and create 617 jobs over the next nine years, according to an earlier presentation by the BDC.
Members of the finance board include City Comptroller Joan M. Pratt and Finance Director Harry E. Black. Both of them voted to close today’s meeting.
The board’s approval of TIF financing means that the proposal will go before the City Council.
______________________________________________________
Heist of the century: Wall Street's role in the financial crisis Wall Street bankers could have averted the global financial crisis, so why didn't they?
In this exclusive extract from his book Inside Job, Charles Ferguson argues that they should be prosecuted
'When did Wall street know there was a bubble and that they could game it?' Photograph: Eric Thayer/Reuters/Corbis Bernard L Madoff ran the biggest Ponzi scheme in history, operating it for 30 years and causing cash losses of $19.5bn. Shortly after the scheme collapsed and Madoff confessed in 2008, evidence began to surface that for years, major banks had suspected he was a fraud. None of them reported their suspicions to the authorities, and several banks decided to make money from him without, of course, risking any of their own funds. Theories about his fraud varied. Some thought he might have access to insider information. But quite a few thought he was running a Ponzi scheme. Goldman Sachs executives paid a visit to Madoff to see ifthey should recommend him to clients. A partner later recalled: "Madoff refused to let them do any due diligence on the funds and when asked about the firm's investment strategy they couldn't understand it. Goldman not only blacklisted Madoff in the asset management division but banned its brokerage from trading with the firm too."
UBS headquarters forbade investing any bank or client money in Madoff accounts, but created or worked with several Madoff feeder funds. A memo to one of these in 2005 contained the following, in large boldface type: "Not to do: ever enter into a direct contact with Bernard Madoff!!!"
JPMorgan Chase had more evidence, because it served as Madoff's primary banker for more than 20 years. The lawsuit filed by the Madoff bankruptcy trustee against JPMorgan Chase makes astonishing reading. More than a dozen senior JPMorgan Chase bankers discussed a long list of suspicions.
The Securities and Exchanges Commission has been deservedly criticised for not following up on years of complaints about Madoff, many of which came from a Boston investigator, Harry Markopolos, whom they treated as a crank. But suppose a senior executive at Goldman Sachs, UBS or JPMorgan Chase had called the SEC and said: "You really need to take a close look at Bernard Madoff. He must be working a scam."
But not a single bank that had suspicions about Madoff made such a call. Instead, they assumed he was probably a crook, but either just left him alone or were happy to make money from him.
It is no exaggeration to say that since the 1980s, much of the global financial sector has become criminalised, creating an industry culture that tolerates or even encourages systematic fraud. The behaviour that caused the mortgage bubble and financial crisis of 2008 was a natural outcome and continuation of this pattern, rather than some kind of economic accident.
This behaviour is criminal. We are talking about deliberate concealment of financial transactions that aided terrorism, nuclear weapons proliferation and large-scale tax evasion; assisting in major financial frauds and in concealment of criminal assets; and committing frauds that substantially worsened the worst financial bubbles and crises since the Depression.
And yet none of this conduct has been punished in any significant way.
Total fines on the banks for their role in the Enron fraud, the internet bubble, violation of sanctions against countries including Iran and money-laundering activities appear to be far less than 1% of financial sector profits and bonuses during the same period.
There have been very few prosecutions and no criminal convictions of large US financial institutions or their senior executives. Where individuals not linked to major banks have committed similar offences, they have been treated far more harshly.
The Obama government has rationalised its failure to prosecute anyone (literally, anyone at all) for bubble-related crimes by saying that while much of Wall Street's behaviour was unwise or unethical, it wasn't illegal. With apologies for my vulgarity, this is complete horseshit.
When the government is really serious about something – preventing another 9/11, or pursuing major organised crime figures – it has many tools at its disposal and often uses them. There are wiretaps and electronic eavesdropping. There are undercover agents who pretend to be criminals in order to entrap their targets. There are National Security Letters, an aggressive form of administrative subpoena that allows US authorities to secretly obtain almost any electronic record – complete with a gag order making it illegal for the target of the subpoena to tell anyone about it. There are special prosecutors, task forces and grand juries. When Patty Hearst was kidnapped in 1974, the FBI assigned hundreds of agents to the case.
In organised crime investigations, the FBI and government prosecutors often start at the bottom in order to get to the top. They use the well-established technique of nailing lower-level people and then offering them a deal if they inform on and/or testify about their superiors – whereupon the FBI nails their superiors, and does the same thing to them, until climbing to the top of the tree. There is also the technique of nailing people for what can be proven against them, even if it's not the main offence. Al Capone was never convicted of bootlegging, large-scale corruption or murder; he was convicted of tax evasion.
A reasonable list of prosecutable crimes committed during the bubble, the crisis, and the aftermath period by financial services firms includes: securities fraud, accounting fraud, honest services violations, bribery, perjury and making false statements to US government investigators, Sarbanes-Oxley violations (false accounting), Rico (Racketeer Influenced and Criminal Organisations Act) offences, federal aid disclosure regulations offences and personal conduct offences (drug use, tax evasion etc).
Let's take the example of securities fraud. Where to begin?
When did Wall Street insiders know there was a really serious sub-prime mortgage bubble, and that they could game it? Many of the clever ones knew by about 2004, when Howie Hubler at Morgan Stanley first started to bet against the worst securities with the approval of his management. But you can only make money betting against a bubble as it unravels. As long as there was room for the bubble to grow, Wall Street's overwhelming incentive was to keep it going. But when they saw that the bubble was ending, their incentives changed. And we therefore know that many on Wall Street realised there was a huge bubble by late 2006, because that's when they started massively betting on its collapse.
Here, I must briefly mention a problem with Michael Lewis's generally superb financial journalism. In his book The Big Short, Lewis leaves the impression that Wall Street was blindly running itself off a cliff, whereas a few wild and crazy, off-the-beaten-track, adorably weird loners figured out how to short the mortgage market and beat the system. With all due respect to Mr Lewis, it didn't happen like that. The Big Short was seriously big business, and much of Wall Street was ruthlessly good at it.
To begin with, a number of big hedge funds figured it out. Unlike investment banks, however, they couldn't make serious money by securitising loans and selling CDOs (collateralised debt obligations), so they had to wait until the bubble was about to burst and make their money from the collapse. And this they did. Major hedge funds including Magnetar, Tricadia, Harbinger Capital, George Soros, and John Paulson made billions of dollars each by betting against mortgage securities as the bubble ended, and all of them worked closely with Wall Street in order to do so.
In fairness to Mr Lewis, it is true that in several major cases – most notably Citigroup, Merrill Lynch, Lehman and Bear Stearns – senior management was indeed disconnected and thus clueless, allowed their employees to take advantage too long and therefore destroyed their own firms.
But cluelessness was most definitely not an issue with the senior management of Goldman Sachs, JPMorgan Chase and Morgan Stanley. As we saw, Morgan Stanley started betting against the bubble as early as 2004. Conversely, JPMorgan Chase mostly just remained prudently above the junk mortgage fray. Goldman Sachs, though, was in a class by itself. It made billions of dollars by betting against the very same stuff that it had been making billions selling only a year or two before.
Almost all the prospectuses and sales material on mortgage-backed bonds sold from 2005 until 2007 were a compound of falsehoods. And as the bubble peaked and started to collapse, executives repeatedly lied about their companies' financial condition. In some cases, they also concealed other material information, such as the extent to which executives were selling or hedging their own stock holdings because they knew their firms were about to collapse.
In some cases, we have evidence of senior executive knowledge of and involvement in misrepresentations. For example, quarterly presentations to investors are nearly always made by the CEO or chief financial officer of the firm; if lies were told in these presentations, or if material facts were omitted, the responsibility lies with senior management. In other cases, such as Bear Stearns, we have evidence from civil lawsuits that senior executives were directly involved in selling securities whose prospectuses allegedly contained lies and omissions.
The Rico Act provides for severe criminal (and civil) penalties for operating a criminal organisation. It specifically enables prosecution of the leaders of a criminal organisation for having ordered or assisted others to commit crimes. It also provides that racketeers must forfeit all ill-gotten gains obtained through a pattern of criminal activity, and allows government prosecutors to obtain pre-trial restraining orders to seize defendants' assets. Finally, it provides for criminal prosecution of corporations that employ Rico offenders.
Rico was explicitly intended to cover organised financial crime as well as violent criminal organisations such as the mafia and drug cartels. A great deal of the behaviour that occurred during the bubble would appear to fall under Rico statutes. Moreover, pre-trial asset seizure is a widely and successfully used technique in combating organised crime, and asset seizures now generate more tha $1bn a year for the US government. However, there has not been a single Rico prosecution related to the financial crisis, nor has a single Rico restraining order been issued to seize the assets of any individual banker or any firm.
It is important to note here that these asset seizures would not merely represent justice for offenders but for victims as well. US law allows seized assets to be used to compensate victims. In this case, the potential economic impact of seizures could be enormous.
Finally, personal conduct subject to criminal prosecution might range from possession and use of drugs, such as marijuana and cocaine, to hiring of prostitutes, employment of prostitutes for business purposes, fraudulent billing of personal or illegal services as business expenses (sexual services, strip club and nightclub patronage), fraudulent use or misappropriation of corporate assets or services for personal use (eg use of corporate jets), personal tax evasion and a variety of other offences.
I should perhaps make clear here that I'm not enthusiastic about prosecuting people for possession or use of marijuana, which I think should be legal. In general, I tend to think that anything done by two healthy consenting adults, including sex for pay, should be legal as well.
But the circumstances here are not ordinary. First, there is once again a vast disparity between the treatment of ordinary people and investment bankers. Every year, about 50,000 people are arrested in New York City for possession of marijuana – most of them ordinary people, not criminals, whose only offence was to accidentally end up within the orbit of a police officer. Not a single one of them is ever named Jimmy Cayne, despite the fact that the marijuana habit of the former CEO of Bear Stearns has been discussed multiple times in the national media (his predecessor in the job, Ace Greenberg, called him a "dope-smoking megalomaniac").
There is also a second, even more serious, point about this. If the supposed reason for failure to prosecute is the difficulty of making cases, then there is an awfully easy way to get a lot of bankers to talk. It is a technique used routinely in organised crime cases. What is this, if not organised?
As time passes, criminal prosecution of bubble-era frauds will become even more difficult, even impossible, because the statute of limitations for many of these crimes is short – three to five years. So an immense opportunity for both justice and public education will soon be lost. In some circumstances, cases can be opened or reopened after the statute of limitations has expired, if new evidence appears; but finding new evidence will grow more difficult with time as well. And there is no sign whatsoever that the Obama administration is interested.
Charles Ferguson will appear at the Edinburgh international book festival on Sunday 12 August.
Take note that the ACLU has been silent on much of what has happened....the NAACP seems strangely silent to me, as are the labor leaders as I've said before.......we need people for justice to take hold of these organizations and we need to be guarded by these organization's activities today. ACLU MARYLAND AND EDUCATION REFORM? WE ARE WATCHING YOUR FAILURE TO ADVOCATE CIVIL JUSTICE AND PROTECT PUBLIC EDUCATION!
I spoke with a young woman in the march in Baltimore who had come from New York. She was in the education field so I told her my story about charters and privatizing education....she sees it she says...but what are the choices...our public schools are bad. I explained the difference between a democratic public education that teaches civics, political rights, and open government as opposed to vocational schooling that deliberately focuses on job skills training having none of the above. I said to the young lady-----you wouldn't be shouting 'THIS IS WHAT DEMOCRACY LOOKS LIKE' if we lose democratic, public education. She said 'you know----they don't say anything about that in the schools in New York'.......YOU HAD BETTER BELIEVE THERE'S A REASON FOR THAT! WE NEED AN APP FOR THAT!
Below you'll see examples of open fraud and government neglect.......third world traits.
Police turn protesters away from Inner Harbor pavilions United Workers target mega-mall owner, General Growth Properties, for its "poverty wages" in a four-mile march.
Fern Shen May 20, 2012 at 11:11 am Baltimore Brew
Baltimore police blocking a group trying to march outside Harborplace to protest worker pay and conditions there.
Categories Before protesters arrived at Baltimore’s Inner Harbor yesterday to call attention to working conditions and “poverty wages” for the workers who cook, chop, clean, dish-wash and bus tables there, one of them waited to talk to a reporter.
“They treated us like machines – like we didn’t have any emotions or needs,” said Raquel Rojas, a former Cheesecake Factory line cook, standing with leaders of the group organizing the protest, Baltimore-based United Workers.org.
As Rojas spoke in Spanish, her words translated by a member of the group, Baltimore police could be seen in small clusters around the pavilions.
There were also plain-clothed security guards, apparently hired by mega-mall owner General Growth Properties (GGP). At points, they locked the pavilion doors, letting puzzled pedestrians through individually.
United Workers has been pressing GGP, Cordish Companies (manager of the Power Plant attractions) and other firms that own or operate property at the city’s tourist waterfront to make tenants pay a living wage and support education and health care for workers and their families.
United Workers won a “living wage” for some contract workers at the Baltimore Orioles’ Camden Yards a few years ago.
Baltimore police at Harborplace yesterday. (Photo by Fern Shen)
Saying that GGP has not replied to the group’s letters, they organized yesterday’s march to “Occupy the GGP.”
Chicago-based GGP has not responded to a message seeking comment from The Brew.
Rojas said the $9-per-hour job at Cheesecake Factory making pizzas and salads actually paid less because of her employer’s practices.
The 44-year-old said the restaurant changed the schedule without telling her and refused to pay her for $1,400 of work.
After she got sick (“I had mono”), they “punished me” and reduced her hours, she claimed.
Cheesecake Factory: No Comment
United Workers said such practices are widespread at restaurant and other tourist-oriented establishments at the Inner Harbor.
Cheesecake Factory senior manager Connie Fogle said she could not comment. She referred a reporter to the company’s corporate office, where a message has not yet been returned.
“With this kind of pay one job is not enough – I have had to work two or three jobs,” Rojas said. “I have two children and three grandchildren who depend on me.”
The group also singled out Chipotle located at the Pratt Street pavilion.
It called on the Mexican-styled grill (which lauds its advocacy of “local food”) to improve the wages and conditions for farm workers in its supply chain.
Four-Mile March
When about 125 protesters arrived at the Inner Harbor – singing “This Little Light of Mine” and carrying signs that said “Respect For All” and “Dignity” – they moved in a long line, past tourists.
They had started four miles away, in west Baltimore, walking through Mondawmin Mall (also owned by General Growth Properties) and marching down Pennsylvania Avenue and other streets to downtown Baltimore.
United Workers, who started their protest march miles away, arrive at the Inner Harbor. (Photo by Fern Shen)
Climbing up the outside steps of the Light Street Pavilion, they used open air walkways to cross Light Street and proceed through McKeldin Square.
Police: “This is Private Property”
But when they attempted to circle back and cross Light Street at ground level and take their protest near or in the Pratt Street Pavilion, Lieutenant Anthony Proctor stopped them.
“You need a permit to be here,” he said.
“What if we just we want to go onto the pavement?” asked Nathaniel Norton, an attorney with the Legal Aid Bureau of Baltimore, pointing to the area between the pavilions, pretty much the center of Baltimore waterfront tourism.
The group marched down Pennsylvania Avenue on their way to the Harbor. (Photo by Fern Shen)
“That’s private property . . . My understanding is they don’t want you here,” Lt. Proctor said.
He directed them to the front of the GGP-owned Gallery Mall, back from the water on the other side of Pratt Street.
Lt. Proctor said the protest would be “disruptive” and distract attention from the entertainers who perform at the waterfront spot.
Norton said police were “preventing them from exercising their First Amendment rights.”
The protesters retreated to the corner of Pratt and Light streets, in front of the Gallery, and continued their protest.
_________________________________________________________
I SPOKE EARLIER ABOUT UNDER ARMOUR'S RECEIPT OF BUSINESS TAX CREDITS TO BUILD IN AFFLUENT HARBOR ENTERPRISE ZONE.....BILLION DOLLAR COMPANY GETTING TAX BREAKS BUILDS A MUCH NEEDED ATHLETIC FIELD.....IN AN AFFLUENT NEIGHBORHOOD AND AS THE NUMBER ONE CONTRIBUTOR......DONATES TO NON-PROFIT GRANTING AGENCIES WHO FUNNEL EVEN MORE BACK INTO THE SAME NEIGHBORHOODS......THEY ARE LAUGHING ALL THE WAY TO YOUR GOVERNMENT COFFERS! AS CARL STOKES, CHAIR OF THE FINANCE COMMITTEE GIVING ALL THIS LARGESSE.....THE CITY HAS PLENTY OF MONEY....IT COULD EASILY FUND ITS SCHOOLS----WE THANK HIM FOR THAT STATEMENT!
City panel closes meeting over Under Armour financing
Mark Reutter May 21, 2012 at 4:59 pm Baltimore Brew
Categories The Baltimore Board of Finance today closed its monthly meeting to the press and public in order to discuss $35 million in tax increment financing for the proposed expansion of Under Armour’s Locust Point headquarters.
Steve Kraus, clerk of the board and chief of the city’s bureau of treasury management, invoked an exemption to Maryland’s Open Meetings Act that allows public meetings to be closed when disclosure of financial or proprietary information would injure a private party.
Kraus said today’s presentation to the board by the Baltimore Development Corp. (BDC) involved “issues related to financing sensitive in nature.”
Mayor Stephanie Rawlings-Blake is backing a plan to use city TIF bonds to pay up to $35 million in infrastructure improvements in and around the Tide Point offices of the sports-apparel maker.
These would include a new athletic field for Under Armour employees and nearby residents, a biking and walking trail to connect Tide Point to Fort Avenue, relocating a syrup storage unit and upgrading streets, including an extension of Key Highway.
Under Armour proposes to build 550,000 square feet of new buildings as part of its expansion and create 617 jobs over the next nine years, according to an earlier presentation by the BDC.
Members of the finance board include City Comptroller Joan M. Pratt and Finance Director Harry E. Black. Both of them voted to close today’s meeting.
The board’s approval of TIF financing means that the proposal will go before the City Council.
______________________________________________________
Heist of the century: Wall Street's role in the financial crisis Wall Street bankers could have averted the global financial crisis, so why didn't they?
In this exclusive extract from his book Inside Job, Charles Ferguson argues that they should be prosecuted
'When did Wall street know there was a bubble and that they could game it?' Photograph: Eric Thayer/Reuters/Corbis Bernard L Madoff ran the biggest Ponzi scheme in history, operating it for 30 years and causing cash losses of $19.5bn. Shortly after the scheme collapsed and Madoff confessed in 2008, evidence began to surface that for years, major banks had suspected he was a fraud. None of them reported their suspicions to the authorities, and several banks decided to make money from him without, of course, risking any of their own funds. Theories about his fraud varied. Some thought he might have access to insider information. But quite a few thought he was running a Ponzi scheme. Goldman Sachs executives paid a visit to Madoff to see ifthey should recommend him to clients. A partner later recalled: "Madoff refused to let them do any due diligence on the funds and when asked about the firm's investment strategy they couldn't understand it. Goldman not only blacklisted Madoff in the asset management division but banned its brokerage from trading with the firm too."
UBS headquarters forbade investing any bank or client money in Madoff accounts, but created or worked with several Madoff feeder funds. A memo to one of these in 2005 contained the following, in large boldface type: "Not to do: ever enter into a direct contact with Bernard Madoff!!!"
JPMorgan Chase had more evidence, because it served as Madoff's primary banker for more than 20 years. The lawsuit filed by the Madoff bankruptcy trustee against JPMorgan Chase makes astonishing reading. More than a dozen senior JPMorgan Chase bankers discussed a long list of suspicions.
The Securities and Exchanges Commission has been deservedly criticised for not following up on years of complaints about Madoff, many of which came from a Boston investigator, Harry Markopolos, whom they treated as a crank. But suppose a senior executive at Goldman Sachs, UBS or JPMorgan Chase had called the SEC and said: "You really need to take a close look at Bernard Madoff. He must be working a scam."
But not a single bank that had suspicions about Madoff made such a call. Instead, they assumed he was probably a crook, but either just left him alone or were happy to make money from him.
It is no exaggeration to say that since the 1980s, much of the global financial sector has become criminalised, creating an industry culture that tolerates or even encourages systematic fraud. The behaviour that caused the mortgage bubble and financial crisis of 2008 was a natural outcome and continuation of this pattern, rather than some kind of economic accident.
This behaviour is criminal. We are talking about deliberate concealment of financial transactions that aided terrorism, nuclear weapons proliferation and large-scale tax evasion; assisting in major financial frauds and in concealment of criminal assets; and committing frauds that substantially worsened the worst financial bubbles and crises since the Depression.
And yet none of this conduct has been punished in any significant way.
Total fines on the banks for their role in the Enron fraud, the internet bubble, violation of sanctions against countries including Iran and money-laundering activities appear to be far less than 1% of financial sector profits and bonuses during the same period.
There have been very few prosecutions and no criminal convictions of large US financial institutions or their senior executives. Where individuals not linked to major banks have committed similar offences, they have been treated far more harshly.
The Obama government has rationalised its failure to prosecute anyone (literally, anyone at all) for bubble-related crimes by saying that while much of Wall Street's behaviour was unwise or unethical, it wasn't illegal. With apologies for my vulgarity, this is complete horseshit.
When the government is really serious about something – preventing another 9/11, or pursuing major organised crime figures – it has many tools at its disposal and often uses them. There are wiretaps and electronic eavesdropping. There are undercover agents who pretend to be criminals in order to entrap their targets. There are National Security Letters, an aggressive form of administrative subpoena that allows US authorities to secretly obtain almost any electronic record – complete with a gag order making it illegal for the target of the subpoena to tell anyone about it. There are special prosecutors, task forces and grand juries. When Patty Hearst was kidnapped in 1974, the FBI assigned hundreds of agents to the case.
In organised crime investigations, the FBI and government prosecutors often start at the bottom in order to get to the top. They use the well-established technique of nailing lower-level people and then offering them a deal if they inform on and/or testify about their superiors – whereupon the FBI nails their superiors, and does the same thing to them, until climbing to the top of the tree. There is also the technique of nailing people for what can be proven against them, even if it's not the main offence. Al Capone was never convicted of bootlegging, large-scale corruption or murder; he was convicted of tax evasion.
A reasonable list of prosecutable crimes committed during the bubble, the crisis, and the aftermath period by financial services firms includes: securities fraud, accounting fraud, honest services violations, bribery, perjury and making false statements to US government investigators, Sarbanes-Oxley violations (false accounting), Rico (Racketeer Influenced and Criminal Organisations Act) offences, federal aid disclosure regulations offences and personal conduct offences (drug use, tax evasion etc).
Let's take the example of securities fraud. Where to begin?
When did Wall Street insiders know there was a really serious sub-prime mortgage bubble, and that they could game it? Many of the clever ones knew by about 2004, when Howie Hubler at Morgan Stanley first started to bet against the worst securities with the approval of his management. But you can only make money betting against a bubble as it unravels. As long as there was room for the bubble to grow, Wall Street's overwhelming incentive was to keep it going. But when they saw that the bubble was ending, their incentives changed. And we therefore know that many on Wall Street realised there was a huge bubble by late 2006, because that's when they started massively betting on its collapse.
Here, I must briefly mention a problem with Michael Lewis's generally superb financial journalism. In his book The Big Short, Lewis leaves the impression that Wall Street was blindly running itself off a cliff, whereas a few wild and crazy, off-the-beaten-track, adorably weird loners figured out how to short the mortgage market and beat the system. With all due respect to Mr Lewis, it didn't happen like that. The Big Short was seriously big business, and much of Wall Street was ruthlessly good at it.
To begin with, a number of big hedge funds figured it out. Unlike investment banks, however, they couldn't make serious money by securitising loans and selling CDOs (collateralised debt obligations), so they had to wait until the bubble was about to burst and make their money from the collapse. And this they did. Major hedge funds including Magnetar, Tricadia, Harbinger Capital, George Soros, and John Paulson made billions of dollars each by betting against mortgage securities as the bubble ended, and all of them worked closely with Wall Street in order to do so.
In fairness to Mr Lewis, it is true that in several major cases – most notably Citigroup, Merrill Lynch, Lehman and Bear Stearns – senior management was indeed disconnected and thus clueless, allowed their employees to take advantage too long and therefore destroyed their own firms.
But cluelessness was most definitely not an issue with the senior management of Goldman Sachs, JPMorgan Chase and Morgan Stanley. As we saw, Morgan Stanley started betting against the bubble as early as 2004. Conversely, JPMorgan Chase mostly just remained prudently above the junk mortgage fray. Goldman Sachs, though, was in a class by itself. It made billions of dollars by betting against the very same stuff that it had been making billions selling only a year or two before.
Almost all the prospectuses and sales material on mortgage-backed bonds sold from 2005 until 2007 were a compound of falsehoods. And as the bubble peaked and started to collapse, executives repeatedly lied about their companies' financial condition. In some cases, they also concealed other material information, such as the extent to which executives were selling or hedging their own stock holdings because they knew their firms were about to collapse.
In some cases, we have evidence of senior executive knowledge of and involvement in misrepresentations. For example, quarterly presentations to investors are nearly always made by the CEO or chief financial officer of the firm; if lies were told in these presentations, or if material facts were omitted, the responsibility lies with senior management. In other cases, such as Bear Stearns, we have evidence from civil lawsuits that senior executives were directly involved in selling securities whose prospectuses allegedly contained lies and omissions.
The Rico Act provides for severe criminal (and civil) penalties for operating a criminal organisation. It specifically enables prosecution of the leaders of a criminal organisation for having ordered or assisted others to commit crimes. It also provides that racketeers must forfeit all ill-gotten gains obtained through a pattern of criminal activity, and allows government prosecutors to obtain pre-trial restraining orders to seize defendants' assets. Finally, it provides for criminal prosecution of corporations that employ Rico offenders.
Rico was explicitly intended to cover organised financial crime as well as violent criminal organisations such as the mafia and drug cartels. A great deal of the behaviour that occurred during the bubble would appear to fall under Rico statutes. Moreover, pre-trial asset seizure is a widely and successfully used technique in combating organised crime, and asset seizures now generate more tha $1bn a year for the US government. However, there has not been a single Rico prosecution related to the financial crisis, nor has a single Rico restraining order been issued to seize the assets of any individual banker or any firm.
It is important to note here that these asset seizures would not merely represent justice for offenders but for victims as well. US law allows seized assets to be used to compensate victims. In this case, the potential economic impact of seizures could be enormous.
Finally, personal conduct subject to criminal prosecution might range from possession and use of drugs, such as marijuana and cocaine, to hiring of prostitutes, employment of prostitutes for business purposes, fraudulent billing of personal or illegal services as business expenses (sexual services, strip club and nightclub patronage), fraudulent use or misappropriation of corporate assets or services for personal use (eg use of corporate jets), personal tax evasion and a variety of other offences.
I should perhaps make clear here that I'm not enthusiastic about prosecuting people for possession or use of marijuana, which I think should be legal. In general, I tend to think that anything done by two healthy consenting adults, including sex for pay, should be legal as well.
But the circumstances here are not ordinary. First, there is once again a vast disparity between the treatment of ordinary people and investment bankers. Every year, about 50,000 people are arrested in New York City for possession of marijuana – most of them ordinary people, not criminals, whose only offence was to accidentally end up within the orbit of a police officer. Not a single one of them is ever named Jimmy Cayne, despite the fact that the marijuana habit of the former CEO of Bear Stearns has been discussed multiple times in the national media (his predecessor in the job, Ace Greenberg, called him a "dope-smoking megalomaniac").
There is also a second, even more serious, point about this. If the supposed reason for failure to prosecute is the difficulty of making cases, then there is an awfully easy way to get a lot of bankers to talk. It is a technique used routinely in organised crime cases. What is this, if not organised?
As time passes, criminal prosecution of bubble-era frauds will become even more difficult, even impossible, because the statute of limitations for many of these crimes is short – three to five years. So an immense opportunity for both justice and public education will soon be lost. In some circumstances, cases can be opened or reopened after the statute of limitations has expired, if new evidence appears; but finding new evidence will grow more difficult with time as well. And there is no sign whatsoever that the Obama administration is interested.
Charles Ferguson will appear at the Edinburgh international book festival on Sunday 12 August.
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