Obama fundraisers have deep ties to lobbyists

President Obama has long talked up his pledge not to accept campaign contributions from lobbyists as a sign that he's serious about ethics reform in Washington. But that hasn't stopped his 2012 campaign from recruiting individuals with strong ties to the lobbying industry to raise cash for his re-election effort.

The New York Times' Eric Lichtblau reports that the Obama campaign is working with at least 15 "bundlers" who are linked to the lobbying industry. This group of lobbying-affiliated fundraisers--who work either working for private consulting firms or corporations--have raised more than $5 million for the campaign.

Technically, the individuals aren't in violation of Obama's self-imposed lobbyist ban because they aren't officially registered as federal lobbyists with the Senate. But there are no illusions about what they actually do for a living.

Among the bundlers on the list, according to the Times: Sally Susman, who heads up lobbying for the drug manufacturer Pfizer, and David L. Cohen, who oversees lobbying for the telecommunications giant Comcast. Both have raised at least $500,000 apiece for Obama's re-election campaign.

Obama aides declined to comment on specific donors, but in a lengthy statement posted on the campaign's website, spokesman Ben LaBolt accused the Times of "missing the forest for the trees." The paper, he said, obscured Obama's "long history of advancing ethics and government reform and brushing right past his opponents' records with nothing but a shrug."

Yet LaBolt didn't respond directly to what could be the most damaging part of the piece: While Obama isn't technically taking cash from "federal lobbyists," his campaign has deeper ties to the lobbying industry than Obama and his aides have advertised.

Instead, LaBolt tried to use the story as an attack on Obama's GOP rivals, including Mitt Romney, who freely and openly raise cash from special interests in Washington.

"Rather than include that context, the Times let the perfect be the enemy of the good, punishing efforts to promote reform," LaBolt complained.

IN 2012, VOTE FOR THE CANDIDATE THAT PROMISES TO SEND THESE BANKERS TO JAIL

 

If the Occupy Wall Street protesters want to target a single big bank, which should they choose?  The decision wouldn’t be easy, given the bad behavior of the country’s biggest brand-name banks. We look at the country’s four largest—Bank of America, JPMorgan Chase, Citigroup, and Wells Fargo—and throw in Goldman Sachs, a natural target of any protest. Here’s a taste of the deadliest sins committed by the banks, followed by a full account of all the gory details at each bank. Warning: It isn’t pretty

The Seven Deadliest Sins of the Big Banks

1. JPMorgan Chase kicks 54 military families out of their homes—despite a law against doing so.

2. Wells Fargo gives bonuses to loan officers to put minority borrowers into high-priced subprime mortgages—internally dubbed “ghetto loans.”

3. Citigroup, Bank of America, and Goldman Sachs all pay huge fines to settle charges they duped their own clients.

4. Goldman Sachs assists in Europe’s economic collapse by helping Greece mask the truth about its finances.

5. JPMorgan turns a blind eye to Bernie Madoff’s deceptions.

6. Bank of America pays $137 million to settle government claims it rigged the municipal-bond market.

7. Despite these and other unpardonable sins, banks showers tens of millions of dollars in bonus money on top executives.

JPMorgan Chase

Jamie Dimon is “America’s least hated banker,” the financial writer Roger Lowenstein wrote in The New York Times Magazine at the end of 2010. But if JPMorgan Chase & Co. is the best of the bunch, then that speaks volumes about how horribly banks have acted in recent years.

There’s the $211 million fine JPMorgan paid in July to settle charges that it defrauded local governments in 31 states—along with the $130 million it returned to municipalities it was accused of duping.

There’s the $722 million in fines and restitution payments it made after JPMorgan confederates were caught paying off officials in Jefferson County, Alabama (home to Birmingham), to secure a municipal finance deal that nearly bankrupted the county.

There’s the fact the bank was in so great a rush to evict people from their homes that it admits that some of its people might have forged foreclosure documents—a problem so widespread that it felt compelled to suspend 56,000 foreclosures while it investigated its own behavior.

Or maybe the biggest sin is the central role JPMorgan has played—and continues to play—in the rise of what might be called the “poverty industry”: all those businesses that exploit the working poor, such as the payday-loan industry, where lenders charge 400 percent interest on short-term, small-denomination loans against a person’s next paycheck (or their Social Security or unemployment payments).

And don’t forget the Bernie Madoff connection. Perhaps it’s not fair to blame JPMorgan for Madoff’s sins just because the infamous fraudster used Chase to handle billions of dollars in investors’ cash. Nonetheless, Madoff trustee Irving Picard has pointed an accusing finger at the bank. He has sued the bank for $6 billion, claiming that not only should it have known about the fraud, it did know. In June 2007, 18 months before Madoff’s fraud was exposed, an officer at JPMorgan wrote an email to colleagues reporting that another bank executive “just told me that there is a well-known cloud over the head of Madoff and that his returns are speculated to be part of a Ponzi scheme.” The bank, the suit contends, had withdrawn all but $35 million of the $276 million it had invested in Madoff-linked hedge funds by the time the fraud was revealed. A JPMorgan spokesman “vigorously” denied Picard’s charges—and Picard has responded by tripling damages to $19 billion.

Goldman Sachs is widely reviled for duping its own clients by selling them shares in a mortgage-backed security the investment bank dubbed Abacus. But JPMorgan had its own Abacus. It was called Squared CDO 2007. And according to the Securities and Exchange Commission, JPMorgan’s behavior was just as contemptible as Goldman Sachs’s. It, too, let a hedge fund secretly choose the subprime loans in a product that the hedge fund wanted to bet against; it, too, failed to inform clients purchasing shares in Squared that it had let a hedge-fund manager rig the game.

In June, JPMorgan Chase (without denying or admitting guilt) paid $154 million to settle Squared-related charges filed by the SEC—equal to less than two days’ worth of company earnings that quarter. The bank also returned $126 million to clients who lost money on Squared and, for good measure, paid $57 million to investors who lost money in a second, similar deal called Tahoma CDO-I.

Yet a lack of candor in dealings with its own clientele is only one way JPMorgan contributed to the subprime disaster, causing so much misery for so many. Through its subprime arm, Chase Home Finance, the bank fed the subprime machine by originating billions of dollars of subprime home loans a year—$12 billion just in 2006, the year the subprime-mortgage orgy reached its peak.

And the bank, through JPMorgan Mortgage Acquisitions, was a huge player on the other side of the equation as well. JPMorgan Acquisitions snapped up $18 billion in subprime loans in 2006 alone, holding on to them long enough to pay a rating agency to stamp them Triple-A before selling them in bundles to pension funds, municipalities, and others.

JPMorgan’s treatment of active-duty members of the armed forces has been particularly shameful. The Servicemembers Civil Relief Act forbids a bank from foreclosing on a soldier fighting overseas, and caps home-loan interest rates at 6 percent for most active-duty personnel. JPMorgan has admitted to congressional investigators that it has overcharged 10,000 military families on their mortgages and foreclosed on 54 of them.

Then there are the multimillion-dollar lines of credit JPMorgan provides (according to “The Predators’ Creditors,” a report by National People’s Action, to Ace Cash Express and Cash America, two of the country’s larger payday lenders. JPMorgan has also been a central player in the rise of the instant tax-refund business. Until leaving the business last year under pressure from federal regulators, JPMorgan was the bank to 13,000 of these instant-refund mills, which cater to people so desperate for quick cash that they’ll pay triple-digit interest rates to get their tax refund immediately rather than waiting two weeks.

JPMorgan received $25 billion in TARP money at the end of 2008—but with financial reform on the horizon, the bank spent $6 million on lobbyists in 2009 and an additional $7 million in 2010. 2010 was a particularly good year for JPMorgan, which booked $17 billion in earnings, and for Jamie Dimon, who received $21 million in compensation—or 900 times more than the $23,000 a year the average Chase teller makes. Still, that was half the $42 million Dimon paid himself in 2006 and less than the $34 million he received in 2007. It was slightly better than the $20 million Dimon made in 2008—but, then, 2008 was the year that Dimon and his fellow bankers nearly brought the global economy to its knees.

Wells Fargo

Wells might seem small, at least when compared to giants like JPMorgan or Bank of America, and therefore not as worthy of revulsion as the other big boy banks, but then looks are deceiving. Wells is the country’s second largest bank in terms of deposits and its stock is valued at more than that of JPMorgan Chase, Citi, Bank of America, or Goldman Sachs.

It’s also the bank with the most shameful record on race.

Don’t take our word for it. Consider the sworn affidavit of a whistleblower named Tony Paschal, who for 10 years worked in Virginia as a loan officer for Wells Fargo Financial, the bank’s subprime subsidiary. “They referred to subprime loans made in minority community as ghetto loans,” Paschal said in an affidavit he gave shortly after the subprime collapse. “The company put ‘bounties’ on minority borrowers. By this I mean that loan officers [like myself] were offered cash incentives to aggressively market subprime loans in minority communities.”

Another whistleblower, Camille Thomas, who reviewed loan papers at four Well Fargo offices in the Memphis area between 2004 and 2008, said in an affidavit she gave last year, “It was generally assumed that African-American customers were less sophisticated and intelligent and could be manipulated more easily into subprime loans.” Elderly blacks who were house rich but cash poor were particularly prized, given the profits the bank could make bamboozling them to refinance with a high-fee, high-interest loan crammed with expensive extras.

Doris Dancy, another former Wells Fargo Financial employee, spoke during a deposition of the pressures she felt to dangle deceptively low teaser rates in front of black homeowners to induce them to refinance into loans that, once the teaser rate expired, carried interest rates of between 11 percent and 17 percent. Dancy left Wells at the start of 2008, after just six months, she said, because “I thought this was an unethical and dirty trick… I knew it was going to cause folks to lose their homes.”

A fourth whistleblower, Michael Simpson, a former branch manager overseeing a Wells Fargo Financial office in Memphis, said “Money corrupted Wells Fargo and clouded the judgment of upper management. The enormous amounts of money coming in from subprime loans meant that unethical and dirty managers like my district manager were supported and rewarded.” In 2006 alone, according to data provided by a trade association covering the subprime-mortgage market, Wells made $28 billion in subprime home loans.

The city of Memphis and the local county government have sued Wells for “unfair, deceptive, and discriminatory” lending practices that officials there contend cost them tens of millions in tax dollars and caused rampant blight. The city of Baltimore has filed a similar suit, though a federal judge there has instructed the city to narrow its claims. In February, Wells paid $10 million to settle a separate class-action suit charging that it improperly added attorney’s fees to the refinancings of 60,000 or so military veterans.

The bank has also admitted to Congress that it illegally seized the homes of 17 active-duty combatants and overcharged more than 3,000 military families on their mortgages. It denies, however, the charges of a racial bias in its lending.

Just like JPMorgan Chase, Wells too has been a big player in the poverty industry. The bank provided much of the initial seed money to those behind Advance America, today the largest payday lender with more than 2,000 stores across the country, and it still provides multimillion-dollar lines of credit to Advance America and several other large chains. Wells has angered consumer advocates by offering its own payday product carrying a triple-digit interest rate.

In July, Wells agreed to pay (without denying or admitting guilt) $85 million to settle charges filed by the Federal Reserve that it pushed borrowers into high-interest subprime loans, even though they qualified for lower-rate loans, and for falsifying documents. The Fed touted the fine as the largest it had ever imposed in a consumer-enforcement case. But the fine seemed a pittance given the $4 billion in profits the bank booked in the previous quarter. In a prepared statement, the company’s CEO, John Stumpf, referred to “the alleged actions committed by a relatively small group of team members.”

Wells took $25 billion in TARP money at the end of 2008—and has spent more than $12 million on D.C. lobbyists in the 30 months since then. Stumpf, a Wells man since 1998 and CEO since 2007, was in a top position when the worst of the bank’s practices occurred. But who cares about a raft of charges that they targeted black homeowners and falsified loan documents when Wells has booked $37 billion in pre-tax profits over the past two years? Stumpf is paid an annual salary of $6.6 million but received $12 million in additional compensation in 2009 and $14 million more in 2010—or just under $40 million in two years.

Citigroup

The sins of Citi start with Sandy Weill—the perfect poster boy for the subprime era. It was in 1986 that Weill, then a 53-year-old Wall Street castoff looking for his next act, bought a mangy, third-rate lender called Commercial Credit. You’re buying a loan shark, his otherwise loyal personal assistant said of this chain of storefront lenders in the business of gouging working-class customers looking for financing on small purchases like refrigerators and bedroom sets. But Weill saw its potential, aggressively moving Commercial Credit into subprime mortgages and then using the profits to go on a buying spree. A dozen years later, he merged his company with Citibank and took over as co-CEO.

It’s hard to overstate the destructiveness of Weill’s greed. By the time he made his play for Citi, Weill had already swallowed up Travelers Insurance, Smith Barney, and Salomon Brothers. Except a Depression-era law, the Glass-Steagall Act, dictated that banks, with their federally insured deposits, couldn’t take over insurance companies or Wall Street investment houses. But Weill put together this behemoth anyway and went about masterminding the repeal of Glass-Steagall, which happened in 1999.

The repeal of Glass-Steagall set the stage for the financial meltdown that would follow years later. The rationale for Glass-Steagall was never more clear than in the final months of 2008, when federal officials faced the potential for widespread bank failure largely because of the great risks taken by its investment-banking arms.

Yet the pain Weill inflicted on the world didn’t end with the role he played in the repeal of Glass-Steagall. There was Citi’s takeover in 2000 of The Associates, a subprime-mortgage lender widely considered the industry’s most predatory. Two years later, Citigroup paid a then-record $215 million to settle charges leveled by the FTC that The Associates, renamed CitiFinancial, used deception to convince customers to refinance at usurious interest rates—and agreed to reform its ways. Still, the company would set another record when in 2004 it paid the Federal Reserve $70 million (without admitting its guilt) to resolve new charges against CitiFinancial. But what did a few hundred million dollars in settlements matter when compared to the tens of billions of profits Citi was reaping? A top-five subprime lender, Citi made $38 billion in subprime home loans in 2006 alone, a year in which the bank reported $28 billion in profits.

It wasn’t just the origination of subprime home loans that drove profits. Like JPMorgan Chase and other goliaths born with the end of Glass-Steagall, Citi played the securitization game as well. The bank wrangled more than $20 billion in mortgage-backed deals in 2006 alone. On October 19, Citi agreed to pay $285 million (without denying or admitting guilt) to settle a complaint filed by the SEC charging that the bank had defrauded its own clients by selling them shares in a rigged mortgage-backed security.

It was just another slap on the wrist, really, given that two days earlier, the bank reported profits of $4 billion in the year’s third quarter.

Bank of America

Bank of America’s story is similar to that of the other big banks. It paid $137 million to federal and state authorities to settle charges that it rigged bids on municipal bonds, defrauding schools, hospitals, and a long list of municipalities, and it coughed up an additional $20 million to resolve claims by 160 or so military personnel claiming they had been illegally booted from their homes in a foreclosure.

Bank of America was the first major bank to get into the subprime-mortgage business when it purchased a multibillion-dollar subprime lender in 1992 (it bought a second huge player several years later). Its employees have as much explaining to do as any bank about the "robo-signing" scandal—which saw bank employees swearing they had done the necessary due diligence to prove the bank had the right to seize an individual’s home, when they had not. During a deposition, for instance, one Bank of America employee asked how she could be expected to actually look over the paperwork when she was signing 7,000 to 8,000 foreclosure documents per month.

Like the other banks, Bank of America is also an enabler of the poverty industry, giving Advance America, the giant payday chain, a $265 million line of credit—allowing it to borrow money at 3 percent interest and loan it out at 400 percent.

The bank paid $1.35 billion to Freddie Mac in 2010 to put to rest claims (largely inherited with its purchase of Countrywide at the start of 2008) that it misled Freddie about loans sold during the subprime boom—and then a report by the inspector general for the agency overseeing Freddie said that dollar figure didn’t come close to paying for Countrywide’s sins. Bank of America proposed a payment of $8.5 billion to settle claims by private investors that Countrywide deceived them in its sale of mortgage-backed securities—except the deal was blocked by, among others, the FDIC and the attorneys general of New York and Delaware.

Yet one way Bank of America stands out from its competitors: shareholders are suing the company over its purchase of Merrill Lynch, claiming company executives failed to disclose the worst about Merrill until after the deal had closed. The bank (without admitting or denying guilt) already settled SEC charges that it deceived its shareholders over the Merrill acquisition, paying $150 million—a dollar figure the federal judge approving the deal called “paltry.” Another way Bank of America stands out: its handling of its roughly 1.3 million mortgage accounts that are delinquent.

Customers of all the big banks complain that being behind on your payments means a Kafkaesque journey through a maze where straight answers are impossible to come by and the odds are high that you’ll need to send in your paperwork several times before the right person actually receives it. Still, Bank of America distinguishes itself even among this crowd. A study by Moody’s released at the end of last year found that Bank of America took longer than any of the other major banks to resolve a delinquent loan. And data from HAMP, the program the Obama administration set up to help homeowners avoid foreclosure, shows that Bank of America has the highest number of customers eligible for a loan modification under HAMP—but the lowest rate of success: it provided loan modifications to fewer than one in three homeowners eligible for the program. (Not that the other banks have done much better: Bank of America has granted permanent loan mods to 32 percent of those who have gone through the program, compared to 35 percent for JPMorgan Chase, 36 percent at Citi, and 39 percent at Wells.)

Bank of America received two bailouts from Washington totaling $45 billion—and since that time has spent more than $9 million on D.C. lobbyists. The bank was particularly generous to Ken Lewis, the deposed CEO behind the ill-conceived purchases of Countrywide and Merrill: he left the company with an exit package of nearly $64 million in retirement pay. It has been similarly munificent with Brian Moynihan, who took over the company at the start of 2010. Under his stewardship, BofA’s share price has fallen nearly 60 percent, but the board of directors awarded him $9.1 million in stock at the end of his first year on the job, above and beyond his $950,000 annual salary.

Goldman Sachs

Bank of America has admitted that its employees paid “kickbacks” to government officials to win deals in the lucrative muni bond market. The Goldman Sachs advantage, in contrast, is that so many of its former partners are the government. Henry Paulson, the CEO and chairman of Goldman Sachs before becoming George W. Bush’s secretary of the Treasury, let Lehman Brothers (a longtime Goldman rival) die because he believed in the free market. Several days later, however, Paulson helped save Goldman’s bacon when he spent $85 billion in government money to bail out the insurance giant AIG.

No financial institution was a bigger customer of AIG’s than Goldman, which had used AIG to “short” (in English, to bet against) the subprime market. And no institution outside AIG itself was as dependent on the insurance giant’s survival as Goldman was. AIG owed Goldman $13 billion in credit-default swaps—and, incredibly, the deal terms hammered out with the government had Goldman receiving all $13 billion (as opposed to the 13 cents on the dollar Merrill Lynch received from other failed insurers, according to New York magazine).

Today, Goldman faces a rash of lawsuits from aggrieved clients who feel betrayed—betrayed by an investment adviser that continued to sell billions of dollars’ worth of mortgage-backed securities to its customers even as it failed to inform them that the firm was making enormous bets that these would turn out to be terrible investments.

In mid-2009, Goldman paid $60 million—literally less than the amount of revenue booked in a half-day that year—to end an investigation by the Massachusetts attorney general into its subprime-mortgage activities. New York’s new attorney general is investigating the mortgage-backed securities operations at Goldman (and also Bank of America and Morgan Stanley).

And, of course, there’s Abacus and the $550 million the company paid the SEC (without denying or admitting guilt) because it failed to inform clients that it had allowed John Paulson, a prominent hedge-fund manager seeking to bet against its success, to handpick subprime home loans he thought had the greatest chance of failing.

Goldman didn’t originate subprime loans like the other big banks. Instead, it bankrolled top subprime lenders like New Century and (along with Citigroup and Merrill Lynch) financed CompuCredit, a top subprime credit-card issuer which, after it was sued by the FTC for engaging in “deceptive conduct in connection with marketing credit cards,” agreed to refund at least $114 million to customers.

Critics castigate other banks for abusing individual investors. Goldman they accuse of rigging whole markets. The German magazine Der Spiegel published a long piece last year charging Goldman Sachs of helping the Greek government mask the true extent of its debt (Goldman denied comment when contacted by the magazine). Harper’s ran a provocative article by Frederick Kaufman that essentially charged Goldman with messing up the world market for wheat simply to turn a buck—and inadvertently causing widespread hunger across the globe. (Again, Goldman declined comment.) Rolling Stone political writer Matt Taibbi—he of the unforgettable description of Goldman as “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money”—lays much of the blame on Goldman for the spike in the price of oil several years back.

Goldman received $10 billion in TARP money—and then seemed to spit in the face of those choosing to bail out Wall Street’s banks. It ended 2008 with $2.3 billion in profits but paid only $14 million in taxes that year—rather than the $800 million it would owe if paying the standard 35 percent that corporations even sometimes pay. Goldman explains a tax rate of less than 1 percent by pointing to a change in its “geographic earnings mix”—or as Lloyd Doggett, a Democratic congressman from Texas, explained it, “With the right hand out begging for bailout money, the left is hiding it offshore." That left hand is also giving themselves huge bonuses, starting with CEO Lloyd Blankfein. Goldman’s reputation, and also its stock, is down, but Blankfein’s compensation is way up. At the start of the year, the Goldman board bumped his base salary from $600,000 to $2 million annually and showered him $13 million in stock.

It’s enough to make you want to stuff your earnings under a mattress rather than trusting your money to one of these malefactors. But then you’d need to rely on a check casher to pay the rent and other bills—and Wells Fargo, JPMorgan Chase, and Bank of America are among the big banks profiting off the check-cashing business.

Research Assistance by David Graham

Only a mad man would nationalize oil. 

Only a mad man would spend billions of the oil money to provide clean water to his desert people.

Only a mad man would use that water to turn the desert into agricultural land with the potential to rival the production of California.

Only a mad man would encourage marriage by giving newly-weds money to buy a home.

The Mad Man is Dead. Long live the Mad Man!

In 1953 while drilling for oil in southern Libya, workers found instead a huge freshwater sea beneath the sands, a vast ocean called the Nubian Sandstone Aquifer System (NSAS), which stretches beneath Libya, Egypt, Chad and Sudan.  The water had accumulated during the last ice age. Its reserves are estimated to be the equivalent to about 500 years of Nile River flow and are expected to last a thousand years.

 THE GREAT MAN-MADE RIVER

Western technicians said that Libya did not have the expertise to exploit this underground ocean; but in the early 1980s Colonel Muammar Gaddafi initiated the Great Man-Made River Authority, a 25-billion-dollar project to raise the water and pipe it across the desert. Expertise and equipment was imported from Italy, Spain, Germany, Japan and South Korea. The first water began to flow in September 1989 and the project is nearing completion this year, 2011.

It is already the world’s largest irrigation project and the largest underground network of pipes and aqueducts. It supplies 6,500,000 cubic metres of fresh water daily. From being one of the driest countries on earth, the Libyan desert is now blooming.

LIBYA HAS WATER TO GREEN THE DESERT
by Simba Russeau, Guardian, May 27, 2011

With only five percent of the country getting at least 100 millimetres of rainfall per year, Libya is one of the driest countries in the world. Historically, coastal aquifers or desalination plants located in Tripoli were of poor quality due to contamination with salt water, resulting in undrinkable water in many cities including Benghazi. Oil exploration in the southern Libyan desert in the mid-1950s revealed vast quantities of fresh, clean groundwater - this could meet growing national demand and development goals. Scientists estimate that nearly 40,000 years ago when the North African climate was temperate, rainwater in Libya seeped underground forming reservoirs of freshwater.

In 1983, Libyan leader Muammar Gaddafi initiated a huge civil water works project known as the Great Man-Made River (GMMR) - a massive irrigation project that drew upon the underground basin reserves of the Kufra, Sirte, Morzuk, Hamada and the Nubian Sandstone Aquifer - to deliver more than five million cubic metres of water per day to cities along Libya's coastal belt.

"The Colonel's GMMR [Great Man-Made River] project was discounted when first unveiled as an uneconomic flight of fancy and a wasteful exploitation of un-renewable freshwater reserves," Middle East-based journalist Iason Athanasiadis told IPS. "But subsequently it was hailed as a masterful work of engineering, tapping into underground aquifers so vast that they could keep the 2007 rate of dispersal going for the next 1,000 years." Lying beneath the four African countries Chad, Egypt, Libya and Sudan, the Nubian Sandstone Aquifer System (NSAS) is the world's largest fossil water aquifer system, covering some two million square kilometres and estimated to contain 150,000 cubic kilometres of groundwater. Fossil water is groundwater that has been trapped in underground fossil aquifers for thousands or even millions of years....

"The GMMR [Great Man-Made River] provides 70 percent of the population with water for drinking and irrigation, pumping it from Libya's vast underground aquifers like the NSSA [Nubian Sandstone Aquifer System] in the south to populated coastal areas 4,000 kilometres to the north," Ivan Ivekovic, professor of political science at the American University of Cairo told IPS. "The entire project was drawn out over five phases. Phase one took water from eastern pipelines in As-Sarir and Tazerbo to Benghazi and Sirte; phase two supplied water in Tripoli and western pipelines in Jeffara from the Fezzan region; and phase three intended to create an integrated system and increase the total daily capacity to almost four million cubic metres and provide up to 138,000 cubic metres per day to Tobruk." With an estimated cost of nearly 30 billion dollars, the GMMR's network of nearly 5,000 kilometres of pipeline from more than 1,300 wells drilled up to 500 metres deep into the Sahara was also intended to increase the amount of arable land for agricultural production.

"Libya could start an agro-business similar to California's San Joaquin Valley. Like Libya, California is essentially desert but because of irrigation and water works projects that desert valley became the largest producer of food and cotton in the world, making it the ninth largest economy in the world," Patrick Henningsen, 21st Century Wire editor and founder, told IPS. "At the moment the only agro-markets in the Mediterranean zone competing to supply citrus and various other popular supermarket products to Europe are Israel and Egypt. In 10 or 20 years, Libya could surpass both of those countries because they now have the water to green the desert."...

Blogger's Note:  Thank you Bruce.  It seems even the worst of us manage to do some good - although, the jury is still out on W.

More Capitalist Thievery

How The Owners of Tide detergent, Bounty Yowels, and Gillette Shaving Products Avoid Paying Taxes on Their Billions in Profits

By Allan Sloan, Published: October 19

The tax-avoidance spotlight has been shining brightly, via the media, on companies such as General Electric, Exxon Mobil and Verizon, and on the big multinational banks. But some of the most clever and innovative tax avoiding is being done by a company not usually associated with financial wheeling and dealing: Procter & Gamble.

In three deals spread over almost a decade, the owner of Tide detergent, Bounty towels, Gillette shaving products and many other household names, has managed to reopen a loophole that Congress closed in 1997. By my estimate, P&G’s profits on the deals, which involve selling brands it no longer wants, total about $6 billion, are tax-free to the company and are tax-deferred to its shareholders, possibly forever.


A straight-up sale would have triggered a $2 billion federal tax bill and a hefty state tax bill (for details, see fortune.com/sloan). All three involve so-called Reverse Morris Trust transactions, of which more later. “P&G is the most active practitioner of this technique,” tax expert Robert Willens says.

Why isn’t P&G on the tax radar? Because it has kept a low profile, and because the deals have been spread over an extended period: Jif peanut butter and Crisco shortening in a 2002 deal, Folgers coffee in 2008 and Pringles chips in a deal scheduled to close this year. Besides, the deals are so convoluted that you have to be a tax techie (or a masochist) to make your way through them.

Before we proceed, let’s be clear: I’m not accusing P&G of wrongdoing. The deals are perfectly legal, and under current market mores, P&G’s obligation to maximize its owners’ returns trumps its obligation to pay taxes to support our society. “P&G’s goal in these transactions is to achieve the best value for company shareholders, while also seeking a good fit for the business being sold,” company spokeswoman Jennifer Chelune says. Fair enough.

If there’s no abuse, why am I discussing these sales? To show that the system needs reforming. To demonstrate how even a company like P&G practices the dark tax-avoiding arts. And to show how big the stakes are.


I’ve been following P&G’s transactions since 2001, when it announced plans to do a tax-advantaged deal to sell Jif to J.M. Smucker, the jam and jelly giant. It made me smile. Who could resist writing about combining PB with J? Not me. Then came the Folgers deal, and now Pringles.

Let me give you some history, and show you how this works. Until 1997, Morris Trusts were a routine tax-free dealmaking maneuver. A company would stick a business it wanted to unload into a new corporation owned by its shareholders, which is a tax-free transaction. A nanosecond later, a buyer would acquire the new corporation in a tax-free stock-for-stock deal. Company shareholders would end up with shares in both the original company and in the buyer of the business being unloaded.

But after several deals involving lots of cash turned Morris Trusts into major tax drains that were more like sales than mere tax-efficient corporate spinoffs — Disney’s sale of newspapers and General Motors’ sale of its defense business got the most ink — Congress tightened the rules. Loophole openers begat Reverse Morrises, which require that shareholders of the selling company end up with a majority stake in the acquiring company — a big disincentive to buyers. But P&G has managed to find buyers — Smucker in 2002 and 2008, Diamond Foods in 2011 — willing to do that.

Even if current bids to “reform” corporate taxes by lowering the rate and broadening the base are enacted, you can bet that P&G would still be doing Reverse Morris Trust deals or something similar. At a 25 percent corporate tax rate, rather than the current 35 percent, P&G would still keep $1.5 billion away from the IRS. It would do whatever it could to make the sales tax-free unless all available loopholes get nailed shut. Good luck getting that done.

After all, corporate tax avoidance is as American as apple pie and, well, peanut butter and jelly. 


Sloan is Fortune magazine’s senior editor at large.

THE DEATH PENALTY

By Liz Goodwin
National Affairs ReporterThe Lookout

While Amanda Knox's release from Italian prison took the spotlight, two exonerated men who spent a combined four decades in prison were quietly set free on Tuesday.

Obie Anthony, 37, and Michael Morton, 57, each insisted on their innocence throughout their many years in jail serving life sentences for murder. And each man was eventually freed with the help of the nonprofit Innocence Project, which works to overturn wrongful convictions.

Anthony spent 17 years in prison after he was convicted of shooting and killing a man outside a brothel in Los Angeles. The prosecution's star witness, a pimp, eventually recanted his testimony. The pimp was offered a lighter sentence for his own crimes in order to testify against Anthony, the L.A. Times reports, and no one else at the crime positively identified Anthony as the shooter. Anthony said he was never there.

Anthony told the Associated Press that he isn't angry at the system that wrongly imprisoned him. "I knew from the very beginning that justice will come," he said. "I never once wavered in my faith." He said he spent his time in jail reading self-help books. He became engaged to his high school sweetheart during a prison visit more than year ago.

Morton, a Texan who spent nearly 25 years in prison on charges of beating his wife to death, was also released on Tuesday after a long campaign by the Innocence Project to uncover evidence they say was deliberately suppressed by the prosecution.

DNA testing on a bandana found near the scene of the crime found blood from Morton's wife and an as-yet-unnamed convict who is suspected of killing another woman in a similar way two years later, while Morton was in jail. (When Morton was convicted in 1987, current DNA testing didn't exist.) The Innocence Project says the prosecution hid from the jury that Morton's three-year-old son, who witnessed the murder, told a relative that a "monster"--not his father--was the perpetrator. The jury was also never told that Morton's wife's purse was stolen and her credit cards used in the weeks after her death, when Morton was in custody, the Innocence Project says.

As described in this great feature in the Austin American-Statesman, the prosecution painted Morton as a sex-crazed and murderous monster because he left a note to his wife that said she made him feel "unwanted" by refusing to have sex with him the night before she died. They said he faked the burglary and killed his wife in a rage.

"Colors seem real bright to me now. Women are real good looking," Morton told the AP after his release. He may be eligible for up to $2 million from Texas under the state's exonerated prisoner compensation law.

John Raley, Morton's attorney, told CBS that his client may have trouble adjusting to life outside of prison.

"He's kind of going to be Rip Van Winkle," Raley said. "He's never held a cell phone. Reagan was president when he went in so there is going to be a long adjustment."

The case may have consequences for Texas Gov. Rick Perry's campaign to win the Republican presidential nomination. Williamson County District Attorney John Bradley, a close Perry ally, is accused by the Innocence Project of slowing the release of evidence that would have exonerated Morton more quickly.

More Families Rely on Government Benefits Now,

Than During the Recession

Nearly half of all Americans lived in a household that received some kind of government benefit during the first three months of last year, the Wall Street Journal reports, based on new Census data. That's even higher than the figure recorded during the depths of the Great Recession.

Just over 48 percent of Americans lived in households that took in benefits during the first quarter of 2010--up from 44.8 percent in the third quarter of 2008, the heart of the downturn.

The bleak economy appears to be driving the increase. The largest single category of benefits was means-tested programs that are designed to help the needy--things like food stamps, subsidized housing, or Medicaid. Just over 34 percent of Americans lived in a household that received means-tested benefits.

The recession officially lasted from December 2007 until June 2009. But growth and job creation since then has been anemic, leaving a growing number of Americans dependent on government help.

Most of the rest came from programs for the elderly. Of older Americans, 14.5 percent lived in a household where someone was on Medicare, and 16 percent lived in a home that took in Social Security benefits. The Obama administration and Congress have been considering cuts to both programs in order to trim the deficit.

Nobel Peace Prize goes to women's rights activists

OSLO, Norway (AP) — Africa's first democratically elected female president, a Liberian campaigner against rape and a woman who stood up to Yemen's autocratic regime won the Nobel Peace Prize on Friday in recognition of the importance of women's rights in the spread of global peace.

The 10 million kronor ($1.5 million) award was split three ways between Liberian President Ellen Johnson Sirleaf, women's rights activist Leymah Gbowee from the same African country and democracy activist Tawakkul Karman of Yemen — the first Arab woman to win the prize.

The chairman of the Norwegian Nobel Committee told The Associated Press that Karman's award should be seen as a signal that both women and Islam have important roles to play in the uprisings known as the Arab Spring, the wave of anti-authoritarian revolts that have challenged rulers across the Arab world.

"The Arab Spring cannot be successful without including the women in it," Jagland said.

He said Karman, 32, belongs to a Muslim movement with links to the Muslim Brotherhood, the Islamist group "which in the West is perceived as a threat to democracy." He added that "I don't believe that. There are many signals that that kind of movement can be an important part of the solution."

Yemen is an extremely conservative society but a feature of the revolt there has been a prominent role for women who turned out for protests in large numbers. The uprising has, however, been one of the least successful, failing to unseat President Ali Abdullah Saleh as the country descends into failed state status and armed groups take increasingly central roles. In Libya's and Syria's uprisings, women have been largely absent. And while there were many women protesters in Egypt's revolution, few had key leadership positions.

Karman is a mother of three who heads the human rights group Women Journalists without Chains. She has been a leading figure in organizing the protests against Saleh that kicked off in late January.

"I am very very happy about this prize," Karman told The Associated Press. "I give the prize to the youth of revolution in Yemen and the Yemeni people."

Citing the Arab Spring alone could have been problematic for the committee. Libya descended into civil war that led to NATO military intervention. Egypt and Tunisia are still in turmoil. Hardliners are holding onto power in Yemen and Syria and a Saudi-led force crushed the uprising in Bahrain, leaving an uncertain record for the Arab protest movement.

Jagland told AP it was difficult to find a leader of the Arab Spring revolts, especially among the many bloggers who played a role in energizing the protests, and noted that Kamran's work started before the Arab uprisings.

"It was not easy for us to say to pick one from Egypt or pick one from Tunisia, because there were so many," he said. "And we did not want to say that one was more important than the others."

Kamran "started her activism long before the revolution took place in Tunisia and Egypt. She has been a very courageous woman in Yemen for quite along time," Jagland said.

No woman had won the prize since 2004, when the committee honored Wangari Maathai of Kenya, who died last month at 71. 2004 was also the last year the prize went to an African.

Liberia was ravaged by civil wars for years until 2003. The drawn-out conflict that began in 1989 left about 200,000 people dead and displaced half the country's population of 3 million. The country — created to settle freed American slaves in 1847 — is still struggling to maintain a fragile peace with the help of U.N. peacekeepers.

Sirleaf, 72, has a master's degree in public administration from Harvard University and has held top regional jobs at the World Bank, the United Nations and within the Liberian government.

In elections in 1997, she ran second to warlord-turned-president Charles Taylor, who many claimed was voted into power by a fearful electorate. Though she lost by a landslide, she rose to national prominence and earned the nickname, "Iron Lady." She went on to became Africa's first democratically elected female leader in 2005.

Sirleaf was seen as a reformer and peacemaker in Liberia when she took office. She is running for re-election this month and opponents in the presidential campaign have accused her of buying votes and using government funds to campaign. Her camp denies the charges. The election is Tuesday.

"This gives me a stronger commitment to work for reconciliation," Sirleaf said Friday from her home in Monrovia. "Liberians should be proud."

In a 2005 interview with The Associated Press, Sirleaf said she hoped young girls would see her as a role model and be inspired.

"I certainly hope more and more of them will be better off, women in Liberia, women in Africa, I hope even women in the world."

"If you're competing with men as a professional, you have to be better than they are ... and make sure you get their respect as an equal," Sirleaf said. "It's been hard. Even when you gain their acceptance, it's in a male-dominated away. They say, 'Oh, now she's one of the boys."

Buttons from her presidential campaign say it all: "Ellen — She's Our Man."

Jagland said the committee didn't consider the upcoming election in Liberia when it made its decision.

"We cannot look to that domestic consideration," he said. "We have to look at Alfred Nobel's will, which says that the prize should go to the person that has done the most for peace in the world."

Gbowee, who organized a group of Christian and Muslim women to challenge Liberia's warlords, was honored for mobilizing women "across ethnic and religious dividing lines to bring an end to the long war in Liberia, and to ensure women's participation in elections."

Gbowee has long campaigned for the rights of women and against rape. In 2003, she led hundreds of female protesters through Monrovia to demand swift disarmament of fighters who preyed on women throughout Liberia during 14 years of near-constant civil war.

Gbowee works in Ghana's capital as the director of Women Peace and Security Network Africa. The group's website says she is a mother of five.

"I know Leymah to be a warrior daring to enter where others would not dare," said Gbowee's assistant, Bertha Amanor. "So fair and straight, and a very nice person."

Karman is from Taiz, a city in southern Yemen that is a hotbed of resistance against Saleh's regime, and now lives in the capital, Sanaa. She is a journalist and member of Islah, an Islamic party. Her father is a former legal affairs minister under Saleh.

Long an advocate for human rights and freedom of expression in Yemen, she has been campaigning for Saleh's ouster since 2006 and mounted an initiative to organize Yemeni youth groups and opposition into a national council.

On Jan. 23, Karman was arrested at her home. After widespread protests against her detention — it is rare for Yemen women to be taken to jail — she was released early the next day.

Karman has been dubbed "Iron Woman, "The Mother of Revolution" and "The Spirit of the Yemeni Revolution" by fellow protesters.

During a February rally in Sanaa, she told the AP: "We will retain the dignity of the people and their rights by bringing down the regime."

The peace prize was in line with Norway's development aid strategy, which is often focused on women's rights. Norwegian Prime Minister Jens Stoltenberg called the award "important and worthy."

In his 1895 will, award creator Alfred Nobel gave only vague guidelines for the peace prize, saying it should honor "work for fraternity between nations, for the abolition or reduction of standing armies and for the holding and promotion of peace congresses."

The peace prize is the only Nobel handed out in Oslo, Norway. The other five awards — in medicine, physics, chemistry, literature and economics — are presented in Stockholm.

Last year's peace prize went to imprisoned Chinese dissident Liu Xiaobo.

___

Anti-Wall Street protests escalate in N.Y. and elsewhere

Mr. President,

Why Is It That No Matter Who We Vote For Nothing Changes?

By , Thursday, October 06,12:23 AM

The long-running New York protest against economic inequality and perceived Wall Street excesses gained momentum Wednesday as union members joined marchers in Lower Manhattan, while students at several colleges walked out of classes in solidarity and like-minded organizers completed plans to bring the fight to Washington.

Since beginning with a few dozen demonstrators in New York on Sept. 17, the Occupy Wall Street protests have not only grown, but have become increasingly organized, offering medical aid, legal help and a newspaper.

A similar protest decrying the “corporate machine” is slated to begin in Washington on Thursday, with organizers advertising a noon concert and rally on Freedom Plaza at 13th Street and Pennsylvania Avenue NW. “Stop the Machine! Create a New World,” read online fliers calling protesters to bring sleeping bags to 13th Street and Pennsylvania Avenue. , “where we will NONVIOLENTLY resist the corporate machine by occupying Freedom Plaza to demand that America’s resources be invested in human needs and environmental protection instead of war and exploitation.”

The protest’s Web site (www.October2011.org) lists more than a dozen people principally responsible for organizing the protest, among them community and peace group organizers, a pastor, a feminist, an environmentalist, a “rabble-rouser” and a pediatrician who quit her practice to advocate for governmental single-payer health care. Many more organizations are listed as supporters committed to bringing members to the protest.

In New York on Wednesday, people marched from Foley Square to Zuccotti Park, the protesters’ unofficial headquarters.

Sterling W. Roberson, vice president for the United Federation of Teachers, said union members shared the ideals of activists who have been camped out in sleeping bags for more than two weeks. “The middle class is taking the burden, but the wealthiest of our state and country are not,” he said.

Karen Higgins, a co-president of National Nurses United, came with a group of colleagues from Boston. She said they had seen patients who skipped important medical tests because they couldn’t afford them.Roxanne Pauline, a coordinator for the Northeastern Pennsylvania Area Labor Federation, said some of her union’s members plan to stay in Zuccotti Park over the weekend.

The protesters have varied causes, but have reserved most of their criticism for Wall Street. They’ve spoken out about unemployment and inequality.

One of the larger protests outside New York on Wednesday was in Boston, where about 200 Northeastern University students gathered on campus to condemn what they called corporate control of government and the spiraling costs of their education.

Hundreds of college students at New York’s sprawling public university system walked out of classes Wednesday afternoon.Protests were scheduled at State University of New York campuses in Albany, Buffalo, Binghamton, New Paltz and Purchase.

Danielle Kingsbury, a 21-year-old senior at New Paltz, said she walked out of an American literature class to show support for some of her professors who she said have had their workloads increased because of budget cuts.

— From news services and Washington Post staff writers

Suit alleges banks and mortgage companies cheated veterans and U.S. taxpayers

Bernie Madoff Robbed the Greedy, And He's In Jail For Life. When Do These Crooks Go To Federal Prison?

By Steve Vogel, Published: October 4

Some of the nation’s biggest banks and mortgage companies have defrauded veterans and taxpayers out of hundreds of millions of dollars by disguising illegal fees in veterans’ home refinancing loans, according to a whistleblower suit unsealed in federal court in Atlanta.

The suit accuses the companies, including Wells Fargo, Bank of America, J.P. Morgan Chase and GMAC Mortgage, of engaging in “a brazen scheme to defraud both our nation’s veterans and the United States treasury” of millions of dollars in connection with home loans guaranteed by the Department of Veterans Affairs.

“This is a massive fraud on the American taxpayers and American veterans,” James E. Butler Jr., one of the lawyers bringing the suit, said Tuesday.

Tens of thousands of the VA loans have gone into default or resulted in foreclosures, resulting in “massive damages” to the U.S. government, the suit alleges. The faulty loans will cost taxpayers hundreds of millions of dollars, with the costs rising as more VA loans go into default, according to the suit.

The two mortgage brokers who brought the suit said in an interview that they were instructed by the lenders not to show attorney’s fees on their estimates, but to add them to the title examination fee.

Under VA rules, lenders can charge veterans for recording fees and taxes, credit reports and other customary fees, but they are not allowed to charge attorney’s fees or settlement closing fees. “It was gut-wrenching to us, seeing the brazenness” of the lenders, broker Victor E. Bibby said.

The case involves refinanced loans that are available to retired or active-duty veterans on homes they already own. The program is aimed at giving veterans the opportunity to lower their interest rates or shorten the terms of existing home mortgages.

The whistleblower suit, which was unsealed Monday, seeks to recover damages and civil penalties on behalf of the U.S. government. The Justice Department has notified the U.S. District Court that it is not taking over the case but is reserving the right to intervene at a later date, according to court papers.

“The government has not yet made a decision about whether to intervene in this case,” Sally Quillian Yates, United States attorney for the Northern District of Georgia, said Tuesday. “As the case develops, we will continue to evaluate the merits of the case, and we will consider intervening . . . if it becomes appropriate to do so.”

“This is a very significant case,” Patrick Burns, spokesman for the nonprofit Taxpayers Against Fraud, said Tuesday. “It deals with widespread fraud from veterans who were personally pickpocketed for hundreds if not thousands of dollars, and the liability has been shoved on the federal government.”

During the past decade, more than 1.2 million of the refinanced loans have been made to veterans and their families, and up to 90 percent may have been affected by the alleged fraud, according to attorneys for the plaintiffs.

“The banks collected hundreds of millions of dollars in hidden fees from veterans, and they obtained hundreds of millions of dollars in loan guarantees they otherwise wouldn’t have received,” said Mary Louise Cohen, a Washington attorney who is also representing the whistleblowers.

The case has been brought under the False Claims Act by two mortgage brokers in Georgia, and has been under federal seal since it was filed in 2006 in U.S. District Court for the Northern District of Georgia. Cases brought under the act often remain under seal for years while they are investigated.

Three of the companies named in the suit — Wells Fargo, Bank of America and SunTrust Mortgage — declined to comment.

Speaking on background, representatives of two banks said the government’s decision to not intervene yet means the Justice Department does not think it’s a strong case. But Burns, whose organization monitors whistleblower cases, said the government’s decision to allow private law firms to take the lead was not unusual given limited resources for investigating alleged fraud.

“God help any bank that takes this case to trial,” Burns said. “A jury’s only question is going to be ‘How much do they have?’ ”

The suit includes as an exhibit a loan document in which Wells Fargo reported a $950 title examination rather than “a reasonable and customary fee” of between $125 and $200. Banks collected anywhere from $300 to $1,000 per loan in hidden fees by adding the prohibited charges to the allowable fees, according to the suit.

Bibby, one of the plaintiffs, is president and chief executive of U.S. Financial Services, a Georgia-based corporation that provides mortgage services in seven states. As brokers, Bibby and the company’s vice president of operations, Brian J. Donnelly, helped veterans choose lenders and complete the application forms. Since 2001, their company has helped set up thousands of the veterans’ refinancing loans, according to the suit.

In 2005, Donnelly said he read the rules in a VA handbook governing the fees that could be charged for the transactions, which are known as Interest Rate Reduction Refinancing Loans, or IRRRL loans.

Donnelly, who served three years in the Army, did further research and said became convinced that the charges were fraudulent. “We knew it was wrong,” he said.

“We started putting two and two together,” Bibby said. “It was kind of like a coconut hitting us on the head. They’re hiding it intentionally.”

Bibby and Donnelly said they approached the lenders, who insisted they were doing nothing wrong. The brokers reported their allegations to the U.S. government, providing copies of hundreds of “fradulent transactions.” Upon filing the whistleblower lawsuit, the court ordered the case sealed.

Earlier this year, Wells Fargo agreed to a $10 million settlement in a separate class-action lawsuit that alleged it improperly added attorney’s fees to about 60,000 refinancing loans for veterans.

Other companies named as defendants include CitiMortgage, Washington Mutual Bank, PNC Bank (which acquired National City Mortgage), Countrywide Home Loans, Mortgage Investors, First Tennessee Bank (which acquired First Horizon Home Loan), Irwin Mortgage and New Freedom Mortgage.




Staff writer Lisa Rein contributed to this report.